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301. Making Korea Grow Again: Rebalancing the Moon Jae-in Economic Agenda

Author:
Choong Yong Ahn
Publication Date:
05-2018
Content Type:
Working Paper
Institution:
Korea Economic Institute of America (KEI)
Abstract:
The Moon Jae-in administration in South Korea has taken a two-pronged approach to ensure urgently needed job creation and inclusive growth. Although measures towards each set of economic policies have been implemented since Moon took office in May 2017, what’s often referred to as “incomeled growth” has been prioritized over innovative growth. The income-led growth model is largely driven by domestic consumption through pro-labor distributional policies including a wage hike to raise the disposable income of low- and middleincome individuals, thereby triggering equity with growth. Focused more on the supply side, the innovative growth model encourages startups to create jobs and innovate. It is a great challenge for Korea to pursue growth and equity through both sets of policies. After a year in office, the Moon administration’s economic agenda, often referred to as J-nomics, has not fully produced the intended policy objectives in terms of job creation and growth. To mitigate a declining potential growth rate and pursue robust and inclusive growth, the twin policies need to be rebalanced, reprioritized, and interconnected in a mutually reinforcing manner to empower the private sector to play a bigger role. As a mid-sized open economy, Korea requires global market competitiveness on the supply side to create decent jobs by buoying entrepreneurship and innovation. Structural reforms in the labor market combined with deregulations necessary for the advent of disruptive 4th-industrial-revolution technologies must be expedited. Furthermore, a new business ecosystem in which win-win collaborations between globally-oriented conglomerates and small businesses must be encouraged to replace a zero-sum business culture.
Topic:
Economics, Science and Technology, Global Markets, and Economic growth
Political Geography:
Asia, South Korea, and Korea

302. The Economic Importance of the KORUS FTA: A Case Study of the Korean Beef Market After Renegotiations

Author:
Jin Kyo Suh
Publication Date:
05-2018
Content Type:
Working Paper
Institution:
Korea Economic Institute of America (KEI)
Abstract:
Beef trade was a major sticking point between the United States and South Korea in ratifying the KORUS FTA. The outcome of the renegotiations that led to the March 2018 agreement in principle did not impact sections pertaining to beef in the agreement, though looking at how beef trade would have been affected should the talks have failed highlights the importance of the agreement to both countries, but particularly the United States. This paper estimates the demand for imported beef in South Korea by source and product by using the production version of the Rotterdam demand system and assesses what the potential impact of U.S. withdrawal from the KORUS FTA would have been on beef trade between the U.S. and South Korea. The results suggest U.S. withdrawal from the KORUS FTA would have resulted in a considerable increase in Australian beef exports to South Korea, largely at the expense of U.S. beef. This is because there is significant price competition between beef imports from the United States and Australia. Furthermore, Korean consumers substitute American beef for Australian beef when the relative price of U.S. beef rises.
Topic:
Economics, Treaties and Agreements, Exports, and Trade Policy
Political Geography:
Asia, South Korea, North America, Korea, and United States of America

303. How Social Inequalities Affect Sustainable Development: Five Causal Mechanisms Underlying the Nexus

Author:
Bettina Schorr
Publication Date:
01-2018
Content Type:
Working Paper
Institution:
Postgraduate Program on Sustainable Development and Social Inequalities in the Andean Region (trAndeS)
Abstract:
Since the publication of the Brundtland Report in 1987, social inequality has been a topic of concern for the international development community. In the last decade, given the rise of global inequality the subject gained even more prominence as several international organizations (UNDP, World Bank, OECD) began emphasizing the negative impact of social inequality on human well-being. The Agenda 2030, the current development strategy adopted by the United Nations in 2015, elevated “reducing inequality” to one of the 17 Sustainable Development Goals (Goal No. 10). This paper connects with this growing concern over the impact of social inequalities on the opportunities for sustainable development. It proposes a research agenda for the social sciences to contribute to the debate by identifying the causal mechanisms that constitute the nexus between social inequalities and sustainable development. The focus on these intermediary steps is important in order to understand in more detail the barriers that social inequalities pose for more sustainable social, economic and ecological arrangements. This is especially necessary when it comes to designing or implementing strategies (political or technological) that aim to promote sustainable development, above all in highly unequal societies.
Topic:
Development, Economics, Inequality, Sustainable Development Goals, Sustainability, and Ecology
Political Geography:
Argentina, Latin America, and Chile

