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3022. From Master Plans to Stimulus Packages: Reflections on Urban Assistance to Rich and Poor Countries
- Author:
- Michael Cohen
- Publication Date:
- 11-2009
- Content Type:
- Working Paper
- Institution:
- The New School Graduate Program in International Affairs
- Abstract:
- The intensive efforts of the World Bank and other urban lending programs focused on the immediate physical needs of housing and urban services rather than considering cities as sites of value creation, income generation, or productivity—an urbanization model of high urban population growth shaped this focus. Such urban planning and policy need to be considered in terms of its intention and how objectives implicitly and explicitly address the issue of context. Moreover, lessons of policy and program assistance practice should be reflected in urban lending program design; their evolution and use suggest the need for more attention to context.
- Topic:
- Development, Economics, Poverty, and Third World
3023. China: Bogus Boom?
- Author:
- John H. Makin
- Publication Date:
- 08-2009
- Content Type:
- Policy Brief
- Institution:
- American Enterprise Institute for Public Policy Research
- Abstract:
- China's economic statistics have become the envy of the world. On July 15, China reported a 7.9 percent growth rate for the second quarter of 2009 compared to the same period a year earlier. Meanwhile, China's stock markets are on fire, and its property markets are heating up fast as well. Shanghai's two stock markets are up 75 percent and 95 percent respectively so far this year. The more widely traded Hong Kong Index is up 27 percent, a stellar performance compared to largely flat stock markets in the United States, Europe, and Japan. In even stronger contrast, Russia, which is one of China's emerging-market peers, has seen its economy drop by 10.1 percent during the first half of this year, while its stock market has struggled as well.
- Topic:
- Economics, Emerging Markets, and International Political Economy
- Political Geography:
- Russia, United States, Japan, China, Europe, and Hong Kong
3024. Can China Keep Growing?
- Author:
- John H. Makin
- Publication Date:
- 05-2009
- Content Type:
- Policy Brief
- Institution:
- American Enterprise Institute for Public Policy Research
- Abstract:
- Governor Zhou Xiaochuan's comment is an open acknowledgement that the “adverse feedback loop,” in which financial-sector problems hurt the real economy, which in turn intensifies negative conditions in finance, has hit China hard. China's real growth rate, which peaked at 13 percent in 2007 and is heavily dependent on exports, plunged to 6.1 percent on a year-over-year basis in the first quarter of 2009. Nominal growth, a measure of the current money value of goods and services, fell even more sharply, from 21.4 percent in 2007 to 3.6 percent in the first quarter of this year. The fact that the nominal growth rate is 2.5 percent below the real growth rate suggests that, at least as far as output is concerned, deflation has taken hold at a 2.5 percent rate in China.
- Topic:
- Economics, Emerging Markets, and International Political Economy
- Political Geography:
- China
3025. Inflation Scare: Crazy but Real
- Author:
- John H. Makin
- Publication Date:
- 07-2009
- Content Type:
- Policy Brief
- Institution:
- American Enterprise Institute for Public Policy Research
- Abstract:
- The recent steps by the Federal Reserve to preempt deflation have—ironically and unexpectedly— prompted a surge in inflation fears both inside the United States and abroad, especially in China. Specifically, the Fed's measures to go beyond the stimulus inherent in a zero percent federal funds rate by purchasing Treasury and mortgage securities has conjured visions—especially in the eyes of major buyers of Treasury securities, China foremost— of massive money printing to underwrite trillions of dollars of additional government borrowing at low interest rates. As markets have shown, if that were the Fed's intention—which it decidedly is not—the effort would fail because excessive money printing—creating a money supply larger than the quantity of money demanded— would push up interest rates as inflation expectations rose.
