US moves warships to track North Korea rocket launch

North Korea launched a rocket in April but it failed after only a few minutes

The US is moving navy ships into position to track a North Korean rocket due to launch later this month.

The warships were moved to achieve "the best situational awareness", the US military chief in the region said.

Japan's government, meanwhile, has formally issued an order to its military to shoot down any rocket debris that infringes on its territory. 

The Migrant Money Machine

The developed world could make a big difference to the global economy simply by helping migrants to do what comes naturally: send money home.

BY PETER PASSELL | DECEMBER 4, 2012

Everybody knows that the tens of millions of migrants from developing countries (documented and undocumented) who work in Europe, North America and the Persian Gulf send home a lot of money. What most don't know, though, is that the sums are triple the development aid budgets of the rich donor countries, and growing rapidly. Nor are many people aware that remittances have morphed from an afterthought to a key component in strategies for transforming poor countries into successful "emerging market" economies. Indeed, it's becoming clear that Lant Pritchett, a brand-name economist now at the Center for Global Development, was ahead of his time in arguing that the best thing rich countries could do for the developing world is to let their migrants do the heavy lifting.  

Top Ten Myths About China in 2012

Posted by Evan Osnos

For China, 2012 was a humbling year. When the history of China’s reform era is written, this moment may prove to be a pivot point, a time when the myths that China and the world had adopted about the politics and economics of the People’s Republic began to wash away, leaving blunt facts about what China’s idiosyncratic national system has and has not achieved. Here are some of the myths that collapsed this year:

Inflation - Not so great expectations

Dec 3rd 2012, 15:09 by M.C.K. | WASHINGTON 

THOSE who criticise central banks for having acted with insufficient vigour generally argue that they have failed to talk a good game. Paul Krugman and Michael Woodford are among the best-known advocates of this view. The underlying theory is that the expectation of faster consumer price inflation causes prices to rise more rapidly as people attempt to offset the anticipated erosion of their purchasing power by spending more on goods and services. According to this model, central banks theoretically have the power to lower real borrowing costs and real debt burdens (and real wages) even when nominal interest rates have hit 0%, simply by talking convincingly.

The Debt Limit Is the Real Fiscal Cliff

December 3, 2012, 6:00 am

Washington is all abuzz over the impending tax increases and spending cuts referred to as the fiscal cliff, an absurdly inaccurate term that both Democrats and Republicans have unfortunately adopted in order to pursue their own agendas. In truth, it is a nonproblem unless every impending tax increase and spending cut takes effect permanently – something so unlikely as to be effectively impossible.

External Shocks and China’s Monetary Policy

By zheng Liu and Mark M. Spiegel

China prohibits its private sector from freely trading foreign assets and tightly manages currency exchange rates. In the wake of the recent global financial crisis, interest rates on China’s foreign assets fell sharply, while yields on Chinese domestic assets remained relatively high, posing a challenge for China’s monetary policy. Opening the capital account would improve China’s capacity to weather external shocks, such as sudden declines in foreign interest rates. However, allowing the exchange rate to float without removing capital controls is less effective.