Liberalization of policies related to foreign direct investment accounted for 30 percent of US inward FDI stock growth and 18 percent of US outward FDI stock growth between 1982 and 2006, find Matthew Adler and Gary Clyde Hufbauer. Working Paper 08-7.
News Release: Steven R. Weisman of the New York Times to Join Peterson Institute
The exchange rate of the dollar could play a critical role in both the evolution of the housing and financial crises and the needed policy responses, testifies C. Fred Bergsten. Presidential candidates and Congress should take note that export-led growth—generated by globalization—and its creation of new jobs are cushioning the US slowdown and so far preventing a recession.
Edwin M. Truman dispels four myths about sovereign wealth funds and presents a blueprint for sovereign wealth fund best practices.
Peterson Perspectives: Interviews on Current Issues
Edwin M. Truman analyzes both the key concerns raised by sovereign wealth funds and the essential measures required to alleviate those concerns in a
website audio interview.
>> Transcript
William R. Cline and John Williamson present new estimates of fundamental equilibrium exchange rates for leading advanced and emerging-market economies in Policy Brief 08-7 using a model Cline has developed in Working Paper 08-6.
News Release: Key Asian Currencies Still Substantially Undervalued with Respect to Dollar
Morris Goldstein and Nicholas Lardy find the undervaluation of the renminbi has increased in the three years since China adopted its new currency regime.
Peterson Perspectives: Interviews on Current Issues
In a three-part interview, Morris Goldstein analyzes the origins of the subprime credit crisis, the policy responses so far, and suggests his own top ten regulatory reforms needed to respond to the subprime credit crisis. To avoid future financial crises, Goldstein presents a proposal to improve regulatory liquidity.
Sustaining high growth may be easier for China than India, writes Arvind Subramanian.
Hybrid financial institutions do not work, and those in the United States—such as Fannie Mae and Freddie Mac—should be nationalized, recommends Adam S. Posen.
Peterson Perspectives: Interviews on Current Issues
Michael Mussa argues that the Fund should take a stronger stand on violation of norms for exchange rates in this website
interview.
>> Transcript
Jeffrey J. Schott proposes a 5-step plan for Doha Round rehabilitation.
World Trade Organization membership can place Russia on the right economic track, argues Anders Åslund.
Peterson Perspectives: Interviews on Current Issues
The decision by the House of Representatives to change the rules for Congressional action on trade agreements drives a gaping hole in US trade policy and poses the gravest threat to the global trading system in decades, says C. Fred Bergsten in a website
interview. See also Policy Brief 08-5.
Howard Rosen testifies before Congress that the United States needs a comprehensive strategy to address the economic disruptions to American workers and firms that are an inevitable part of globalization. See also event on Trade Adjustment Assistance. America must reform healthcare and education to better protect Americans against job loss, says Jacob Funk Kirkegaard.
As US skill levels fall, policymakers need to reform immigration policies to encourage the inflow of high-skilled workers from abroad, writes Jacob Kirkegaard.
Putin's unproductive two-term presidency leaves a huge backlog of reforms that can no longer be ignored, writes Anders Åslund.
America's Gains from Globalization
Gary Clyde Hufbauer answers critics who question US gains from globalization.
Paper | Summary
New Book: Challenges of Globalization: Imbalances and Growth
Anders Åslund and Marek Dabrowski
The United States should seek partnership with Beijing to provide joint global economic leadership instead of focusing on narrow bilateral problems, writes C. Fred Bergsten.
New Book: Economic Sanctions Reconsidered, 3rd edition, with CD-ROM
by Gary Clyde Hufbauer, Jeffrey J. Schott, Kimberly Ann Elliott, and Barbara Oegg
>> Release Event | In Brief | Selected Case Studies Online
Jeffrey J. Schott examines the history and future of the world trading system with recommendations for reform.
Peterson Perspectives: Interviews on Current Issues
William R. Cline explains the effect of climate change on agriculture on a country-by-country basis, where the impact will be greatest, and what we need to do to reduce the risks in this
website audio interview.
>> Transcript
Unabated global warming is estimated to reduce world agriculture potential 5 to 15 percent by the 2080s, with the greatest losses falling disproportionately on developing countries, writes William R. Cline. See also Global Warming and Agriculture. Cline agrees with the Stern Review: Aggressive action is necessary to abate global warming.
