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521. Contractionary Currency Crashes In Developing Countries

Author:
Jeffrey Frankel
Publication Date:
02-2005
Content Type:
Working Paper
Institution:
The John F. Kennedy School of Government at Harvard University
Abstract:
To update a famous old statistic: a political leader in a developing country is twice as likely to lose office in the 6 months following a currency crash as otherwise. This difference, which is highly significant statistically, holds regardless whether the devaluation takes place in the context of an IMF program. Why are devaluations so costly? Many of the currency crises of the last ten years have been associated with output loss. Is this, as alleged, because of excessive reliance on raising the interest rate as a policy response? More likely it is because of contractionary effects of devaluation. There are various possible contractionary effects of devaluation, but it is appropriate that the balance sheet effect receives the most emphasis. Passthrough from exchange rate changes to import prices in developing countries is not the problem: this coefficient fell in the 1990s, as a look at some narrowly defined products shows. Rather, balance sheets are the problem. How can countries mitigate the fall in output resulting from the balance sheet effect in crises? In the shorter term, adjusting promptly after inflows cease is better than procrastinating by shifting to short-term dollar debt, which raises the costliness of the devaluation when it finally comes. In the longer term, greater openness to trade reduces vulnerability to both sudden stops and currency crashes.
Topic:
Debt, Economics, Developing World, Exchange Rate Policy, Currency, and Devaluation
Political Geography:
Global Focus

522. Workforce Intermediaries for the Twenty-first Century

Author:
Robert Giloth
Publication Date:
11-2003
Content Type:
Working Paper
Institution:
American Assembly at Columbia University
Abstract:
Confronted with businesses facing a long-term shortage of skilled workers and evaluations showing that job training for the poor over the past 25 years had produced only meager results, a number of groups throughout the country have sought to find a more effective approach. The efforts of these partnerships, which editor Robert Giloth calls 'workforce intermediaries', are characterized by a focus on improving business productivity and helping low-income individuals not just find a job, but advance over time to jobs that enable them to support themselves and their families. This book takes stock of the world of workforce intermediaries: entrepreneurial partnerships that include businesses, unions, community colleges, and community organizations. Noted scholars and policy makers examine the development and effectiveness of these intermediaries, and a concluding chapter discusses how to provide a more coherent approach to increasing the viability and capacity of these important institutions.
Topic:
Economics, Education, Human Welfare, International Trade and Finance, and Labor Issues
Political Geography:
Global Focus

523. Micro-Economic Approaches to Evaluating the Burden of Malaria

Author:
Pia Malaney
Publication Date:
04-2003
Content Type:
Working Paper
Institution:
The John F. Kennedy School of Government at Harvard University
Abstract:
The links between malaria and poverty are both obvious and subtle. While the correlation between the two is apparent, directions and mechanisms of causation are less so, and different methodological approaches to understanding the relationship provide widely divergent perspectives on the impact of the disease. Recent macroeconomic studies have suggested that in highly malarious countries the disease may be responsible for reducing economic growth by up to 1.3 percentage points a year. This methodology, however, functions independently of the chains of causation and cannot shed much light on underlying mechanisms. Micro-economic studies, which aggregate the cost per case to households, find a much smaller impact, generally less than one percent of per capita GDP. The traditional cost-of-illness methodology, which forms the basis of most of these studies, however, was designed to study illnesses that represent a far smaller disease burden. The pandemic nature of malaria presents economic costs that the traditional model is simply not able to capture. The paper explores the difference between the results of the different methodological approaches, examining some of the mechanisms through which malaria can affect long-term economic growth and development, and expands the cost-of-illness methodology to incorporate these effects.
Topic:
Economics, Health, Poverty, and Malaria
Political Geography:
Global Focus

524. "Injustes" sanctions: les constructions internationales de la dénonciation des embargos et l'escalade de la vertu abolitionniste

Author:
Ariel Colonomos
Publication Date:
11-2001
Content Type:
Working Paper
Institution:
Centre d'Etudes et de Recherches Internationales (CERI)
Abstract:
At a time when the use of sanctions has intensified considerably, criticism directed at embargos is gaining ground. In interpreting this significant rise in opposition, this article shows how and why mobilization against sanctions has developed, what sort of actors are involved and what forms it takes. This research brings to light the formation of networks and coalitions against both unilateral and multilateral measures. It underlines the role, status and scope of those whose business it is to fashion norms, by questioning the main analytical categories their strategies are usually based on. An expertise in embargo assessment, destined to levy judgment on a type of very specific violence, is developing in both national and transnational public spaces. This research, analyzing the emergence of this expertise, sheds light on the development of a conception of unjust sanctions and identifies the mechanisms of its construction on an international scale. This text in particular underlines the importance of traditions of just war, especially their reinterpretation by actors on the international scene and its moral norm-makers. Considering the development of these standards allows us to grasp one of the most decisive aspects of the use of force in the post-cold war world, as well as the establishment of certain international reforms.
Topic:
Development, Economics, International Cooperation, and International Trade and Finance
Political Geography:
Global Focus

525. Still Dead After All These Years: Interpreting the Failure of General Equilibrium Theory

Author:
Frank Ackerman
Publication Date:
11-1999
Content Type:
Working Paper
Institution:
Global Development and Environment Institute at Tufts University
Abstract:
For years after the Spanish dictator actually died, the mock television newscast on “Saturday Night Live” was periodically interrupted with a “news flash” informing viewers that “General Franco is still dead!” This served both to satirize the breathlessly urgent style of television news reporting, and to suggest that after many decades of taking an absolute ruler for granted, the world needed more than one reminder that he was no longer alive and well. Much the same is true for general equilibrium theory. In the course of its long decades of rule over the discipline of economics, general equilibrium became established as the fundamental framework for theoretical discourse. Its influence continues to spread in policy applications, with the growing use of computable general equilibrium models. It has successfully colonized much of macroeconomics, with the insistence on the derivation of rigorous microfoundations for macro models and theories. General equilibrium theory is widely cited in a normative context, often in textbooks or semitechnical discussion, as providing the rigorous theoretical version of Adam Smith’s invisible hand and demonstrating the desirable properties of a competitive economy.
Topic:
Economics and General Equilibrium Theory
Political Geography:
Global Focus

526. A New Discipline: Development Ethics

Author:
Denis Goulet
Publication Date:
08-1996
Content Type:
Working Paper
Institution:
Kellogg Institute for International Studies
Abstract:
'Development' has long been equated with modernization and Westernization and studied as a straightforward economic issue. The discipline of economics has been the main source of policy prescription for development decisionmakers. This view is now widely criticized as ethnocentric and as economically reductionist. Change is occurring: economics itself is reintegrating ethics into its conceptualization, methodology, and analysis; a new paradigm of development is in gestation; and a new discipline, development ethics, has come into being. Development ethics centers its study of development on the value questions posed: What is the relation between having goods and being good in the pursuit of the good life; what are the foundations of a just society; and what stance should societies adopt toward nature? The new discipline emerges from two sources, which are now converging: from engagement in development action to the formulation of ethical theory, and from a critique of mainstream ethical theory to the crafting of normative strategies to guide development practice. Development ethics has a dual mission: to render the economy more human and to keep hope alive in the face of the seeming impossibility of achieving human development for all.
Topic:
Development, Economics, Ethics, Economic Growth, and Modernization
Political Geography:
Global Focus