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601. International: Techno-Stock Troubles

Author:
Oxford Analytica
Publication Date:
06-2000
Content Type:
Policy Brief
Institution:
Oxford Analytica
Abstract:
The current bubble in 'technology stocks' has led to official concern about over-enthusiasm by investors and the banking consequences of a sudden price collapse. The first signs of the long awaited shift emerged last week, as investors shifted from fashionable technology, media and telecoms (TMT) stock back into traditional 'old economy' blue chips. Capital flooding in from Europe and Japan to the United States has been attracted to booming markets led mostly by these stocks. The rest of the market (misleadingly known as the 'old economy') has risen comparatively little.
Topic:
Economics, International Trade and Finance, and Science and Technology
Political Geography:
United States, Japan, and Europe

602. United Kingdom—Euro Issues

Author:
Oxford Analytica
Publication Date:
01-2000
Content Type:
Policy Brief
Institution:
Oxford Analytica
Abstract:
The formal position of the United Kingdom government that it favours entry into the European single currency 'in principle', but subject to five economic tests and popular sanction in a referendum, masks increasingly deep splits among senior ministers as to what exactly this formula means in terms of practical timing. A profound disagreement between the treasury and the foreign office, personified and led by their respective politicians, exists and is likely to intensify both in the run-up to the next UK election and throughout the next parliamentary term.
Topic:
Government, International Trade and Finance, and Politics
Political Geography:
United Kingdom and Europe

603. EMU Effects on International Trade and Investment

Author:
Harry Flam and Per Jansson
Publication Date:
04-2000
Content Type:
Working Paper
Institution:
United Nations University
Abstract:
The partial effect of nominal exchange rate volatility on exports from each EMU member to the rest of the EMU is estimated on annual data for 1967-97, using modern time-series methods. The long-run relations between exchange rate volatility and exports are mostly negative and in several cases insignificantly different from zero. Thus, these estimates do not provide much support for the hypothesis that the elimination of nominal exchange rate volatility will significantly increase trade within the EMU. However, the EMU will presumably lead to geographical concentration of production and therefore indirectly to increased trade within the EMU and, during a transitional stage, to increased foreign direct investment, both within the EMU and between the EMU and the rest of the world.
Topic:
Economics, Government, International Political Economy, and International Trade and Finance
Political Geography:
Europe

604. The International Financial Architecture

Author:
Jeffrey A. Frankel
Publication Date:
06-1999
Content Type:
Policy Brief
Institution:
The Brookings Institution
Abstract:
The recent financial crises in many emerging market economies have raised anew questions about the appropriate exchange-rate regime and the use of capital controls as policy instruments. The use of both mechanisms should be tailored to each country's unique circumstances. Fixed exchange-rate mechanisms, such as dollarization (adopting the dollar as legal tender in place of the national currency), are suited to small open economies or those desperate to import monetary stability. Larger economies, such as the European Union (EU) and the United States, should allow their currencies to float. Intermediate regimes that fall between fixed- and floating-rate regimes—such as bands, baskets, and crawls (See Figure 1 for definitions)—are still appropriate for some countries. Certain well-targeted restrictions on the composition of capital flows might be appropriate for some emerging-market countries as temporary measures when inflows are particularly high.
Topic:
Economics and International Trade and Finance
Political Geography:
United States and Europe

605. Hollywood and Europe: A Case of Trade in Cultural Industries, the 1993 GATT Dispute

Author:
Luc Veron
Publication Date:
03-1999
Content Type:
Working Paper
Institution:
Center for International Studies, University of Southern California
Abstract:
The heated dispute that erupted at the end of the GATT (General Agreement on Tariffs and Trade) negotiations between the United States (US) and the European Union (EU) on audio-visual services is fairly representative of the cultural argument in trade. Culture is often proclaimed to oppose full liberalisation of international exchanges of goods and services. In 1989, after the liberalisation of US film import in Korea, angry Koreans directors in some Seoul theatres showing US movies released poisonous snakes Japan traditionally opposed rice imports on the basis that it would endanger Japanese culture. The United States claimed that the "potato-potato-potato rhythm at idle and the staccato beat at cruising speeds" of a Harley-Davidson was part of the American culture with the obvious aim to ridicule any notion of culture, or more precisely of national culture. German director Wim Wenders replied to the latter by provocatively reminding that the essence of US national culture being trade the Americans have no sense of any possible contradiction between trade and culture. When, to justify the remarkable work of the Australian Film Commission, experts came up with a tentative definition of Australian culture, the simple evocation of Crocodile Dundee generated outrage, especially among the feminists. It is uneasy to find an acceptable and workable definition of national culture to analyse its impact on trade.
Topic:
Globalization, Industrial Policy, and International Trade and Finance
Political Geography:
United States, Japan, Europe, Germany, Australia, and Korea

