Imbalances, Disequilibria and Correlation Traps

by Michael Pettis, China Financial Markets Chiwoong Lee at Goldman Sachs has a new report out (“China vs. 1970s Japan”, September 25, 2012) in which he predicts that China’s long-term growth rate will drop to 7.5-8.5%.  I disagree very strongly with his forecast, of course, and expect China’s growth rate over the next decade to …

Globalization and Minsky

by Michael Pettis Author’s note: About ten years ago I published an article in Foreign Policy that I just recently re-read. In the article I extended one of the arguments I made in my book, The Volatility Machine, that the globalization process is driven primarily by monetary expansion and the consequent increase in risk appetite. …