Articles written by Daniel McDowell
By Daniel McDowell
08 Nov 2011 |
Briefing
In the wake of last week's G-20 Summit in Cannes, France, a number of commentators have suggested that the lack of a U.S. response to Europe's debt crisis is a clear sign of American decline. To support the "decline narrative," some have trotted out financial crises from the 1990s, when the U.S. led the way in bailing out Mexico and East Asian countries. Yet, on two counts, the analysis is flawed.
By Daniel McDowell
14 Sep 2011 |
Briefing
It's happening again. International credit markets are showing signs of strain; economic growth around the world is stalling; and there are growing fears the global economy could slip back into a recession. Last Friday, the G-7 finance ministers met in Marseille, France. Despite calls from the International Monetary Fund for the group to "act now -- and act boldly," the summit ended without any plan of action.
By Daniel McDowell
23 May 2011 |
Briefing
The International Monetary Fund is in an unexpected state of flux. In the coming weeks, a highly political process will unfold
behind the scenes as the Europeans wrangle with a group of emboldened
emerging-market countries for the fund's top slot. If the U.S.
is shrewd, it will lobby for a bargain that will leave the Europeans in
control for now, but that paves the way for meaningful change in the
near future.
By Daniel McDowell
05 Apr 2011 |
Feature
In the wake of the global financial crisis, the world's emerging economies have finally achieved initial victories in their long-running campaigns to reform the structures of global financial governance. Via the newly empowered G-20, the emerging economies have won public acknowledgment of the need for capital controls and have pushed through a redistribution in voting power at the International Monetary Fund. These are significant achievements for the Global South, but their ultimate effects lie in the details.
By Daniel McDowell
22 Feb 2011 |
Briefing
Throughout the G-20 finance ministers meeting last weekend, murmurs were heard about the role of the dollar and the need to reform the global monetary system. This is nothing new, as several economies have expressed an interest in demoting the dollar since the global financial crisis broke out in 2008. But despite the chorus of calls for monetary-system overhaul, the prospects for meaningful change are dim.
By Daniel McDowell
21 Feb 2011 |
Briefing
Over the weekend, G-20 finance ministers met in Paris to discuss steps on how to address persistent global current account imbalances that some fear could send the global economy back into recession. In the end, the group reached consensus on a list of legitimate "imbalance indicators" by which each economy may be judged. Yet, as achievements go, this agreement is about as insignificant as they come.
By Daniel McDowell
05 Jan 2011 |
Briefing
The Federal Reserve's decision to extend temporary credit lines to five foreign central banks -- including the European Central Bank -- that were initially
scheduled to expire in January suggests that the Fed isn't counting on
2011 to be free of international financial distress, and that it remains prepared
to throw its resources behind any potential financial stabilization
effort for Europe.
By Daniel McDowell
20 Dec 2010 |
Briefing
Last week, China reported that over the past year, consumer prices had
risen 5.1 percent. While prices have been creeping up in China for
months now, the report grabbed international attention, and for good
reason. As the world's factory and its second-largest economy, China's
inflation rate has serious consequences for the global economy and
domestic stability.
By Daniel McDowell
29 Nov 2010 |
Briefing
China and Russia announced they will no longer use the dollar
to conduct their bilateral trade, but instead will use their domestic
currencies, the yuan and ruble, to do so. Some doomsayers have depicted
this move as yet another sign of the dollar's imminent decline, but a closer look suggests the deal will have more of a symbolic
impact than any tangible economic or geopolitical effects.
By Daniel McDowell
15 Nov 2010 |
Briefing
By the close of the G-20 summit in Seoul, the U.S. succeeded in getting the Chinese to acknowledge that global trade imbalances, largely a consequence of the sizeable U.S. trade deficit with China, were problematic for the
global economy, but failed in getting Beijing to do anything about it. This result says less about the G-20's ability to coordinate
policy than it does about the changing distribution of global power.
