Number of results to display per page
Search Results
202. Labor force participation, job search effort and unemployment insurance in the laboratory
- Author:
- Wolfgang Lechthaler and Patrick Ring
- Publication Date:
- 03-2020
- Content Type:
- Working Paper
- Institution:
- Kiel Institute for the World Economy (IfW)
- Abstract:
- How the provision of unemployment benefits affects employment and unemployment is a debated issue. In this paper, we aim at complementing theoretical and empirical contributions to this debate with a laboratory experiment: We simulate a job market with search effort and labor force participation decisions while varying the maximum length of unemployment benefit eligibility. Our results reveal two separable, opposing effects: Individuals within the labor force search with lower effort when unemployment benefits are extended. However, individuals are more likely to participate in the labor force and to actively search for a job. Concerning employment, the second effect dominates so that unemployment benefits raise employment.
- Topic:
- Economics, International Political Economy, Markets, Labor Issues, Employment, Unemployment, and Job Creation
- Political Geography:
- Global Focus
203. Coronavirus: globalisation is not the cause but the remedy
- Author:
- Blaise Wilfert
- Publication Date:
- 04-2020
- Content Type:
- Policy Brief
- Institution:
- Robert Schuman Foundation (RSF)
- Abstract:
- While the Covid-19 pandemic is unfolding in all its violence, "globalisation", to read more than one, is said to be the great culprit for what is happening to us, whether it has been the lightning speed of the virus' spread, the impotence of States to stop its progression, the inability of "capitalism" to produce medical equipment or the madness of stock market speculation. The logical consequence of this has been the repeated call, with some pathos, urgently to invent the time “after”, after the follies of globalisation. The magnitude of the shock that Covid-19 represents provides an ideal sounding board to replay a tune that is in fact an old one, familiar to us since the 1990s at least, or even the 1980s, but with an incomparable and therefore particularly disturbing echo. Defined both as liberalization - the triumph of the borderless market economy - and as planetarisation - the unification of the planet through flows of all kinds, information, migrants, ideas and representations, tourists, religious practices - globalisation is said to have become a form of disease fatal to the world. Hence to deglobalise[ 1]. Yet, it has to be said again, more than twenty years after Paul Krugman, globalisation is not to blame, and those who currently claim the opposite, with a communicative passion, pretending to draw conclusions from a lucid analysis of the recent past, rely on biased historical narratives to impose a political agenda, whether explicit or implicit. So, let a historian try to say a word about it, since understanding the times we are in requires understanding the times from whence we have come.
- Topic:
- Globalization, Markets, Coronavirus, and COVID-19
- Political Geography:
- Global Focus
204. Economic Costs of Ex ante Regulations
- Author:
- Hosuk Lee-Makiyama and Badri Narayanan Gopalakrishnan
- Publication Date:
- 10-2020
- Content Type:
- Research Paper
- Institution:
- European Centre for International Political Economy (ECIPE)
- Abstract:
- Regulations are an indispensable part of an economy and are proven to generate a significant impact on the economic, environment and social landscape. Through an extensive survey of literature and empirical study, the paper contrasts the benefits and costs arising in the light of the imposition of ex ante regulations of attempting to regulate a market sector, before a market failure has even occurred. It diverges from the norm of regulating ex-post, i.e. addressing market failures as they arise, which is the case in most modern open economies. The study highlights the economic impacts of shifting from ex post to ex ante in the online services sector as stipulated by the proposals for the Digital Services Act. It estimates a loss of about 85 billion EUR in GDP and 101 billion EUR in lost consumer welfare, due to a reduction in productivity, after accounting for other control variables. These costs are equivalent to losing all the gains that the EU has achieved to date from all its bilateral free trade agreements; or losing the contribution of passenger cars to the EU trade balance with the rest of the world. In the context of the pandemic-induced economic contraction, the GDP loss is equivalent to one-quarter of EU current account surplus projected for 2020. The extraordinarily high costs and rarity of ex ante rules warrant a discussion on the true objectives of the Digital Services Act. It is unclear which market failures it is envisaged to address – or how these failures can be so critical for the well-being for the European citizens, yet so irreparable and impossible to remedy ex post.
- Topic:
- Economics, Environment, International Political Economy, Markets, Treaties and Agreements, Social Policy, and Trade
- Political Geography:
- Europe
205. COVID-Induced Sovereign Risk in the Euro Area: When Did the ECB Stop the Contagion?
- Author:
- Aymeric Ortmans and Fabien Tripier
- Publication Date:
- 10-2020
- Content Type:
- Working Paper
- Institution:
- Centre d'Etudes Prospectives et d'Informations Internationales (CEPII)
- Abstract:
- This paper studies how the announcement of the ECB’s monetary policies stopped the spread of the COVID-19 pandemic to the European sovereign debt market. We show that up to March 9, the occurrence of new cases in euro area countries had a sizeable and persistent effect on 10-year sovereign bond spreads relative to Germany: 10 new confirmed cases per million people were accompanied by an immediate spread increase of 0.03 percentage points (ppt) that lasted 5 days, for a total increase of 0.35 ppt. For periods afterwards,the effect falls to near zero and is not significant. We interpret this change as an indicator of the success of the ECB’s March 12 press conference, despite the “we are not here to close spreads” controversy. Our results hold for the stock market, providing further evidence of the effectiveness of the ECB’s March 12 announcements in stopping the financial turmoil. A counterfactual analysis shows that without the shift in the sensitivity of sovereign bond markets to COVID-19, spreads would have surged to 4.2% in France, 12.5% in Spain, and 19.5% in Italy by March 18, when the ECB’s Pandemic Emergency Purchase Programme was finally announced.
- Topic:
- Debt, Economics, International Political Economy, Markets, Central Bank, COVID-19, and Banking
- Political Geography:
- Europe
206. Corporate tax avoidance and industry concentration
- Author:
- Farid Toubal, Mathieu Parenti, and Julien Martin
- Publication Date:
- 07-2020
- Content Type:
- Working Paper
- Institution:
- Centre d'Etudes Prospectives et d'Informations Internationales (CEPII)
- Abstract:
- This paper argues that tax avoidance by large corporations has contributed to the 25% increase in concentration among U.S. firms since the mid-1990s. Corporate tax avoidance gives large firms a competitive edge, which translates into larger market shares and an increase in the granularity of the economy. We develop IV and difference-in-differences strategies that show the causal impact of tax avoidance on firm-level sales. Had firms not resorted to tax avoidance in 2017, our results imply that the average industry concentration would have been 8.3% lower, which is around its early 2000 level.
- Topic:
- Economics, International Political Economy, Markets, Tax Systems, Corporations, Tax Evasion, and Corporate Tax
- Political Geography:
- United States and Global Focus
207. Is a bubble inflating on Poland’s housing market?
- Author:
- Adam Czerniak and Stefan Kawalec
- Publication Date:
- 03-2020
- Content Type:
- Special Report
- Institution:
- Center for Social and Economic Research - CASE
- Abstract:
- The year 2019 brought double-digit growth in Polish housing prices, for both new and existing homes. In some cities, real prices for residential real estate have reached the highest levels in history, even higher than at the peak of the boom in 2008. As a result, some are saying that there is a growing price bubble. But thus far no research has been produced that would comprehensively verify this hypothesis on the basis of data from 2006-2019. This work aims to fill that gap. This is exceptionally important, because assessing the likelihood that a housing price bubble is emerging is key for the conduct of monetary and macroprudential policy in Poland. Because if we’re really dealing with growth in macroeconomic imbalances, then taking pre-emptive action to limit further price growth and prepare the economy (including the financial sector) for a potential collapse in housing prices is essential for limiting fluctuations in growth.
