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1712. What Bond Markets Can Learn from Argentina
- Author:
- Anna Gelpern
- Publication Date:
- 04-2005
- Content Type:
- Working Paper
- Institution:
- Peterson Institute for International Economics
- Abstract:
- Argentina has completed the largest and most complex sovereign bond restructuring in history. Before the debt exchange, it owed about $82 billion in principal and $20 billion in past due interest. Hundreds of thousands of creditors held 150 kinds of defaulted instruments issued in six currencies under the laws of eight jurisdictions. Creditors owed just over 76% of the total, or $62 billion, got $35 billion in new performing bonds. Other performing debt includes $40 billion in domestic and about $30 billion in multi-lateral obligations. Argentina left behind almost $25 billion in defaulted principal and interest.
- Topic:
- Development, Economics, and International Trade and Finance
- Political Geography:
- Argentina and South America
1713. China's Role in the Revived Bretton Woods System: A Case of Mistaken Identity
- Author:
- Nicholas R. Lardy and Morris Goldstein
- Publication Date:
- 03-2005
- Content Type:
- Working Paper
- Institution:
- Peterson Institute for International Economics
- Abstract:
- According to a popular argument put forward by three Deutsche Bank economists (Dooley, Folkerts-Landau, and Garber, here after DFG), one needn't worry about the sustainability of either the large US current account deficit or the undervalued exchange rates of a group of Asian economies (Dooley, Folkerts-Landau, and Garber 2003, 2004a, 2004b, 2004c; Folkerts-Landau 2004). In their view, the United States and the Asian economies have entered into an implicit contract—the so-called revived Bretton Woods system (hereafter BW2)—that can comfortably carry on for another decade or two, with significant net benefits to both parties.
- Topic:
- Economics and International Trade and Finance
- Political Geography:
- United States, China, and Asia
1714. US Trade Policy in 2005
- Publication Date:
- 02-2005
- Content Type:
- Working Paper
- Institution:
- Peterson Institute for International Economics
- Abstract:
- Some time ago, Fred Bergsten and I were talking about the fact that, if trade liberalization is to move forward and retrogression is to be prevented, the focus of the policy community and the public on the benefits of trade-in the full sense, including imports-and on the issues around trade needs to increase. The adverse effects trade has on some people are very keenly felt and often lead to vociferous opposition, while the benefits of trade for a far greater number of people are diffuse and usually little if at all understood-for example, by consumers-and seldom generate political activity on behalf of trade.
- Topic:
- Economics, Human Welfare, and International Trade and Finance
- Political Geography:
- United States
1715. This is Bangalore Calling: Hang Up or Speed Dial? What Technology-Enable International Trade in Services Means for the US Economy
- Author:
- Catherine L. Mann
- Publication Date:
- 01-2005
- Content Type:
- Working Paper
- Institution:
- Peterson Institute for International Economics
- Abstract:
- Globalization, always a contentious issue, has become even more so with media reports of U.S. service-sector jobs being outsourced to emerging-market economies, such as call center operations to Ireland or programming jobs to India. Traditionally, these jobs have been considered “nontradable” and therefore safe from the competitive forces of international trade and investment. But increasingly, technological advances are making it easier to buy services from other companies, even those in developing countries, where savings in the cost of labor or the opportunity to use the 24- hour clock to speed product develop- ment can be irresistible.
