VoxEU

As part of the US policy response to the global crisis, the Dodd-Frank Financial Reform Act calls for regulators to identify systemically risky financial firms ? the sort that took the US financial crisis global. But how to identify these firms remains unclear. Some claim the task is impossible. This column begs to differ and names the 10 most systemically risky financial firms in the US.

President of the World Bank, Robert Zoellick, caused a stir this week by hinting at a need to return to the gold standard. While supporting the drive for pro-growth policies and the desire to maintain an open international trade system, this column argues that a return to gold would struggle to achieve this and could even be a destabilising force.

Olivier Blanchard, economic counsellor at the IMF, talks to Romesh Vaitilingam about the two ?rebalancing acts? needed for a strong global recovery and the particular challenges facing the US, Europe and the emerging market economies. He also discusses fiscal consolidation, financial reform and ?currency wars?.

Developing countries have enjoyed strong economic performance over the past decade ? often growing twice as fast as OECD economies. This column asks whether developing countries will continue to outpace rich countries over the coming two decades. Updating Angus Maddison's famous projections, it forecasts a world starkly different from that of today. The world's poor countries, according to the forecast, will account for nearly 70 percent of global GDP in 2030.

Is the global economic recovery about to grind to a halt? This column provides evidence on economic performance in the decade after a macroeconomic crisis. It finds much slower growth, as well as several episodes of 'double-dips,' as well as many instances of plain 'bad luck' that strike at a time when the economy remains highly vulnerable.

Are declarations of victory against the global crisis premature? This column argues that 'graduation' - the emergence from recurrent crisis bouts - is a long and painful process which neither developed nor developing countries look close to completing. Two centuries of evidence suggests that most countries need 50 years before the chances of further crises subside.

In Mel Brooks' hit film and Broadway musical The Producers, those charged with making their musical a success instead try to profit from making it a spectacular failure. This column argues that some bankers may have been playing the same game in the run-up to the global crisis. If so, just as in The Producers, the perpetrators should be heading to jail.

With the advanced economies at a critical juncture, some economists are urging more fiscal stimulus while others argue that raising debt levels will stunt growth. This column presents the Reinhart-Rogoff findings on the relationship between debt and growth based on data from 44 countries over 200 years with a focus on the debt-growth link during high-debt episodes.

Reinhart and Rogoff's recent influential study of financial crises finds a recurring root - the country's property markets. This column argues that a similar housing bubble may be developing in China. Urgent research is needed to determine the risk of a full-blown crisis.

The world's current economic problems started when housing bubbles burst in several advanced economies. Economic recovery without housing market recovery is unlikely to be sustained. There is at least a one-in-eight chance of housing slumps in the three big economies (U.S., Japan and Germany) ending imminently, but there is nothing approaching the same probability elsewhere. If things turn out as projected here, we may be about to have a test of the locomotive theory - whether the big economies can pull along their smaller brethren - both for housing markets and generally.

The G20 communiqu stresses the difficulty of balancing fiscal stimulus and fiscal consolidation. This column-written by one of the world's leading macroeconomists-sums up the research-based policy analysis of the issue. Put simply, what advanced countries need is clarity of intent, an appropriate calibration of fiscal targets, and adequate structural reforms ? with a little help from monetary policy and their (emerging market) friends.

Smoking, heavy drinking, and being overweight are known causes of disease. This column presents experimental evidence to try and understand why people ignore this advice. It compares lifestyle choices with people's attitudes to risk and their patience, finding that while people with an unhealthy lifestyle are no more risk-loving than other people, they are more impatient.

Markets liked the European Stabilization Mechanism, but a closer look shows that the money announced is not available. When markets realize this, they may do to Portugal and Spain what they did to Greece. Worse still, crucial principles have been sacrificed for the sake of unconvincing announcements. The debt crisis is unlikely to go away and the monetary union will have to be reconstructed to re-establish the principle of collective fiscal discipline.

This column, first posted on April 19, 2008, argues that sovereign debt crises have historically followed financial crises. Although data covering only the last thirty years might have given few hints about Greece's current problems, the Reinhart-Rogoff database spanning eight centuries reveals that today's event are very much in line with historical experience.

First posted November 17, 2008, this column's analysis is more relevant than ever. It asks why investors rushed to government securities, even though the U.S. was at the epicenter of the financial crisis. This column attributes the paradox to key emerging market economies' exchange practices, which require reserves most often invested in U.S. government securities. America's exorbitant privilege comes with a cost and a responsibility that U.S. policy makers should bear in mind as they address financial reform.