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1. Zombies at Large? Corporate Debt Overhang and the Macroeconomy

Author:
Òscar Jordà, Martin Kornejew, Moritz Schularick, and Alan M. Taylor
Publication Date:
10-2021
Content Type:
Working Paper
Institution:
Institute for New Economic Thinking (INET)
Abstract:
What are the macroeconomic consequences of business credit booms? Are they as dangerous as household credit booms? If not, why not? We answer these questions by collecting data on non-financial business liabilities (primarily bank loans and corporate bonds) for 17 advanced economies over the past 150 years. Unlike household credit, business credit booms are rarely followed by macroeconomic hangovers. Data on debt renegotiation costs—instrumented by a country’s legal tradition—show that frictions to debt resolution make recessions deeper and longer—an important factor in explaining the differences with household credit booms.
Topic:
Debt, Economics, International Political Economy, Global Recession, Macroeconomics, Credit, and Corporations
Political Geography:
Global Focus

2. Central Banks Caught Between Market Liquidity and Fiscal Disciplining: A Money View Perspective on Collateral Policy

Author:
Jakob Vestergaard and Daniela Gabor
Publication Date:
12-2021
Content Type:
Working Paper
Institution:
Institute for New Economic Thinking (INET)
Abstract:
Despite much attention to unconventional monetary policies after the financial crisis, the collateral policies of central banks are rarely discussed. And when they are, the haircuts applied to assets pledged to access central bank liquidity tend not to be analyzed. An exception to these trends is the recent work by Nyborg (2017), who argues that the collateral policies adopted by the European Central Bank (ECB) aggravated the sovereign debt crisis and put the survival of the euro at risk. Taking our point of departure in the money view literature (Mehrling 2011), we argue however that Nyborg’s critique of the ECB’s crisis response is misguided and that his proposal to deepen and reinforce the ECB’s role in the fiscal disciplining of member states would be procyclical and destabilizing. Through our analysis of Nyborg’s work and the ECBs crisis response, we identify core principles for countercyclical collateral policies suitable for market-based financial systems.
Topic:
International Political Economy, Global Markets, Central Bank, Macroeconomics, Money, Fiscal Policy, European Central Bank, and Banking
Political Geography:
Europe

3. Land Tenure Security, Credit Access and Agricultural Productivity in Cameroon

Author:
Tchinda Kamdem Eric Joel and Kamdem Cyrille Bergaly
Publication Date:
01-2020
Content Type:
Research Paper
Institution:
African Economic Research Consortium (AERC)
Abstract:
Cameroonian farmers face two tenure systems: a modern regime and a customary regime. These two regimes are perpetually confronting each other, putting farmers in a total uncertainty as to the regime to adopt to ensure the sustainability of their ventures. This study aims to assess the influence of land tenure security on agricultural productivity through credit access. To achieve this goal, a two-stage sampling technique was applied to data from the third Cameroon Household Survey (ECAM 3). The number of farmers selected for the analysis was 602. These data were analysed using descriptive and three-step recursive regression models. The results of the analysis reveal that land tenure security improves agricultural productivity through the credit access it allows. A proof of the robustness of this result has been provided through discussion of the effects of land tenure security in different agro-ecological zones and through a distinction between cash crops and food crops. The overall results confirm that land tenure security positively and significantly influences agricultural productivity. The regression has also shown that the size of the farm defined in one way or another, the perception of farmers on their level of land tenure security and therefore indicates the intensity with which land tenure security influences agricultural productivity. The recorded productivity differential indicates that smallholder farmers, because they keep small farms, feel safer and produce more than those who keep medium-sized farms. The results also show that land tenure security significantly improves the value of production per hectare of food products that are globally imported into Cameroon. Therefore, we recommend that the public authorities promote land tenure security by reinforcing the unassailable and irrevocable nature of land title, but also by easing the conditions of access to it.
Topic:
Agriculture, Development, Economics, International Political Economy, Economic structure, and Economic Policy
Political Geography:
Africa and Cameroon

4. Restraining Ourselves: Helping by Not Hurting

Author:
Nathan Nunn
Publication Date:
01-2020
Content Type:
Policy Brief
Institution:
Economics for Inclusive Prosperity (EfIP)
Abstract:
In this brief, I discuss the current state of economic development policy, which tends to focus on interventions, usually funded with foreign aid, that are aimed at fixing deficiencies in developing countries. The general perception is that there are inherent problems with less-developed countries that can be fixed by with the help of the Western world. I discuss evidence that shows that the effects of such ‘help’ can be mixed. While foreign aid can improve things, it can also make things worse. In addition, at the same time that this ‘help’ is being offered, the developed West regularly undertakes actions that are harmful to developing countries. Examples include tariffs, antidumping duties, restrictions on international labor mobility, the use of international power and coercion, and tied-aid used for export promotion. Overall, it is unclear whether interactions with the West are, on the whole, helpful or detrimental to developing countries. We may have our largest and most positive effects on alleviating global poverty if we focus on restraining ourselves from actively harming less-developed countries rather than focusing our efforts on fixing them.
Topic:
Development, Economics, International Political Economy, Developing World, and Economic Development
Political Geography:
United States and Global Focus

