Over the past decade, Chinese trade revenues, savings and purchases of US debt increased. Low interest rates encouraged US consumers to spend and housing prices soared. But such imbalances could not be sustained and financial instruments containing mortgages for homes that have lost their value, have proven toxic for the world. Economists and central bankers are still struggling to find a way out of the subprime mortgage crisis. If Japan’s lost decade offers lessons, then deflation must be averted at all costs if there is to be hope for a recovery.. But for the long-run, one magical phrase emerges from experts and that’s “stricter regulations for the banking industry.” Once governments succeed in restoring consumer and investor confidence, they should focus on designing regulations that encourage responsibility and a long-term outlook. Furthermore, policymakers have to recognize the need for global oversight of the banking industry, either by strengthening existing institutions or by creating new international authorities. The timing of the rescue is uncertain, and the certainty of its efficacy remains in question. To put the matter in historical perspective, there is still no consensus on whether government spending policies of Franklin D. Roosevelt or increased demand for goods created by Second World War pulled the United States out of the Great Depression. One certainty for this crisis: there are no localized solutions for a problem that extends throughout the world.

Steps Out of the Global Development Crisis

The crisis isn’t over – not without global partnerships on unemployment and environmental sustainability
Jens Martens
September 20, 2010

IMF Chief: Crisis Not Over Until Jobs Come Back

Nations must coordinate polices to regain control of corporations
Bjoern H. Amland
September 16, 2010

If Only China Were More Like Japan

Some nations don’t save for the economic rainy days
John Lee
September 8, 2010

Silicon Valley Expats Spur Innovation in India

A new diaspora of tech workers takes off in search of opportunity
Sean Randolph
September 2, 2010

America, Land of Paradox: The Country That Launched Corporate Globalization Should Be First to End It

Tariffs could shrink trade – and global economy
Joe Costello
September 1, 2010

Western Profits Wilt on China's Surging Wages

Big corporations, hungry for profits, hunt for cheap workers elsewhere
Ambrose Evans-Pritchard
August 31, 2010

Joys and Pains of a Global Paradigm Shift

Developing nations race to fill slack in global economy
Michael Casey
August 27, 2010