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1. The Great Supply Chain Shift from China to South Asia?

Author:
Ganeshan Wignaraja
Publication Date:
07-2023
Content Type:
Research Paper
Institution:
Gateway House: Indian Council on Global Relations
Abstract:
Global supply chains connect world industry and international trade in manufactures. East Asia’s dominance with China as the preferred assembly hub in global supply chains has brought unprecedented regional prosperity, but South Asia remains a latecomer. However, pandemic-related and post-pandemic continuing disruptions to supply chains and slowing growth are being keenly felt, dampening China’s attractiveness. In an uncertain global economy, increasingly footloose foreign investors are looking for alternative production locations. Is it South Asia’s turn to prosper through supply chains in this uncertain world? This is the topical public policy question facing India and the others in South Asia. This paper discusses the concept of global supply chains, the industrial rise of East Asia, drivers of supply chain relocation from China, South Asia’s prospects, India as a complementary hub and policy lessons from East Asia’s industrial success. For the purposes of this paper, South Asia is broadly defined as the India and its contiguous countries: Afghanistan, Bangladesh, Bhutan, India, Maldives, Nepal, Pakistan and Sri Lanka.
Topic:
Industrial Policy, Monetary Policy, Foreign Direct Investment, Industrialization, COVID-19, Supply Chains, and Geoeconomics
Political Geography:
China, South Asia, Asia, Southeast Asia, and United States of America

2. Is “Inflation First” Really “Rentiers First”? The Taylor Rule and Rentier Income in Industrialized Countries

Author:
Mario Seccareccia and Guillermo Matamoros Romero
Publication Date:
07-2023
Content Type:
Working Paper
Institution:
Institute for New Economic Thinking (INET)
Abstract:
The Taylor rule has returned as a significant policy guide amid increasingly overt political pressures for its official (and not just its implicit) adoption at the US Fed as inflation fears have come to dominate monetary policy actions both in the US and internationally in recent times. Our paper analyzes the effect of monetary policy on the functional distribution of income by reconstructing how the post-1970s “inflation first” policy commitments of central banks came to be crystallized in the Taylor rule. While there are differences among the various specifications of this “rule”, the Taylor relation is merely an offshoot of what can be described generically as the family of Wicksellian reaction functions whose implications support rentier income over time. Because of the internal logic of the Taylor rule, this has led to different interpretations such as, for example, the more Keynesian Yellen rule, which depart from the strict sense of the Taylor rule. The paper also interprets the Taylor Rule in light of Wicksell’s formulation and analyzes the potential consequence of the differences. In contrast to the strict Wicksell rule of “proportional” adjustment, our econometric findings suggest evidence that central banks adjust “over-proportionally” the benchmark money interest rate in the presence of changes in the inflation rate for the complete “inflation first” era since the 1970s until the COVID-19 crisis. They thereby strongly favored rentier incomes in their reaction functions, with the possible exception of the post-financial crisis period. To limit the pro-rentier consequences of such inflation-targeting regimes, it is important that policymakers mandate multiple objectives for central banks, as exemplified in the current US Fed’s dual mandate.
Topic:
Economics, Inflation, Industrialization, and Rentierism
Political Geography:
North America and United States of America

3. Reshoring Semiconductor Manufacturing: Addressing the Workforce Challenge

Author:
Sujai Shivakumar, Charles Wessner, and Thomas Howell
Publication Date:
10-2022
Content Type:
Special Report
Institution:
Center for Strategic and International Studies (CSIS)
Abstract:
On August 9, 2022, President Biden signed the CHIPS and Science Act, sweeping legislation that seeks to strengthen the U.S. semiconductor supply chain, encourage investments in semiconductor manufacturing facilities in the United States, stimulate semiconductor research and development (R&D), and disincentivize U.S. investments in chip-making plants in China. Among other things, the legislation will provide $52.7 billion in federal outlays over five years for loans, loan guarantees, grants, and other financial support for domestic chip-making investments, as well as a 25 percent tax credit for semiconductor investments in the United States. Bolstered by this unprecedented level of federal support, six major chip makers are investing in new wafer fabrication facilities (“fabs”) in the United States: Intel, Samsung, TSMC, GlobalFoundries, Texas Instruments, and Micron Technology.
Topic:
Science and Technology, Manufacturing, Industrialization, and Semiconductors
Political Geography:
North America and United States of America

4. The Pillars Necessary for a Strong Domestic Semiconductor Industry

Author:
Sujai Shivakumar, Charles Wessner, and Thomas Howell
Publication Date:
05-2022
Content Type:
Special Report
Institution:
Center for Strategic and International Studies (CSIS)
Abstract:
All major U.S. defense systems and platforms rely on semiconductors for their performance, and the erosion of U.S. capabilities in microelectronics is a direct threat to the United States’ ability to defend itself and its allies. The COMPETES and USICA legislation, currently being reconciled in Congress, represents a national strategy to secure U.S. competitiveness and national security in the twenty-first century. Both the House and Senate legislation call for $52 billion to support U.S.-based semiconductor research and production. They also authorize several programs to both expand U.S. semiconductor fabrication capacity and support the continued research and development (R&D) of advanced chips. The key question is how these intentions can best be turned into reality. There are several challenges that the domestic semiconductor industry confronts, such as international competition, capital investment requirements, workforce needs, gaps in the supply chain, and the shortfall in venture capital funding and technical support needed to enable commercialization of promising technologies.
Topic:
Security, Military Strategy, Innovation, Industrialization, and Defense Industry
Political Geography:
North America and United States of America