304. Global Terrorism Index 2018: Measuring and understanding the global impact of terrorism

Publication Date:
11-2018
Content Type:
Special Report
Institution:
Institute for Economics & Peace
Abstract:
The GTI is produced by the Institute for Economics & Peace (IEP) based on data from the Global Terrorism Database (GTD). Data for the GTD is collected and collated by the National Consortium for the Study of Terrorism and Responses to Terrorism (START) at the University of Maryland. The GTD contains over 170,000 terrorist incidents for the period 1970 to 2017. Deaths from terrorism fell for the third consecutive year, after peaking in 2014. The total number of deaths fell by 27 per cent between 2016 and 2017, with the largest falls occurring in Iraq and Syria. Iraq recorded over 5,000 fewer deaths from terrorism in 2017, while Syria recorded over 1,000 fewer deaths. The fall in deaths was reflected in scores on the GTI, with 94 countries improving, compared to 46 that deteriorated. This is the highest number of countries to record a year on year improvement since 2004 and reflects the increased emphasis placed on countering terrorism around the world since the surge in violence in 2013. The large falls in the number of deaths in Iraq and Syria is mainly the result of ISIL’s continuing decline. The number of deaths from terrorist attacks attributed to ISIL fell by 52 per cent in 2017, with total incidents falling by 22 per cent. There was a corresponding decrease in the lethality of attacks, highlighting the weakening capacity of the organisation. ISIL has now lost most of its territory and sources of revenue and is actively redirecting resources away from the Middle East and into North Africa, sub-Saharan Africa, and Southeast Asia.
Topic:
Political Violence, Economics, Terrorism, and Peace
Political Geography:
Middle East, North Africa, Southeast Asia, Global, and Sub-Saharan Africa

305. Global Peace Index 2018: Measuring peace in a complex world

Publication Date:
06-2018
Content Type:
Special Report
Institution:
Institute for Economics & Peace
Abstract:
This is the twelfth edition of the Global Peace Index (GPI), which ranks 163 independent states and territories according to their level of peacefulness. Produced by the Institute for Economics and Peace (IEP), the GPI is the world’s leading measure of global peacefulness. This report presents the most comprehensive data-driven analysis to-date on trends in peace, its economic value, and how to develop peaceful societies. The GPI covers 99.7 per cent of the world’s population, using 23 qualitative and quantitative indicators from highly respected sources, and measures the state of peace using three thematic domains: the level of Societal Safety and Security; the extent of Ongoing Domestic and International Conflict; and the degree of Militarisation. In addition to presenting the findings from the 2018 GPI, this year’s report includes analysis of trends in Positive Peace: the attitudes, institutions, and structures that create and sustain peaceful societies. It looks at changes in indicators of Positive Peace that immediately precede deteriorations or improvements in peacefulness, which provides a framework for predictive analysis. The report also assesses the ways in which high levels of peace positively influence major macroeconomic indicators.
Topic:
Economics, Peace Studies, Violence, and Peace
Political Geography:
Global Focus

306. Mexico Peace Index 2018:A comprehensive measure of peacefulness in Mexico

Publication Date:
04-2018
Content Type:
Special Report
Institution:
Institute for Economics & Peace
Abstract:
The 2018 Mexico Peace Index (MPI), produced by the Institute for Economics and Peace (IEP), provides a comprehensive measure of peacefulness in Mexico. The MPI is based on the work of the Global Peace Index, which is the leading measure of global peacefulness and has been produced by IEP every year since 2007. This is the fifth annual edition of the MPI, setting out the key trends, patterns and drivers of peace in Mexico, while also highlighting the most significant policy opportunities available to governments. The report analyses the dynamics of violence in Mexico and the strengths and weaknesses of the attitudes, institutions and structures, known as Positive Peace, needed to substantially lower the rates of violence. The report also estimates the significant economic impact of violence to the Mexican economy and the need to increase the level of investment in violence containment. Finally, the report provides strong quantitative evidence to aid in the development of policies to create a more peaceful society. The research is of assistance to policymakers, researchers, business leaders and the general public in building peace in Mexico.
Topic:
Economics, Peace Studies, Conflict, Violence, and Peace
Political Geography:
Central America and Mexico

