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1. The state of economic convergence in the Eurozone: Two decades of monetary union and economic governance

Author:
Adriaan Schout
Publication Date:
01-2023
Content Type:
Special Report
Institution:
Clingendael Netherlands Institute of International Relations
Abstract:
What is the state of economic convergence in the euro area? And will the redefinition of the Stability and Growth Pact result in a more effective policy for achieving convergence? A common currency, together with the four freedoms, was assumed to lead to economic convergence. This Clingendael Report reviews the state of convergence in the euro area by focusing on nominal, real and institutional convergence. Despite a range of policy initiatives and monitoring systems, convergence has not been achieved neither in terms of monetary and economic performance nor of the quality of governance at the national level. Despite some major successes in convergence, welfare has continued to diverge in some countries and differences in debt levels have increased up to the point of threatening the - economic and political - coherence of the euro area. Public spending also varies considerably while higher public spending does not ensure higher growth levels. The paradoxical situation has arisen in which countries that (drastically) reduced debt levels performed better in terms of growth and reduction in unemployment.
Topic:
Economics, Governance, European Union, Economic Growth, and Economic Stability
Political Geography:
Europe

2. Making Sense of Pakistani Youth How Youth in Pakistan View State, Society, Religion, and Politics

Author:
Ahmed Alili and Fizza Batool
Publication Date:
04-2022
Content Type:
Special Report
Institution:
Pak Institute for Peace Studies (PIPS)
Abstract:
In view of the growing radicalization among educated youth and its adverse effects on Pakistan’s social, political, and economic stability, the study was conducted by Pak Institute for Peace Studies. The research was driven by the necessity and urge to understand youths’ internal thinking processes that shape their behaviours and actions. It is an attempt to make sense of how educated young men and women make sense of themselves and the world around them. To answer this question, the study sought to gain insights into various dimensions of youths’ thinking through a mixed-method approach to data collection, using survey questionnaires, interviews, observations as well as literature review. The findings present an interesting overall picture of an ordinary youths’ thinking and shed light on how youths situate themselves within their in-groups and the larger society. The study also aimed at appraising the overall quality of thoughts among youth and their tolerance/acceptance level for diversity and inclusion. Questions were designed to gauge youths’ cognitive skills, and their ability to think clearly and argue rationally etc. Likewise, another objective was to observe the impact of education on their outlook and general behaviour. The findings also provide a peek into worldviews commonly held by the youth, and whether they identify themselves as members of the larger human fraternity.
Topic:
Radicalization, Political stability, Youth, and Economic Stability
Political Geography:
Pakistan and Middle East

3. Iraq-Gulf Relations: An Anchor for Stability and Restraining Iranian Involvement in the Region?

Author:
Yoel Guzansky and Yaron Schneider
Publication Date:
05-2022
Content Type:
Working Paper
Institution:
Institute for National Security Studies (INSS)
Abstract:
While weathering a political crisis, Iraq is now at a crossroads regarding the future of the state. In tandem, neighboring Sunni states, led by Saudi Arabia, are moving closer to Baghdad. What are the reasons for this development, and how is it likely to affect the Middle East, Iran’s expansion in the area, and Israel?
Topic:
Economics, International Cooperation, Economic Stability, and Regional Power
Political Geography:
Iraq, Iran, Middle East, and Gulf Nations

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

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

5. Istanbul Journal of Economics: Volume 72 Issue 2

Author:
Gökhan Karabulut
Publication Date:
06-2022
Content Type:
Journal Article
Journal:
Istanbul Journal of Economics
Institution:
Istanbul University Faculty of Economics
Abstract:
Istanbul Journal of Economics-İstanbul İktisat Dergisi is an open access, peer-reviewed, scholarly journal published two times a year in June and December. It has been an official publication of Istanbul University Faculty of Economics since 1939. The manuscripts submitted for publication in the journal must be scientific and original work in Turkish or English. Being one of the earliest peer-reviewed academic journals in Turkey in the area of economics, Istanbul Journal of Economics-İstanbul İktisat Dergisi aims to provide a forum for exploring issues in basicly economics and publish both disciplinary and multidisciplinary articles. Economics is the main scope of the journal. However, multidisciplinary and comparative approaches are encouraged as well and articles from various social science areas such as sociology of economics, history, social policy, international relations, financial studies are welcomed in this regard. The target group of the journal consists of academicians, researchers, professionals, students, related professional and academic bodies and institutions.
Topic:
Economics, Islam, Religion, Communications, Natural Resources, Finance, Internet, Economic Growth, Macroeconomics, Currency, Unemployment, Sustainability, COVID-19, BRICS, Labor Market, Economic Stability, Consumer Behavior, Rent-seeking, Energy, and Wages
Political Geography:
Europe, Turkey, and Asia

