Political Geography: North America / Publication Year: within 3 Years / Topic: Economy

1. Is the banking crisis back?

Author:: Olivier Perquel
Publication Date:: 03-2023
Content Type:: Policy Brief
Institution:: Robert Schuman Foundation (RSF)
Abstract:: On March 8th, 2023, the Silvergate Bank, a small American regional establishment, a crypto-currency specialist, went bankrupt. Two days later, on March 10th, the Silicon Valley Bank, a large regional bank, which had become the 16th largest in the US by total assets, and the largest holder of the liquidities of Californian startups and venture capital, failed. On March 12th, Signature Bank (roughly half of the size of Silicon Valley Bank), of which the Trump family was a client until the Capitol incidents, also collapsed. Three bank runs in only a few days, even though everyone believed that since the 2007 crisis and the subsequent massive re-regulation of the banking sector in the United States and in Europe, the banking sector was safe. These three bankruptcies followed the same mechanism. Silicon Valley, as its name suggests, was the main bank of the Californian Silicon Valley, where startups and venture capital funds deposited their liquidities. And following the extraordinary development of this activity until 2022, these liquidities had become extremely large. It should indeed be understood that these funds and startups which look for financial backing all the time and obtain frequent and ever larger fundraises, therefore own significant amounts of liquidities. Indeed, start-ups raise money at a given point in time to finance their runway, i.e. their investments and working capital requirements, for a certain period of time (one, two or three years) until the following fundraise. As a result, during the intermediary period, they deposit the amounts raised and not yet spent in banks. Similarly, the venture capital funds take a certain time to invest the amounts raised and, in the meantime, deposit their Dry Powder in banks. Hence these bank deposits grow extremely rapidly. However, an organization like Silicon Valley Bank cannot develop at the same speed as its credit activities, far from it. It is therefore obliged to invest its assets in bonds, notably US Treasury bonds, liquid in nature, and not risky - supposedly. And when rates rise, the value of these bonds decreases, even if it does not show in the bank’s accounts, since these bonds are generally accounted for as “held to maturity”, i.e. at par. Indeed, at maturity, these bonds will be reimbursed at par; and if the banks keep these bonds until then, it will not lose any money
Topic:: Economy, Banking Crisis, and Startup
Political Geography:: North America and United States of America

2. United States–China semiconductor standoff: A supply chain under stress

Author:: Jeremy Mark and Dexter Tiff Roberts
Publication Date:: 02-2023
Content Type:: Working Paper
Institution:: Atlantic Council
Abstract:: In August 2022, the US Congress passed the CHIPS and Science Act, a law that approves subsidies and tax breaks to help jump-start the renewed production on American soil of advanced semiconductors.1 Just two months later, the Joe Biden administration issued wide-ranging restrictions on the export to China of chips and chip-making technology to undercut that country’s ability to manufacture the same class of integrated circuits.2 Taken together with a steady stream of Biden administration prohibitions on technology sales to key Chinese companies, the US initiatives represent a profound turn toward competition with China in the high-tech realm.3 They also highlight an effort to restructure the complex, multinational supply chains centered on East Asia that manufacture hundreds of billions of dollars of semiconductors a year. As such, the Biden administration has set in motion a process that could alter the business strategies—and fortunes—of homegrown and foreign-invested semiconductor companies based in China, world-leading chipmakers in Taiwan and South Korea, and suppliers around the world that provide the industry with the machinery and myriad inputs that fuel chip production. The Biden administration insists that its restrictions on sales to China are intended only to limit China’s ability to produce the cutting-edge chips that can feed into the development of weapons and other strategically important technologies—and not to cripple its semiconductor industry. But the current state of play of sanctions and support for US-based semiconductor production, including by Taiwanese and Korean chipmakers, is not the endpoint in this process. Rather, the momentum to constrain Beijing’s semiconductor program is likely to continue in the coming months, at the very least with additional restrictions on Chinese companies and government-linked entities, and unprecedented bureaucratic scrutiny of American venture-capital and equity-financing flows to China. That amounts to more bad news for corporate leaders in Asia, North America, and Europe who have spent the past generation building a globe-spanning semiconductor industry that has faced few barriers to expansion. As US restrictions mount, and sales of certain technologies to China flag, the once-unimaginable process of reorienting semiconductor supply chains will become an ever-present reality. The CHIPS and Science Act already is becoming an important factor in corporate strategy, providing incentives for Taiwanese, Korean, and American companies to make big bets on new factories in places like New York, Ohio, Texas, and Arizona—witness Taiwan Semiconductor Manufacturing Company’s (TSMC’s) recent decision to build a second factory in Phoenix.4 This paper explores the potential implications of US semiconductor policy for the global semiconductor supply chains and the competition for primacy in an industry that is constantly changing the face of the global economy and one that has implications for global security in all its dimensions. It begins by examining the policies put in place by the Biden administration, and then discusses the changes taking place across the industry, with a focus on Asia.
Topic:: Economy, Business, Supply Chains, Semiconductors, and Economic Competition
Political Geography:: China, Asia, North America, and United States of America

3. The Insurance Implications of Government Student Loan Repayment Schemes

Author:: Martin Gervais, Qian Liu, and Lance Lochner
Publication Date:: 01-2023
Content Type:: Working Paper
Institution:: Centre for Human Capital and Productivity (CHCP), Western University
Abstract:: A large literature examines the extent to which consumption responds to idiosyncratic earnings shocks.1 This paper studies whether student loan repayments serve as a source of insurance, much like government tax and transfer programs.2 Indeed, this insurance mechanism is an explicit aim of formal income-contingent repayment schemes in many countries, where the efficient structure of contingencies depends on such market frictions as moral hazard, adverse selection, and costly income verification (Lochner and Monge-Naranjo, 2016). We use new administrative data that links detailed information on Canadian student loan recipients with their repayment and income histories from the Canada Student Loans Program (CSLP), income tax filings, and post-secondary schooling records to measure the extent to which student borrowers adjust loan repayments to insure against income variation.3 Several mechanisms are available for students to adjust loan repayments in response to income fluctuations: formal, like CSLP’s Repayment Assistance Plan (RAP); and informal, such as delinquency or default. Close to 30% of students are enrolled in RAP soon after graduation, although that fraction falls as incomes rise thereafter. ∗ Gervais: University of Georgia, Athens, mgervaisca@gmail.com. Liu: Brock University, St. Catharines, Canada, qliu@brocku.ca. Lochner: Western University, London, Canada, llochner@uwo.ca. We thank the Statistics Canada Research Data Centres at Western University and McMaster University. Lochner gratefully acknowledge support from the Social Sciences and Humanities Research Council of Canada. 1See, e.g., the survey by Meghir and Pistaferri (2011) and references therein. 2Brzozowski et al. (2010) show that the tax and transfer system in Canada is very effective at absorbing income movements. 3Lochner, Liu and Gervais (2021) document sizable transfers implicit in the CSLP through differences in repayment by expected post-school income. Within 5 years of graduation, nearly 10% of borrowers have defaulted on their debt. In addition, borrowers can make larger payments than required should they experience unexpectedly high income: 40% of borrowers have fully repaid their student debt within 5 years of graduation. Indeed, loan payments are shown to increase in income, more so in early years and for individuals with higher initial debt. More formally, we estimate that on average, an unexpected $1,000 change in yearover-year income is associated with a $30 change in loan payment: from a $50 change the year after graduation, declining to a $20 change 5 years after graduation. Loan repayments are also used to absorb income variation that is more permanent in nature: for borrowers whose income is consistently below or above expected income at graduation, the magnitude of average repayment adjustment is similar to the average yearly response.
Topic:: Debt, Education, Economy, Insurance, and Student Loans
Political Geography:: Canada and North America

