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961. Strengthening the International Financial Architecture: Where Do We Stand?

Author:
Morris Goldstein
Publication Date:
10-2000
Content Type:
Working Paper
Institution:
Peterson Institute for International Economics
Abstract:
It's not easy to get senior economic officials worked up about the functioning of the international monetary system. Usually, they are preoccupied with the more immediate issues surrounding the national and global economic outlook. But the Mexican peso crisis of 1994-95 and, even more so, the Asian financial crisis of 1997-98 made crisis management important for the economic outlook and pushed many of the otherwise arcane issues in the so-called “international financial architecture” (hereafter, IFA) to the front burner of economic policy.
Topic:
Economics, International Organization, International Trade and Finance, and Political Economy
Political Geography:
Asia and Mexico

962. Transatlantic Issues in Electronic Commerce

Author:
Catherine L. Mann
Publication Date:
10-2000
Content Type:
Working Paper
Institution:
Peterson Institute for International Economics
Abstract:
The global and dynamic e-commerce marketplace will increasingly impact the nature of national and international economic and government relations. This paper highlights three areas where the United States and European Union (EU) governments differ in their approaches as to how best to serve their domestic constituencies: treatment of trade flows, approach to tax regimes, manner of protecting personal data. Because the Internet marketplace is global but policy jurisdictions remain local, policy conflicts can develop. Policymakers on both sides need to harness technology and promote incentives for the private sector to help solve problems caused by the jurisdictional overlap. In addition to cross-border jurisdictional overlap, problems within a country can develop from issue convergence and policy overlap. That is, because the e-commerce marketplace is so integrated, the policy toward handling one issue, even within the national context, has implications for the policy set that is available to policymakers on other issues. Therefore, policies within a country must be more carefully meshed with each other with an eye toward consistency in the face of the forces of electronic commerce..
Topic:
Economics, International Trade and Finance, and Political Economy
Political Geography:
United States and Europe

963. Inflation, Monetary Transparency, and G3 Exchange Rate Volatility

Author:
Adam S. Posen and Kenneth N. Kuttner
Publication Date:
07-2000
Content Type:
Working Paper
Institution:
Peterson Institute for International Economics
Abstract:
Short-term volatility in G3 bilateral exchange rates has been a fact of life since the beginning of the post-Bretton Woods float. It has been established, surprisingly, that this volatility is not only disproportionately large relative to the variation in relative macroeconomic fundamentals of Germany, Japan, and the United States, but is in fact largely unrelated to them. The apparent disconnect between fundamentals and dollar-yen and dollar-euro exchange rate fluctuations has led to perennial complaints about persistent exchange rate “misalignments,” and their real effects on the G3 (and other) economies, giving rise in turn to recurring proposals for government policies to limit this volatility. The idea that volatility reflects nothing more than the (perhaps rational, certainly profit-seeking) behavior of foreign exchange traders seems to give justification for a policy response. Yet, the disjunction between macroeconomic expectations and the volatility seems to indicate as well that some deviation from domestic monetary policy goals would be necessary to intervene against exchange rate swings.
Topic:
Economics, International Trade and Finance, and Political Economy
Political Geography:
United States, Japan, and Germany

964. The New Asian Challenge

Author:
C. Fred Bergsten
Publication Date:
03-2000
Content Type:
Working Paper
Institution:
Peterson Institute for International Economics
Abstract:
The initial postwar challenge from East Asia was economic. Japan crashed back into global markets in the 1960s, became the largest surplus and creditor country in the 1980s, and was viewed by many as the world's dominant economy by 1990. The newly industrialized countries (Korea, Taiwan, Hong Kong, Singapore) followed suit on a smaller but still substantial scale shortly thereafter. China only re-entered world commerce in the 1980s but has now become the second largest economy (in purchasing power terms), the second largest recipient of foreign direct investment inflows, and the second largest holder of monetary reserves. Indonesia and most of Southeast Asia grew at 7 percent for two or more decades. The oil crises of the 1970s and the financial crises of the late 1990s injected temporary setbacks but East Asia has clearly become a third major pole of the world economy, along with North America and Western Europe.
Topic:
Economics, International Trade and Finance, and Political Economy
Political Geography:
Japan, China, Europe, Israel, Taiwan, East Asia, Asia, North America, Korea, Singapore, and Hong Kong