6. Egypt Faces Severe Economic Problems

Author:
Sara Nowacka
Publication Date:
08-2022
Content Type:
Working Paper
Institution:
The Polish Institute of International Affairs
Abstract:
In August, a year before the end of his term of office, Tarek Amer, head of the Egyptian Central Bank, resigned. This was a consequence of the deepening economic crisis caused by a decline in the country’s currency reserves and the impact of global problems on Egypt, which is dependent on food imports. Capital-intensive investments, mainly in the energy and real estate sectors, will exacerbate Egypt’s situation. Given the size of its population, economic collapse would have a significant destabilising impact on the EU’s southern neighbourhood.
Topic:
Economics, Currency, Economic Stability, and Economic Crisis
Political Geography:
Middle East and Egypt

7. Rethinking EU economic governance: The Stability and Growth Pact

Author:
Francesco De Angelis and Frederico Mollet
Publication Date:
11-2021
Content Type:
Policy Brief
Institution:
European Policy Centre (EPC)
Abstract:
It is time to reimagine the EU’s economic governance. In early 2021, the EPC set out to do just that in its Rethinking EU Economic Governance Task Force. Drawing on insights from participating experts, academics and policymakers, this first Policy Brief in a series of EPC publications outlines how the debate on the Stability and Growth Pact (SGP), the EU’s framework for fiscal and macroeconomic surveillance, has evolved and the reform options that have surfaced. There is broad dissatisfaction with the SGP and how it has fared in an environment of prolonged low-interest rates, missed inflation targets and low growth. In February 2020, the European Commission launched a review of the SGP in an attempt to address its shortcomings, but it was quickly put on hold by COVID-19, when the fiscal rules were suspended. Half a year later, the Commission is finishing what it started. We are in a drastically different world since the European Commission launched the review. Not only has government debt increased significantly, but regional, economic and social divides have worsened, policymakers face inflationary pressures for the first time in decades, and the Recovery and Resilience Facility and accompanying EU-level bond issuance fundamentally changed the EU’s economic architecture. In parallel, there is a widespread acknowledgement that averting, as well as adapting to, the climate crisis requires a steep increase in public investment. Thanks to the EPC Task Force’s ongoing work, Francesco De Angelis and Frederico Mollet can pinpoint the SGP’s major flaws, post-COVID-19 challenges, and five broad categories of reform options: Interpretative flexibility to smooth fiscal adjustment paths and potentially place less emphasis on problematic indicators. Moderate non-treaty reforms to reduce complexity and procyclicality and increase enforceability. The ‘golden rule’ to exempt some public investments from the fiscal rules. Central fiscal capacity for macroeconomic stabilisation. Off-balance-sheet investments to increase public investment.
Topic:
Political Economy, Governance, European Union, Economic Growth, COVID-19, Economic Stability, and European Commission
Political Geography:
Europe

8. ‘A careful foot can step anywhere’: The UAE and China in the Horn of Africa: Implications for EU engagement

Author:
Jos Meester and Guido Lanfranchi
Publication Date:
06-2021
Content Type:
Policy Brief
Institution:
Clingendael Netherlands Institute of International Relations
Abstract:
Over the last decade, the UAE and China have vastly expanded their economic, political and military footprint in the Horn of Africa, and their actions now have the potential to shape developments in the region. Room for cooperation between Abu Dhabi and Beijing exists on issues such as maritime security, regional stability, and economic development. Moreover, the two countries’ interaction could lead to improvements in the Horn’s underdeveloped infrastructure by triggering a race to investment. Yet, development and stability in the region might suffer if the strategic interests of external players take precedence over local ones, or if local elites (mis)use external support for narrow domestic political calculations. The EU and its member states have high stakes in the Horn’s stability. To optimise their engagement, European policymakers should be aware of the implications of the Emirati and Chinese presence, and they should strive to improve cooperation among the wide range of external players active in the Horn.
Topic:
Economics, International Cooperation, Politics, Military Affairs, Economic Development, and Economic Stability
Political Geography:
Africa, China, Asia, and Horn of Africa

