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12. Transportation and Communication Infrastructure in Latin America: Lessons from Asia
- Author:
- Barbara Kotschwar
- Publication Date:
- 04-2012
- Content Type:
- Working Paper
- Institution:
- Peterson Institute for International Economics
- Abstract:
- In Latin America, inadequate transportation infrastructure has been identified as an increasingly important impediment to the region's further integration in global trade and a significant factor preventing countries from properly taking advantage of the multitude of regional, plurilateral, and bilateral trade agreements signed in the past decade and a half. This paper examines transport and communications infrastructure initiatives in Latin American and Asian regional trade arrangements and finds several lessons Asia can teach Latin America.
- Topic:
- Development, Economics, International Trade and Finance, Communications, and Infrastructure
- Political Geography:
- Asia and Latin America
13. Global Imbalances and Foreign Asset Expansion by Developing Economy Central Banks
- Author:
- Joseph E. Gagnon
- Publication Date:
- 03-2012
- Content Type:
- Working Paper
- Institution:
- Peterson Institute for International Economics
- Abstract:
- Over the past 10 years, central banks and governments throughout the developing world have accumulated foreign exchange reserves and other official assets at an unprecedented rate. This paper shows that this official asset accumulation has driven a substantial portion of the recent large global current account imbalances. These net official capital flows have become large relative to the size of the industrial economies, and they are a significant factor contributing to the weakness of the economic recovery in the major industrial economies.
- Topic:
- Development, Economics, Emerging Markets, Globalization, Markets, Monetary Policy, and Financial Crisis
14. Spillover Effects of Exchange Rates: A Study of the Renminbi
- Author:
- Arvind Subramanian, Aaditya Mattoo, and Prachi Mishra
- Publication Date:
- 03-2012
- Content Type:
- Working Paper
- Institution:
- Peterson Institute for International Economics
- Abstract:
- This paper estimates the impact of China's exchange rate changes on exports of competitor countries in third markets, known as the "spillover effect." Recent theory is used to develop an identification strategy in which competition between China and its developing country competitors in specific products and destinations plays a key role. The variation is used—afforded by disaggregated trade data—across exporters, importers, product, and time to estimate this spillover effect. The results show robust evidence of a statistically and quantitatively significant spillover effect. Estimates suggest that, on average, a 10 percent appreciation of China's real exchange rate boosts a developing country's exports of a typical 4-digit Harmonized System (HS) product category to third markets by about 1.5 to 2 percent. The magnitude of the spillover effect varies systematically with product characteristics as implied by theory.
- Topic:
- Development, Economics, and Markets
- Political Geography:
- China
15. Capital Controls: Myth and Reality-A Portfolio Balance Approach
- Author:
- Carmen M. Reinhart, Nicolas E. Magud, and Kenneth S. Rogoff
- Publication Date:
- 03-2011
- Content Type:
- Working Paper
- Institution:
- Peterson Institute for International Economics
- Abstract:
- The literature on capital controls has (at least) four very serious apples-to-oranges problems: (i) There is no unified theoretical framework to analyze the macroeconomic consequences of controls; (ii) there is significant heterogeneity across countries and time in the control measures implemented; (iii) there are multiple definitions of what constitutes a "success" and (iv) the empirical studies lack a common methodology-furthermore these are significantly "overweighted" by a couple of country cases (Chile and Malaysia). In this paper, we attempt to address some of these shortcomings by: being very explicit about what measures are construed as capital controls. Also, given that success is measured so differently across studies, we sought to "standardize" the results of over 30 empirical studies we summarize in this paper. The standardization was done by constructing two indices of capital controls: Capital Controls Effectiveness Index (CCE Index), and Weighted Capital Control Effectiveness Index (WCCE Index). The difference between them lies in that the WCCE controls for the differentiated degree of methodological rigor applied to draw conclusions in each of the considered papers. Inasmuch as possible, we bring to bear the experiences of less well known episodes than those of Chile and Malaysia. Then, using a portfolio balance approach we model the effects of imposing capital controls on short-term flows. We find that there should exist country-specific characteristics for capital controls to be effective. From this simple perspective, this rationalizes why some capital controls were effective and some were not. We also show that the equivalence in effects of price- vs. quantity-capital control are conditional on the level of short-term capital flows.
- Topic:
- Development, Economics, International Trade and Finance, and Markets
- Political Geography:
- Latin America and Southeast Asia
16. Capital Account Liberalization and the Role of the Renminbi
- Author:
- Nicholas R. Lardy and Patrick Douglass
- Publication Date:
- 02-2011
- Content Type:
- Working Paper
- Institution:
- Peterson Institute for International Economics
- Abstract:
- Despite an erosion of consensus on its benefits, capital account convertibility remains a long-term goal of China. This paper identifies three major preconditions for convertibility in China: a strong domestic banking system, relatively developed domestic financial markets, and an equilibrium exchange rate. The authors examine each of these in turn and find that, in significant respects, China does not yet meet any of the conditions necessary for convertibility. They then evaluate China's progress to date on capital account liberalization, including recent efforts to promote renminbi internationalization and greater use of the renminbi in trade settlement. The paper concludes with an overview of remaining obstacles to convertibility and policy recommendations.
