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91. Inequality in the 21st century: A critical analysis of Piketty’s work

Author:
Nadia Garbellini
Publication Date:
01-2018
Content Type:
Working Paper
Institution:
Institute for New Economic Thinking (INET)
Abstract:
Thomas Piketty’s (2014) Capital in the XXI Century aims to analyze distributions of income and wealth and their determinants, in a set of developed countries from the nineteenth century to the present. The objective is a bold one, made even more so by the fact that Piketty pursues it not only from a theoretical, but also, from an empirical point of view. The task is particularly impressive not only because of the enormous effort required in collecting and organising data, but also because the work entails attaching a deterministic interpretation to facts and figures from radically different countries over a time span that covers almost two centuries, thereby forcing comparison between numbers coming from clearly incommensurable contexts. These difficulties are not lost to Piketty, who states that “[w]ithout precisely defined sources, methods, and concepts, it is possible to see everything and its opposite.” (Piketty, 2014, pp.2-3) This study argues that the empirical ‘methods and concepts’ adopted by Piketty are not always consistent with those coming from his reference theoretical framework, nor from National Accounts (United Nations, 2009).
Topic:
Economics, Inequality, Income Inequality, Economic Growth, and Capital
Political Geography:
Global Focus

92. Economic Growth and Carbon Emissions: The Road to ‘Hothouse Earth’ is Paved with Good Intentions

Author:
Miriam Schröder and Servaas Storm
Publication Date:
11-2018
Content Type:
Working Paper
Institution:
Institute for New Economic Thinking (INET)
Abstract:
All IPCC (2018) pathways to restrict future global warming to 1.5°C (and well below an already dangerous 2°C) involve radical cuts in global carbon emissions. Such decarbonization, while being technically feasible, may impose a ‘limit’ or ‘planetary boundary’ to growth, depending on whether or not human society can decouple economic growth from carbon emissions. Decoupling is regarded viable in global and national policy discourses on the Paris Agreement—and claimed to be already happening in real time: witness the recent declines in territorial CO2 emissions in a group of more than 20 economies. However, some scholars argue that radical de-carbonization will not be possible while increasing the size of the economy. This paper contributes to this debate as well as to the larger literature on climate change and sustainability. First, we develop a prognosis of climate-constrained global growth for 2014-2050 using the Kaya sum rule. Second, we use the Carbon-Kuznets-Curve (CKC) framework to empirically assess the effect of economic growth on CO2 emissions using measures of both territorial (production-based) emissions and consumption-based (tradeadjusted) emissions. We run panel data regressions using OECD ICIO CO2 emissions data for 61 countries during 1995-2011; to check the robustness of our findings we construct and use panel samples sourced from alternative databases (Eora; Exio; and WIOD). Even if we find evidence suggesting a decoupling of production-based CO2 emissions and growth, consumption-based CO2 emissions are monotonically increasing with per capita GDP (within our sample). We draw out the implications of these findings for climate policy and binding emission reduction obligations.
Topic:
Climate Change, Economic Growth, Carbon Emissions, and Paris Agreement
Political Geography:
Global Focus

93. Energy in Economic Growth: Is Faster Growth Greener?

Author:
Gregor Semieniuk
Publication Date:
04-2018
Content Type:
Working Paper
Institution:
School of Oriental and African Studies - University of London
Abstract:
An influential theoretical hypothesis holds that if aggregate productivity growth accelerates, then so does the decline in energy intensity. Whether faster growth is greener in this sense is crucial for modeling future growth and climate change mitigation, but empirical evidence is lacking. This paper characterizes the global, long-run historical relationship between changes in energy intensity and labor pro- ductivity growth rates. Basing estimates on an unbalanced panel of 180 countries for the period 1950-2014 and the world as a whole, it captures a significantly larger historical window than previous studies. The paper finds a stylized fact whereby the rate at which energy intensity changes is constant or even increases as labor productivity accelerates. Faster growth is not greener. This provides important new information for calibrating integrated assessment models, many of which make a green growth assumption in near term projections.
Topic:
Economics, Energy Policy, Economic Growth, Green Technology, and Renewable Energy
Political Geography:
Global Focus

