China devalues – what it means

The New York Times reports that China "on Tuesday sharply devalued the country’s currency, the renminbi, a move that could raise geopolitical tensions and weigh on growth elsewhere."  Why?  What's the big deal about changing the value of a currency by two percent?  Three reasons: 1. The value of the renminbi relative to the dollar is part of what determines the price of Chinese imports in the … [Read more...]

Remembering Thalidomide: In Praise of Regulations and Bureaucrats

The front page of this morning’s New York Times carried an obituary for Dr. Frances Oldham Kelsey.  The name wasn’t familiar to me, but I knew the story for which she was famous: blocking the approval of thalidomide for use in the United States.  As the Times points out, by September 1960, “The drug had already been sold to pregnant women in Europe for morning sickness, and the application seemed … [Read more...]

Secular stagnation: What is it? Should we care?

Why is the economy growing so slowly?  Is this a temporary phenomenon or a new normal?  Chris Farrell and Steve Cecchetti had a nice discussion about these questions this morning on Minnesota Public Radio (MPR).  Larry Summers first applied the term "secular stagnation" to these questions and there's been much debate about the idea ever since. (VoxEU published an e-book on the subject that is … [Read more...]