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11. Global Growth Projections for The Conference Board Global Economic Outlook 2019

Author:
Abdul Erumban and Klaas de Vries
Publication Date:
12-2018
Content Type:
Special Report
Institution:
The Conference Board
Abstract:
This paper presents the methodology for The Conference Board Global Economic Outlook 2019, which includes growth projections for 11 major regions and individual estimates for 33 mature and 36 emerging market economies for 2019-2023 and 2024-2028. The projections are based on a supply-side growth accounting model that estimates the contributions of the use of factor inputs—labor and capital—and total factor productivity growth to the growth of real gross domestic product (GDP). While labor input growth rates are estimated using data on demographic changes and participation rates—including an estimation to adjust for the change in the composition (or quality) of the workforce—capital input and total factor productivity growth are econometrically estimated using a wide range of related variables during past periods. The obtained trend growth rates for the period 2019-2023 are adjusted for possible deviations between actual and potential output in the short run.
Topic:
Labor Issues, Economy, and Capital Flows
Political Geography:
Global Focus

12. A World in Transition: the Rise of Populism and the Fall of Multilateralism? (Full Issue)

Author:
Emily E. Fox, Richard Aidoo, Marten Brienen, Carlos de la Torre, Alexander B. Makulilo, and Joel Martinez
Publication Date:
04-2017
Content Type:
Journal Article
Journal:
The Journal of Diplomacy and International Relations
Institution:
School of Diplomacy and International Relations, Seton Hall University
Abstract:
For the Journal’s 19th issue, we explore modern populism across the world. Richard Aidoo looks at the landscape of anti-Chinese populism in the context of Africa’s resource scramble, while Alexander B. Makulilo takes an in depth look at the siren song of populism in Tanzania. Marten Brienen and Carlos de la Torre hone in on populism in Latin America, exploring its early 21st Century evolution and its relationship with democracy respectively. Additionally, the Journal is proud to publish an interview with Ron Boquier and Raul Castillo, both of whom are active supporters of human rights in Venezuela, a county was a harbinger of recent global populist sentiment. Outgoing editor Joel Martinez speaks with Boquier and Castillo on the roles of the United Nations and United States in helping to advance democratic reform in the country.
Topic:
International Relations, Human Rights, Politics, Natural Resources, Law, Democracy, Populism, Multilateralism, and Capital Flows
Political Geography:
Africa, China, Asia, Latin America, and Tanzania

13. Against Foreign Capital?: The Populist Temptation in Tanzania

Author:
Alexander B. Makulilo
Publication Date:
04-2017
Content Type:
Journal Article
Journal:
The Journal of Diplomacy and International Relations
Institution:
School of Diplomacy and International Relations, Seton Hall University
Abstract:
Populism has always been a contested concept. However, its core message across definitions is simply in defense of the “common people” who are often regarded as marginalized. Hence, as a movement, it claims to seek for “inclusion.” In this regard, its core assumption is just doing away with elites and establishes a more direct democracy thereby reducing inequality and exclusion. As a leader, a populist is associated with “a strongly personalistic leadership style; outsiderism, or the claim that the new leader does not originate from among the existing political class; an anti-system, antiinstitutions and anti-organisations rhetoric, often targeting political parties and political corruption; a call for restoring ‘the power of the people.’” This indicates that an individual leader becomes the center of politics in a polity thereby undermining political institutions. This, in turn, suggests “decisionism” and lack of predictability in the political system. As such, a populist leader tends to free himself from any kind of institutional control hence promoting institutional decay. As such, populism is “anti-party, antielite, anti-establishment, anti-political.” Indeed, populists are hostile to the rich, to finance capital, and to big corporations.
Topic:
Politics, Populism, and Capital Flows
Political Geography:
Africa and Tanzania