94. Measuring Impact: A Meta-Analysis of Oxfam’s Livelihoods Effectiveness Reviews

Author:
Rob Fuller
Publication Date:
11-2017
Content Type:
Research Paper
Institution:
Oxfam Publishing
Abstract:
This paper presents the results of a meta-analysis examining the overall impact of 23 livelihoods projects evaluated as part of Oxfam GB’s Effectiveness Reviews between 2011 and 2016. Results show a statistically significant, positive impact on the welfare of participants, measured by household consumption and wealth. Analysis indicates an increase in household consumption of approximately 6.6% (95% confidence interval from 1.6% to 11.9%). While some projects had more positive results than others, these differences are not explained by regions, whether the country has lower-income or middle-income status, whether households were initially poorer than average, nor by project scale, budget or duration. However, there is some evidence that female-headed households have tended to benefit less from the projects than male-headed households. Projects that targeted a specific agricultural product or products (such as vegetables, coffee or dairy production) were generally found to be successful in promoting production and sales.
Topic:
Agriculture, Gender Issues, Food, Economic Growth, Farming, and Empowerment
Political Geography:
Global Focus

95. Potential impact of financial innovation on financial services and monetary policy

Author:
Marek Dabrowski
Publication Date:
07-2017
Content Type:
Special Report
Institution:
Center for Social and Economic Research - CASE
Abstract:
The recent wave of financial innovation, particularly innovation related to the application of information and communication technologies, poses a serious challenge to the financial industry’s business model in both its banking and non-banking components. It has already revolutionised financial services and, most likely, will continue to do so in the future. If not responded to adequately and timely by regulators, it may create new risks to financial stability, as occurred before the global financial crisis of 2007-2009. However, financial innovation will not seriously affect the process of monetary policymaking and is unlikely to undermine the ability of central banks to perform their price stability mission.
Topic:
Energy Policy, Environment, Monetary Policy, Financial Crisis, Economic Growth, Innovation, and Trade
Political Geography:
Europe, Global Focus, and European Union

96. The Future Development of EU Exports in a Global Context

Author:
Robert Stehrer, Roman Stöllinger, and Sandra Leitner
Publication Date:
11-2017
Content Type:
Working Paper
Institution:
Center for Social and Economic Research - CASE
Abstract:
Global trade patterns are changing rapidly. Emerging economies are increasing their share of exports overall and intensifying competition in nearly all sectors. Using a gravity-based approach, this report examines the future profile of European Union (EU) world market shares at the aggregate and sectoral level. It further points towards the changing patterns of trade within the EU. Based on the results, some conclusions on EU industrial policy are drawn.
Topic:
Industrial Policy, International Trade and Finance, Global Markets, Economic Growth, and Trade
Political Geography:
Europe, Global Focus, and European Union

97. Drivers of Economic Growth in Africa

Publication Date:
10-2017
Content Type:
Special Report
Institution:
The African Capacity Building Foundation (ACBF)
Abstract:
The paper produced by the African Capacity Building Foundation (ACBF) shows that investment, human capital formation, debt, and overseas development assistance drive Africa’s economic growth. It recommends paying attention to capacity, which is critical to making Africa’s growth sustainable and inclusive. Continental, regional, and national long-term growth plans require stronger capacities to improve economic governance, align national and subnational institutions, coordinate planning and financing ministries, and cultivate a culture of committed leadership to stir economies when times are hard and execute recovery plans without policy reversals. The paper provokes discussion, encourages further investigation, and defines the critical capacity challenges to tackling the growth-equality disconnect in Africa.
Topic:
Economics, Economic Growth, Capacity, and Economic Development
Political Geography:
Africa and Global Focus

