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281. Reconciling Contrasting Views on the Growth Effect of Currency undervaluations

Author:
Cécile Couharde, Carl Grekou, Valérie Mignon, and Florian Morvillier
Publication Date:
05-2024
Content Type:
Working Paper
Institution:
Centre d'Etudes Prospectives et d'Informations Internationales (CEPII)
Abstract:
This paper provides an in-depth analysis of the link between exchange rate misalignments and economic growth for a large sample of 170 countries over the 1973-2019 period. We rely on new cross-country data on multilateral currency misalignments and cross-quantile regressions to demonstrate that the seemingly divergent views of the Washington Consensus and the export-led growth theory on the role of currency undervaluations in promoting economic growth can be reconciled. Although any significant departures from the equilibrium exchange rate levels are found undesirable, we show that undervaluations are more likely to stimulate economic growth in developing countries. However, this positive impact is observed only up to certain thresholds of development level and currency undervaluation. Consequently, strategies in the poorest countries that systematically undervalue currencies in real terms to foster growth should be carefully tailored, as they raise the risk for these economies of switching from a positive to a less favorable growth regime, depending on both their specific wealth level and the extent of their currency undervaluation.
Topic:
Economic Growth, Currency, and Undervaluation
Political Geography:
Global Focus

282. The Industrial Cost of Fixed Exchange Rate Regimes

Author:
Blaise Gnimassoun, Carl Grekou, and Valérie Mignon
Publication Date:
06-2024
Content Type:
Working Paper
Institution:
Centre d'Etudes Prospectives et d'Informations Internationales (CEPII)
Abstract:
Premature deindustrialization in most emerging and developing economies is one of the most striking stylized facts of the recent decades. In this paper, we provide solid empirical evidence supporting that the choice of a fixed exchange rate regime accelerates this phenomenon. Relying on a panel of 146 developed, emerging, and developing countries over the 1974-2019 period, we show that fixed exchange rate regimes have had a negative, significant, and robust effect on the size of the manufacturing sector —developing countries being the most affected by the industrial cost of such a regime. Additional gravity model regressions show that the impact of fixed regimes passes through the trade channel. In particular, this regime has kept countries with low relative productivity in a state of structural dependence on imports of manufactured products to the detriment of the emergence of a strong local manufacturing sector.
Topic:
Developing World, Manufacturing, Industrialization, Deindustrialization, Exchange Rates, and Emerging Economies
Political Geography:
Global Focus

283. The Percolation of Knowledge across Space

Author:
Pierre Cotterlaz and Arthur Guillouzouic
Publication Date:
07-2024
Content Type:
Working Paper
Institution:
Centre d'Etudes Prospectives et d'Informations Internationales (CEPII)
Abstract:
This paper shows that the negative effect of geographical distance on knowledge flows stems from how firms gain sources of knowledge through their existing network. We start by documenting two stylized facts. First, in aggregate, the distance elasticity of patent citations flows has remained constant since the 1980s, despite the rise of the internet. Second, at the micro level, firms disproportionately cite existing knowledge sources, and patents cited by their sources. We introduce a framework featuring the latter phenomenon, and generating a negative distance elasticity in aggregate. The model predicts Pareto-distributed innovator sizes, and citation distances increasing with innovator size. These predictions hold well empirically. We investigate changes of the underlying parameters and geographical composition effects over the period. While the distance effect should have decreased with constant country composition, the rise of East Asian economies, associated to large distance elasticities, compensated lower frictions in other countries.
Topic:
Economy, Innovation, Patents, and Knowledge Diffusion
Political Geography:
East Asia and Global Focus

284. UIP Deviations in Times of Uncertainty: Not all Countries Behave Alike

Author:
Purva Gole, Erica Perego, and Camelia Turcu
Publication Date:
07-2024
Content Type:
Working Paper
Institution:
Centre d'Etudes Prospectives et d'Informations Internationales (CEPII)
Abstract:
In this paper, we reconsider the role of uncertainty in explaining uncovered interest rate parity (UIP) deviations by focusing on 60 emerging and developing (EMDE) and advanced (AE) economies, over the period 1995M1--2023M3. We show that differentiating between EMDE currencies and AE currencies is crucial for understanding UIP deviations as the behaviour of excess returns differs in the two groups in periods of uncertainty: deviations become wider for EMDEs and narrow for AEs. These new results are consistent with the idea that in periods of uncertainty, global investors might change their risk preferences and move from high currency-risk investments in EMDEs towards less risky ones in AEs. This evidence holds for both the short-run and long-run UIP, and becomes stronger since the Global Financial Crisis (GFC).
Topic:
Interest Rates, Risk, Uncertainty, and Emerging Economies
Political Geography:
Global Focus

