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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 |
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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) |
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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) |
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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) |
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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) |
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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) |
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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) |
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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) |
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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) |
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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) |
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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) |
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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) |
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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) |
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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) |
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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) |
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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) |
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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) |
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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) |
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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) |
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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) |
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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) |
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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) |
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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) |
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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) |
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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) |
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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) |
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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) |
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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) |
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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) |
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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) |
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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) |
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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) |
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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) |
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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) |
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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) |
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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) |
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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) |
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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) |
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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) |
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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) |
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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) |
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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) |
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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) |
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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) |
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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. |
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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) |
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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) |
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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) |
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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) |
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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) |
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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) |
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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) |
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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) |
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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) |
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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) |
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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) |
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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) |
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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) |
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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) |
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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) |
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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) |
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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) |
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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) |
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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) |
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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) |
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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) |
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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) |
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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) |
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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) |
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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) |
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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) |
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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) |
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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) |
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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) |
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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) |
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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) |
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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) |
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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) |
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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) |
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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) |
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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) |
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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) |
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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) |
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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) |
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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) |
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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) |
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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) |
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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) |
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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) |
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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) |
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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) |
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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) |
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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) |
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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) |
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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) |
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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) |
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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) |
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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) |
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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) |
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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) |
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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) |
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The Argentine government has proposed
dropping the Argentine peso and adopting the U.S. dollar as its national
currency (Updated March 1, 1999) |
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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) |
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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) |
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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) |
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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) |
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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) |
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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) |
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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) |
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The latest manifestation of Japan's
economic woes is that Japan's already low interest rates have fallen below
zero. (Updated December 1, 1998) |
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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) |
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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) |
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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) |
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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) |
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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) |
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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) |
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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) |
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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) |
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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) |
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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) |
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Fears Up |
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) |
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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) |
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Ecuador's Economy Heads South
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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) |
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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) |
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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) |
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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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