4. Building a Coalition - the U.S. Faces Down Competition with China in the Chip Sector

Author:: Damian Wnukowski
Publication Date:: 04-2023
Content Type:: Working Paper
Institution:: The Polish Institute of International Affairs
Abstract:: In recent months, the U.S. has intensified its international efforts to limit China’s ability to produce the most advanced chips. The result includes the introduction by Japan and the Netherlands of restrictions on the export of modern machines for chip production. In response, China is trying to attract foreign investment and develop its own potential in this sector. The U.S. actions may significantly slow the pace of China’s technological development and economic growth and limit its potential to further strengthen its military capabilities. This may make it difficult for China to support Russia with dual-use products and render possible offensive actions against Taiwan harder.
Topic:: Economy, Production, Semiconductors, and Competition
Political Geography:: China, Asia, North America, and United States of America

5. Balance of Trade, Balance of Power: How the Trade Deficit Reflects U.S. Influence in the World

Author:: Daniel Griswold and Andreas Freytag
Publication Date:: 04-2023
Content Type:: Policy Brief
Institution:: The Cato Institute
Abstract:: The U.S. trade deficit is a misunderstood symbol of U.S. economic strength and influence in the world. The deficit is not driven by unfair trade abroad or industrial weakness at home and, as the Trump years show, cannot be “fixed” through higher tariffs. Instead, the trade deficit is driven by a persistent net inflow of foreign capital, which reduces interest rates and fuels economic output. Contrary to myth, the trade deficit is not a cause of deindustrialization or a loss of manufacturing jobs. In fact, the current balance of trade points to America’s continuing influence in global affairs—as a haven for global investment, as a robust producer and buyer of global goods and services, and as the provider of a strong dollar that remains at the center of the global economy. Policymakers should reject measures that restrict trade and foreign investment and instead seek to expand America’s commercial ties to the rest of the world.
Topic:: Foreign Policy, Economy, Trade, and Trade Deficit
Political Geography:: North America and United States of America

6. Course Correction: Charting a More Effective Approach to U.S.-China Trade

Author:: Clark Packard and Scott Lincicome
Publication Date:: 05-2023
Content Type:: Policy Brief
Institution:: The Cato Institute
Abstract:: Over the past several years the U.S.-China economic relationship has soured and become subordinated to broader concerns about national security and geopolitics. After a decades‐long reform agenda in China that lifted hundreds of millions out of grinding poverty, Chinese president Xi Jinping has increasingly turned inward—reembracing Maoist socialism and heavy‐handed central planning. Washington’s response to these worrisome developments has been reflexively hawkish economically, scattershot, and woefully inadequate for the economic challenge that China presents.
Topic:: National Security, Bilateral Relations, Economy, and Trade
Political Geography:: China, Asia, North America, and United States of America

7. Rational Eviction: How Landlords Use Evictions in Response to Rent Control

Author:: Eilidh Geddes and Nicole Holz
Publication Date:: 07-2023
Content Type:: Policy Brief
Institution:: The Cato Institute
Abstract:: As housing prices rise, cities are turning to rent control policies, hoping to ensure longterm affordable housing. Typically, rent control policies require leases to be renewed at statutorily limited rent increases. Rent control policies reduce the returns from operating in the rental market, creating well‐studied incentives for landlords to leave the rental market. Many rent control policies—including San Francisco’s—feature vacancy decontrol provisions, which allow landlords to reset rents to market rates when tenants move. These policies limit the reductions in returns to operating in the rental market but create incentives for landlords to induce tenant turnover, possibly through evictions. The more tenants move, the more often a landlord can raise rents to market rates.
Topic:: Markets, Economy, Eviction, Housing, and Rent
Political Geography:: North America and United States of America

8. Central Bank Digital Currency: The Risks and the Myths

Author:: Nicholas Anthony and Norbert Michel
Publication Date:: 01-2023
Content Type:: Policy Brief
Institution:: The Cato Institute
Abstract:: Central bank digital currencies (CBDCs) have the potential to radically transform the American financial system—ultimately usurping the private sector and endangering Americans’ core freedoms. Although CBDCs have gained the attention of politicians, central bankers, and the tech industry, this experiment should be left on the drawing board. This paper provides a summary of why Congress should explicitly prohibit the Federal Reserve and the Department of the Treasury from issuing a CBDC.
Topic:: Finance, Economy, Fiscal Policy, Banking, and Digital Currency
Political Geography:: North America and United States of America

9. Self‐Service Bans and Gasoline Prices: The Effect of Allowing Consumers to Pump Their Own Gas

Author:: Vitor Melo
Publication Date:: 01-2023
Content Type:: Policy Brief
Institution:: The Cato Institute
Abstract:: Billions of people live in countries that ban self‐service fueling at gasoline stations, including some of the world’s largest countries by population, including China, India, and Brazil, among many others. The impact of these bans is largely understudied despite their prevalence presumably because this policy is often implemented at the national level and because there have been no policy changes in these countries that allow for an assessment of these bans on gasoline prices.
Topic:: Gas, Regulation, Economy, and Consumer Behavior
Political Geography:: North America, Global Focus, and United States of America

10. Inequality of Opportunity and Income Redistribution

Author:: Marcel Preuss, Germán Reyes, Jason Somerville, and Joy Wu
Publication Date:: 01-2023
Content Type:: Working Paper
Institution:: Center for Distributive, Labor and Social Studies (CEDLAS)
Abstract:: We examine how people redistribute income when there is uncertainty about the role luck plays in determining opportunities and outcomes. We elicit redistribution decisions from a U.S.- representative sample who observe worker outcomes and whether luck magnified workers’ effort (“lucky opportunities”) or determined workers’ income directly (“lucky outcomes”). We find that participants redistribute less and are less reactive to changes in the importance of luck in environments with lucky opportunities. Our findings have implications for models that seek to understand and predict redistribution attitudes, and help to explain the gap between lab evidence on support for redistribution and U.S. inequality trends.
Topic:: Inequality, Economy, Redistribution, and Income
Political Geography:: North America and United States of America

11. Mexico Peace Index 2023

Author:: Institute for Economics and Peace (IEP)
Publication Date:: 01-2023
Content Type:: Special Report
Institution:: Institute for Economics & Peace (IEP)
Abstract:: This is the tenth edition of the Mexico Peace Index (MPI), produced by the Institute for Economics and Peace (IEP). It provides a comprehensive measure of peacefulness in Mexico, including trends, analysis and estimates of the economic impact of violence in the country. The MPI is based on the Global Peace Index, the world’s leading measure of global peacefulness, produced by IEP every year since 2007. The MPI consists of 12 sub-indicators aggregated into five broader indicators. Mexico’s peacefulness improved by 0.9 percent in 2022. This was the third straight year of improvement following four consecutive years of deteriorations. Seventeen states improved, while 15 deteriorated.
Topic:: Security, Economy, Violence, and Peace
Political Geography:: North America and Mexico

12. A New Horizon in U.S. Trade Policy: Key Developments and Questions for the Biden Administration

Author:: Trevor Sutton and Mike Williams
Publication Date:: 03-2023
Content Type:: Policy Brief
Institution:: Center for American Progress - CAP
Abstract:: This issue brief examines some of the key trade initiatives pursued by the Biden administration to date. It then sets out key questions facing U.S. trade policy in a global environment defined by volatility and renewed ambition to tackle the great challenges of the 21st century, such as climate change, inequality, and great power competition.
Topic:: Foreign Policy, Climate Change, Treaties and Agreements, European Union, Inequality, Economy, Trade Policy, and Strategic Competition
Political Geography:: Europe, North America, Asia-Pacific, United States of America, and Americas

13. A Growth Perspective on Wyoming

Author:: Thảo-Nguyên Bùi, Tim Freeman, Farah Kaddah, Lucas Lamby, and Yang Li
Publication Date:: 03-2023
Content Type:: Working Paper
Institution:: The John F. Kennedy School of Government at Harvard University
Abstract:: This report sets out to understand if the economy of the State of Wyoming is positioned to grow into the future. To do this, the report begins by investigating the past. To know where the state economy could be headed, and how that direction may be improved, it is critical to understand how the state developed the economic structure and drivers that it has today. Thus, Wyoming’s economic trajectory is explored over the long, medium, and short term. From this investigation, we find that Wyoming faces an overall growth problem, but we also find a high degree of variation in economic engines and growth prospects across the state. The problem that this report identifies is that the composition of economic activities is not positioned to sustain a high quality of life across all parts of the state. “Across all parts of the state” is an essential part of the problem statement for Wyoming. While some local and regional economies in the state are growing and bumping up against identifiable constraints, other local and regional economies are experiencing sustained contractions and will require new sources of growth in order to retain (or expand) population and high quality of life. Since economic dynamics vary significantly across the state, analysis is conducted in as much geographic detail as possible. By combining historical and geographic dimensions of growth, this report aims to inform pathways for sustained and inclusive prosperity across the of Wyoming.
Topic:: Economy, Economic Growth, Telework, and Green Economy
Political Geography:: North America and United States of America