14. Channelling household savings to productive uses through the capital markets

Author:
Geetima Das Krishna, Vardhana Pawaskar, and Ankit Bhardwaj
Publication Date:
11-2015
Content Type:
Working Paper
Institution:
Centre for Policy Research, India
Abstract:
Savings provides the means for investments. Typically, investments are primarily funded through domestic savings and the rest through foreign capital inflows. Domestic savings are from three sources -- households, private and public sector. Household savings form the largest part of total savings. As domestic savings contributes the most to capital formation, it can also be a limiting factor to investments. The paper deals with changing pattern of Household savings, its shift away from capital (financial) markets towards unproductive assets like gold and possibilities of channelization household savings to investment rather than speculative assets. The paper looks at the current policy incentives in terms of tax to boost capital market investment and whether it has served the purpose of long term capital formation. The current savings environment indicates a high proportion being in physical rather than financial assets. Within financial assets derivatives are preferred over the cash equity. We propose that an investment of incentive structure should support a pyramid where the small investors would hold maximum in the less risky assets and reduce the holdings as they move towards risky assets. Our paper is organized as, section (2) studies trends in current macro-economic scenario in terms of the savings; section (3), deals with, the capital formation and share of capital markets in terms of raising new capital. In section (4), we look at the current investment pattern in Indian capital markets and the incentives provides to boost trading in the equity and derivative products. Section (5) we give our proposal on the layered approach to investment architecture. Finally, section (6) concludes the paper.
Topic:
Finance, Economy, Capital Flows, and Investment
Political Geography:
South Asia, India, and Asia

15. Exclusion, Informality, and Predation in the Cities of Delhi

Author:
Cities of Delhi Team
Publication Date:
08-2015
Content Type:
Working Paper
Institution:
Centre for Policy Research, India
Abstract:
Delhi is India’s richest city and as the capital of the nation has long enjoyed favourable treatment from the Centre. As the home to the country’s national bureaucracies, it also benefits from a large base of secure, well-paid, government jobs. Over the last decade the city has grown at an average real rate of 10 percent, and has benefitted from a dramatic increase in large-scale infrastructure development. Yet, despite these advantages, Delhi is a deeply divided city marked by layers of social exclusion. In the modern imaginary, the city represents the promise of freedom and opportunity. It marks a social space that is less constrained by traditional identities and one in which greater social interaction and density support economic dynamism. If development must, as Amartya Sen has so influentially argued, be based on strengthening basic capabilities, then the city can surely be a privileged site of capability-enhancement. Indeed, the migrants who flood the city often come in search of better livelihoods, education, health, and basic services. But as any resident of Delhi knows, the quality of such services varies dramatically across neighbourhoods, and the part of the city one lives in significantly impacts one’s ability to take full advantage of what the city has to offer. The Cities of Delhi (CoD) project starts with the simple recognition that India’s capital is marked by different settlement types, defined by diverse degrees of formality, legality, and tenure, which taken together produce a highly differentiated pattern of access to basic services. This report provides an overview of the findings from CoD. It builds directly on the place, process, and institution reports available at citiesofdelhi.cprindia.org, but in no way substitutes for these reports, all of which stand on their own as original empirical contributions. This overview is instead a synthesis, an effort to tie together the findings from the reports, to paint a broad picture of patterns of unequal access to basic services in the city and to provide an analysis of how these patterns of inequality are linked to structures and practices of governance.
Topic:
Development, Urbanization, Inequality, Economy, and Capital Flows
Political Geography:
South Asia, India, and Asia

16. From Financial Repression to External Distress: The Case of Venezuela

Author:
Carmen M. Reinhart and Miguel Angel Santos
Publication Date:
04-2015
Content Type:
Working Paper
Institution:
The John F. Kennedy School of Government at Harvard University
Abstract:
Recent work has supported that there is a connection between domestic debt level and sovereign default on external debt. We examine the potential linkages in a case study of Venezuela from 1984 to 2013. This unique example encompasses multiple financial crises, cycles of liberalization and policy reversals, and alternative exchange rate arrangements. The Venezuelan experience reveals a nexus among domestic debt, financial repression, and external vulnerability. Unlike foreign currency-denominated debt, debt in domestic currency may be reduced through financial repression, a tax on bondholders and savers producing negative real interest rates. Using a variety of methodologies we estimate the magnitude of the tax from financial repression. On average, this financial repression tax (as a share of GDP) is similar to those of OECD economies, in spite of much higher domestic debt-to-GDP ratios in the latter. The financial repression "tax rate" is significantly higher in years of exchange controls and legislated interest rate ceilings. In line with earlier literature on capital controls, our comprehensive measures of capital flight document a link between domestic disequilibrium and a weakening of the net foreign asset position via private capital flight. We suggest these findings are not unique to the Venezuelan case.
Topic:
Debt, Finance, Capital Flows, Inflation, and Interest Rates
Political Geography:
South America and Venezuela