606. A Primer on the Balance Sheet of the Eurosystem

Author:
Daniel Gros
Publication Date:
02-1999
Content Type:
Policy Brief
Institution:
Centre for European Policy Studies (CEPS)
Abstract:
The ECB has just published the opening balance sheet for the Eurosystem, which is the official name given to the ECB plus the 11 national central banks of the euro zone. All 15 national central banks are part of the ESCB, but the participation of the four outsiders is purely formal. The balance sheet, which is reproduced at the end of this Commentary, reveals two very interesting facts: During 1998, the national central banks of the euro zone increased their holdings of dollar foreign exchange reserves by the equivalent of about 38 bn euro. This means that they de facto intervened consistently to support the dollar during that year. The ECB starts with huge foreign exchange reserves: 237 bn euro plus gold worth 100 bn euro. This is much more than the amount held by the US Federal Reserve and constitutes a major share of the reserves held by all OECD countries.
Topic:
Economics, International Trade and Finance, and Regional Cooperation
Political Geography:
Europe

607. The First Weeks of the Eurosystem: An Initial Assessment and a Look Forward

Author:
Karel Lannoo
Publication Date:
02-1999
Content Type:
Policy Brief
Institution:
Centre for European Policy Studies (CEPS)
Abstract:
With the successful launch of the euro, the start of ESCB monetary policy operations and the operation of Target payment system, the previously national interbank bank markets have been integrated at once in a unified euro interbank market. Outstanding public debt was redenominated in euro, trading conventions harmonised and all EMU stock markets have started quoting in euro. This does not, however, bring us at once to a US-style capital market. Euroland remains profoundly different from the US in the weight of the regions and the importance of banks.
Topic:
International Trade and Finance
Political Geography:
United States and Europe

608. An Economic System for Post-War South-East Europe

Author:
Daniel Gros
Publication Date:
05-1999
Content Type:
Working Paper
Institution:
Centre for European Policy Studies
Abstract:
Economic recovery in the region requires stable currencies and open markets. The best way to establish these two basic conditions quickly is for the countries concerned to immediately link their currencies to the euro via a currency board and join the customs union of the EU. The EU should support this radical approach financially in two ways: a) through compensation for lost tariff revenues (conditional on clean and efficient border controls), and, b) emergency loans to acquire the necessary backing for the currency board. The currency boards should graduate to full euroisation in 2002. The total cost for the EU would be modest: around 2 billion euro p.a. if all countries participate. A market-led approach that pays local hosts to house refugees would ensure that the expenditure on refugees benefits the local economies.
Topic:
Development, Economics, International Trade and Finance, and Migration
Political Geography:
Europe and Eastern Europe

609. EU—Membership Indecision

Author:
Oxford Analytica
Publication Date:
09-1999
Content Type:
Policy Brief
Institution:
Oxford Analytica
Abstract:
The attractions of the single european currency are likely to draw the Scandinavian countries into the euro-area by around 2003. However, the outlook for United Kingdom accession is complicated by differences in its economic profile compared with the rest of the euro-area, combined with its enduringly euro-sceptical public opinion. These factors are likely to postpone its accession until later in the decade.
Topic:
Economics and International Trade and Finance
Political Geography:
United Kingdom and Europe

610. The External Sector, the State and Development in Eastern Europe

Author:
Barry Eichengreen and Richard Kohl
Publication Date:
03-1998
Content Type:
Working Paper
Institution:
Berkeley Roundtable on the International Economy
Abstract:
Early optimists hoped that Eastern Europe might be able to emulate the high-performance economies of Asia once the shock of liberalization was absorbed. The ingredients of the East Asian “miracle,” in this view, were rapid accumulation based on high investment in physical and human capital, productivity growth based on technology transfer through licensing and direct foreign investment, rapidly expanding exports able to support industrial specialization and scale economies, and a strong state capable of guiding the development process and solving coordination problems. Emulating this recipe could provide the basis, it was hoped, for the expansion of exports and buoyant economic growth more generally.
Topic:
Development, Government, and International Trade and Finance
Political Geography:
Europe, Eastern Europe, and Asia