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  • Author: Makysm Bielawski
  • Publication Date: 01-2021
  • Content Type: Commentary and Analysis
  • Institution: Razumkov Centre
  • Abstract: We are witnessing how the authoritarian states of the Russian Federation and the People’s Republic of China are trying to destroy the unity of democratic Europe by means of economic expansion. Therefore, the infrastructure projects are used for this purpose. Consequently, it is appropriate to equate “Nord Stream-2” and "Belt and Road Initiative". If the projects are implemented, the EU security will be unbalanced; as a result, it will affect the interests of the USA. The American government, regardless the party affiliation, is aware of such challenges. Therefore, obviously, after the inauguration of the new President of the United States, the containment policy of JSC “Gazprom” will only enhance. This will be facilitated by the position of Joseph Biden, which he has voiced on several occasions since 2015 during negotiations with the EU leadership and which is generally described as “unprofitable agreement”.
  • Topic: Foreign Policy, Economics, Natural Resources, European Union, Gas
  • Political Geography: Russia, China, Ukraine
  • Author: Michael Mariano, Adam Sacks
  • Publication Date: 07-2021
  • Content Type: Commentary and Analysis
  • Institution: Oxford Economics
  • Abstract: We all remember our first concert or seeing our favorite band live, but rarely do we think of the stagehands, lighting techs, and ushers who worked hard to deliver these memorable experiences or the impact they have on our local, state, and national economies. In order to better understand the economic impact this important industry has across the United States, Oxford Economics developed a customized framework to analyze the impact of the concerts and the live entertainment industry's nationwide economic contributions in 2019 and conducted an in-depth analysis of the economic impacts of live event venues, artists, and visitor spending in terms of economic output, labor income, taxes, and jobs. Due to the pandemic putting a pause on live events in 2020, this report examined 2019 data to ensure a complete analysis could be conducted that is in line with regular performance of the industry. The industry drives significant economic activity that supports businesses, households, and government finances across the United States. In the wake of COVID-19, live events were shut down for over a year. Beyond the cultural loss involved, the US economy has incurred massive losses in GDP, employment, household income, and tax revenue due to the absence of live events. After a year of isolation, many crave getting back to enjoying memorable live experiences safely in 2021 and into the 2022 and 2023 seasons, which position the industry for growth in the coming years. The Concerts and Live Entertainment Industry, as defined by this report, includes all live musical performances, such as festivals and concerts, and comedy shows held in amphitheaters, clubs, theaters, arenas, stadiums, and other venues. Not included in this analysis are theater, Broadway, sporting events, and family shows.
  • Topic: Economics, Culture, Music, popular culture, Entertainment
  • Political Geography: North America, United States of America
  • Author: Mervat Zakaria
  • Publication Date: 04-2021
  • Content Type: Commentary and Analysis
  • Institution: Future for Advanced Research and Studies (FARAS)
  • Abstract: Uncovering the limitations of the Chinese Iranian agreement The Economic Cooperation Agreement signed between Iran and China in March 2021 unfolded a development plan that includes China injecting $ 400 billion into various sectors of the Iranian economy. This grants Tehran an opportunity to increase the pressures imposed on the new US administration, regarding resumption of the Joint Comprehensive Plan of Action held with the P5+1 in 2015, as well as confronting the surrounding regional threats and alleviating internal pressures by improving the Iranian standard of living.
  • Topic: Economics, International Cooperation, Treaties and Agreements
  • Political Geography: China, Iran, Middle East, Asia
  • Author: Karam Saeed
  • Publication Date: 06-2021
  • Content Type: Commentary and Analysis
  • Institution: Future for Advanced Research and Studies (FARAS)
  • Abstract: The stripping of a young man on June 8, by Tunisian police in the district of Sidi Hassine, west of the capital Tunis, has sparked a wave of angry protests that swept the whole country. The popular tensions do not stem only from a rejection of violations by the security forces of the cabinet headed by Hichem El Mechichi. Rather they are being stoked by the escalating political polarization among the presidency, the cabinet and the parliament. This is accompanied with the underperformance of state institutions failing to carry out their essential functions, in addition to the deteriorating living conditions, the messy monetary policies, increasing reliance on borrowing from other countries, while at the same time cutting subsidies. All of this triggered the recent wave of protests.
  • Topic: Economics, Protests, Institutions, Police
  • Political Geography: North Africa, Tunisia
  • Author: Muthana Al-Obeidi
  • Publication Date: 07-2021
  • Content Type: Commentary and Analysis
  • Institution: Future for Advanced Research and Studies (FARAS)
  • Abstract: The New Mashriq Plan, which was announced in the Baghdad tripartite summit (which brought together president Abdel-Fattah El-sisi of Egypt, King Abdullah II of Jordan, and the Iraqi prime minister, Mustafa al-Kadhimi), stimulated a lot of analyses, which reflected two opposing views. Some analysts seemed to be overly optimistic about the outcomes of this Iraqi-Egyptian-Jordanian project. On the other hand, others adopted a more skeptical, even pessimistic, attitude, believing that it will fail to achieve its purpose, on account of the many challenges it has to face. Despite all the analyses available about the project, questions are still being raised, such as: How did the project develop? What is its economic agenda? What about its political dimensions? And, last but not least, what will its future be like?
  • Topic: Economics, Politics, Treaties and Agreements
  • Political Geography: Iraq, Middle East, Egypt, Jordan
  • Author: Nawar Samad
  • Publication Date: 07-2021
  • Content Type: Commentary and Analysis
  • Institution: Future for Advanced Research and Studies (FARAS)
  • Abstract: A Russian business delegation visited Lebanon in late June 2021 to offer support to the country by cultivating projects in the oil sector, development plans for the energy industry as well as the ports in Beirut and Tripoli. For the past two years, Lebanon, which is going through the worst economic and financial crisis in its history, and has been trying to secure international aid to survive, is now facing the attractive Russian economic bailout offer. Although such an offer is welcomed by Lebanon, the Russian initiative raises concerns across the West, and particularly in the United States, which is in control of Lebanon’s banking system and still has significant influence on the state’s politics and financial sector. The United States believes that it is not possible to dissociate this Russian offer from Moscow’s desire to expand its influence in a region, in which it already established military presence and gained access to the Eastern Mediterranean, where a conflict is underway over investment of newly-discovered gas fields.
