South-Westerns' Economic News Summaries
EconNews Online

EconNews Online is South-Western's service to provide summaries of the latest economics news stories. Review the brief summaries and, for stories of interest, select the full summary.
INTERNATIONAL FINANCE
Title  Brief Summary 
Dollar Falls, Travelers Feel the Pain
Full Summary
The steep decline of the dollar against the euro has caused traveling Americans to feel the pain of higher prices all across Europe. It now takes more dollars to buy euros and that translates into higher prices for travelers.
(Updated August, 2007)
Legislation Would Penalize China
Full Summary
With support from both Democrats and Republicans, proposed legislation would penalize China for continuing to support their currency in world currency markets. China has for some time now intervened in the foreign exchange market to keep the value of its currency, the yuan, low in relation to the dollar.
(Updated July, 2007)
The Dollar vs. the Yuan
Full Summary
The Central Bank of China announced recently that it would begin to let the country’s currency fluctuate more in foreign exchange trading. The country has long pegged the yuan at 8.27 to the dollar as a strategy to keep Chinese goods competitive on the world market.
(Updated June, 2007)
Whoa! China Applies Brakes to Economy
Full Summary
Chinese monetary officials, fearing that their overheating economy could lead to inflation, have taken steps to rein in China's soaring economy. For the second time in only five weeks, central bankers have tightened the reigns on credit by increasing reserve requirements for Chinese banks.
(Updated August, 2006)
Like a Bird or a Plane, Japanese Interest Rates Rise Above Zero
Full Summary
Japan appears to have pulled out of a decade-long slump during which interest rates have hovered near or at zero percent. Japan's central bank increased rates from its zero interest rate policy (ZIRP) for the first time in six years. Economists believe this will be an important test of the central bank's ability to manage the improving economy.
(Updated August, 2006)
Manipulation of the Chinese Currency, or Americans Spending Beyond Their Means?
Full Summary
The People’s Bank of China—China’s central bank—has long manipulated the value of the yuan. The central bank has kept its currency, the yuan, at a fixed rate with the U.S. dollar on the international exchange market. As a result, Chinese goods are cheaper to the rest of the world and their exports are in great demand. But other countries, left with growing trade deficits, are not happy with the Chinese policy.
(Updated June, 2006)
In Japan, Cheap Money is a Thing of the Past
Full Summary
The Japanese central bank has announced the end to a lush monetary policy. The bank adopted an expansionary monetary stance five years ago as an emergency measure to save Japan's foundering economy. This loose money policy propped up Japanese banks by providing plenty of cash at almost zero interest rates, and then the desired multiplier effect kicked in throughout the economy.
(Updated April, 2006)
In the End, There Really is No Such Thing as a Free Lunch-or Free Money Either
Full Summary
The Japanese Central Bank has announced the end to a lush monetary policy. The Bank adopted an expansionary monetary stance five years ago as an emergency measure to save Japan's foundering economy. This loose money policy propped up Japanese banks by providing plenty of cash at almost zero interest rates, and then the desired multiplier effect kicked in throughout the economy.
(Updated April, 2006)
U.S. Reactions to China's Revaluation
Full Summary
The Bush administration welcomed China's revaluation of the yuan, allowing the Chinese currency to rise against the U.S. dollar. However, China's moderate shift may not be sufficient to cool down the anti-Chinese sentiment that has been building in the U.S. Congress.
(Updated September, 2005)
China (Finally) Releases Currency Peg
Full Summary
After nearly two years of diplomatic and political pressure from its trading partners, China has finally agreed to discontinue pegging its currency to the U.S. dollar. The Chinese government announced that it will allow the yuan to appreciate modestly against the dollar.
(Updated September, 2005)
Is the Dollar Vulnerable?
Full Summary
The price of the dollar in world markets has shown volatility recently. With the dollar rising one day and falling the next, analysts question (and worry) whether Asian banks may begin to sell their reserves of dollars and hold reserves in other foreign denominations.
(Updated April, 2005)
A New Concern at the Fed
Full Summary
Federal Reserve Chairman Alan Greenspan has long supported the notion that America can handle its increasing trade and financial deficit vis-a-vis the rest of the world. Greenspan now appears to be at least slightly worried about this and other growing imbalances.
(Updated March, 2005)
Euro Continues to Rise
Full Summary
The euro's value continues to rise on world markets. Europeans are wondering if the European Central Bank will intervene and put a lid on rising currency values, which can dampen exports. Many European nations have become concerned and nervous about the economic impact of the rising currency and are frustrated by the seeming inability of government to do anything about it.
(Updated February, 2005)
Dollar Fall Worries Central Bankers
Full Summary
As the U. S. dollar continues to fall on world currency markets, some analysts worry that foreign countries with large holdings of dollar-based securities may be tempted to pare those holdings. If this were to occur, it could cause the dollar's value to plunge even further.
(Updated February, 2005)
Euro Rises Against the Dollar
Full Summary
European economists are worried that the euro will continue its rise against the U.S. dollar. The euro has risen nearly 7 percent against the dollar in the last two months. The rise in the euro makes member countries exports more expensive and thus less desirable to the rest of the world and can depress economic growth.
(Updated January, 2005)
How Fast Will the Dollar Fall?
Full Summary
The U.S. dollar continues to fall on world markets. Just how fast the dollar falls depends on how long foreigners will invest in U.S. securities; how long Asian countries will continue to support their own currency against the dollar, and how long and how much the U.S. will have to borrow to finance a budget deficit.
(Updated January, 2005)
We'd like to increase Chinese production, but the (Chinese) government won't let me!
Full Summary
Chinese textile firms have been seeking sites to build larger factories to meet production demands, but are finding that the Chinese government is reluctant to lease land to firms.
(Updated December, 2004)
New Law Eliminates Illegal Subsidies
Full Summary
President Bush has signed legislation that will eliminate subsidies on certain manufactured goods, including aircraft, that had enjoyed trade protection. The World Trade Organization (WTO) now considers such subsidies illegal. The new legislation will gradually reduce the subsidies to large companies like Boeing, Microsoft, and General Electric.