- Topic:
- Markets, Economic Growth, Trade, and Housing
- Political Geography:
- Eastern Europe and Poland
208. The political economy of competition, regulation and transformation: Black Economic Empowerment (BEE) and quota allocations in South African industrial fisheries
- Author:
- Thando Vilakazi and Stefano Ponte
- Publication Date:
- 09-2020
- Content Type:
- Working Paper
- Institution:
- Centre for Business and Development Studies (CBDS), Copenhagen Business School
- Abstract:
- Power asymmetries in value chains mean that inequalities in returns, access to key resources and share of value added are reinforced and skewed against smaller players. Policies put in place to enforce market rules and ensure fairness can be ineffective in the context of entrenched market power, lack of competition, and high levels of control by lead firms over key resources and rights – necessitating different rules of the game to change the inequalities. Under these circumstances, transformation and economic participation of marginalized groups are unlikely to be achieved, with important socio-economic and political implications. South Africa’s Black Economic Empowerment (BEE) policies and competition laws target economic redress and inclusion of historically disadvantaged people in the ownership and control of economic activity and productive assets. BEE criteria have been embedded in a number of industry empowerment charters, a Broad-Based BEE Act and a series of codes of implementation. South Africa’s competition law is well-established and effectively implemented. Yet, the impacts of these instruments have been frustratingly limited and slow, especially in sectors where a few companies dominate. The paper draws on secondary sources and in-depth interviews with industry players in the South African Hake Deep Sea Trawl (HDST) fishery to examine the interactions between industrial fishery quota allocations by the government, BEE policy, and competition dynamics as they impact on allocation of finite access to national resource endowments. It shows that, even in one of the most regulated sectors of South Africa’s economy, large incumbents maintain a disproportionate amount of bargaining power vis-à-vis smaller players in HDST fishery, both upstream and downstream, and throughout the domestic and global value chains. We conclude that as long as rules protect incumbency, inequality will be sustained. Even where scale economies are at play, quota allocation, transformation and competition regulation should go hand in hand to facilitate the effective participation of black-owned businesses as competitors in the hake value chain.
- Topic:
- Economics, Markets, Race, Economic Inequality, Economic Policy, Participation, Fishing, and Value Chains
- Political Geography:
- South Africa
209. Not every time is the right time for real-time marketing: branding in the COVID-19 pandemic
- Author:
- Lisa Ann Richey and Maha Rafi Atal
- Publication Date:
- 08-2020
- Content Type:
- Working Paper
- Institution:
- Centre for Business and Development Studies (CBDS), Copenhagen Business School
- Abstract:
- As the global Covid-19 pandemic spread through Europe and North America, companies raced to communicate how they were responding to the crisis. Advertising that focuses on a company’s response to humanitarian crises is hardly new. Every holiday season features a parade of brands touting their seasonal partnerships with charitable causes. Yet these exercises in “Covid-branding” struck a particular nerve with both consumers and media commentators because so many of the brands stuck to the same script.
- Topic:
- Economics, Markets, Communications, and Advertising
- Political Geography:
- Europe, North America, and Global Focus
210. Canada’s Historical Search for Trade Markets
- Author:
- David J. Bercuson
- Publication Date:
- 08-2020
- Content Type:
- Working Paper
- Institution:
- Canadian Global Affairs Institute (CGAI)
- Abstract:
- When U.S. President Donald Trump was elected in 2016 on a promise to cancel the North American Free Trade Agreement (NAFTA), Canada risked losing the free-trade regime that it had enjoyed with the U.S. since the original U.S.-Canada Free Trade Agreement took effect in 1989. Those who came to Canada’s rescue, by persuading the Trump administration to eventually make a new deal, the United States-Mexico-Canada agreement, were Canada’s trading partners in the United States, whose interests were threatened: Nearly two-thirds of U.S. states now have Canada as their most important trading partner. This was indicative of a long-term trade pattern of an ever-increasing closeness in trade between the U.S. and Canada. It is a pattern that started since before Confederation and in spite of not a few attempts in Canada to diversify exports away from the U.S. However, that simply cannot happen in any meaningful way: The 170-year-old pattern of Canada-U.S. trade is now so permanent as to be utterly irreversible. Since the decision by Britain to end tariff preferences for its colonies in the mid-19th century, Canada has naturally sought to penetrate the U.S. market for its exports. The desire has not always been mutual: American protectionism has, at times, hampered the export of Canadian products to the U.S., although tariff barriers have failed to stop what is a seemingly natural and, in many ways, necessary north-south flow of goods and services. Even Canadian attempts to reorient its own trade emphasis to enhance domestic east-west trade, or to expand into countries beyond the United States have made little difference. The trading relationship between Canada and the U.S. has endured through wars and in peacetime, through Republican administrations and Democratic ones. It will only continue to grow. Fantasizing about some markedly different trading future is therefore a waste of Canada’s time and energy, which should instead be expended on further penetrating the American marketplace and solidifying ties with state and local governments, local manufacturing associations, Congress and new industries. Canada should take advantage of its new trade deal with the U.S. to integrate the Canadian economy as fully into that of the U.S. as possible. There may be others like President Trump or some like him in Canada, who try to disrupt the trade relationship. That even Trump eventually was persuaded to agree to free trade with Canada is evidence, however, that an ever-closer trading relationship is simply a reality that cannot be stopped.
- Topic:
- Markets, History, Trade, and Donald Trump
- Political Geography:
- Canada, North America, and United States of America
211. Should Denmark and Sweden join the banking Union?
- Author:
- Dirk Schoenmaker and Svend E. Hougaard Jensen
- Publication Date:
- 06-2020
- Content Type:
- Policy Brief
- Institution:
- Bruegel
- Abstract:
- Though outside the euro area, Denmark and Sweden could benefit from joining the European Union’s banking union. It would provide protection in case of any need to resolve at national level a large bank with a Scandinavian footprint, and would mark a choice in favour of more cross-border banking. But joining the banking union would also involve some loss of decision-making power.
- Topic:
- Markets, European Union, Economy, and Banks
- Political Geography:
- Europe, Denmark, and Sweden
212. The European Union’s post-Brexit reckoning with financial markets
- Author:
- Rebecca Christie and Thomas Wieser
- Publication Date:
- 05-2020
- Content Type:
- Policy Brief
- Institution:
- Bruegel
- Abstract:
- In the negotiations between the European Union and the United Kingdom over their future relationship, we see a high probability of a weak contractual outcome, given the dominance of politics over considerations of market efficiency.
- Topic:
- Markets, Governance, Europe, Brexit, Negotiation, and Macroeconomics
- Political Geography:
- United Kingdom and Europe
213. Market versus policy Europeanisation: has an imbalance grown over time?
- Author:
- Leonardo Cadamuro and Francesco Papadia
- Publication Date:
- 01-2020
- Content Type:
- Policy Brief
- Institution:
- Bruegel
- Abstract:
- This Policy Contribution tests the hypothesis that an imbalance has grown in Europe over the last few decades because markets have integrated to a greater extent than European-level policymaking, potentially creating difficulties for the democratic process in managing the economy. This hypothesis has been put forward by several authors but not so far tested empirically.
- Topic:
- Markets, Governance, Democracy, Regional Integration, Macroeconomics, and Trade Policy
- Political Geography:
- Europe
214. Transforming the power sector in developing countries: Geopolitics, poverty, and climate change in Bangladesh
- Author:
- Robert F. Ichford
- Publication Date:
- 01-2020
- Content Type:
- Policy Brief
- Institution:
- Atlantic Council
- Abstract:
- Governments across South Asia face many challenges as they seek to improve the lives of the more than 1.8 billion people that live in the region. Increasing geopolitical competition—especially between and among China, Russia, and the United States—is one factor that is affecting progress. This “great power competition,” including over the South China Sea, is intertwined with regional rivalries (e.g., India and Pakistan, India and China, and the United States and Iran) and has important economic, military, technological, and environmental consequences. Energy is a key strategic sector in this competition as China pursues its expansive Belt and Road Initiative (BRI) infrastructure and trade vision, Russia uses arms sales and nuclear energy to expand its regional presence, and the United States confronts Iran and gears up its free and open Indo-Pacific Strategy and Asia EDGE (Enhancing Development and Growth through Energy) initiative. This issue brief considers the transformation of the electricity sector in Bangladesh. It is the fourth country analysis in the Atlantic Council’s “Transforming the Power Sector in Developing Countries” series. This issue brief applies to Bangladesh the analytical framework developed in the first report in the series, which presents general challenges and strategic priorities for developing countries in the context of their implementation of electric power policies and reforms following the 2015 Paris Agreement on climate change.
