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31. How COVID-19 vaccine supply chains emerged in the midst of a pandemic

Author:
Chad P. Bown
Publication Date:
08-2021
Content Type:
Working Paper
Institution:
Peterson Institute for International Economics
Abstract:
Many months after COVID-19 vaccines were first authorized for public use, still limited supplies could only partially reduce the devastating loss of life and economic costs caused by the pandemic. Could additional vaccine doses have been manufactured more quickly some other way? Would alternative policy choices have made a difference? This paper provides a simple analytical framework through which to view the contours of the vaccine value chain. It then creates a new database that maps the COVID-19 vaccines of Pfizer/BioNTech, Moderna, AstraZeneca/Oxford, Johnson & Johnson, Novavax, and CureVac to the product- and location-specific manufacturing supply chains that emerged in 2020 and 2021. It describes the choppy process through which dozens of other companies at nearly 100 geographically distributed facilities came together to scale up global manufacturing. The paper catalogues major pandemic policy initiatives—such as the United States' Operation Warp Speed—that are likely to have affected the timing and formation of those vaccine supply chains. Given the data, a final section identifies further questions for researchers and policymakers.
Topic:
Vaccine, COVID-19, Health Crisis, and Supply Chains
Political Geography:
Global Focus and United States of America

32. Low inflation bends the Phillips curve around the world: Extended results

Author:
Jami Forbes, Joseph E. Gagnon, and Christopher G. Collins
Publication Date:
09-2021
Content Type:
Working Paper
Institution:
Peterson Institute for International Economics
Abstract:
This paper revises and extends PIIE Working Paper 20-6. It continues to find strong support for a Phillips curve that becomes nonlinear when inflation is "low"—which our baseline model defines as less than 3 percent. The nonlinear curve is steep when output is above potential (slack is negative) but flat when output is below potential (slack is positive) so that further increases in economic slack have little effect on inflation. This finding is consistent with evidence of downward nominal wage and price rigidity. When inflation is high, the Phillips curve is linear and relatively steep. These results are robust to placing the threshold between the high and low inflation regimes at 2, 3, or 4 percent inflation or for a threshold based on country-specific medians of inflation. In this nonlinear model, international factors play a large role in explaining headline inflation (albeit less so for core inflation), a role that has been increasing since the global financial crisis.
Topic:
Economics, Financial Crisis, Inflation, and Philips Curve
Political Geography:
Global Focus

33. Dollar not so dominant: Dollar invoicing has only a small effect on trade prices

Author:
Joseph E. Gagnon and Madi Sarsenbayev
Publication Date:
12-2021
Content Type:
Working Paper
Institution:
Peterson Institute for International Economics
Abstract:
This paper estimates and tests four models of the effects of exchange rate changes on export prices. It supports the Goldberg and Knetter (1997) canonical result that exporters adjust their prices by about half of any movement in exchange rates. A new twist is that exchange rate movements against importing countries account for only three-fifths of this price adjustment, while exchange rate movements against a dominant currency account for the other two-fifths. The dominant currency is the euro in Europe and Africa and the US dollar in Asia and the Western Hemisphere. The recent claim that the dollar is the most important driver of export prices (Gopinath et al. 2020) is shown to be valid only for the smallest exporting economies. For the bulk of international trade, the extra effects of the dollar (or the euro) beyond their effects as exporter or importer currencies are relatively modest.
Topic:
Foreign Exchange, Exports, Currency, Trade, and Dollar
Political Geography:
Global Focus

34. Fiscal and exchange rate policies drive trade imbalances: New estimates

Author:
Joseph E. Gagnon and Madi Sarsenbayev
Publication Date:
03-2021
Content Type:
Working Paper
Institution:
Peterson Institute for International Economics
Abstract:
A 2017 PIIE analysis found that fiscal balances and foreign exchange intervention—more broadly, government purchases of foreign assets to influence exchange rates—are the most important factors behind differences in current account balances across countries and over time. The current account is the broadest measure of a country's balance of trade. It records all income received from foreigners and payments made to foreigners. It is dominated by trade in goods and services but also includes income receipts on domestically owned factors of production (capital and labor) that are employed abroad and payments to foreign-owned factors of production at home. A country’s fiscal surplus and official purchases of foreign assets tend to increase its current account balance. Net official purchases by other countries tend to reduce current account balances in the home country, especially when it issues a reserve currency. This paper updates the earlier analysis with three more years (2016–18) and roughly 40 percent more observations. New analysis of net international investment positions (which largely reflect cumulated current account balances) finds even stronger evidence for the dominant role of official reserve positions in explaining differences in current account balances across countries. An increase in a country’s official reserve position causes essentially a dollar-for-dollar increase in its net international investment position.
Topic:
Fiscal Policy, Currency, Trade Policy, and Trade Deficit
Political Geography:
Global Focus

