Currency War

Comparing Perspectives from Developed and Emerging Markets At the February G20 summit in Moscow, Bank of Japan Governor Masaaki Shirakawa said, “At this meeting, IMF and many other participants said it is not appropriate to describe the current situation as currency war and that such an expression is overblown. G20 as well as G7 share the view that efforts by each country to stabilize their own economy will lead to stability in the global economy.” IMF Managing Director Christine Lagarde echoed this statement when she stated, “We think that talk…

Reworking the U.S. Corporate Income Tax Rate

One of the hottest questions in U.S. politics today is, “Does the high U.S. corporate income tax rate relative to other countries, act as a disincentive for multinational firms to invest in the U.S.?” “Has the U.S. corporate tax rate make American firms less competitive globally and cause them to export jobs and capital overseas?” To examine these questions, it is important to know just how much U.S. corporations must pay in total corporate income tax. According to the Organization for Economic Development’s Centre for Tax Policy and Administration, the…

A New Defense of Fiscal Policy

Two important causes of the recent financial crisis were the increasing amount of debt assumed by consumers and the excessive leverage of banks and other financial institutions.  During the decade before the crisis, rates were low, credit was easy, and expectations about the future state of the economy were positive, in large part because of rising real estate values.  Gradually, consumers took on more and more debt.  Between 2000 and 2008, household debt rose from 96% of US personal income to 128%. At some point, and for reasons unknown, there…