There are some early signs that the incoming U.S. administration will pay more attention to the part of its economy that accounts for one-third of demand and output. In a recent discussion with the Canadian prime minister, President-elect Trump raised the question of Washington’s large and systematic trade deficits with its North American neighbors. What […]

The three largest countries of this rapidly expanding organization have accelerated their drive toward closer and more comprehensive economic, political and strategic cooperation. The ongoing consultations show their concern that vast areas of mutual relations are inadequately covered, and that their policy coordination mechanisms should be more actively used in an unfolding multipolar world. One […]

Cutting U.S. budget deficits, maintaining price stability and running a steadily growing economy is impossible under conditions of intensifying military operations in Europe, widening Middle East hostilities and dangerously rising tensions in East Asia. Europe is the best place to start untangling that Gordian knot. And in this epochal confrontation between the U.S. and its […]

Barring an inflation flareup, or an unlikely sudden weakness of the U.S. economy, the next interest rate change should wait until the meeting of the Federal Reserve’s (Fed’s) policy setting committee on March 18-19, 2025. That would give enough time to incoming legislative and executive authorities to decide on the future course of fiscal policy […]

A key currency open economy, with a third of its GDP generated in the external sector, cannot rebalance aggregate demand on a steady and sustained growth path by restricting its participation in global commerce and finance. America’s incoming administration is facing excessive budget deficits (8% of GDP), a runaway public debt ($36 trillion, 123% of […]

After a 6% economic growth last year, this part of the developing world -- consisting of China, India, Indonesia, Malaysia, the Philippines, Thailand and Vietnam -- remains the fastest growing segment of global economy. And that will also be the case this year. Despite an expected slowdown to a 5.5% growth, the developing East Asia […]

Trade has been the foundation of a European peace project after Germany led Europe twice during the last century to largest losses of lives the humanity has ever known. A fledgling customs union of six nations, founded by the Treaty of Rome on March 25, 1957, followed a successful European Steel and Coal Community – […]

An excessive and totally unnecessary U.S. interest rate cut last September has stored a problem of price instability for the next American government facing a runaway public debt, huge budget deficits and unprecedented challenges to world peace and security. The Fed’s procyclical move is a major policy error. A credit easing of the magnitude usually […]

And when that moment comes, Washington and Beijing will not be reinventing the wheel of a peaceful and productive modus vivendi. The two countries’ presidents talked -- and apparently agreed – about all those key issues during their meeting in Bali, Indonesia, on November 14, 2022. The same bilateral problems were reviewed, and updated, during […]

A 25-basis points interest rate cut this week is in the bag. But, as always, financial markets’ greed is pushing for more, prodding the Fed to “go big” -- with another quarter point bonanza. Traders have already taken some key U.S. money market rates in that direction. Will the Fed cooperate? Anything can happen in […]

Washington has blissfully ignored decades of systematic and excessive trade deficits on its merchandize trade with China. And during that time, Beijing has tirelessly lectured Washington to embrace the mantra of the “win-win cooperation” instead of a “zero sum game” of another era. Here are some numbers to show what’s at stake. Over the last […]

During most of the last decade, there was a perfect correspondence between the annual averages in the growth of world economy (3.4%) and the global trade transactions (3.4%). Last year, that relationship broke down: the world economy grew 3.3% while the volume of world trade declined 3% to a total of $31 trillion. The fact […]

That’s the reaction I got in late 1980s from one of my Wall Street contacts. Armed with a reasonably good knowledge of economics, money and banking theory and some common sense, I argued that the U.S. Federal Reserve System (the Fed) had no reason to cut interest rates to please Wall Street traders. At this […]

A badly mismanaged U.S. economy is now going through a cyclical adjustment marked by an extremely expansionary fiscal policy, price rigidities and trade flows in a world split along increasingly bellicose security fault lines. That is the general setting in which the policy making committee of the American central bank (the Fed) has to make […]

None of the currently active war theaters is nearing a peaceful conclusion. Sadly, they are becoming intractably expanding bloodbaths or uncompromising fields of confrontation. It has been decades now that the Middle East war ceased to be synonymous with Arab-Israeli fighting. The Iran-Iraq war in the 1980s lit up the fuse that led to American […]