Making Room for China

Dani Rodrik writes about the current Chinese government's main instrument which is the currency undervaluation for subsidizing manufacturing and other tradable sectors, and for promoting growth through structural change.

The author is a Professor of Political Economy at Harvard University’s John F. Kennedy School of Government, is the first recipient of the Social Science Research Council’s Albert O. Hirschman Prize. His latest book is One Economics, Many Recipes: Globalization, Institutions, and Economic Growth.

Read the whole article here.

The Gold Bubble and the Gold Bugs

Nouriel Roubini writes about the Gold price in recent years; Gold prices rise sharply only in two situations: when inflation is high and rising, gold becomes a hedge against inflation; and when there is a risk of a near depression and investors fear for the security of their bank deposits, gold becomes a safe haven.

Read the rest of the article on the Project Syndicate website, click here

The Stories you missed in 2009

Check this article, it appeared in the Foreign Policy magazine, and it's about the stories we may missed in 2009, while their importance is so great that could affect the world.

the link is here, and below is the abstract of the article

Sometimes it's the page A14 stories -- the ones that never see the light of cable news or take a second life in the blogosphere -- that tell you the most about what happened during any given year. From a naval alliance that could shift the military balance of power on two continents to a troubling security gap in the U.S. passport system to a brand-new way to circle the globe, these are the stories that never got the attention they deserved in 2009 but could dominate the conversation in 2010.

The Northeast Passage Opens for Business

The mythic Northwest Passage still captures imaginations, but this September, two German vessels made history by becoming the first commercial ships to travel from East Asia to Western Europe via the northeast passage between Russia and the Arctic. Ice previously made the route impassable, but thanks to rising global temperatures, it's now a cakewalk. "There was virtually no ice on most of the route," Capt. Valeriy Durov told the BBC. "Twenty years ago, when I worked in the eastern part of the Arctic, I couldn't even imagine something like this."

The significance of this development varies depending on whom you ask. The passage could be a gold mine for the commercial shipping industry, opening up a vastly shorter and cheaper route from Asia to Europe. But for environmentalists, the news is a sign that climate change may be reaching a dangerous tipping point.

Scientists' latest observations suggest that the Arctic might be largely ice-free during the summer within the next decade. The environmental consequences -- increased flooding in coastal regions around the world and extinction of local animal species -- are well known. But the thaw also opens possibilities for geopolitical competition. Russia has literally planted its flag beneath the Arctic ice, staking a claim to newly accessible natural resources, much to the consternation of the other northern states. The newly opened route will also benefit Russia by bringing new business to its eastern ports. With the scramble for the Arctic's riches heating up, even peaceful Canada has been holding war games to prepare for possible military confrontation.

Photo: istockphoto.com

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Caricature map of Europe, 1914

A visualization of the decline of the world's four maritime empires (British, Portuguese, French, Spanish) from 1800 to 2009.

Visualizing empires decline from Pedro M Cruz on Vimeo.