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1211. COVID-19 Implications for China's National Security

Author:
Marta Gębska
Publication Date:
03-2022
Content Type:
Journal Article
Journal:
Security and Defence Quarterly
Institution:
War Studies University
Abstract:
The COVID-19 pandemic began in March 2020 and China has since been under public scrutiny for neglecting the first signs of this global health challenge and for its lockdown strategy. Although lockdowns have not lasted for long, China needs to confront the political, social, and economic implications for its national security. The paper aims to fill a gap in the knowledge and investigate aspects of China’s national security in light of the pandemic. The study is based on desk research using secondary data and statistical and comparative analysis. It also employs an inductive method to build general theorems. The Chinese government can be seen as successful in dealing with the pandemic because of a low death toll and minimal economic losses. By early February 2022, only 106,863 Chinese had been diagnosed, and 4,636 had died from the virus. China also achieved enviable economic success and, its output grew by 18.3% year on year in the first quarter of 2021, the fastest rate since the 1990s, and it was the first major economy to withdraw its pandemic stimulus. China consolidated its position in low-income countries and improved its image as a global leader in trade by supplying vaccines, masks and ventilators, and strengthened its geopolitical standing. It will face threats from other countries working on a joint approach to the challenges posed by Beijing and while the aftereffects of the crisis can be seen, it also fears that they might further affect China's national security.
Topic:
National Security, International Security, Economy, COVID-19, and Economic Security
Political Geography:
China and Asia

1212. The role of local governance in achieving political stability: A joint public-private effort towards sustainable development

Author:
Pranish Desai
Publication Date:
11-2022
Content Type:
Special Report
Institution:
Good Governance Africa (GGA)
Abstract:
Improving local governments' performance is vital because it is the governance sphere that is closest to local communities, local businesses, and local economic activities. It is in the best interest of companies operating in municipalities to play an active role in ensuring that their host municipalities can effectively deliver services, maintain infrastructure and plan for the future, thereby catalysing sustainable development. This will not only benefit municipalities and businesses but communities at large.
Topic:
Governance, Economy, Political stability, and Municipalities
Political Geography:
Africa

1213. A strategy to future-proof Zambia’s mining industry

Author:
Vincent Obisie-Orlu
Publication Date:
11-2022
Content Type:
Policy Brief
Institution:
Good Governance Africa (GGA)
Abstract:
Zambia is in an opportune position to benefit from the growing demand for copper to support the global energy transition. Policymakers in President Hakainde Hichilema’s administration have an opportunity to build a resilient and high-performance Zambian economy to bring a true New Dawn. To realise this vision, Zambia must address key economic challenges such as the legacy effects of the previous instability of the mining regulatory system. Volatile changes have plagued the country until recently, with past governments changing mining taxes in response to the copper price. Resultantly, investment growth has diminished and the multiplier effect that would otherwise have been associated with mining has been foregone. Poor macroeconomic governance and mining growth retardation have also pushed Zambia’s national debt to unsustainable levels, as exports have been insufficient to fund debt repayment. The country is now seeking debt relief from its external creditors and has struck a deal with the International Monetary Fund. In this first of a two-part policy briefing series, we examine the key economic challenges associated with mining governance reform and provide recommendations that will help develop a resilient mining tax regime and a more streamlined regulatory environment. The second briefing will address the debt challenge. Considering the growing demand for copper to meet the global net-zero goal, and an impending global supply crunch, more copper will need to be produced and Zambia is in a prime position to do so. At the same time, Zambia has declining copper ore grades. Our primary recommendation, therefore, is that a profit-based Mineral Royalty Tax (MRT) framework be strongly considered. This will enable investment in the necessary capital and infrastructure needed to increase output and promote exploration. Though profit-based MRTs can be exploited by mining companies making claims of increased capital investment to increase outputs, when combined with the implementation of the Extractive Industries Transparency Initiative (EITI)’s reporting standards, the risk of exploitation is reduced.
Topic:
Natural Resources, Economy, Tax Systems, Mining, and Industry
Political Geography:
Africa and Zambia