9. China’s Influence in Southeastern, Central, and Eastern Europe: Vulnerabilities and Resilience in Four Countries

Author:
Erik Brattberg, Philippe Le Corre, Paul Stronski, and Thomas de Waal
Publication Date:
10-2021
Content Type:
Working Paper
Institution:
Carnegie Endowment for International Peace
Abstract:
China’s presence has brought socioeconomic opportunities to Georgia, Greece, Hungary, and Romania. Yet it has exacerbated governance shortfalls, undermined elements of political and economic stability, and complicated the European Union’s ability to reach consensus on key issues.
Topic:
Foreign Policy, Governance, European Union, Political stability, Resilience, and Economic Stability
Political Geography:
China, Europe, Greece, Romania, Hungary, Georgia, and United States of America

10. The Biggest Problem in Post-Communist Transition: The Privatization of Large Enterprises

Author:
Anders Åslund
Publication Date:
09-2021
Content Type:
Working Paper
Institution:
Center for Social and Economic Research - CASE
Abstract:
Thirty years after the collapse of the Soviet Union, it is rather clear what transition policies have worked. Almost all the post-communist countries have become market economies and have achieved macroeconomic stability. Privatization was economically necessary, and its economic outcomes have been very positive. Alas, politically, these successes have often been unsustainable because of strong popular sentiments against the private ownership of big enterprises. Substantial renationalization has occurred. What went wrong? How could privatization be done better, or be defended? What should be done to defend private enterprise in the future? This paper argues that the nature of privatization is far less important than the establishment of good rule of law so that private property rights can be defended.
Topic:
Privatization, Economic Growth, Macroeconomics, Trade, Transition, Soviet Union, and Economic Stability
Political Geography:
Post-Soviet Europe

11. After the Fall: Lebanon’s Path towards Monetary Stabilization

Author:
Jean Tawile
Publication Date:
05-2021
Content Type:
Working Paper
Institution:
Arab Reform Initiative (ARI)
Abstract:
Lebanon is suffering the worst economic crisis in its history, caused by an economic model that produced a rentier economy feeding off a corruption-ridden state and preventing any economic growth and social justice. This model is not redeemable. This paper argues that stabilizing the currency is a first step to getting Lebanon’s economy back on the right track and explores possible pathways for doing so.
Topic:
Economics, Monetary Policy, Fiscal Policy, Strategic Stability, and Economic Stability
Political Geography:
Middle East and Lebanon

12. Why a Traditional Austerity Plan Would Exacerbate Lebanon’s Woes

Author:
Mounir Mahmalat
Publication Date:
01-2020
Content Type:
Journal Article
Journal:
Harvard Journal of Middle Eastern Politics and Policy
Institution:
The John F. Kennedy School of Government at Harvard University
Abstract:
Following the eruption of mass protests in autumn 2019, Lebanon’s economy slid into a deep financial and economic crisis. Given the magnitude of Lebanon’s contemporary economic woes, a bailout program with participation by the International Monetary Fund (IMF) appears unavoidable. However, while a bailout program could avoid formal default and cushion the immediate effects of financial impasse, the austerity measures that will come attached are unlikely to achieve their goals. This article argues that in clientelist polities with weak states such as Lebanon’s, austerity programs carry the risk of leaving unaddressed the underlying inefficiencies that led to economic decline in the first place. Instead of prioritizing budgetary measures and spending cuts in a conditional reform program, international donors should seize this novel window of opportunity to legitimize a reform plan with popular demands. Measures to increase judiciary independence and political accountability in particular bear a larger potential than austerity measures alone to change politics and finally create a sustainable economic model.
Topic:
Financial Crisis, Austerity, Sustainability, and Economic Stability
Political Geography:
Middle East and Lebanon