14. 'Win Without Fighting': The Chinese Communist Party's Political and Institutional Warfare Against the West

Author:: John Lee and Lavina Lee
Publication Date:: 05-2022
Content Type:: Special Report
Institution:: Hudson Institute
Abstract:: When compared to Western forms of diplomatic conversation and strategic discussion, phrases emanating from Beijing and the Chinese Communist Party (CCP) can appear peculiar, platitudinous, and so ambiguous as to be devoid of practical content. China’s paramount leader Xi Jinping speaks frequently about a ‘community of shared future,’ a ‘common destiny for mankind’ as part of his ‘China dream,’ or of his country’s ‘rejuvenation.’ He promises to pursue and achieve a ‘new type of great-power relations’ with the United States that will ‘expand the converging interests of all and build a big global family of harmony and cooperation.’ Yielding to the temptation to dismiss these phrases as glib and meaningless or as empty promises to the world would be a serious mistake. Emerging as the victorious side after the world was reshaped in the aftermath of the Second World War, and, more recently, the formal end of the Cold War, the United States and its allies have generally enjoyed dominance in all forms of power. The challenge and threat of China is largely understood in the context of its increase in material power, which is relatively easy to understand and quantify. In contrast, far less attention is being paid to non-material power, which is, admittedly, more nebulous and difficult to assess. However, China’s focus has been on relentlessly building its ‘comprehensive national power’ (CNP), that is, the sum-total of its powers and strengths—economic, military affair, science and technology, education, and resource—and influence. Thus, CNP encompasses both material and non-material power, and China’s buildup of both of these forms of power best explains its strategic and diplomatic successes. Chinese ‘rejuvenation’ is also not just about building GDP or having the world’s largest naval fleet. Rather, the CCP’s vision of a ‘community of shared future for mankind’ is very much about displacing the dominance enjoyed by the US and other advanced democracies in shaping global discourse and conversations, norms and standards, and influence within and through institutions. The advanced democracies have taken these less obvious forms of power for granted, a complacency that Beijing has exploited. As the CCP recognizes, “In the final analysis, the rise of a great power is a cultural phenomenon. It (that power) must be accepted by the international community. Be accommodated by the international system, rely on the international system, and be recognised by international norms.” To be sure, there is a rich and growing literature on the CCP’s various information, influence, and institutional resources and activities, and this report does not seek to reproduce the excellent work already in the public domain. Rather, it begins from the uncomfortable but growing realization that the CCP believes it has long been at war with the US and its allies, even though kinetic force has been used in only a few instances. It looks at why this war is being waged, what the hallmarks of success for Beijing look like, and how the use of non-material strategies in the form of political and institutional warfare complements and augments China’s better known material approaches in the CCP’s determined attempts to win this ongoing war or struggle. The report seeks to emphasize that, in understanding the challenge and threat of China, political and institutional warfare should not be treated as optional or interesting adjuncts to traditional notions of warfare or that their effects are peripheral to core strategic and even military objectives. On the contrary, non-material approaches are essential to the Chinese strategy and have real-world outcomes that are often the same ones that the use of force or economic coercion is intended to achieve. Just as the CCP views comprehensive power as encompassing material and non-material elements, its notion of waging and winning a war may or may not include a military element. We need to do the same when countering, deterring, and, if necessary, defeating Chinese strategies and actions. Moreover, the CCP’s approach is not just about putting its views forward in overt or veiled ways in the hope that it will change our minds about various issues. Instead, Beijing’s strategy is much more proactive and profound than that. The CCP’s political and institutional approaches are about fundamentally changing and shaping even the way we begin to think about or analyze an issue or what we perceive to be its ‘first principles.’ It is designed to shape the way we talk (or do not talk) about an issue, the presumptive and analytical frameworks we employ to do so, and the discourse regarding it that is accepted and deemed acceptable. At first glance, such a deeply cognitive approach might seem fanciful and impossible to implement. However, this report offers two recent case studies of instances where the CCP enjoyed considerable success in melding the material and the cognitive—with tangible and real-world results. This report then offers a summary of the real-world strategic effects and their impacts on the tactical decision-making of countries and their elites that should concern those in charge of our political, economic, military, and diplomatic policies and activities. In conclusion, it suggests some general responses to the CCP’s strategy, approach, and actions in these contexts.
Topic:: Foreign Policy, Politics, Economy, Institutions, Strategic Competition, and Chinese Communist Party (CCP)
Political Geography:: China, Asia, North America, and United States of America

15. Restarting the Post-Pandemic Indian Economy

Author:: Aparna Pande, Eric B. Brown, and Thomas J. Duesterberg
Publication Date:: 07-2022
Content Type:: Special Report
Institution:: Hudson Institute
Abstract:: This report is a result of a Takshashila-Hudson Roundtable Series that brought together experts, policymakers, and academics from India and the United States in November and December 2021 to discuss opportunities for the two nation-states to collaborate in a fast-changing global order. This section summarizes key recommendations for policymakers based on deliberations at the Takshashila-Hudson roundtable series Restarting the Post-Pandemic Indian Economy. The recommendations are divided into four themes for India-US Collaboration: Trade, Investments, Technology, and Human Capital Movement.
Topic:: Science and Technology, Immigration, Economy, Investment, Human Capital, Trade, and Supply Chains
Political Geography:: South Asia, India, North America, and United States of America

16. Reboot: Framework for a New American Industrial Policy

Author:: Martijn Rasser, Megan Lamberth, Hannah Kelley, and Ryan Johnson
Publication Date:: 05-2022
Content Type:: Special Report
Institution:: Center for a New American Security (CNAS)
Abstract:: This paper presents an initial framework for a new American industrial policy, a blueprint for what is needed to ensure the United States has the vision, goals, plans, and resources for an era of sustained strategic competition. The concept, informed by an overarching national technology strategy and a supply chain resilience strategy, is the initial contribution in a larger effort to provide policymakers with a comprehensive toolkit to navigate competition with China and engage with countries around the world, friend and foe alike.4 To provide tangible real-world examples of a new sensible American industrial policy and to illustrate how policies would vary by sector and over time, subsequent reports will detail what a new American industrial policy would look like in action for three key sectors: biotechnology, semiconductors, and green technologies.
Topic:: Economy, Green Technology, Strategic Competition, Industry, Biotechnology, and Semiconductors
Political Geography:: China, North America, and United States of America

17. The Inflation Weapon: How American Sanctions Harm Iranian Households

Author:: Esfandyar Batmanghelidj
Publication Date:: 01-2022
Content Type:: Special Report
Institution:: Fourth Freedom Forum
Abstract:: This study examines the humanitarian harms of U.S. sanctions on Iranian citizens by focusing on their principal economic impact—high rates of inflation. Although nonexperimental, the study draws upon various data to present a cohesive, if not comprehensive, narrative of the economic shocks that followed the imposition of U.S. sanctions in 2012 and 2018.
Topic:: Foreign Policy, Sanctions, Economy, and Inflation
Political Geography:: Iran, Middle East, North America, and United States of America