- Topic:
- Economics, International Political Economy, International Trade and Finance, and Monetary Policy
- Political Geography:
- United States and China
3026. Three Lessons from the Financial Crisis
- Author:
- John H. Makin
- Publication Date:
- 09-2009
- Content Type:
- Policy Brief
- Institution:
- American Enterprise Institute for Public Policy Research
- Abstract:
- More than two years have passed since the U.S. housing bubble burst. That event ushered in a financial crisis that was not only intense but also stunning. So stunning in fact, that in August of last year, just a month before the collapse of Lehman Brothers, the global economy was close to a crisis worthy of comparison with the Great Depression, yet neither the markets nor the Federal Reserve had much of an inkling of what was to come. The Standard and Poor's (S) 500 Index had come down to about 1,300 from its October 2007 high of 1,576. Positive growth had just been reported for the U.S. economy during the second quarter of 2008 at an annual rate of 2.8 percent (later revised down to 1.5 percent). Almost one percentage point of that growth came from U.S. consumption, and government spending also contributed. The wave of relief after the Bear Stearns scare in March 2008 had provided a nice boost to the economy and to markets. That boost was further enhanced by the substantial contribution to growth from net exports (2.9 percentage points) thanks to what was, then, continuing strength in the global economy, especially in China, which had reported blistering 10.1 percent year-over-year growth in the second quarter of 2008. These and other positive components more than offset a drag from inventories and residential investment. In short, the real economy had not shown much evidence of damage emanating from the chaos that was churning in the financial sector.
- Topic:
- Economics, International Political Economy, International Trade and Finance, Markets, Monetary Policy, and Financial Crisis
- Political Geography:
- United States and China
3027. Postcrisis Risks
- Author:
- John H. Makin
- Publication Date:
- 11-2009
- Content Type:
- Policy Brief
- Institution:
- American Enterprise Institute for Public Policy Research
- Abstract:
- The only thing scarier than the slide of the dollar, which has dropped by 15 percent since March, would be an attempt by the Federal Reserve to stop it. Such an attempt would show that we have learned nothing from the Bank of Japan's disastrous premature exit from a zero-interest policy in August 2000. Closer to home, it would resemble the Fed's premature move to mop up “excess” reserves by doubling reserve requirements in three steps between August 1936 and May 1937, which was followed by the third-worst recession of the twentieth century, from May 1937 to June 1938.
- Topic:
- Economics, International Political Economy, International Trade and Finance, Monetary Policy, and Financial Crisis
- Political Geography:
- United States and Japan
3028. Wall Street Is Dancing Again
- Author:
- John H. Makin
- Publication Date:
- 10-2009
- Content Type:
- Policy Brief
- Institution:
- American Enterprise Institute for Public Policy Research
- Abstract:
- Wall Street is dancing again to the music of a sharp rise in stock prices. The question that remains is whether Main Street, currently languishing in a sad world of job losses, unavailable credit, and weakened balance sheets, will get to join the party. To put the question more precisely, will the “adverse feedback loop” that saw a financial collapse last fall that crushed the real economy work in reverse, so that a financial bounce boosts the real economy in coming quarters? The jury is still out on this important question.
- Topic:
- Economics, Markets, and Financial Crisis
- Political Geography:
- United States
3029. Africa's Private Sector: What's Wrong with the Business Environment and What to Do About It
- Author:
- Vijaya Ramachandran, Manju Kedia Shah, and Alan Gelb
- Publication Date:
- 03-2009
- Content Type:
- Policy Brief
- Institution:
- Center for Global Development
- Abstract:
- Why has the private sector failed to thrive in much of sub-Saharan Africa? Drawing on a unique set of enterprise surveys, we identify inadequate infrastructure (especially unreliable electricity and poor quality roads) and burdensome regulations as the biggest obstacles to doing business. We find as well that the private sector in many countries is dominated by ethnic minorities, which inhibits competition and lowers demand for a better business environment. Solutions include investing in infrastructure, providing risk guarantees, and reforming regulations to lower the cost of doing business, as well as increasing access to education for would-be entrepreneurs.
- Topic:
- Development, Economics, Emerging Markets, Globalization, and International Trade and Finance
- Political Geography:
- Africa
3030. Growing Pains in Latin America: An Economic Growth Framework as Applied to Brazil, Costa Rica, Colombia, Mexico, and Peru
- Author:
- Liliana Rojas-Suarez
- Publication Date:
- 09-2009
- Content Type:
- Policy Brief
- Institution:
- Center for Global Development
- Abstract:
- Before the global economic crisis began in 2008, all countries in Latin America, long known as the world's most economically and financially volatile region, had experienced five consecutive years of economic growth, a feat that had not been achieved since the 1970s. Yet despite this growth, Latin America's incomeper-capita gap relative to high-income countries and other emerging-market economies widened, and poverty remained stubbornly high. Latin America, in short, suffered from growing pains even when things were going reasonably well.
- Topic:
- Economics and Emerging Markets
- Political Geography:
- Brazil, Colombia, Latin America, Mexico, Costa Rica, and Peru