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Renewing America

Ideas and initiatives for rebuilding American economic strength.

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Politics-Proof Economies?

by Michael Spence
Federal workers demonstrate for an end to the U.S. government shutdown on the west front of the U.S. Capitol in Washington, October 13, 2013 (Jonathan Ernst/Courtesy Reuters). Federal workers demonstrate for an end to the U.S. government shutdown on the west front of the U.S. Capitol in Washington, October 13, 2013 (Jonathan Ernst/Courtesy Reuters).

This post was co-authored with David Brady, Deputy Director and Senior Fellow at the Hoover Institution and Professor of Political Science at Stanford University.

MILAN–Governments’ inability to act decisively to address their economies’ growth, employment, and distributional challenges has emerged as a major source of concern almost everywhere. In the United States, in particular, political polarization, congressional gridlock, and irresponsible grandstanding have garnered much attention, with many worried about the economic consequences. Read more »

Overshooting in Emerging Markets

by Michael Spence
Chinese banknotes are seen at a vendor's cash box at a market in Beijing February 14, 2014 (Kim Kyung-Hoon/Courtesy Rueters). Chinese banknotes are seen at a vendor's cash box at a market in Beijing February 14, 2014 (Kim Kyung-Hoon/Courtesy Rueters).

Until relatively recently, countries’ so-called middle-income transitions were largely ignored–in part because what was supposed to be a transition often became a trap. A few economies in Asia–particularly Japan, South Korea, and Taiwan–sailed through to high-income status with relatively high growth rates. But the vast majority of economies slowed down or stopped growing altogether in per capita terms after entering the middle-income range. Read more »

The Real Challenges to Growth

by Michael Spence
A man looks down as he waits in line to enter a government-run employment office in Madrid (Sergio Perez/Courtesy Reuters). A man looks down as he waits in line to enter a government-run employment office in Madrid (Sergio Perez/Courtesy Reuters).

Advanced economies’ experience since the 2008 financial crisis has spurred a rapidly evolving discussion of growth, employment, and income inequality. That should come as no surprise: For those who expected a relatively rapid post-crisis recovery, the more things stay the same, the more they change. Read more »

The Distributional Challenge

by Michael Spence
A pedestrian looks at an electronic board displaying various stock prices outside a brokerage in Tokyo (Yuya Shino/Courtesy Reuters). A pedestrian looks at an electronic board displaying various stock prices outside a brokerage in Tokyo (Yuya Shino/Courtesy Reuters).

Assessing the recent past and looking forward to the near term is a natural end-of-year exercise. When it comes to the global economy in 2013 and 2014, it may well be a necessary one as well.

In the past year, systemic risk declined. Europe came together around the need to stabilize the eurozone, with the European Central Bank and Germany playing the leading roles. Read more »

2013 By the Numbers: The Good, the Bad, and the Ugly

by Edward Alden
The numbers "2013" are illuminated atop 1 Times Square (Gary He/Courtesy Reuters). The numbers "2013" are illuminated atop 1 Times Square (Gary He/Courtesy Reuters).

As 2013 fades into 2014, it seems like a good time to do a quick performance check on the United States. CFR’s Renewing America initiative is premised on the understanding that the United States’ ability to influence world events rests on a robust, competitive economy. While any given year is at best a snapshot in a very long game, some of the numbers from this year are nonetheless quite striking (and more on the positive side than not). And so, with apologies to Clint Eastwood, my snap assessment. Read more »

What’s Stopping Robust Recovery?

by Michael Spence
People walk past screens at the bourse in Madrid, as they are reflected on the surfaces of tables (Andrea Comas/Courtesy Reuters). People walk past screens at the bourse in Madrid, as they are reflected on the surfaces of tables (Andrea Comas/Courtesy Reuters).

MILAN – The growth map of the global economy is relatively clear. The U.S. is in a partial recovery, with growth at 1.5 to 2 percent and lagging employment. Europe as a whole is barely above zero growth, with large variations among countries, though with some evidence of painful re-convergence, at least in terms of nominal unit labor costs. China’s growth, meanwhile, is leveling off at 7 percent, with other developing countries preparing for higher interest rates. Read more »

New Zealand Offers Lessons for the U.S. Housing Bubble

by Renewing America Staff
New Zealand resident Brett Plumer nails a national flag to his house in Auckland (Bogdan Cristel/Courtesy Reuters). New Zealand resident Brett Plumer nails a national flag to his house in Auckland (Bogdan Cristel/Courtesy Reuters).

The Federal Reserve may have lessons to learn from New Zealand about managing a mortgage market. In an op-ed for Bloomberg, CFR Adjunct Senior Fellow Peter Orszag explains that by imposing limits on high loan-to-value mortgages, the Reserve Bank of New Zealand is helping to manage housing prices.

The Government Shutdown: Tell Me How This Ends

by Edward Alden
National Park Service employee Richard Trott places a sign barring visitors to the Lincoln Memorial in Washington on October 1, 2013 (Jason Reed/Courtesy Reuters). National Park Service employee Richard Trott places a sign barring visitors to the Lincoln Memorial in Washington on October 1, 2013 (Jason Reed/Courtesy Reuters).

Now that the government has actually shut down, the conventional wisdom is that it will be fairly short. The House Republicans, realizing they have overplayed their hand and are on the wrong side of public opinion, will back down and accept a clean, short-term continuing resolution to get the government back to work. I am not so optimistic. Read more »

The Blurry Frontiers of Economic Policy

by Michael Spence
A man walks past displays of the Japanese yen's exchange rates against the U.S. dollar and the euro in Tokyo on May 2, 2012 (Kim Kyung-Hoon/Courtesy Reuters). A man walks past displays of the Japanese yen's exchange rates against the U.S. dollar and the euro in Tokyo on May 2, 2012 (Kim Kyung-Hoon/Courtesy Reuters).

Milan — Around the world, policies, technologies, and extended learning processes have combined to erode barriers to economic interaction among countries. Pick any indicator: trade relative to global GDP, capital flows relative to the global capital stock, and so forth – all are rising. Read more »

Decision Time for the Global Economy

by Michael Spence
A construction worker looks at the Pudong financial district in Shanghai (Carlos Barria/Courtesy Reuters). A construction worker looks at the Pudong financial district in Shanghai (Carlos Barria/Courtesy Reuters).

Milan – In the dog days of summer, Milan is quieter than many European cities. The locals are away, and, unlike Paris or Rome, tourists do not take their place. Here and elsewhere, people, businesses, governments, and markets take a break, decompress, and reflect. Europe’s economic problems will still be here, waiting for us, in September. Read more »