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RealTime Economic Issues Watch

A website forum in which senior fellows of the Peterson Institute for International Economics discuss and debate their responses to global economic and financial developments as they occur each day and offer insights that others might overlook.

Global Financial Crisis

Views on the current crisis in global financial markets, their impact on the real economy and the public policy choices confronting the United States and other countries.

The Speech for Which We Have Been Waiting

by Simon Johnson | March 11th, 2010 | 03:15 pm

For nearly two years now we have waited for a speech. We need a simple speech and a direct speech—most of all a political speech—about what exactly happened to our financial system, and therefore to our economy, and what we must do to make sure it can never happen again.
President George W. [...]

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European Carbon Tax? European Monetary Fund? It Could Be a Marriage Made in Crisis Heaven

by Jacob Funk Kirkegaard | March 11th, 2010 | 10:28 am

Lacking the policy instruments to deal with Greece and other economic crises, some in Europe have floated the idea of a European Monetary Fund (EMF) as an institutionalized “European solution” to such situations. However, any new EU or—more likely—eurozone institution faces some formidable political obstacles, which rule out an EMF [...]

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Governor Gjedrem’s Critique of the G-20: A Response

by Edwin M. Truman | March 10th, 2010 | 10:24 am

On February 25, Bank of Norway Governor Svein Gjedrem delivered an interesting and important speech at the Peterson Institute for International Economics. He analyzed and critiqued multilateral approaches to today’s global economic challenges. He advocated: (1) effective collaboration by the systemically important countries; (2) anchoring such collaboration in a [...]

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Greece, Act III—Athens’s Leverage versus Eurozone Solidarity?

by Jacob Funk Kirkegaard | March 5th, 2010 | 04:31 pm

In the latest phase of its financial melodrama, Greece successfully placed a €5 billion 10-year government bond in the financial markets on Thursday (March 4). The bond issue was heavily oversubscribed, but it still produced a high yield of approximately 6.3 percent (or approximately 300 basis points above the [...]

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Treasury’s Disappointing Performance on Capitol Hill

by Simon Johnson | March 4th, 2010 | 05:00 pm

The campaign to convince people that Treasury is serious about banking reform—led sometimes by President Obama—suffered a major blow Thursday on Capitol Hill. In testimony to the Congressional Oversight Panel, Assistant Secretary for Financial Stability and “Counselor to the Secretary” Herb Allison said, “There is no too big to fail [...]

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