- Topic:
- Security, Climate Change, Energy Policy, Markets, Oil, Governance, Geopolitics, Gas, Renewable Energy, Fossil Fuels, and Transition
- Political Geography:
- Bangladesh, South Asia, and Asia
215. Energy sector diversification: Meeting demographic challenges in the MENA region
- Author:
- Bina Hussein
- Publication Date:
- 01-2020
- Content Type:
- Special Report
- Institution:
- Atlantic Council
- Abstract:
- Countries in the Middle East and North Africa (MENA) region are expected to witness a substantial growth in population over the next three decades. Many of the hydrocarbon-rich nations in this region will need to meet a commensurate increase in job demand. This report focuses on four nations that are predominantly reliant on the oil and gas sector: Saudi Arabia, the United Arab Emirates (UAE), Kuwait, and Algeria. In all four nations, the majority of the local population is employed in the public sector, which, in the long term, will become economically unsustainable. In order to meet the growing job demand, these nations must both diversify their economies beyond the energy sector and expand their energy sectors beyond hydrocarbons. Doing so will create important employment opportunities in new industries. Saudi Arabia, the UAE, and Kuwait all have strategies in place that, if followed, could pave the way towards a diversified knowledge-based economy. Algeria, on the other hand, is at a crossroads. Even as it is undergoing a political transition, the transition can create opportunities for the new government to change the country’s course and push economic reforms that are not only aimed at lowering the current unemployment rate but also at making the private sector more enticing. Additionally, all four nations will need to take steps to increase female participation in the workforce by easing current restrictions and making labor laws more favorable towards women. The energy sector plays a large role in the economies of all four nations. This sector has a critical role to play in efforts to diversify the economy and teach skills that will be beneficial in the future or can be applied in other sectors as well. Moreover, all four nations also have sovereign wealth funds that either play, or can play, a key role in diversifying the economy, strengthening existing industries, and helping to create new industries altogether. This report offers the following recommendations on how these four nations can work towards meeting demographic challenges in relation to the economy, specifically the role of the energy sector: Governments can strengthen the private sector through increased foreign investment and by incentivizing entrepreneurship through reforms that open up the economy and make it more lucrative for investors. Governments can create laws and support structures that encourage women to work and increase female participation in the workforce. Opportunities should be provided to teach skills and impart knowledge relevant to the job market that will also be relevant in the future. Lessons should be learned from the experience of the energy sector and leveraged to achieve successes in other areas. For example, the state-owned oil and gas companies have successfully set up a structure that allows them to not only invest in their employees but also take care of the community by offering health care services, education, and more.
- Topic:
- Demographics, Energy Policy, Markets, Oil, Governance, Geopolitics, Gas, Renewable Energy, Fossil Fuels, and Transition
- Political Geography:
- Middle East, North Africa, and Gulf Nations
216. Transcending History’s Heavy Hand The Future in Economic Action
- Author:
- Jens Beckert and Timur Ergen
- Publication Date:
- 03-2020
- Content Type:
- Working Paper
- Institution:
- Max Planck Institute for the Study of Societies
- Abstract:
- This paper discusses sociological analyses of the formation and role of expectations in the economy. Recognition of the social constitution of expectations advances the understand- ing of economic action under conditions of uncertainty and helps to explain core features of modern capitalist societies. The range of applications of the analytical perspective is il- lustrated by closer examination of three core spheres of capitalist societies: consumption, investment, and innovation. To provide an idea of core challenges of the approach, three major research questions for the sociological analysis of expectations are presented.
- Topic:
- Economics, Markets, Sociology, Capitalism, and Innovation
- Political Geography:
- Global Focus
217. Trade Update 2020: An Eye on Ammunition Transfers to Africa
- Author:
- Nicolas Florquin, Elodie Hainard, and Benjamin Jongleux
- Publication Date:
- 12-2020
- Content Type:
- Special Report
- Institution:
- Small Arms Survey
- Abstract:
- Even though states may not intentionally supply materiel to armed groups, a lack of stringent risk assessments on weapons and ammunition exports destined for areas prone to diversion can hamper efforts to curtail the broader illicit arms trade. The 2020 edition of the Small Arms Survey’s annual Trade Update, Trade Update 2020: An Eye on Ammunition Transfers to Africa, delves into cases of authorized small arms ammunition transfers to Africa through exploring the potential of beyond-the-norm data sources. Relying on peacekeeping operations, national customs, and civil society research, the case studies highlight ammunition imports from opaque exporters to countries affected by armed conflict, states subject to arms embargoes, and other areas on the continent equally prone to seeing arms and ammunition diverted from the licit to illicit markets. Ammunition accounted for 42 per cent of all authorized African small arms imports in 2017. Since countries with low transparency records do export ammunition to government forces in conflict-affected regions and such regions are prone to diversion, there is a gap in risk identification. Therefore, findings from the case studies emphasize the importance of exporters improving their reporting practices and carrying out stringent risk assessments. In addition, the leveraging of multiple data sources can enhance the monitoring of the authorized ammunition trade and help curb unauthorized activities.
- Topic:
- Civil Society, Crime, Markets, Peacekeeping, Arms Trade, and Transparency
- Political Geography:
- Africa
218. The Future of the Automotive Industry: Dangerous Challenges or New Life for a Saturated Market?
- Author:
- Annamaria Simonazzi, Jorge Carreto Sanginés, and Margherita Russo
- Publication Date:
- 11-2020
- Content Type:
- Working Paper
- Institution:
- Institute for New Economic Thinking (INET)
- Abstract:
- The automotive industry is undergoing a radical transformation. New social, technological, environmental and geopolitical challenges are redefining the characteristics of a saturated market, opening new scenarios while offering opportunities for the entry of new players. These challenges are bound to trigger reorganization of the global value chain between old and new suppliers and car makers and their suppliers, affecting the distribution of employment, the regionalization of production and the dynamic evolution of the comparative advantage of nations. In this paper we address the issue of the reorganization of global value chains in the face of these challenges. The analysis will compare the relative position of core and peripheries in the North-American and European macro-regions, focusing on Mexico, which represents a significant case study for analysis of the impact of the digital transformation on the domestic value chain in an “integrated periphery”, and of trade agreements on the location policies of big multinationals. The dependency of the Mexican automotive industry on the strategic decisions of global players is considered a factor of great vulnerability, especially in a context of rapid change in the patterns of consumption, technologies and international trade agreements. For Mexico, as for European producers in the integrated and semi-peripheries, the main challenge in the near future will be posed by the radical transformation the industry is going through in electrical and autonomous-driving vehicles, which sees regions and players outside the traditional automotive clusters in the lead. The transformations taking place are bound to change the global structure of automotive production. The rise of new competitors from the emerging economies and would-be entrants from other sectors, competing in mastering the new digital and software technologies, threatens the established structure of the industry. The pandemic has led to a spectacular acceleration in the process of change, while heightening uncertainty about future developments. This is why the governments of leading countries are joining in the race, wielding carrots and sticks in support of their industries and in the endeavor to encourage risk-taking and investment in research and innovation, step up e-vehicle production while providing for the necessary infrastructures, and guarantee their companies a place in the new industry.
- Topic:
- Markets, Networks, Integration, Decarbonization, Digitalization, Production, and Automotive Industry
- Political Geography:
- Europe, North America, and Mexico
219. Czech EU presidency: Basis for a Successful Implementation
- Author:
- Vít Havelka
- Publication Date:
- 12-2020
- Content Type:
- Policy Brief
- Institution:
- Europeum Institute for European Policy
- Abstract:
- Czech policy makers must not resort to a partisan programme of the Czech presidency. Strong antipathy between government and opposition might create a fragile political environment for the presidency Czech priorities must be thoroughly discussed with partners in trio, and the Czech Republic should closely coordinate its intentions with Sweden in order to counterbalance French influence Space of Czech initiatives will be limited due to the current phase of the EP legislative period, and the Czechs should thus focus only on particular issues that they consider vital – single market policies, environmental policies, and innovation. The EU presidency must be used for EU membership promotion in the Czech Republic. Importantly, there should take place high-level meetings in the Czech Republic and outside of Prague.
