In most countries that experience a fiscal crisis, there is no ambiguity about the situation. The government is unable to sell debt at a reasonable interest rate. This probably coincides with a broader shift out of domestic assets, as smart investors read the writing on the wall or in the newspapers. The currency collapses and, often, inflation accelerates. The government is forced to slash spending and, cap in hand, asks for help from the world’s least popular ambulance service: the Internation

With the confirmation of Xi Jinping as China’s new president this month at the National People’s Congress, the political transition from the outgoing leader, Hu Jintao, is complete. Indeed, the transition effectively took place last November when the Communist Party of China chose Xi as its general secretary, because all political power in China flows from the party. With the formal NPC confirmation of Xi as the country’s new president, he will become China’s most powerful leader by combining th

Since it made a top last September, Apple’s share price has crashed more than 40 percent. The chart shows the company’s stock is now in bear territory, with prices having broken a four-year trendline in December 2012. The powerful wave that started in early 2009 at $100 and carried Apple’s share to $700 has expired. Now, what lies ahead for the former Wall Street darling?Keeping the stock price as a reference, picture four scenarios and evaluate each likelihood. In the first, we imagine Apple’s

After North Korea’s third nuclear test, the tensions between South and North Korea have intensified so much that it raises the question of whether the countries have reached the point of no return. It is time for us to review what has gone wrong.Historically, South Korea has become more conciliatory toward North Korea, but North Korea has responded sometimes cooperatively and at other times provocatively with a varied degree of intensity. The Syngman Rhee government and the first half of the Par

CAMBRIDGE ― This year marks the 100th anniversaries of two distinct institutional innovations in American economic policy: the introduction of the federal income tax and the establishment of the Federal Reserve. They are worth commemorating, if only because we are at risk of forgetting what we have learned since then.Initially, neither the income tax nor the Fed was associated with the explicit concepts of fiscal and monetary policy. Indeed, it wasn’t until after the experience of the 1930s that

PARIS ― A chess piece has fallen in Latin America. The road to prosperity and peace for the citizens of many countries ― probably even yours ― runs through the recent death of Venezuelan President Hugo Chavez and a counterintuitive deal between two nations.Depending on whom you speak to, Chavez was either a jerk or a hero whose face should be immortalized as a two-tone T-shirt decal. What cannot be denied is that Transparency International rates Venezuela the most corrupt country in South Americ

Last Friday, the Labor Department reported that 236,000 new jobs were created in February. That’s good news ― but not nearly good enough. Even if this rate were to continue, which seems unlikely, the United States wouldn’t be back to pre-recession levels of unemployment for another four years.American workers remain in a bear market. More than 12 million Americans are still without work. Another 8 million are working part time but would rather be working full time. Many have given up looking. Th

March 11 marks the second anniversary of the Great East Japan Earthquake and tsunami that killed 15,881 people and left 2,668 others missing.No fewer than 315,000 people have been forced to live as evacuees, and about 160,000 of them are from Fukushima Prefecture, where the nuclear crisis broke out at Tokyo Electric Power Co.’s Fukushima No. 1 nuclear power plant.Let us together pray anew for the repose of the victims’ souls. Reconstruction from the disaster has been delayed, and the government

Justin Lin is a celebrity in China. He is a member of the National People’s Congress and the Chinese People’s Political Consultative Conference, which met last week to formalize the election of Communist Party General-Secretary Xi Jinping as president of the People’s Republic of China.Lin used to be a senior vice president of the World Bank. He is also honorary director of the China Center for Economic Research at Peking University. In Taiwan, where he was born in 1952, however, he is a military

Each human being is different from any other, having a mix of strengths and weaknesses that are unique. In the same way, societies differ from each other, having evolved out of different historical circumstances. For example, in the 19th century, the British Empire was a source of pride in the United Kingdom, being a small island that took control of more than half the planet and converted its resources to its advantage. India’s view on the same empire is different, for it saw its share in the g

