Webdiary - Founded and Inspired by Margo Kingston

From the end of February 2007, Webdiary will no longer be publishing articles sourced from Project Syndicate, including those from Kenneth Rogoff. Subsequent articles in Professor Rogoff's The Unbound Economy series can be accessed via the Project Syndicate site here.

Many people have been asking why the dollar hasn’t crashed yet. Will the United States ever face a bill for the string of massive trade deficits that it has been running for more than a decade?

"If a major flare-up causes investors to lose confidence in low volatility, the bottom could fall out from under equity and housing prices. In that case, do investors and policymakers have a plan B?": Kenneth Rogoff

"When is the United States going to wake up to what is happening in Latin America? The growing influence of Venezuela’s leftist president, Hugo Chávez, is casting a dark shadow over the region.": Kenneth Rogoff

"As an American, I am appalled, ashamed, and embarrassed by my country’s lack of leadership in dealing with global warming. Scientific evidence on the risks mounts by the day, as most recently documented in England’s magisterial Stern Report. Yet, despite the fact that the United States accounts for roughly 25% of all man-made global carbon emissions, Americans show little will or inclination to temper their manic consumption. ... America’s unwillingness to take the lead on environmental issues may some day be regarded as one of the country’s most profound political failures. One hopes that it changes course soon, before we all are forced to wear swimsuits to work.": Kenneth Rogoff

"Television and newspapers continue to trumpet every twist and turn of global financial markets. In truth, however, the big story is the uneerie calm that has engulfed virtually every major asset class, from stocks to bonds. Is the whole investment world on Prozac?": Kenneth Rogoff

"This year, the US will borrow roughly $800 billion to finance its trade deficit. Incredibly, the US is now soaking up roughly two-thirds of all global net saving, a situation without historical precedent." Kenneth Rogoff

"It is appalling that the world has decided to blame the United States for the crushing end to five years of global trade talks last month (the so-called "Doha round"). I am the first to admit that the US under President George W. Bush has not covered itself with multilateral glory in recent years. But accuse America of sabotaging the trade talks? Give me a break.": Kenneth Rogoff

"Many people rightly regard the annual G-8 (Group of Eight) presidential summit as the closest thing we have to a functioning world government. So it is a shame that these meetings tend to be so scripted and dull, with so little room for the informality needed to make genuine progress on tough issues involving world peace and prosperity.": Kenneth Rogoff

"Poor oil-rich Russia. It is trying so hard to have its turn as chair of the elite Group of Eight countries taken seriously. Of, course, people who really want to be unkind will point out the absurdity of Russia’s membership in a club that includes the giant economies of US, Germany, Japan, England, France, Italy, and (less so) Canada. Why wasn’t Chinese president Hu Jintao, whose country’s economy is the world’s second largest (when measured at world prices), given a seat at the table instead of Putin? After all, even with all its energy resources, and even with today’s sky-high oil and gas prices, Russia’s national income is only about the size of Greater Los Angeles. ": Kenneth Rogoff

"Do you want to know which video clip will soon be scaring the daylights out of policymakers throughout the world? In a scenario that looks uncannily like the spread of a global pandemic, the economist Thomas Holmes has prepared a dynamic map simulation showing the spread of Wal-Mart stores throughout the United States. Starting at the epicenter in Bentonville, Arkansas, where Sam Walton opened his first store in 1962, giant boxy Wal-Mart stores have now multiplied to the point where the average American lives less than seven kilometers from an outlet." Kenneth Rogoff

"Any good international investment banker knows that the end of April is a bad time to come peddling his services, for that is when the world’s finance ministers return home from the IMF meetings in Washington, chastened that risks to the global economy could spill over into their own backyards. Ministers are too busy recovering from their trauma to think about paying fat fees for big new international bond issues. Who wants to build up debt if there might be a financial crisis around the corner? Better to keep socking away US Treasury bills, even if the return is far lower than on most other investments." Kenneth Rogoff

"For most of the twentieth century, programmers were patently unsuccessful in designing chess computers that could compete with the best humans. A human chess master’s ability to intuit, visualise, and prioritise easily prevailed over the brute force approach of computers. The computers gradually improved, but they still seemed far inferior to the top humans. Or so we thought." Kenneth Rogoff

""India everywhere" was the theme at this year's World Economic Forum. In the West, there is so much focus on China that India's achievements are often acknowledged only as an afterthought. As if to underscore the point that political stability must triumph in the long run, the Indians plastered Swiss buses with the banner: "India: The World's Fastest Growing Democracy."" Kenneth Rogoff

"Has the United States transcended the laws of economics? As the New Year begins, the US continues to race ahead of its rich-country counterparts. The gargantuan US trade deficit? No problem. In 2005, it widened further, and the dollar only strengthened. Low investment and a deteriorating primary education system? Not to worry. The super-flexible US economy keeps managing to produce more with less." Kenneth Rogoff

"If the late great Argentine economist Raul Prebisch were alive today, he no doubt would wonder whether the world had turned upside down. His hugely influential "dependency" theory argued that if poor countries relied too much on commodity exports, they would never achieve the industrial depth needed to sustain rapid growth. Instead, they would become mired in a cycle of declining global commodity prices and ever-dwindling income shares." Kenneth Rogoff