(Updated December, 2004)
Will China Float Its Currency?
Full Summary
China continues to peg its currency, the yuan, to the U.S. dollar, but International Monetary Fund (IMF) officials are calling for China to float its currency immediately. Supporters of this move say that it will reduce the United States' trade deficit and add strength to the global economy.

(Updated November, 2004)
Is the Fed a slowpoke? 
Full Summary
The Federal Reserve Bank plans to increase the federal funds target rate from its lowest level in more than four decades. Central bankers from around the world will likely cheer the move as a stabilizing factor for their own economies. The cheers will come because the higher interest rates in the U.S. will narrow the existing gap in interest rates between the United States and the twelve nations who use the euro as their currency.

(Updated August, 2004)
Long-run Effects of the Trade Deficit 
Full Summary
Recent government data indicate a fall in the February trade deficit. This is good news for analysts who continue to worry about the long-run effects of America's negative trade balance with the rest of the world. The biggest worry is that foreign investors would balk at continuing to lend money to the U. S., and the U.S. Treasury would have to seek other sources to finance the trade deficit.

(Updated May, 2004)
Chinese Economy Heating Up 
Full Summary
Evidence continues to emerge suggesting that the Chinese economy may be overheating. As a result, the Chinese central bank is considering an increase in interest rates and the government is hinting at retreating from the current position of pegging the yuan at 8.2 to the U.S. dollar.

(Updated April, 2004)
Talking Down the Yen 
Full Summary
The Japanese yen has risen strongly against world currencies, making Japanese goods more expensive to the rest of the world. A weaker yen is desired to increase demand for Japanese products.

(Updated June 2, 2003)
Russia Gushing With Oil Dollars  
Full Summary
While the rest of the world wrestles with increased payments to oil producing countries resulting from oil prices that are close to $40 a barrel, Russia, the world's second-largest oil producer, has to contend with oil dollars that are literally gushing in.

(Updated April 4, 2003)
Like a Good Neighbor  
Full Summary
Gross domestic product figures for Japan are to be released shortly and are expected to show that the economy contracted in the quarter ending December 2002.

(Updated April 4, 2003)
Inciting Inflation  
Full Summary
Japan's central bank has kept short-term interest rates at zero for almost four years, without initiating the hoped-for stimulus. In reaction to falling prices, climbing budget deficits, a declining yen and a tightening of business and consumer spending, there is a push to try inflation.

(Updated April 4, 2003)
Germany's Troubles Bubble Up  
Full Summary
Economic data point to a myriad of problems in the German economy. There is widespread pessimism about the economy and this has resulted in a decrease in retail sales and an increase in bankruptcies.

(Updated April 4, 2003)
Problems in Euro Land 
Full Summary
Europe appears to be one of the weakest regional economies at this time. Euro zone economic growth was an annualized 1.2% for the third quarter, and the European Central Bank is expected to lower interest rates in order to stimulate the EU economy.

(Updated Februry 5, 2003)
Lula's Problem  
Full Summary
The new president of Brazil is faced with a slipping national currency, mounting public debt, and the risk of default. Whether his leadership and the $30 billion International Monetary Fund (IMF) loan will be sufficient to rescue Brazil is unknown at this time.

