Kevin P. Gallagher
Part of a Triple Crisis series leading up to the Nov. 11-12 G-20 meetings.
Part two of Triple Crisis blogger Kevin Gallagher’s interview with the Real News Network on why many developing countries are adopting capital controls as a countermeasure to the Fed’s proposed quantitative easing and why the IMF is supporting them.
Watch part one of the interview at the Real News Network. Read more on Gallagher’s work on capital controls and foreign investment.
Michael Prowse, Guest Blogger
Part of a Triple Crisis series leading up to the Nov. 11-12 G-20 meetings.
Whenever liberal policymakers make a serious plea for global economic cooperation, it elicits a knee-jerk reaction from conservatives. Don’t interfere with free markets which require freely adjusting exchange rates.
Tim Geithner’s proposed numerical targets for current account deficits and surpluses met just this response. And Chinese communists, ironically, allied themselves with traditional conservatives. Cui Tiankai, a Chinese deputy foreign minister and leading G-20 negotiator, said the 4 per cent proposed ceiling for surpluses and deficits harked back “to the days of planned economies”.
Kevin P. Gallagher
Part of a Triple Crisis series leading up to the Nov. 11-12 G-20 meetings.
In response to his opinion article in the Guardian, Triple Crisis blogger Kevin Gallagher was interviewed by the Real News Network on the consequences of the Fed’s proposed quantitative easing and its implications for G-20 leaders currently trying to prevent a “currency war” at the Seoul summit.
Read more on Gallagher’s work on capital controls and foreign investment.
Matías Vernengo
Part of a Triple Crisis series leading up to the Nov. 11-12 G-20 meetings.
The expectations for the meeting of the world leaders where huge, but when they gathered no agreement was reached on currency wars, commodity prices or demand stimulus. As it should be clear, I am not making a prediction about the forthcoming G-20 meeting, but just recalling the failed London Economic Conference, held in the summer of 1933, at the peak of the Great Depression. Contrary to conventional wisdom, which argues that the conference failed because it was unable to reestablish a credible Gold Standard, the main mistake in London was the incapacity to provide a framework for global expansion, in part as a result of British incapacity, in part as a result of American unwillingness as noted by Charles Kindleberger.
Bhumika Muchhala, Guest Blogger
Part of a Triple Crisis series leading up to the Nov. 11-12 G-20 meetings.
Ahead of the Group of 20 (G-20) industrial and developing nations summit meeting in Seoul this week, a plethora of dysfunctions and imbalances in the world economy are revealing themselves in a showdown between surplus and deficit countries. Reaching beyond the power-play ensuing on the G-20 stage, specific fault lines come to light, such as the growth strategies pursued by emerging economies across Asia, which have come to depend excessively on international capital flows and exports to advanced economies (AEs).
Stephany Griffith-Jones
Part of a Triple Crisis series leading up to the Nov. 11-12 G-20 meetings.
Triple Crisis is pleased to welcome Professor Stephany Griffith-Jones, Director of the Financial Markets Program at the Initiative for Policy Dialogue at Columbia University, as a regular contributor.
It seems that currency issues will dominate discussions in the G-20 meetings in Seoul. This is an important subject, but one that is being tackled incorrectly, as Jane D’Arista so clearly sets out in her blog.
The issues of imbalances and exchange rates relate mainly to the pattern of global growth, clearly a significant theme. But far more important in the short term, especially for poorer people both in developed and in developing countries, is to have MORE growth than current policies in developed countries will assure.
C.P. Chandrasekhar
Part of a Triple Crisis series leading up to the Nov. 11-12 G-20 meetings.
Triple Crisis blogger C.P. Chandrasekhar was interviewed by Newsclick on the ongoing “currency wars” between the US, China, and other developing countries. This contentious issue will be a priority for many leaders attending this week’s G-20 meetings in Seoul.
Gerald Epstein
Part of a Triple Crisis series leading up to the Nov. 11-12 G-20 meetings.
Triple Crisis blogger Gerald Epstein was interviewed by the Real News Network on the recent focus on China’s monetary policy in US politics and media. He asks whether this currency war is a diversion from the real problems facing US economy.
Nancy Alexander, Guest Blogger
Part of a Triple Crisis series leading up to the Nov. 11-12 G-20 meetings.
The G-20 aims to accelerate the global recovery through a global economic rebalancing process which, among other things, requires consumers in advanced deficit countries, such as the U.S., to cut spending and consumers in emerging surplus countries, such as China, to expand spending.
To accomplish this, the G-20 countries committed themselves to certain policies and asked the IMF to track their implementation through a “Mutual Assessment Process” (MAP). However, the MAP may take countries to a dead end for several reasons.
Kevin P. Gallagher
Part of a Triple Crisis series leading up to the Nov. 11-12 G-20 meetings.
Kevin P. Gallagher published the following opinion article on the US Federal Reserve’s approval November 3 of further “quantitative easing” to stimulate the US economy, which has implications for next week’s G-20 meeting of world leaders.
To no one’s surprise, the Federal Open Market Committee has sanctioned another round of quantitative easing – or “QE2”, as it is fashionably referred to. The Fed’s QE2 may not have the desired effect on the US economy, but will certainly accentuate currency tensions in the developing world. So, the US should not be surprised when its proposals to fix global finance are met with stiff resistance at the G20 meeting next week.
To its credit, the US Fed seems to be the sole believer (with any power) in the need for expansionary policies in the United States. The outcome of the US midterm elections has tied the hands of the government to engage in expansionary fiscal policy. The Fed alone has the power to act.
Read the full article at the Guardian.
Read more on Gallagher’s work on capital controls and foreign investment. And follow the debates over G-20 policies in our Spotlight G-20 series, with contributions by Ilene Grabel, Ha-Joon Chang, Jane D’Arista, Sarah Anderson and others.