New Book: Leveling the Carbon Playing Field: International Competition and US Climate Policy Design
>> Event: Book Release | News Release
With global agricultural prices soaring, North Korea is set to experience yet another famine, write Stephan Haggard, Marcus Noland, and Erik Weeks.
Peterson Perspectives: Interviews on Current Issues
Marcus Noland reports on the results of a survey of 1,346 North Korean refugees in this website
interview.
>> Transcript
New Book: Accountability and Oversight of US Exchange Rate Policy by C. Randall Henning
>> News Release
Inflation now plagues many former communist countries with fixed exchange rates; those with floating exchange rates, balanced budgets, and inflation targeting are not, writes Anders Åslund. Inadequate fiscal and monetary policies are exacerbating inflation in India, writes Arvind Subramanian, but inflation targeting is an unnecessary and inappropriate solution to India's current crisis.
The Korea–United States Free Trade Agreement can be ratified this year if both countries resolve problems that threaten to delay the accord, says Jeffrey J. Schott. See also Policy Brief 07-7. Improvements in South Korea's political and economic institutions over the past decade have outstripped the country’s "First World economy, Third World politics" image, say Marcus Noland and Erik Weeks. Working Paper 08-5.
Most viewed pages for the past 7 days.
News Release Steven R. Weisman of the New York Times to Join Peterson Institute
Policy Brief 08-7 New Estimates of Fundamental Equilibrium Exchange Rates
William R. Cline and John Williamson
Policy Brief 08-3 A Blueprint for Sovereign Wealth Fund Best Practices
Edwin M. Truman
Speech Globalization: The Concept, Causes and Consequences
John Williamson
Working Paper 08-6 Estimating Consistent Fundamental Equilibrium Exchange Rates
William R. Cline
Working Paper 08-7 Policy Liberalization and FDI Growth, 1982 to 2006
Matthew Adler and Gary Clyde Hufbauer
Op-ed Looking Beyond the Boom
Marcus Noland and Howard Pack
Op-ed China's Currency Needs to Rise Further
Morris Goldstein and Nicholas R. Lardy
Policy Brief 07-4 Global Imbalances: Time for Action
Alan Ahearne, William R. Cline, John Williamson, et al.
Event Oil Prices and Energy Policy
Under Secretary of the Treasury David McCormick
Most recently posted material.
Article
Markets and Famine in North Korea
[pdf]
Stephan Haggard, Marcus Noland, and Erik Weeks—August 19, 2008
In the 1990s, as many as a million North Koreans died in one of the worst famines of the 20th century. Unlike the dramatic recent natural disasters in Burma and China, North Korea's current food crisis, a product of self-destructive policies, bad weather, and global food price increases, has metastasized largely beyond public view, abetted by Pyongyang's penchant for secrecy.
Op-ed
The Growth Future—India and China
Arvind Subramanian—August 19, 2008
Can China and India sustain their current growth rates? A traditional answer to this question is conditional: yes, provided they continue to implement policy reforms. But historical experience allows a less guarded answer. There are few examples of countries that have grown as strongly and for such long periods as India and China have—6 percent and 10 percent, respectively, for nearly three decades—and then suffered a sharp slowdown or collapse. If history is a reliable guide, then barring major upheavals, economic growth looks likely to continue in both countries until some threshold level of prosperity is attained.
Op-ed
Four Myths about Sovereign Wealth Funds
Edwin M. Truman—August 14, 2008
Sovereign wealth fund, a generic description of governmental investment activities, is a term that was coined just three years ago by Andrew Rozanov (2005). I identify sovereign wealth funds (SWFs) as separate pools of government-owned or government-controlled financial assets that include some international assets, which total at least $4 trillion by my latest count. Sovereign wealth funds take many forms and are designed to achieve a variety of economic and financial objectives—from stabilization to intergenerational wealth transfer. They properly include government pension funds to the extent that they invest in marketable international assets. The very diversity of sovereign wealth funds may be one reason why they are poorly understood.