(Updated January 2, 2003)
The Thailand Tiger 
Full Summary
Thailand's economy grew by 5.1 percent in the second quarter of this year, and is estimated to be 4 percent for 2002. The only source of concern about the economy is the prospect of a war with Iraq and its impact on oil prices.
(Updated October 10, 2002)
Big Bank Bailout  
Full Summary
Many Japanese officials feared that the banking industry might collapse and throw the economy into turmoil. To prevent this potential disaster, the Bank of Japan announced a plan to purchase stocks from banks, a solution that will require legislative change.
(Updated October 10, 2002)
Brazil Si, Argentina No 
Full Summary
The Bush Administration has proposed a $30 billion relief package for Brazil, but there has been no reconsideration of our position towards Argentina.
(Updated September 1, 2002)
Vacation Time 
Full Summary
A decline in average hours worked annually per employee has hindered Europe's goal to become the most competitive economy in the world.
(Updated September 1, 2002)
It Was Supposed to Float - Not Sink! 
Full Summary
The value of Argentina's national currency, the peso, plummeted,throwing the country into a deeper financial crisis. Argentine President Eduardo Duhalde is losing popular support and unless he can stop the peso's fall, his ability to govern is questionable.
(Updated May 1, 2002)
German Joblessness Grows 
Full Summary
Exports are an important part of Germany's economy and the U.S. recession has reduced the demand for German exports, leading to a slowdown in the German economy. Unemployment rose to over 4 million people and a two-year high rate of 10.4 percent in January.
(Updated March 20, 2002)
Salvation Takes More Than a Floating Peso 
Full Summary
Argentina is hoping that a devaluation of the peso will promote export growth and provide sufficient stimulus to end Argentina's four-year recession. Analysts believe that even if supporting measures are adopted, improvements in the Argentine economy will take years, not months to accomplish.
(Updated March 20, 2002)
A Northern Enigma 
Full Summary
In 2001, the Canadian dollar lost 6.25 percent of its value despite an economy that is technically not in recession.
(Updated February 13, 2002)
Argentina Afloat, but the Peso's Sinking 
Full Summary
Argentina cut the peso, its national currency, free from the dollar in an attempt to rescue an economy that appeared headed towards financial collapse. A free fall of the peso would dampen prospects of economic growth and could affect other Latin American currencies.
(Updated February 13, 2002)
In Japan, Woe is the Word 
Full Summary
Japan is entering its fourth recession in a decade, unemployment at 5.4 percent is at a postwar high, and the government's budget deficit is 130 percent of gross domestic product - the highest of the developed economies.
(Updated January 15, 2002)
Default With Argentina 
Full Summary
Argentina's economy is plagued with recession, 20 percent unemployment, a banking system on the verge of collapse, government workers who have not been paid for weeks, a public health system in trouble and concerns that retirement benefits will not be paid.
(Updated January 15, 2002)
Forget the Franc, Ditch the Drachma 
Full Summary
The extraordinary move to the euro will provide a host of benefits to Europeans, the most visible being the ability to avoid exchange bureaus when traveling form country to country.
(Updated January 15, 2002)
Trapped 
Full Summary
The dilemma for Japan's policy makers is how to revive an economy where prices and economic growth continue to fall even with interest rates at almost zero.
(Updated December 1, 2001
Rescue on the Pampas 
Full Summary
Widespread fears that Argentina will default on its debt repayment has prompted the country's President to announce a partial restructuring of the country=s debt, subsidies for the poor, and tax breaks for business firms.
(Updated December 1, 2001
Real Problems 
Full Summary

Over the past 10 months, the value of the real, Brazil's currency, has fallen significantly relative to the dollar. The real hit a low of 2.835 to the dollar on September 21, 10 days after the terrorist attacks.
(Updated November 1, 2001

