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562. Better Returns in a Better World: Responsible investment: overcoming the barriers and seeing the returns
- Author:
- Rory Sullivan, Helena Viñes Fiestas, and Rachel Crossley
- Publication Date:
- 11-2010
- Content Type:
- Working Paper
- Institution:
- Oxfam Publishing
- Abstract:
- “We can't afford not to invest in the developing world. We all know that's where the greatest need is; but that is also where some of the greatest dynamism is.” Ban Ki Moon, UN Secretary-General speaking at the UN Global Compact Leaders Summit, June 2010.
- Topic:
- Development, Economics, International Trade and Finance, Markets, and Poverty
- Political Geography:
- United Nations
563. Sovereign Bankruptcy in the European Union in the Comparative Perspective
- Author:
- Leszek Balcerowicz
- Publication Date:
- 12-2010
- Content Type:
- Working Paper
- Institution:
- Peterson Institute for International Economics
- Abstract:
- This paper distinguishes four alternative sovereign debt resolution mechanisms: pure market solutions, modified market solutions, crisis lending by the IMF and other institutions, and the proposed Sovereign Debt Restructuring Mechanism (SDRM). It is hard to find—at the general level of analysis—the unique advantages of SDRM. The assessment of the European Stabilization Mechanism will ultimately depend on its operation, especially whether it will be a tool of subsidizing countries in debt distress or an instrument of fiscal crisis lending. The present fiscal problems in the eurozone are due to the erosion of fiscal discipline and not to the lack of strong compensatory transfers within the eurozone. The right model to look at the conditions for the stability of the eurozone is not a single state but the gold standard–type system, a system of sovereign states with a (de facto) single currency. Based on this analogy and considering modern developments, three types of measures are needed to safeguard the stability of the eurozone: (1) measures that would reduce the procyclicality of the macroeconomic policies and of the economy; (2) reforms that would help the eurozone economies grow out of increased public debt; and (3) steps to increase the flexibility of the economy so that it can deal with the future shocks in a better way.
- Topic:
- Debt, Economics, Markets, Monetary Policy, and Financial Crisis
- Political Geography:
- Europe
564. Trade Disputes Between China and the United States: Growing Pains so Far, Worse Ahead?
- Author:
- Gary Clyde Hufbauer and Jared C. Woollacott
- Publication Date:
- 12-2010
- Content Type:
- Working Paper
- Institution:
- Peterson Institute for International Economics
- Abstract:
- This study covers the history of Sino-US trade relations with a particular focus on the past decade, during which time each has been a member of the World Trade Organization (WTO). Providing a brief history of 19th and 20th century economic relations, this paper examines in detail the trade disputes that have arisen between China and the United States over the past decade, giving dollar estimates for the trade flows at issue. Each country has partaken in their share of protectionist measures, however, US measures have been characteristically defensive, protecting declining industries, while Chinese measures have been characteristically offensive, promoting nascent industries. We also cover administrative and legislation actions within each country that have yet to be the subject of formal complaint at the WTO. This includes an original and comprehensive quantitative summary of US Section 337 intellectual property rights cases. While we view the frictions in Sino-US trade a logical consequence of the rapid increase in flows between the two countries, we caution that each country work within the WTO framework and respect any adverse decisions it delivers so that a protracted protectionist conflict does not emerge. We see the current currency battle as one potential catalyst for such conflict if US and Chinese policymakers fail to manage it judiciously.
- Topic:
- Economics, International Trade and Finance, Markets, and Bilateral Relations
- Political Geography:
- United States and China
565. Russia's Oil Exports: Economic Rationale Versus Strategic Gains
- Author:
- Adnan Vatansever
- Publication Date:
- 12-2010
- Content Type:
- Working Paper
- Institution:
- Carnegie Endowment for International Peace
- Abstract:
- Russia, the world's largest oil producer, is vigorously promoting the development of new outlets for oil exports. While the recent launch of a long-awaited cross-border oil pipeline between Russia and China has received most of the publicity, it is a part of a much larger Russian initiative aimed at developing new oil export infrastructure in almost every possible direction: Asia, the Baltic Sea region, the Black Sea region, and the Arctic. This export strategy will have considerable policy and economic implications for Eastern and Central Europe and even the United States.
