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The augmented misery index for the second half of 2011 improved dramatically compared with the first half, largely reflecting the sharp decrease in “headline” consumer price index and the biggest increase in housing prices since the end of 2009, write Gary Clyde Hufbauer and Woan Foong Wong. Listen to related interview.

Simon Johnson testifies that if big banks are allowed to gamble with proprietary trading, their losses will ultimately be borne by the American taxpayer.

Rather than imposing taxes on foreign corporations, congress should focus on corporate tax reform that puts US companies on the same competitive playing field as their foreign rivals, writes Gary Clyde Hufbauer. Policy Brief 12-3.

The latest semiannual estimates of fundamental equilibrium exchange rates (FEERs) by William R. Cline and John Williamson find that modest appreciation of the renminbi against the dollar, combined with higher inflation in China than in the United States, has narrowed the undervaluation of the Chinese currency from 16 percent in April to 11 percent in late October. Policy Brief 11-18. Listen to related interview China's Currency: Modest Appreciation but Still Undervalued.

Anders Åslund writes that the Gaidar Forum offers a good overview of Russia's current ongoing economic policy discussion.

Peterson Perspectives Interviews

 Economic Crisis in Egypt: Enter the IMF

with Mohsin S. Khan

 Ratcheting Up Economic Pressure on Iran II

with Mohsin S. Khan | Transcript [pdf]

 Ratcheting Up Economic Pressure on Iran I

with Jeffrey J. Schott | Transcript [pdf]

Gary Clyde Hufbauer and Julia Muir assess whether latest developments in Japan's postal reform legislation represent true reform or will camouflage an entrenchment of Japan Post's formidable monopoly powers. Policy Brief 12-2.

Edwin M. Truman examines three interrelated steps through which the international monetary system [pdf] can and should be improved: surveillance, adjustment and reserve accumulation, and an institutionalized global swap network. See also Policy Brief 11-19.

Recent adjustments to the US regulatory framework, including the Dodd-Frank Wall Street Reform and Consumer Protection Act, have not fixed the core problems [pdf] that brought the United States to the brink of complete catastrophe in fall 2008, testifies Simon Johnson.

Edwin M. Truman investigates the purpose of Asian regional policy coordination and whether Asian regional policy coordination will come to replace or complement global policy coordination. Working Paper 11-21.

The main goal of those who wish to democratize Russia should be to break the power of the corrupt elite, writes Anders Åslund.

Edmund Malesky, Dimitar Gueorguiev, and Nathan Jensen show that openness to foreign investment can have differential effects on corruption, even within the same country and under the exact same domestic institutions over time. Working Paper 11-20.

At the United Nations climate change conference in Copenhagen in 2009 and Cancun in 2010, the United States joined other developed countries in pledging to mobilize $100 billion in funding to help developing countries reduce greenhouse gas emissions. Trevor Houser and and Jason Selfe argue in Working Paper 11-19 that Washington's best hope is to use limited public funds to leverage private sector investment through bilateral credit agencies and multilateral development banks.

New Book: The Arab Economies in a Changing World, Second Edition
by Marcus Noland and Howard Pack

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Policy Brief The European Crisis Deepens
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North Korea: Witness to Transformation Heijo Photo Collection
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Book Sustaining China's Economic Growth after the Global Financial Crisis
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RealTime Economic Issues Watch How Euro Brinkmanship Is Beginning To Succeed
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Event Sustaining China's Economic Growth after the Global Financial Crisis

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Most recently posted material.

Peterson Perspectives Interview Will French Voting Test Franco-German Ties?
Nicolas Veron — February 7, 2012
Nicolas Véron assesses the contest between President Nicolas Sarkozy and the socialist Francois Hollande, and the implications for European integration.

Op-ed Europe's New Fiscal Compact Treaty Does Not Outlaw Keynesianism and Is a Stepping Stone to More Progress
Jacob Funk Kirkegaard — February 6, 2012
In record time since the idea was first mulled over at the EU Council on December  9, 2011, Europe has compiled a new fiscal compact treaty. Angela Merkel called it a "masterpiece" on the night of its final approval on January 30. It is perhaps unsurprising, though, that not everyone agrees. Many policymakers and economists—particularly those in English-speaking or peripheral European countries—have quickly dismissed the new fiscal compact treaty as an economic disaster for Europe that, true to caricatures of German policies, forever outlaws Keynesian countercyclical policies.

Peterson Perspectives Interview Taking the Measure of China's Future Leader
Nicholas R. Lardy — February 6, 2012
Nicholas R. Lardy says the United States will use the visit of Vice President Xi Jin Ping to assess where US-China relations are going in the next decade.

