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Begin New Search Topic Economics Political Geography United States Content Type Policy Brief Publication Year within 25 Years

31. Economic Statecraft: American Economic Power and the New Face of Financial Warfare

Author:
Elizabeth Rosenberg and Zachary K. Goldman
Publication Date:
06-2015
Content Type:
Policy Brief
Institution:
Center for a New American Security (CNAS)
Abstract:
The United States has long relied on its economic power to protect and advance its interests abroad. In an increasingly integrated international financial system, the U.S. economy and capital markets remain the largest in the world by almost every measure. This status affords the United States an important global leadership position and the ability to shape foreign policy outcomes with economic tools. The structure of the international trade and financial system, in which many significant banking and energy transactions as well as currency reserves are denominated in U.S. dollars, reinforces the central role of the United States.
Topic:
Foreign Policy, Economics, Globalization, International Trade and Finance, Markets, and Power Politics
Political Geography:
United States

32. Quantity Theory of Money Redux? Will Inflation Be the Legacy of Quantitative Easing?

Author:
William R. Cline
Publication Date:
05-2015
Content Type:
Policy Brief
Abstract:
Since the onset of the Federal Reserve's unconventional program of large scale asset purchases, known as quantitative easing (QE), some economists and financial practitioners have feared that the consequent buildup of the Fed's balance sheet could lead to a large expansion of the money supply, and that such an increase could cause a sharp rise in inflation. So far fears about induced inflation have not been validated. This Policy Brief examines the basis for the original concerns about inflation in terms of the classic quantity theory of money, which holds that inflation occurs when the money supply expands more rapidly than warranted by increases in real production. The Brief first reviews the US experience and shows that whereas rapid money growth might have been a plausible explanation of inflation in the 1960s through the early 1980s, subsequent data have not supported such an explanation. It then shows that the quantity theory of money has not really been put to the test after the Great Recession, because a sharp increase in banks' excess reserves and corresponding sharp decline in the "money multiplier" has meant that the rise in the Federal Reserve's balance sheet has not translated into increased money available to the public in the usual fashion. The most likely aftermath of quantitative easing remains one of benign price behavior. However, if nascent inflationary conditions materialize, the Federal Reserve will need to manage adroitly the large amounts of banks' excess reserves that have accumulated as a consequence of QE in order to limit inflationary pressures.
Topic:
Economics, International Political Economy, International Trade and Finance, and Federal Reserve
Political Geography:
United States

33. Reshoring by US Firms: What Do the Data Say?

Author:
Lindsay Oldenski
Publication Date:
09-2015
Content Type:
Policy Brief
Institution:
Peterson Institute for International Economics
Abstract:
Reshoring—when firms shift manufacturing production back to the United States—has been getting a great deal of publicity lately. Oldenski examines the most recent data on the global operations of US firms and concludes that although some companies have reversed their previous offshoring decisions, there is no evidence of a widespread reshoring trend. But this should not be considered a defeat for US competitiveness. US multinationals continue to move operations offshore, but they also continue to grow stronger, producing more in their US operations and adding more to total US exports. The structure of US manufacturing has changed, but the ability to adapt to the changing nature of global business has been and will continue to be crucial to the continued growth of US manufacturing.
Topic:
Economics and International Trade and Finance
Political Geography:
United States

34. Chinese Investment and CFIUS: Time for an Updated (and Revised) Perspective

Author:
Theodore Moran
Publication Date:
09-2015
Content Type:
Policy Brief
Institution:
Peterson Institute for International Economics
Abstract:
For more than a decade, China has complained about what it maintains has been a pattern of erratic and politicized treatment of Chinese investors when they attempt to acquire US companies. The Chinese want the Committee on Foreign Investment in the United States (CFIUS) to be more open and transparent in its rulings and to not discriminate against Chinese firms. The United States is not likely to accede to these demands in any formal or legal manner. Moran proposes practical steps to address the concerns of Chinese investors without diluting CFIUS procedures. He provides a national security threat assessment filter, which allows Chinese investors—like investors of all nationalities—to determine when their proposed acquisitions might pose a genuine threat and when any such threat is simply not plausible. He also suggests that first-time Chinese investors seek expert counsel to overcome the secrecy surrounding CFIUS objections to figure out how to proceed with problematic acquisitions.
Topic:
Economics, Markets, and Foreign Direct Investment
Political Geography:
United States

35. An Assessment of the Korea-China Free Trade Agreement

Author:
Jeffrey Schott, Eujiin Jung, and Cathleen Cimino-Isaacs
Publication Date:
12-2015
Content Type:
Policy Brief
Institution:
Peterson Institute for International Economics
Abstract:
Of all the free trade agreements (FTAs) concluded by Korea with its major trading partners since the turn of the century, the Korea-China FTA may be the largest in trade terms. It is, however, far from the best in terms of the depth of liberalization and the scope of obligations on trade and investment policies. Korea and China agreed to liberalize a large share of bilateral trade within 20 years, but both sides incorporated extensive exceptions to basic tariff reforms and deferred important market access negotiations on services and investment for several years. Political interests trumped economic objectives, and the negotiated outcome cut too many corners to achieve such a comprehensive result. The limited outcome in the Korea-China talks has two clear implications for economic integration among the northeast Asian countries. First, prospects for the ongoing China-Japan-Korea talks will be limited and unlikely to exceed the Korea-China outcome. Second, Korea and Japan need to strengthen their bilateral leg of the northeast Asian trilateral and the best way is by negotiating a deal in the context of the Trans-Pacific Partnership.
Topic:
Economics, International Trade and Finance, Politics, and Bilateral Relations
Political Geography:
United States, China, Asia, and Korea

