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2. A reform strategy to transform energy: From piecemeal to systemwide change
- Author:
- Steven Fries
- Publication Date:
- 08-2022
- Content Type:
- Working Paper
- Institution:
- Peterson Institute for International Economics
- Abstract:
- The Intergovernmental Panel on Climate Change (IPCC) Sixth Assessment Report on Climate Change Mitigation highlights the vast gap between climate change mitigation actions and climate stabilization goals. But its broad policy prescriptions are likely to leave policymakers pondering what specific actions to take. Informed by accumulating evidence on transforming aspects of energy systems like power generation from solar and wind resources and battery electric cars, this paper develops a more pointed energy reform strategy than that of the IPCC to deliver the necessary systemwide changes. It makes the case for two unorthodox policies. One is for governments to provide, in addition to R&D supports, market-creating supports for early deployment of low-carbon technologies in initial markets. The second is to sequence emissions pricing after innovation and market-creating supports and differentiate this pricing across key energy sectors rather than imposing one economywide price. Compared with a single price, targeting higher emissions pricing on sectors that are costlier to decarbonize still promotes cost-effective emission cuts but limits adverse distributional impacts. The paper also considers nonprice barriers to change and ways to coordinate domestic reforms across countries.
- Topic:
- Climate Change, Economics, Reform, Carbon Emissions, and Energy
- Political Geography:
- Global Focus
3. From hermit kingdom to miracle on the Han
- Author:
- Douglas A. Irwin
- Publication Date:
- 09-2021
- Content Type:
- Working Paper
- Institution:
- Peterson Institute for International Economics
- Abstract:
- In 1960, South Korea’s exports were about 1 percent of GDP, and the country’s ability to import depended almost entirely on US aid. After changing its foreign exchange and trade policies in the mid-1960s, Korea saw a surge in exports to more than 10 percent of GDP by the end of the decade. What factors account for the shift in policy that enabled this dramatic export growth to occur? The United States helped initiate the process by withholding financial assistance, pressuring Korea to devalue its currency and reform its foreign exchange regime. Initially, the Korean government resisted taking these steps, but in 1964 it became firmly committed to an export promotion strategy to boost foreign exchange earnings and end its dependence on American aid.
- Topic:
- Economics, Foreign Exchange, Reform, Exports, and Trade
- Political Geography:
- Asia and South Korea
4. Does Trade Reform Promote Economic Growth? A Review of Recent Evidence
- Author:
- Douglas A. Irwin
- Publication Date:
- 05-2019
- Content Type:
- Working Paper
- Institution:
- Peterson Institute for International Economics
- Abstract:
- Do trade reforms that significantly reduce import barriers lead to faster economic growth? In the two decades since the critical survey of empirical work on this question by Francesco Rodriguez and Dani Rodrik in 2000, new research has tried to overcome the various methodological problems that have plagued previous attempts to provide a convincing answer. This paper examines three strands of recent work on this issue: cross-country regressions focusing on within-country growth, synthetic control methods on specific reform episodes, and empirical country studies looking at the channels through which lower trade barriers may increase productivity. A consistent finding is that trade reforms that significantly reduce import barriers have a positive impact on economic growth, on average, although the effect differs across countries. Overall, these research findings should temper some of the previous agnosticism about the empirical link between trade reform and economic performance.
- Topic:
- Economics, Reform, Economic Growth, and Trade
- Political Geography:
- Global Focus
5. Does Trade Reform Promote Economic Growth? A Review of Recent Evidence
- Author:
- Douglas A. Irwin
- Publication Date:
- 05-2019
- Content Type:
- Working Paper
- Institution:
- Peterson Institute for International Economics
- Abstract:
- Do trade reforms that significantly reduce import barriers lead to faster economic growth? In the two decades since the critical survey of empirical work on this question by Francesco Rodriguez and Dani Rodrik in 2000, new research has tried to overcome the various methodological problems that have plagued previous attempts to provide a convincing answer. This paper examines three strands of recent work on this issue: cross-country regressions focusing on within-country growth, synthetic control methods on specific reform episodes, and empirical country studies looking at the channels through which lower trade barriers may increase productivity. A consistent finding is that trade reforms that significantly reduce import barriers have a positive impact on economic growth, on average, although the effect differs across countries. Overall, these research findings should temper some of the previous agnosticism about the empirical link between trade reform and economic performance.
- Topic:
- Reform, Economic Growth, and Trade
- Political Geography:
- Global Focus
6. The Financial Sector and Growth in Emerging Asian Economies
- Author:
- William R. Cline
- Publication Date:
- 03-2015
- Content Type:
- Working Paper
- Institution:
- Peterson Institute for International Economics
- Abstract:
- The financial sectors in Asian emerging-market economies are now relatively unlikely to provoke new financial crises, either because of reforms after the East Asian financial crisis in the later 1990s or because of the dominance of state-owned banks not subject to bank runs. Financial intermediation is surprisingly high and is consistent with higher rates of saving and investment and hence growth in the main economies of the region (as compared to, say, counterparts in Latin America). Nonetheless, there are sharply diverging patterns (e.g., high foreign ownership of banks in Korea versus minimal presence in China) and differing national structures (bank dominated, portfolio oriented, and diversified) within Asia. Cline recommends establishing long-term plans to improve efficiency in state-owned banks or reduce their dominance and pursuing bank capitalization targets at least as ambitious as those of Basel III. Cline also calls for ensuring adequate regulation of growing nonbank intermediaries, reversing a recent trend toward national barriers to foreign banks in some economies, and improving the legal security of bank regulators.
- Topic:
- Economics, Emerging Markets, Financial Crisis, and Reform
- Political Geography:
- Asia
7. Maintaining Financial Stability in the People's Republic of China during Financial Liberalization
- Author:
- Nicholas Borst and Nicolas R. Lardy
- Publication Date:
- 08-2015
- Content Type:
- Working Paper
- Institution:
- Peterson Institute for International Economics
- Abstract:
- China's banking system is now the largest in the world, and its capital markets are rapidly approaching the size of those in the advanced economies. Borst and Lardy trace the evolution of China's financial system away from a traditional bank-dominated and state-directed financial system toward a more complex, market-based system. They analyze and outline the optimal sequence of financial reforms needed to manage the new risks accompanying this evolution.
- Topic:
- Economics, Markets, Financial Crisis, and Reform
- Political Geography:
- China