18. The case for a cautiously optimistic outlook for US inflation

Author:: David Reifschneider and David Wilcox
Publication Date:: 03-2022
Content Type:: Policy Brief
Institution:: Peterson Institute for International Economics
Abstract:: The Federal Reserve and most other analysts failed to anticipate the surge in inflation in 2021. Considerable debate now surrounds the question of whether the Fed is too sanguine in anticipating that too-high inflation will mostly take care of itself over the next few years, even as the unemployment rate remains low and monetary policy remains accommodative. This Policy Brief concludes that although the Federal Open Market Committee (FOMC) was too optimistic in the projections it issued in December 2021, the broad contour of its baseline inflation outlook for 2022 and beyond remains sensible. The authors find the 2021 surge in inflation resulted mainly from COVID-19-related sectoral developments rather than the classic situation of aggregate demand outstripping the overall economy's long-run productive potential. The statistical analysis in this Policy Brief was conducted before Russia invaded Ukraine. As a result of the war, the inflation situation will probably get worse before it gets better, and could do so in dramatic manner if Russian energy exports are banned altogether. Nonetheless, if the key considerations identified in this Policy Brief remain in place, and if monetary policymakers respond to evolving circumstances in a sensible manner, the inflation picture should look considerably better in the next one to three years.
Topic:: Federal Reserve, Economy, and Inflation
Political Geography:: North America and United States of America

19. For inflation relief, the United States should look to trade liberalization

Author:: Gary Clyde Hufbauer, Megan Hogan, and Yilin Wang
Publication Date:: 03-2022
Content Type:: Policy Brief
Institution:: Peterson Institute for International Economics
Abstract:: With US inflation running at 40-year high rates, the Federal Reserve is signaling more interest rate hikes in 2022 and 2023. President Joseph R. Biden Jr. has also vowed to act against what he calls anticompetitive behavior by corporations. But policymakers are overlooking one set of actions that could make a meaningful contribution to taming inflation: trade liberalization. The data cited in this Policy Brief indicate that a feasible package of liberalization could deliver a one-time reduction in consumer price index (CPI) inflation of around 1.3 percentage points, amounting to $797 per US household, about half the size of pandemic relief in 2021. As a bonus, the embrace of trade liberalization would curb inflationary expectations taking hold in American firms now protected by trade barriers from foreign competition.
Topic:: Economy, Inflation, and Trade Liberalization
Political Geography:: North America and United States of America

20. Sanctions Run Amok – The Undermining of U.S. Power

Author:: Keith A. Preble
Publication Date:: 12-2022
Content Type:: Journal Article
Journal:: Fletcher Security Review
Institution:: The Fletcher School, Tufts University
Abstract:: Well into its second year, the Biden administration has continued to grapple with persistent foreign policy challenges while new ones have emerged: North Korea has not curtailed its weapons of mass destruction (WMD) programs; negotiations with Iran on resuscitating the Joint Comprehensive Plan of Action (JCPOA) remain stalled; and a Russian troop buildup near Ukraine may signal a potential invasion and full-scale conflict. In confronting these and other challenges, the United States continues to use economic sanctions as a mean of punishing, signaling, and coercing rivals into changing their foreign policy behaviors. As a tool of American economic power, policymakers often see sanctions as “Goldilocks” instruments that are “just right,” albeit ones that require time and patience to facilitate policy change.
Topic:: Security, Foreign Policy, Sanctions, and Economy
Political Geography:: Russia, Iran, North Korea, North America, and United States of America

21. 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

22. 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

23. The (Updated) Case for Free Trade

Author:: Scott Lincicome and Alfredo Carrillo Obregon
Publication Date:: 04-2022
Content Type:: Policy Brief
Institution:: The Cato Institute
Abstract:: The long‐standing bipartisan consensus in favor of free trade in the United States has unraveled as the nation’s commitment to the multilateral trading system is increasingly subordinated to inward‐looking ideological priorities. Like all forms of market competition, trade can be disruptive for some companies and workers, and various trade agreements may require updating to address both an increasingly authoritarian China and the 21st‐century global economy. Nevertheless, both the seen and unseen economic benefits that free trade has delivered to countless individuals, businesses, and communities in America are undeniable and irreplaceable. Furthermore, the lone alternative to free trade, protectionism, has repeatedly proven to impose high costs for minimal benefits. In short, the case for free trade is an economic no‐brainer.
Topic:: Geopolitics, Economy, Free Trade, and Protectionism
Political Geography:: North America and United States of America

24. Opening Up Military Innovation: Effects of Bottom‐Up Reforms to U.S. Defense Research

Author:: Sabrina Howell, Jason Rathje, John Van Reenen, and Jun Wong
Publication Date:: 02-2022
Content Type:: Policy Brief
Institution:: The Cato Institute
Abstract:: The U.S. economy’s productivity growth has slowed down in recent decades. This slowdown appears due in part to declining innovation, especially among high‐growth new firms, making the design of innovation incentives particularly important. One overlooked but crucial decision a government or private‐sector research funder must consider is whether to take a centralized top‐down approach, tightly specifying the desired innovation, or a more open bottom‐up approach, giving more latitude to firms to define their research proposals. The bottom‐up approach may be useful if the research funder is uncertain about what opportunities exist. We compare these two strategies by studying a major reform to the Small Business Innovation Research (SBIR) program at the U.S. Air Force.
Topic:: Reform, Economy, Research, Innovation, Defense Industry, and Military
Political Geography:: North America and United States of America

25. Resilient Industry Ecochains for the US-Taiwan Partnership

Author:: Stephen Su
Publication Date:: 07-2022
Content Type:: Special Report
Institution:: East-West Center
Abstract:: Stephen Su, Senior Vice President and General Director of the Industrial Technology Research Institute (ITRI) of Taiwan, explains that the "United States and Taiwan can work closely together to develop resilient industry ecochains for key industries such as semiconductors, telecommunications, automotive, biotech, machinery, etc."
Topic:: Partnerships, Economy, Industry, Resilience, COVID-19, and Supply Chains
Political Geography:: China, Taiwan, Asia, North America, and United States of America

26. A New Horizon for Korea-US Economic Relations under the Yoon Suk-yeol Administration

Author:: Jin Kyo Suh
Publication Date:: 07-2022
Content Type:: Special Report
Institution:: East-West Center
Abstract:: Dr. Jin Kyo Suh, Senior Research Fellow at the Korea Institute for International Economic Policy, explains that "Korea-US relations are entering a new era with the inauguration of the Yoon Seok-yeol government.." as "President Yoon Seok-yeol himself is well aware of the importance of universal values, such as freedom, democracy and human rights."
Topic:: Foreign Policy, Bilateral Relations, and Economy
Political Geography:: Asia, South Korea, North America, and United States of America

27. Memo on an "Economic Article 5" to Counter Authoritarian Coercion

Author:: Ivo H. Daalder and Anders Fogh Rasmussen
Publication Date:: 06-2022
Content Type:: Policy Brief
Institution:: Chicago Council on Global Affairs
Abstract:: The world's democracies need a way to fight back against coercive economic actions by authoritarian governments, argue Ivo Daalder and Anders Fogh Rasmussen. Increasingly, authoritarian countries are using economic coercion against democracies. In recent years, China’s economic coercion of Lithuania and Australia stands out as a prominent example. Russia uses economic levers to achieve geopolitical aims, notably by weaponizing its natural resources. The aim of such coercion is to bend the will of democratic countries. This is a test for the free world. In response, we propose an Economic Article 5 among democracies to counter authoritarian coercion.
Topic:: Foreign Policy, Authoritarianism, Economy, Business, and Trade
Political Geography:: Russia, China, Asia, North America, and United States of America

