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The article informs on a discussion paper recently posted on the Federal Reserve's website by Jeremy Rudd on inflation. It mentions that when firms expect costs to rise, they set higher prices, in both cases, inflation becomes a self-fulfilling prophecy. It also mentions that central bankers' task is to pin down expectations at a low, stable level, if they succeed, they can control inflation.

Contends that the only thing standing between Brazil and Asia-like rates of economic growth is poor government. How Brazil has changed for the worse; Disintegration of Brazil's society; High inflation rates; Debt; Comments from a paper by Rudiger Dornbusch, an economist at the Massachusetts Institute of Technology; Brazil's resources, including enthusiasm and entrepreneurialism.

The article reports on debt restructuring in Argentina, which defaulted on bonds worth $81 billion in December 2001. A majority of creditors surrendered their claims before a February 25th deadline, in exchange for new bonds worth about 35 cents on the dollar. The giant debt swap involves 152 varieties of paper denominated in six currencies and governed by eight jurisdictions. These bonds will now be exchangeable for three new issues. Bondholder groups think it a travesty. But on March 1st, Néstor Kirchner, Argentina's president, declared the restructuring a triumph, claiming "at least 70-75%" of bondholders had accepted it. Standard & Poor's, a credit rating agency, has said it will upgrade Argentina to B- after a successful debt swap. Argentina defaulted so heavily because it defaulted so late. Its descent into default, devaluation and destitution is vividly recounted in a new book by Paul Blustein. J.P. Morgan has announced that Argentina's weight in the EMBI Global will rise from 1.9% to about 2.7% once the latest debt swap is declared a success.

The article focuses on Ben Bernanke, a former Princeton professor of economics who is awaiting Senate confirmation to replace Alan Greenspan as chairman of the Federal Reserve Board. At the height of the stockmarket bubble in 1999, he co-authored an influential paper with Mark Gertler of New York University which argued that central banks should focus on asset prices only insofar as they are likely to influence consumer prices. Targeting asset prices directly, his paper claimed, would create more, not less, instability. This suggests that a Bernanke Fed might be even less inclined to fret about soaring house prices than Mr Greenspan, who has only recently worried aloud about them. Everyone knows that Mr Bernanke, unlike Mr Greenspan, is a long-standing supporter of the idea that the Fed should set a public target for inflation against which it can be held accountable, as many central banks do. Mr Bernanke will doubtless nudge the Fed towards inflation-targeting. But the change is likely to be evolutionary rather than radical. His initial task will be to prove his inflation-fighting credentials and shake off a lingering reputation for dovishness.

Discusses foreign relations between Great Britain and Germany in light of the June 1999 publication of a joint Anglo-German paper called `Europe, the third way, die neue Mitte,' emphasizing New Labour positions on Anglo-Saxon economics. Political, economic and institutional differences between Britain and Germany; Identification of the group that prepared the paper; Possible gains for British Prime Minister Tony Blair.

The article discusses economic and political conditions in Ecuador, with a particular focus on budget shortfalls arising from drops in oil prices and the strength of the dollar. Details on Ecuadorean President Rafael Correa and on the country's public debt are also presented. Other topics include corruption and regulations allowing the government to issue electronic money and paper currency associated with its Central Bank.

This article discusses the impact of foreign investment within China. During a session of China's parliament, the head of the government's statistics service said that if mergers and acquisitions by foreign companies in China continued unchecked, China's brands and its innovative ability would disappear. The debate over foreigners intensified, with some papers publishing criticisms of the sale of stakes in Chinese state-owned banks to foreign banks.

This article focuses on United States Federal Reserve chairman Alan Greenspan, whose term ends in January 2006. At this year's meeting of the Federal Reserve Bank of Kansas City, a collection of central bankers and economists, distinguished even by the elevated standards of Jackson Hole, Wyoming paid tribute to Alan Greenspan's 18 years as chairman of the Federal Reserve. Greenspan gave warning that an unusually long period of economic stability might have encouraged investors to accept lower risk premiums and thus inflated the prices of assets, such as shares and homes. Moreover, Mr Greenspan, who until recently gave short shrift to the idea of a housing bubble in America, said that the property boom was an "imbalance" and that prices of homes could fall. He argued that in future the Fed will need to pay more attention to asset prices. Despite Mr Greenspan's caution, the gathering preferred to focus on his past performance. His chief examiners were Alan Blinder (a former vice-chairman of the Fed) and Ricardo Reis, both of Princeton University, whose paper concluded that "he has a legitimate claim to being the greatest central banker who ever lived". According to Messrs Blinder and Reis, the main ingredients of Mr Greenspan's tenure have been intellectual flexibility, scepticism of economic models and forecasts and a preference for discretion over formal policy rules such as inflation targeting. Mr Greenspan's Fed sees monetary policy as risk management, looking not only at the most likely path for the economy but at all the possible paths it might follow. In any case, Mr Greenspan's words of caution at Jackson Hole were surely an attempt to lean against the current housing boom. Perhaps he is showing more intellectual flexibility on how to respond to asset prices than Messrs Blinder and Reis give him credit for.