17. Natural Resources and Capital Flight: A Role for Policy?

Author:
Lemma W. Senbet, Gregoire Rota-Graziosi, and Rabah Arezki
Publication Date:
09-2014
Content Type:
Working Paper
Institution:
African Economic Research Consortium (AERC)
Abstract:
This paper investigates the relationship between natural resources and capital flight in the form of tax avoidance from multinational corporations. In particular, it focuses on the spillover effects in terms of tax revenue mobilization and stock market development from the thin capitalization rule, a policy instrument aimed at limiting firm tax avoidance through setting limits on a firm’s foreign indebtedness. We exploit the plausibly exogenous within-country variations of data on oil discoveries for a panel of 117 countries during the period 1970–2012. We find evidence that oil discoveries significantly enhance both tax revenue mobilization and stock market development, but only when a thin capitalization rule is in place. We argue that these findings can be explained through the limiting role of a thin capitalization rule in multinational companies’ use of financial transactions among their affiliates or tax havens to transfer part of the profit. The thin capitalization rule may thus not only help limit the erosion of the domestic tax base but may also entice multinational corporations to resort to using and developing the domestic financial system.
Topic:
Development, Economics, International Trade and Finance, Financial Markets, Economic growth, Capital Flows, and Capital Flight
Political Geography:
Africa

18. Capital Flows to Emerging Markets: An alternative Theoretical Framework

Author:
Bruno Bonizzi
Publication Date:
11-2013
Content Type:
Working Paper
Institution:
School of Oriental and African Studies - University of London
Abstract:
This paper represents a theoretical contribution to the analysis of international capital flows. It outlines an alternative theoretical framework based on Post-Keynesian monetary theory, and in particular on Hyman Minsky’s Wall Street paradigm and concept of Money-manager capitalism and Jan Toporowski’s theory of capital market inflation. The key aspects of such an approach are, firstly, that in a monetary analysis capital flows need to be understood as “flows of funds”, as opposed to the traditional understanding of capital flows based on “real” decision, such as saving and investment. A consequence of this is the need of focusing on gross rather than net capital flows. Secondly, when considering emerging markets, the asymmetric nature of the international monetary system must be stressed. Thirdly, it is important to understand the specific forms that capital flows take: in today’s world, pension funds and other institutional investors — alongside banks — are key players in the financial markets, and their role in shaping capital flows to emerging markets must be explicitly recognised. This paper synthesises these elements by understanding capital flows as the result of institutional investors portfolio choice. Along the lines of Minsky and Toporowski, portfolio choice by institutional investors need to be assessed in relation to their balance sheet structure, beside risk/return trade-offs and general state of risk aversion
Topic:
Emerging Markets, Capital Flows, Investment, and Economic Theory
Political Geography:
Global Focus

19. A Note on Mundell-Fleming and Developing Countries

Author:
John Weeks
Publication Date:
03-2008
Content Type:
Working Paper
Institution:
School of Oriental and African Studies - University of London
Abstract:
This paper inspects the statement found in macroeconomic text books that under a flexible exchange rate regime with perfectly elastic capital flows monetary policy is effective and fiscal policy is not. The logical validity of the statement requires that the domestic price level effect of devaluation be ignored. The price level effect is noted in some textbooks, but not analysed. When it is subjected to a rigorous analysis, the interaction between exchange rate changes and domestic price level changes render the standard statement false. The logically correct statement would be, under a flexible exchange rate regime with perfectly elastic capital flows the effectiveness of monetary policy depends on the values of the import share and the sum of the trade elasticities. Monetary policy will be more effective than fiscal policy if and only if the sum of the trade elasticities exceeds the import share. Inspection of data from developing countries indicates a low effectiveness of monetary policy under flexible exchange rates. In the more general case of less than perfectly elastic capital flows the conditions for monetary policy to be more effective than fiscal policy are even more restrictive. Use of empirical evidence on trade shares and interest rate differentials suggest that for most countries fiscal policy would prove more effective than monetary policy under a flexible exchange rate regime. In any case, the general theoretical assertion that monetary policy is more effective is incorrect.
Topic:
Monetary Policy, Developing World, Capital Flows, Macroeconomics, and Fiscal Policy
Political Geography:
Global Focus