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611. Collective Management of International Financial Crises

Author:
Saori N. Katada
Publication Date:
07-1998
Content Type:
Working Paper
Institution:
Center for International Studies, University of Southern California
Abstract:
The world has experienced many financial crises. Despite numerous research and policy efforts in prevention to present them at of large scale, the global economy has not seen economists' (and investors') Nirvana of financial globalization without the occasional crises. On the contrary, the increasing dynamism and changing nature of financial flows across national borders seem to have created a larger number of new problems for creditors, debtors and international financial institutions. That has typically been true for middle income countries in Latin America and Asia and, very recently, in Eastern Europe, which have been integrated into the international financial system. During the two decades between the late 1970s and the late 1990s, three major sets of financial crises originated from those middle income countries, intensifying concerns for international financial stability.
Topic:
Economics, Globalization, International Political Economy, and International Trade and Finance
Political Geography:
Europe, Israel, East Asia, Latin America, Central America, and North America

612. Theoretical Explanations of Trade Competitiveness and a North American Application

Author:
Imtiaz Hussain
Publication Date:
01-1998
Content Type:
Working Paper
Institution:
Centro de Investigación y Docencia Económicas
Abstract:
How do we reconcile economic competitiveness with trade regionalism? This exploratory investigation first takes stock of how competitiveness has been defined by both economists and political scientists, then extracts an inclusive model from the different literatures, and finally broadly assesses business transactions and trends across North America using that model. Beginning with the Ricardo-Viner and Hecksher-Olin explanations, various types of competitiveness articulated by Michael Porter, Mancur Olson, and David Mares are subsequently brought in. preliminary findings presented as hypotheses for future testing, suggest that: that evaporation of hegemony has resulted in multiple claims to competitiveness across North America, policy convergences are more widespread and common than ever before, regional-level cooperation provides an efficient means for all three countries to offset global competitiveness, and domestic interests, though still a potential veto force, are slowly embracing, rather than opposing, supranational efforts.
Topic:
International Relations, Economics, and International Trade and Finance
Political Geography:
Europe and North America

613. Agriculture and Supranationalism: A Comparative Study on North American and West European Policy-Making Experiences

Author:
Imtiaz Hussain
Publication Date:
01-1998
Content Type:
Working Paper
Institution:
Centro de Investigación y Docencia Económicas
Abstract:
The proliferation of regional trading blocs in the 1990s raises a fundamental question: To what extent is policy-making shifting from the national government to a regional entity? The conversion of GATT into the World Trade Organization, also in the 1990s, further complicates the search for an answer since new or revitalized multilateral rules also exert influences upon policy outcomes. I apply that question to a study of farm policy, with the European Union and the North American Free Trade Agreement (NAFTA) as my cases. The next two sections profile the importance of agriculture and my rationale in selecting the two cases before pointing gout the organization of the remainder of the study.
Topic:
Agriculture and International Trade and Finance
Political Geography:
Europe and North America

614. The 1998 Per Jacobsson Lecture: Managing the International Economy in an Age of Globalisation

Author:
Peter D. Sutherland
Publication Date:
10-1998
Content Type:
Policy Brief
Institution:
Overseas Development Council
Abstract:
Good afternoon. Thank you, Sir Jeremy, for that kind introduction. I am honored, not merely to have been selected to deliver this year's Per Jacobsson lecture, but by the presence of so many distinguished guests. I am also delighted that two previous Per Jacobsson lecturers could be here this afternoon, and I would like to recognize them: Jacques de Larosiere, the former Managing Director of the IMF and more recently the President of the European Bank for Reconstruction and Development, and Joseph Yam, the Chief Executive of the Hong Kong Monetary Authority.
Topic:
Economics, Globalization, Government, International Trade and Finance, and Politics
Political Geography:
Europe

615. Mixed Signals

Author:
Peter A. Hall and Robert J. Franzese Jr.
Publication Date:
09-1997
Content Type:
Working Paper
Institution:
Institute of European Studies (IES), UC Berkeley
Abstract:
Plans for European Monetary Union are based on the conventional postulate that increasing the independence of the central bank can reduce inflation without any real economic effects. However, the theoretical and empirical bases for this claim rest on models of the economy that make unrealistic information assumptions and omit institutional variables other than the central bank. When the signaling problems between the central bank or other actors in the political economy are considered, we find that the character of wage bargaining conditions the impact of central bank independence by rendering the signals between the bank and the bargainers more or less effective. Greater independence can reduce inflation without major employment effects where bargaining is coordinated, but it brings higher levels of unemployment where bargaining is uncoordinated. Thus, currency unions like the EMU may require higher levels of unemployment to control inflation than their proponents envisage; they will have costs as well as benefits, costs which will be distributed unevenly among and within the member nations based on the changes induced in the status of the bank and of wage coordination.
Topic:
Economics, Government, International Trade and Finance, and Political Economy
Political Geography:
Europe