The article focuses on economic conditions in Argentina. No matter where one goes in Argentina these days, evidence of the country's remarkable economic recovery is hard to avoid. In the northern Patagonian province of Rio Negro, the autumn apple crop has given way to hordes of skiers; near the Brazilian border, Chilean-owned factories churn out paper pulp; and in the beach resorts south-east of Buenos Aires, builders race to finish new homes in time for the holiday tenants who will flock there next January. Since its collapse in 2001-02, Argentina's economy has grown by a quarter. According to government estimates, it has finally surpassed its previous peak of May 1998. In another sign that the worst is over, on July 18, 2005 the government issued dollar bonds for the first time since its massive debt default of 2001. But while the economy may have recovered its former size, it is different in many other ways. Some of the imbalances of the 1990s have been fixed: budget deficits have turned into surpluses; devaluation has ignited exports; and the public debt has been restructured. Yet many ordinary Argentines see a country that is more unequal, less prosperous and less economically secure than it was seven years ago. Many of the new jobs are in the informal sector: Argentina has the same number of formal-sector employees today as it did in 1980, while the number of informal workers has doubled. Such jobs pay less. Real wages in service jobs are still a quarter below their pre-crisis level. The overall share of wages in GDP has declined by 15%.

JUST when Gerhard Schr&oauml;der, Germany's chancellor, was beginning to look as if he could do nothing right, he may at last be starting to get his act together again. Over the past few weeks, he has managed to impose his authority on his rebellious party, clinched a deal with the opposition on sorely needed labour-market reforms, slashed taxes on savings, put forward a raft of proposals to help small businesses, and, if a leaked strategy paper from his office is to be believed, is at last contemplating an overhaul of Germany's generous welfare state, with a strong new accent on personal responsibility. After weeks of discussion within government ranks of how to make the rich pay more, just before Christmas Mr Schr&oauml;der surprised everyone and pleased businessmen by announcing plans for a new savings tax which will actually leave higher earners better off. The government has announced plans, for example, to extend Germany's notoriously restrictive shop-opening hours from 4pm to 8pm on Saturday--a small step, but one that could well be lengthened, once the bill reaches the Bundesrat, parliament's upper house, where state premiers from all the main parties have already said they will press for a further relaxation of the law. He sets out a raft of measures to help the small and medium-sized businesses of Germany's beleaguered Mittelstand, which provides jobs for around 70% of German workers but has hitherto felt left out in the cold by Mr Schr&oauml;der's government.

Describes the harsh effect the breakup of the Soviet Union and a fall in timber and paper prices is having on Finland's timber-based economy. Disappearance of Soviet export markets; Move to peg the Finnish markka to the ECU; Historical governing problems, including socialist paternalism; Election Finland's non-Socialist government for 25 years; Upcoming referendum on joining the European Community (EC); Debate over whether to join.

Discusses the white paper to be put out by the European Union (EU) to define the main bits of the acquis communautaire (the EU's body of laws and regulations) that the East Europeans must adopt to be ready for a single market in labor, goods and capital. Examples of countries that have made compatibility with the laws of the EU a legal requirement; Two areas where East Europeans face particular difficulties in adopting EU legislation.

The article focuses on upward economic mobility in Europe, Nordic countries, and the United States. Two new research papers confirm that, if one compares the incomes of children with those of their parents, or considers how long people in one income group stay there, Nordic countries emerge as far more mobile than America. In the Nordic countries, tax and welfare systems deliberately try to help the children of the poor to do better than their parents.

The article looks at how Brazil issued its first international bond. Emerging markets are tainted in investors' eyes by "original sin": they must borrow from rich foreigners in the foreigners' currencies. When investors worry, those currencies jump, increasing the borrowers' burden, sometimes through no fault of their own. Brazil, the world's biggest emerging-market debtor, knows all about original sin, having endured a series of painful devaluations over the decades. On September 19th it gained something akin to absolution, by issuing its first international bond in its own currency, the real. Brazil is not the pioneer. Uruguay issued an international peso bond in 2003 and Colombia followed last year. Other countries, such as Mexico, make it easy for foreign investors to buy domestic bonds. Brazil has a giant domestic debt market, where interest rates are among the world's highest, but makes it hard for foreigners to invest. The new bond pays real interest rates without the red tape, and investors queued up. Until now, only investors willing to open accounts and pay taxes in Brazil, mainly locals along with foreign banks and hedge funds, have been able to buy real paper yielding close to 20%.

