Search

Begin New Search Topic International Trade and Finance Publishing Institution The Brookings Institution

11. Dynamics of Inflation "Herding": Decoding India's Inflationary Process

Author:
Urjit R. Patel and Gangadhar Darbha
Publication Date:
01-2012
Content Type:
Working Paper
Institution:
The Brookings Institution
Abstract:
Compared to immediately preceding years, that is, its own recent history, India's inflation became unhinged (thereby reversing creditable performance) from as far back as 2006. The paper puts forward an empirical framework to analyze the time series and cross-sectional dynamics of inflation in India using a large panel of disaggregated sector prices for the time period, 1994/95 to 2010/11. This allows us to rigorously explore issues that have been, at best, loosely posed in policy debates such as diffusion or comovement of inflation across sectors, role of common and idiosyncratic factors in explaining variation, persistence, importance of food and energy price changes to the overall inflation process, and contrast the recent experience with the past. We find, interalia, that the current period of high inflation is more cross-sectionally diffused, and driven by increasingly persistent common factors in non-food and non-energy sectors compared to that in the 1990s; this is likely to make it more difficult for anti-inflationary policy to gain traction this time round compared to the past. The paper has also introduced a novel measure of inflation, viz., Pure Inflation Gauges (PIGs) in the Indian context by decomposing price movements into those on account of: (1) aggregate shocks that have equiproportional effects on all sector prices; (2) aggregated relative price effects; and (3) sector-specific and idiosyncratic shocks. If PIGs, in conjunction with our other findings, for example, on persistence had been used as a measure of underlying (pure) inflationary pressures, the monetary authorities may not have been sanguine regarding the timeliness of initiating anti-inflationary policies.
Topic:
Development, Economics, Industrial Policy, International Trade and Finance, and Monetary Policy
Political Geography:
South Asia and India

12. Can Producer Associations Make Agriculture Sustainable? Evidence from Farmer Development Centers in India

Author:
Raj M. Desai and Shareen Joshi
Publication Date:
01-2012
Content Type:
Working Paper
Institution:
The Brookings Institution
Abstract:
This paper evaluates the impact of the Self- Employed Women's Association's (SEWA) farmer development center (FDC) initiative across five farming districts in Gujarat, India. The initiative provided a mix of training, information provisions, access to farming inputs, risk mitigation, and output. Controlling for a range of individual-specific, household, and village level factors, we find that SEWA membership primarily raised awareness of available opportunities among its participants, linked women to the financial sector and to diversified employment opportunities, including non-farm work. There is also evidence that the program's impact varied depending on the participants' socio-economic background. The poorest members experienced higher farm and non-farm incomes, increased food consumption, improved household and farm productivity, more self-employment opportunities, a greater likelihood of opening a bank account, higher crop harvests, and greater food security. These estimates suggest that the major comparative advantage of FDCs lies in improving access to credit and in expanding access to useful information.
Topic:
Agriculture, Development, Economics, International Trade and Finance, and Markets
Political Geography:
India and Gujarat

13. Korea, Colombia, Panama: Pending Trade Accords Offer Economic and Strategic Gains for the United States

Author:
Mauricio Cá¡rdenas and Joshua Meltzer
Publication Date:
07-2011
Content Type:
Policy Brief
Institution:
The Brookings Institution
Abstract:
A trio of trade agreements now pending before Congress would benefit the United States both economically and strategically. Carefully developed accords with South Korea, Colombia and Panama will boost U.S. exports significantly, especially in the key automotive, agricultural and commercial services sectors. Among the other benefits are: increased U.S. competitiveness enhancement of U.S. diplomatic and economic postures in East Asia and Latin America new investment opportunities better enforcement of labor regulation and improved transparency in these trading partners' regulatory systems.
Topic:
Diplomacy, Economics, International Trade and Finance, Treaties and Agreements, and Labor Issues
Political Geography:
Kenya, United States, Israel, Colombia, and Latin America

14. Adjusting to China: A Challenge to the U.S. Manufacturing Sector

Author:
Martin Neil Baily
Publication Date:
01-2011
Content Type:
Policy Brief
Institution:
The Brookings Institution
Abstract:
During an "exit interview" with the Wall Street Journal, departing National Economic Council Director Lawrence Summers argued that history would judge the United States based on how well we adjust to China's emergence as a great power, economically and politically. In the face of China's progress, America's manufacturing sector faces major challenges in becoming and remaining competitive and our choice of national economic policies will affect how well we meet those challenges. It is essential that the U.S. trade deficit not balloon as the economy recovers. There is scope to expand our exports in services and agriculture, but improving the competitiveness of U.S. manufacturing is vital.
Topic:
International Trade and Finance, Markets, and Bilateral Relations
Political Geography:
United States, China, and America

15. Thresholds in the Process of International Financial Integration

Author:
Eswar Prasad, M. Ayhan Kose, and Ashley D. Taylor
Publication Date:
05-2009
Content Type:
Working Paper
Institution:
The Brookings Institution
Abstract:
The financial crisis has re-ignited the fierce debate about the merits of financial globalization and its implications for growth, especially for developing countries. The empirical literature has not been able to conclusively establish the presumed growth benefits of financial integration. Indeed, a new literature proposes that the indirect benefits of financial integration may be more important than the traditional financing channel emphasized in previous analyses. A major complication, however, is that there seem to be certain “threshold” levels of financial and institutional development that an economy needs to attain before it can derive the indirect benefits and reduce the risks of financial openness. In this paper, we develop a unified empirical framework for characterizing such threshold conditions. We find that there are clearly identifiable thresholds in variables such as financial depth and institutional quality—the cost-benefit trade- off from financial openness improves significantly once these threshold conditions are satisfied. We also find that the thresholds are lower for foreign direct investment and portfolio equity liabilities compared to those for debt liabilities.
Topic:
Development, Economics, Globalization, International Political Economy, and International Trade and Finance

