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231. Measuring economic resilience for the CEE and Black Sea countries in the framework of comprehensive defense

Author:
Maria Constantinescu
Publication Date:
12-2023
Content Type:
Journal Article
Journal:
Security and Defence Quarterly
Institution:
War Studies University
Abstract:
The main research objective of this paper is to identify key factors influencing economic resilience from the perspective of comprehensive defence. This involves developing a composite economic resilience index (Ericda) that outlines the relative economic resilience of countries in Central and Eastern Europe and the Black Sea regions, within the comprehensive defence framework. The paper employs qualitative research methods, focusing on an analysis of specialist literature pertaining to economic resilience. Quantitative methods are also used for developing the Economic Resilience Index from the Comprehensive Approach to Defence (Ericda) perspective. This includes using data on selected resilience indicators in Central and the Eastern European and Black Sea region countries to generate rankings. The results of the study reveal strong positive correlations between the economic resilience index and various factors, such as logistics and infrastructure, economic complexity, foreign trade vulnerabilities and dependence, economic stability and development, governance effectiveness, military, and human capital. Additionally, a negative correlation was observed with the resilience index. The research findings suggest that to ensure effective comprehensive defence, isolated measures targeting individual pillars are inadequate. Economic resilience requires a collaborative approach, extending beyond the purview of the finance ministry and involving a broader range of stakeholders.
Topic:
Economics, International Security, Resilience, Economic Security, and Military
Political Geography:
Europe and Black Sea

232. Exchange Rate Arrangements: Fix, Float, or Manage?

Author:
Nathaniel Cline, Carlos Schönerwald da Silva, and Matias Vernengo
Publication Date:
10-2023
Content Type:
Working Paper
Institution:
Political Economy Research Institute (PERI), University of Massachusetts Amherst
Abstract:
The paper tries to provide a concise summary of the main debates on exchange rate arrangements. It a simple taxonomy of exchange rate arrangements, fixed, flexible and managed, and a brief analysis of the main debates about their advantages and disadvantages. It emphasizes the different policy objectives of mainstream and heterodox schools of thought, suggesting that they tend to be more relevant than the specific defense of one particular exchange rate arrangement. In that sense, there are divergences on their preferences within schools of thought. The paper also discusses the causes of currency crises and the role of the dollar in the international monetary system.
Topic:
Economics, Monetary Policy, Crisis Management, Exchange Rate Policy, and Currency
Political Geography:
Global Focus

233. Optimal Inflation Targeting With Anchoring

Author:
Thomas Michl
Publication Date:
06-2023
Content Type:
Working Paper
Institution:
Political Economy Research Institute (PERI), University of Massachusetts Amherst
Abstract:
This paper presents an alternative foundation to the standard quadratic loss function characterizing central bank inflation policy. The alternative treats high employment as a social benefit. In recognition of the inherent asymmetry of the output gap, two self-imposed constraints provide guardrails that rule out excess unemployment and opportunistic reflation. The loss function includes a novel reverse discounting mechanism that penalizes the bank for more sustained inflation gaps that could undermine confidence in the central bank’s target. In the absence of anchoring, the central bank is obliged to use economic slack to accomplish a disinflation but the presence of anchoring creates greater policy flexibility freeing it from the tyranny of the sacrifice ratio. The central bank’s optimal policy differs dramatically from the standard Taylor Rule recommendation in choosing policy plans with higher employment, in its willingness to overshoot inflation targets, and in avoiding excess unemployment, all while observing the discipline needed for successful inflation targeting.
Topic:
Economics, Employment, Banks, and Inflation
Political Geography:
Global Focus

234. The Crisis of Capitalism, the Noun

Author:
Nancy Folbre
Publication Date:
05-2023
Content Type:
Working Paper
Institution:
Political Economy Research Institute (PERI), University of Massachusetts Amherst
Abstract:
This paper explores the challenges that feminist theory, stratification economics, and intersectionality pose to the characterization of capitalism as a unitary system. Attention to the structural basis for inequalities based on gender and race weakens traditional Marxian concepts of exploitation based on the appropriation of surplus value. On the other hand, the continuing relevance of many forms of collective conflict heightens appreciation of the ways in which capitalist institutions discourage the forms of cooperation necessary to address both ecological threats and shortfalls in care provision.
Topic:
Economics, Race, Capitalism, Intersectionality, Gender, and Feminist Theory
Political Geography:
Global Focus

