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  • Author: Francis E. Warnock, John D. Burger
  • Publication Date: 01-2003
  • Content Type: Working Paper
  • Institution: U.S. Government
  • Abstract: While there is a severe home bias in U.S. investors' foreign bond portfolios, we find that portfolio weights are greater for countries with more open capital accounts and whose bond returns are less correlated with U.S. returns. Positions in local-currency-denominated bonds are particularly sensitive to past and prospective returns volatility. An analysis of changes in portfolio weights over time indicates that U.S. investors have recently moved out of smaller markets and those with low and declining credit ratings. Our data also allow for an analysis of the size and currency composition of international bond markets. We find that countries with stronger institutions and better inflation performance have larger local currency bond markets. An implication for developing countries is that creditor friendly policies, such as vigilance on the inflation front and the development of strong institutions, can enable local bond market development and may in turn attract global investors.
  • Topic: International Relations, Economics, International Trade and Finance
  • Political Geography: United States
  • Author: Jonathan H. Wright, Alain P. Chaboud
  • Publication Date: 01-2003
  • Content Type: Working Paper
  • Institution: U.S. Government
  • Abstract: The failure of uncovered interest parity can be ascribed to the existence of a risk premium. The size of this risk premium may shrink to zero over sufficiently small intervals of time. In contrast, because no interest is paid on intradaily positions and interest is instead paid discretely at the point when a position is rolled over from one day to the next, the size of the interest differential remains fixed over any interval that covers the time of the discrete interest payment. This is true no matter how short that interval is. Using a large dataset of high frequency exchange rate data, we run uncovered interest parity regression over different time intervals. We replicate the rejection of the uncovered interest parity hypothesis with daily data, but find results that are consistently much more supportive of the uncovered interest parity hypothesis over short windows of intradaily data that span the time of the discrete interest payment.
  • Topic: Conflict Prevention, International Relations, Economics, International Trade and Finance
  • Author: Joseph E. Gagnon
  • Publication Date: 01-2003
  • Content Type: Working Paper
  • Institution: U.S. Government
  • Abstract: Krugman (1989) argued that differences across countries in estimated income elasticities of import demand are due to omission of an exporter supply effect. He showed that such an effect can be derived in a theoretical model with economies of scale in production and a taste for variety in consumption. In his model, countries grow by producing new varieties of goods, and they are able to export these goods without suffering any deterioration in their terms of trade. This paper analyzes U.S. import demand from different source countries and finds strong evidence of a supply effect of roughly half the magnitude (0.75) of the income elasticity (1.5). Price elasticities for the most part are estimated close to -1, which is typical for the literature. Exclusion of the supply effect leads to overestimation of the income elasticity. Results based on U.S. exports to different destinations are less robust, but largely corroborate these findings.
  • Topic: International Relations, Economics, International Trade and Finance
  • Political Geography: United States
  • Author: Francis E. Warnock, Sara B. Holland
  • Publication Date: 01-2003
  • Content Type: Working Paper
  • Institution: U.S. Government
  • Abstract: High growth, liquid Chilean firms have greater relative weights in U.S. equity portfolios, but the most important determinant of a firm's portfolio weight is whether it is listed on a U.S. exchange. Cross-listing does not, however, appear to have permanent benefits: Weights in U.S. portfolios of firms that cross-listed in the mid-1990s increased at the expense of firms that cross-listed earlier. Put another way, firms appear to be able to access international capital at the time of the cross-listing, but this access may well be short-lived.
  • Topic: International Relations, Economics, International Trade and Finance
  • Political Geography: South America
  • Author: Kristina Balalovska, Mieczyslaw P. Boduszynski
  • Publication Date: 09-2003
  • Content Type: Working Paper
  • Institution: The Woodrow Wilson International Center for Scholars
  • Abstract: In the first half of 2003, postcommunist East European countries became pawns in two disputes between the European Union (EU) and the United States (US). The first, broadly covered by the Western media, was the clash over the US-led invasion of Iraq. The second was over the jurisdiction of the newly established International Criminal Court (ICC). Although the latter skirmish was less noticed in the wider world, it was in many ways the more significant of the two. In both cases, the small states of East and Central Europe were forced to choose between the conflicting demands of the EU and US. Unlike the battle over the Iraq war, EU member states were united on the point of not granting the US immunity in the ICC. Moreover, it was impossible to walk a tightrope between Europe and the US in the ICC case because it required decisive action, whereas on the question of whether or not to invade Iraqi, some postcommunist countries were able to lend tacit support to both sides. Finally, a lot more was at stake in the ICC issue, since both the US and the EU threatened defecting countries with concrete sanctions.