616. A Strategy for Launching the Euro

Author:
Maurice Obstfeld
Publication Date:
02-1997
Content Type:
Working Paper
Institution:
Institute of European Studies (IES), UC Berkeley
Abstract:
This paper studies the constraints placed by the Maastricht Treaty on the rates at which member currencies will exchange against the Euro at the start of stage 3 of economic and monetary union (EMU). The paper shows that the stage 3 bilateral conversion factors for EMU member currencies must correspond to closing market exchange rates as of December 31, 1998; furthermore, currency conversion rates into the Euro cannot be determined until that date. Moreover, official announcements about intended conversion factors will carry no credibility with markets, as market rates must be chosen over any prennounced rates according to the Treaty. Unless there is heavy official intervention in the runup to stage 3, EMU members' bilateral market rates will exhibit excessive volatility and may induce beggar-thy-neighbor policy behavior. On the other, hand, exchange-rate targeting may open the door to speculative currency crises. The only feasible solution appears a widely-publicized institutional reform to subjugate national central banks' policies entirely to the goal of intra-EMU exchange stability in the final months of stage 2.
Topic:
International Political Economy and International Trade and Finance
Political Geography:
Europe

617. Taking the State Back Out? Comparing French Responses to Globalization in Agriculture and Shipping

Author:
Mark Aspinwall and Imtiaz Hussain
Publication Date:
01-1997
Content Type:
Working Paper
Institution:
Centro de Investigación y Docencia Económicas
Abstract:
How autonomous is a state in today's highly interdependent international economy to pursue policies that diverge widely from the international norm? does the degree of autonomy vary for different domestic sectors? We adapt and apply Benjamin Cohen's unholy trinity model (1993), to a comparative assessment of how France responded to globalization over agriculture and shipping, focusing on three dimensions—investment, transaction costs, and government policy responses. Although France is reputed to possess a strong state machinery (Katzenstein, 1987; Wilson, 1987; Skocpol, 1985), our analysis raises qualifications. On the one hand, regardless of government policy intentions, we find irreversible forms of disinvestments in both sectors, though different in nature—geographic for shipping, and functional for agriculture; on the other, we also find continued dependence upon the state–for internal and endogenous, as well as external and exogenous, factors influence policy-making, the nature of these factors are different for the two sectors. We conclude by drawing implications of our findings for state-society relations and European integrations.
Topic:
Agriculture, Globalization, and International Trade and Finance
Political Geography:
Europe and France

618. Canadian Environmental Movement and Free Trade

Author:
Sofía Gallardo
Publication Date:
01-1997
Content Type:
Working Paper
Institution:
Centro de Investigación y Docencia Económicas
Abstract:
The concern for the quality of the environment reached significant proportions in the 1960's and 1970's throughout North America and Europe as other new social movements were emerging. Unlike some of the others, environmentalism has endured as a vital and major social phenomenon, one that has reoriented human perceptions, attitudes, and behavior.
Topic:
Environment and International Trade and Finance
Political Geography:
Europe, Germany, and North America

619. Trading Places: The Caribbean Faces Europe and the Americas in the Twenty-first Century

Author:
Anthony T. Bryan
Publication Date:
06-1997
Content Type:
Working Paper
Institution:
The North-South Center, University of Miami
Abstract:
The challenges confronting the Caribbean with respect to trade with Europe and the Americas are essentially similar: the future of existing regimes of significant preferences, the need to plan for the long term without such preferences, and the development of a strategy to meet the transition. Unfortunately, the dialogue on these matters often has been characterized as a protocol for the Caribbean to “choose between friends.” Growth in the economies of the Caribbean will depend to a large extent on participation in or access to global trade arrangements. Ideally, a Caribbean strategy for participation should involve simultaneous access to as many pacts as possible. This paper is an overview of the legacy and the future of trade relations between the Caribbean and Europe, and between the Caribbean and the Americas, as these relationships constitute the Caribbean's most urgent global agenda.
Topic:
Economics, Emerging Markets, and International Trade and Finance
Political Geography:
United States, America, Europe, and Caribbean

620. Economic Structure and the Decision to Adopt a Common Currency

Author:
Jeffrey A. Frankel and Andrew K. Rose
Publication Date:
08-1996
Content Type:
Working Paper
Institution:
Institute of European Studies (IES), UC Berkeley
Abstract:
Everyone studing EMU cites the theory of Optimum Currency Areas: whether a country like Sweden should join the currency union depends on such parameters as the extent of Swedish trade with other EU members and the correlation of Sweden's income with that of other members. Few economists have focused on what we consider one of the most interesting aspects of this issue. Trade patterns and income correlation are endogenous. Sweden could fail the OCA criterion for membership today, and yet, if it goes ahead and joins anyway, could, as the result of joining, pass the Optimum Currency Area (OCA) criterion in the future. (Further, even if Sweden does not enter EMU quickly, it will be more likely to satisfy the OCA criteria in the future as a result of its recent accession to the EU.) The few economists who have identified the importance of the endogeneity of trade patterns and income correlation are divided on the nature of the relationship between the two. This is an important empirical question, which may hold the key to the answer regarding whether it is in Sweden's income interest to join EMU. We review the OCA theory, highlighting the role of trade links and income links. Then we discuss and analyze the endogeneity of these parameters. We present econometric evidence suggesting strongly that if trade links between Sweden and the rest of Europe strengthen in the future, then Sweden's income will become more highly correlated with European income in the future (not less correlated, as some have claimed). This has important implications for the OCA criterion. It means that a naïve examination of historical data gives a biased picture of the effects of EMU entry on Sweden. It also means that EMU membership is more likely to make sense for Sweden in the future than it does today.
Topic:
International Political Economy and International Trade and Finance
Political Geography:
Europe and Sweden