- Topic:
- Environment, Government, Markets, European Union, and Innovation
- Political Geography:
- Europe and Czech Republic
220. Emerging Europe and the capital markets union
- Author:
- Alexander Lehmann
- Publication Date:
- 09-2020
- Content Type:
- Policy Brief
- Institution:
- Bruegel
- Abstract:
- The European Union’s capital markets union (CMU) plan is in urgent need of a revamp. Because of Brexit, EU capital markets and supervision need to become more integrated. The ongoing deep recession increases the need for equity finance mobilised by capital markets. The eleven EU countries in central and south-eastern Europe which joined the EU in 2004 and after (EU11) are particularly affected by the ongoing consolidation of exchanges, which has diminished liquidity in smaller markets and in the traded securities of mid-sized companies. Corporate funding remains even more bank-dependent in the EU11 than in the rest of the EU. Equity capital, whether in the form of listed shares or directly supplied by investment funds, is particularly underdeveloped. Even though the sustained and superior growth record in the region compared to the rest of the EU should be a magnet for investors, cross-border exposure to traded equity in the region remains very limited. To gain broader acceptance in all EU countries, CMU will need to support more forcefully funding for small and medium enterprises (SMEs), and foster market integration throughout the single market, including outside the euro area. The immediate priorities for the EU should be to revise market regulation and facilitate capital market access by smaller firms. Lighter standards in dedicated SME markets should be widened for newly-listed companies, but should not be available to more mature listed companies. In this way, high standards of transparency and integrity, which have been bolstered by post-financial crisis regulation, will be preserved. The EU11 countries need to embrace corporate governance rules and greater transparency of company financial data, which would facilitate equity finance. They must also attract investors who will seek disclosure of environmental, social and governance performance of issuers. Much could be done to foster liquidity on national exchanges, including by embracing the inevitable further consolidation of exchanges and other infrastructure.
- Topic:
- Markets, European Union, Regulation, Finance, Business, Capital, Corporate Governance, and Private Equity
- Political Geography:
- Europe
221. On the Origins of Entrepreneurial Alertness: Did Bauer and Yamey Precede Kirzner?
- Author:
- J. Robert Subrick
- Publication Date:
- 10-2020
- Content Type:
- Journal Article
- Journal:
- The Cato Journal
- Institution:
- The Cato Institute
- Abstract:
- After the Second World War, the entrepreneur virtually disappeared from economic analysis (Baumol 1968). This neglect followed from the emerging models of general equilibrium that formed one aspect of the core of economic theory. By assumption, the Walrasian auctioneer knew the appropriate prices necessary to equate quantity supplied with quantity demanded in each market. In addition, the auctioneer knew when and by how much to adjust prices when an exogenous factor changed such as income or production technology. Trade only occurred at equilibrium prices so that markets cleared. No market participant chose or changed prices; it occurred exogenously. Kenneth Arrow recognized the lack of real world mechanisms to determine and adjust prices in competitive markets. He identified a logical gap in the perfectly competitive model. He wrote that “there is no place for a rational decision with respect to prices as there is with respect to quantities” (Arrow 1959: 42). Prices exist independent of consumer and firm behavior. A complete model would have to provide a solution to the conundrum.
- Topic:
- Markets, History, Entrepreneurship, and Economy
- Political Geography:
- North America and United States of America
222. Assessing State Capacity Libertarianism
- Author:
- Ryan H. Murphy and Colin O'Reilly
- Publication Date:
- 10-2020
- Content Type:
- Journal Article
- Journal:
- The Cato Journal
- Institution:
- The Cato Institute
- Abstract:
- Tyler Cowen (2020), in a controversial and widely discussed blog post, has argued that free economic institutions must be accompanied by state capacity to achieve maximal growth rates. He calls this “State Capacity Libertarianism,” which echoes positions he has posed previously (Cowen 2007, 2018). Besley and Persson (2011) can be perhaps seen as a direct predecessor. Criticisms immediately emerged, with Henderson (2020) arguing that Cowen’s specific proposals are in direct conflict with libertarianism, and with minor caveats, free economic institutions are already able to achieve the goals Cowen hopes to achieve with state capacity. Geloso and Salter (forthcoming) argue that the lack of examples of wealthy countries with weak states is due to survivorship bias, and they apply their argument to criticize Cowen (Geloso and Salter 2020). Caplan (2018), while not directly addressing State Capacity Libertarianism, argues that there is little reason to believe that the effects of state capacity are the result of strong states themselves, rather than the social and cultural factors that allowed a strong state to emerge in the first place. The purpose of this article is to put data to the question of the individual effects of state capacity and free economic institutions on economic performance, and the potential interaction between the two.
- Topic:
- Economics, Markets, State, and Libertarianism
- Political Geography:
- Global Focus
223. Levant Illicit Tobacco 2019
- Author:
- Oxford Economics
- Publication Date:
- 03-2020
- Content Type:
- Commentary and Analysis
- Institution:
- Oxford Economics
- Abstract:
- This report provides an overview of the nature of illicit trade in cigarettes across three markets in the Levant region: Egypt, Jordan, and Lebanon. It establishes estimates of Illicit Consumption in each market and the impact it has on government tax revenue.
- Topic:
- Economics, Markets, Finance, and Illegal Trade
- Political Geography:
- Africa, Middle East, Lebanon, Egypt, and Jordan
224. Ensuring a trusted 5G ecosystem of vendors and technology
- Author:
- Rajiv Shah
- Publication Date:
- 09-2020
- Content Type:
- Special Report
- Institution:
- Australian Strategic Policy Institute (ASPI)
- Abstract:
- 5G will be the next generation of mobile telecommunications. There are differing views on how quickly it will become commonplace and exactly what form it will take, but it will ultimately transform much of what we do and how society functions. The trustworthiness, security and resilience of 5G networks will therefore be critical. A key part of this will be the partnerships that network operators form with vendors to provide and maintain the network infrastructure. There’s now a good understanding that 5G will underpin critical national infrastructure in a way that previous telecommunication technologies don’t, and that supply-chain trust and security are key national security issues. Australia and some other countries have eliminated specific vendors from their 5G supply chains, but the space is globally contested and there is no consensus on what happens next. There is a need for a trusted ecosystem of vendors, which may also bring enormous opportunities for states, including Australia, to develop sovereign 5G capabilities and grow their 5G market. However, barriers to entry and a lack of consensus among key 5G stakeholders across the public and private sectors are holding up progress towards these goals.
- Topic:
- Markets, Science and Technology, Cybersecurity, and 5G
- Political Geography:
- Global Focus
225. How Market Sentiment Drives Forecasts of Stock Returns
- Author:
- Roman Frydman, Nicholas Mangee, and Josh Stillwagon
- Publication Date:
- 05-2020
- Content Type:
- Working Paper
- Institution:
- Institute for New Economic Thinking (INET)
- Abstract:
- We reveal a novel channel through which market participants’ sentiment influences how they forecast stock returns: their optimism (pessimism) affects the weights they assign to fundamentals. Our analysis yields four main findings. First, if good (bad) “news” about dividends and interest rates coincides with participants’ optimism (pessimism), the news about these fundamentals has a significant effect on participants’ forecasts of future returns and has the expected signs (positive for dividends and negative for interest rates). Second, in models without interactions, or when market sentiment is neutral or conflicts with news about dividends and/or interest rates, this news often does not have a significant effect on ex ante or ex post returns. Third, market sentiment is largely unrelated to the state of economic activity, indicating that it is driven by non-fundamental considerations. Moreover, market sentiment influences stock returns highly irregularly, in terms of both timing and magnitude. This finding supports recent theoretical approaches recognizing that economists and market participants alike face Knightian uncertainty about the correct model driving stock returns.
- Topic:
- Economics, Markets, and Stock Markets
- Political Geography:
- United States
226. Uncertain Futures: Imaginaries, Narratives, and Calculative Technologies
- Author:
- Jens Beckert and Richard Bronk
- Publication Date:
- 12-2019
- Content Type:
- Working Paper
- Institution:
- Max Planck Sciences Po Center on Coping with Instability in Market Societies (MaxPo)
- Abstract:
- Dynamic capitalist economies are characterised by relentless innovation and novelty and hence exhibit an indeterminacy that cannot be reduced to measurable risk. How then do economic actors form expectations and decide how to act despite this uncertainty? This paper focuses on the role played by imaginaries, narratives, and calculative technologies, and argues that the market impact of shared calculation devices, social narratives, and contingent imaginaries underlines the rationale for a new form of ‘narrative economics’ and a theory of fictional (rather than rational) expectations. When expectations cannot be anchored in objective probability functions, the future belongs to those with the market, political, or rhetorical power to make their models or stories count. The paper also explores the dangers of analytical monocultures and the discourse of best practice in conditions of uncertainty, and considers the link between uncertainty and some aspects of populism.
