After protracted negotiations, Eurozone leaders finally agreed on a new package of measures last week. The outline deal has a three-pronged approach aimed at tackling the main aspects of the crisis: reducing Greece's debt burden, avoiding a credit crunch by recapitalising European banks, and preventing contagion to other countries via a boost to the EFSF.
Topic:
Debt, Economics, Markets, Regional Cooperation, and Financial Crisis
Politicians and pundits portray Herbert Hoover as a defender of laissez faire governance whose dogmatic commitment to small government led him to stand by and do nothing while the economy collapsed in the wake of the stock market crash in 1929. In fact, Hoover had long been a critic of laissez faire. As president, he doubled federal spending in real terms in four years. He also used government to prop up wages, restricted immigration, signed the Smoot-Hawley tariff, raised taxes, and created the Reconstruction Finance Corporation-all interventionist measures and not laissez faire. Unlike many Democrats today, President Franklin D. Roosevelt's advisers knew that Hoover had started the New Deal. One of them wrote, "When we all burst into Washington ... we found every essential idea [of the New Deal] enacted in the 100-day Congress in the Hoover administration itself."
Topic:
Economics, Markets, Political Economy, Financial Crisis, and Governance
Research on West African migration has tended to focus on specific 'crisis migration' issues, such as trafficking, international refugee flows or irregular migration to Europe. This reflects rather Eurocentric policy priorities, since these forms of West African migration are actually relatively small in comparison with intra-regional migration.
Topic:
Demographics, Markets, Migration, and Labor Issues
Thirteen years since its launch, Europe's common currency is in crisis. A Greek debt restructuring is inevitable, and concern is now focusing on contagion among the larger euro area economies. The prospect of a cascade of disorderly sovereign defaults is chilling investors, and the departure of some members from the common currency is increasingly being discussed. The Economist Intelligence Unit's central forecast is that the currency area will survive, but the odds of failure are too high to ignore. To help clients anticipate the implications for their operations of a collapse in the euro zone, we have compiled a list of frequently asked questions (FAQ), exploring the potential scope and impact of a euro-area break-up. We look at what “break-up” could mean, although in practice numerous possible permutations exist between the extremes of departure by a single country and the exit of all 17 members.
Topic:
Economics, International Trade and Finance, Markets, Regional Cooperation, Monetary Policy, and Financial Crisis
Since the beginning of the twenty‐first century, Africa has seen the arrival of a new form of Chinese migration. Largely independent from big Chinese players, these “new entrepreneurial migrants” come to Africa not as workers in the highly prestigious state projects, but rather to follow their own economic interests. Engaging in business activities as diverse as petty manufacturing, printing, pharmaceutical and medical services, restaurants, beauty salons and last but not least, general trade, these independent Chinese migrants are often acknowledged for bringing affordable new commercial services and goods to low‐income households on the African continent. On the other hand, the high visibility of the Chinese entrepreneurial activities has also sparked anti‐Chinese sentiments among many African entrepreneurs.
Topic:
Economics, Imperialism, International Trade and Finance, and Markets
Nobody can be left in any doubt as to the importance of innovation for prosperity upon reading that “people living in the first decade of the twentieth century did not know modern dental and medical equipment, penicillin, bypass operations, safe births, control of genetically transmitted diseases, personal computers, compact discs, television sets, automobiles, opportunities for fast and cheap worldwide travel, affordable universities, central heating, air conditioning . . . technological change has transformed the quality of our lives.”
Topic:
Development, Economics, Globalization, and Markets
Weatherhead Center for International Affairs, Harvard University
Abstract:
Those who study the role of agriculture in the political economy of development focus on government policy choices on the one hand and the impact of price shocks on the other. We argue that the two should be studied together. We find that civil unrest (Granger) causes government policies, pushing governments in poor and medium income countries to shift relative prices in favor of urban consumers. We also find that while civil wars are related to food price shocks, when government policy choices are taken into account, the relationship disappears. We thus learn two things: Policies that placate urban consumers may inflict economic costs on governments, but they confer political benefits. And when estimating the relationship between price shocks and political stability, equations that omit the policy response of governments are misspecified.
Topic:
Agriculture, Development, Economics, Government, Markets, Political Economy, and Food
The food system of the United States is currently witnessing a remarkable shift. Small farms and artisanal producers are on the rise, working with restaurants, institutional food services, and retail outlets to make locally-sourced, sustainably-grown food more widely available. Health- and environment-conscious consumers— “the locavores” —are placing new demands on the food system in ways that are affecting the nation's economy as well as its eating habits (see the “infographic” opposite). On March 4, 2011, United States Studies at the Wilson Center, with the support of the Chesapeake Bay Trust, convened practitioners, scholars, farmers, producers, and food activists to discuss both the scope of this phenomenon and the challenges faced by those seeking to transform the way Americans eat.
Peterson Institute for International Economics (PIIE)
Abstract:
Credit Rating Agencies (CRAs) are prominent participants in the assessment of credit risk by financial markets. They determine and publish credit ratings, which represent the CRA's opinions on issuers' relative probability of default. The market for credit ratings is currently dominated in most western countries by three players: n Standard Poor's (S) is a division of the McGraw- Hill Companies, a US-based media group whose ownership is dispersed (the largest shareholder is Capital Group, with 12 percent of shares); n Moody's Corporation is an autonomous US-based listed company with dispersed ownership (the largest shareholder is Berkshire Hathaway, with 12.5 percent of shares); n Fitch Ratings is a division of the Fitch Group which is jointly owned by Fimalac, a Paris-based listed investment vehicle (60 percent of shares), and the US-based Hearst Corporation (40 percent of shares).
Topic:
Debt, Economics, Globalization, International Trade and Finance, and Markets
Peterson Institute for International Economics (PIIE)
Abstract:
After 18 years, Russia is finally on the verge of acceding to the World Trade Organization (WTO). No country has struggled for so long to become a member of this important organization. The last impediment was removed on November 9, when Russia and Georgia concluded an agreement on monitoring trade flows across their disputed border. The WTO Working Party, which oversaw the negotiations, then approved Russian accession on November 10, clearing the way for formal membership to be adopted at the WTO ministerial conference to be held December 15–17, 2011 (WTO 2011).
Topic:
Conflict Resolution, Economics, International Trade and Finance, Markets, and Bilateral Relations