Economics

Extremes of wealth and income inequality

11 October 2016

The extremes of wealth and income inequality that have developed within the OECD countries, and particularly in the United States, since the early 1980s, have created unbalanced societies, which are by their nature more unstable than was the situation in the 1950s and 1960s. Arguably the mass of [read more]

Wealth is so concentrated that a large segment of society is virtually unaware of its existence

11 October 2016

As Piketty wrote, “the inescapable reality is this; wealth is so concentrated that a large segment of society is virtually unaware of its existence, so that some people imagine that it belongs to surreal or mysterious entities.”[1] So far from the playing field of opportunity and economic [read more]

Economic Imbalances

4 October 2016

The effects of serious domestic imbalances in large economies inevitably spill-over into the rest of the world. Pettis maintains that “Large persistent trade imbalances, …. are almost always caused by distortions in financial, industrial trade policies.”[1] However, as with Wile E [read more]

IMF: “Deutsche Bank appears to the most important net contributor to systemic risks in the global banking system”

1 October 2016

One of the lessons of 2008 is the fact that governments need to be more aware of the operations of banks and to understand that bank failures can have a catastrophic effect on national economies. Notwithstanding this, there is good reason for apportioning a share of responsibility for the events of [read more]

Does it matter if China cleans up its banks?

31 August 2016

By Michael Petts I’ve always thought that Shirley Yam of the South China Morning Post has a great nose for financial risk, and this shows in an article she published last week on mainland real estate. For anyone knowledgeable about the history of financial bubbles and crises, much of the [read more]

Rebalancing, wealth transfers, and the growth of Chinese debt

22 June 2016

Michael Pettis For the past ten years much of what I have written about debt in China was aimed mainly at trying to convince analysts and policymakers that the Chinese economy was structurally dependent on an unsustainable increase in debt in order to generate GDP growth rates above some level. [read more]

How Much Investment is Optimal

2 June 2016

Michael Pettis: A few years ago I wrote an essay on my blog that received a lot of attention and in which I tried to explain what the underlying assumption was for analysts who considered that China’s low level of investment relative to that of, say, the US proved that China could not possibly [read more]

The titillating and terrifying collapse of the dollar. Again.

8 May 2016

Michael Pettis: Foreign perceptions about the Chinese economy are far more volatile than the economy itself, and are spread across a fantastic array of forecasts. On one extreme there are still many who hold the view that overwhelmingly dominated the consensus just four or five years ago, with a [read more]

A Review of “Why Nations Fail” by Daron Acemoglu and James A Robinson

10 February 2016

A Review of “Why Nations Fail” by Daron Acemoglu and James A Robinson – pub. Profile Books, London 2012 The authors put forward a simple thesis, that those nations with “inclusive” institutions, that permit pluralism will prosper over the long term, in contrast to autocratic or, [read more]

Christina Figueres, Abu Dhabi January 18th 2016, WFES

23 January 2016

The following is a partial transcription of Christina Figueres’ speech made at the World Future Energy Summit, Abu Dhabi, January 18th 2016. What is particularly interesting is her rejection of the role of the market and the need to ensure that the market moves in the right direction [read more]

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