Political Economy

Hope may spring eternal, but the presidential victor in 2012 will dictate an economic policy that is stuck in the mud. What then, will break unsustainable imbalances and market interference? Lacking an untoward event, we will wait for the…

That a couple of Latin American countries have recently announced the expropriation of foreign investors in the energy sector seems hardly like new news. After all, cycles of nationalization and privatization have unfolded for more than…

It encourages me to see Portugal fade from the headlines instead of becoming the next Greece. But it discourages me to see Spain take Portugal's place as the next Greece. All the while, the root problem has been the same: the common…

Here is the video everyone is talking about, Ron Paul and Paul Krugman debating the economy and economic policy. Enjoy.

The agenda in the euro zone is changing. The likely outcome of the weekend elections in Greece and France are just as much an effect as a cause of the shift in the agenda. For the first time since the crisis began, the German insistence on…

Collapsing credit demand ultimately leads to a loss of banking capital, which is the exact opposite of what the LTRO program was set up to achieve. Interestingly, as the charts below show, banks seem to think that there will be a slowing of…

ECB President Draghi's support for a growth pact for Europe is important, perhaps under-appreciated by the market. This is not simply a tactic to deflect attention from the IMF's call that the ECB ease monetary policy further. The ever…

We must stress that opening talks does not mean that a deal is going to be easy. In our view, Hungary did the bare minimum to get the EU back to the negotiating table, and that difficult negotiations remain ahead. On a separate but related…

Recent events in Europe mark the beginning of the push back against German-led austerity, but it is even bigger as the IMF's call for the ECB to cut rates illustrates

The FDR moment occurred in 1933 when FDR took the reigns of monetary policy from an ineffective Fed and sparked a robust recovery in aggregate demand. The Fed had allowed aggregate demand to collapse for three years when FDR responded. He…