13. A Review of Pillar I & II of Zambia’s Economic Stabilisation and Growth Programme 2017-2019

Author:
Florence Banda-Muleya, Shebo Nalishebo, Mbewe Kalikeka, Nakubyana Mungomba, Ignatius Masilokwa, and Caesar Cheelo
Publication Date:
06-2019
Content Type:
Working Paper
Institution:
Zambia Institute for Policy Analysis and Research (ZIPAR)
Abstract:
The economic crisis of 2015 destabilised Zambia’s economic performance. The depreciation of the Kwacha and its pass-through effects led to inflation of as high as 22% and growth, at 2.9%, was far below the 5% target. The overall Budget deviation was 15% of Parliamentary appropriations in 2015, disrupting planned activities and attainment of set macroeconomic objectives. There were huge variations between what the consequent national Budgets committed to do and what they actually did. To fix this and nudge the country back towards high sustained economic growth, the Economic Stabilisation and Growth Programme (ESGP) was crafted in 2017. The five-pillar plan aimed to ensure prudent fiscal management by providing a system of accountability and a standard against which results could be measured, among other things. The aim of this paper is to review the ESGP, particularly, its performance in 2018. The paper sets out to understand how well Zambia faired in implementing the ESGP as well as to highlight the broader fiscal trends recently. It ultimately seeks to make recommendations about how Zambia can revive its path to economic stability and growth. The paper focuses tightly on the first two pillars of the ESGP, i.e. (i) restoring budget credibility; and (ii) enhancing domestic resource mobilisation and refocusing public expenditure. The remaining three pillars are slated to be reviewed in the second half of 2019.
Topic:
Budget, Finance, Economic Growth, and Economic Stability
Political Geography:
Africa and Zambia

14. Explaining Bank Stability Using Bank Specific Factors in Zimbabwe

Author:
Albert Muparuri
Publication Date:
01-2018
Content Type:
Journal Article
Journal:
The Rest: Journal of Politics and Development
Institution:
Centre for Strategic Research and Analysis (CESRAN)
Abstract:
This study examined the role played by bank specific factors in explaining bank stability in Zimbabwe. A panel data set was compiled covering 15 CAMEL type ratios from all 26 banking institutions which were operational in Zimbabwe between 2009 and 2014. The Principal Component Analysis (PCA) and Random Effects (RE) model were applied to establish the statistically significant CAMEL type bank distress prognosticators in Zimbabwe. This study revealed that Capital, Asset Quality and Earnings (CAE), are the most statistically significant bank specific factors which influence distress in the Zimbabwean market. On the macroeconomic front, statistical significance was established on the ‘end-period Consumer Price Index (CPI)’ in determining bank stability in Zimbabwe. This implies that a deteriorating asset quality base in a bank with a feeble capital base and weak earnings in a market dogged by inflation instability is a classic precursor to bank distress in Zimbabwe.
Topic:
Economics, Banks, Banking, and Economic Stability
Political Geography:
Africa and Zimbabwe

15. Good and Bad Banking on Europe’s Periphery: Pathways to Catching Up and Falling Behind

Author:
Rachel A. Epstein and Martin Rhodes
Publication Date:
10-2017
Content Type:
Working Paper
Institution:
The Kolleg-Forschergruppe (KFG)
Abstract:
In this paper we seek to explain why bank performance has varied so dramatically during and after the financial crisis on Europe’s periphery, both across states and within them. Our dependent variable is bank performance defined in terms of credit provision and banks’ contribution to financial stability. Our independent variable is the particular mix at play between political/social purpose and what we call ‘market authority’ - the importance of market incentives, signals and pricing within a particular financial ‘ecosystem’. “Economic nationalism” or the politicization of local and regional banks has often imbued banks with social and political goals, serving the economy at different levels, and is one major source of political/social purpose. But the latter must be constrained by market authority. We argue that for optimal bank performance, economic nationalism or political/social purpose must be constrained by market authority, otherwise a political logic (e.g. cronyism, a lack of professionalism, and deficits in banking expertise) can easily subvert or distort credit provision and undermine financial stability.
Topic:
Nationalism, Financial Crisis, Finance, Banking, and Economic Stability
Political Geography:
Europe