  • Topic: Government, International Organization, Politics, War, Sanctions
  • Political Geography: United States, Iraq, Europe, Macedonia
  • Author: Johnnie Carson
  • Publication Date: 09-2003
  • Content Type: Working Paper
  • Institution: The Woodrow Wilson International Center for Scholars
  • Abstract: An Introduction from Howard Wolpe: As the new Director of the Woodrow Wilson International Center's Africa Program, I am pleased to present the first of a series of “occasional papers” of interest to those concerned with Africa, and with American policy toward Africa. “From Moi to Kibaki: An Assessment of the Kenyan Transition” provides a remarkably clear and incisive analysis by one of the U.S. Foreign Service's most distinguished Africa specialists.We felt that Ambassador Johnnie Carson's public lecture deserved a wider audience, and was an ideal vehicle for the first of our series of occasional papers.
  • Topic: Democratization, Government, Politics
  • Political Geography: Africa
  • Author: Jean Pascal Zanders, John Hart, Frida Kulah, Richard Guthrie
  • Publication Date: 10-2003
  • Content Type: Working Paper
  • Institution: Stockholm International Peace Research Institute
  • Abstract: Since the end of military action in Iraq and the formation of the Coalition Provisional Authority in May 2003, most debate on the future of Iraq has focused on the short-term problems of governance, internal security and economic reconstruction in that country. In addition to the immediate problems, there is also a need to address long-term issues, such as what role Iraq will play in multilateral bodies. Although some issues can only be resolved in the long term, others will require initial decisions to be taken in the near future. In the very long term (measured in terms of decades) there is no option other than for Iraq to be involved in multilateral controls on chemical weapons (CW). However, in the medium term (measured in years) it is unclear what the best method would be to take Iraq from its current situation—as an occupied state with, at the very least, a past CW programme of which knowledge is incomplete—to a new situation where an Iraqi Government commits Iraq to membership of and adherence to multilateral disarmament regimes.
  • Topic: Arms Control and Proliferation, Human Welfare, Weapons of Mass Destruction
  • Political Geography: Iraq, Arabia
  • Author: Siemon T. Wezeman
  • Publication Date: 08-2003
  • Content Type: Working Paper
  • Institution: Stockholm International Peace Research Institute
  • Abstract: In December 1991, in Resolution 46/36 L, the United Nations General Assembly established the United Nations Register of Conventional Arms (UNROCA), a 'universal and non-discriminatory Register of Conventional Arms' to which nations were invited to report annually, on a voluntary basis, their imports and exports of certain types of conventional weapons during the previous calendar year. The main purpose of the Register was stated as being 'to prevent excessive and destabilizing accumulations of arms'. Resolution 46/36 L also mentioned as goals: (a) implementing new confidence-building measures, (b) the reduction of arms transfers (which by the mid-1980s had reached their highest level since 1950), (c) addressing the problem of the illicit and covert arms trade, including its effects on human rights, (d) reducing the burden placed by arms acquisitions on countries' economies, and (e) the reduction of military expenditures. In practical terms, nations were to start reporting in 1992 on weapons delivered in 1991, and the process was to be reviewed periodically by a group of government experts to consider the need for improvement.
  • Topic: Defense Policy, Arms Control and Proliferation, Human Welfare, United Nations
  • Author: Zdzislaw Lachowski, Björn Hagelin, Sam Perlo-Freeman, Petter Stålenheim, Dmitri Trofimov, Alyson J. K. Bailes
  • Publication Date: 07-2003
  • Content Type: Working Paper
  • Institution: Stockholm International Peace Research Institute
  • Abstract: The international attention paid to the nations of the South Caucasus region and Central Asia—a group of post-Soviet states beyond Europe's conventional frontiers but included in the Conference on/Organization for Security and Co-operation in Europe (CSCE/OSCE)—has been fitful at best over the past decade. During the last years of the 20th and at the start of the 21st century, after the conflicts in Georgia and Nagorno-Karabakh became (at least partly) 'frozen', security concerns about the regions tended to decline and to become overshadowed both by 'oil diplomacy' and by concern about developments within Russia itself, in Chechnya and Dagestan. In 2002–2003 a constellation of changes in the outside world has started to reverse this pattern. Chechnya is no longer a regular topic of high-level political debate between Russia and the West, and President Vladimir Putin has played the anti-terrorist card with some success to secure his freedom to deal with it as an internal security matter. The factors prompting greater international attention to Russia's south-western and southern neighbours, by contrast, have the potential to undermine—perhaps for good—any Russian pretension to decisive influence or an exclusive droit de regard in these regions. At the time of writing, however, this latest shift could again be called in question by a new diversion of focus to the 'greater Middle East' following hostilities in Iraq.
  • Topic: Defense Policy, Arms Control and Proliferation
  • Political Geography: Russia, Iraq, Europe, Central Asia, Caucasus, Middle East, Chechnya, Georgia
  • Author: Ekaterina Stepanova
  • Publication Date: 06-2003
  • Content Type: Working Paper
  • Institution: Stockholm International Peace Research Institute
  • Abstract: Since the tragic events of 11 September 2001, much has been said about potential links between the fight against terrorism and peace-building. In the meantime, the fight against terrorism and peace-building have, by and large, continued to be implemented separately and by different sets of actors.
  • Topic: Security, Peace Studies, Terrorism