  • Topic: Diplomacy, Economics, Financial Crisis, Gas
  • Political Geography: Russia, Eurasia, Middle East, Lebanon
  • Author: Markus Jaeger
  • Publication Date: 03-2021
  • Content Type: Commentary and Analysis
  • Institution: German Council on Foreign Relations (DGAP)
  • Abstract: The Biden administration has just issued its Interim National Security Strategic Guidance. The guidance document states the need to “build back better at home” and acknowledges that “international economic policies must serve all Americans” – a theme often referred to as “foreign policy for the middle class”. While the interim guidance does not preclude cooperation with China in selected policy areas, it is unambiguous in considering China a strategic competitor. The prospect of intensifying China-US geopolitical and (geo)economic competition is bad news for Germany, which has high value trading and investment relationships with both countries.
  • Topic: Foreign Policy, Economics, National Security, Geopolitics
  • Political Geography: China, Europe, Asia, Germany, North America, United States of America
  • Author: Didi Kirsten Tatlow, András Rácz
  • Publication Date: 08-2021
  • Content Type: Commentary and Analysis
  • Institution: German Council on Foreign Relations (DGAP)
  • Abstract: China and Russia want to maintain Germany’s political status quo: Centrist, at times mercantilist policies, have often worked in their favor. Now, with the Green Party ascendant and public opinion shifting, neither Russia nor China can be sure that classic "centrism” will emerge after September. Russia and China will increase their influence and interference efforts in the run-up to the election and beyond, using informational, political, and cyber tactics, and economic and political networks.
  • Topic: Economics, Politics, Public Opinion, Elections
  • Political Geography: Russia, China, Eurasia, Asia
  • Author: Klaus-Jurgen Gern
  • Publication Date: 02-2021
  • Content Type: Commentary and Analysis
  • Institution: Kiel Institute for the World Economy (IfW)
  • Abstract: This EUROFRAME Report presents an assess- ment of the economic outlook for 2021 focuses on the euro area based on a synopsis of the fore- casts of EUROFRAME institutes. Perspectives for UK and CEEs countries are described in Boxes A and B, respectively. In the Focus section, we discuss a special topic, based on work done in the EUROFRAME insti- tutes. This time, we discuss the impact that the COVID-19 crisis had on labour markets in Eu- rope and policy responses to this challenge, based on the experience in the countries hosting EUROFRAME institutes.
  • Topic: Economics, Regional Cooperation, European Union, Regionalism, Pandemic, COVID-19
  • Political Geography: Europe
  • Author: Klaus-Jurgen Gern, Philipp Hauber, Stefan Kooths, Ulrich Stolzenburg
  • Publication Date: 03-2021
  • Content Type: Commentary and Analysis
  • Institution: Kiel Institute for the World Economy (IfW)
  • Abstract: The global economy continued to recover in the winter semester, despite the number of new infections with the coronavirus rising sharply and containment measures tightened again in many countries. Industrial production and world trade have already fully catched up with activity levels before the pandemic and appear to be little affected by the second wave of Covid-19. While the European economy did slip into recession again, the decline in GDP is not expected to be dramatic and should be followed by a strong recovery from spring onward, provided that progress in vaccination allows a substantial and sustained relaxation of measures designed to suppress the virus. In the course of this year, the global upturn will thus increasingly extend to economic sectors that remain severely impeded for the time being, such as tourism and entertainment, and to economies that are particularly geared to these activities. On a purchasing power parity basis, global output is expected to increase by 6.7 percent in 2021 and by 4.7 percent in 2022, thus progressively closing the gap to the pre-crisis path of activity towards the end of the forecast period. We have raised our December forecast by 0.6 percent for both this year and next, with a particularly strong improvement in the outlook for the United States. World trade in goods is expected to grow by 7.5 percent this year. With growth of 4.7 percent this year and next, respectively, Towards the end of the forecast horizon world trade will thus be even higher than expected before the crisis.
  • Topic: Economics, International Trade and Finance, Forecast, Economic Growth, Pandemic, COVID-19
  • Political Geography: North America, United States of America
  • Publication Date: 06-2021
  • Content Type: Commentary and Analysis
  • Institution: Kiel Institute for the World Economy (IfW)
  • Abstract: The German economy is picking up speed again. After the resurgence of the Covid-19 pandemic had interrupted the economic recovery in the winter half-year, GDP will expand at a fast pace in the further course of the year and exceed its pre-crisis level again. With the removal of the pandemic-related restrictions, activity will rebound, especially in those areas that were previously particularly burdened. Retail trade and contact-intensive services in particular are likely to benefit from the rebound in private household consumption. For the time being, however, the recovery will be delayed in the manufacturing industry. The strong global recovery has brought with it multi-layered supply bottlenecks that are noticeably hampering production in many firms. Despite the very good order situation, production in the manufacturing industry will therefore probably only gradually return to its recovery path in the second half of the year, provided that the supply bottlenecks then gradually ease. With the supply bottlenecks, price pressures have also increased, especially as economic momentum is high worldwide. Thus, prices for raw materials, intermediate goods and transport services have recently been on a broad upward trend. All in all, GDP is expected to grow by 3.9 percent this year and by 4.8 percent in 2022. Consumer prices will rise at a much faster rate of probably 2.6 percent this year and by around 2 percent in 2022.
  • Topic: Economics, GDP, Economic Growth, Pandemic, Industry, COVID-19
  • Political Geography: Europe, Germany
  • Author: Karl Friedhoff, Suh Young Park
  • Publication Date: 05-2021
  • Content Type: Commentary and Analysis
  • Institution: Chicago Council on Global Affairs
  • Abstract: Chicago Council survey data find majorities in South Korea view China as more of a security threat than a security partner and as more of an economic threat than an economic partner. On May 21, South Korea’s President Moon Jae-in will meet President Joe Biden at the White House. In his first 100 days in office, Biden’s foreign policy has focused on repairing alliances and setting the administration’s policy toward China—in March and April alone, the administration participated in US-China talks in Alaska, 2+2 meetings in South Korea and Japan, trilateral talks among national security advisers, and Japanese Prime Minister Yoshihide Suga's visit to Washington. Moon’s visit will add North Korea to the agenda. The two leaders meet at a time when there are significant gaps on their preferred paths forward to dealing with Beijing and Pyongyang. However, recent Chicago Council surveys find that attitudes among publics in South Korea and the United States are remarkably similar when it comes to China and North Korea.