307. Exchange Rate, Petroleum Price and Price Determination in Sierra Leone

Author:
B.I.B. Kargbo
Publication Date:
01-2018
Content Type:
Working Paper
Institution:
African Economic Research Consortium (AERC)
Abstract:
The Sierra Leone economy is a net importer with a chronic negative balance of trade. Imports as a percentage of GDP averaged 40.8% between 2001 and 2010. Imports of food, mineral fuels and lubricants accounted for 50.8% of the total value of imports within the same period. Also, the value of the leone depreciated from Le 920.75 in 1996 to Le 4,000 in 2010 while inflation averaged 12.6% for the same period. As a result of the interplay of these forces, fuel prices are most times adjusted upwards to compensate for the depreciation of the leone against the dollar or to match up with increases in the world price of crude oil. This study determines the effects of monetary environment as well as exchange rate movement and petroleum prices on domestic prices in Sierra Leone by estimating a hybrid model of inflation in which inflation responds to its own lags, lags of other variables, and a set of error-correction terms that represent short run disequilibria from the money market, external sector and output that feed into the inflation process.The empirical results from the parsimonious model show that petroleum product prices and exchange rate, as well as monetary factors determine inflation in Sierra Leone.What is also significant from the findings is that the contribution of petroleum prices to domestic price formation is unfounded in the long run, meaning that it is only a short-run phenomenon. The results also support the view that a fair portion of fluctuations in domestic prices is driven by its own shocks.
Topic:
Development, Economics, International Trade and Finance, Monetary Policy, Economic growth, and Inflation
Political Geography:
Africa and Sierra Leone

308. Conditional Pricing of Currency Risk in Africa's Equity Market

Author:
Odongo Kodongo and Kalu Ojah
Publication Date:
01-2018
Content Type:
Research Paper
Institution:
African Economic Research Consortium (AERC)
Abstract:
In this paper, we sought to establish whether Africa’s volatile currencies drive equity risk premium. We use the stochastic discount factor (SDF) framework to estimate various conditional specifications of the International Capital Asset Pricing Model through generalized method of moments technique. Our results show strong evidence of conditional, time-varying currency risk premium in equity returns. Currency risk is also perceived by international investors as important in informing the equities pricing kernel. We also find evidence that international investors are worried about Africa’s small size equity markets and build anticipated low trading into their pricing calculus.
Topic:
Development, Economics, International Trade and Finance, Global Political Economy, Economic growth, Capital Flows, Currency, and Profit
Political Geography:
Africa

309. Estimating the Size and Trends of the Informal Economy in Ghana

Author:
Matthew Kofi Ocran
Publication Date:
01-2018
Content Type:
Research Paper
Institution:
African Economic Research Consortium (AERC)
Abstract:
The purpose of this paper is to quantitatively examine the evolution of the informal economy over the past four decades. The study used the currency demand approach as analytical framework for the assessment. The findings suggest that there has been an upward trend in the size of the informal economy as a proportion of the officially recorded GDP. For instance, the size of the informal economy as a proportion of the official GDP estimates increased steadily, from 14% in 1960 to 18% by 1977. The proportion fell thereafter and started picking up again from 1983 to a new high of 30% between 2003 and 2004. The outcome of the study has policy implications particularly for the design of effective monetary and fiscal policy and the selection of appropriate policy instruments.
Topic:
Development, Economics, International Political Economy, Monetary Policy, Economic growth, Fiscal Policy, and Profit
Political Geography:
Africa and Ghana

310. Econometric Analysis of Gender and Labour Market Outcomes in Urban Cameroon

Author:
Christian Zamo Akono
Publication Date:
01-2018
Content Type:
Research Paper
Institution:
African Economic Research Consortium (AERC)
Abstract:
In every country, gender disparities are observed in various aspects of daily life, the most visible ones being those related to labour market outcomes. This paper highlights the importance of the labour market related gender disparities in Cameroon with special focus on the relative contribution of identified determinants on unemployment duration, employment status and remuneration. Based on the 2010 Employment and the Informal Sector Survey by the National Institute of Statistics, both parametric and non-parametric analyses of unemployment durations have been used. They include probit model estimates for the choice of non-wage earner status, estimates of Mincer-type equations and various extensions of the Blinder-Oaxaca decomposition. The results obtained can be summarized in three main points as follows. Firstly, women have longer periods of unemployment and are less likely to leave unemployment for a job than men. Results indicate that these gender disparities in exit probabilities from unemployment are due to differences in human capital endowments and to socioeconomic factors, which have a tendency of increasing women’s reservation wage. Also, unobserved heterogeneity with greater positive duration dependence for women is confirmed. Secondly, there are gender differences in probability transitions to either wage or non-wage employment with women being more likely to be self-employed. Of these gender differences, human capital endowment and job search methods account for 20.64% and 38.20%, respectively. The remaining part is due to unobserved factors. Thirdly, gender differences in labour market earnings are around 6% and 17% among wage and non-wage earners, respectively. Observable factors in wage equations account for only for 6% and 30% in the respective groups. These results suggest the formulation of several policies to reduce the observed differences. Some of these policies relate to the conception and implementation of vocational training targeting women and, to some extent, the setting up of programmes for relocating unemployed individuals to where employment opportunities are greater. Others relate to reducing the
Topic:
Economics, Gender Issues, International Political Economy, International Trade and Finance, Labor Issues, Economic growth, Capital Flows, and Macroeconomics
Political Geography:
Africa and Cameroon