Fear of Diving 
Full Summary
In August, the IMF transferred $8.0 billion to rescue the Argentine currency and stave off a financial crisis that could potentially affect the entire region. However, the September 11 terrorist attacks combined with the upcoming congressional elections and Brazil's devaluation has intensified the recession and produced investor panic and soaring interest rates.
(Updated November 1, 2001
Sayonara, Economic Growth? 
Full Summary
Japan released data confirming that output of goods and services contracted in the second quarter of this year. Japan is technically not in recession, since last quarter's gross domestic product figures were revised to show a slight increase .
(Updated October 1, 2001
Border Crossing 
Full Summary
The fallout from the terrorist attacks on the United States has impacted the Canadian economy, possibly throwing it into recession. The damage and disruptions resulting from the terrorist attack on September 11 has weakened both the United States and Canadian economies.
(Updated October 1, 2001
The Too Strong Dollar?
Full Summary
After years of assuming that a strong dollar was good for the U.S. economy, many economists are calling for the Bush Administration to reexamine its policy, arguing that the current strength of the dollar is hurting exporters.
(Updated September 1, 2001
Searching for Help
Full Summary
The Netherlands is one of the European Union's fastest growing economies, has the lowest unemployment of the 12 Euro nations, and faces a labor shortage. But labor costs are rising and this is partly responsible for the Netherlands having the highest rate of inflation among the Euro nations.
(Updated September 1, 2001
Blame it on Capitalism?
Full Summary
After a decade of free market reforms, Argentina finds itself deeply in debt, facing the prospects of devaluation and a default on its international obligations.
(Updated September 1, 2001
Cashing in on the Euro
Full Summary
Although the euro had its debut on January 4, 1999, its circulation was confined to electronic payments and world financial markets, and Europeans have never seen a euro. The first euro coins and bills will be circulated on January 1, 2002.
(Updated September 1, 2001
Uncommon Markets
Full Summary
The EU's board of governors is currently debating whether to lower interest rates - the smaller EU countries are afraid that lowered interest rates will be inflationary, and the larger EU countries would like to have interest rates lowered.
(Updated August 1, 2001
Singapore Slump
Full Summary
Singapore is the latest economy to slip into recession; the ministry attributed the decline to slower growth in the U.S., especially in the electronics industry. A continuing U.S. slowdown will result in a weakening of the European and other Asian economies, further diminishing Singapore's chances for recovery.
(Updated August 1, 2001
Argentina's Ds -- Debt, Default, Devaluation
Full Summary
The Asian financial crisis of 1997 - 1998 unleashed a series of devaluations and economic slowdowns that threatened to throw the global economy into recession. Four years later, Argentina is now facing economic crisis and many fear that it will spread to other Latin American countries.
(Updated August 1, 2001
Pumping Yen
Full Summary
Japan's policy makers are struggling to revive a stagnant economy¾consumer and business spending has decreased in recent months because of a lack of confidence in their economic future. As a consequence, prices have fallen and so has the value of assets.
(Updated May 1, 2001
German Jobless Jolt
Full Summary
A success of the EU was the decrease in unemployment in Germany and other EEU countries. Germany just announced that for the second month in a row its jobless rate had risen, now standing at 9.3 percent of the workforce, or 3.8 million individuals.
(Updated April 1, 2001
A Turkey Float
Full Summary
The lira, Turkey's national currency, will now be determined by market forces rather than being pegged to a mixture of the U.S. dollar and the euro. Analysts expect there to be little impact on other economies as a result of Turkey's devaluation.
(Updated April 1, 2001
Rates are Cut -- But Is It Enough?
Full Summary
Japan's economy has had its ups and downs in the 1990s, and a long recession followed by a modest recovery. In recent months, the unemployment rate has climbed and consumer spending fell, prompting fears that Japan is slipping into recession once again.
(Updated March 1, 2001
Bogus Bills
Full Summary
About a year ago, Ecuador adopted the U.S. dollar in the hope that it would end Ecuador's economic problems. The promised economic benefits have been slow in arriving, but the move has been a boon to counterfeiters.
(Updated March 1, 2001
Worldly Questions
Full Summary
The new U.S. Administration may usher in a change in U.S. economic policy with respect to a number of international issues. Recent world financial crises, the ever-growing trade deficit, high dollar, competition from the euro, antiquated world financial structure, and the impact of a U.S. recession on other economies are challenges that will occupy the Bush Administration.