  • Topic: Security, Foreign Policy, Economics, Public Opinion
  • Political Geography: China, Asia, South Korea, North America, Southeast Asia
  • Author: Luka Steric
  • Publication Date: 03-2021
  • Content Type: Commentary and Analysis
  • Institution: Belgrade Centre for Security Policy
  • Abstract: Foreign direct investments are the cornerstone of the current government’s economic policy. In their statements, the officials call them drivers of development, saying that they have enabled the revival of the economy and turned Serbia into the “economic tiger of Southeast Europe.”1 The fact that the value of the investments Serbia has managed to attract is greater “than what was achieved by all the countries of the Western Balkans put together” 2 is often mentioned as the key measure of success. However, the story of brilliant success quickly loses its lustre when one considers the long-term effects and all-encompassing consequences of this policy. Due to the way they are contracted and implemented, foreign direct investments represent one of the key mechanisms for capturing the state. Hiding behind the stories of a better future and new jobs, the government is breaking down the system of legal regulations and statutory procedures, promoting private interest to the detriment of the public one, and using foreign investments as propaganda ammunition to legitimise unlimited power. The results of such policy are a number of negative consequences for the state and the citizens, such as the increase of public debt, dramatic violation of workers’ rights and alarming problems with environmental pollution. In order to mask the negative consequences and legitimise the policy of attracting foreign investors based on the above described pattern, a complex narrative has been developed presenting foreign investments as a successful, and the only possible, model for state development. This meta-narrative about progress, which media are building up every day, is based on four basic component narratives: on the economic revival, on the efficiency of personal rule, on transparent contracts and on the opponents of Serbia’s development who ‘unfoundedly’ criticise the government’s economic success. In the analysis of the narrative we will focus on the statements of officials made since 2012, which is when the regime led by the Serbian Progressive Party came to power. Many of the described mechanisms, such as non-transparent, harmful contracts and unjustifiably high subsidies, also existed during the previous government.3 However, the capture of the state, carried out - among other things - with the help of foreign direct investments, has reached completely new dimensions under the current regime, while the narratives that accompany it have been significantly ‘improved’.
  • Topic: Development, Economics, Foreign Direct Investment, Drugs
  • Political Geography: Europe, Serbia
  • Publication Date: 06-2020
  • Content Type: Commentary and Analysis
  • Institution: Future for Advanced Research and Studies (FARAS)
  • Abstract: Sales of medical masks, gloves, adhesive tapes and other protective equipment have soared in the Middle East after the spread of COVID-19 and especially after the WHO raised the virus global threat assessment to its “highest level” on February 29. This led to an increase in demand for masks to a degree of “obsession" at times, raising regional concerns after the increase in its price along with risking its supply and the formation of a parallel market. Although the subject of medical masks may fall under public health matters, measures taken to address its economic use actually have to do with the adopted governmental policies to deal with fighting the pandemic on state levels. These policies include, but are not limited to, enhancing healthcare infrastructure, monopoly prevention, consumer protection, relaunching inactive factories specifically after the disruption of imports from China as one of the largest global masks suppliers.
  • Topic: Economics, Health, COVID-19
  • Political Geography: Middle East, North Africa
  • Author: Matthew Eldridge
  • Publication Date: 04-2020
  • Content Type: Commentary and Analysis
  • Institution: Urban Institute
  • Abstract: Even as many developing countries are confronting the health impacts of the COVID-19 pandemic, they are already bracing for the widespread, global recession that will follow. These countries already struggle to provide many services and supports to their citizens, and although the emergency assistance packages of international financial institutions are a start, they alone won’t be enough to mitigate the economic impact of COVID-19 and enable a strong recovery. Although most developing countries escaped the 2007–08 financial crisis with limited damage, for many, this economic downturn is expected to be much worse because of the direct health effects, the sharp decline in global economic activity, the structural composition of their economies, and constrained policy options.
  • Topic: Development, Economics, Pandemic, COVID-19
  • Political Geography: Global Focus
  • Author: Li Hao
  • Publication Date: 03-2020
  • Content Type: Commentary and Analysis
  • Institution: Japan Institute Of International Affairs (JIIA)
  • Abstract: As of March 9, 2020, instances of pneumonia attributable to the novel coronavirus (COVID-19) have appeared in more than 100 countries; more than 80,000 persons have been infected in China, of whom over 3,000 have died. These infections have spread to Japan, South Korea, Italy, Iran and elsewhere, devastating global exchange and economic activity. This paper offers a brief examination of the political and economic impact of this outbreak on China.
  • Topic: Economics, Politics, COVID-19
  • Political Geography: China, Asia, Global Focus
  • Author: Catherine Wilson
  • Publication Date: 07-2020
  • Content Type: Commentary and Analysis
  • Institution: Lowy Institute for International Policy
  • Abstract: High population growth is driving a rapid increase in the proportion of young people in Pacific Island countries, with half the region's population aged under 23. This 'youth bulge' is particularly acute in Melanesian states and will have a major impact on every area of development in the region in the coming decades. Economic prosperity, political success and social stability in the Pacific Islands region in the future will depend on harnessing this demographic dividend and preventing youth marginalisation and disillusionment. Urgent and coordinated national and regional responses should include addressing pressing health problems, expanding Australia's seasonal worker scheme, increasing migration pathways, and targeted skills and employment programs.