285. The Great Depression as a Savings Glut

Author:
Victor Degorce and Éric Monnet
Publication Date:
11-2024
Content Type:
Working Paper
Institution:
Centre d'Etudes Prospectives et d'Informations Internationales (CEPII)
Abstract:
New data covering 23 countries reveal that banking crises of the Great Depression coincided with a sharp international increase in deposits at savings institutions and life insurance. Deposits fled from commercial banks to alternative forms of savings. This fuelled a credit crunch since other institutions did not replace bank lending. While asset prices fell, savings held in savings institutions and life insurance companies increased as a share of GDP and in real terms. These findings provide new explanations of the fall in credit and aggregate demand in the 1930s. They illustrate the need to consider nonbank financial institutions when studying banking crises.
Topic:
History, Great Depression, Banking Crisis, Savings, and Thrift
Political Geography:
Global Focus and United States of America

286. Pioneering a new classification: a comprehensive study of healthcare products in global trade

Author:
Pierre Cotterlaz, Guillaume Gaulier, Aude Sztulman, and Deniz Ünal
Publication Date:
01-2024
Content Type:
Working Paper
Institution:
Centre d'Etudes Prospectives et d'Informations Internationales (CEPII)
Abstract:
International trade in healthcare products took off in the 2000s at the height of hyper-globalisation. Twenty years on, the Covid-19 shock drove home to governments the importance of health security and trained the spotlight on the industrial sovereignty issues raised by the international organisation of production. However, the tangled web of international value chains has compromised the traceability of the manufacturing of these essential goods. In addition, the classification of healthcare products across a multitude of industries in the trade and production nomenclatures makes them hard to identify and muddies the picture further. In this paper, we have painstakingly identified these products and classified them together in one industry grouping to assess the scale of and trends in trade to meet the needs of national health systems. Covering a vast range of products (medicinal products and their compounds, medical technology equipment and small medical materials), this healthcare industry grouping has posted the strongest relative growth since 2000, rising to take the number two share of world trade in 2021 just behind electronic products. This paper details the nature of world trade in the healthcare industry grouping and its five branches by production stage (intermediate and final), type of trade flows (one-way and two-way) and quality/price range. It goes on to present how the advanced countries are positioned compared with the rest.
Topic:
Health, International Trade and Finance, Developing World, Economy, and Emerging Economies
Political Geography:
Global Focus

287. Are Mass Layoffs Individually Costly But Socially Beneficial?

Author:
Axelle Arquie and Thomas Grjebine
Publication Date:
01-2024
Content Type:
Working Paper
Institution:
Centre d'Etudes Prospectives et d'Informations Internationales (CEPII)
Abstract:
Relying on rich administrative data, this paper examines the adaptive capabilities of the French labor market in the aftermath of large-scale layoffs in the manufacturing sector. We assess both individual and aggregate effects of these shocks, using a unique quantitative definition of mass layoffs. We first show that displaced workers suffer a long-lasting increase in the probability of being unemployed and, for those who find a job, a decrease in their salary. While mass layoffs entail costs for displaced workers, there is a possible social benefit if they result in productive reallocation of workers to the most innovative companies and in the creation of new firms. Remarkably, our findings indicate that firms that hire displaced workers exhibit lower investment rates, decreased value added, and a reduced workforce, with a higher proportion of employees on fixed-term contracts. Additionally, mass layoffs do not contribute to the enhancement of allocative efficiency, as the most skilled workers are less likely to be matched with the most successful establishments. Furthermore, we assess the extent to which local economies adapt to these shocks, revealing that, six years after the mass layoff event, the local unemployment rate is 12% higher in comparison to unaffected regions. Lastly, the affected areas experience a diminished share of new establishment creation.
Topic:
Employment, Economy, and Layoffs
Political Geography:
Global Focus

288. Automation, Global Value Chains and Functional Specialization

Author:
Lionel Fontagné, Ariell Reshef, Gianluca Santoni, and Giulio Vannelli
Publication Date:
03-2024
Content Type:
Working Paper
Institution:
Centre d'Etudes Prospectives et d'Informations Internationales (CEPII)
Abstract:
We study how technology adoption and changes in global value chain (GVC) integration jointly affect labor shares and business function specialization in a sample of 14 manufacturing industries in 14 European countries in 1999– 2011. Our main contribution is to highlight the indirect effect of robotization on relative demand for labor via GVC integration. To do this, we develop a methodology to separately account for robots in the total capital stock. Increases in upstream, forward GVC participation directly reduce labor shares, mostly through reductions in fabrication, but also via management, marketing and R&D business functions. We do not find any direct effects of robot adoption; robotization affects labor only indirectly, by increasing upstream, forward GVC integration. In this sense robotization is “upstream-biased”. We also study novel channels through which rapid robotization in China shaped robotization in Europe and, therefore, GVC participation. This highlights an understudied way by which the global integration of China has affected relative demand for labor in its trading partners.
Topic:
Science and Technology, Labor Issues, Automation, and Global Value Chains
Political Geography:
Global Focus