5. THE BRICS COUNTRIES’ MONETARY AND FINANCIAL POWER: WHAT HAS CHANGED SINCE THE 2008 GLOBAL FINANCIAL CRISIS AND WHY IT MATTERS

Author:
Luiza Peruffo
Publication Date:
01-2020
Content Type:
Journal Article
Journal:
Conjuntura Austral: Journal of the Global South
Institution:
Conjuntura Austral: Journal of the Global South
Abstract:
The grouping of the BRICS countries is controversial in several ways. First, because its origins do not have a political foundation: Brazil, Russia, India and China were first put together as an acronym created in the financial market (O’NEILL, 2001) and this was eventually transposed onto the political world. The group’s advocates have argued that the geopolitical initiative that followed made sense because it brought together countries of continental proportions, large economies, with huge domestic markets –an argument that falls apart with the inclusion of South Africa in 2010. In addition, there is the issue of the disproportionate economic power between China and the other members of the bloc. Moreover, many argue that there are few common interests between the economies, which have such diverse productive structures, and therefore it would be unlikely that they could form a cohesive group (see STUENKEL, 2013, pp. 620-621 for a review of criticisms of the group).
Topic:
Economics, International Political Economy, Global Financial Crisis, and Economic Cooperation
Political Geography:
Russia, China, India, South Africa, and Brazil

6. A COMPARATIVE ANALYSIS OF THE BRICS COUNTRIES IN THE INTERNATIONAL DEVELOPMENT COOPERATION FIELD

Author:
Augusto Leal Rinaldi and Laerte Apolinário Júnior
Publication Date:
01-2020
Content Type:
Journal Article
Journal:
Conjuntura Austral: Journal of the Global South
Institution:
Conjuntura Austral: Journal of the Global South
Abstract:
The first decade of the 21st century gave way to a series of international political-economic dynamics with the potential to reorganize global power (IKENBERRY, 2018; KITCHEN; COX, 2019; MAHBUBANI, 2009; MEARSHEIMER, 2018, 2019). Among the changes, one common reference is the rise of the BRICS –Brazil, Russia, India, China, and South Africa –and, consequently, their performance for demanding reforms of the global governance system (COOPER, 2016; HURRELL, 2018; ROBERTS; ARMIJO; KATADA, 2018; STUENKEL, 2017). The emerging economies have invested in consolidating their new status by acting in different branches of global governance, demanding changes and policies to see a reasonable parity between their economic weight and ability to participate as real decision-makers. In this context, international regimes are a crucial dimension to consider.
Topic:
Development, International Cooperation, International Political Economy, Geopolitics, International Development, Economic Development, and Economic Cooperation
Political Geography:
Russia, China, India, South Africa, and Brazil

7. ECONOMIC REBALANCING AND GEOECONOMIC CHALLENGES FOR CHINA: THE CASE OF INTRA-BRICS TRADE AND FOREIGN DIRECT INVESTMENTS

Author:
Marcelo Milan and Leandro Teixeira Santos
Publication Date:
01-2020
Content Type:
Journal Article
Journal:
Conjuntura Austral: Journal of the Global South
Institution:
Conjuntura Austral: Journal of the Global South
Abstract:
This article examines the geoeconomic challenges brought to China by the effects of trade and foreign direct investment (FDI) flows, and consequently by the nature and composition of international economic alliances, mainlycooperation among underdeveloped nations(Glosny, 2010), of rebalancing3of its drivers of growth4. It evaluates likely impacts on other BRICS countries, given the economic linkages developed during the past couple of decades, as an example of what may happen to broader geoeconomic arrangements as the process of rebalancing deepens
Topic:
International Political Economy, Foreign Direct Investment, Geopolitics, and Economic Cooperation
Political Geography:
Russia, China, India, South Africa, and Brazil