  • Topic: Demographics, Economics, Migration, Politics, Employment, Youth, Population Growth, Marginalization
  • Political Geography: Melanesia, Pacific Ocean
  • Publication Date: 01-2020
  • Content Type: Commentary and Analysis
  • Institution: Oxford Economics
  • Abstract: McCarran and its sister airports bring widespread benefit to the Las Vegas region. Oxford Economics found that 25% of all jobs in the region are supported by airport operations and that the benefit is widespread. For example, passengers arriving by air support over 115,000 jobs in the hospitality and leisure industry and 11,000 jobs in manufacturing and related activities are supported by cargo operations. Just as importantly, direct access from McCarran to global markets help Las Vegas diversify its economy and attract new companies to the region.
  • Topic: Economics, Tourism, Job Creation, Travel
  • Political Geography: North America, United States of America, Las Vegas
  • Publication Date: 03-2020
  • Content Type: Commentary and Analysis
  • Institution: Oxford Economics
  • Abstract: This report provides an overview of the nature of illicit trade in cigarettes across three markets in the Levant region: Egypt, Jordan, and Lebanon. It establishes estimates of Illicit Consumption in each market and the impact it has on government tax revenue.
  • Topic: Economics, Markets, Finance, Illegal Trade
  • Political Geography: Africa, Middle East, Lebanon, Egypt, Jordan
  • Publication Date: 04-2020
  • Content Type: Commentary and Analysis
  • Institution: Oxford Economics
  • Abstract: In this report, Oxford Economics looks at the impact the COVID-19 pandemic on the economies of Asia-Pacific. We look at the impact of lockdown measures to contain the pandemic in China and other economies in the region, and their toll on business and households. As the COVID-19 pandemic continues around the globe, governments, investors, business and households are beginning to understand the financial and economic costs more clearly. In this report we examine the channels through which COVID-19 has impacted on the economies of the Asia-Pacific region. We explore the economic cost of lockdown measures, particularly so in China, as well as knock-on effects through supply-chains, tourism, and financial markets. We set out our forecasts for an historically-sharp downturn in the first half of 2020, but potential for a rapid recovery starting later this year and into 2021. Finally, we examine a downside scenario, simulated using our Global Economic Model, in which lockdown measures spread globally and the economic cost is even greater than in our baseline forecast.
  • Topic: Economics, Public Health, Pandemic, COVID-19
  • Political Geography: Asia, Asia-Pacific
  • Publication Date: 09-2020
  • Content Type: Commentary and Analysis
  • Institution: Oxford Economics
  • Abstract: This research seeks to quantify the size and scale of the illicit consumption of cigarettes in Mexico, as well as the impact on government revenues, for the most recent 12-month period pre-Coronavirus.
  • Topic: Economics, Governance, Illegal Trade, Consumerism
  • Political Geography: North America, Mexico
  • Author: Claudia Schmucker, Stormy-Annika Mildner
  • Publication Date: 10-2020
  • Content Type: Commentary and Analysis
  • Institution: German Council on Foreign Relations (DGAP)
  • Abstract: Today, trade policy is used more and more often to achieve geopolitical goals. To defend European interests in this new geo-economic environment, the EU must recalibrate its unilateral, bilateral, and multilateral trade toolbox. While the EU needs to counter the increasingly unlevel international playing field, self-sufficiency is not a viable option. The strength of the EU depends on its openness and integration in world markets.
  • Topic: Economics, Reform, European Union, Trade
  • Political Geography: Europe
  • Author: Stephen Grenville
  • Publication Date: 07-2019
  • Content Type: Commentary and Analysis
  • Institution: Lowy Institute for International Policy
  • Abstract: Recognition of the need for greater government intervention in the economy is increasingly shaping the US political debate, with this shift paralleled among prominent economists. The surprising success of Bernie Sanders’ 2016 presidential campaign has emboldened Democratic presidential hopefuls to advocate bold platforms involving larger government. Coincidentally, some prominent economists are advocating greater government expenditure to address ‘secular stagnation’. This is unlikely to result in a radical shift away from the post-Reagan small-government policies, but the centre of gravity has shifted towards recognising a role for more government intervention.
  • Topic: Economics, Politics, Elections, Fiscal Policy
  • Political Geography: North America, United States of America
  • Author: Roland Rajah
  • Publication Date: 01-2019
  • Content Type: Commentary and Analysis
  • Institution: Lowy Institute for International Policy
  • Abstract: East Asia is no longer reliant on US or Western markets to fuel its growth, giving it more room to manage amid global trade tensions. Heightened global trade tensions and the US desire to ‘decouple’ from the Chinese economy for national security reasons pose significant risks to East Asia’s export-driven growth model. However, the latest data suggests East Asia is no longer so dependent on exporting to the West, with China in particular eclipsing the United States as the leading source of ‘final demand’ for the rest of the region’s exports. This gives East Asia much greater room to manoeuvre, as regional integration is now a more viable platform for growth while US decoupling efforts will likely struggle to find traction in the region.
  • Topic: Economics, International Trade and Finance, Global Markets, Exports
  • Political Geography: China, East Asia, Asia, North America, United States of America
  • Publication Date: 04-2019
  • Content Type: Commentary and Analysis
  • Institution: Future for Advanced Research and Studies (FARAS)
  • Abstract: Qatar and Turkey were quick to express their opposition to the US designation, on April 8, 2019, of the Islamic Revolutionary Guard Corp (IRGC) as a foreign terrorist organization. This stance cannot be separated from Doha and Ankara's perception of the repercussions that such a move could have on their position on various regional crises or the bilateral relations with Iran, which appear to be heading toward difficult challenges. The most critical of these challenge are the continuous pressures it faces at home and abroad. This could spell serious problems for Qatar and Turkey if they insist on siding with Iran in the coming period.
  • Topic: Economics, Terrorism, Sanctions, Alliance, Islamic Revolutionary Guard Corp (IRGC)
  • Political Geography: Iran, Turkey, Tehran, Qatar, Ankara, Doha
  • Publication Date: 11-2019
  • Content Type: Commentary and Analysis
  • Institution: Oxford Economics
  • Abstract: Since opening its first office in Japan in 2005, Huawei has played a significant role in developing Japan's digital infrastructure. Working collaboratively with local manufacturers and innovators, the company has developed a suite of innovations that tailor technology solutions to the Japanese context. Huawei also delivers long-term benefits to Japan's productive potential, through its investment in Japanese research and development and the training it provides to its employees and the wider Japanese workforce. This report, commissioned by Huawei, seeks to quantify the company's "total economic impact" across Japan, through its direct operations and the "knock-on effects" it creates in Japanese supply chains and the wider economy. We find that in 2018, Huawei sustained a JPY 766 billion contribution to Japan's GDP, supported 46,400 Japanese jobs and generated JPY 208 billion in tax revenues.