28. Throwing Down the Gauntlet: What the IMF Can Do About Egypt’s Military Companies

Author:: Yezid Sayigh
Publication Date:: 04-2022
Content Type:: Working Paper
Institution:: Carnegie Endowment for International Peace
Abstract:: Until recently, both the International Monetary Fund (IMF) and the World Bank were wholly reticent to say anything about the involvement of the Egyptian Armed Forces (EAF) and other military agencies in Egypt’s civilian economy. This is a longstanding problem. By turning a blind eye to the diversion of resources to the military sector and to the increasingly significant impacts on the economy and public finances, these international financial institutions (IFIs) have undermined the effectiveness of their own programs and allowed their resources to be invested in support of suboptimal policies by the Egyptian government. There is a question of propriety when international assistance allows distorted policy incentives to continue or even intensify and disregards the fact that much of the hype about global growth in the Egyptian economy obscures the very real constraints imposed on private sector development. It is high time to throw down the gauntlet: IFIs and their governmental sponsors should tackle the reality of military involvement systematically in their programs and policy recommendations, and they should confront the issue head on in their dealings with Egypt’s authorities. Reticence persists but is starting to dissipate. A report released by the World Bank in December 2020 noted that military agencies account for an appreciable proportion of all state-owned enterprises producing capital goods; consumer durables and apparel; materials; food, beverages, and tobacco; automobiles and components; retailing; media and entertainment; semiconductors and intelligent transportation system equipment; and technology hardware and equipment.1 The IMF went further in a July 2021 review of its loan agreement with Egypt, in which it referred to the presence and role of Egyptian military companies for the first time ever.2 Significantly, it included them explicitly in its assessment of state-owned enterprises in general—many of which, the report noted, are “registering weak financial performance while some are benefiting from an uneven playing field”—and implied that military companies should come under the same broad reform policies that the IMF proposes for the public sector as a whole. Now that the IMF, in particular, has broken its former silence, it should refine its approach so as to tackle the Egyptian military’s economic role in a more targeted and consistent manner—hence making its approach more effective and sustainable. This requires a mix of measures. The first set involves bringing military agencies and companies within the scope of recommendations proposed by the IMF for Egypt’s civilian public sector and state-owned enterprises as a whole. These first measures therefore engage with IMF recommendations and Egyptian government policy initiatives relating to broad questions of ownership, regulation, and financing strategy. The second set of measures tackles the specific aspects of the legal, regulatory, and judicial frameworks that enable the military’s activities in the civilian domain. Unless they are revised, these enabling frameworks will impede wider reforms, but the Egyptian government and IMF have, for the most part, neither reviewed nor addressed them to date.
Topic:: Regulation, Economy, Business, IMF, Civil-Military Relations, and Military
Political Geography:: Middle East, North America, and Egypt

29. U.S. Strategy and Economic Statecraft: Understanding the Tradeoffs

Author:: Christopher S. Chivvis and Ethan Kapstein
Publication Date:: 04-2022
Content Type:: Working Paper
Institution:: Carnegie Endowment for International Peace
Abstract:: Few would dispute that U.S. economic policy has enormous consequences for America’s national security and role in the world. But economic policy is too often made without a clear picture of the strategic tradeoffs it entails. The purpose of this paper is to help clarify some of these tradeoffs by considering three alternative models of U.S. economic statecraft. The first model examined here, America First, has several national security and economic disadvantages. It would not only antagonize some of Washington’s key military allies but probably also undermine U.S. international competitiveness. It might even induce countries to turn their economic attention toward China, reducing the United States’ global influence accordingly. A better approach would be a blend of two other models, namely alliance economics and globalization 2.0. Together these approaches could help orient the United States for the geopolitical challenges of the next decade. By emphasizing commercial relations with U.S. military allies, such a blend would recall Article 2 of the North Atlantic Treaty, which calls for international economic cooperation among NATO member states. And by leading a reformed multilateral system, the United States would again put itself at the center of the rules-based global economic order that brought prosperity to millions.
Topic:: Foreign Policy, NATO, Geopolitics, Economy, Economic Cooperation, and Strategy
Political Geography:: North America and United States of America

30. U.S.-China Technological “Decoupling”: A Strategy and Policy Framework

Author:: Jon Bateman
Publication Date:: 04-2022
Content Type:: Special Report
Institution:: Carnegie Endowment for International Peace
Abstract:: A partial “decoupling”2 of U.S. and Chinese technology ecosystems is well underway. Beijing plays an active role in this process, as do other governments and private actors around the world. But the U.S. government has been a primary driver in recent years with its increased use of technology restrictions: export controls, divestment orders, licensing denials, visa bans, sanctions, tariffs, and the like. There is bipartisan support for at least some bolstering of U.S. tech controls, particularly for so-called strategic technologies, where Chinese advancement or influence could most threaten America’s national security and economic interests. But what exactly are these strategic technologies, and how hard should the U.S. government push to control them? Where is the responsible stopping point—the line beyond which technology restrictions aimed at China do more harm than good to America? These are vexing questions with few, if any, clear answers. Yet the United States cannot afford simply to muddle through technological decoupling, one of the most consequential global trends of the early twenty-first century. The U.S. technology base—foundational to national well-being and power—is thoroughly enmeshed with China in a larger, globe-spanning technological web. Cutting many strands of this web to reweave them into new patterns will be daunting and dangerous. Without a clear strategy, the U.S. government risks doing too little or—more likely—too much to curb technological interdependence with China. In particular, Washington may accidentally set in motion a chaotic, runaway decoupling that it cannot predict or control. Sharper thinking and more informed debates are needed to develop a coherent, durable strategy. Today, disparate U.S. objectives are frequently lumped together into amorphous constructs like “technology competition.” Familiar terms like “supply chain security” often fail to clarify such basic matters as which U.S. interests must be secured and why. Important decisions are siloed within opaque forums (like the Committee on Foreign Investment in the United States [CFIUS]), narrow specialties (like export control law), or individual industries (like semiconductors), concealing the bigger picture. The traditional concerns of “tech policy” and “China policy” receive outsized attention, while second-order implications in other areas (such as climate policy) get short shrift. And as China discourse in the United States becomes more politically charged, arguments for preserving technology ties are increasingly muted or not voiced at all. This report aims to address these gaps and show how American leaders can navigate the vast, perilous, largely unmapped terrain of technological decoupling. First, it gives an overview of U.S. thinking and policy—describing how U.S. views on Chinese technology have evolved in recent years and explaining the many tools that Washington uses to curb U.S.- China technological interdependence. Second, it frames the major strategic choices facing U.S. leaders—summarizing three proposed strategies for technological decoupling and advocating a middle path that preserves and expands America’s options. Third, it translates this strategy into implementable policies and processes—proposing specific objectives for U.S. federal agencies and identifying the technology areas where government controls are (or are not) warranted. The report also highlights many domestic investments and other self-improvement measures that must go hand in hand with restrictive action.
Topic:: National Security, Science and Technology, Intellectual Property/Copyright, Authoritarianism, Economy, Espionage, Military, and Interdependence
Political Geography:: China, Asia, North America, and United States of America

31. Bad news for the Fed from the Beveridge space

Author:: Olivier Blanchard, Alex Domash, and Lawrence H. Summers
Publication Date:: 07-2022
Content Type:: Policy Brief
Institution:: Peterson Institute for International Economics
Abstract:: The Federal Reserve seeks to cool an overheated US labor market to ease wage hikes and reduce job vacancies, without a painful spike in unemployment. But empirical evidence indicates that these goals have never been accomplished together and remain unlikely now. In fact, fighting inflation will require a reduction in job vacancies and also an increase in unemployment. The inverse relationship between job vacancies and unemployment is measured by the Beveridge curve, named after a British economist. Blanchard, Domash, and Summers find that the Fed’s hope that vacancies can be decreased without increasing unemployment flies in the face of historical empirical evidence. The current low unemployment rate and the very high vacancy-to-unemployment ratio suggest that the labor market is overheating and the natural unemployment rate has increased. It has increased about 1.3 percentage points from its pre-COVID level, implying the labor market is even more overheated than suggested by the current unemployment rate.
Topic:: Economy, Unemployment, and Labor Market
Political Geography:: North America and United States of America

32. Behavioral Responses to Supply‐Side Drug Policy during the Opioid Epidemic

Author:: Simone Balestra, Heige Liebert, and Nicole Maestas
Publication Date:: 12-2022
Content Type:: Policy Brief
Institution:: The Cato Institute
Abstract:: In the last 20 years, the use of prescription opioids has grown dramatically in the United States. Since 1999, the number of opioid prescriptions increased by 300 percent, surpassing 255 million prescriptions in 2012 (81.3 prescriptions per 100 people) before declining to 153 million prescriptions by 2019 (46.7 per 100 people). Opioids may be an effective analgesic for acute pain, but they are also associated with high risks of addiction and overdose. Death rates from opioid poisoning tripled between 2000 and 2014, contributing to a stunning reversal in 1999 of the long‐running decline in midlife mortality. The increase in overdose deaths was initially driven by prescription opioid poisonings, but the more recent surge in deaths has been attributed to illicit opioids such as heroin and fentanyl.
Topic:: Economy, Drugs, Public Health, and Opioid Crisis
Political Geography:: North America and United States of America