- Topic:
- Economics, Globalization, International Trade and Finance, and Science and Technology
- Political Geography:
- United States and Ireland
1716. The Fed: Pulling on a Rubber Band
- Author:
- John H. Makin
- Publication Date:
- 12-2005
- Content Type:
- Policy Brief
- Institution:
- American Enterprise Institute for Public Policy Research
- Abstract:
- On December 13 the Federal Reserve's Open Market Committee (FOMC) raised the federal funds rate, the principal tool for setting monetary policy, by 25 basis points to 4.25 percent. At the same time, the Federal Reserve Board of Governors greatly simplified what had been a tortured statement explaining the basis for their actions and the factors that will govern future actions. The statement was remarkably brief: Despite elevated energy prices and hurricanerelated disruptions, the expansion in economic activity appears solid. Core inflation has stayed relatively low in recent months and longer-term inflation expectations remain contained. Nevertheless, possible increases in resource utilization as well as elevated energy prices have the potential to add to inflation pressures. The Committee judges that some further measured policy firming is likely to be needed to keep the risks to the attainment of both sustainable economic growth and price stability roughly in balance. In any event, the Committee will respond to changes in economic prospects as needed to foster these objectives. (emphasis added).
- Topic:
- Economics, Emerging Markets, Government, and International Trade and Finance
1717. Why the Dollar Is Rising . . . Again
- Author:
- John H. Makin
- Publication Date:
- 11-2005
- Content Type:
- Policy Brief
- Institution:
- American Enterprise Institute for Public Policy Research
- Abstract:
- Let's begin with a riddle: Why is the dollar like a Republican president? Answer: Because the dollar faces incessant predictions of imminent collapse, but in the end it wins out over weaker alternatives.
- Topic:
- Development, Economics, Government, and International Trade and Finance
1718. Greenspan's Second Bubble
- Author:
- John H. Makin
- Publication Date:
- 04-2005
- Content Type:
- Policy Brief
- Institution:
- American Enterprise Institute for Public Policy Research
- Abstract:
- I knew Alan Greenspan had his first bubble in late 1999 when cab drivers were too busy talking to their brokers on cell phones to talk with customers. The "cab driver test" flashed its second bubble warning light to me just recently when I arrived in Key West for the annual winter vacation with my family. Without any prompting, our cab driver told us of a Key West real estate market on fire. Condos that were selling a year ago for $600,000 could not be touched for $1 million today, while the units under construction were sold four times over before anyone even thought of occupying them. The old hotels were being torn down to be replaced by condos that were selling like hotcakes before construction had begun. Meanwhile, room rates and rental rates in Key West have hardly budged. The implied return on investment in real estate is tied to an expectation of ever-rising prices, not to income from property.
- Topic:
- Economics, International Trade and Finance, and Political Economy
1719. Should Americans Save More?
- Author:
- John H. Makin
- Publication Date:
- 03-2005
- Content Type:
- Policy Brief
- Institution:
- American Enterprise Institute for Public Policy Research
- Abstract:
- Alarmists who call for American households to save more point to a steady drop in the conventionally measured U.S. saving rate to about 1 percent at the end of last year and to a rise in household debt to a level well over 100 percent of personal disposable income. The current account deficit, our external deficit, measures national dis-saving at close to 6 percent of GDP. The federal government's budget deficit contributes about 4 percentage points to national dis-saving and it, too, is the subject of considerable hand-wringing by those who point to a need for higher U.S. saving at both the household and national levels.
- Topic:
- Economics, International Trade and Finance, and Political Economy
- Political Geography:
- America
1720. Slower Growth
- Author:
- John H. Makin
- Publication Date:
- 02-2005
- Content Type:
- Policy Brief
- Institution:
- American Enterprise Institute for Public Policy Research
- Abstract:
- The average forecast for 2005 U.S. growth is 3.5 percent, with some prognosticators hoping for 4 percent. This forecast is predicated upon the assumption that the economy is on a sustainable expansion path, where consumption will be supported by steady growth of employment and household incomes. The 3.5 percent growth forecast for 2005 is identical to the mean growth rate of the U.S. economy since 1947. However, there is good reason to believe that the consensus forecast is too high. This possibility has important consequences because U.S. growth must be sustained at least at average levels to avoid a sharp drop in global growth. There are no signs of higher growth in Europe and Asia. Growth in Japan is looking weaker, while Chinese growth is moderating.
- Topic:
- Economics, International Trade and Finance, and Political Economy
- Political Geography:
- United States, Japan, China, Europe, and Asia