  • Topic: Economics, Tax Systems, Innovation, Private Sector
  • Political Geography: Japan, Asia
  • Author: Benjamin Augé
  • Publication Date: 10-2018
  • Content Type: Commentary and Analysis
  • Institution: Institut français des relations internationales (IFRI)
  • Abstract: On June 5th 2017, Saudi Arabia, the United Arab Emirates, Egypt and Bahrain broke off diplomatic relations with Qatar and agreed to isolate the Emirate via an air and land blockade. These countries decided to punish Qatar under the pretext of a speech the Emir of Qatar, Tamim bin Hamad Al-Thani, would have made on May 23rd, which reiterated the strong ties between his country and Iran.[1] The situation has been at a deadlock for a year, and Qatar refuses to apply the Emirati and Saudi Arabian list of the 13 demands. The latter mainly include the closure of the Al Jazeera TV station and the Turkish military base on its territory, downgrading diplomatic relations with Iran, as well as a total separation with movements such as Hezbollah or even the Muslim Brotherhood.[2] However, although this crisis only pits Persian Gulf countries against each other, apart from Egypt, both sides have tried to win support. Donald Trump has adopted the stance of the Saudi-Emirati side[3] – but the State Department under Rex Tillerson (2017-2018) has always remained cautious –, Europe remains neutral with no leader daring to choose one side rather than another. The confrontation was particularly marked in West Africa. Four countries in this area – Senegal, Mauritania, Chad and Niger – quickly downgraded their diplomatic relations with Qatar shortly after the start of the crisis. However, their strategy vis-à-vis this wealthy gas Emirate has changed considerably over the last twelve months, as Doha's efforts to obtain new support in the rest of West Africa has started to bear fruit.
  • Topic: International Relations, Diplomacy, Economics
  • Political Geography: Saudi Arabia, West Africa, Senegal, Qatar, United Arab Emirates, Chad, Mauritania, Niger, Gulf Nations
  • Publication Date: 10-2018
  • Content Type: Commentary and Analysis
  • Institution: Future for Advanced Research and Studies (FARAS)
  • Abstract: Several Middle Eastern countries, such as Turkey and Iran, have been recently shifting into international currencies or local currencies, instead of the US dollar, in their foreign trade. This shift comes amid the US economic sanctions on Iran in tandem with its souring relations with Turkey. What is striking in this regard is that there is an international acceptance of other currencies, especially the Chinese yuan, with the pricing of some oil contracts in the same currency. This move seems to have a particular political significance, namely rejecting the impact of the US dollar on the trade of these countries rather than its economic feasibility, amid the sharp fluctuations in the local currencies of Iran, Turkey, and India in the past period.
  • Topic: Economics, International Trade and Finance, Currency, Trade Policy
  • Political Geography: Russia, China, Iran, Eurasia, Middle East, North America, United States of America
  • Author: Simon Kyte, David Goodger, Helen McDermott
  • Publication Date: 12-2018
  • Content Type: Commentary and Analysis
  • Institution: Oxford Economics
  • Abstract: A “no-deal” Brexit would cause a 5% drop in UK outbound travel and tourism trips in 2020, because of the stifled economic backdrop and impact of a weaker pound. Ireland and Spain would be the hardest hit from fewer UK visitors. In contrast, the weaker pound could mean that UK tourism inflows are 4% higher in a “no-deal” scenario, provided there is no travel disruption. But lower levels of domestic tourism mean that we would expect UK travel and tourism GDP to be 2% lower than our baseline forecast in 2020.
  • Topic: Diplomacy, Economics, Regional Cooperation, Tourism, European Union, Brexit
  • Political Geography: United Kingdom, Europe
  • Author: Jenny Andersson, Olivier Godechot
  • Publication Date: 06-2018
  • Content Type: Commentary and Analysis
  • Institution: Max Planck Sciences Po Center on Coping with Instability in Market Societies (MaxPo)
  • Abstract: Throughout the long postwar period, crisis was a conjectural phenomenon and the exception in a normalcy of growth and social progress. Many key concepts of the social sciences – indeed, our understanding of democracy, embedded markets, enlightened electorates, benevolent political elites, and problem-solving progressive alliances – seem inapt for understanding today’s societal upheaval. In the wake of the financial crisis of 2008, we have witnessed the breakdown of majority alliances, the return of populism on a grand scale both in the Western world and globally, and the eruption into chaotic and sometimes violent social protests. The forces that underpinned the framework of welfare capitalism seem obsolete in the face of financial and political elites who are paradoxically both disconnected from national territory and sometimes in direct alliance with nationalist and populist movements. Politics of resentment, politics of place, and new politics of class interact in ways that we do not yet understand. Perhaps the greatest paradox of all is that neoliberalism has spawned authoritarianism. At the same time, these processes are not at all new, but must be put in the context of the socioeconomic and cultural cleavages produced by the shift to neoliberalism since the 1970s. The paper presents arguments by leading scholars in economic history, economic sociology, and political economy in brief thinknotes that were prepared for the MaxPo Fifth-Anniversary Conference on January 12 and 13, 2018, in Paris.
  • Topic: Economics, International Political Economy, Financial Crisis, Inequality, Neoliberalism, Free Market
  • Political Geography: Global Focus
  • Author: Michael Emerson
  • Publication Date: 03-2017
  • Content Type: Commentary and Analysis
  • Institution: Centre for European Policy Studies
  • Abstract: A team of economists at CEPS was commissioned by the Policy Department on Economic and Scientific Policies for the Committee on Internal Market and Consumer Protection to assess the likely economic impact of Brexit on EU27, together with some scenarios for the terms of the UK’s secession. For the EU 27, the losses were found to be virtually insignificant, and hardly noticeable in the aggregate. For the UK, however, the losses could be highly significant, with various estimates running up to ten times greater as a share of GDP. Impacts on some member states – in particular Ireland – and some sectors in the EU27 could be more pronounced than the average for the EU27. Michael Emerson is Associate Senior Research Fellow, Matthias Busse is Researcher, Mattia Di Salvo is Research Assistant, Daniel Gros is Director and Jacques Pelkmans is Senior Research Fellow – all at CEPS.