98. Challenging the World to Build New Foundations of Human Solidarity

Author:
Jim Yong Kim
Publication Date:
10-2017
Content Type:
Working Paper
Institution:
Columbia University World Leaders Forum
Abstract:
President of the World Bank Group Dr. Jim Yong Kim delivers an address titled, "Challenging the World to Build New Foundations of Human Solidarity," an event of the Columbia University World Leaders Forum at Low Library.
Topic:
Development, World Bank, Economic Growth, and Social Justice
Political Geography:
New York, Global Focus, and United States of America

99. The Functions of the Stock Market and the Fallacies of Shareholder Value

Author:
William Lazonick
Publication Date:
06-2017
Content Type:
Working Paper
Institution:
Institute for New Economic Thinking (INET)
Abstract:
Conventional wisdom has it that the primary function of the stock market is to raise cash for companies for the purpose of investing in productive capabilities. The conventional wisdom is wrong. Academic research on sources of corporate finance shows that, compared with other sources of funds, stock markets in advanced countries have been insignificant suppliers of capital for corporations. The purpose of this essay is to build a rigorous and relevant conception of the evolving role of the stock market in the U.S. corporate economy. In fact, the functions of the stock market go well beyond “cash” to include four other functions, which can be summarized as “control,” “creation,” “combination,” and “compensation.” In this paper, I argue, based on historical evidence, that in the growth of the U.S. economy the key function of the stock market was control. Specifically, the stock market enabled the separation of managerial control over the allocation of corporate resources from the ownership of the company’s shares. Yet, assuming that the key function of the stock market is cash, economists known as agency theorists see this separation of control from ownership as the “original sin” of American capitalism, and argue that the evils of managerial control can be overcome by compelling corporate managers as “agents” to maximize the value of corporate shareholders as “principals.” What is missing from the agency-theory argument is a theory of the value-creating firm, or what I call a “theory of innovative enterprise.” The value-creation process requires three social conditions of innovative enterprise: strategic control, organizational integration, and financial commitment. The functions of the stock market may support the types of strategic control, organizational integration, and financial commitment that can result in the generation of high-quality products at low unit costs—the economic definition of innovative enterprise. It is possible, however, that the functions of the stock market may undermine the types of strategic control, organizational integration, and financial commitment that the innovation process requires. In this paper, I provide a brief overview of the role of the control function of the stock market in supporting innovative enterprise in the historical rise to dominance of U.S. managerial capitalism from the early decades of the twentieth century. Then I elaborate the five functions of the stock market—control, cash, creation, combination, and compensation—in terms of the ways in which, from the perspective of the theory of innovative enterprise, each function can support value creation or, alternatively, empower value extraction. I then turn to a discussion of the evolving roles of the five functions of the stock market in major U.S. business corporations over the past century. The concluding section draws on the history of the actual functions of U.S. stock markets to critique the dominant ideology that, for the sake of superior economic performance, a company should be run to “maximize shareholder value” (MSV). I indicate how MSV undermines the social conditions of innovative enterprise: strategic control, organizational integration, and financial commitment.
Topic:
Economics, Economic Growth, Stock Markets, and Shareholder Democracy
Political Geography:
Global Focus

100. Fragile States Index 2017 – Annual Report

Author:
J. J. Messner, Nate Haken, Hannah Blyth, Christina Murphy, Amanda Quinn, George Lehner, and Daniel Ganz
Publication Date:
05-2017
Content Type:
Special Report
Institution:
The Fund for Peace
Abstract:
The Fragile States Index, produced by The Fund for Peace, is a critical tool in highlighting not only the normal pressures that all states experience, but also in identifying when those pressures are pushing a state towards the brink of failure. By highlighting pertinent issues in weak and failing states, The Fragile States Index—and the social science framework and software application upon which it is built—makes political risk assessment and early warning of conflict accessible to policy-makers and the public at large.
Topic:
Fragile States, Economic Growth, Domestic Politics, Coup, Instability, and Autocracy
Political Geography:
Africa, United Kingdom, Turkey, Middle East, South Africa, Brazil, Colombia, South America, North America, Ethiopia, Mexico, South Sudan, Global Focus, and United States of America