The article discusses a paper drawn up by a team led by Wim Kok, a former Dutch prime minister. Kok's brief was to produce a progress report on the so-called Lisbon agenda: the ambition to turn the European Union (EU) into "the world's most competitive, knowledge-based economy by 2010", set at an EU summit in Lisbon in 2000. Kok's view of how things are going at the halfway stage is not encouraging. Unemployment remains high, growth is slow, researchers are moving to America, manufacturers to China. There is also the uncertain outlook for Europe's growing number of pensioners. The structural reforms that are seen as crucial to the revitalisation of the European economy are, above all, the responsibility of national governments. Besides the technical complexity of harmonising social-security reforms across the European continent, experience suggests that the EU is ill-suited to imposing reforms. If real reform is to happen in Europe, it will be hard necessity and the power of example that create the pressure for change. Fortunately, both are being provided by the ten countries that joined the EU in May, particularly the eight from central Europe.

The article offers policy suggestions for economic growth in developing countries. Over the past 15 years or so, economists have developed a long list of now-familiar remedies for developing countries hoping to grow their way to prosperity. This "Washington Consensus" includes the removal of trade protection and the introduction of deregulation, as well as fiscal and monetary discipline. Meanwhile, other economists have suggested that development depends not on specific policies but on "institutional" factors, such as a respect for property rights, which constrain the powers of the state. Two studies argue that institutional overhaul and broad economic reforms are not necessary to spur economic growth. In one of these papers, Edward Glaeser, a Harvard economist, and three co-authors question several prominent studies that treat institutions as a wellspring of development. Researchers at Harvard's Kennedy School of Government looked at 83 instances between 1957 and 1992 in which annual gross domestic product growth increased by at least two percentage points and the higher growth was sustained for at least eight years. These bursts of growth were not normally preceded by a big shift in policy, or by full-blown economic and political reforms--such as liberalisation or a move towards democracy. What struck the authors was the humble nature of the initial triggers of growth. These usually consist of nothing more than relaxing specific constraints on private activity.

The article comments on economic policy in the United States. This week the Federal Reserve added some flesh to America's skeletal interest rates when it raised them by a quarter of a point, to 1.25%. The market predicts that rates will gradually rise to 4% or thereabouts by the end of next year. The economy is skipping along nicely and rates, after all, are still very low. But the market is also starting to fret about inflationary pressures. Indeed, some--this newspaper included--think that the Fed has been too sluggish: with monetary policy still loose, inflation is likely to creep upwards. But the outlook for interest rates will be quite different if inflation is not America's biggest economic problem. A fascinating paper, "Dicing with Debt", by Stephen King, the head economist at HSBC, a big British bank, explains why it might not be. Mr King's starting-point is that the Fed and other central banks need not have been as worried as they were about the threat of deflation. As the experience of America in the 1930s and Japan in the 1990s shows, central banks can do little about this, because they cannot set interest rates lower than zero. There is thus a distinct danger that by pushing real interest rates back to where they should have been in the first place, monetary tightening will reveal the economic recovery to have been more fragile than most think--and threaten a hard landing and the malign sort of deflation that the Fed was so keen to avoid. This could even mean that rates need to fall next year, not rise. And with rates so low and budget deficits already high, America's economic armoury is much depleted.

According to Thai officials, two "Vayupak" mutual funds, to be set up by the Thai government, will not only provide a good return to investors: they will also mop up excess deposits in Thai banks, improve the management of state-owned firms, speed privatisation and rescue stricken Thai businesses. Suchart Jaovisidha, the finance minister, says that the government devised this scheme to make better use of the 500 billion baht ($12 billion) that it has tied up in wholly and partially state-owned firms. Ammar Siamwalla, a prominent Thai economist, argues that Vayupak is a pseudo-privatisation in which the government manages to borrow against the value of its holdings without relinquishing control, and without adding to the public debt--on paper at any rate. So Vayupak will mark another step in the government's growing involvement in the economy, including a role in corporate restructuring, through the state-owned Thai Asset Management Corporation, and its big stake in many banks thanks to state-led recapitalisation after the 1997-98 financial crisis.

Compares government spending in countries with central government and parliamentary systems. Authors of a discussion paper for the Center for Economic Policy Research; Details of findings; Reasons for lower spending in governments run by presidents; Limitations of their research; Implications for Great Britain.

The article focuses on the newly formed Commonwealth of Independent States, which was launched by three Slav republics, Russia, Ukraine, and Belorussia, in the Belorussian capital, Minsk, on December 8, 1991. It has already done two valuable jobs. One was to provide the means of a quick, dignified death for Russia. The Commonwealth's other use has been to offer a forum for resolving, or at least discussing, the problems bequeathed by Russia to its successor states. A couple of the most pressing issues have already been settled, on paper anyway.