  • Topic: Economics, Brexit, Global Political Economy
  • Political Geography: Europe
  • Publication Date: 05-2017
  • Content Type: Commentary and Analysis
  • Institution: Oxford Economics
  • Abstract: US freight railcar manufacturers contribute $6.5 billion to U.S. GDP and support nearly 65,000 jobs. However, increased global competition and evidence suggesting unfair business practices puts this contribution at risk. Oxford Economics conducted an original study that evaluates the practices of Chinese state-owned enterprises' (SOE) push into the U.S. market and the potential risks to domestic manufacturers and domestic supply chains. The study focuses primarily on U.S. freight railcar production and includes consequences from a similar experience in Australia's freight railcar production, when faced with the entrance of Chinese SOEs.
  • Topic: Economics, Hegemony, State Actors, Transportation
  • Political Geography: China, Asia, Australia, Australia/Pacific, North America, United States of America
  • Author: Solomon Greene
  • Publication Date: 06-2016
  • Content Type: Commentary and Analysis
  • Institution: Urban Institute
  • Abstract: Earlier this month, House Republicans released a new plan to fight poverty and help Americans move up the economic ladder. The plan begins and ends with the premise that “The American Dream is the idea that, no matter who you are or where you come from, if you work hard and give it your all, you will succeed.” In between, however, there is scant mention of the role that place (i.e., where you come from) plays in perpetuating poverty or shaping economic opportunity. This is a glaring omission, especially in light of the plan’s insistence on grounding poverty-reduction policies in the best available evidence. The evidence shows that geography plays a powerful role in determining life outcomes in the United States. Better understanding the mechanisms by which zip codes determine destiny and identifying effective strategies to sever the connection between poverty and place should be central to any federal antipoverty plan.
  • Topic: Development, Economics, Poverty
  • Political Geography: North America, United States of America
  • Author: Solomon Greene, Benjamin Edwards, G. Thomas Kingsley
  • Publication Date: 05-2016
  • Content Type: Commentary and Analysis
  • Institution: Urban Institute
  • Abstract: Cities are where sustainable development challenges like poverty and disaster risk are felt most acutely, particularly as the world’s population shifts to urban areas. But cities can also be incubators for the policies to address those challenges, and local leaders increasingly hold the keys to fostering inclusive growth and mitigating climate change. Fortunately, city leaders across the globe are rallying behind sustainable development in all its dimensions: environmental sustainability, economic opportunity, and social inclusion. Mayors and local leaders were instrumental in securing a dedicated goal on inclusive and sustainable cities in the United Nations’s 2030 Agenda and framework of 17 high-level Sustainable Development Goals (SDGs), signed by all member states at a historic summit last September. Since then, hundreds of local leaders have made commitments to support SDGs in their cities, forming new global networks and designing local implementation plans.
  • Topic: Economics, Environment, Sustainable Development Goals, Cities
  • Political Geography: Global Focus
  • Author: Jonas E. Arias, Guido Ascari, Nicola Branzoli, Efrem Castelnuovo
  • Publication Date: 01-2015
  • Content Type: Commentary and Analysis
  • Institution: Board of Governors of the Federal Reserve System
  • Abstract: Working with a small-scale calibrated New-Keynesian model, Coibion and Gorodnichenko (2011) find that the reduction in trend inflation during Volcker's mandate was a key factor behind the Great Moderation. We revisit this finding with an estimated New-Keynesian model with trend inflation and no indexation based on Christiano, Eichenbaum and Evans (2005). First, our simulations confirm Coibion and Gorodnichenko's (2011) main finding. Second, we show that a trend inflation-immune Taylor rule based on economic theory can avoid indeterminacy even at high levels of trend inflation such as those observed in the 1970s.
  • Topic: Economics, Monetary Policy, Economic Theory, Inflation
  • Political Geography: Global Focus
  • Author: Shaghil Ahmed, Brahima Coulibaly, Andrei Zlate
  • Publication Date: 05-2015
  • Content Type: Commentary and Analysis
  • Institution: Board of Governors of the Federal Reserve System
  • Abstract: We assess the importance of economic fundamentals in the transmission of international shocks to financial markets in various emerging market economies (EMEs). Our analysis covers the so-called taper-tantrum episode of 2013 and six earlier episodes of severe EME-wide financial stress since the mid-1990s. Cross-country regressions lead us to the following results: (1) EMEs with relatively better economic fundamentals suffered less deterioration in financial markets during the 2013 taper-tantrum episode. (2) Differentiation among EMEs set in quite early and persisted throughout this episode. (3) Controlling for economic fundamentals, we also find that, during the taper tantrum, financial conditions deteriorated more in those EMEs that had earlier experienced larger private capital inflows and greater exchange rate appreciation. (4) For earlier episodes, we find little evidence of investor differentiation across EMEs being explained by differences in their relative vulnerabilities during EME crises of the 1990s and early 2000s. (5) That said, differentiation across EMEs based on fundamentals does not appear to be unique to the 2013 episode. Differences in economic fundamentals played a role in explaining the heterogeneous EME financial market responses during the global financial crisis of 2008, and the role of fundamentals appeared to progressively increase through the European crisis in 2011 and subsequently the 2013 taper tantrum.
