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21. Urban Amenities and Regional Performance: Case Study of Indonesia

Author:
Titik Anas, Widdi Mugijayani, Estiana Cahyawati, and Muhammad Ridho
Publication Date:
06-2024
Content Type:
Working Paper
Institution:
Economic Research Institute for ASEAN and East Asia (ERIA)
Abstract:
The aim of this paper is to evaluate the importance of urban amenities to economic development using Indonesia as a case study. Indonesia has rich micro-level data on urban amenities, which we group in this paper into 12 categories, namely education, health, religious, and shopping facilities; accommodations; banks; historical sites; recreation sites; restaurants; public transportation stations; modern shopping facilities; and gas stations. Using panel data of 2007 and 2014, we test how urban amenities affect regional development, proxied by employment and population growth. We show that education and shopping facilities significantly affect the growth of employment and population. We also found that the effect of the availability of education facilities is stronger in the regions with industrial parks.
Topic:
Development, Globalization, Services, Productivity, and Amenities
Political Geography:
Indonesia, Asia, and Southeast Asia

22. Analysis of Istanbul Stock Market Returns Volatility with ARCH and GARCH Models

Author:
İpek M. Yurttagüler
Publication Date:
01-2024
Content Type:
Journal Article
Journal:
Istanbul Journal of Economics
Institution:
Istanbul University Faculty of Economics
Abstract:
In today’s world where globalization is intensely experienced, differences in risk perception, developments in capital markets, and the negativities faced in the markets due to uncertainty are very important when researching the structures of the stock markets, and therefore determining current volatilities. One of the biggest problems encountered is the inability to price stocks effectively. Therefore, estimating and modeling volatility becomes crucial. The diversity of the portfolio, created by international investors in the financial markets and the sustainability of their investment decisions, are closely related to the volatility variable. However, the fact that financial markets are more fragile in developing countries increases the importance of volatility. There are many different methods in the literature when estimating volatility. Due to the inadequacy of traditional time series models in estimating volatility, conditional heteroskedasticity models are used with ARCH and GARCH class models being frequently used. In this study, the series of daily opening values of the ISE100 Index covering from 02.01.2003 to 30.09.2022 was estimated using ARCH/GARCH models for volatility with the aim to determine which model has the higher explanatory power. According to the findings, the GARCH(1,1) model gave more meaningful results in explaining the ISE100 return volatility.
Topic:
Economics, Globalization, Stock Markets, and Volatility
Political Geography:
Turkey and Middle East

23. A Generalised Commodity Theory of Exploitation

Author:
Photis Lysandrou
Publication Date:
01-2024
Content Type:
Working Paper
Institution:
City Political Economy Research Centre (CITYPERC), University of London
Abstract:
This paper argues that the conceptual framework of Marx's Capital allows for the extraction of a commodity-based theory of capitalist exploitation that is distinct from the traditional labour-value based theory. The rationale for extracting such a theory is that it allows for an explanation of the current rise in global economic inequality in a way that shows this development to be entirely consistent with the fundamental laws of capitalism as it enters its globalised and financialised stage of development.
Topic:
Globalization, Capitalism, Commodities, Exploitation, and Financialized Capitalism
Political Geography:
Global Focus

24. The European Union between the United States and China: should we choose between equidistance and following?

Author:
Philippe Etienne
Publication Date:
10-2024
Content Type:
Working Paper
Institution:
Robert Schuman Foundation (RSF)
Abstract:
The competition between the world's two major powers structures all international relations and influences the choices made by all other countries. The latter fear the consequences of tensions between the two giants and, in the main, want to avoid having to choose. But the problem is not the same everywhere. To put it simply, China benefits in the "global South" from a certain hostility towards the West, while the United States can play on the fear aroused by the emergence of Chinese power, which no longer hesitates to resort to power relations, especially in Eastern Asia[1]. Against this backdrop, Europe is in a delicate situation. It must contend with its assimilation to the United States as being part of the “West” which is increasingly rejected. Although it shares much with its American ally, particularly the values of democracy and security arrangements, it does not always have the same interests as the United States and must preserve its room for manoeuvre if it is not to be dragged into decisions in which it has no part. Before examining how the European Union is facing up to this challenge, and how it should behave in the future, the driving forces and prospects of the Sino-American rivalry require exploration.
Topic:
International Relations, Globalization, European Union, Global South, and Rivalry
Political Geography:
China, Europe, Asia, North America, and United States of America

25. On the Importance of Placebo and Nocebo Effects in International Trade

Author:
Lucian Cernat
Publication Date:
06-2024
Content Type:
Policy Brief
Institution:
European Centre for International Political Economy (ECIPE)
Abstract:
Trade agreements are powerful drivers of global economic integration, leading to increased trade flows between countries. Usually, trade agreements are extensive documents with hundreds of provisions and different levels of enforceability. Are all these provisions useful, even those that are “best endeavours” and do not introduce legally binding obligations on trading partners? This policy brief proposes a new methodological approach to evaluate these effects. The basic idea is inspired by the “placebo effect” in medicine: under the right conditions, one can get positive results, even when the actual intervention is simply a “sugar pill”. Similarly, trade policies may have positive effects even when they lack strong, enforceable commitments. A placebo trade policy effect can emerge from “soft provisions” that bring positive trade effects, compared to the “do nothing” scenario. The main hypothesis behind this new methodology is that even if trade interventions lack the force to solve problems outright, a positive placebo effect can arise if stakeholders believe that such a policy will generate favourable market access. Conversely, a negative nocebo effect might emerge when stakeholders are convinced that certain trade policy initiatives (notably FTAs) have a detrimental impact, despite undeniable evidence to the contrary. The paper concludes with a few concrete examples illustrating both the placebo and nocebo effects and identifies factors that may lead to more positive outcomes from current and future trade policies.
Topic:
Globalization, Treaties and Agreements, European Union, Trade, and WTO
Political Geography:
Europe