1214. What Do We Really Know about Productivity Differentials across Countries?

Author:
Jayati Ghosh
Publication Date:
04-2022
Content Type:
Working Paper
Institution:
Political Economy Research Institute (PERI), University of Massachusetts Amherst
Abstract:
This paper examines and critiques the most widely used measure of productivity (output per worker employed) and argues that this is a flawed, inadequate and even misleading measure of economic progress. In terms of cross-country comparisons and assessing trends over time, both the numerator (GDP or value added) and the denominator (number of workers or hours worked) have significant conceptual and measurement problems. These issues are considered in general, and also with regard to how they affect analyses of productivity differentials in the U.S. and India in the recent period.
Topic:
Political Economy, GDP, Employment, Economy, and Productivity
Political Geography:
South Asia, India, North America, and United States of America

1215. Inflation Targeting in Open Economies: The Contradictions of Determinacy and Stability

Author:
Esteban Perez-Caldentey and Matias Vernengo
Publication Date:
12-2022
Content Type:
Working Paper
Institution:
Political Economy Research Institute (PERI), University of Massachusetts Amherst
Abstract:
Since 1999, more than half of Latin American countries have put in practice inflation targeting regimes with the objective of maintaining price stability within a low inflation environment. Building on previous work, we argue that the adoption of this monetary regime was the result of a policy shift that began with the Washington Consensus, and which materialized sequentially in increased financial openness, greater exchange rate flexibility, leading eventually to the implementation of inflation targeting. We further sustain that in the case of an open economy, the use of inflation targeting leads to incoherent and contradictory results that severely question its alleged superiority over other monetary frameworks. Finally, we posit the need for comprehensive regulatory frameworks to deal with the complex dynamics and transmission mechanisms that characterize economies that have a high degree of financial openness, such as those of Latin America.
Topic:
Regulation, Economy, Inflation, and Economic Stability
Political Geography:
Latin America

1216. Lessons from the Inflation of 2021-202(?)

Author:
Asha Banerjee and Josh Bivens
Publication Date:
12-2022
Content Type:
Working Paper
Institution:
Political Economy Research Institute (PERI), University of Massachusetts Amherst
Abstract:
Starting in mid-2021, inflation in the United States rose to levels not seen since the early 1980s. This inflation followed on the heels of the economic shock imposed by the global COVID-19 pandemic and the significant fiscal policy interventions meant to smooth the fallout of this shock. As of October 2022, inflation – both headline and core measures stripping out food and energy prices – remained at historically high levels, though there are significant signs of softening in the near-future. This episode has sparked furious debate over the proper policy response, and has exposed how little innovative thinking has been done on inflation by either macroeconomists or policy analysts since the 1980s price acceleration was ended by the Volcker shock. This paper identifies a number of key questions raised by the inflationary outbreak of the past 18 months and offers some answers. An extremely brief summary of these questions and answers is provided below, with the rest of the paper expanding on these points.
Topic:
Economy, Inflation, Macroeconomics, Fiscal Policy, and COVID-19
Political Geography:
North America and United States of America

1217. The Price of Speculation: Cryptocurrencies and Climate Change

Author:
Izaura Solipa and Gerald Epstein
Publication Date:
08-2022
Content Type:
Working Paper
Institution:
Political Economy Research Institute (PERI), University of Massachusetts Amherst
Abstract:
Cryptocurrencies are a form of digital currency whose popularity has rapidly increased over the past decade. What distinguishes them from other electronic currencies is their underlying technology known as the blockchain, a decentralized public ledger in which transactions among the network peers are accurately and securely recorded. The validation and mining process, where new coins are issued, is highly computationally intensive and thus requires vast amounts of energy. The literature estimates energy consumption levels of the cryptocurrency mining to be as high as those of countries such as Angola, Iceland or Cuba, and a corresponding emission of at least 3-15 million tons of CO2. We discuss these estimated impacts of Bitcoin and other cryptocurrencies on both energy levels and the environment, and then outline alternative applications that could promote climate change mitigation. We argue that despite the latter applications and the possible benefits from the technology, particularly in the energy sector, the financial uses of blockchain are creating significant environmental costs without any clear social or economic benefit stemming from this largely speculative activity.
Topic:
Climate Change, Science and Technology, Economy, Cryptocurrencies, Blockchain, Digital Currency, and Speculation
Political Geography:
Global Focus

