This one seems a no-brainer to me. The easiest and quickest way to create global liquidity and enable credit-starved emerging and developing countries to increase their spending is for the IMF to engineer a vast new SDR allocation. It can be done at the stroke of a pen, and it does not require...

One can make a decent argument that the financial crisis has bottomed out in the advanced countries (with the real-economy consequences still to come of course). But it is barely starting in the emerging markets, and it could get much, much worse. Some of these economies are hurt by (now) dec...

Whichever way the Paulson plan goes, it is clear that we are in for a period of heavily regulated finance. The questions are: what type of regulations and how heavily will they be administered? Many commentators have argued that the problem is not one of inadequate or insufficient regulation and...

No, it is not. I am prompted to write this by a piece in today's NYT, which centers around my colleague Ken Rogoff's views on financial globalization and its pitfalls. I think Ken is quite correct in his diagnosis of the problem, but I disagree with him on the policy implications that he draws. ...

A while back, I asked about concrete examples of financial innovation that had made a real difference--a positive one!--to our lives. Paul Volcker has come up with the best answer I have yet heard, but it is not quite what you may have thought: Volcker .. mocked the argument that "financial in...

One important unknown about the fiscal stimulus plan is how much bang for the buck it will provide. Call it the Keynesian multiplier or whatever else you want, the issue is the magnitude of employment and real GDP a given fiscal spending can generate. Much of the discussion about the stimulus ...

by Asim Khwaja, guest blogger The post-9/11 emphasis on Pakistan continues to portray madrassas (religious schools) as a focal point – their rising prevalence the subject of great concern. What is surprising is that this “myth” persists despite evidence to the contrary – that madrassas are in fa...

You don't come here for this kind of stuff, but if you are interested in Turkey, you should read this. And if you also happen to read Turkish, you should then turn here.

I just came back from a conference in Spain, where this was the question on the table. I made the following points. First, expenditure cuts are not going to do the job on their own, unless accompanied by policies targeted directly at improving competitiveness. Second, "structural reforms" (which...

My latest Project Syndicate piece argues that the world economy has handled the financial shock rather well so far, but that the real test for globalization is yet to come. History teaches that global economic order is difficult to establish and maintain in the absence of a dominant economic ...

There are a few things that suddenly ignite my urge to blog again. This piece a couple of days ago by Dominique Strauss-Kahn urging nations to coordinate their approaches to financial regulation almost did it. Here is a little excerpt: Imagine a financial holding company that owns a commercia...

In the world of economics and finance, revolutions occur rarely and are often detected only in hindsight. But what happened on February 19 can safely be called the end of an era in global finance. On that day, the International Monetary Fund published a policy note that reversed its long-held po...

OK, many of you have asked but I knew that I had to put in an explanation for my continued absence here when my mother in Turkey complained that she missed the "postcards" from me on the blog. I am alive and well. But here are two reasons why this space will not be updated frequently over the...

Germany. Financial meltdown has been averted in Europe – for now. But the future of the European Union and the fate of the eurozone still hang in the balance. If Europe doesn’t find a way to reactivate the continent’s economy soon, it will be doomed to years of gloom and endless mutual recrimina...

My last post left a few loose ends, so let me clarify and amplify. First, Albert Hirschman is very much with us, although in failing health. He could not attend yesterday's event in his honor, although his wonderful wife Sarah Hirschman and many members of the Hirschman family were there. It was...

Well at least a couple of them. I gave a talk with this name at LSE the other day, which was extremely well attended. I am not happy with the title at all, which as I joked, makes me sound like a Tom Friedman wannabe. But it does capture a couple of key ideas I was trying to get across: the m...

The Greek crisis is yet another manifestation of the political trilemma of the world economy: economic globalization, political democracy, and the nation-state are mutually irreconcilable. We can have at most two at one time. Read the rest here.

British Prime Minister Gordon Brown promotes it as a vehicle for creating high-skill jobs. French President Nicolas Sarkozy talks about using it to keep industrial jobs in France. The World Bank’s chief economist, Justin Lin, openly supports it to speed up structural change in developing nations...

but unfortunately, not anytime very soon! If you want to read a good book in the meantime, read this.