35. Fiscal resiliency in a deeply uncertain world: The role of semiautonomous discretion

Author:
Peter R. Orszag, Robert E. Rubin, and Joseph E. Stiglitz
Publication Date:
01-2021
Content Type:
Policy Brief
Institution:
Peterson Institute for International Economics
Abstract:
Orszag, Rubin, and Stiglitz outline a new fiscal framework that they argue would better equip policymakers to face deep uncertainties about future interest rates (which, they say, may not remain low forever), hard-to-predict global shocks, and climate risks. They reject fiscal anchors—simple limits on deficits or debt as a share of GDP that governments adopt to check their spending and borrowing—that have historically guided fiscal policy and believe any attempts to modify such targets for the current period of low interest rates are likely to fail. Instead they propose making the budget respond more automatically to economic distress (through stronger automatic stabilizers) and to long-term fiscal pressures (e.g., embedding adjustment mechanisms in health care and pension programs), as well as creating an infrastructure program and extending debt maturities to insure against interest rate changes. Such a "streamlined dashboard" would then allow policymakers to use discretion as necessary to take any additional actions—either to provide more stimulus during short-term difficulties or to adjust the automatic features themselves—rather than adhering to fiscal targets that may no longer be appropriate when economic conditions change.
Topic:
Financial Crisis, Economy, Fiscal Policy, and Fiscal Deficit
Political Geography:
Global Focus

36. Sovereign wealth funds are growing more slowly, and governance issues remain

Author:
Julien Maire, Adnan Mazarei, and Edwin M. Truman
Publication Date:
02-2021
Content Type:
Policy Brief
Institution:
Peterson Institute for International Economics
Abstract:
In the last two decades, sovereign wealth funds (SWFs)—funds accumulated by a government that are invested in whole or in part abroad to benefit the country in the future—have faced increased public scrutiny over their investment patterns, financial results, and governance. This Policy Brief updates and expands a prototype scoreboard rating the transparency and accountability of SWFs, which Truman established in 2007. This fifth edition of the scoreboard shows that the average scores continued to improve for the 64 SWFs examined, but governance issues remain. New funds have emerged—many of them government holding companies or strategic investment funds—but the growth of assets under management by SWFs has slowed, in some cases partly because of withdrawals to help finance expenses related to the COVID-19 pandemic, raising questions about their future role.
Topic:
Government, Markets, Sovereign Wealth Funds, Governance, Regulation, and Capital
Political Geography:
Global Focus

37. Does the new fiscal consensus in advanced economies travel to emerging markets?

Author:
Olivier Blanchard, Josh Felman, and Arvind Subramanian
Publication Date:
03-2021
Content Type:
Policy Brief
Institution:
Peterson Institute for International Economics
Abstract:
Anew consensus on fiscal policy has emerged in advanced economies, that stimulus is both needed and feasible. At first blush, the scope for stimulus seems even greater in emerging markets, since their primary deficits are smaller and interest-growth differentials more favorable, suggesting that they can sustain much higher levels of debt. But more careful analysis suggests that this is not the case. The authors point out that what matters for debt sustainability are not current conditions but rather the range of possible future outcomes. And prospects for interest rates and growth are more uncertain in emerging markets, while primary balances are more difficult to adjust. As a result, debt limits are in fact tighter than advanced economies. Taking India as a case study, the authors argue that what is needed in the current situation is responsible, slow fiscal adjustment. More generally, one should be careful about importing wholesale the new fiscal consensus into emerging markets.
Topic:
Emerging Markets, Monetary Policy, Fiscal Policy, and Consensus
Political Geography:
Global Focus