1218. Measuring the intangible economy to address policy challenges

Author:
Marie Le Mouel
Publication Date:
04-2022
Content Type:
Working Paper
Institution:
Bruegel
Abstract:
European economies exhibit the so-called ‘productivity puzzle, whereby investments’ in digital technologies and intangible assets have not delivered the hoped-for productivity gains. Explanations for this puzzle lie in the unequal ability of companies to make use of these technologies, and resulting patterns of market concentration, productivity divergence and dampened business dynamism. Access to firm-level data is essential to properly understand these rich dynamics. The purpose of the first work package of the MICROPROD project was to improve the firm-level data infrastructure, expand the measurement of intangible assets and enable cross-country analyses of these productivity trends. The MICROPROD researchers developed the Micro Data Infrastructure (MDI), a centralised platform that harmonises access to the firm-level data gathered by national statistical institutes. The data infrastructure developed through this work package offers valuable insights into the evolution of productivity across the European Union and into the effects of digitalisation and globalisation. It can thus generate important evidence for designing policies to support the European Commission’s policy objectives, especially for achieving the digital and green transitions. In addition, the research enabled by this data infrastructure and carried out within the context of MICROPROD can provide valuable lessons about the response of European economies to the COVID-19 pandemic and its aftermath.
Topic:
Infrastructure, European Union, Digital Economy, Economy, and COVID-19
Political Geography:
Europe and Global Focus

1219. Measuring macroeconomic uncertainty during the euro’s lifetime

Author:
Monika Grzegorczyk and Francesco Papadia
Publication Date:
06-2022
Content Type:
Working Paper
Institution:
Bruegel
Abstract:
It is a cliché in official economic institutions’ publications and their leaders’ speeches to lament exceptional uncertainty. The complaint does, however, ring true currently. A solid empirical basis should be given to this view by properly measuring macroeconomic uncertainty. To measure macroeconomic uncertainty, we start from observable forecasts of macroeconomic variables, which are transformations of underlying economic conditions. By observing how forecasts change over time, we measure the flow of macroeconomic surprises. The more intense the flow of surprises, the greater uncertainty can be said to be. Greater differences among forecasts are also evidence of uncertainty. We draw out four indicators of macroeconomic uncertainty, measured over the lifetime of the euro: How the macroeconomic forecasts of a given institution for the same time period change over time; How the macroeconomic forecasts of a given institution deviate from realised outcomes; How the macroeconomic forecasts of different institutions deviate from one other; How dispersed the forecasts of different professionals are. We also measure whether the ‘stag-‘ or the ‘-flationary’ component is stronger in the overall stagflationary shock caused by the Russian invasion of Ukraine.
Topic:
Economy, Institutions, Macroeconomics, Uncertainty, and Euro
Political Geography:
Europe and Global Focus

1220. Mapping banking centres globally since 1970

Author:
Emmanuel Mourlon-Druol
Publication Date:
07-2022
Content Type:
Working Paper
Institution:
Bruegel
Abstract:
Brexit and the rise of China as a leading international economic power have revived discussions about the geography of banking centres. This paper analyses the geographical evolution of banking centres since the 1970s, based on a database constructed from a ranking of the top banks in the world created by The Banker magazine, a UK-based monthly publication specialised in international financial affairs. We describe both how the database was created and the ways in which it can be used to inform policy on money and capital markets. We address why the data can be used to proxy the size of International Financial Centres (IFCs) and the methodological limitations it may present. We find that banking consolidations and the evolution of the legal framework are more central to the changing geography of banking centres than economic and financial crises. We also highlight that, despite major shifts in global economic power, leading banking centres are hard to replace.
Topic:
Economy, Brexit, History, Fiscal Policy, and Banking
Political Geography:
Global Focus