- Topic:
- Economics, Markets, Capitalism, Innovation, Uncertainty, and Calculation
- Political Geography:
- Global Focus
227. An Overview of German New Economic Sociology and the Contribution of the Max Planck Institute for the Study of Societies
- Author:
- John Wilkinson
- Publication Date:
- 02-2019
- Content Type:
- Working Paper
- Institution:
- Max Planck Sciences Po Center on Coping with Instability in Market Societies (MaxPo)
- Abstract:
- New economic sociology (NES) in Germany has many similarities with economic sociology in the United States in its conscious efforts to institutionalize its presence within the broader sociology community, its promotion of a canon via handbooks, and its focus on the sociology of markets. At the same time, it differs in its stronger connections to the German classics, the greater vitality of a macrosociological tradition in Germany, the prior existence of a “bridging” generation of economic sociologists, and its later consolidation in a period of neo-liberal globalization, all of which have given NES in the German-speaking world a distinctive character. In addition, it has been influenced by successive waves of French economic sociology – Bourdieu, convention, and actor-network theory – and its bilingual academic tradition has ensured its integration into English-speaking NES. In its contribution to the sociology of markets, the fact that NES emerged later in Germany than in the US led to a greater concern with quality markets rather than commodity markets, and a concomitantly greater attention to issues of value and price. These latter themes, in their turn, establish a continuity with German economic sociology’s enduring concern with understanding the role of money. Not surprisingly, therefore, German NES is now making key contributions to discussions on the sociology of money and is increasingly situating its analysis within the broader dynamic of capitalism and current processes of financialization.
- Topic:
- Economics, Markets, Sociology, and Discipline
- Political Geography:
- Europe and Germany
228. Lessons Learned and Evolving Practices of the TIBER Framework for Resilience Testing in the Netherlands
- Author:
- Petra Hielkema and Raymond Kleijmeer
- Publication Date:
- 10-2019
- Content Type:
- Working Paper
- Institution:
- Carnegie Endowment for International Peace
- Abstract:
- Financial institutions face an evolving threat landscape with a wide range of hostile actors targeting them. Regulators and consumers reasonably expect the institutions to make themselves more secure. The question then emerges as to whether financial institutions are complying with the different standards, rules, and regulations regarding their security. International standard-setting bodies have recognized the need to raise the bar higher for the resilience of financial institutions. The publication of the Committee on Payments and Market Infrastructures-International Organization of Securities Commissions (CPMI-IOSCO) guidance on cyber resilience in June 2016 has been pivotal in emphasizing the need to have an integrated approach for financial market infrastructures, with the institution’s board being ultimately responsible and accountable for cyber resilience.1 Increasingly, authorities and financial institutions alike recognize that, in addition to assessing the overall resilience posture of a financial institution against sophisticated attacks, it will be important to actually test this posture. The CPMI-IOSCO guidance includes a chapter dedicated to testing, containing several examples of activities to that end. Recently, frameworks for testing the resilience posture of institutions in practice have been developed internationally.
- Topic:
- Markets, Science and Technology, Finance, and Resilience
- Political Geography:
- Europe, Netherlands, and Global Focus
229. Inflation Targets in Latin America
- Author:
- José De Gregorio
- Publication Date:
- 11-2019
- Content Type:
- Working Paper
- Institution:
- Peterson Institute for International Economics (PIIE)
- Abstract:
- Many emerging-market economies have adopted inflation targeting regimes since they were introduced by New Zealand in 1990. Latin America has not been the exception. Currently eight Latin American countries conduct monetary policy through inflation targeting regimes: Brazil, Chile, Colombia, Guatemala, Mexico, Paraguay, Peru, and Uruguay. This paper reviews the history of chronic inflation in Latin America and describes these countries’ experience with inflation targets and their performance during the global financial crisis.
- Topic:
- Markets, Developing World, Economies, and Inflation
- Political Geography:
- Brazil, Colombia, Uruguay, Latin America, Central America, Mexico, Chile, Peru, Guatemala, and Paraguay
230. Making Basel III Work for Emerging Markets and Developing Economies
- Author:
- Thorsten Beck and Liliana Rojas-Suarez
- Publication Date:
- 04-2019
- Content Type:
- Working Paper
- Institution:
- Center for Global Development (CGD)
- Abstract:
- A sound financial regulatory framework is critical for minimizing the risk imposed by financial system fragility. In the world’s emerging markets and developing economies (EMDEs), such regulation is also essential to support economic development and poverty reduction. Meanwhile, it is increasingly recognized that global financial stability is a global public good: recent decades have seen the development of new international financial regulatory standards, to serve as benchmarks for gauging regulation across countries, facilitate cooperation among financial supervisors from different countries, and create a level playing field for financial institutions wherever they operate. For the worldwide banking industry, the international regulatory standards promulgated by the Basel Committee on Banking Supervision (BCBS) stand out for their wide-ranging scope and detail. Even though the latest Basel recommendations, adopted in late 2017 and known as Basel III, are, like their predecessors, calibrated primarily for advanced countries, many EMDEs are in the process of adopting and adapting them, and many others are considering it. They do so because they see it as in their long-term interest, but at the same time the new standards pose for them new risks and challenges. This report assesses the implications of Basel III for EMDEs and provides recommendations for both international and local policymakers to make Basel III work for these economies.
- Topic:
- Development, Economics, Emerging Markets, and Markets
- Political Geography:
- Global Focus
231. Collective Reputation in Trade: Evidence from the Chinese Dairy Industry
- Author:
- Jie Bai, Ludovica Gazze, and Yukun Wang
- Publication Date:
- 10-2019
- Content Type:
- Working Paper
- Institution:
- The John F. Kennedy School of Government at Harvard University
- Abstract:
- Collective reputation implies an important externality. Among firms trading internationally, quality shocks about one firm’s products could affect the demand of other firms from the same origin country. We study this issue in the context of a large-scale scandal that affected the Chinese dairy industry in 2008. Leveraging rich firm-product level administrative data and official quality inspection reports, we find that the export revenue of contaminated firms dropped by 84% after the scandal, relative to the national industrial trend, and the spillover effect on non-contaminated firms is measured at 64% of the direct effect. Notably, firms deemed innocent by government inspections did not fare any better than noninspected firms. These findings highlight the importance of collective reputation in international trade and the challenges governments might face in signaling quality and restoring trust. Finally, we investigate potential mechanisms that could mediate the strength of the reputation spillover. We find that the spillover effects are smaller in destinations where people have better information about parties involved in the scandal. New firms are more vulnerable to the collective reputation damage than established firms. Supply chain structure matters especially in settings where firms are less vertically integrated and exhibit fragmented upstream-downstream relationships.
- Topic:
- International Trade and Finance, Markets, Business, Global Political Economy, and Accountability
- Political Geography:
- China and Asia
232. Smart Development Banks
- Author:
- Eduardo Fernández-Arias, Ricardo Hausmann, and Ugo Panizza
- Publication Date:
- 04-2019
- Content Type:
- Working Paper
- Institution:
- The John F. Kennedy School of Government at Harvard University
- Abstract:
- The conventional paradigm about development banks is that these institutions exist to target well-identified market failures. However, market failures are not directly observable and can only be ascertained with a suitable learning process. Hence, the question is how do the policymakers know what activities should be promoted, how do they learn about the obstacles to the creation of new activities? Rather than assuming that the government has arrived at the right list of market failures and uses development banks to close some well-identified market gaps, we suggest that development banks can be in charge of identifying these market failures through their loan-screening and lending activities to guide their operations and provide critical inputs for the design of productive development policies. In fact, they can also identify government failures that stand in the way of development and call for needed public inputs. This intelligence role of development banks is similar to the role that modern theories of financial intermediation assign to banks as institutions with a comparative advantage in producing and processing information. However, while private banks focus on information on private returns, development banks would potentially produce and organize information about social returns.
