current account

The US can run budget deficits that help to fuel current account deficits without worry about government or national insolvency precisely because the rest of the world wants Dollars. But surely that cannot be true of any other nation.…

The yen and the Swiss franc were seen as safe haven currencies during the tumultuous crisis in Europe. The Swiss National Bank has effectively and apparently cheaply took the franc out of the game. This may have increased some speculative…

The following numbers come from a recent article in Die Welt on the backlash in Europe against the ratings agencies.

when government deficit spends, some of the claims on government will end up in the hands of foreigners. Does this matter?

So how do we explain the European crisis? One theory is that the European crisis was caused by the moral turpitude and spendthrift habits of lazy Europeans along the periphery, in sharp contrast to the hard-working and thrifty countries of…

Here’s an interpretation of the euro zone I have been meaning to run by you and I touched on it in the update to my post on how austerity in Europe works. In a fixed exchange rate environment like the euro area, you don’t have currency…

The currency may well be undervalued, but a significant rise in the RMB, especially if it is countered domestically by an increase in credit at lower real rates, might actually make the global imbalances worse and, more worryingly, cause…

Here are a few excerpts from Stephen Roach’s latest at Project Syndicate.

The challenge that the Irish economy faces can best be described in the context of flows and stocks of assets and liabilities. Under the Memorandum of Understanding (MoU) with the IMF/EU/ECB Troika, Ireland must implement a severe fiscal…

Fernandez will try to maintain the unorthodox mix of policies for as long as she can, and has shown little willingness to more towards orthodoxy during her first term. Troubles will come both internally and externally, with the growing fear…