965. Electronic Commerce in Developing Countries: Issues for Domestic Policy and WTO Negotiations

Author:
Catherine L. Mann
Publication Date:
03-2000
Content Type:
Working Paper
Institution:
Peterson Institute for International Economics
Abstract:
Electronic commerce and its related activities over the internet can be the engines that improve domestic economic well-being through liberalization of domestic services, more rapid integration into globalization of production, and leap-frogging of available technology. Since electronic commerce integrates the domestic and global markets from its very inception, negotiating on trade issues related to electronic commerce will, even more than trade negotiations have in the past, demand self-inspection of key domestic policies, particularly in telecommunications, financial services, and distribution and delivery. Because these sectors are fundamental to the workings of a modern economy, liberalization here will rebound to greater economic well-being than comparable liberalization in more narrowly focussed sectors. Thus, the desire to be part of the e-commerce wave can be a powerful force to erode domestic vested interests that have slowed the liberalization of these sectors.
Topic:
Development, Economics, Government, International Trade and Finance, and Political Economy

966. International Economic Agreements and the Constitution

Author:
Richard M. Goodman and John M. Frost
Publication Date:
02-2000
Content Type:
Working Paper
Institution:
Peterson Institute for International Economics
Abstract:
International agreements, such as the General Agreement on Tariffs and Trade (GATT) and the North American Free Trade Agreement (NAFTA), generally aim to facilitate the free flow of goods and services among nations. The U.S. Supreme Court has developed a jurisprudence similarly aiming to facilitate the free flow of goods and services among the several states. That jurisprudence has developed from litigation challenging the constitutionality of state actions on the basis of the Commerce and Supremacy Clauses of the Constitution (art. I, § 8, cl. 3, and art. VI, cl. 2). In some subject areas, Commerce Clause decisions closely align with international agreements. In other areas, either or both fall short of achieving economic integration.
Topic:
Economics, Government, International Trade and Finance, and Political Economy
Political Geography:
United States and North America

967. The Political Economy of Open Source Software

Author:
Steven Weber
Publication Date:
06-2000
Content Type:
Working Paper
Institution:
Berkeley Roundtable on the International Economy
Abstract:
Coca-Cola sells bottles of soda to consumers. Consumers drink the soda (or use it in any other way they like). Some consumers, out of morbid curiosity, may read the list of ingredients on the bottle. But that list of ingredients is generic. Coca-Cola has a proprietary 'formula' that it does not and will not release. The formula is the knowledge that makes it possible for Coke to combine sugar, water, and a few other readily available ingredients in particular proportions and produce something of great value. The bubbly stuff in your glass cannot be reverse-engineered into its constituent parts. You can buy it and you can drink it, but you can't understand it in a way that would empower you to reproduce it or improve upon it and distribute your improved cola drink to the rest of the world.
Topic:
International Law, Political Economy, and Science and Technology

968. Foreign Missile Developments and the Ballistic Missile Threat to the United States Through 2015

Publication Date:
09-1999
Content Type:
Working Paper
Institution:
Board of Governors of the Federal Reserve System
Abstract:
The worldwide ballistic missile proliferation problem has continued to evolve during the past year. The proliferation of technology and components continues. The capabilities of the missiles in the countries seeking to acquire them are growing, a fact underscored by North Korea's launch of the Taepo Dong-1 in August 1998. The number of missiles in these countries is also increasing. Medium- and short-range ballistic missile systems, particularly if armed with weapons of mass destruction (WMD) warheads, already pose a significant, threat to US interests, military forces, and allies overseas. We have seen increased trade and cooperation among countries that have been recipients of missile technologies from others. Finally, some countries continue to work toward longer-range systems, including ICBMs.
Topic:
International Relations, Arms Control and Proliferation, and Political Economy
Political Geography:
United States and North Korea

969. Russia—Debt Rollover

Author:
Oxford Analytica
Publication Date:
08-1999
Content Type:
Policy Brief
Institution:
Oxford Analytica
Abstract:
On July 28, the IMF's Board of Directors announced their approval of a 4.5 billion dollar loan to Russia. Rather than representing a breakthrough deal, the agreement is merely the latest chapter in the cycle of non–compliance and renegotiation that has characterised the Fund's relationship with Moscow. With presidential and parliamentary polls scheduled during the next twelve months, electoral pressures will almost certainly prevent the latest macroeconomic programme being implemented. Moreover, unless the root cause of Russia's economic problems—its dire GDP growth rate—is rectified, a further round of comprehensive renegotiations will be required.
Topic:
Debt, Economics, Government, International Trade and Finance, Political Economy, and Politics
Political Geography:
Russia and Moscow