- Topic:
- Development, Industrial Policy, Markets, and Banks
- Political Geography:
- Global Focus and Global Markets
233. Europe 1957 to 1979: From the Common Market to the European Monetary System
- Author:
- Joseph Halevi
- Publication Date:
- 11-2019
- Content Type:
- Working Paper
- Institution:
- Institute for New Economic Thinking (INET)
- Abstract:
- This essay deals with the contradictory dynamics that engulfed Europe from 1959 to 1979, the year of the launching of the European Monetary System. It focuses on how the macroeconomic frame- work of stop-go policies in the 1960s ended up privileging external – intra-European - exports at the expense of domestic demand. The paper offers a very tentative explanation as to why stop-go policies, by weakening domestic demand, did not put an end to the to the ‘long boom’ earlier as they should have. The French crisis of 1968-69 leading to the demise of De Gaulle is discussed at length, as is the renewal of the German export drive in the wake of a nominal revaluation of the D-Mark in 1969. Finally, the revival of labor struggles in Italy in the same year is put in the context of the structural weaknesses of the Italian economy as analyzed by the late Marcello de Cecco. The conclusion is that European countries had neither the political culture nor the institutional mechanisms to coordinate mutually advantageous policies. Their so-called cooperation was an exercise in establishing hegemony while defending the interests specific to the dominant economic groups of each country. The essay then deals with the formation of the EMS as an expression of efforts to establish and enforce economic dominance.
- Topic:
- Economics, Markets, History, Monetary Policy, Capitalism, Common Market, and Macroeconomics
- Political Geography:
- Europe
234. The Knightian Uncertainty Hypothesis: Unforeseeable Change and Muth’s Consistency Constraint in Modeling Aggregate Outcomes
- Author:
- Roman Frydman, Søren Johansen, Anders Rahbek, and Morten Tabor
- Publication Date:
- 03-2019
- Content Type:
- Working Paper
- Institution:
- Institute for New Economic Thinking (INET)
- Abstract:
- This paper introduces the Knightian Uncertainty Hypothesis (KUH), a new approach to macroeconomics and finance theory. KUH rests on a novel mathematical framework that characterizes both measurable and Knightian uncertainty about economic outcomes. Relying on this framework and John Muth’s pathbreaking hypothesis, KUH represents participants’ forecasts to be consistent with both uncertainties. KUH thus enables models of aggregate outcomes that 1) are premised on market participants’ rationality, and 2) yet accord a role to both fundamental and psychological (and other non-fundamental) factors in driving outcomes. The paper also suggests how a KUH model’s quantitative predictions can be confronted with time-series data.
- Topic:
- Economics, Markets, Economic Theory, Macroeconomics, and Mathematics
- Political Geography:
- United States
235. Oh Mother: The Neglected Impact of School Disruptions
- Author:
- David Jaume and Alexander Willén
- Publication Date:
- 03-2019
- Content Type:
- Working Paper
- Institution:
- Center for Distributive, Labor and Social Studies (CEDLAS)
- Abstract:
- Temporary school closures (TSC) represent a major challenge to policymakers across the globe due to their potential impact on instructional time and student achievement. A neglected but equally important question relates to how such closures affect the labor market behavior of parents. This paper provides novel evidence on the effect of temporary school closures on parental labor market behavior, exploiting the prevalence of primary school teacher strikes across time and provinces in Argentina. We find clear evidence that temporary school closures negatively impact the labor market participation of mothers, in particular lower-skilled mothers less attached to the labor force and mothers in dual-income households who face a lower opportunity cost of dropping out of the labor force. This effect translates into a statistically significant and economically meaningful reduction in labor earnings: the average mother whose child is exposed to ten days of TSCs suffers a decline in monthly labor earnings equivalent to 2.92% of the mean. While we do not find any effects among fathers in general, fathers with lower predicted earnings than their spouses also experience negative labor market effects. This suggests that the parental response to TSCs depend, at least in part, on the relative income of each parent. A back-of-the-envelope calculation suggest that the aggregate impact of TSCs on annual parental earnings is more than $113 million, and that the average mother would be willing to forego 1.6 months of labor earnings in order to ensure that there are no TSCs while her child is in primary school.
- Topic:
- Economics, Education, Markets, Political Economy, and Labor Issues
- Political Geography:
- United States
236. Should We Worry About Corporate Leverage?
- Author:
- Şebnem Kalemli-Özcan
- Publication Date:
- 10-2019
- Content Type:
- Policy Brief
- Institution:
- Economics for Inclusive Prosperity (EfIP)
- Abstract:
- There has been a large increase in corporate leverage in many countries since the early 2000s. Figure 1 plots corporate debt to GDP since 2002 for different groups of countries. With the exception of the U.S., both advanced economies and emerging markets have corporate debt exceeding GDP since 2005. U.S. corporate debt is also on an increasing trend. The fastest growth in corporate debt has been observed in emerging markets. A closer look will reveal that China and other fast growing emerging countries in Asia drive most of the increase in corporate debt for the emerging markets.
- Topic:
- Debt, Economics, Markets, Regulation, Multinational Corporations, and Economic Policy
- Political Geography:
- United States and Global Focus
237. The Impact of Macroeconomic Variables on Capital Market Development in Botswana’s Economy
- Author:
- Koketso Molefhi
- Publication Date:
- 03-2019
- Content Type:
- Working Paper
- Institution:
- Botswana Institute for Development Policy Analysis
- Abstract:
- The study examines the impact of macroeconomic variables on stock and bond markets development in Botswana using Autoregressive Distributed Lag (ARDL)-Bounds Test. The results indicate that macroeconomic variables have an impact on capital market development in Botswana. In the short run, real output, money supply and inflation have a positive influence on the development of the stock market, while real exchange rate retards its development. Real output further supports the development of the stock market in the long run. For the bond market, only two variables, inflation rate and lending rate have positive and negative impact on the bond market in the long run respectively, while none of the variables influence the bond market in the short run. Policy implications include increased efforts by policy makers to increase money supply, gross domestic product for the development of stock market, while the bond market development requires a decrease in lending rates.
- Topic:
- Economics, Markets, Capital Flows, Macroeconomics, and Economic Development
- Political Geography:
- Africa and Botswana
238. Petro Dollar. Petro Yuan. Petro Rupee?
- Author:
- Amit Bhandari
- Publication Date:
- 08-2019
- Content Type:
- Working Paper
- Institution:
- Gateway House: Indian Council on Global Relations
- Abstract:
- Over the last two decades, every component of the global energy scenario has changed: demand, supply and energy-type. The only constant has been the U.S. Dollar as the currency of energy trade. Lately, the Chinese Yuan has emerged to challenge the Dollar. Can the Indian Rupee be a third player? India is now the world’s third-largest consumer and second-largest importer of energy. Its open market, transparent regulation and growing demand give it an opportunity to become the hub of a vibrant new oil market, simultaneously ensuring its energy security and raising the international profile of the Rupee. This paper explores the possibility the Rupee could be the third currency in which energy is traded, and the challenges and opportunities it presents.
- Topic:
- Security, Energy Policy, Markets, Oil, Currency, and Trade
- Political Geography:
- China, South Asia, India, Asia, North America, and United States of America
239. Towards 2022: Options for paying back Zambia's Eurobond Debt
- Author:
- Mbewe Kalikeka, Shebo Nalishebo, and Florence Banda-Muleya
- Publication Date:
- 12-2019
- Content Type:
- Working Paper
- Institution:
- Zambia Institute for Policy Analysis and Research (ZIPAR)
- Abstract:
- On 20th September 2022, Zambia’s first Eurobond will mature. The Government will be required to settle its principal payment amounting to US$750 million in full. Twenty months later in April 2024, the Government will have to settle the second Eurobond worth US$1 billion. The third US$1.25 billion Eurobond will be paid back in three instalments in July of 2025, 2026 and 2027. With less than three years before the first Eurobond matures, there is no clear indication of how and where the money to pay back these Eurobonds is going to come from. This paper considers several options that will mitigate the possibility of a default when the principal payments on the Eurobonds are due. The lack of a payment strategy has made the bondholders jittery about whether they will get their money back. Bondholders have communicated their consternations by dumping the Zambian bonds which are perceived to be risky. With increasing yield rates on the three Eurobonds, of about 17% by end-September 2019, the market seems to have already priced in a default – only nations already in default, such as Venezuela, have yields as high as Zambia’s1. The yield rate is the barometer used to assess the risk inherent in the bond. In general, higher yields mean the bond has higher risk and corresponds to a decline in the value of the bond. There have been efforts made towards establishing a Eurobond Redemption Strategy, but its contents are yet to be publicised. Also, the failure to release the 2020-2022 Medium Term Expenditure Framework by September 2019, and the absence of the 2020-2022 Medium Term Debt Strategy to show a clear borrowing plan have added to the market apprehension. By just about every measure, the Zambian economic fundamentals are fragile. Growth is ailing, prompting the authorities to revise their growth projection targets from 4% to 2% in 2019. Agriculture has been in recession for several quarters now. The 2019 mining fiscal regime that has significantly raised the tax burden on mining companies to unsustainable and uncompetitive levels, coupled with reduced ore grades, has resulted in 8.4% reduction in mining value added in the second quarter of 2019. The electricity load management which commenced in mid-2019 continues to have adverse economy-wide effects. This has implications on revenue targets. Tax revenues in September 2019 were 17% lower than projected, a trend likely to continue at least up to the end of the year. Further, the recent weakness of the Kwacha is not helping either as it has increased the cost of external borrowing and debt servicing, making it prohibitively more expensive to service foreign-currency denominated loans, which include the Eurobonds.