Peterson Perspectives Interview Is Europe's Shadow Lifting from the United States?
Jacob Funk Kirkegaard — February 3, 2012
Jacob Funk Kirkegaard argues that the latest progress in solving the euro debt crisis is easing the threat of damage to the fragile US recovery.

China Economic Watch Can Affordable Housing Sustain China’s Economic Growth?
Nicholas Borst — February 3, 2012
China’s affordable housing program is considered by many to be a ray of hope in what is otherwise a bleak property market. CLSA’s China Macro Strategist Andy Rothman was memorably quoted as being comp ...

RealTime Economic Issues Watch How Euro Brinkmanship Is Beginning To Succeed
Jacob Funk Kirkegaard — February 3, 2012
European Union leaders had the umpteenth euro crisis summit at the end of January. Indeed the EU Council meets so often that the descriptions of these gatherings should be changed from "yet another summit" to "back in session." The slide to near-permanent policymaking has occurred as the ...

RealTime Economic Issues Watch The Markets’ Favorable Response to Italy’s Major Steps Ahead
Juan Carlos Martinez Oliva — February 3, 2012
Since December, Premier Mario Monti of Italy has taken several steps that appear to have improved market confidence in the country’s ability to repay its debt, thereby raising hopes that Italy can recover from its financial and economic crisis. Parliamentary approval of an additional p ...

Event Congressional Testimony: The Outlook for the Eurozone
C. Fred Bergsten and Simon Johnson —February 2, 2012
C. Fred Bergsten and Simon Johnson testify before the US Senate.

Peterson Perspectives Interview Economic Crisis in Egypt: Enter the IMF
Mohsin S. Khan — February 1, 2012
Mohsin S. Khan discusses why Egypt has reluctantly turned to the International Monetary Fund for help and the outlook for negotiations to rescue its economy.

News Release New Book by Nicholas Lardy Argues China Must Adopt New Growth Model
February 1, 2012
WASHINGTON—China has emerged successfully from the global financial and economic crisis but must nonetheless undertake fundamental reforms to sustain its economic growth and help the rest of the world recover, a new book by ...

Event Sustaining China's Economic Growth after the Global Financial Crisis
Nicholas R. Lardy —February 1, 2012
The Peterson Institute released its new book, Sustaining China's Economic Growth after the Global Financial Crisis, on February 1, 2012. The study, by Senior Fellow Nicholas R. Lardy, focuses on how the Chinese government's financial, exchange rate, and pricing policies have led to growing internal and external imbalances. Lardy argues that China must adopt a fundamentally new model to continue economic growth, avoid the accumulation of unsustainable asset positions, and contribute to the rebalancing of the global economy.

Congressional Testimony The Outlook for the Euro Crisis and Implications for the United States
C. Fred Bergsten — February 1, 2012
The economic and financial problems in the euro area are clearly serious and plentiful. The area is in the midst of multiple, frequently overlapping, and mutually reinforcing crises. A fiscal crisis is centered on Greece but visible across the southern euro area and Ireland. A competitiveness crisis is manifest in large and persistent current account deficits in the euro area periphery and even larger current account imbalances. A banking crisis was first evident in Ireland but has now spread throughout the area via accelerating concerns over sovereign solvencies.

Congressional Testimony Outlook for the Euro Area
Simon Johnson — February 1, 2012
Successive plans to restore confidence in the euro area have failed. The market cost of borrowing is at unsustainable levels for euro banks and a significant number of governments. Two major problems loom over the euro area. First, the introduction of sovereign credit risk has made nations, and subsequently banks, effectively insolvent unless they receive large-scale bailouts. Second, the ensuing credit crunch has exacerbated difficulties in the real economy, causing Europe's periphery to plunge into recession. This has increased the financing needs of troubled nations well into the future.

RealTime Economic Issues Watch How to Discourage Currency Manipulation: Tax It Heavily
Joseph E. Gagnon — January 31, 2012
Federal Reserve Chairman Ben Bernanke recently said that Chinese currency manipulation "is blocking what might be a more normal recovery process." In fact, the problem goes beyond China to include many other emerging economies and even a few advanced economies. Altogether, governments in thes ...

Speech Unraveling the Euro Crisis
Edwin M. Truman — January 31, 2012
I chose my title, Unraveling the Euro Crisis, with the thought that the question on everyone's mind is whether the euro will unravel. To answer that question one must identify where Europe was before the crisis in order to help unravel the strands of the crisis.