Former independent presidential candidate Ahn Cheol-soo has returned home, pledging to “walk the thorny road to usher in a new politics.” Ahn’s plan to run in the April by-election in Seoul’s Nowon C district has left the main opposition Democratic United Party flustered. The party’s leaders are anxious, not knowing how to respond.The party is split over whether it should field a candidate of its own or return the favor Ahn made in the presidential election. He dropped out of the presidential ra

Plans are shaping up for a household debt write-off, one of the key campaign pledges of President Park Geun-hye. The Financial Services Commission is planning to launch an 870 billion won debt-rescheduling fund as early as the end of this month.The envisioned fund, dubbed the “People’s Happiness Fund,” will purchase overdue debts from financial companies and then write them down so that delinquent borrowers can resume debt repayment.Eligible for the debt rescheduling program are people who have

The forgotten war has just turned 10 years old, but of course almost no one took notice.Since early 2003, at least 300,000 people have been killed. More than 2 million others have been forced from their homes. And day by day, even now, the problems are worsening.More people fled to feculent refugee camps in the first two months of 2013 than in all of the previous year. The reason: intensifying aerial bombardments and indiscriminate military raids.The surviving victims of this terrible, unending

WASHINGTON ― The Obama administration’s approach toward North Korea has been described as “strategic patience.” A more accurate evaluation of U.S. policy would be “failure.” The administration has alternately wooed and threatened North Korea for four years, with no discernible effect.Here’s what failure looks like: Since President Obama took office, Pyongyang has conducted several missile tests and two nuclear weapons tests, the most recent on Feb. 12. When the international community has tried

There are worse things than learning, as the residents of Shanghai did this week, that the source of the water for your morning shower and tea was contaminated by at least 5,916 dead pigs. You might find out that lamb you ate for dinner was duck soaked in toxic chemicals. That those dumplings you had as a late-night snack were fried in oil recovered from a gutter running beside an open sewer. Or worse yet, that the baby formula you’ve fed your newborn is laced with a plasticizer that damages kid

PRINCETON ― Last month, Oxfam, the international aid organization, launched a campaign called “Behind the Brands.” The goal is to assess the transparency of the world’s 10 biggest food and beverage companies concerning how their goods are produced, and to rate their performance on sensitive issues like the treatment of small-scale farmers, sustainable water and land use, climate change, and exploitation of women.Consumers have an ethical responsibility to be aware of how their food is produced,

Shortly after the financial crisis spread around the globe like a plague, the world’s leaders developed what they thought would be an antidote. Working through the Group of 20, they agreed to adopt common rules for all financial companies, no matter where they operated. The global system would be less risky, the thinking went, if derivatives dealing, an opaque $639 trillion market, worked more like stock trading on exchanges. If large banks had more capital, they would be able to absorb losses s

It is an aphorism in Western society that those who cannot work successfully in their chosen profession often resort to teaching the very same discipline. While this statement does injustice to the numerous teachers who passionately pursue their chosen field of education, it is uncannily accurate in describing the faculty of South Korean law schools. The accuracy of the aphorism stems from the fact that the vast majority of law professors in South Korea were unable to pass the South Korean bar e

Anyone still in need of proof that austerity isn’t fixing the euro area’s debt crisis should visit Portugal. Hundreds of thousands of Portuguese took to the streets of Lisbon to protest against economic austerity on March 2, and the only surprise is that they didn’t do so earlier. Portugal is the euro area’s clearest example of how austerity is killing the patient, with the ill effects of counterproductive fiscal retrenchment unfolding before our eyes. We rarely hear about Portugal’s economic tr

Social networking makes teenagers of us all. Lots of my ridiculously successful friends ― some of whom appear regularly on television, give TED talks and are the kind of people who get harassed in restaurants by their fans (while my fans remain remarkably good-mannered and never, ever come over to introduce themselves or say a word) ― will still not permit themselves to have a Facebook account because the thought of people unfriending them is terrifying.One of these women ― you would recognize h