- Topic:
- Development, Economics, and Monetary Policy
- Political Geography:
- China
17. Delivering on US Climate Finance Commitments
- Author:
- Trevor Houser and Jason Selfe
- Publication Date:
- 11-2011
- Content Type:
- Working Paper
- Institution:
- Peterson Institute for International Economics
- Abstract:
- At the United Nations climate change conference in Copenhagen in 2009 and Cancun in 2010, the United States joined other developed countries in pledging to mobilize $100 billion in public and private sector funding to help developing countries reduce greenhouse gas emissions and adapt to a warmer world. With a challenging US fiscal outlook and the failure of cap-and-trade legislation in the US Congress, America's ability to meet this pledge is increasingly in doubt. This paper identifies, quantifies, and assesses the politics of a range of potential US sources of climate finance. It finds that raising new public funds for climate finance will be extremely challenging in the current fiscal environment and that many of the politically attractive alternatives are not realistically available absent a domestic cap-and-trade program or other regime for pricing carbon. Washington's best hope is to use limited public funds to leverage private sector investment through bilateral credit agencies and multilateral development banks.
- Topic:
- Climate Change, Development, Economics, Energy Policy, Politics, and Foreign Direct Investment
- Political Geography:
- United States, America, Washington, and United Nations
18. India's Growth in the 2000s: Four Facts
- Author:
- Arvind Subramanian and Utsav Kumar
- Publication Date:
- 11-2011
- Content Type:
- Working Paper
- Institution:
- Peterson Institute for International Economics
- Abstract:
- This paper marks the first attempt at examining the growth performance across Indian states for the 2000s, a period also marked by the global financial crisis. Four key findings are reported. First, consistent with the fact that the 2000s was the best ever decade for Indian macroeconomic performance, growth increased across almost all major states in 2001–09 compared to 1993–2001. Second, nevertheless, there is a continued phenomenon of divergence or rising inequality across states: On average the richer states in 2001 grew faster in 2001–09. Third, during the crisis years of 2008 and 2009, states with the highest growth in 2001–07 suffered the largest deceleration. Since states with the highest growth were also the most open, it seems that openness creates dynamism and vulnerability. Finally, although the demographic dividend—a young population boosting economic dynamism—was evident before 2000, there is little evidence that there was any dividend in the 2000s. Demography alone cannot be counted on for future economic growth.
- Topic:
- Demographics, Development, Economics, Industrial Policy, International Trade and Finance, and Social Stratification
- Political Geography:
- South Asia and India
19. Asia and Global Financial Governance
- Author:
- C. Randall Henning and Mohsin S. Khan
- Publication Date:
- 10-2011
- Content Type:
- Working Paper
- Institution:
- Peterson Institute for International Economics
- Abstract:
- Currently, Asia's influence in global financial governance is not consistent with its weight in the world economy. This paper examines the role of Asia in the International Monetary Fund (IMF) and the Group of Twenty (G-20). It looks in particular at how the relationship between East Asian countries and the IMF has evolved since the Asian financial crisis of 1997–98 and outlines how Asian regional arrangements for crisis financing and economic surveillance could constructively interact with the IMF in the future. It also considers ways to enhance the effectiveness of Asian countries in the G-20 process.
- Topic:
- Development, Economics, Emerging Markets, Globalization, International Trade and Finance, and Monetary Policy
- Political Geography:
- Israel and Asia
20. Do Developed and Developing Countries Compete Head to Head in High Tech?
- Author:
- Robert Z. Lawrence and Lawrence Edwards
- Publication Date:
- 06-2010
- Content Type:
- Working Paper
- Institution:
- Peterson Institute for International Economics
- Abstract:
- Concerns that growth in developing countries could worsen the US terms of trade and that increased US trade with developing countries will increase US wage inequality both implicitly reflect the assumption that goods produced in the United States and developing countries are close substitutes and that specialization is incomplete. In this paper we show on the contrary that there are distinctive patterns of international specialization and that developed and developing countries export fundamentally different products, especially those classified as high tech. Judged by export shares, the United States and developing countries specialize in quite different product categories that, for the most part, do not overlap. Moreover, even when exports are classified in the same category, there are large and systematic differences in unit values that suggest the products made by developed and developing countries are not very close substitutes—developed country products are far more sophisticated.
- Topic:
- Development, Emerging Markets, International Trade and Finance, Markets, Science and Technology, and Labor Issues
- Political Geography:
- United States