970. The Macroeconomic Experience of Japan Since 1990: An Empirical Investigation

Author:
Warwick McKibbin
Publication Date:
12-1999
Content Type:
Working Paper
Institution:
The Brookings Institution
Abstract:
This paper outlines the macroeconomic experience of the Japanese economy since 1990. The MSG2 multi-country model is used to determine the extent to which the strong yen and growth experience of Japan over this period was due to underlying trends in the Japanese economy and to what extent shocks such as changes in the settings of monetary and fiscal policies in Japan and overseas, as well as the Kobe earthquake, played a role. It is shown that many of the key features of the Japanese economy over this period can be attributed to inappropriate macroeconomic policy settings in Japan as well as reflecting long term trends due to population changes and a maturing of the Japanese economy. In particular, it is shown that announcing expansionary fiscal policy in advance of implementation and exaggerating the extent of actual stimulus, tended to appreciate the yen and raise long term real interest rates which further reduced real GDP growth over the period. The extent to which macroeconomic policy rather than entrenched structural problems can explain the experience suggests that future prospects for the Japanese economy are not as bleak as sometimes predicted. Growth is unlikely to return to the high levels experienced in previous decades because of the maturing of the Japanese economy and low future population growth in Japan. This paper projects growth to be sustainable at around 2.5% per year over the next decade and a continual appreciation of the yen in both real and nominal terms.
Topic:
Economics and Political Economy
Political Geography:
Japan, Israel, and East Asia

971. The Case Against Tax Cuts

Author:
William G. Gale and Alan J. Auerbach
Publication Date:
03-1999
Content Type:
Policy Brief
Institution:
The Brookings Institution
Abstract:
Emerging federal budget surpluses have sparked calls for large-scale tax cuts that would be irresponsible and counterproductive. Surpluses over the next ten years are based on optimistic assumptions regarding revenues and spending. Even if they do materialize, the surpluses will exist only because government accounting obscures the growing cost of future liabilities. The government faces a large, long-term deficit, and tax cuts would make this problem worse. The proposed 10-percent income tax rate cut would provide disproportionately large benefits to wealthy households and little to lower income households. It would have little effect on economic growth, but would impose higher burdens on future generations, and would reduce future budget discipline by violating the budget rules. Moreover, for most families, tax burdens are already at their lowest level in twenty years. Saving the surplus, by paying down public debt, would help the economy much more than would tax cuts.
Topic:
Government and Political Economy
Political Geography:
United States

972. EMU and Labour Markets: Vae Germania?

Author:
Daniel Gros
Publication Date:
02-1999
Content Type:
Policy Brief
Institution:
Centre for European Policy Studies (CEPS)
Abstract:
The outcome of the first round of wage negotiations in post-EMU Germany sheds some new light on the old question: What impact will the euro have on labour markets and unemployment? Economists would say that it depends on the structure of the bargaining process. In wage-setting, it seems that either one of the two extremes of full centralisation or complete fragmentation is conducive to low inflation and unemployment.
Topic:
Economics and Political Economy
Political Geography:
Europe and Germany

973. The Globalization of Services: What Has Happened? What Are the Implications?

Author:
Gary Hufbauer and Tony Warren
Publication Date:
10-1999
Content Type:
Working Paper
Institution:
Peterson Institute for International Economics
Abstract:
Globalization has affected all facets of the world economy. This includes services, which in most economies are the single largest contributor to economic growth and employment. However, despite its importance to national output, the impact of globalization on services is only recently receiving the attention of researchers and policy-makers.
Topic:
Economics, International Trade and Finance, and Political Economy

974. Hazards and Precautions: Tales of International Finance

Author:
Gary Clyde Hufbauer and Erika Wada
Publication Date:
09-1999
Content Type:
Working Paper
Institution:
Peterson Institute for International Economics
Abstract:
In the wake of financial crises in Mexico (1994-95), Asia (1997-98), Russia (1998) and Brazil (1998-99), respected observers have questioned the benefits of wide-open international capital markets (Bhagwati, 1998; Krugman, 1998; Rodrik, 1998; Eichengreen, 1999). Our purpose is to identify true hazards and suggest appropriate precautions.
Topic:
Economics, International Trade and Finance, and Political Economy
Political Geography:
Russia, Asia, Brazil, and Mexico

975. Does Talk Matter After All? Inflation Targeting And Central Bank Behavior

Author:
Adam S. Posen and Kenneth N. Kuttner
Publication Date:
09-1999
Content Type:
Working Paper
Institution:
Peterson Institute for International Economics
Abstract:
Since 1990, a number of countries have adopted inflation targeting as their declared monetary strategy. Interpretations of the significance of this movement, however, have differed widely. To some, inflation targeting mandates the single-minded, rule-like pursuit of price stability without regard for other policy objectives; to others, inflation targeting represents nothing more than the latest version of cheap talk by central banks unable to sustain monetary commitments. Advocates of inflation targeting, including the adopting central banks themselves, have expressed the view that the transparency and communication of the inflation targeting framework grant the central bank greater short-run flexibility in pursuit of its long-run inflation goal.
Topic:
Economics, International Organization, International Trade and Finance, and Political Economy