16. Afghanistan Stabilization Program: A Summary of Research and Key Outcome Trends

Author:
Radha Iyengar and Jacob N. Shapiro
Publication Date:
04-2017
Content Type:
Policy Brief
Institution:
Empirical Studies of Conflict Project (ESOC)
Abstract:
To provide evidence about which programs best foster stability in fragile and conflict-affected areas we systematically review the relationship between stabilization programming and a broad range of outcomes in Afghanistan. Following a pre-analysis plan, we reviewed 89 existing studies from government, policy think tanks, and academic journals from over 15 years and statistically analyzed data from a range of sources from 2009 to 2015. While we compile a relatively comprehensive set of data, our analysis is based on a subset of stabilization programming the lack of a central repository of reliable data on program spending limited the analysis—because data were kept in disparate locations and never consolidated our quantitative analysis. Overall, we find that some stabilization programming is correlated with small, short-term improvements in support for the Afghan government, perceived access to health care, and economic activity despite the fact that these programs typically targeted more violent areas. We note that the size of this effect was small relative to the overall trends in key security, economic, and attitudinal outcomes over the same period and does not necessarily indicate a direct causal impact of these programs. This positive correlation was primarily observed for relatively low dollar programs (which in some cases were conducted over large parts of a region or country). Qualitative evidence suggests this may be because these smaller programs are easier to administer and less susceptible to corruption. These effects were not sustained beyond one year, suggesting limited scope for long-term or sustainable changes. The lessons our analysis suggest that modest programs with bounded expectations on the size and duration of impact must be included in considerations of future stabilization efforts. We also recommend that future programs collect higher quality data, coordinate their evaluation efforts among donors, plan ahead by building in reporting requirements, and make effective use of new technologies to be facilitated programming that is more adaptive to the conditions on the ground. As these best practices are incorporated, policymakers and implementers can enable better design and implementation of stabilization projects in conflict-affected areas in the future.
Topic:
Conflict Resolution, Economics, International Security, War on Terror, Strategic Stability, and Economic Stability
Political Geography:
Afghanistan

17. The Personal Wealth Interests of Politicians and the Stabilization of Financial Markets

Author:
Ahmed Tahoun and Laurence van Lent
Publication Date:
10-2016
Content Type:
Working Paper
Institution:
Institute for New Economic Thinking (INET)
Abstract:
We examine whether personal wealth interests affect politicians’ decisions about stabilizing financial markets. We use the setting of the government’s support of financial institutions under the 2008 Emergency Economic Stabilization Act. We find that the personal wealth interests of politicians are positively associated with voting in favor of the EESA. We implement several analyses to show that personal wealth interests rather than unobservable beliefs in the financial sector explain our result.
Topic:
Financial Markets, Economic Stability, Economic Crisis, and Wealth
Political Geography:
North America and United States of America

18. Kosovo Security Barometer - Fourth Edition

Author:
Kosovar Centre for Security Studies (KCSS)
Publication Date:
12-2014
Content Type:
Special Report
Institution:
Kosovar Centre for Security Studies (KCSS)
Abstract:
The fourth edition of the KSB provides a summary of public perceptions on: security and justice institutions; risks and threats towards citizens and economic stability; and internal and external threats. Compared to the previous versions, this edition of the KSB includes respondents’ answers to a set of additional questions pertaining to data protection. The survey was carried out in the second half of October 2014, through face-to-face interviews conducted around Kosovo.The national sample from which the research was drawn featured 1,101 households, following a representative sample of the population above 18 years old in Kosovo. The ethnic breakdown of the interviewed respondents used for the purposes of this ediction of the KSB was: 87.92percent K-Albanian, 9.08 percent K-Serbian, and 3 percent others (Bosnian 1.0 percent, Turks 1.0 percent, and RAE 1.0 percent). Perceptions presented in this report are a summary of information gathered from respondents and it only demonstrates how people perceive these institutions. Hence, this report does not represent a conclusive assessment of the quality of the work of the institutions subject to this study.
Topic:
Security, Public Opinion, Privacy, Institutions, Survey, Economic Stability, and Data Collection
Political Geography:
Europe, Kosovo, and Balkans

19. Iran in the 10th Year of the 2nd Gulf War

Author:
BILGESAM
Publication Date:
03-2013
Content Type:
Special Report
Institution:
BILGESAM (Wise Men Center for Strategic Studies)
Abstract:
The second Gulf War ended the Ba’ath regime in Iraq, exhausted by wars and embargoes for 23 years. Because of the war Iraq plunged into chaos and came almost to the verge of a de facto disintegration. The War has not only changed the internal balances in Iraq but also affected the Middle Eastern geopolitics profoundly. While a new political structure had been created in Iraq reflecting the primacy of the majority Shiite groups, the de facto autonomy of Kurdish groups in the north, which have developed close relations with the USA, has gradually gained a constitutional character. The PKK terrorist organization recovered during this period increased its maneuvering capability in northern Iraq and Qandil Mountain and intensified its attacks against Turkey. Following the withdrawal of USA troops at the end of 2011, instability in Iraqi politics has deteriorated and it was observed that that emerging power vacuum is being filled to a large extent by Iran. The “Iraq in the Tenth Year of the Second Gulf War” report pay attention to Iraqi actors, the emerging state structure and the political-economic situation of the country, as well as the way how the emerging power vacuum affects the region and Turkey. The report analyzes the deepening political instability and internal disputes in the post-US Iraq, Turkey’s relations with the central government and the Kurdish Administration in the north. The report also tries to explore the future of the ongoing political and economic instability in Iraq and provides the Turkish decision-makers with recommendations for Turkey’s national interests.
Topic:
Economics, Conflict, Kurds, Gulf War, and Economic Stability
Political Geography:
Iraq and Middle East