Op-ed
Financial Hybrids Do Not Work
Adam S. Posen—August 7, 2008
Hybrid financial institutions—those that combine both a public mission and a profit-maximizing goal—do not work and should cease to exist. It is no coincidence that the most spectacular crashes of the recent financial turmoil involved hybrids on both sides of the Atlantic. In the United States, it was Fannie Mae and Freddie Mac; in Germany, it was Sachsen LB and IKB Deutsche Industriebank. In both countries, these neither-fish-nor-fowl institutions were long recognized as financial accidents waiting to happen. Hybrid institutions are erected where there is political pressure to provide credit to borrowers whom the market left alone will not serve, but the cost is too large or embarrassing for the government to fund on its balance sheet. If these institutions do well, a few hybrid managers and shareholders end up very rich; but if they don't, the taxpayers end up with a large bill. In between, retired officials and politicians get high-paying jobs there, and government influence directs credit to purposes with electoral rewards. No government should leave financial hybrids in existence. The American agencies should be nationalized, since enhancing mortgage liquidity still has public utility, while the German Landesbanks should be privatized or shut down, since markets have superceded their purposes.
Working Paper 08-7
Policy Liberalization and FDI Growth, 1982 to 2006 [pdf]
Matt Adler and Gary Clyde Hufbauer—August 5, 2008
Global economic expansion over the last three decades has been remarkable. While nominal world GDP has increased four times, world bilateral trade flows have grown more than six-fold, and the stock of foreign direct investment (FDI) has grown by roughly 20 times since 1980. The sources of global trade and investment growth are well known—general economic expansion, policy liberalization, and better communications and technology—but the impact of each source is unclear.
Adler and Hufbauer attempt to uncover the contribution of policy liberalization to the rising ratios of US inward and outward FDI stocks to GDP over the last three decades. Drawing on stylized facts and an unorthodox calculation method the authors estimate that roughly 30 percent of US inward FDI stock growth and 18 percent of US outward FDI stock growth between 1982 and 2006 can be attributed to policy liberalization. In total, and as a conservative measure, US inward and outward FDI stock growth between 1982 and 2006 contributed roughly $234 billion annually to the level of US real GDP in 2006. Of this annual gain, roughly $77 billion results from the expected rate of FDI stock growth (as a simple consequence of GDP growth); $48 billion is attributable to FDI stock growth from policy liberalization; and $112 billion is attributable to FDI stock growth from "everything else"—a combination of market forces and technological change.
Op-ed
Looking Beyond the Boom
Marcus Noland and Howard Pack—August 1, 2008
The Arab world is experiencing an economic boom spurred by surging energy prices, reinforced by reform. But most Arabs do not live in major oil-producing countries, and the region has the world's lowest employment rate—less than half of adults are formally employed. The Arab world will have to create 55 to 70 million jobs between now and 2020 to keep pace and bring the rate of unemployment down to the global norm.
Op-ed
WTO Can Place Russia on the Right Track
Anders Åslund—July 31, 2008
Accession to the World Trade Organization (WTO) should be a major strategic priority for Russia. WTO membership would bring substantial gains to the overheated Russian economy. These gains would come primarily from the liberalization of foreign direct investment in services, lower tariffs, and greater access for Russian products in foreign markets. The country is very close to entering the organization, but three obstacles remain: agreements with Ukraine, Georgia, and the European Union on various issues. These issues can be resolved, and President Dmitry Medvedev has been very enthusiastic about the WTO. Russia's accession could be his signal that he is putting Russia on the right economic track again.
Event
Oil Prices and Energy Policy
July 29, 2008
Under Secretary of the Treasury David McCormick addressed the issue of oil prices and energy policy at an Institute event. Audio and video of the event are available online.
News Release Steven R. Weisman of the New York Times to Join Peterson Institute for International Economics
July 29, 2008
WASHINGTON—The Peterson Institute for International Economics announced today that Steven R. Weisman, currently chief international economics correspondent of the New York Times, will join its staff as Editorial Director and Public Policy Fellow. At the Institute, Mr. Weisman will work closely with the research staff to bring their analyses and policy proposals more extensively into the public debate and to increase broader understanding of the challenges and opportunities posed by globalization. He will have special responsibility for creating materials for the Institute's highly visible website and for increasing the Institute's outreach to the media.
Event
Whither Federal Reserve Communications
July 28, 2008
Frederic S. Mishkin, Federal Reserve Board of Governors, presented his views on the implementation of the Federal Reserve's communications strategy at an Institute event. Audio and video of the event are available online.