235. Geopolitics, the Global South and Development Policy

Author:
Stephan Klingebiel
Publication Date:
01-2023
Content Type:
Policy Brief
Institution:
German Institute of Development and Sustainability (IDOS)
Abstract:
This policy brief discusses the new geopolitical and geo-economic context and its significance for the Global South and the development policies of Western actors. The systemic confrontation between China and the USA, the Russian invasion of Ukraine, but also the seizure of power through a military putsch in Niger, among other places, show: The environment for global cooperation efforts has become much more difficult. Actors in the Global South are no longer just participants on the sidelines of geopolitical conflicts, but are taking an active role. Western countries and Russia make strong efforts to woo them. At the same time, China and India in particular aspire to leadership roles as leaders for the Global South. The following points are of particular importance: (1) The changes in the international system have given the Global South as a group (despite the enormous differences between the actors in this group) a new impetus of identity – similar to the West. It is noteworthy that this North/South bloc formation makes other possible commonalities less pronounced. This applies above all to the attempt – which has been less success-ful so far – to strengthen the identification of open democratic systems as a mark of belonging. For many debates and alliances, the identification “Global North/South” is formative. Formation of North and South camps is not helpful for finding international solutions. Approaches to counteract entrenched bloc formations and to create effective formats for exchange and understanding are therefore important. (2) From the perspective of Southern actors, the existing international order is a deeply unjust system that primarily protects the interests of the West, and especially those of the USA. Political offers from the West that do not really lead to structural changes are unlikely to arouse interest in the Global South, and will instead favour counter-designs – be they from China with its claim to leadership for the Global South or Russia. (3) In principle, the development policy of OECD actors has important potential to help shape the realignment of relations with the Global South. The policy field is, on the one hand, a proof of international credibility (among other things, fulfilment of international obligations) and, on the other hand, an approach that makes it possible to work with operational means on international problems in the first place. (4) Western development policy is likely to face further difficult situations with risks of escalation and failure (such as Niger and Afghanistan) in the face of multiple tensions in developing regions. Development policy should reflect the geopolitical context even more consciously in strategy and action. The defining geo-political context harbours the danger that the original development policy task – sustainable development of the partner countries – will be overshadowed. (5) Overall, it should be an important concern to rethink how international burden-sharing for development and climate finance agendas is organised. Here, it is important to consider both the actors from the Global North and those from the Global South.
Topic:
Economics, Geopolitics, International Order, Cooperation, and Development Policy
Political Geography:
Global South

236. The Effects of Robotization on Foreign Direct Investment

Author:
Sungwoo Hong, Wongi Kim, and Yeo Joon Yoon
Publication Date:
08-2023
Content Type:
Working Paper
Institution:
Korea Institute for International Economic Policy (KIEP)
Abstract:
This study aims to investigate the effects of robotization on foreign direct investment (FDI). We address this research question by providing a theoreti-cal prediction derived from a simple model and then empirically testing our prediction. Theoretically, we found that an exogenous rise in industrial robots depresses both the robot rental rate and the domestic cost of task execution. Thus, it is more profitable to perform more tasks at home, leading to a de-crease in FDI. Empirical results are summarized as follows. First, an increase in robotization in source countries negatively affects outward FDI. Second, this negative effect is not consistent across global regions.
Topic:
Economics, Foreign Direct Investment, and Industrial Structure
Political Geography:
Global Focus

237. An Analysis on the Regional Integration of Northeast Asia by Developing NARCI (Northeast Asia Regional Cooperation Index)

Author:
Ji Young Moon, Jehoon Park, and Sung-Hoon Park
Publication Date:
10-2023
Content Type:
Working Paper
Institution:
Korea Institute for International Economic Policy (KIEP)
Abstract:
This paper aims to develop an index to analyze regional cooperation in Northeast Asia, which is Northeast Asia Regional Cooperation Index(NARCI). NARCI evaluates intra-regional cooperation and integration in four areas, which are functional cooperation, politico-security cooperation, socio-cultural cooperation, and institutionalization, in order to identify the conflict and cooperation situation in the Northeast Asian region. The analysis of economic integration found that Northeast Asian regional cooperation is characterized by a high level of integration in goods trade and regional value chain cooperation, but a relatively low level of integration in intra-regional direct investment and energy supply chain cooperation. The analysis of the political and security cooperation shows that the intensification of U.S.-China competition and the factional confrontation between Korea, U.S., Japan, and North Korea, China, Russia have had a significant impact on regional cooperation in political and diplomatic security. The result shows that the level of integration is low, with all evaluation indicators being negative. The analysis of the socio-cultural integration shows a relatively low level of integration in civil society cooperation and intergovernmental exchanges, a relatively high level of integration in cultural and educational exchanges and study abroad, and a neutral level of integration in information technology cooperation, labor mobility, and the share of tourists in the region. Finally, the analysis of institutional integration shows a relatively high level of integration in the bilateral channels between governments and the institutionalization of regional cooperation in the socio-cultural field, and half of the countries had institutional integration in financial integration and regional cooperation in the economic field. The level of integration in the political and security field was low due to the existence of only multilateral meetings. The analysis of NARCI shows that the impact of geopolitical conflicts on the economy and socio-culture has been expanding in recent years. However, the low level of political and diplomatic cooperation in the region and related institutional deficiencies are considered to be insufficient to buffer these risks, and efforts are needed to address them.
Topic:
Economics, Industrial Policy, Regional Cooperation, Economic Growth, and Regional Integration
Political Geography:
Asia and Northeast Asia