20. Crisis and Calm: Demand for U.S. Currency at Home and Abroad From the Fall of the Berlin Wall to 2011

Author:
Ruth Judson
Publication Date:
11-2013
Content Type:
Working Paper
Institution:
Board of Governors of the Federal Reserve System
Abstract:
U.S. currency has long been a desirable store of value and medium of exchange in times and places where local currency or bank deposits are inferior in one or more respects. Indeed, as noted in earlier work, a substantial share of U.S. currency circulates outside the United States. Although precise measurements of stocks and flows of U.S. currency outside the United States are not available, a variety of data sources and methods have been developed to provide estimates. This paper reviews the raw data available for measuring international banknote flows and presents updates on indirect methods of estimating the stock of currency held abroad: the seasonal method and the biometric method. These methods require some adjustments, but they continue to indicate that a large share of U.S. currency is held abroad, especially in the $100 denomination. In addition to these existing indirect methods, I develop a framework and basic variants of a new method to estimate the share of U.S. currency held abroad. Although the methods and estimates are disparate, they provide support for several hypotheses regarding cross-border dollar stocks and flows. First, once a country or region begins using dollars, subsequent crises result in additional inflows: the dominant sources of international demand over the past decade and a half are the countries and regions that were known to be heavy dollar users in the early to mid-1990s. Second, economic stabilization and modernization appear to result in reversal of these inflows. Specifically, demand for U.S. currency was extremely strong through the 1990s, a period of turmoil for the former Soviet Union and for Argentina, two of the largest overseas users of U.S. currency. Demand eased in the early 2000s as conditions gradually stabilized and as financial institutions developed. However, this trend reversed sharply with the onset of the financial crisis in late 2008 and has continued since then.
Topic:
International Trade and Finance, Currency, Banking, and Economic Stability
Political Geography:
North America and United States of America

21. Economic Policy Coordination in the EMU: From Maastricht via SGP to the Fiscal Pact

Author:
Jørgen Mortensen
Publication Date:
08-2013
Content Type:
Special Report
Institution:
Center for Social and Economic Research - CASE
Abstract:
The present paper first takes a step backwards with an attempt to situate the adoption of this Treaty in discussion of the SGP and the “Maastricht criteria” (the criteria for EMU membership fixed in the Maastricht Treaty) in a longer perspective of the sharing of competences for macroeconomic policy making within the EU from the initial Treaty to the Maastricht Treaty and the Stability and Growth Pact (SGP). It then presents the main features of the Fiscal Treaty and its relation to the SGP and draws some conclusions as regards the importance and relevance of this new step in the process of economic policy coordination. It concludes that the Treaty on Stability, Coordination and Governance in the Economic and Monetary Union does not seem to offer a definitive solution to the problem of finding the appropriate budgetary-monetary policy mix in the EMU already well identified in the Delors report in 1989 and regularly emphasised ever since and now seriously aggravated due to the Crisis. Furthermore, the implementation of this Treaty may under certain circumstances contribute to an increase in the uncertainties as regards the distribution of the competences between the European Parliament.
Topic:
Globalization, Treaties and Agreements, Economic Growth, Macroeconomics, Eurozone, Trade, Economic Integration, and Economic Stability
Political Geography:
Europe

22. Azerbaijan’s Fiscal Policy after the Oil Boom

Author:
Dmytro Boyarchuk
Publication Date:
01-2012
Content Type:
Policy Brief
Institution:
Center for Social and Economic Research - CASE
Abstract:
Azerbaijan’s current fiscal stance is quite strong; however, this stability is completely based on oil-related revenues. In the meantime, the situation with alternative sources of fiscal revenues is uncertain. A large part of fiscal management is built on opacity and an assessment of budget spending efficiency has never been done. It is likely that Azerbaijan will only be able to maintain its fiscal stability through the next ten years or so, i.e. until the end of the active oil-extraction period. In the more distant future, a substantial fiscal correction will be necessary.
Topic:
Oil, Reform, Budget, Fiscal Policy, and Economic Stability
Political Geography:
Central Asia, Caucasus, Eastern Europe, and Azerbaijan