33. Reimagining the TPP: Revisions that Could Facilitate U.S. Reentry

Author:: Wendy Cutler and Clete Willems
Publication Date:: 12-2022
Content Type:: Special Report
Institution:: Asia Society
Abstract:: Since the United States withdrew from the Trans-Pacific Partnership (TPP) in 2017, countries in the Asia-Pacific have actively concluded trade deals without the U.S. This includes China, which is a member of the Regional Comprehensive Economic Partnership (RCEP) and has recently applied to join the TPP, now known as the CPTPP. These developments have increased the urgency for the United States to step up its economic engagement in the world’s fastest-growing region. The Indo-Pacific Economic Framework for Prosperity (IPEF) is a useful step in this direction, but countries in the region are clamoring for more. A return to CPTPP would provide an immediate boost to U.S. economic competitiveness and geopolitical influence. However, many concerns about the original TPP are legitimate and U.S. trade policy views have shifted since the agreement was concluded. A new report by the Asia Society Policy Institute titled Reimagining the TPP: Revisions that Could Facilitate U.S. Reentry aims to start a meaningful conversation about potential U.S re-entry into the CPTPP based on extensive consultations and important input from a broad range of trade experts, domestic stakeholders, and CPTPP members. It offers recommendations for improvements and updates to the agreement in 12 areas needed to meet U.S. economic interests and facilitate U.S. re-entry.
Topic:: Economy, Trans-Pacific Partnership, and Trade Policy
Political Geography:: North America and United States of America

34. World Economy Winter 2022: Strong headwinds for global economic activity

Author:: Klaus-Jurgen Gern, Stefan Kooths, Ulrich Stolzenburg, Jan Reents, and Nils Sonnenberg
Publication Date:: 12-2022
Content Type:: Working Paper
Institution:: Kiel Institute for the World Economy (IfW)
Abstract:: Global growth has decelerated over the course of the year under the impact of high energy prices and great uncertainty. Monetary policy, which is being tightened very quickly in view of high inflationary pressure across the board, is now also putting a drag on economic activity. Overall, production remained on an upward trend into the fall, with impetus coming from easing supply bottlenecks and the continuing normalization of activity in those sectors of the economy particularly affected by the Covid-19 pandemic. Towards the end of the year, however, economic momentum weakened noticeably further. The major advanced economies in particular are currently facing a period of weak economic activity despite considerable fiscal support measures. At the same time, the problems for the Chinese economy remain significant. While global output (measured on a purchasing power parity basis) at 3.2 percent is expected to grow by 0.3 percentage points more this year than expected in September, we continue to forecast an increase of only 2.2 percent next year. For 2024, our expectation has even been reduced slightly to 3.2 percent, mainly because we do expect the US economy to recover slowly. Inflation is likely to have peaked and is expected to slow significantly over the forecast horizon thanks to lower commodity prices and easing economic tensions. However, underlying inflation is not likely to return to target levels until the end of the forecast period.
Topic:: Monetary Policy, Economy, Business, COVID-19, and Emerging Economies
Political Geography:: China, Europe, Asia, North America, and United States of America

35. The US economic presence in Greece – George Tzogopoulos

Author:: George Tzogopoulos
Publication Date:: 12-2022
Content Type:: Policy Brief
Institution:: Hellenic Foundation for European and Foreign Policy (ELIAMEP)
Abstract:: The excellent status of Greek-American relations is reflected in the economic sphere. The stock of American Foreign Direct Investment (FDI) in Greece has increased in the recent years. The technology sector has captured the attention of American digital giants, which have displayed a tendency to choose to build some of their innovation hubs in Greece. Although this is not a new phenomenon, the last few years have seen several new investments, as well as an increasing number of tech-labs in which Greece’s digital ecosystem flourishes. Over and beyond Greece’s digital transformation, the country’s shift toward green energy has sparked the interest of American companies, keen to explore opportunities. In tandem, the US is a critical supplier of liquefied natural gas (LNG) to Greece, which is, in addition, slowly acquiring the infrastructure capacity to function as an artery through which American LNG can be transported to other markets in the Balkans. Greek ship-owners are playing a significant role in the new energy market. The investment of ONEX in Syros is crucial for Greek-American co-operation in the maritime sector and could possibly be replicated in the Elefsis shipyards. The real estate sector appears attractive for American companies. Focused principally on the acquisition and/or renovation of hotels, this is expected to boost the tendency of American tourists to return to Greece after the two-years hiatus imposed by the COVID-19 pandemic. The positive momentum could also encourage more American students to study in Greece. The volume of Greek-American trade has steadily increased since 2016, with Greece maintaining a diminishing surplus.
Topic:: Science and Technology, Bilateral Relations, Economy, Trade, Real Estate, and Digital Transition
Political Geography:: Europe, Greece, North America, and United States of America

36. Fragile States Index 2021 – Annual Report

Author:: Natalie Fiertz, Nate Haken, Patricia Taft, Emily Sample, and Wendy Wilson
Publication Date:: 05-2021
Content Type:: Special Report
Institution:: The Fund for Peace
Abstract:: The Fragile States Index, produced by The Fund for Peace, is a critical tool in highlighting not only the normal pressures that all states experience, but also in identifying when those pressures are pushing a state towards the brink of failure. By highlighting pertinent issues in weak and failing states, The Fragile States Index—and the social science framework and software application upon which it is built—makes political risk assessment and early warning of conflict accessible to policy-makers and the public at large.
Topic:: Climate Change, Authoritarianism, Employment, Fragile States, Economy, Political stability, Conflict, Crisis Management, Peace, Resilience, COVID-19, Health Crisis, Early Warning, and Risk Assessment
Political Geography:: Africa, Europe, Middle East, Tajikistan, Germany, Armenia, Central America, Spain, Lebanon, Timor-Leste, North America, Ethiopia, Southeast Asia, El Salvador, Global Focus, and United States of America

37. Another reason to raise the Fed's inflation target: An employment and output boom

Author:: David Reifschneider and David Wilcox
Publication Date:: 08-2021
Content Type:: Policy Brief
Institution:: Peterson Institute for International Economics
Abstract:: In 2012, the Federal Reserve formally adopted an inflation target and set it at 2 percent, in line with the level chosen by many other central banks. In hindsight, this setting left policymakers with too little room to cut interest rates when they want to fight recessions. Many researchers have noted that if central banks raised their inflation targets—either individually or in concert—they could do a better job in the long run of keeping inflation near its target and the workforce fully employed. Reifschneider and Wilcox highlight an additional and less-noted consequence of raising the inflation target modestly: The economy could enjoy a temporary but substantial boom in employment and output as it adjusted to the increase in the target. Critical to generating this favorable outcome would be decisive action by monetary policymakers to ensure that the higher inflation target is achieved in a reasonably timely manner. In light of substantial transition benefits, as well as the long-run improvement in economic performance, the authors recommend that the Federal Reserve raise its inflation target to 3 percent as part of its next framework review.
Topic:: Federal Reserve, Employment, Economy, and Inflation
Political Geography:: North America and United States of America

