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Dr Ivanovitch - MSI Global
Dr. Michael Ivanovitch is an independent analyst focusing on world economy, geopolitics and investment strategy. He served as a senior economist at the OECD in Paris, international economist at the Federal Reserve Bank of New York and taught economics at Columbia Business School. 
Daily updates on world economy
U.S. will avoid recession only if it can control food and energy prices.
Germany’s economic mismanagement is a huge problem for E.U. economy.
U.S.-China relations remain in a deeply hostile competitive mode.
The weak yen is an effort to restore Japan’s export-led growth.

Recent Essays

Peace in Europe Should be America’s First Priority

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 […]

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U.S. Monetary and Fiscal Policies Should Be Coordinated

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 […]

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Trump Needs a Deal with Russia and China to Fix the Economy

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 […]

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Developing East Asian Economies Strongly Focused on Peace and Prosperity

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 […]

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E.U. and China Should not Rush into a Trade War

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 – […]

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Archives

U.S. Federal Reserve Has Added a Problem to America’s Geostrategic Policy

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 […]

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Once the Election’s “Sound and Fury” Is Over, U.S. and China Should Talk About Living Together

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 […]

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U.S. Economy Does Not Need Interest Rate Cuts

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 […]

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U.S. Should Balance Its China Trade and Clarify Bilateral Red Line Issues

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 […]

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West’s Declining Business with China Is Depressing World Trade

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 […]

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Wall Street Says: “The Fed Will Cave In”

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 […]

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The Fed Responds to Relevant Data and Ignores Temper Tantrums

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 […]

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World Economy Is Caught Up in A Broadening Global Conflict

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 […]

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The Dollar Remains the World’s Key Transactions Currency

The role of the dollar as a linchpin of the international monetary system is one of the most debated issues in the post-WWII global economy. Agreements on world trade and finance, adopted at Bretton Woods in July 1944, quickly proved inadequate. The system of fixed (but adjustable) exchange rates, and the fixed price of gold, […]

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The State of the U.S. Economy Is the Central Election Issue

Barring major security problems in the weeks and months ahead, jobs and incomes will stay at the top of people’s concerns in the run-up to November 5 elections. Opinion polls show that those two economic variables, and the quality of economic management, have already determined the voters’ election choices. All that is very different from […]

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