What Makes Mr. Zhang Save?
Wilson Quarterly published in their Summer 2009 edition this argument that it was policy more than culture that explained high savings rates in China, and that these high savings rates would decline sharply in the next few years. I think the issue of high Chinese savings is one of the most confusing issues and one in which there were far too many unsubstantiated and implausibe claims. A shorter version appeared in the South China Morning Post on July 6, 2009.
The G20 Meetings: No Common Framework, No Consensus
Carnegie Brief published in May 2009 the following piece arguing that because the major economic powers have incompatible frameworks for explaining the crisis, and very different domestic political constraints, the G20 meeting was bound to end without a serious plan to resolve the crisis. In this article I was pretty pressimistic that policymakers on either side would come to the necessary agreements any time soon.
Beijing’s Consumption Blues
This March 4, 2009, Wall Street Journal OpEd piece argues that the fiscal stimulus package in China is not helping create net demand.
Now is Not the Time to Attack China
In an OpEd article for the Financial Times on February 17, 2009 I argued that China would have tremendous difficulty in adjusting to the new trade environment.
China’s Great Demand Challenge
Far Eastern Economic Review published this piece in January 2009 on the difficulties facing China as it was forced to adjust to the expected contraction in US demand. It was where I laid out most clearly, I think, my understanding of the challenges facing China as a result of the 2008 crisis.
US and China Must Tame Imbalances Together
On January 6, 2009, YaleGlobal Online published this piece which argues that the two nations must coordinate fiscal and monetary policy to control the crisis they helped create.
Asia Faces a Tough 2009 as Output Decreases
This December 15, 2009 OpEd piece for the Financial Times argues that the crisis will occur in two stages. Frist, the trade deficit countries will see a breakdown in their ability to finance consumption. Second, the contraction in net demand by trade deficit countries would force an ugly contraction in net supply by trade surplus countries.
The Questionable Future of China’s Monetary Regime
In this 2008 Q4 article for the Harvard Asia-Pacific Review I argue that it is already too late for Chinese monetary policy to shift.
Chinese Inflation: It’s Money, Not Pork
I argued in this April 2008 Far Eastern Economic Review piece that the cause of inflation in China was excessively loose monetary policy, not a one-time food-price shock. Those of us in the “money”camp predicted continuing inflation, whereas those in the”pork” camp predicted a gradual decline in inflation. In the end inflation came down sharply by the end of 2008, but rather than confirm the “pork” view, I subsequently argued that the shocking speed with which it declined, in line with other indicators suggesting a collapse in money supply, actually reinforced the “money” camp argument.
China’s Last Option: Let the Yuan Soar
In this June 2007 Far Eastern Economic Review piece I argue that the central bank has already waited too long to adjust the value of the yuan, and that unless they engineered a maxi-revaluation the monetary imbalances were simply going to get worse. They didn’t, and I suspect that by early 2008 it was already too late to do anything about it.
Buying into China’s volatility
This piece, which appeared in Far Eastern Economic Review in January 2007, uses an option framework to explain why bankrupt Chinese banks had such high valuations and how they represent excellent volatility trades on Chinese growth. It is an extension of the framework described in the July 2000 Global Finance article listed below.
Can China Lead the Fight Against Financial Crisis?
A longish article in Caijing, on November 15, 2004, argues that China should take the lead in developing a Minsky-style approach to sovereign liability management.
Re-engineering the Volatility Machine: How the IMF Can help prevent Financial Crises
In my Fall 2003 piece for the World Policy Journal I argued that while no one can prevent financial crises, the IMF, using a Minsky approach to financial instability, can actually play a smarter role in understanding and advising on vulnerabilities to crisis.
Value Judgments: Will Foreign Investors Improve China’s markets?
This November 2003 piece in China Economic Review explains why Chinese markets are speculative and will remain speculative, even with the much vaunted introduction of foreign investors via the QFII program.
Will Globalization Go Bankrupt?
This September 2001 Foreign Policy piece was one of the ones I had most fun writing. I argued that “globalization” — which is characterized by a surge in trade flows, an even greater surge in international capital flows, asset price surges and, most intriguingly, a stage of the industrial revolution — has occurred six times in the past 200 years and has always come to a screeching halt. Besides describing the globalization process, I finish by speculating about what the end of this round of globalization will look like.
Volatility-loving Companies in a Volatility-hating Environment
In my July 2000 Global Finance piece I show how, using an option framework, acquisitions and spin-offs can have what seem like very surprising impacts on underlying value. This framework became one of the basic frameworks I use for understanding the impact of changes in volatility of companies and countries.
The New Dance of the Millions? Liability Management and the Next Debt Crisis
In this July 1998 piece for Challenge: The Journal of Economic Policy, I argued that we were in a very standard liquidity cycle and, like it had always done in the past, this cycle would end in an ugly way. Developing countries would have to prepare their balance sheets for such an event.
The Liquidity Trap: Latin America’s Free-Market Past
The first policy-journal piece I published came out in Foreign Affairs in November 1996. At the time Latin America had just embraced neo-liberal policies to re-energize the economy. These “Washington Consensus” policies, presumably embraced by Latin American countries for the first time, were supposed to end Latin America’s long dalliance with counterproductive industrial policies and would pave the way for a period of long and sustainable growth. In this article I argued that in fact these policies had been tried many times before in Latin American history and had always failed before. I further argued that what had really driven the growth process, and seemed to be doing so again, was liquidity inflows. This article got a lot of attention at the time from left-wing academics and political critics, but was pretty much ignored by my intended audience — policy types in the US and Latin America, investors and journalists who were at the time falling over themselves to proclaim a new era in Latin American history.