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Paul Krugman has noticed that trade has absolutely collapsed with this economic downturn. It is worse than the Great Depression.
Question: is this aiding global re-balancing?
Here are two data points from Europe today which lead to that question.
The BBC reports on Germany:
Germany’s trade surplus fell 43% in August after a drop in exports from Europe’s biggest [...]

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Marshall Auerback here. This is a cross-post from an article I wrote at the finance site New Deal 2.0, a one-stop-shop for current news, sharp analysis and potential solutions of the country’s fiscal crisis.
We’ve said it before and we’ll say it again. As a matter of national accounting, the domestic private sector cannot increase savings [...]

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I have to admit to hyping the debate now swirling about protectionism. I believe that tariffs are not a very good solution to a trade problem as they are likely to result in retaliation and/or escalation. Moreover, they end up protecting small groups at the expense of higher prices for everyone else.  That is why [...]

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I just finished reading a Financial Times article about the likely coordinated global policy solutions to emerge from the upcoming G-20 meeting in Pittsburgh.  It does not sound like there is a huge amount of consensus. Indeed, it sounds like there is a lot of finger pointing regarding what the true causes of the financial [...]

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Now that President Obama has signalled his willingness to punish the Chinese for dumping on tires, a whole host of other industries are likely to file their own ‘copy-cat’ complaints.
Reuters says:
President Barack Obama’s decision to restrict tire imports from China after union workers complained of a surge could lead to copycat cases in areas such [...]

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In 2002, the global economy was weak and equity markets around the world were at multi-year lows following the greatest equity bubble and bust in world history. Many policy makers including Alan Greenspan, chairman of the U.S. Federal Reserve, feared a deflationary spiral of Great Depression proportions resulting from the stock market collapse.
To prevent such [...]

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Chinese vice-premier Wang Qishan has been appointed to lead a taskforce to make the renminbi the currency of choice for trade settlements, especially with regional trading partners. HSBC economist Qu Hongbin believes this latest salvo in China’s intensifying efforts to ditch the dollar demonstrates the Chinese are moving sooner than most expect to internationalise their [...]

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When the stimulus bill was being crafted, I wrote three posts lamenting the protectionist Buy American provision attached to the bill.

‘Buy American’ will translate into a 21st century Smoot-Hawley
The U.S. is exporting unemployment with ‘Buy America’
Canada is furious about U.S. protectonism

The last of these three demonstrated that the provision was needlessly creating lots of ill [...]

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During the Great Depression, it was the Smoot-Hawley Tariff Act, which in hindsight is blamed for triggering a wave of protectionist actions globally.  Protectionism was a major contributor to the downward spiral that created depression.  So, have we avoided this kind of outcome this go around?
At this juncture, it is pretty unclear we have. Simmering [...]

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This comes via Bloomberg:
Global central banks risk inflation, currency devaluation and a “big consolidation” in bond markets by pumping cash into their economies, the People’s Bank of China said in its quarterly monetary policy report.
The Federal Reserve and the Bank of England this year started quantitative easing, or printing money to buy government bonds, a [...]