(Updated February 1, 2001
Turkey Troubles
Full Summary
The International Monetary Fund (IMF) agreed to provide emergency loans in order to restore Turkey's financial stability. The IMF bailout resulted from fears that the country's banking system would collapse.
(Updated January 1, 2001)
Debt and Doubt in Argentina
Full Summary
Argentina is in the midst of an economic crisis due in part to economic choices that the government has made, but also as a result of international credit markets demanding higher interest rates. The IMF may have avoided a crisis with an emergency loan package, but high interest rates may be a signal that more turbulence lies ahead.
(Updated January 1, 2001
Dollar Dilemma 
Full Summary 
A strong dollar was supposed to be good for the American economy, and the inflow of foreign capital into the U.S. has supported productivity improvements and increased profitability of American firms. Economists are now having second thoughts about these benefits.
(Updated December 1, 2000
Shoring Up Hope for the Euro 
Full Summary 
Europe's hopes for the euro to become a premier international currency have been beset with problems. The euro continues to fall to record lows and has become a U.S. problem leading to Fed intervention to prop up the euro.
(Updated November 1, 2000
Gas Taxes Are Highly Inflammatory 
Full Summary 
The 10-year-high level of gas prices caused angry protest in most of Western Europe. The object of the protests was the gasoline tax, which in the U.K. amounts to 76.8 percent of the retail price of gasoline, while in the U.S. represents only 24.1 percent of the pump price.
(Updated October 1, 2000
Liberté, Egalité, Fraternité, and Capitalism
Full Summary
France was a country where bureaucrats and bureaucracy seemingly controlled a large part of everyday life, strikes and demonstrations were commonplace, unemployment and taxes were high, and growth was low. But France has changed.
(Updated September 1, 2000)
Euro-Scorecard
Full Summary
The euro, which was first introduced on January 1, 1999 at $1.17, fell to approximately $.90 by mid-August, 2000. The weakness of the euro has kindled fears of higher inflation and has led some to question whether the EMU was a worthwhile undertaking.
(Updated September 1, 2000)
A Booming Brazil
Full Summary
In late 1998, Brazil underwent a severe currency crisis that resulted in the devaluation of the real, Brazil's national currency, in January 1999. Brazil's economy appears to be on the road to recovery and economists expect next year's economic growth to be between 4.5 and 5 percent.
(Updated September 1, 2000)
Interest Rates in Japan a Zero
Full Summary
Interest rates in Japan have been almost zero since February 1999, a policy adopted as an emergency measure to assist Japan's ailing economy. It was expected to only be a temporary measure, but policymakers at Japan's central bank have just voted to keep interest rates at their current level.
(Updated August 1, 2000)
To Russia with Dollars
Full Summary
Two years ago, Russia experienced an economic crisis that sent its currency into collapse. Since this spring, stability and economic reform are taking hold in Russia and there is some evidence that U.S. companies are renewing their interest and investments.
(Updated August 1, 2000)
Rupiah Out of Control
Full Summary
Indonesian officials were considering some form of currency controls in order to stabilize the faltering rupiah, the national currency of Indonesia. The rupiah has lost 18 percent of its value in relation to the U.S. dollar since January, primarily because of political unrest.
(Updated July 1, 2000)
Is the Sun Rising?
Full Summary
Japan's economy has alternated between recession and very modest growth. A 2.4 percent increase in the total output of goods and services for the first quarter of this year follows six months of decline, including a decrease of 1.6 percent in the previous quarter. Is this an indication of sustainable recovery or just another turn in Japan's growth and contraction cycle.
(Updated July 1, 2000)
Eurosion
Full Summary
The euro was introduced in January 1999 with hopes that it would become a powerful rival to the dollar. On Wednesday, May 3, 2000, the euro sunk to a new low against the dollar -- a decline of 24 percent since its introduction.
(Updated June 1, 2000)
Priming the Pump
Full Summary
Japan's economy has been floundering for several years. The unemployment rate reached 4.9 percent in February and March. In a move to ease unemployment, the Japanese government announced a plan to spend $3.67 billion to create new jobs.
(Updated June 1, 2000)
Trading Dollars for Sucres
Full Summary
The destruction of sucres, once the national currency of Ecuador, is part of a program called dollarization. Ecuador has adopted the U.S. dollar as its currency in the hope that it will end Ecuador's economic problems.
(Updated May 1, 2000)
 