289. Marka Deneyimi Yaratma Sürecinde Hikâye Anlatıcılığının Rolü

Author:
Ezgi Limanlı and Burcu Öksüz
Publication Date:
12-2024
Content Type:
Journal Article
Journal:
AURUM Journal of Social Sciences
Institution:
Altinbas University
Abstract:
Bu çalışma, marka deneyimi ve hikâye anlatıcılığı kavramları arasındaki ilişkiyi tespit etmeyi amaçlamaktadır. Marka deneyimi ve hikâye anlatıcılığı kavramlarının, marka ile müşteri arasındaki ilişkide yarattığı duygusal ve davranışsal etkiler (memnuniyet, deneyim, güven ve sadakat gibi) incelenmiştir. Veri toplama yöntemi olarak nitel bir araştırma yöntemi olan odak grup görüşmeleri (üç oturum) kullanılmıştır. Odak grup görüşmelerinde 20 ile 30 yaş aralığında bulunan 8 kadın ve 8 erkek olmak üzere toplam 16 katılımcı yer almıştır. Bütçe ve zaman kısıtlarının olması nedeniyle tesadüfi olmayan örnekleme yöntemlerinden kolayda örnekleme yöntemine başvurulmuştur. Katılımcılara toplam 18 soru yöneltilmiştir. Katılımcılardan öncelikle marka olgusunu kapsayan soruları, daha sonra marka deneyimi sürecinde hikâye anlatıcılığına ilişkin soruları yanıtlamaları istenmiştir. Elde edilen bulgular detaylıca analiz edilmiş ve yorumlanmıştır. Çalışma sonuçlarına göre, hikâye anlatıcılığının marka deneyiminde bir bakıma katalizör görevi üstlendiği görülmektedir. Tüketicilerin duygularına hitap eden, iyi bir şekilde kurgulanmış ve doğru kanallarla ifade edilen gerçek bir hikâyenin tüketicilerde empatiyi arttırdığı ve onları ikna ettiği ortaya konulmuştur.
Topic:
Economics, Communications, Consumer Behavior, Storytelling, Branding, and Marketing
Political Geography:
Turkey and Global Focus

290. “Leonardo Da Vinci: Yapay Zekâ Işığın Bilgeliği / Cern’den Nasa’ya İnsanlık Ve Metaverse” Dijital Sergisinin Beden Teması Bağlamında İncelenmesi

Author:
Cansu Kösem İşık
Publication Date:
12-2024
Content Type:
Journal Article
Journal:
AURUM Journal of Social Sciences
Institution:
Altinbas University
Abstract:
Bilişim İletişim Teknolojilerinin (BİT) gelişimiyle birlikte beden hızla dijitalleşmektedir. Bedenin bu durumu, tüm algı ve deneyim pratiklerinin köklü bir şekilde değişmesi sonucunda meydana gelmektedir. Hareketli ekranlar, datalar ve kodlarla etkileşim içinde olan beden, bu teknolojik araçların bir uzantısı haline gelmiştir. Artık tüm dijital araçlar bedenle iç içe geçmiş durumdadır. Bu noktada arzu, eğlence, özgürlük gibi pratikler bedeni biçimlendirmenin araçları olarak öne çıkmaktadır. Bu makalede, bedeni biçimlendiren bir eğlence pratiği olarak Leonardo da Vinci: Yapay Zekâ Işığın Bilgeliği / CERN’den NASA’ya İnsanlık ve Metaverse dijital sergisi incelenmiştir. Bu bağlamda bedenin dijital çağdaki durumunu kavramak amaçlanmıştır. Makalede yöntem olarak dijital otoetnografi yöntemi kullanılmış; araştırmacı kendisini inceleme nesnesi, başka bir deyişle dijital sergiyi deneyimleyen olarak ele almıştır. Bu bağlamda inceleme, Walter Benjamin’in optik bilinçdışı, sanat eserinin aurası – sezgisel algısı – ve kullanım değeri üzerine olan düşünceleri, Rosi Braidotti, Katherine Hayles, Amber Case’nin posthüman beden kuramı ve Friedrich Nietzsche’nin yabancılaşma konusundaki düşünceleri ekseninde gerçekleştirilmiştir. Araştırma sonucunda ise, bedenin teknoloji dolayımlı olduğu görülmüştür. Bedenin bu hali, dijital endüstrinin yerleştiği, aktığı ve bedeni yeniden üreterek sistemin işlerliğini sağladığı bir alan olarak anlaşılmıştır. Beden, BİT’in alanıyla eklemlenerek, algısal bir çeşitliliğe açılmıştır. Bu çeşitlilikle haşır neşir haldeki beden, kendine odaklı aynı zamanda hikayeden yoksun bir forma kavuşmuştur. Diğer yandan, dijital sanat eserinin içindeki beden de yeniden üretilmiş, bağlamından kopartılmıştır. Deneyimleyen beden tükenen ve tüketen bir forma evrilirken, eserin içindeki beden de benzer bir duruma evrilmiştir.
Topic:
Science and Technology, Artificial Intelligence, Digital Art, and Body
Political Geography:
Global Focus