38. How the rest of the world responds to the US-China split

Author:: Hung Tran
Publication Date:: 01-2021
Content Type:: Policy Brief
Institution:: Atlantic Council
Abstract:: The election of Joe Biden as the forty-sixth US president is not expected to change the list of substantive issues dividing the United States and China, such as trade, investment, technology, geopolitical competition, national security, and human rights—except that the priority among them may change, with human rights concerns moving more to the forefront. However, the tone and modality of the unfolding of the US-China competition will change from Donald Trump’s unilateralism to Biden’s efforts to build alliances with “likeminded” countries in Europe, Asia, and elsewhere to deal with the challenges China has posed. In a way, Biden’s alliance-building approach may intensify pressure on the rest of the world to take sides. How countries respond to this challenge, unwelcome by most, depends on whether they see themselves as competitors to China, or as “price takers” in the international economic system.
Topic:: Global Markets, Regulation, Finance, Economy, Trade, and Digital Policy
Political Geography:: China, Europe, Asia, North America, United States of America, and Indo-Pacific

39. Priorities for US-Africa commercial policy in the Biden Administration

Author:: Aubrey Hruby
Publication Date:: 04-2021
Content Type:: Special Report
Institution:: Atlantic Council
Abstract:: With a renewed focus on multilateralism, President Joe Biden, in his first one hundred days, has actively been reengaging with traditional US allies and partners repeatedly sidelined by the Trump administration. African countries have been included in this effort. When addressing the African Union Summit of African presidents in February, he reaffirmed the United States’ commitment to partnering with African nations to address challenges including climate change and erosion of democratic institutions. Biden has gained widespread praise for supporting the appointment of Dr. Ngozi Okonjo-Iweala as the first African head of the World Trade Organization (WTO), nominating officials who have deep experience in African markets to Cabinet positions, such as Linda Thomas-Greenfield as ambassador to the United Nations, and putting together a historically diverse government, including many senior members of the African diaspora. Building on this early progress, Biden has an opportunity to reset US-Africa policy by not only prioritizing it at a level unseen during the last four years, but also changing the long history of siloing Africa policy. The Biden administration should look to further integrate African nations into broader US foreign policy, acknowledging Africa’s increasing importance to US priorities and enhanced standing on the global stage. Doing so will allow the new administration to deepen commercial and people-to-people ties with African nations, benefiting US businesses, furthering US interests, and working to address global challenges, such as public health and climate change. This more multifaceted and nuanced engagement with African states will set a foundation for stronger US-Africa partnerships, support mutual economic growth, and contribute to strengthening US global leadership. While cooperation with African states is critical to regional stability and global security, this issue brief sets aside security policy and focuses on ways the Biden administration can strengthen its commercial policy and public diplomacy with African nations. This effort includes building on commercial policies started under the Trump administration, facilitating green growth, and deepening people-to-people ties. In doing so, Biden’s domestic priorities of promoting diversity and climate responsibility will be reflected in Africa policy and ensure US businesses can take advantage of increasing opportunity in African markets and remain competitive globally.
Topic:: Foreign Policy, Diplomacy, Economy, Business, and Joe Biden
Political Geography:: Africa, North America, and United States of America

40. Enhancing US-Japan cooperation on global supply chains

Author:: Miyeon Oh and James Hildebrand
Publication Date:: 05-2021
Content Type:: Special Report
Institution:: Atlantic Council
Abstract:: Mounting US-China tensions and the COVID-19 pandemic have led to growing calls in the United States and among its allies and partners, including Japan, to address the vulnerabilities in global supply chains critical to national security and economic competitiveness. Strategic uncertainty has led stakeholders to pose the following questions. What role should government play, and to what extent can, or should, governments require firms to operate more in line with national security interests? How can firms manage short-term and long-term risks to balance national security requirements and commercial interests? How should trusted partners be defined, and what is a desirable allied and multilateral approach to enhancing security and resilience of global high-tech supply chains? With new administrations in both the United States and Japan, the two countries have an opportunity to consider these questions and rethink coordination of their efforts to establish secure and resilient supply chains. This issue brief analyzes recent developments in US and Japanese supply-chain policy, explores the importance of closer coordination through case studies of the semiconductor and rare-earth minerals industries, and provides a set of recommendations for the Joseph R. Biden Jr. and Yoshihide Suga administrations to enhance US-Japan cooperation in the years ahead. These recommendations include actions to operationalize the April 2021 US-Japan Joint Leaders’ Statement by creating a bilateral interagency Supply Chain Steering Committee that includes sector-specific working groups to enhance public-private-partnerships in high-technology industries, and by expanding bilateral supply-chain cooperation into multilateral efforts through flexible and informal frameworks.
Topic:: Science and Technology, Bilateral Relations, Economy, Innovation, Trade, Defense Industry, and Supply Chains
Political Geography:: Japan, Asia, North America, and United States of America

41. Navigating Relations with Russia in the Arctic: A Roadmap for Stability

Author:: Andrea Kendall-Taylor, Jim Townsend, Lawson W. Brigham, and Nicholas Lokker
Publication Date:: 11-2021
Content Type:: Special Report
Institution:: Center for a New American Security (CNAS)
Abstract:: Until recently, the Arctic was largely immune to the geopolitical tensions that play out between Russia and the transatlantic partners in other regions and on other issues. Indeed, the Arctic is one area where the United States and Russia, together with the other Arctic states, have engaged in quiet cooperation on issues including search and rescue, scientific research, and the environment. Such pragmatic cooperation has been possible in part because bilateral irritants are diffused by shared and cross-cutting interests among all eight Arctic states, as well as the region’s multilayered governance regime.1 However, climate change and the Arctic’s melting sea ice have opened access and allowed for increased human activity, which, in turn, has amplified competition in the region. At stake are core national interests for the Arctic states, ranging from economic opportunities to security and stability. The region’s growing importance and level of activity, alongside the lack of trust and limited dialogue on military issues between Russia and the United States, raise the risk of conflict and instability in the region. For Russia, its part of the Arctic, including an increasingly accessible Northern Sea Route, is central to core national security concerns and an important pillar of the economy and future development. To secure its interests, the Kremlin has taken numerous actions, many of them military, in the Arctic that are of shared concern to the other Arctic nations and NATO.
Topic:: Security, Bilateral Relations, Infrastructure, Military Affairs, Economy, and Strategic Competition
Political Geography:: Russia, North America, Arctic, and United States of America

42. Rebuilding the Midwest's infrastructure: Driving equitable economic recovery in a world reshaped by COVID-19

Author:: John Austin and Alexander Hitch
Publication Date:: 01-2021
Content Type:: Special Report
Institution:: Chicago Council on Global Affairs
Abstract:: In the midst of a national discussion about the need to update our infrastructure, the Midwest is primed for a new round of investment. The agenda for the country and for the Midwest must reflect the realities of an economy and society shaped by longstanding structural, economic, racial, and geographic inequities, accentuated by the onset of the COVID-19 pandemic. At the same time, this moment offers a clear opportunity to ensure that a new infrastructure development plan capitalizes on the unique assets and economic opportunities inherent to each region to accelerate economic growth and spread its benefits to more people and places. In the Midwest, this agenda includes several core components. It must adapt to the economic realities of the post-COVID-19 world. It must also contribute to innovation in a host of sectors—from manufacturing to product-delivery systems to health care—while enhancing the ability to organize state- and local-level infrastructure initiatives. Finally, it must dovetail with the urgent need and newfound political will to close gaps in equity and opportunity based on race, income, and geography.
Topic:: Development, Infrastructure, Economy, and COVID-19
Political Geography:: North America and United States of America

43. Cooperation or Coercion? The Views of US Opinion Leaders on Foreign Policy Approaches

Author:: Craig Kafura, Dina Smeltz, Joshua W. Busby, Joshua D. Kertzer, and Jonathan Monten
Publication Date:: 03-2021
Content Type:: Commentary and Analysis
Institution:: Chicago Council on Global Affairs
Abstract:: Following four years of former President Donald Trump’s “America first” foreign policy, President Joe Biden is seeking to reorient the US approach to world affairs, placing much greater emphasis on international cooperation. This reorientation has already been evident in Biden’s decisions to return the United States to the Paris climate agreement, extend the New START arms control treaty with Russia, remain in the World Health Organization, reengage with the United Nations Human Rights Council, and commit to rejoining the Iran nuclear deal if Iran returns to complying with it. To what extent do Democratic, Republican, and Independent foreign policy professionals support Biden’s international agenda? The results of the 2020 Chicago Council on Global Affairs-University of Texas at Austin survey of more than 900 US executive branch officials, congressional staff, think tank scholars, university professors, journalists, and interest group representatives indicates there is substantial support among leaders of different political persuasions for a greater emphasis on cooperation and less reliance on coercion in foreign policy. However, this consensus also has a partisan tilt: Democrats and Independents are far more likely to agree on cooperative foreign policy approaches the United States should use, while Republicans are more comfortable with coercive measures. Taken together, these findings suggest that Biden should be able to attract strong support for his foreign policy from Democratic and Independent members of the foreign 2 policy community but will find it much more difficult to gain Republican backing for many of his international initiatives.
Topic:: Security, Foreign Policy, Defense Policy, Politics, Economy, Business, Trade, and Survey
Political Geography:: Middle East, North Africa, and North America