It Ain't Over 'Til It's Over
Full Summary
The Japanese economy expanded modestly in the first and second quarters of 1999, and Japanese authorities thought their policies had caused an economic turnaround after 2 years of recession. However, the economy contracted during the last two quarters, and two consecutive quarters of negative growth means that Japan's recession has resumed.
(Updated March 1, 2000)
 
Maybe It's Contagious?
Full Summary
A week after the Federal Reserve Bank raised U. S. interest rates, the European Central Bank, the Bank of England and South Korea all raised their interest rates as a result of central banks becoming worried about inflationary pressures in their economies.
(Updated March 1, 2000)
The Dollarization of Ecuador
Full Summary
The President of Ecuador wants to replace Ecuador's national currency with the U.S. dollar in an attempt to rescue Ecuador from its worst economic crises in 70 years. His plan won approval from Ecuador's central bank.
(Updated February 1, 2000)
Putin In, Policy Out?
Full Summary
Vladimir V. Putin, the Acting President of Russia after the resignation of Boris Yeltsin, has been noticeably silent about his economic views. The Russian economy is clearly in trouble, but many Russians believe that Putin's economic policies will be an improvement over Yeltsin's.
(Updated February 1, 2000)
Fewer Zeros for Japan
Full Summary
Japan's efforts to promote the yen as an international currency have become more intense with the advent of euro, the European Economic Union's currency. The proposed change is largely cosmetic - neither the exchange rate nor the purchasing power of the yen is predicted to change significantly.
(Updated January 1, 2000)
Where Shorter May Be Better…The French Work Week
Full Summary
As a remedy for its 12 percent unemployment rate, France passed a law to reduce the work week to 35 hours without any reduction in pay. Initially, businesses were against the plan and labor was for it, but the experience so far has led to some changes in position - more businesses are supporting the measure while some unions have argued against it.
(Updated December 1, 1999)
Real Trouble
Full Summary
Brazil's currency, the real, was devalued in January of this year. The central bank allowed the real to float in the foreign-exchange market. As a consequence, the real initially lost about 40 percent of its value,...
(Updated December 1, 1999)
 
Pumping Yen
Full Summary
Japan has recently emerged from its longest post-World War II recession aided, in part, by eight major fiscal stimulus packages adopted by the Japanese government in the last decade. The economy is now expanding but the expansion is shaky.
(Updated December 1, 1999)
 
A Taxing Problem for Brazil
Full Summary
In Brazil, about half of the retail price of most products is made up of taxes. There are about 55 separate taxes on output, and as a percent of national output Brazil collects more taxes than either the U.S. or Japan. Tax and other structural reforms are needed to stimulate the economy and attract foreign investment.
(Updated November 1, 1999)
 
A Reverse in the Yen
Full Summary
Since mid-July the Japanese yen has risen about 15 percent relative to the dollar, and the Japanese economy-in recession for the past seven years-has recently shown signs of recovering. This recovery has attracted increased foreign investment, putting upward pressure on the yen, and the G-7 has put pressure on Japan to stop the yen from appreciating.
(Updated November 1, 1999)
The Paradox of Thrift, Japenese Style
Full Summary
Japan, at the urging of the U.S., has been spending at a feverish pace in order to stimulate its economy into recovery. As a consequence of the spending and recession, annual budget deficits grew and total debt has almost doubled. Rising debt levels tend to produce higher long-term interest rates which would affect the development of many Asian economies.
(Updated October 1, 1999)
Malaysian Economy Out of Control
Full Summary
When the Asian financial crisis hit Malaysia last year, its prime minister blamed his country's financial problems on foreign currency traders and banned the removal of foreign money. In February, Malaysia replaced the ban with a steep exit tax, but now announced that it has removed this exit tax. The government does not believe that the removal of the tax will result in a mass exodus of capital from the country.
(Updated October, 1999)
Severing Some Bonds
Full Summary
For the past few years, foreign investors have bought huge amounts of U.S. Treasuries, but recently they have sold more than they bought. Instead they are purchasing U.S. other securities-stock and corporate bond sales to foreign investors are at record levels. If this trend continues, it could have significant ramifications for U.S. stock markets and interest rates.
(Updated October 1, 1999)
An Agenda For Awaking Argentina
Full Summary
Because of Argentina's fixed-rate currency system, both monetary and fiscal policy have limited ability to help the economy recover. The architect of Argentina's recovery in the early 1990s, Domingo Cavallo, has offered a proposal to end the current recession.
(Updated August 1, 1999)
 