  • Topic: Economics, Emerging Markets, Markets, Exchange Rate Policy, Fiscal Policy, Economic Crisis
  • Political Geography: Global Focus
  • Author: Michiel De Pooter, Patrice Robitaille, Ian Walker, Michael Zdinak
  • Publication Date: 03-2014
  • Content Type: Commentary and Analysis
  • Institution: Board of Governors of the Federal Reserve System
  • Abstract: In this paper, we consider whether long-term inflation expectations have become better anchored in Brazil, Chile, and Mexico. We do so using survey-based measures as well as financial market-based measures of long-term inflation expectations, where we construct the market-based measures from daily prices on nominal and inflation-linked bonds. This paper is the first to examine the evidence from Brazil and Mexico, making use of the fact that markets for longterm government debt have become better developed over the past decade. We find that inflation expectations have become much better anchored over the past decade in all three countries, as a testament to the improved credibility of the central banks in these countries when it comes to keeping inflation low. That said, one-year inflation compensation in the far future displays some sensitivity to at least one macroeconomic data release per country. However, the impact of these releases is small and it does not appear that investors systematically alter their expectations for inflation as a result of surprises in monetary policy, consumer prices, or real activity variables. Finally, long-run inflation expectations in Brazil appear to have been less well anchored than in Chile and Mexico.
  • Topic: Development, Economics, Inflation, Bonds
  • Political Geography: Brazil, South America, North America, Mexico, Chile
  • Author: Nicholas Coleman, Leo Feler
  • Publication Date: 03-2014
  • Content Type: Commentary and Analysis
  • Institution: Board of Governors of the Federal Reserve System
  • Abstract: While the finance literature often equates government banks with political capture and capital misallocation, these banks can help mitigate financial shocks. This paper examines the role of Brazil's government banks in preventing a recession during the 2008-2010 financial crisis. Government banks in Brazil provided more credit, which offset declines in lending by private banks. Areas in Brazil with a high share of government banks experienced increases in lending, production, and employment during the crisis compared to areas with a low share of these banks. We find no evidence that lending was politically targeted or that it caused productivity to decline in the short-run.
  • Topic: Economics, Financial Crisis, Governance, Local, Lending, Banking
  • Political Geography: Brazil, South America
  • Author: Jonas E. Arias, Juan F. Rubio-Ramirez, Daniel F. Waggoner
  • Publication Date: 03-2014
  • Content Type: Commentary and Analysis
  • Institution: Board of Governors of the Federal Reserve System
  • Abstract: Are optimism shocks an important source of business cycle fluctuations? Are deficit-financed tax cuts better than deficit-financed spending to increase output? These questions have been previously studied using SVARs identified with sign and zero restrictions and the answers have been positive and definite in both cases. While the identification of SVARs with sign and zero restrictions is theoretically attractive because it allows the researcher to remain agnostic with respect to the responses of the key variables of interest, we show that current implementation of these techniques does not respect the agnosticism of the theory. These algorithms impose additional sign restrictions on variables that are seemingly unrestricted that bias the results and produce misleading confidence intervals. We provide an alternative and efficient algorithm that does not introduce any additional sign restriction, hence preserving the agnosticism of the theory. Without the additional restrictions, it is hard to support the claim that either optimism shocks are an important source of business cycle fluctuations or deficit-financed tax cuts work best at improving output. Our algorithm is not only correct but also faster than current ones.
  • Topic: Economics, Business , Tax Systems, Economic Theory, Deficit
  • Political Geography: Global Focus
  • Author: John Rogers, Chiara Scotti, Jonathan H. Wright
  • Publication Date: 03-2014
  • Content Type: Commentary and Analysis
  • Institution: Board of Governors of the Federal Reserve System
  • Abstract: This paper examines the effects of unconventional monetary policy by the Federal Reserve, Bank of England, European Central Bank and Bank of Japan on bond yields, stock prices and exchange rates. We use common methodologies for the four central banks, with daily and intradaily asset price data. We emphasize the use of intradaily data to identify the causal effect of monetary policy surprises. We find that these policies are effective in easing financial conditions when policy rates are stuck at the zero lower bound, apparently largely by reducing term premia.
  • Topic: Economics, Monetary Policy, Exchange Rate Policy, Banking
  • Political Geography: Japan, Europe, Asia, England
  • Author: Logan T. Lewis
  • Publication Date: 04-2014
  • Content Type: Commentary and Analysis
  • Institution: Board of Governors of the Federal Reserve System
  • Abstract: U.S. imports and exports respond little to exchange rate changes in the short run. Pricing behavior has long been thought central to explaining this response: if local prices do not respond to exchange rates, neither will trade flows. Sticky prices and strategic complementarities in price setting generate sluggish responses, and they are necessary to match newly available international micro price data. Using trade flow data, I test models capable of replicating these trade price data. Even with significant pricing frictions, the models still imply a trade response to exchange rates stronger than found in the data. Moreover, using significant cross-sector heterogeneity, comparative statics implied by the model find little to no support in the data. These results suggest that while complementarity in price setting and sticky prices can explain pricing patterns, some other short-run friction is needed to match actual trade flows. Furthermore, the muted response found for sectors with high long-run substitutability implies that simply assuming low elasticities may be inappropriate. Finally, there is evidence of an asymmetric response to exchange rate changes.
  • Topic: Economics, International Trade and Finance, Exchange Rate Policy, Capital Flows
  • Political Geography: North America, United States of America
  • Author: Stephanie E. Curcuru, Charles P. Thomas, Francis E. Warnock, Jon Wongswan
  • Publication Date: 05-2014
  • Content Type: Commentary and Analysis
  • Institution: Board of Governors of the Federal Reserve System
  • Abstract: Portfolio rebalancing is a key driver of the Uncovered Equity Parity (UEP) condition. According to UEP, when foreign equity holdings outperform domestic holdings, domestic investors are exposed to higher exchange rate exposure and hence repatriate some of the foreign equity to decrease their exchange rate risk. By doing so, foreign currency is sold, leading to foreign currency depreciation. We examine the relationship between U.S. investors' portfolio reallocations and returns and find some evidence consistent with UEP: Portfolio shifts are related to past returns in the underlying equity markets. But we argue that a motive other than reducing currency risk exposure is likely behind this rebalancing. In particular, U.S. investors may be exploiting mean reversion in underlying equity markets, rebalancing away from equity markets that recently performed well and moving into equity markets market just prior to relatively strong performance. Such behavior suggests tactical reallocations to increase returns rather than reduce risk.
