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.

Entrepreneurs Wary of China Currency

US businesses that import materials or goods from China prepare for higher costs
Emily Maltby
May 26, 2010

The Web of Globalization

Severing global connections won’t resolve the economic crisis
Nayan Chanda
May 24, 2010

Behind the Drama in Europe Lies a Global Crisis

During economic hard times, national interest trumps cooperation
Edmund Conway
May 20, 2010

Taming Globalization? Kebabs, Mini-Skirts and Meth – Part II

Facing economic crisis, politicians take refuge in food and sartorial patriotism
Ilaria Maria Sala
May 20, 2010

American Made…Chinese Owned

More Chinese firms can slap a “Made in the USA” label on their products
Sheridan Prasso
May 13, 2010

Renminbi Revaluation Won't Trigger a Shopping Spree

As long as the state hogs land and resources, Chinese urge to save will prevail
Zhiwu Chen
May 12, 2010

Lessons From Athens

Global funds fuelled Greece’s wealth, debt – and subsequent rescue
Nayan Chanda
May 12, 2010