44. Foes to Partners: 25 Years of U.S.-Vietnam Relations

Author:: Jeffrey Ordaniel and Ariel Stenek
Publication Date:: 10-2021
Content Type:: Special Report
Institution:: Pacific Forum
Abstract:: Authors of this volume participated in the inaugural U.S.-Vietnam Next-Generation Leaders Initiative. With backgrounds in academia, public policy, military and industry, the cohort brings rich insights on the past, present, and future of the U.S.-Vietnam relationship. Between October 2020 and April 2021, cohort members engaged with senior experts and practitioners as they developed research papers addressing various aspects of the bilateral relationship.
Topic:: Security, Diplomacy, Bilateral Relations, and Economy
Political Geography:: Vietnam, North America, Southeast Asia, and United States of America

45. A New Era of US Policy Toward the Korean Peninsula

Author:: Joshua Nezam
Publication Date:: 02-2021
Content Type:: Special Report
Institution:: Pacific Forum
Abstract:: This paper offers concrete policy recommendations and institutional tools for the incoming Biden administration and Congress to revise policy toward the Korean Peninsula. Deterring North Korea will remain a focus of the alliance, but prioritizing denuclearization must no longer monopolize the alliance’s political capital nor paralyze its global potential. The US and South Korea must clarify how shared values translate into policy convergence in security, economy, and technology domains to rediscover relevance in an era of multidimensional structural competition with China. Even without a comprehensive nuclear agreement with North Korea, the near-term priority must be to revitalize the regional security architecture to uphold extended deterrence to South Korea and Japan while institutionalizing a process of managing tensions and capping North Korea’s most destabilizing capabilities. Lastly, Congress must deliberate a viable path toward risk reduction and peace with Pyongyang while advocating for transformational change through advocacy for human rights and freedom of information.
Topic:: Security, Foreign Policy, Science and Technology, Economy, and Alliance
Political Geography:: North America, Korean Peninsula, and United States of America

46. U.S.-Thai Economic Prospects–Turning A New Page

Author:: Judy A. Benn
Publication Date:: 11-2021
Content Type:: Special Report
Institution:: East-West Center
Abstract:: Judy A. Benn, Former Executive Director American Chamber of Commerce in Thailand, explains that “for Thailand to take full advantage of post-pandemic opportunities and reignite its economy to make-up for the last 18 months, the nation will need to capitalize on its centralized geographic location and position as one of Southeast Asia’s strongest manufacturing bases.”
Topic:: International Trade and Finance, Treaties and Agreements, Bilateral Relations, Regulation, and Economy
Political Geography:: North America, Thailand, Southeast Asia, and United States of America

47. The Venezuelan Oil Industry Collapse: Economic, Social and Political Implications

Author:: Rafael Ramírez
Publication Date:: 11-2021
Content Type:: Commentary and Analysis
Institution:: Istituto Affari Internazionali
Abstract:: Venezuela’s hydrocarbons industry has completely collapsed. Seven years of mismanagement and political purges, the dismantling of Petróleos de Venezuela S.A.’s (PDVSA) managerial structures and deviations in longstanding company policy implemented by the government of Nicolás Maduro since 2014 have undermined the sector and destabilised the national economy.
Topic:: Climate Change, Energy Policy, Oil, Natural Resources, Economy, and Industry
Political Geography:: Venezuela, North America, and United States of America

48. Russia in the Arctic—A Critical Examination

Author:: Eugene Rumer, Richard Sokolsky, and Paul Stronski
Publication Date:: 03-2021
Content Type:: Working Paper
Institution:: Carnegie Endowment for International Peace
Abstract:: Russia has big Arctic plans, but how they will be realized is uncertain. For the United States this will likely mean the return to a Cold War–like environment rather than a new chapter in great-power competition in the Arctic. Russia’s Arctic ambitions have attracted increasing attention in the West over the past decade as climate change opens up new opportunities in the region for navigation and exploration of its riches. For its part, Moscow casts a wary eye on what it sees as a challenge from the United States and the North Atlantic Treaty Organization (NATO) to its position and ambitions there. The Kremlin’s rhetoric about Western encroachment has become more strident, in sync with its enhanced military posture and ambitious economic and infrastructure projects.
Topic:: NATO, Cold War, Infrastructure, Geopolitics, and Economy
Political Geography:: Russia, Eurasia, North America, Arctic, and United States of America

49. Do US firms have an incentive to comply with the FLSA and the NLRA?

Author:: Anna Stansbury
Publication Date:: 06-2021
Content Type:: Working Paper
Institution:: Peterson Institute for International Economics
Abstract:: To what extent do US firms have an incentive to comply with the Fair Labor Standards Act (FLSA) and the National Labor Relations Act (NLRA)? Stansbury examines this question through a simple comparison of the expected costs of noncompliance (in terms of legal sanctions) to the profits firms can earn through noncompliance. In the case of the FLSA minimum wage and overtime provisions, typical willful violators are required to pay back wages owed and in some cases additional penalties, if detected by the Department of Labor (DOL). Based on available data on the penalties levied, a typical firm would need to expect a chance of at least 78-88 percent that its violation would be detected in order to have an incentive to comply with the FLSA. In practice, the probability of detection many firms can expect to face is likely much lower than this. In the case of the NLRA, a firm that fires a worker illegally is required to reinstate the worker with back pay if the violation is detected. Based on empirical estimates of the effect of unionization on firm profits, a typical firm may have an incentive to fire a worker illegally for union activities if this illegal firing would reduce the likelihood of unionization at the firm by as little as 0.15-2 percent. These analyses illustrate that neither the FLSA nor the NLRA penalty and enforcement regimes create sufficient incentive to comply for many firms. In this context, the substantial evidence of minimum wage and overtime violations, and of illegal employer behavior toward unions, is not surprising.
Topic:: Labor Issues, Regulation, and Economy
Political Geography:: North America and United States of America

50. Raising a caution flag on US financial sanctions against China

Author:: Jeffrey J. Schott
Publication Date:: 01-2021
Content Type:: Policy Brief
Institution:: Peterson Institute for International Economics
Abstract:: China’s policies in Xinjiang, Hong Kong, and the South China Sea and its ongoing support for Iran, North Korea, and Venezuela pose major challenges for the United States, where bipartisan pressure is growing to ramp up punitive sanctions against leading Chinese firms and financial institutions. Financial sanctions freeze the US assets or bar US entry of the targeted individuals and firms and prohibit US financial firms from doing business with them. Schott explains why US officials should carefully weigh the risks to international financial markets and US economic interests before imposing punitive sanctions on major financial institutions engaged with China. The collateral costs of such sanctions would be sizable, damaging US producers, financial institutions, and US alliances. By restricting access of major banks to international payments in US dollars and barring use of messaging systems like SWIFT, tougher US financial sanctions would effectively “weaponize” the dollar; friends and foes alike would be pushed to seek alternatives to dollar transactions that, over time, would weaken the international role of the dollar. Instead of doubling down on current unilateral financial sanctions, US policy should deploy sanctions in collaboration with allies and calibrate trade and financial controls to match the expected policy achievements.
Topic:: Human Rights, Sanctions, Finance, and Economy
Political Geography:: China, Asia, North America, and United States of America

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COLUMBIA UNIVERSITY PRESS