Will the US dollar be dethroned as the global currency?
Darvas, Zsolt. Can the euro or the Chinese renminbi challenge the supremacy of the dollar? The US dollar still dominates global currency markets. It has appreciated sharply at the outbreak of the recent global financial crisis. This is remarkable, since risky American financial structures were the prime reason behind the crisis. The US economy accumulated […]
Do equity price drops foreshadow recessions?
Bluedorn, Jogn, Decressin, Jörg & Terrones, Marco. There are concerns that the recent sharp drop in equity prices in the advanced economies may signal a rise in the risk of a double-dip recession. This column examines the performance of equity prices as predictors of new recessions in the G7 economies. The findings suggest that equity prices are […]
The (Debt) Hangover – Part II
Oman, William. The summer of 2011 has taken developed and overdeveloped economies on a rough ride – and it has taken its toll on consumers, investors, and politicians. With talk of a double dip recession in the United States and a break-up of the eurozone, it seems like a second—possibly larger—financial and economic storm is […]
Limiting the Damage of a Greek Default
Nixon, Simon. The euro zone is running out of road. Greece’s budget problems have spun out of control to the point where there is an imminent threat to the survival of the single currency. The euro zone’s strategy until now—a mixture of obfuscation, prevarication and broken promises—has comprehensively failed. The market now regards a Greek […]