- Topic:
- Economics, Energy Policy, Markets, and Oil
- Political Geography:
- United States and Europe
566. Has the Fed Been a Failure?
- Author:
- George A. Selgin, Lawrence H. White, and William D. Lastrapes
- Publication Date:
- 11-2010
- Content Type:
- Working Paper
- Institution:
- The Cato Institute
- Abstract:
- As the one-hundredth anniversary of the 1913 Federal Reserve Act approaches, we assess whether the nation's experiment with the Federal Reserve has been a success or a failure. Drawing on a wide range of recent empirical research, we find the following: (1) The Fed's full history (1914 to present) has been characterized by more rather than fewer symptoms of monetary and macroeconomic instability than the decades leading to the Fed's establishment. (2) While the Fed's performance has undoubtedly improved since World War II, even its postwar performance has not clearly surpassed that of its undoubtedly flawed predecessor, the National Banking system, before World War I. (3) Some proposed alternative arrangements might plausibly do better than the Fed as presently constituted. We conclude that the need for a systematic exploration of alternatives to the established monetary system is as pressing today as it was a century ago.
- Topic:
- Civil Society, Government, and Markets
- Political Geography:
- United States
567. Do Vouchers and Tax Credits Increase Private School Regulation?
- Author:
- Andrew J. Coulson
- Publication Date:
- 10-2010
- Content Type:
- Working Paper
- Institution:
- The Cato Institute
- Abstract:
- School voucher and education tax credit programs have proliferated in the United States over the past two decades. Advocates have argued that they will enable families to become active consumers in a free and competitive education marketplace, but some fear that these programs may in fact bring with them a heavy regulatory burden that could stifle market forces. Until now, there has been no systematic, empirical investigation of that concern. The present paper aims to shed light on the issue by quantifying the regulations imposed on private schools both within and outside school choice programs, and then analyzing them with descriptive statistics and regression analyses. The results are tested for robustness to alternative ways of quantifying private school regulation, and to alternative regression models, and the question of causality is addressed. The study concludes that vouchers, but not tax credits, impose a substantial and statistically significant additional regulatory burden on participating private schools.
- Topic:
- Education, Government, and Markets
- Political Geography:
- United States
568. Interest on Excess Reserves as a Monetary Policy Instrument: The Experience of Foreign Central Banks
- Author:
- David Bowman, Etienne Gagnon, and Mike Leahy
- Publication Date:
- 03-2010
- Content Type:
- Working Paper
- Institution:
- Board of Governors of the Federal Reserve System
- Abstract:
- This paper reviews the experience of eight major foreign central banks with policy interest rates comparable to the interest rate on excess reserves paid by the Federal Reserve. We pursue two main lines of inquiry: 1) To what extent have these policy interest rates been lower bounds for short-term market rates, and 2) to what extent has tightening that included increasing these policy rates been achieved without reliance on reductions in reserves or other deposits held at the central bank? The foreign experience suggests that policy rate floors can be effective lower bounds for market rates, although incomplete access to central bank accounts and interest on them weakens this result. In addition, the foreign experience suggests that tightening by increasing the interest rate paid on central bank balances can help reduce or eliminate the need to drain balances. These results are consistent with theoretical results that show that tightening without draining is possible, irrespective of whether excess reserves are large or small.
- Topic:
- Markets, Interest Rates, Central Bank, and Fiscal Policy
- Political Geography:
- Global Focus
569. A Theory of Capital Rationing
- Author:
- Jan Toporowski
- Publication Date:
- 09-2010
- Content Type:
- Working Paper
- Institution:
- School of Oriental and African Studies - University of London
- Abstract:
- This paper revisits some of the issues originally put forward by the author as the theory of capital market inflation, in the book The End of Finance (Toporowski 2000). The paper makes much clearer the key assumptions and relationships between the operations of the capital market dominated by institutional investors, and the balance sheets of companies. In this way, it presents a theory of how macroeconomic dynamics may be affected by disequilibrium in the capital market. The first part of the paper examines the demand for new equity issues by institutional investors, namely insurance companies and pension funds. In the second part of the paper it is argued that the tendency of pension funds to mature may be a factor in forcing companies into debt and thus discouraging their investment and restricting their cash flow. The tendency towards forced indebtedness may be reinforced by an inelastic demand for capital by banks. The third part of the paper argues that the inelastic supply of capital in the capital market gives rise to processes of capital market inflation or deflation. The first of these may make banks more fragile. The second may contribute to deflationary processes in the macroeconomy. A fourth section argues that further instability is added by international capital market integration.
- Topic:
- Debt, Markets, Banks, and Investment
- Political Geography:
- Global Focus
570. Why Fiscal Stimulus Is Unlikely to Work
- Author:
- Kevin A. Hassett
- Publication Date:
- 03-2009
- Content Type:
- Working Paper
- Institution:
- American Enterprise Institute for Public Policy Research
- Abstract:
- This paper reviews the empirical literature on countercyclical policy. It finds that three types of countercyclical policies have been studied in the literature: built in stabilizers, temporary policy changes, and more permanent policy changes. The literature is decidedly mixed on the effectiveness of temporary changes, but more hopeful concerning the other two.
- Topic:
- Debt, Economics, Markets, and Political Economy
- Political Geography:
- United States