Advanced Economies

  • Article

    Painful Euro Crisis and Lessons for the World – Part I

    by Jacob Funk Kirkegaard | November 16, 2011 Jacob Funk Kirkegaard identifies four overlapping euro crises: weak regulatory institutions, undercapitalized banks, uneven competitiveness and contagion. Kirkegaard warns that that there is no easy fix – the world can expect the drawn-out containment efforts of the past 18 months to continue. If the reforms succeed, Europe will be a more tightly integrated union, but one cannot rule out failure either.

  • Note

    Why the Euro Doomsayers Are Wrong

    by Jacob Funk Kirkegaard | November 15, 2011 The key issue is how the European Central Bank (ECB)—noncommittal in its intentions but still the only institution in Europe (or elsewhere) with the resources to credibly prevent financial contagion—plays its hand.

  • Note

    Europe’s New Message: My Way or the Drachma Highway

    by Jacob Funk Kirkegaard | November 4, 2011 The drama surrounding Prime Minister George Papandreou’s proposal to hold a referendum on Greece’s acceptance of its bailout package, followed by his change of mind, has had the positive outcome he apparently intended. Though messy, his tactics have broadened the political support for the International Monetary Fund (IMF) reform program in Greece.

  • Note

    Papandreou’s Risky Gambit to Spread the Burden of Austerity

    by Jacob Funk Kirkegaard | November 1, 2011 The stunning decision by Prime Minister George Papandreou to send the recent deal with Greece to a popular referendum has thrown markets into turmoil, roiled the Greek political world, and cast fresh doubt on the viability of the rescue plan for Europe as a whole.

  • Note

    Europe’s Forward Step - But No End to Volatility

    by Jacob Funk Kirkegaard | October 31, 2011 What did the euro leaders decide at 4 a.m. on Thursday morning? Given the lack of details, it might be too early to tell. But the announcement at the Euro Summit takes Europe closer than ever to a "comprehensive deal" that addresses all the relevant problem areas: Greece, the faltering European banking sector, institutional reform in Europe and – implicitly at least – that EU bazooka that is supposed to prevent the spread of contagion from the periphery to the core of Europe.

  • Note

    The ECB: Using a Crisis to Maximize Leverage

    by Jacob Funk Kirkegaard | October 14, 2011 Paraphrasing Donald Rumsfeld, the former Defense Secretary, you fight a financial crisis with the institutions you have, not the institutions you might want. No doubt Europe went into its current financial and sovereign debt crisis woefully under-institutionalized. In effect, Europe was flying on just one motor—the European Central Bank (ECB), the only institution able to respond powerfully and in real time.

  • Note

    Energy Poverty American Style

    by Trevor Houser and Shashank Mohan | September 26, 2011 The term “energy poverty” is used to describe the 1.6 billion people in the developing world who lack access to electricity or the more than 2 billion who still rely on biomass as their primary source of energy. This phenomenon presents a significant barrier to economic growth in poor countries. But data released last week from the Census Bureau points to a new kind of energy poverty taking place here in the United States as the result of high oil prices and a weak economic recovery.

  • Article

    Europe's Debt Crisis: Five Ways It's Been Put to Good Use

    by Jacob Funk Kirkegaard | September 6, 2011 In five critical ways, the European debt crisis and the ensuing reforms will make the EU far better equipped to face long-term political and economic challenges.