8. GEOGRAPHY, INTERNATIONAL TRADE AND INSTITUTIONS: AN ECONOMETRIC ANALYSIS OF THE BRICS

Author:
Marcelo Corrêa, Luiz Michelo, and Carlos Schonerwald
Publication Date:
01-2020
Content Type:
Journal Article
Journal:
Conjuntura Austral: Journal of the Global South
Institution:
Conjuntura Austral: Journal of the Global South
Abstract:
After two decades of intense debate about the determinants of economic development, with authors examining the variables that characterize geography, institutions and international trade, BRICS countries were left behind. Thus, in order to fill this gap, this paper uses econometrics of panel data to analyze the economic performance of these developing nations. Mainstream economists have run into serious problems to deal with these particular determinants within the traditional endogenous growth model, and they have not come up with an agreement, so they keep trying to figure out who is the “winner of this competition”. Empirical evidence shows that there is not a unique explanatorydeterminant, and recognizing which of them can provide the best understandingdepends on the particularities of each case (ROS, 2013).Examining BRICS as a group of countries demonstrates that these specific developing nations share some remarkable features. They are rapidly-growing nations with a vast amount of land and growing participation in international trade. So, empirical tests are feasible and desirable in order to understand their recent development. However, they are also different in many aspects, mostly in terms of institutional characteristics. Thus, our goal is to find out if the econometrics of panel data can shed some light on this ongoing debate.
Topic:
International Political Economy, International Trade and Finance, Trade, Trade Policy, Economic Cooperation, and Geography
Political Geography:
Russia, China, India, South Africa, and Brazil

9. BRICS STUDENTS EDUCATION IN CHINA FROM 2010 TO 2018: DEVELOPMENT, PROBLEMS AND RECOMMENDATIONS

Author:
Cheng Jing
Publication Date:
01-2020
Content Type:
Journal Article
Journal:
Conjuntura Austral: Journal of the Global South
Institution:
Conjuntura Austral: Journal of the Global South
Abstract:
Attracting international students is an important way to promote the internationalization of one country’s higher education, and to enhance youth and education exchanges between countries. As the biggest developing country in world, China has attachedimportance to the international students education in China since 2010 so as to improve the quality of China’s higher education and promote its internationalization. What’s striking is that in September of 2010, for the first time, the Ministry of Education of the People’s Republic of Chinafrom the perspective of national strategymapped out a plan targeting the international students educationin China, and releasedStudy in China Program, which was designed to “promote the communication and cooperation between China and other countries in education, promptthe sustainable and healthy development of the international students education in China and improve the internationalization of Chineseeducation”. This program highlightedthat China would“accelerate the quota of scholarship step by step in accordance with the need of national strategy and development”, with the targets of attracting 500,000 international students by 2020 and “making China the top destination country in Asia for international students”（China’s Ministry of Education, 2010:647).
Topic:
Education, International Political Economy, and Geopolitics
Political Geography:
Russia, China, India, South Africa, and Brazil

10. Making Peace with Climate Adaptation

Author:
Louise Van Schaik, Camilla Born, Elizabeth Sellwood, and Sophie de Bruin
Publication Date:
03-2020
Content Type:
Working Paper
Institution:
Clingendael Netherlands Institute of International Relations
Abstract:
Climate change poses risks to poor and rich communities alike, although impacts on the availability and distribution of essential resources such as water, food, energy and land will differ. These changes, combined with other social, political and economic stresses and shocks, can increase tensions within and between states, which, if unmanaged, can lead to violence. Climate-related changes to transboundary waters, food security and trade patterns, sea levels, and Arctic ice, as well as the transition to a low-carbon economy, have profound geopolitical implications. Largescale climate-related migration may also affect the stability of states, and relations between states. Climate action itself may prove destabilizing: (mal)adaptation can disrupt economic and social relations, particularly if implemented without appropriate political economy analysis and risk assessments. In response to analyses linking climate change to security, peace and security actors increasingly realize that interventions to promote peace and stability are more likely to be effective if they incorporate such analyses. At the United Nations, member states have agreed to shift towards a “preventive” approach to conflict risks, grounded in sustainable development. The UN leadership is adjusting institutional structures to better understand and respond to climate-related security risks at all levels, including a newly established climate security mechanism in New York. Many regional intergovernmental institutions have also recognized the links between climate change, peace and security. Some, such as the Intergovernmental Authority on Development in East Africa and the European Union, have incorporated climate-related factors into their conflict early-warning mechanisms. We are only just beginning to understand the realities of adapting to unprecedented climate change, however. Climate-related factors will need to be incorporated systematically into political analysis, risk assessment, and early warning, accompanied by deeper integration of climate-security risk assessment into planning and political engagement in the field. Similarly, more consistent analysis of climate-related security risks must contribute to politically informed, conflict-sensitive adaptation strategies.
Topic:
Conflict Prevention, Climate Change, International Political Economy, Peace, and Sustainability
Political Geography:
Global Focus