38. The evolving gender gap in labor force participation during COVID-19

Author:
Simeon Djankov, Pinelopi Koujianou Goldberg, Lisa Hyland, and Eva (Yiwen) Zhang
Publication Date:
04-2021
Content Type:
Policy Brief
Institution:
Peterson Institute for International Economics
Abstract:
Despite many significant gains by women in the paid workforce in recent decades, the percentage of women participating in the labor force has remained lower than the percentage of male participants. Now, in response to the COVID-19 pandemic and the global economic downturn it precipitated, the gap in labor force participation between men and women in some economies has actually widened, with potentially damaging repercussions for women’s career prospects and pay. The pandemic has disproportionately affected sectors employing more women, such as retail stores, restaurants, and the hotel and hospitality business. An increase in family caregiving responsibilities because of school and childcare closures has also fallen on working mothers' shoulders. Both factors have pulled women out of the labor force. The authors track trends in male and female labor force participation in 43 countries and find substantial differences across countries in the way women’s participation has been affected relative to that of men. In some countries, such as Colombia, Chile, and Cyprus, the gender gap in labor force participation widened the most during the pandemic. The gender gap also widened in the United States, driving 2.5 million women from their jobs in what Vice President Kamala Harris called a “national emergency” for women. In other economies, such as Luxembourg and Lithuania, the gender gap in labor force participation, unexpectedly, shrank during the early period of the pandemic. On average, female employees have fared better in countries where women are less concentrated in the services sector, less likely to be employed as temporary workers, and where laws supported greater equality at the onset of the crisis. Greater government expenditure on childcare in the pre-COVID-19 era, however, does not appear to have insulated female workers from the damaging repercussions of the pandemic.
Topic:
Economics, Gender Issues, Labor Issues, Women, Services, COVID-19, and Empowerment
Political Geography:
Colombia, Chile, Cyprus, Global Focus, and United States of America

39. Low inflation bends the Phillips curve around the world

Author:
Kristin Forbes, Joseph E. Gagnon, and Christopher G. Collins
Publication Date:
03-2020
Content Type:
Working Paper
Institution:
Peterson Institute for International Economics
Abstract:
This paper models inflation by combining the multicountry framework of one of its authors (Forbes) with the nonlinear specification proposed by the other two (Gagnon and Collins). The results find strong support for a Phillips curve that becomes nonlinear when inflation is low, in which case excess economic slack has little effect on inflation. This finding is consistent with evidence of downward nominal wage and price rigidity. The estimates also show a significant and economically meaningful Phillips curve relationship between slack and inflation when slack is negative (i.e., when output is above long-run potential). In this nonlinear model, international factors play a large role in explaining headline inflation, a role that has increased over time, supporting the results of Forbes’ linear model.
Topic:
Economics, Inflation, and Data
Political Geography:
Global Focus

40. What might have been: Globalization on the medal stand at the Tokyo Olympics

Author:
Soyoung Han and Marcus Noland
Publication Date:
04-2020
Content Type:
Policy Brief
Institution:
Peterson Institute for International Economics
Abstract:
The Summer Olympic Games are the most globalized sporting event on earth. Until now, the Summer Games had been postponed only three times—in 1916, 1940, and 1944—all because of world wars. So, the announcement that in response to the COVID-19 pandemic, the 2020 Tokyo Games would be postponed by a year is significant, implicit testimony to the destructiveness of the pandemic. The Tokyo Games were expected to continue the evolution of the Games away from the aristocratic European milieu where the modern Olympic movement began. As poverty has declined and incomes across the global economy have converged, participation in the Games has broadened and the pattern of medaling has become more pluralistic, particularly in sports with low barriers to entry in terms of facilities and equipment. This Policy Brief presents forecasts of medal counts at the 2020 Tokyo Summer Games had they had gone on as scheduled, setting aside possible complications arising from the coronavirus pandemic. The forecasts are not just a depiction of what might have been. They establish a benchmark that can be used when the Games are eventually held, to examine the impact of the uneven incidence of the pandemic globally.
Topic:
Economics, Globalization, Sports, and Olympics
Political Geography:
Japan, Asia, and Global Focus