- Topic:
- Debt, Economics, Markets, Public Debt, and Eurobonds
- Political Geography:
- Africa and Zambia
240. States of Change: Attitudes in Central and Eastern Europe 30 Years after the Fall of the Berlin Wall
- Publication Date:
- 11-2019
- Content Type:
- Special Report
- Institution:
- Open Society Foundations
- Abstract:
- Despite deep concerns about the future of democracy, people in Central and Eastern Europe retain a strong attachment to civil society and faith in the freedoms achieved with the collapse of Communism, according to States of Change: Attitudes in Central and Eastern Europe 30 Years after the Fall of the Berlin Wall, a report from the Open Society Foundations. Based on polling by YouGov conducted in Bulgaria, the Czech Republic, Germany, Hungary, Poland, Romania, and Slovakia, States of Change provides a snapshot of current opinion on democracy, freedom of speech, the market economy, and the media in the former Eastern Bloc and Germany.
- Topic:
- Civil Society, Democratization, Markets, Democracy, Media, Berlin Wall, and Free Speech
- Political Geography:
- Eastern Europe and Central Europe
241. Exchange Rate Flexibility, Financial Market Openness and Economic Growth
- Author:
- Il Houng Lee, Eunjung Kang, and Kyunghun Kim
- Publication Date:
- 04-2019
- Content Type:
- Working Paper
- Institution:
- Korea Institute for International Economic Policy (KIEP)
- Abstract:
- With global recovery not in sight, along with calls for stronger structural reform, international policy coordination is again under spotlight. Correcting global imbalance would contribute towards closing the demand gap. Emerging economies in particular should allow greater exchange rate flexibility and not intervene in the foreign exchange market to reflect fundamentals. Yet, the impact of greater exchange rate flexibility is unclear as they also struggle to keep their growth momentum alive and hedge against greater exposure to potential capital reversal than ever before. With the loss of monetary policy independence, emerging markets (EMs) are running out of policy options. Against this background, unless international policy coordination is fundamentally recast, a comprehensive review of all emerging market economies’ policy options are in order, including both macro policy instruments, micro measures, and global safety net aimed at attaining the best possible solution to escaping global recession.
- Topic:
- Markets, Finance, Economic Growth, and Exchange Rate Policy
- Political Geography:
- Global Focus
242. Integration within the European Single Market: accounting, computer, and construction services
- Author:
- Anna Malinowska, Krzysztof Głowacki, Malgorzata McKenzie, and Przemysław Kowalski
- Publication Date:
- 05-2019
- Content Type:
- Special Report
- Institution:
- Center for Social and Economic Research - CASE
- Abstract:
- This report analyses the extent of integration within the European Single Market in three services sectors, (1) construction, (2) IT/computer services, and (3) accounting and auditing services, and draws key conclusions in the context of future Single Market services liberalisation efforts. The main body of the report provides a comparative analysis of trade integration and recent trade developments within the three sectors, focusing on Poland’s stakes in the agenda regarding liberalisation of trading in services. It assesses the still existing trade barriers, both for Polish services providers operating in the European Single Market and for foreign firms from other Single Market member states selling to customers in Poland. The discussion of potential benefits from further liberalisation of trade in these sectors for Poland is set in the broader context of the offensive and defensive interests in these sectors of three of Poland’s EU partners: Germany, Hungary and Sweden. The main body of the report is organised into three parts. The first one serves as the background for subsequent analyses, providing general information on trade in services in the EU and modes of the provision of services across borders, as well as presenting statistics on export competitiveness in the sectors of interest. The second part discusses the Services Directive and relevant liberalisation efforts within the Single Market. This is followed by a detailed analysis of the remaining barriers in the three sectors within the Single Market. The last section concludes and provides key policy recommendations. The Annexes present additional sectoral statistics and information on economic characteristics, trade integration, and the remaining trade barriers identified in Poland and the three selected EU partners (Germany, Hungary and Sweden). Additional information on the OECD Services Trade Restrictiveness Index methodology used to assess the significance and implications of remaining trade barriers is also included. The study “Integration within the European Single Market: accounting, computer and construction services” was commissioned by the Ministry of Foreign Affairs (in consultation with the Ministry of Entrepreneurship and Technology) and prepared by CASE – Center for Social and Economic Research. It is intended as a Polish contribution to the ongoing discussion on the future of the Single Market at the highest political level as well as in the context of upcoming programming of the agenda of the next European Commission.
- Topic:
- Markets, European Union, Economic Growth, and Trade
- Political Geography:
- Europe and Poland
243. EuroPACE Market Analysis
- Author:
- Grzegorz Poniatowski, Izabela Styczynska, Karolina Beaumont, and Karolina Zubel
- Publication Date:
- 10-2019
- Content Type:
- Special Report
- Institution:
- Center for Social and Economic Research - CASE
- Abstract:
- EuroPACE is an innovative tool designed to make home renovation simple, affordable and reliable for all Europeans by combining affordable financing with people-centric technical assistance. EuroPACE offers 100% up-front financing that can be repaid over a long term of up to 25 years. The innovation lies in the collection and repayment mechanism – financing is attached to the property and is repaid regularly with charges linked to a property. Homeowners are offered logistical and technical support throughout the process and access to trained and qualified con-tractors. Thus, EuroPACE overcomes the main barriers to home renovation – lack of financing, technical knowledge and complexity of the works. The concept of EuroPACE is inspired by the success of a financing model called Property Assessed Clean Energy (PACE), launched in California in 2008. In the United States (US), the PACE market reached over USD 6 billion in funded projects, including the retrofit of over 220,000 homes, which resulted in more than 50,000 new local jobs and the creation of hundreds new companies.
- Topic:
- Energy Policy, Markets, Climate Finance, Fiscal Policy, and Innovation
- Political Geography:
- Europe
244. Globalization and Its ‘Born Throwaways’: Exploring the Impact of Neo-Liberal Reforms on Irregular Migration in Africa
- Author:
- Elias Chukwuemeka Ngwu, Anthony Chinedu Ugwu, and Emeka Charles Iloh
- Publication Date:
- 10-2019
- Content Type:
- Working Paper
- Institution:
- African Heritage Institution (AfriHeritage)
- Abstract:
- Policies of free trade and the adoption of neoliberal economic models, which are important aspects of globalization, have caused major disruptions in labor markets around the world. In the less developed regions of the world, relatively unskilled agricultural hands have been rendered redundant in production processes while in the more technologically advanced countries, several long-stable industries closed down while some others were outsourced to less developed countries in a bid to maintain competitiveness. As the flow of material and cultural goods and services accelerated over time under the rubrics of globalization, human beings dislodged from their various productive bases became important components of the exchange. However, whereas the process of globalization appears to be bringing humanity closer together due to advances in transportation and communication technologies, this apparent physical closeness has created social distance between individuals and groups across territorial boundaries. Large numbers of mostly economic migrants from the less developed regions have ossified into an army of social outcasts, born throwaways, in various destination and transit countries. This paper explored the contradictions and tensions arising from globalization-induced migration within and out of Africa. It found that the massive outflow of irregular migrants from Africa has fed into the stream of modern day slavery in transit and destination countries that is unlikely to abate even in the face of apparent repudiation of globalization by its avid promoters, the United States and Great Britain.