  • Topic: Economics, Markets, Risk, International Portfolios, Equity
  • Political Geography: North America, United States of America
  • Author: David Bowman, Juan M. Londono, Horacio Sapriza
  • Publication Date: 06-2014
  • Content Type: Commentary and Analysis
  • Institution: Board of Governors of the Federal Reserve System
  • Abstract: We investigate the effects of U.S. unconventional monetary policies on sovereign yields, foreign exchange rates, and stock prices in emerging market economies (EMEs), and we analyze how these effects depend on country-specifc characteristics. We find that, although EME asset prices, mainly those of sovereign bonds, responded strongly to unconventional monetary policy announcements, these responses were not outsized with respect to a model that takes into account each country's time-varying vulnerability to U.S. interest rates affected by monetary policy shocks.
  • Topic: Economics, Emerging Markets, Foreign Exchange, Markets, Monetary Policy, Exchange Rate Policy, Interest Rates, Stock Markets
  • Political Geography: North America, United States of America
  • Author: Matteo Iacoviello
  • Publication Date: 08-2014
  • Content Type: Commentary and Analysis
  • Institution: Board of Governors of the Federal Reserve System
  • Abstract: Using Bayesian methods, I estimate a DSGE model where a recession is initiated by losses suffered by banks and exacerbated by their inability to extend credit to the real sector. The event triggering the recession has the workings of a redistribution shock: a small sector of the economy--borrowers who use their home as collateral--defaults on their loans. When banks hold little equity in excess of regulatory requirements, the losses require them to react immediately, either by recapitalizing or by deleveraging. By deleveraging, banks transform the initial shock into a credit crunch, and, to the extent that some firms depend on bank credit, amplify and propagate the shock to the real economy. I find that redistribution and other financial shocks that affect leveraged sectors accounts for two-thirds of output collapse during the Great Recession.
  • Topic: Economics, Global Recession, GDP, Economic Theory, Fiscal Policy, Banking
  • Political Geography: Global Focus
  • Author: Lorenzo Caliendo, Fernando Parro, Esteban Rossi-Hansberg, Pierre-Daniel Sarte
  • Publication Date: 10-2014
  • Content Type: Commentary and Analysis
  • Institution: Board of Governors of the Federal Reserve System
  • Abstract: We study the impact of regional and sectoral productivity changes on the U.S. economy. To that end, we consider an environment that captures the effects of interregional and intersectoral trade in propagating disaggregated productivity changes at the level of a sector in a given U.S. state to the rest of the economy. The quantitative model we develop features pairwise interregional trade across all 50 U.S. states, 26 traded and non-traded industries, labor as a mobile factor, and structures and land as an immobile factor. We allow for sectoral linkages in the form of an intermediate input structure that matches the U.S. input-output matrix. Using data on trade flows by industry between states, as well as other regional and industry data, we obtain the aggregate, regional and sectoral elasticities of measured TFP, GDP, and employment to regional and sectoral productivity changes. We find that such elasticities can vary significantly depending on the sectors and regions affected and are importantly determined by the spatial structure of the US economy. We highlight the role of these elasticities by tracing out the effects of productivity gains in California in the Computers and Electronics industry between 2002 and 2007 on all other U.S. sectors and regions.
  • Topic: Economics, Science and Technology, GDP, Regionalism, Productivity
  • Political Geography: North America, United States of America
  • Author: Ozge Akinci
  • Publication Date: 10-2014
  • Content Type: Commentary and Analysis
  • Institution: Board of Governors of the Federal Reserve System
  • Abstract: Estimated dynamic models of business cycles in emerging markets deliver counterfactual predictions for the country risk premium. In particular, the country interest rate predicted by these models is acyclical or procyclical, whereas it is countercyclical in the data. This paper proposes and estimates a small open economy model of the emerging-market business cycle in which a time-varying country risk premium emerges endogenously. In the proposed model, a firm's borrowing rate adjusts countercyclically as the default threshold of the firm depends on the state of the macroeconomy. I econometrically estimate the proposed model and find that it can account for the volatility and the countercyclicality of country risk premium as well as for other key emerging market business cycle moments. Time varying uncertainty in firm specific productivity contributes to delivering a countercyclical default rate and explains 70 percent of the variances in the trade balance and in the country risk premium. Finally, I find the predicted contribution of nonstationary productivity shocks in explaining output variations falls between the extremely high and extremely low values reported in the literature.
  • Topic: Economics, Business , Economic Theory, Risk, Trade
  • Political Geography: Global Focus
  • Author: Jane Haltmaier
  • Publication Date: 12-2014
  • Content Type: Commentary and Analysis
  • Institution: Board of Governors of the Federal Reserve System
  • Abstract: The Great Financial Crisis coincided with a sizable reduction in global external imbalances, defined as the absolute value of the sum of individual country current account surpluses and deficits relative to global GDP. Although current account balances should not respond to a downturn that is uniform across countries, one that hits countries with current account deficits harder than those with surpluses might result in a decline in the global balance. This paper quantifies the cyclical portion of the current account balance for 35 countries using estimates of the severity of the cycle in each country relative to that of its trading partners in conjunction with three estimates of the sensitivity of the current account balance to changes in the output gap. Two of the estimates are derived from equations linking trade to income and the third is derived from the relationship between changes in current account balances and changes in output gap differentials. The main result is that the bulk of the reduction in the global current account imbalance since 2006 appears to have been structural. Cyclical forces are estimated to account for between 10 and 30 percent of the decline. In the aggregate, the cyclical effect is estimated to be currently holding down the global current account balance by about 1/2 percentage point. However, the size of the cyclical effect is more substantial for some countries. Both surplus and deficit countries have contributed to the decline in the absolute value of the global current account imbalance, but the contribution of the deficit countries is about twice as large as that of the surplus countries. Changes in oil prices have had largely offsetting effects on the global current account balance, but changes in real exchange rates in recent years have contributed to the reduction.
  • Topic: Economics, Energy Policy, Oil, Natural Resources, Financial Crisis, GDP, Exchange Rate Policy, Trade
  • Political Geography: Global Focus