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Begin New Search Topic Political Economy Publication Year within 25 Years

1. The State of EU-US Digital and Energy Cooperation

Author:
Federica Marconi, Wolfgang Münchau, and Irene Paviotti
Publication Date:
02-2024
Content Type:
Working Paper
Institution:
Istituto Affari Internazionali
Abstract:
In a time of rapid technological advancements and changing energy paradigms, the European Union and the United States are trying to coordinate their efforts to navigate the complexities of an ever-evolving landscape. Transatlantic dialogues and cooperative endeavours are key mechanisms for mitigating tensions and fostering a common assessment of the opportunities and risks arising from these advancements. Critical in this regard are the problems of governance emanating from technological development and its consequences in the digital sphere as well as the delicate balance between security, competitiveness and environmental targets in the energy dimension.
Topic:
Climate Change, International Cooperation, Political Economy, Governance, European Union, Transatlantic Relations, Digital Policy, and Energy
Political Geography:
Europe, North America, and United States of America

2. The Invisible Leverage of the Top 1 Percent: Absentee Debtors and Their Hedge Funds

Author:
Stefano Sgambati
Publication Date:
01-2024
Content Type:
Working Paper
Institution:
City Political Economy Research Centre (CITYPERC), University of London
Abstract:
The existing literature on finance, debt and inequality depicts economic elites as a creditor class. According to a popular thesis, over the past four decades, the rich and ultra-rich households in the top 1 percent have experienced a saving glut (excess income), which they have invested in the debts of the poor and their governments. While it is undeniable that the rich have expanded their income share at the expenses of the poor, to refer to them as ‘creditors’ or ‘lenders’ is a misrepresentation of how they actually expand their wealth and income shares by financial means. For it conceals the fact that a great deal of their investments is leveraged, that is, carried out with borrowed money. This article shows that the debts generated by individuals and households in the top 1 percent easily surpass those of all other households and even exceed those of the most indebted states in the world. However, these debts are hard to estimate, and indeed they are not accounted for in statistics on household debt. This is because households in the top 1 percent do not borrow from banks, like normal households do, but they are instead absentee debtors who borrow through the hedge funds, private equity firms, personal investment trusts, and big banks of which they are dominant shareholders and ultimate beneficiaries. To gain an insight into their invisible leverage, the article looks at how much hedge funds borrow, and why their leverage matters.
Topic:
Debt, Political Economy, Inequality, Finance, Elites, Hedge Funds, and Leverage
Political Geography:
Global Focus

3. Freedom of Association as a Key Aspect of Human Capital Management

Author:
Lenore Palladino
Publication Date:
01-2024
Content Type:
Working Paper
Institution:
Political Economy Research Institute (PERI), University of Massachusetts Amherst
Abstract:
Employee freedom of association— the right of workers to form and join organizations of their own choosing— is a fundamental human right that has been consistently disrespected by large U.S. employers (Economic Policy Institute 2019; International Labour Organization 2022). Freedom of association requires employers to refrain from discouraging employees’ right to organize but is routinely violated without meaningful penalty. In over forty percent of union election campaigns, employers face charges for violating employees’ right to organize—which does not include cases where no charges are filed (Economic Policy Institute 2019). The recent wave of well-known companies like Amazon and Starbucks blatantly engaging in practices to discourage their workers from forming unions has seen new challenges from the Biden National Labor Relations Board, but labor law in the United States does not adequately protect the right to freedom of association, and a change in political leadership could give companies carte blanche to override workers' rights (Clean Slate 2022). Companies can choose to establish corporate policies to respect employee freedom of association rights and can engage in behavior demonstrating their commitment to respecting this fundamental human right as part of their approach to Human Capital Management. This article focuses on two aspects of freedom of association as an aspect of Human Capital Management. The first is to examine what kinds of corporate policies exist to clarify corporate standards of conduct when employees are engaged in organizing activity. What kinds of policies focus on compliance with the minimal standards in U.S. labor law, and what policies comply with international norms as enshrined in ILO Conventions 87 and 98? The second prong of the article looks at negative ramifications for corporate value when companies do not respect workers' freedom of association and such behavior becomes public. What is the effect on customer attitudes, how is management behavior becoming increasingly visible, and what ramifications might this have for institutional investors?
Topic:
Political Economy, Employment, Human Capital, Labor Rights, Business Management, and Freedom of Association
Political Geography:
North America and United States of America