- Topic:
- Development, Globalization, Markets, Migration, Neoliberalism, and Economic Development
- Political Geography:
- Britain, Africa, and United States
245. Yarişilabi̇li̇r Pi̇yasalar Modeli̇ Üzeri̇ne Bi̇r Uygulama: Türki̇ye Gsm Pi̇yasasi | An Application on Contestable Markets Model: Gsm Market in Turkey
- Author:
- Recep Tari and Muhammet Rıdvan Ince
- Publication Date:
- 04-2019
- Content Type:
- Journal Article
- Journal:
- Journal of Academic Inquiries
- Institution:
- Sakarya University (SAU)
- Abstract:
- Bu çalışma, Türkiye GSM piyasasının Yarışılabilir Piyasalar Modeline uygunluğunun test edilmesi amacıyla hazırlanmıştır. Piyasanın, modele uygunluğunun test edilebilmesi amacıyla öncelikle piyasadaki firmaların ayrı ayrı kârları incelenmiş, sonrasında piyanın genel karlılığı analiz edilmiştir. 2008 – 2018 yılları arasını kapsayan analiz sonucunda piyasada aşırı karın mevcut olduğu görülmüştür. Aşırı kâra rağmen, analiz dönemi boyunca Türkiye GSM piyasasına herhangi bir firmanın giriş yapmaması, çalışmanın yönünü piyasaya giriş engellerini ve batık maliyetleri incelemeye yöneltmiştir. Spektrumun kıt bir kaynak olması, piyasada faaliyet gösterecek firma sayısını kısıtlamaktadır. Ayrıca, spektrum tahsisi için gerekli olan lisanslama maliyetleri, batık maliyet özelliği taşımaktadır. Piyasaya özgü bu iki unsur, Yarışılabilir Piyasalar Modelinin temel varsayımlarına uymamaktadır. Sonuç olarak, piyasanın daha etkin çalışabilmesi için sanal mobil şebeke operatörlerinin piyasaya entegre edilmesi önerilmiştir. | This study has been prepared in order to test the suitability of the GSM Market in Turkey to Contestable Market model. In order to test the suitability of the market to the model, firstly, the profits of the firms in the market were examined and then the overall profitability of the market was analyzed. As a result of the analysis covering the period between 2008 and 2018, it was observed that there was excessive profit in the market. Despite the excessive profit, no firms enter to the market directed the study to examine entry barriers and the sunk costs. The fact that the spectrum is a scarce resource restricts the number of firms to operate in the market. In addition, the licensing costs required for the spectrum allocation include the sunk costs. These two market-specific elements do not comply with the basic assumptions of the Contestable Market Model. As a result, it is proposed to integrate the virtual mobile network operators into the market for the market to work more effectively.
- Topic:
- Markets, Science and Technology, and Communications
- Political Geography:
- Turkey and Middle East
246. Natural gas pricing GSA Bolivia: Brazil using virtual hub and expected monetary value instruments
- Author:
- Sergio M. Medinaceli and Jorge L. Gumucio
- Publication Date:
- 11-2019
- Content Type:
- Working Paper
- Institution:
- Institute for Advanced Development Studies (INESAD)
- Abstract:
- The purpose of this paper is to show the shortcomings of incentive policies, specifically competitiveness, if they are designed without considering fundamentals of market development such as, level of demand, level of investment, and availability of alternative sources of supply. We focus on the analysis of the main market, financial, and economic variables in the Bolivia-Brazil Gas Supply Agreement, their relationship, development and dynamics through time and the current situation before the contract is renegotiated in 2019. Our analysis centers on the effective negotiation margin that Bolivia has calculated from the overall production costs of Bolivian gas (using EMV) vis a vis the opportunity cost of Brazil importing LNG. Using 10%-15% as discount rates and WTI prices between $50 and $60/bbl, the natural gas price result of EMV is between $ 4.96 and $ 7.99/MMbtu. Using the Bolivian tax incentive gas price should be between $2.29 and $5.16/MMbtu. Under the assumptions that WTI levels would be around $ 60/bbl, investors use a 15% discount rate to invest in Bolivia, incentive policy is in place, and the price of LNG is around $ 6.84/MMbtu; the opportunity cost of Brazil importing gas from Bolivia is $ -0.55/MMbtu. The same case without incentive policy will yield a $ -3.38/MMbtu. On the other hand, if the transport tariff is reduced the margin becomes positive under the assumption that the incentive policy is still in place. Therefore, as the price of LNG becomes more competitive through increase in supply (worldwide), Brazil will set its negotiation position around the price that they could import LNG on the short to medium term.
- Topic:
- Markets, Regional Cooperation, Natural Resources, Monetary Policy, Gas, Macroeconomics, and Economic Development
- Political Geography:
- Brazil, Latin America, and Bolivia
247. Can EU competition law address market distortions caused by state-controlled enterprises?
- Author:
- Matthew Heim
- Publication Date:
- 12-2019
- Content Type:
- Policy Brief
- Institution:
- Bruegel
- Abstract:
- This Policy Contribution considers whether European competition law could be applied more directly to state owned enterprises that create an unlevel playing field in Europe due to the support they receive from their home governments. This issue is now a priority for many Member States and the European Commission given the impact on European economic autonomy. Competition law may not be the appropriate tool for addressing the granting of illegal subsidies or other forms of support in third countries but it may be more effective than previously thought in dealing with the effect of state-owned entities that distort the internal market. If SOEs are not be resource-constrained or even profit maximising, such SOEs could be unconstrained by competitive pressures and therefore possess a de facto level of market power. By evolving existing exclusionary antitrust theories of harm, such as predatory pricing, to fit the specificities of SOEs, this Policy Contribution argues that it should be possible to add further tools to the EU’s toolbox. In any event, as part of its efforts to address the distortive effects of foreign state ownership and subsidies in the internal market, the Commission should develop a coherent and proactive competition policy to provide guidance to the market.
- Topic:
- Markets, Governance, Macroeconomics, and Strategic Competition
- Political Geography:
- Europe
248. How does China fare on the Russian market? Implications for the European Union
- Author:
- Alicia Garcia-Herrero and Jianwei Xu
- Publication Date:
- 11-2019
- Content Type:
- Working Paper
- Institution:
- Bruegel
- Abstract:
- China’s economic ties with Russia are deepening. Meanwhile, Europe remains Russia’s largest trading partner, lender and investor. An analysis of China’s ties with Russia, indicate that China seems to have become more of a competitor to the European Union on Russia’s market. Competition over investment and lending is more limited, but the situation could change rapidly with China and Russia giving clear signs of a stronger than ever strategic partnership.
- Topic:
- Economics, Markets, Bilateral Relations, Governance, Investment, and Exports
- Political Geography:
- Russia, China, Europe, Eurasia, and Asia
249. Do Patents Lead to Market Concentration and Excess Profits?
- Author:
- Padmashree Gehl Sampath and Walter Park
- Publication Date:
- 04-2019
- Content Type:
- Working Paper
- Institution:
- Global Development and Environment Institute at Tufts University
- Abstract:
- Market concentration in technology intensive industries has been a subject of interest to both scholars and policy analysts. This paper provides a first empirical assessment on how the patenting system contributes to market concentration and the generation of economic rents in three key sectors – pharmaceuticals, chemicals and ICTs. Using data for US multinationals and their foreign affiliates on the one hand, and locally registered private and public companies in Brazil, India and China, we conclude that the concentration of patent ownership is found significantly to relate to market concentration in the USA. In developing countries such as Brazil, India, and China, a strengthening of patent rights has contributed to greater returns for affiliates of U.S. companies but has not stimulated their R&D intensity. The affiliates of U.S. multinationals have enjoyed greater profitability relative to their local competitors in Brazil, India, and China. The paper draws implications for the setting of intellectual property policy and offers suggestions on the role of competition policy in curbing market concentration and related effects on inequality and access.
- Topic:
- Markets, Inequality, and Patents
- Political Geography:
- Global Focus
250. Fair competition put into practice
- Author:
- Lu Tong
- Publication Date:
- 05-2019
- Content Type:
- Policy Brief
- Abstract:
- This year's Government Work Report sent an important signal to the global community that China aims to create a fair market environment based on competitive neutrality. Competitive neutrality is a set of public policies for regulating domestic market order. It means that State‐owned enterprises and private businesses compete on a level playing field and that SOEs should not obtain an unfair competitive advantage to the detriment of free trade in such areas as tax, subsidies, debt, supervision and market entrance.
- Topic:
- Markets, Business, Trade, and Strategic Competition
- Political Geography:
- China and Asia