Venezuela's Economy Headed South
Full Summary
Venezuela has one of the most highly regulated economies in the world, and it has been contracting. Estimates were for a 2 percent decrease in real Gross Domestic Product (GDP) for 1999, but 3 to 5 percent or more may be likely.
(Updated August 1, 1999)
The Sun Could Be Rising
Full Summary
Evidence continues to mount that the Japanese economy is recovering from its longest post World War II recession. In spite of this welcome news, neither Japanese officials nor the public appear to be optimistic about the future.
(Updated August 1, 1999)
Real Problems in Brazil
Full Summary
When economic problems forced Brazil to devalue its currency by more than 40 percent in January 1999, new tensions and old issues arose for Brazil's Mercosur trading partners, including the question of what currency policy Mercosur should adopt.
(Updated July 1, 1999)
The Sun Could Be Rising
Full Summary
Japan, in a recession for the past two years, announced that its gross domestic product (GDP) increased for the first quarter of 1999 by 1.9 percent. Japanese officials were quick to point out that one quarter's growth in GDP, while certainly welcome, does not mean that Japan's economic problems or its recession have ended.
(Updated July 1, 1999)
Vital Signs Improving?
Full Summary
About 18 months ago, what started as an Asian financial crisis spread, and was partly responsible for Russia's defaulting on some of its debt. Economic turmoil then spread to Latin America, and the global economic crisis threatened to plunge the whole world into recession. Although few are willing to declare the crisis over, there is now a widespread feeling that the risk of worldwide recession has been reduced.
(Updated June 1, 1999)
Won Wonderful Recovery?
Full Summary
Asia's economic crisis spread to Korea in October 1997. By December, the won, Korea's currency, had plummeted, foreign reserves had dried up and many thought that Korea would default on its externally held debt. A $58 billion IMF bailout prevented Korea from defaulting on its loans. So far this year, the economic news is good...
(Updated June 1, 1999)
Euro In-Waiting
Full Summary
The euro was introduced on January 1, 1999 and advertised as a strong contender for the global economy's foremost currency. Measured against this standard, the euro today would have to be considered a disappointment. However, currencies do no generally leap to the front; rather they ten to gradually rise.
(Updated June 1, 1999)
Dollar Fixes and Peso-Problems
Full Summary
Argentina pegged the value of its currency to the dollar in an effort to control inflation and promote growth. Argentina is now in a recession, because the stability that resulted from the dollar-peso peg prevents Argentina from stimulating its economy by weakening its currency.
(Updated June 1, 1999)
Prescriptions for Global Ills
Full Summary
Calls for a new global financial system echo from many corners. It is claimed that the global financial crises of recent years are signals that the Breton Woods system that has ruled the world economy for 50 years is broken.
(Updated April 1, 1999)
Interest in Japan is on the Rise
Full Summary
Japan's economy is in its worst recession in the postwar period, and economic analysts fear that the pressure on credit markets will cause interest rates to rise and choke off a much-needed recovery.
(Updated April 1, 1999)
 
Japan's Remedy for Recession: Inflation?
Full Summary
Japan's economy is in the deepest recession in its recent history. So far traditional remedies to revive the economy - tax cuts, increases in government spending, and incentives to encourage private spending - have had little success. Japan's latest measure is to increase its money supply, a move that will force it to contend with increased inflation.
(Updated April 1, 1999)
 
Peso, No! Dollar, Si?
Full Summary
The Argentine government has proposed dropping the Argentine peso and adopting the U.S. dollar as its national currency
(Updated March 1, 1999)
 
Continental Drift
Full Summary
Although many had hoped that the launch of the euro would launch a new era of European competiveness and economic growth, the initial results appear to be disappointing. Continental Europe's economies are slowing, business confidence is slipping and the euro is soft. Europe's growth dimmed further with the Bank of England's forecast that the United Kingdom's economy would expand by only .5 percent. In spite of the growth slowdown, the European Central Bank appears reluctant to lower interest rates. The bank argues that economic reform is needed, rather than lower interest rates.
(Updated March 1, 1999)
 
The Falling Dollar -- Where Will It Go?
Full Summary
The U.S. economy is doing very well, the stock market is hitting new highs, but foreign confidence in the United States Government -- as measured by the strength of the dollar -- is apparently falling.
(Updated February 1, 2000)
 
Euro-Phoria
Full Summary
The euro, the new European currency, debuted January 4 on the world's financial markets. The much-awaited debut was flawless, and enthusiasm for the euro raised its value relative to other major currencies including the dollar.
(Updated February 1, 2000)
 
Euro-Phobia?
Full Summary
Europe's new currency, the euro, is supposed to become the principal rival to the dollar. Although the euro had a positive debut, it is uncertain how it will fare against the dollar both this year and over time.
(Updated February 1, 2000)
 
The Euro & Politics: A Finnish View
Full Summary
Eleven European counries have opted to give up their national currencies and replace it with the euro. While the move to the euro is still viewed with skepticism in some countries, that is not the case in Finland.
(Updated January 1, 1999)
 
Follow the Fiscal Road to Recovery
Full Summary
Japan's economy is in recession. It has been in recession for two years despite initial attempts to stimulate the economy by lowering interest rates and reducing taxes. Japan's latest attempt at recovery relies heavily on increased spending...
(Updated January 1, 1999)
 
ABCs - A Brazilian Cash and Credit Crunch
Full Summary
The difficulty that Brazilian firms are having generating the cash to pay their workers is the result of a decision by the Brazilian government to support the Real and not devalue.
(Updated December 1, 1998)
 
Interest in Japan: Negative?
Full Summary
The latest manifestation of Japan's economic woes is that Japan's already low interest rates have fallen below zero.
(Updated December 1, 1998)
 
Dollar Decline Debated
Full Summary
Since the beginning of July, the dollar has fallen about 20.7 percent against the yen and 12.7 percent against the German mark. Although American consumers love a strong dollar, American businesses prefer a weaker dollar.
(Updated November 11, 1998)
 