36. Estimates of Fundamental Equilibrium Exchange Rates, November 2015

Author:
William R. Cline
Publication Date:
11-2015
Content Type:
Policy Brief
Institution:
Peterson Institute for International Economics
Abstract:
The latest semiannual fundamental equilibrium exchange rate (FEER) estimates find that the US dollar is now overvalued by about 10 percent, comparable to levels in 2008 through early 2010 and again in 2011. Unlike then, the current strong dollar does not reflect a weak renminbi kept undervalued by major exchange rate intervention by China. Instead, China's current account surplus has fallen sharply relative to GDP, and its recent intervention has been to prevent excessive depreciation rather than to prevent appreciation. Additionally, declines in the real effective exchange rates (REERs) for major emerging-market economies and resource-based advanced economies, driven by falling commodity prices in recent months, have strengthened the dollar. Recent increases in the REERs for the euro area and Japan have removed their modest undervaluation identified in the last FEERs estimates in May, and the Chinese renminbi remains consistent with its FEER. The dollar's rise by nearly 15 percent in real effective terms over the past two years could impose a drag of nearly one-half percent annually on US demand growth over the next five years. As the Federal Reserve moves to normalize US monetary policy, it may need to consider a gentler rise in interest rates than it might otherwise have pursued, both to temper possible further strengthening of the dollar in response to higher interest rates and to help offset the demand compression from falling net export
Topic:
Economics, International Trade and Finance, Monetary Policy, and GDP
Political Geography:
United States and China

37. Creating Korea's Future Economy: Innovation, Growth, and Korea-US Economic Relations

Author:
Sean P. Connell
Publication Date:
01-2014
Content Type:
Policy Brief
Institution:
East-West Center
Abstract:
The Korean government's "creative economy" agenda reflects growing consensus that Korea's future growth and prosperity depends on its ability to become a global leader in developing and commercializing innovative new products, services, and business models. To succeed, the Korean government must address regulatory, structural, educational, and cultural obstacles that have constrained Korea's ability to fully utilize its innovative capacities. This new emphasis on innovation brings Korea into closer alignment with the United States, which has long focused on innovation in its growth strategies. Moreover, it comes during the early stages of implementation of the US-Korea Free Trade Agreement (KORUS), which intersects with important areas of Korea's innovation framework policies. Policymakers, businesses, and researchers in both countries should examine potential new opportunities to increase cooperation around initiatives aimed at fostering innovation and growth, both within the bilateral context and at a global level.
Topic:
Economics, Industrial Policy, International Trade and Finance, Treaties and Agreements, and Bilateral Relations
Political Geography:
United States

38. Rethinking the National Export Initiative

Author:
Caroline Freund
Publication Date:
02-2014
Content Type:
Policy Brief
Institution:
Peterson Institute for International Economics
Abstract:
As the United States struggled with unemployment and other effects of the Great Recession in January 2010, President Barack Obama set the goal of doubling exports within five years and creating 2 million new export-related jobs. Four years later, however, exports are less than halfway toward that goal and the rate of export growth is slowing. More worrisome, the administration's strategy failed to boost average export growth from historical levels, despite the robust recovery in international trade after the collapse of 2009. The National Export Initiative (NEI) has come up short.
Topic:
Economics, Industrial Policy, International Trade and Finance, Markets, and Maritime Commerce
Political Geography:
United States

39. Monetary Policy with Abundant Liquidity: A New Operating Framework for the Federal Reserve

Author:
Joseph E. Gagnon and Brian Sack
Publication Date:
01-2014
Content Type:
Policy Brief
Institution:
Peterson Institute for International Economics
Abstract:
The dramatic increase in the Federal Reserve's balance sheet since 2009 has attracted the attention of economists, pundits, and ordinary citizens. The amount of assets held by the Fed recently crossed $4 trillion and will likely continue to rise to a peak of about $4.5 trillion. This run-up in asset holdings has resulted from the Fed's large-scale asset purchase programs, which were intended to support economic growth. However, a side-effect of these asset purchases is the creation of unprecedented amounts of liquidity in the financial system.
Topic:
Economics, International Trade and Finance, Markets, and Monetary Policy
Political Geography:
United States

40. Income Inequality Developments in the Great Recession

Author:
Tomas Hellebrandt
Publication Date:
01-2014
Content Type:
Policy Brief
Institution:
Peterson Institute for International Economics
Abstract:
The Great Recession, which cost tens of millions of jobs, a collapse of asset values around the world, and threatened the global financial system, has generated renewed concern over the long-standing issue of the fairness of the distribution of wealth and income in many societies. Economic inequality has increased in the United States and many other advanced economies over the past 20 to 30 years. This trend generated less worry in the boom years, when unemployment rates were low and cheap credit enabled consumers to borrow and maintain higher standards of living, masking the impact of growing income disparity on consumption patterns and perceptions of well-being.
Topic:
Debt, Economics, International Trade and Finance, Poverty, Social Stratification, and Financial Crisis
Political Geography:
United States, United Kingdom, Germany, Spain, Italy, and Ireland