4. The Economy in its Labyrinth: A Structuralist View of the Mexican Economy in the 21st Century

Author:
Liz Monroy Gomez Franco
Publication Date:
01-2024
Content Type:
Working Paper
Institution:
Political Economy Research Institute (PERI), University of Massachusetts Amherst
Abstract:
In this paper, I analyze the performance of the Mexican economy during the two decades of the 21st century. I focus on the aggregate and sectoral dynamics of the economy to understand the underlying dynamics behind the aggregate performance of the economy. With these results in mind, I analyze the changes and continuities in the conduction of macroeconomic and labor market policy with the arrival of a new administration in 2018. The goal of analyzing both elements is to provide an integrated view of the situation in which the Mexican economy will face three structural challenges: the medium and long-run effects of the COVID-19 pandemic, the integration of artificial intelligence into the production process, and climate change.
Topic:
Climate Change, Political Economy, History, Macroeconomics, Artificial Intelligence, COVID-19, and Labor Market
Political Geography:
North America and Mexico

5. IMF Standby Agreements and Inequality: The Role of Informality

Author:
Ceyhun Elgin and Adem Elveren
Publication Date:
01-2024
Content Type:
Working Paper
Institution:
Political Economy Research Institute (PERI), University of Massachusetts Amherst
Abstract:
In this paper we investigate the response of two inequality metrics to different IMF programs. To this end, we use a relatively large annual (unbalanced) cross-country panel dataset that includes the Gini index and the Estimated Household Income Inequality as the two relevant inequality metrics and covers the period from 1950 to 2016 in an annual basis for 159 countries. Our empirical analysis indicates that in countries where the informal sector size (as percentage of GDP) is relatively larger, the extent of income inequality increases after different IMF programs, but particularly so after standby arrangements. However, we also show that the opposite is true, when informal sector size is small, i.e., inequality declines after different IMF programs.
Topic:
Political Economy, Inequality, IMF, and Informal Economy
Political Geography:
Global Focus

6. Dark Spots in the International Commodity Value Chain: The Case of Copper in Zambia

Author:
Dale Mudenda and Léonce Ndikumana
Publication Date:
01-2024
Content Type:
Working Paper
Institution:
Political Economy Research Institute (PERI), University of Massachusetts Amherst
Abstract:
This paper investigates mineral export misinvoicing in Zambia as a channel of capital flight, with a focus on copper, gold, and gemstones. The analysis reveals major discrepancies between Zambia’s recorded exports and imports as recorded by its trading partners. In the case of copper, a large share of exports recorded in Zambia as headed to Switzerland does not appear in Swiss imports. The ‘missing copper’ cannot be traced through analysis of trade between Switzerland and its major partners either. Gaps in the opposite direction are observed in Zambia-China trade, suggesting export underinvoicing, a common mechanism of capital flight. These do not offset the gaps observed in mirror trade statistics between Zambia and Switzerland, which remain a mystery. Similarly, whereas the primary destination recorded for Zambian gold exports is South Africa, these do not appear in gold imports recorded by South Africa. The gemstones sector is characterized by high informality that enables smuggling and export underinvoicing. Zambia must implement measures to curb misinvoicing of mineral exports and address structural opacity in the trade value chain if it hopes to maximize the gains from the exploitation of its mineral resources.
Topic:
Political Economy, Commodities, Exports, Global Value Chains, and Minerals
Political Geography:
Africa and Zambia

7. Rethinking Monopoly as a Power Relation: The Shift from Market to Intellectual Monopoly

Author:
Cecilia Rikap
Publication Date:
01-2023
Content Type:
Working Paper
Institution:
City Political Economy Research Centre (CITYPERC), University of London
Abstract:
The critical literature on monopolies, from monopoly capital to recent contributions, focuses on the organization that concentrates either market power, capital or property rights. I complement this literature by conceptualizing monopolies as a power relation, which enables me to integrate different ways in which the term is used, from capitalists’ monopoly over the means of production to intellectual monopolization. As I explain here, some firms have developed greater capacities to systematically monopolize intangibles that are essential for organizing labour beyond their owned assets and for controlling demand. Coupled with institutional, political and technological changes, larger absorptive and management capacities to produce and capture knowledge and information resulted in firms’ technological differentiation. The systematic winners of the innovation race hold persistent intellectual monopolies while other firms become subordinate due to their lack of technical autonomy. From this perspective, (intellectual) monopoly power is essential for understanding the distribution of value in capitalism.
Topic:
Political Economy, Labor Issues, Capitalism, Monopoly, Capital, Power Relations, and Value Capture
Political Geography:
Global Focus

