Planning the economy
Politicianal interventions rather than markets are causing economic crises in the world. Misguided attempts to centrally plan and manage the complex transactions of millions of different players are bound to produce unexpected results. In 2007-2008, politically inspired intervention in the housing market in the United States caused an international financial crisis of epic proportions. These days, policies of abundant money supply and unrestricted debt promise trouble for the developed countries.
Opinion: Conventional measures give false reassurance on global risk
Conventional measures could be the wrong ones to gauge the risk of a financial shock to the global economy. Imbalances created by cheap money are building up in the economy. A close look at market capitalization, share buybacks, and interest-rate spreads presents a troubling picture.
Scenarios for Europe
Europe’s basic problem is a lack of leadership. In 2017 it is unlikely to solve the root problems at the heart of its malaise: excessive regulation, a lack of competition and innovation, weakening internal cohesion and an inability to address crises efficiently. A new generation of politicians may emerge that pushes for more market-driven solutions, but it will take several more years for them to be able to implement their vision, if at all.
Bad loans are not the worst threat to Italian banks
Italian banks suffer from poor management and a high ratio of nonperforming loans, but except for a handful of the most troubled institutions, their shareholders and bondholders have no reason to worry. Unless further losses emerge as a consequence of a public debt crisis, a catastrophe is not in sight.
Unrealistic expectations of growth lead to wrong decisions
Governments have been ignoring the hard economic facts of life to deliver political dreams which meet the expectations of voters. They have been living in a world of make-believe by failing to deliver the reforms which current economic positions demand but meddling with more and more government intervention. <i>Pol...
Germany emerges as power broker in Greek debt crisis
Fears that Greece’s financial problems could spill over into an international context upsetting the markets proved unfounded as European compromise provided Greece with short-term breathing space. But the Greek saga proved that Germany has the strength and power to drive European policy impacting all other EU members. <...
How bail-in, bailout, and no economic rescue for countries will work in future
Recession may be over in most Western economies but the recovery is still fragile and slow. Sustaining current public debt levels in many European countries is precarious. But central bankers are sending out a confusing and mixed message which is doing nothing to calm the nerves of anxious investors. <i>Banking cris...
Eurozone heads for further financial trouble
The impact of the economic crisis is still being felt in the eurozone with a lack of growth and high unemployment especially among the young. Now the European Central Bank seems to be indicating that it will tackle a deteriorating financial situation in some countries by further cuts in interest rates which could generate yet more problems. ...
Geopolitics: Durban climate change promises fail to deliver
Delegates to COP17, the United Nations climate change conference in Durban, South Africa, extended their annual gathering to try to hammer out an agreement. But what credibility does it have as the developed countries face economic crisis and the developing nations have pressure to grow. Our expert considers the Durban debates from an Indian perspective in this rep...
Economics: Does Russia deserve its place in the BRICS?
The emerging economies of the world are powering ahead using different strategies. But is Russia's performance sufficient for it to hold its place in this special group. GIS expert Professor Stefan Hedlund investigates in this special report. LABELS are needed because they help identify and sell products. But they are als...