For those interested in policy coordination and exchange rate policy, last week was both entertaining and informative. U.S. Treasury official Lael Brainard’s G-20 background briefing last Monday, interpreted by some as signaling a green light to Japan for further yen depreciation in support of growth, was followed by statements that seemed to repudiate, support, then reinterpret the statement. The result was significant volatility in foreign exchange markets. I suspect that was the opposite of what was intended. Beyond the noise, events last week signal a policy environment where countries have great latitude to take measures that have significant effects on exchange rates. “Currency wars” is hyperbole, but it’s capturing something real.
Jeremy Stein’s speech today–“Overheating in Credit Markets: Origins, Measurement, and Policy Responses”–provides valuable insight on the issue of credit bubbles that could result as a consequence of current Federal Reserve policy. As such, it speaks to the upcoming debate over the Fed’s exit strategy. It’s a must read.
My colleagues Daniel Ahn and Michael Levi are out today with a new look at the case for an oil tax. While an oil tax has little traction on the Hill, many economists favor it. Arguments for the tax usually include its efficiency (demand is relatively insensitive to price in the near term and it can be broadly applied) and its ability to account for environmental externalities.
If you are interested in the frontier thinking of European debt restructuring, you need to read the latest from Buchheit, Gulati, and Tirado. In it, they propose an amendment to the European Stability Mechanism (ESM) that would make future European restructurings easier by strictly limiting the rights of holdout creditors. It’s designed with an eye to the smaller countries of Europe, which have significant debt issued under foreign law. With the prospect of a restructuring in Cyprus on the horizon, and concerns about debt sustainability across the periphery, it’s a timely proposal. While a treaty change seems far fetched, some European policymakers will find it appealing. That doesn’t mean it’s good policy.
Macro and Markets examines the forces influencing the global economy, macroeconomic policies, and financial markets.
In The Hacked World Order, CFR Senior Fellow Adam Segal shows how governments use the web to wage war and spy on, coerce, and damage each other. More
Red Team provides an in-depth investigation into the work of red teams, revealing the best practices, most common pitfalls, and most effective applications of these modern-day devil's advocates. More
Through insightful analysis and engaging graphics, How America Stacks Up explores how the United States can keep pace with global economic competition. More
India now matters to U.S. interests in virtually every dimension. This Independent Task Force report assesses the current situation in India and the U.S.-India relationship, and suggests a new model for partnership with a rising India.
Rates of heart disease, cancer, diabetes, and other noncommunicable diseases (NCDs) in low- and middle-income countries are increasing faster than in wealthier countries. The report outlines a plan for collective action on this growing epidemic.
This report asserts that elevating and prioritizing the U.S.-Canada-Mexico relationship offers the best opportunity for strengthening the United States and its place in the world.
Williams argues that the status quo for peace operations in untenable and that greater U.S. involvement is necessary to enhance the quality and success of peacekeeping missions.
The authors argue that the United States has responded inadequately to the rise of Chinese power and recommend placing less strategic emphasis on the goal of integrating China into the international system and more on balancing China's rise.
Campbell evaluates the implications of the Boko Haram insurgency and recommends that the United States support Nigerian efforts to address the drivers of Boko Haram, such as poverty and corruption, and to foster stronger ties with Nigerian civil society.