8. Fossil Fuel Industry Phase-Out and Just Transition: Designing Policies to Protect Workers’ Living Standards

Author:
Robert Pollin
Publication Date:
02-2023
Content Type:
Working Paper
Institution:
Political Economy Research Institute (PERI), University of Massachusetts Amherst
Abstract:
This paper focuses on just transition policies targeted at supporting workers now employed in the fossil fuel industries and ancillary sectors within high-income economies. As a general normative principle, I argue that the overarching aim of such policies should be to protect workers against major losses in their living standards resulting through the fossil fuel industry phase-out. The impacted workers should be provided with three critical guarantees to accomplish this, in the area of jobs, compensation and pensions. Just transition policies should also support workers in the areas of job search, retraining and relocation, but these forms of support should be understood as supplementary. Within the framework of these broad principles, the paper first reviews experiences with transitional policies in Germany, the UK, the EU and, more briefly, Japan and Canada. A critical point that emerges is that these just transition policies do not provide the needed guarantees for assuring workers that they will not experience major living standard declines. The paper then describe an illustrative just transition program for workers that includes reemployment, income and pension guarantees, focusing on a case study for the U.S. state of West Virginia. The results show that the costs of the just transition program for West Virginia’s fossil fuel industry dependent workers will amount to an annual average of about $42,000 per worker, equal to about 0.2 percent of West Virginia’s GDP. I briefly summarize results from the seven other studies of U.S. states and for the overall U.S. economy. For the U.S. economy overall, the just transition program’s costs would total to about 0.015 percent of GDP. These findings demonstrate that providing a generous just transition program does not entail unaffordable levels of public spending. Robust just transition policies should therefore be understood as an entirely realistic prospect for all high-income economies.
Topic:
Political Economy, Labor Issues, European Union, GDP, Economy, and Fossil Fuels
Political Geography:
Japan, United Kingdom, Europe, Canada, and Germany

9. The Political Economy of the Cost of Living Crisis in the UK: What Is to Be Done?

Author:
Ozlem Onaran
Publication Date:
02-2023
Content Type:
Working Paper
Institution:
Political Economy Research Institute (PERI), University of Massachusetts Amherst
Abstract:
This paper analyzes the political economy of the cost of living crisis in the context of the United Kingdom. The paper presents the long-term trends in the wage share, wealth inequality, labour’s bargaining power, and real wages in the UK. The first and second waves of inflation in 2021-22 are discussed presenting the trends in the profit margins. The policy responses by the conservative governments and the Bank of England are analyzed, and their limitations are assessed. The paper concludes with short-run and medium-run policy alternatives to the cost of living crisis
Topic:
Political Economy, Labor Issues, Inequality, Inflation, and Cost of Living
Political Geography:
United Kingdom and Europe

10. Sellers’ Inflation, Profits, and Conflict: Why Can Large Firms Hike Prices in an Emergency?

Author:
Isabella Weber and Evan Wasner
Publication Date:
02-2023
Content Type:
Working Paper
Institution:
Political Economy Research Institute (PERI), University of Massachusetts Amherst
Abstract:
The dominant view of inflation holds that it is macroeconomic in origin and must always be tackled with macroeconomic tightening. In contrast, we argue that the US COVID-19 inflation is predominantly a sellers’ inflation that derives from microeconomic origins, namely the ability of firms with market power to hike prices. Such firms are price makers, but they only engage in price hikes if they expect their competitors to do the same. This requires an implicit agreement which can be coordinated by sector-wide cost shocks and supply bottlenecks. We review the long-standing literature on price-setting in concentrated markets and survey earnings calls and compile firm-level data to derive a three-stage heuristic of the inflationary process: (1) Rising prices in systemically significant upstream sectors due to commodity market dynamics or bottlenecks create windfall profits and provide an impulse for further price hikes. (2) To protect profit margins from rising costs, downstream sectors propagate, or in cases of temporary monopolies due to bottlenecks, amplify price pressures. (3) Labor responds by trying to fend off real wage declines in the conflict stage. We argue that such sellers’ inflation generates a general price rise which may be transitory, but can also lead to self-sustaining inflationary spirals under certain conditions. Policy should aim to contain price hikes at the impulse stage to prevent inflation from the onset.
Topic:
Political Economy, Inflation, Profit, and COVID-19
Political Geography:
Global Focus