238. Analysis of Trade Pattern Between the EAEU and South Korea

Author:
Zoia Podoba
Publication Date:
05-2023
Content Type:
Policy Brief
Institution:
Korea Institute for International Economic Policy (KIEP)
Abstract:
The Eurasian Economic Union (EAEU) is a relatively newly-formed regional integration bloc. It evolved on the basis of the Customs Union of Russia, Kazakhstan, and Belarus in 2015 with Armenia and Kyrgyzstan joining the agreement. The foreign economic aspirations of the EAEU as a single market, in the context of tense relations with Western partners, are turned towards Asian countries. The pivot to the East is supported by the ideological concept of “Greater Eurasia” (sometimes translated as “Big Eurasia”), which implies more extensive cooperation with the economies of Central, East, and South Asia. At a time when political efforts to bring the Union and Korea closer together have been put on hold, the paper aims to provide a comprehensive description of the bilateral merchandise trade pattern between the EAEU and the Republic of Korea to verify if statistical evidence on bilateral trade provides ground for the development of guiding actual policy deliberations in the future. Trade Intensity Index (TII), the sectoral bilateral coefficient of revealed comparative advantages, and the standard Grubel-Lloyd index have been used in order to analyze the bilateral trade between the EAEU and the Republic of Korea.
Topic:
Economics, Markets, Regional Integration, and Trade
Political Geography:
Eurasia, Asia, and South Korea

239. Enhancing Korea’s Services Trade Statistics: Policy Recommendations

Author:
Jongduk Kim
Publication Date:
05-2023
Content Type:
Policy Brief
Institution:
Korea Institute for International Economic Policy (KIEP)
Abstract:
This study revisits the definition of trade in services, explores the translation of service statistics into the Korean Standard Industry Classification (KSIC), proposes a method to estimate Korea's services trade by mode of service supply under the WTO trade agreement, and seeks ways to collect data on digital trade in services. It classifies the objectives pertaining to the enhancement of Korea's service trade statistics into short-term, medium-term, and long-term agendas.
Topic:
Economics, Trade, WTO, and Service Delivery
Political Geography:
Asia and South Korea

240. A Review of Changes in the Global Value Chain of Latin America

Author:
Sungwoo Hong
Publication Date:
05-2023
Content Type:
Working Paper
Institution:
Korea Institute for International Economic Policy (KIEP)
Abstract:
Based on the findings of the value chain analysis conducted on major Latin American countries, it suggests that these countries may have derived certain economic benefits. This can be attributed to the increased exports to the United States and China, where Latin American countries served as substitute countries for imports during the intensifying competition between the two nations. Amidst the U.S.-China hegemony race and the supply chain disruptions caused by the COVID-19 pandemic, there is a notable shift in focus. Particularly, the United States is actively working to establish secure and stable supply chains, primarily centered around its own country and allied nations, with the intention of reducing dependence on China. As part of this process, the United States advocates for reshoring or near-shoring, which involves relocating production facilities to its home country or neighboring nations. Additionally, the U.S. is implementing various incentives to support this objective. If near-shoring takes place in Latin America, they can be regarded as favorable locations for establishing a foothold to access North America or securing key minerals. Additionally, Latin American countries with substantial backward linkages should be prioritized in trade with the United States. Among them, Mexico and Brazil, which exhibit relatively high levels of backward linkage within Latin America, are considered suitable hubs due to their capacity for generating significant foreign added value in their exports to the United States.
Topic:
Economics, Trade, Global Value Chains, COVID-19, and Minerals
Political Geography:
Latin America and United States of America