Research Topics

Western media and academia have heralded the China collapse narrative. This paper provides a critical and balanced examination of the four challenges facing the Chinese economy—namely, deflation, debt, demographics, and de-coupling/de-risking. It argues that while deflationary pressure is present, consumer demand has been improving as the property market stabilized and policies to bolster domestic demand were and continue to be effective in reflating the economy. China’s debt is predominantly internal and semi-public; the central government could leverage up to resolve the local government debt conundrum. A talent dividend and employment optimization could offset the dissipating population dividend; and finally, China’s high-quality opening, its participation in the multilateral system and its meaningful engagement with the Global South help counteract the decoupling/de-risking strategies of the US. In sum, while challenges abound, China’s sound economic foundations and sensible developmental and macroeconomic policies help to propel economic growth, structural transformation, and green transition.  

Cosponsored by the Levy Economics Institute of Bard College and MINDS – Multidisciplinary Institute for Development and Strategies, with support from the Ford Foundation

Everest Rio Hotel
Rio de Janeiro, Brazil
September 26–27, 2013
This conference was organized as part of the Levy Institute’s global research agenda and in conjunction with the Ford Foundation Project on Financial Instability, which draws on Hyman Minsky's extensive work on the structure of financial governance and the role of the state. Among the key topics addressed: designing a financial structure to promote investment in emerging markets; the challenges to global growth posed by continuing austerity measures; the impact of the credit crunch on economic and financial markets; and the larger effects of tight fiscal policy as it relates to the United States, the eurozone, and the BRIC countries. 

The Rescue Plan Cannot Address the Central Problem

The trillion-dollar rescue package European leaders aimed at the continent’s growing debt crisis in May might well have been code-named Panacea. Stocks rose throughout the region, but the reprieve was short-lived: markets fell on the realization that the bailout would not improve government finances going forward. The entire rescue plan rests on the assumption that the eurozone’s “problem children” can eventually get their fiscal houses in order. But no rescue plan can address the central problem: that countries with very different economies are yoked to the same currency.