976. Modeling Korean Unification

Author:
Marcus Noland, Sherman Robinson, and Tao Wang
Publication Date:
07-1999
Content Type:
Working Paper
Institution:
Peterson Institute for International Economics
Abstract:
For North Korea, product market integration would generate large welfare gains, sufficient to end the famine. Additional gains could be had through military demobilization. For the South, the impact of product market integration would be trivial, but the impact of factor market integration would be considerable, affecting the composition of output, distribution of income, and rate of growth.
Topic:
Economics, International Trade and Finance, and Political Economy
Political Geography:
Israel, East Asia, and Korea

977. Sovereign Liquidity Crisis: The Strategic Case For A Payments Standstill

Author:
Marcus Miller and Lei Zhang
Publication Date:
05-1999
Content Type:
Working Paper
Institution:
Peterson Institute for International Economics
Abstract:
Is sovereign borrowing so different from corporate debt that there is no need for bankruptcy-style procedures to protect debtors? With the waiver of immunity, sovereign debtors who already face severe disruption from short-term creditors grabbing their currency reserves are also exposed to litigious creditors trying to seize what assets they can in a 'race of the vultures'.
Topic:
Economics, International Trade and Finance, and Political Economy

978. Modell Deutschland as an Interdenominational Compromise

Author:
Philip Manow
Publication Date:
05-1999
Content Type:
Working Paper
Institution:
Minda de Gunzburg Center for European Studies, Harvard University
Abstract:
Usually, Germany's social market economy is understood to embody a compromise between a liberal market order and a corporatist welfare state. While this reading of the German case is certainly not entirely wrong, this paper argues that only if we account for the close intellectual correspondence between lutheran Protestantism and economic liberalism on the one hand and between Catholicism and welfare corporatism on the other, can we fully comprehend the nature of the German post-war compromise. In particular, this perspective allows to better explain the anti-liberal undercurrents of Germany's soziale Marktwirtschaft. It was especially the role which Protestant Ordoliberals ascribed to the state in upholding economic order and market discipline which accounts for the major difference between 'classic' and 'German-style' economic liberalism. Yet, the postwar economic order did not represent a deliberately struck compromise between the two major Christian denominations. Rather, Germany's social market economy was the result of the failure of German Protestant Ordoliberals to prevent the reconstruction of the catholic Bismarckian welfare state after the authoritarian solution, which Ordoliberals had endorsed so strongly up until 1936 and from which they had hoped the re-inauguration of Protestant hegemony, had so utterly failed. Since the ordoliberal doctrine up to the present day lacks a clear understanding of the role of the corporatist welfare state within the German political economy, its insights into the functioning logic of German capitalism have remained limit. The paper also claims that accounting for the denominational roots of the postwar compromise allows us to better understand the relationship between consociationalism and corporatism in 'Modell Deutschland'.
Topic:
Economics, Government, Political Economy, and Religion
Political Geography:
Europe and Germany

979. A Cross-Regional Analysis of Civil Society and Democratic Development

Author:
Andrew Green
Publication Date:
09-1999
Content Type:
Working Paper
Institution:
Center for International Studies, University of Southern California
Abstract:
Domestic instability often has a deleterious effect at the international level, too, particularly as more states adopt democratic institutions and market-oriented economies. Whether we are talking about failing multi-ethnic states and their impact on the UN and NATO, or about failing economies and their impact on international markets and such international organizations as the IMF and the World Bank, it is clear that the domestic and international levels cannot be separated. While instability may arise from many different sources, the state-society connection is perhaps the most problematic: a democracy in which the only link between citizens and politicians is the electoral connection is a democracy impoverished by stagnant ideas and limited societal input. A state disconnected from society is prone to domestic instability, with negative effects at both the domestic and international levels.
Topic:
NATO, Civil Society, Democratization, Economics, Ethnic Conflict, International Political Economy, and Political Economy
Political Geography:
United Nations

980. The Competitive Advantage of Hollywood Industry

Author:
Luc Veron
Publication Date:
03-1999
Content Type:
Working Paper
Institution:
Center for International Studies, University of Southern California
Abstract:
The author is very grateful for the support, both material and intellectual, which he received during his stay at the University of Southern California. He is particularly appreciative of the many conversations he had with colleagues at the School of International Relations, the Center for International Studies, the Marshall School of Business and the Department of Economics of USC as well as at UCLA's School of Public Policy and Social Research which greatly helped him to formulate the ideas presented here. Although the author is currently employed by the European Commission, the ideas expressed in this paper are purely personal and do not reflect the views of any institution.
Topic:
Globalization, Industrial Policy, and Political Economy
Political Geography:
United States, Europe, and California