23. The Dollar’s Influence in East Asia: Benevolent or Overbearing? A Comparative Answer in the U.S. Economic Aid and the Dollar Standard

Author:
Gloria Koo
Publication Date:
04-2012
Content Type:
Journal Article
Journal:
Joint U.S.-Korea Academic Studies
Institution:
Korea Economic Institute of America (KEI)
Abstract:
There is no doubt that the United States has been a dominant economic power in the world. U.S. troops are deployed in the various corners of the world, and their military presence is often a strong force in propping up the status quo or a peaceful co-existence, possibly and hopefully more peaceful than otherwise. The U.S. has held an important role in the international system as a military power. But also in an economic sense, the U.S. has been a dominant leader. As a major consumer market and an investor, U.S. influence on the global economy is significant to say the least. This is especially true in East Asia. Through military alliance and economic aid, the U.S. crafted close relationships with East Asian countries and influenced their domestic policymaking. For example, as a provider of military and economic stability, the U.S. wielded much influence on domestic macroeconomic policies of Korea and Taiwan during the early industrialization years of 1950s-60s. The economic aid came with conditions, and Korea and Taiwan complied. Although explicit economic aid stopped in the late 1960s, other forms of assistance, for example loans, grants and technology transfers continued, and more importantly security alliances remained strong. The U.S. still holds much influence over Korea and Taiwan, as a military ally and a major trade partner. In the present day, Korea and Taiwan closely peg their currencies to the U.S. dollar and hold large currency reserves in dollars. As a result, macroeconomic stability of Korea and Taiwan depends largely on the stability of the dollar. In this way, the dollar’s influence on Korea and Taiwan is quite significant. Similar to but also different from the way that Korea and Taiwan depended on U.S. economic aid, they again depend on the dollar to anchor economic stability.
Topic:
International Relations, Economics, Investment, Currency, and Economic Stability
Political Geography:
Taiwan, Asia, South Korea, and United States of America

24. Counter-Cyclical Economic Policy

Author:
The Organization for Economic Co-operation and Development
Publication Date:
05-2010
Content Type:
Policy Brief
Institution:
The Organisation for Economic Co-operation and Development
Abstract:
The effects of the recent economic crisis have stretched policy frameworks in many OECD countries close to breaking point. Recent work by the OECD has examined how policies have interacted with the economic cycle over time and during the recent crisis. The main policy lessons are as follows: • Policy-makers should take into account uncertainties about the functioning of the economy, the nature of economic shocks or the effects of policy and take their decisions accordingly. • Policy in various areas will have to build in greater safety margins and to be more prudent during upswings. • Appropriate fiscal rules can help prepare fiscal policy for the next downturn by leading to swifter consolidation during the upturn. • The monetary and financial policy framework needs to achieve a better articulation between economic and financial stability. • Financial policy needs to strengthen micro-prudential regulation, regulatory interventions may need to target emerging credit-driven bubbles and macro-prudential policies should address systemic risks. • There may be a case for monetary policy leaning against the wind, if asset prices are driven by a credit boom and financial regulation is judged to be insufficiently robust. • Changes to structural policy settings can improve the resilience of the economy to shocks and affect the degree of leverage households and firms take on.
Topic:
Economics, Fiscal Policy, Economic Stability, and Economic Crisis
Political Geography:
Global Focus

25. After the Orange Era: Economic Prospects in Ukraine

Author:
Dmytro Boyarchuk, Kateryna Ruskykh, Olga Kravets, and Vladimir Dubrovskiy
Publication Date:
07-2010
Content Type:
Working Paper
Institution:
Center for Social and Economic Research - CASE
Abstract:
When Victor Yanukovich won Ukraine’s presidential election in February 2010, it marked the official end of the Orange Revolution. Soon after taking office, Yanukovich managed to form a loyal parliamentary coalition in a legally dubious way and, consequently, appointed his ally Mykola Azarov as Prime Minister. Indeed this decision may have made state governance more predictable and even provided for shortterm economic stability, but it may have come at the expense of Ukraine’s democratic freedom and long-term economic prospects.
Topic:
Development, Reform, Institutions, Economic Stability, Post-Soviet Space, and Victor Yanukovich
Political Geography:
Ukraine and Eastern Europe