16. Institutions Versus Policies: A Tale of Two Islands

Author:
Peter Blair Henry and Conrad Miller
Publication Date:
01-2009
Content Type:
Working Paper
Institution:
The Brookings Institution
Abstract:
Recent work emphasizes the primacy of differences in countries' colonially-bequeathed property rights and legal systems for explaining differences in their subsequent economic development. Barbados and Jamaica provide a striking counter example to this long-run view of income determination. Both countries inherited property rights and legal institutions from their English colonial masters yet experienced starkly different growth trajectories in the aftermath of independence. From 1960 to 2002, Barbados' Gross Domestic Product (GDP) per capita grew roughly three times as fast as Jamaica's. Consequently, the income gap between Barbados and Jamaica is now almost five times larger than at the time of independence. Since their property rights and legal systems are virtually identical, recent theories of development cannot explain the divergence between Barbados and Jamaica. Differences in macroeconomic policy choices, not differences in institutions, account for the heterogeneous growth experiences of these two Caribbean nations.
Topic:
Development, Economics, International Trade and Finance, Political Economy, and Poverty
Political Geography:
Caribbean

17. Is the G-20 Summit a Step Toward a New Global Economic Order?

Author:
Johannes F. Linn and Colin I. Bradford
Publication Date:
09-2009
Content Type:
Policy Brief
Institution:
The Brookings Institution
Abstract:
In November 2008, President George W. Bush convened the first G-20 summit in Washington to address the worst global financial economic crisis since the Great Depression. This summit provided a long-overdue opportunity for a dramatic and lasting change in global governance. This was followed by the election of Barack Obama, who had campaigned on a distinctly different foreign policy platform compared with his Republican rival, Senator John McCain. These two events were no mere coincidence.
Topic:
International Organization, International Trade and Finance, and Financial Crisis
Political Geography:
Washington

18. Developing Countries, Dispute Settlement, and the Advisory Centre on WTO Law

Author:
Rachel McCulloch and Chad P. Bown
Publication Date:
12-2009
Content Type:
Working Paper
Institution:
The Brookings Institution
Abstract:
Critical appraisals of the current and potential benefits from developing country engagement in the WTO focus mainly on the Doha Round of negotiations. This paper examines a different aspect of developing country participation in the WTO: use of the WTO dispute settlement system to enforce foreign market access rights already negotiated in earlier rounds of multilateral negotiations. We examine data on developing country use from 1995 through 2008 of the WTO Dispute Settlement Understanding (DSU) to enforce foreign market access. The data reveal three notable trends: developing countries' sustained rate of self-enforcement actions despite declining use of the DSU by developed countries, developing countries' increased use of the DSU to self-enforce their access to the markets of developing as well as developed country markets, and the prevalence of disputes targeting highly observable causes of lost foreign market access, such as antidumping, countervailing duties, and safeguards. The paper also examines how introduction of the Advisory Centre on WTO Law (ACWL) into the WTO system in 2001 has affected developing countries' use of the DSU to self-enforce their foreign market access rights. A first pass at the data indicates that developing country use of the ACWL mirrors their use of the DSU more broadly; the ACWL has had little effect in terms of introducing new countries to DSU self-enforcement. A closer look at the data reveals evidence on at least three channels through which the ACWL may be enhancing developing countries' ability to self-enforce foreign market access: increased initiation of sole-complainant cases, more extensive pursuit of the DSU legal process for any given case, and initiation of disputes over smaller values of lost trade.
Topic:
Development, Economics, International Trade and Finance, and Markets

19. Financial Globalization and Economic Policies

Author:
Eswar Prasad, Kenneth Rogoff, M. Ayhan Kose, and Shang-Jin Wei
Publication Date:
04-2009
Content Type:
Working Paper
Institution:
The Brookings Institution
Abstract:
We review the large literature on various economic policies that could help developing economies effectively manage the process of financial globalization. Our central findings indicate that policies promoting financial sector development, institutional quality and trade openness appear to help developing countries derive the benefits of globalization. Similarly, sound macroeconomic policies are an important prerequisite for ensuring that financial integration is beneficial. However, our analysis also suggests that the relationship between financial integration and economic policies is a complex one and that there are unavoidable tensions inherent in evaluating the risks and benefits associated with financial globalization. In light of these tensions, structural and macroeconomic policies often need to be tailored to take into account country specific circumstances to improve the risk-benefit tradeoffs of financial integration. Ultimately, it is essential to see financial integration not just as an isolated policy goal but as part of a broader package of reforms and supportive macroeconomic policies.
Topic:
Development, Economics, Globalization, and International Trade and Finance
Political Geography:
Global Focus

20. Candidate Issue Index: Trade

Author:
Lael Brainard
Publication Date:
02-2008
Content Type:
Working Paper
Institution:
The Brookings Institution
Abstract:
Compiled by Brookings Institution experts, this chart is part of a series of issue indices to be published during the 2008 Presidential election cycle. The policy issues included in this series were chosen by Brookings staff and represent the most critical topics facing America's next President. Available voting records and statements vary based on time in office. For candidates who have not been a Member of Congress, public statements are noted when available.
Topic:
Economics, International Trade and Finance, and Politics
Political Geography:
United States and America