By Daniel McDowell
09 Nov 2010 |
Briefing
This week's G-20 leaders' summit in Seoul is likely to be more tense and contentious
than any of its predecessors.
This is especially true when it comes to the ongoing economic
prize-fight between the G-20's two juggernauts, the U.S. and China. Unlike
previous summits, where China largely bit its tongue in the face of
Washington's accusations, Beijing seems willing to go on the offensive
this go-round.
By Daniel McDowell
28 Sep 2010 |
Briefing
The Basel Committee on
Banking Supervision announced a new agreement, informally referred to as Basel III, that represents the most significant
set of international financial regulations to emerge since the onset of
the global financial crisis. Yet, to succeed, Basel III depends entirely
on national governments voluntarily following through on the new standards, threatening the nascent agreement's prospects.
By Daniel McDowell
10 Aug 2010 |
World Politics Review
Beijing announced last month that it was unpegging its currency
from the dollar and implementing a more flexible exchange rate system. With more
than a month of this new regime in the books, American
politicians are unimpressed with the yuan's appreciation against
the dollar. But examples from the recent past reveal that patience outperforms bluster when it comes to addressing Beijing's currency policy.
By Daniel McDowell
06 May 2010 |
World Politics Review
With last year's swine flu scare already a distant memory, the
risk of a new epidemic is spreading across Europe. This time the fears
have to do with the debt contagion facing Europe's
PIIGS: Portugal, Ireland, Italy, Greece and Spain. With each of these
countries carrying high debt-to-GDP ratios, financial markets are
growing increasingly skeptical that Greece's debt crisis will be successfully quarantined within its borders.
By Daniel McDowell
29 Apr 2010 |
World Politics Review
Despite early cooperation to address the global
liquidity shortfall, the G-20 has made little progress in the
area of financial regulation. Given the trauma that the entire world economy has suffered, in part due
to a lack of such regulation, one would think more headway would have
been made by now. A closer look, however, reveals a litany of factors
making coordination points
difficult to locate and trickier to maintain.
By Daniel McDowell
10 Mar 2010 |
World Politics Review
As current president of the G-20, South Korea has been busy promoting an apparently
novel solution
to the global trade imbalances that helped pave the way for the recent international financial crisis: an international currency swap regime. But how
would such an arrangement work, and could it actually help correct
current imbalances? As important, is there any chance this idea will
get off the ground?
By Daniel McDowell
18 Feb 2010 |
World Politics Review
Greece's massive debt has shaken
market confidence in the euro and led to a volatile month in
the common currency's exchange rate. Feeling increasing pressure to intervene, European
policymakers have been forced to weigh what is best for the euro against
what public opinion will tolerate. For now, none of the choices are
appealing, which leaves both sides playing a game of financial "chicken."
By Daniel McDowell
22 Jan 2010 |
World Politics Review
A G-7 meeting in Canada next month looks increasingly likely to be a forum for discussing
remedies for global currency imbalances, with a focus on China's undervalued yuan. But instead of trying to influence China's exchange rate through tough talk and diplomacy, a better strategy might be simply to do nothing, because Beijing will probably decide to revalue the yuan on its
own.
By Daniel McDowell
03 Dec 2009 |
World Politics Review
Low interest rates have become something of a staple at the U.S.
Federal Reserve in recent years. Early last month, though, the U.S.
central bank took its "cheap dollar" policy to another level by
committing to near-zero interest rates for the foreseeable future. While the Fed's decision has its roots in domestic economic goals, U.S. monetary policy does not just affect the American economy.
By Daniel McDowell
06 Oct 2009 |
World Politics Review
The IMF has recently responded to
criticisms of its policies toward the world's least developed countries by reforming its approach to "development" lending. The new lending facilities introduced by the fund appear to be part of
a larger "rebranding" effort, designed to promote a kinder, gentler image. But are the new terms available to the world's poorest economies really any friendlier?