26. What Mode of Supply Will Matter the Most for the Future of Services Trade?

Author:
Lucian Cernat
Publication Date:
09-2024
Content Type:
Policy Brief
Institution:
European Centre for International Political Economy (ECIPE)
Abstract:
This Policy Brief looks at the latest trends in services trade and tries to show their importance, in its various manifestations, for virtually all countries in the world. The paper starts with a short history of trade in services across centuries. Fast forward to today’s realities, the paper uses the most comprehensive datasets documenting the latest trends in global trade in services by modes of supply, trying to fill a gap in trade policy analysis and providing new insights on the importance of different modes of supply for various countries. The paper concludes with some recommendations aimed at creating a bridge between the various policy priorities shaping the future of globalisation in coming years.
Topic:
Globalization, Services, Trade, and Supply
Political Geography:
Global Focus

27. Trade, Jobs and Technological Change: What to Expect in the Next Five Years?

Author:
Lucian Cernat
Publication Date:
01-2024
Content Type:
Policy Brief
Institution:
European Centre for International Political Economy (ECIPE)
Abstract:
This Policy Brief explores the intertwined effects of trade and technological change (notably robotics and AI) on employment, highlighting a growing divergence between the number of jobs supported by exports and the declining labour intensity of exports in recent years. The decline in labour intensity may be sharply accelerated by the rise of robotics and the automation of routine tasks, displacing workers in manufacturing and logistics while enhancing productivity. For many countries that have a strong dependence on the trade-jobs nexus, the historically declining labour intensity of exports combined with the rapid adoption of robotics in key economic sectors, will mean that industries could now rely on fewer workers for their exporting activities. This dual shock suggests that, in the future, the number of jobs that depend on trade may decline. The convergence of these forces may lead to certain sectors or regions bearing the brunt of such potential labour disruptions. To address these challenges, supporting policies will be required to mitigate these adverse effects.
Topic:
Globalization, Science and Technology, Digital Economy, Trade, and Artificial Intelligence
Political Geography:
Global Focus

28. Businesses, EU Strengthening International Supply Chains

Author:
Piotr Dzierżanowski
Publication Date:
04-2023
Content Type:
Working Paper
Institution:
The Polish Institute of International Affairs
Abstract:
Over the past three years, global supply chains have experienced problems on an unprecedented scale. Given the rising political tensions and changes in the perception of the role of the economy in international rivalries, a return to international economic relations based on globalisation and trade liberalisation is highly unlikely. Instead, we will witness a necessary strengthening of supply chains, both at the individual business and national levels. For Western economies, the main challenge will be the reduction of related costs.
Topic:
Globalization, European Union, Economy, Business, and Supply Chains
Political Geography:
Europe and Global Focus

29. The Euro Area’s Achilles Heel: Reassessing Italy’s Long Decline in the Context of European Integration and Globalisation

Author:
Dario Guarascio, Philipp Heimberger, and Francesco Zezza
Publication Date:
07-2023
Content Type:
Special Report
Institution:
The Vienna Institute for International Economic Studies (WIIW)
Abstract:
This paper analyses how Italy’s decades-long decline turned the country into the euro area’s Achilles heel, the most vulnerable spot in the common currency. We use a structuralist framework to synthesise different (competing) supply-side and demand-side explanations, accounting for long-term processes and sectoral interdependencies. We argue that structural domestic factors that were already present in the decades after World War II (‘original sins’) – low-cost competition and labour fragmentation, many small firms linked to low innovation, and a deep territorial divide – interacted with the policy constraints brought about by globalisation and European integration to exacerbate Italy’s decline vis-à-vis its euro area peers.
Topic:
Globalization, European Union, Regional Integration, and Macroeconomics
Political Geography:
Europe and Italy

30. How Does Globalisation Affect Social Cohesion?

Author:
Kasper Vrolijk
Publication Date:
01-2023
Content Type:
Working Paper
Institution:
German Institute of Development and Sustainability (IDOS)
Abstract:
This paper explores the effects of globalisation on social cohesion outcomes and the underlying mechanisms. A framework for reviewing the literature is offered, in which labour earnings, household expenditures and firm productivity are identified as the main channels through which economic globalisation affects cohesion, trust and pro-social behaviour. Evidence points towards substantial losses in cohesion following negative globalisation changes, altering cohesion through absolute and relative changes in employment and expenditure (and people’s perception thereof). However, evidence is thin and inconsistent; studies are limited to effects of trade (and not foreign direct investment), cover some dimensions of cohesion but not others, and often evaluate the effect of negative trade events on cohesion (while trade and foreign direct investment may offer gains to workers, households and firms, which boosts cohesion). From the available evidence, it is determined that when setting policy, it is important to address relative losses from globalisation (between groups), incorporate economic costs of social repercussions, and take on market distortions and underlying cyclical or secular trends that may amplify the effects of globalisation on cohesion.
Topic:
Globalization, Economy, Trade, and Social Cohesion
Political Geography:
Global Focus