Where the U.S. Leads Should Others Follow?
Full Summary
The Federal Reserve, in an effort to stimulate demand, has cut U.S. interest rates twice in the last month. The U.S. action has caused many policymakers to look to Europe for similar policy measures.
(Updated November 11, 1998)
 
A Japanese Remedy For Economic Ills?
Full Summary
Japan's economy is in recession. The latest government figures show that the economy has contracted for three successive quarters at an annual rate of 3.3 percent. The magnitude of the decline and the importance of Japan in the world economy have generated concern among U.S. policy makers as to whether the Japanese government has adopted the right economic policies to pull Japan out of its recession.
(Updated October 15, 1998)
 
Open Markets Closing
Full Summary
The belief that capital markets should be open was the prevailing market philosophy in the 90s -- it was the key to rapid growth and development, especially in emerging market economies. The turmoil in Asia's financial markets that has spread to Russia and Brazil has caused some countries to rethink this policy and partially close their capital markets to foreigners.
(Updated October 15, 1998)
 
Real Troubles for Brazil
Full Summary
Brazil's economy, the largest in Latin America and the ninth largest in the world, is in trouble. The economy is being felled by growing current account deficits, fiscal deficits, and a growing fear that the financial crisis that has devastated parts of Asia and Russia was headed south to Brazil.
(Updated October 15, 1998)
Rethinking Capital Ideas
Full Summary
The 1990s were a period of world-wide economic growth. The prevailing doctrine seemed to be that the optimal world is one where capital can freely flow from one country to another. The Clinton Administration led a global push to free the flow of capital throughout the world. Recent events have caused many to question that doctrine.
(Updated October 15, 1998)
 
Watch Out for Falling Rubles
Full Summary
No matter what has happened to political and cultural ties between the United States and Russia, economic ties have been minimal and trade with Russia has never had much of a direct impact on the U.S. economy. The Russian government's decision to devalue the ruble by 34 percent will consequently not have a significant impact on U.S. economic growth.
(Updated September 1, 1998)
Russia's Economy Gets Two "D's"
Full Summary
The Russian government announced two dramatic measures that attempt to avert a collapse of its financial markets -- devaluation and default. The value of the Russian currency will be allowed to float as low as 9.5 to the dollar by December.
(Updated September 1, 1998)
A Yen for Devaluation
Full Summary 
What determines the value of a currency? In the world's financial markets, currencies are just like any other commodity, and the speculative motive is often the cause of dramatic swings in the price of a currency.
(Updated August 12, 1998)
Recession in Japan
Full Summary 
Japan's economy is officially in a recession - the first recession for Japan in 23 years. Economists have been worried about Japan's economic performance and the impact of the Japanese economy on Asia.
(Updated August 12, 1998)
Yen Down,
Fears Up
Full Summary 
The Japanese yen fell to a seven year low against the dollar. As a result of the drop in the yen, the currencies of Singapore, Indonesia, South Korea, Thailand, Taiwan, and Australia also fell.
(Updated June 16, 1998)
A Jolt for Japan
Full Summary 
Japan's economy has been stagnant and to revive it the ruling Liberal Democratic Party has proposed a $124 billion stimulus program, which does not include a tax cut proposal.
(Updated May 19, 1998)
Ecuador's Economy Heads South
Full Summary 
Ecuador's economy is showing signs of distress. In late March, Ecuador's central bank allowed the sucre, Ecuador's national currency, to be devalued by 6%, a move brought on by a multitude of problems, including budget deficit and foreign debt.
(Updated May 19,1998)
Are US Stock Markets Being Bahted? 
Full Summary   
Although it may seem unlikely, stock markets in the US and throughout the world were battered this week, possibly as the result of currency problems in the small Southeast Asian country of Thailand.
(Updated January 15, 1998)
 
Real Uncertainty in Brazil  
Full Summary  
Add Brazil to the list of countries affected by the recent turmoil in financial markets. Brazil's stock market has declined by 30% and there is speculation that Brazil may be the next target for foreign currency speculators. These fears have put pressure on Brazil to devalue its currency in an effort to restore confidence in the real, Brazil's currency.
(Updated January 15, 1998)
Deepening Deficit  
Full Summary 
The Commerce Department reported that the nation's trade deficit grew by 17% in May on the strength of record levels of imports and slightly decreasing exports. Trade deficits with Canada, Mexico and China grew while the deficit with Japan fell. The trade balance improved for manufacturing and services but deteriorated in the energy and food sectors because of price swings.
(Updated September 1, 1997)
 
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