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241. The Environment and Corporate Governance in Zimbabwe

Author:
Hany Besada and arolina Werner
Publication Date:
07-2010
Content Type:
Policy Brief
Institution:
Centre for International Governance Innovation
Abstract:
Formerly one of Africa's most promising economies, Zimbabwe has begun a process of economic reconstruction after decades of political turmoil and economic mismanagement. The advent of a national unity government in February 2009 launched a new but still tentative era of political stability. The government has a daunting political and economic agenda. Top priorities include restoring the rule of law, demonstrating fiscal responsibility, and putting in place macroeconomic and structural reforms to win the confidence of domestic and international investors.
Topic:
Economics and Monetary Policy
Political Geography:
Africa and Zimbabwe

242. Iran's Subsidies Conundrum

Author:
Semira Nikou
Publication Date:
09-2010
Content Type:
Policy Brief
Institution:
United States Institute of Peace
Abstract:
Iran has subsidized petroleum products, basic foodstuffs, medical goods and utilities since 1980, first to manage hardships during the eight-year war with Iraq, and then to prevent political and economic challenges after the war. Since the 1990s, three presidents have tried to cut back subsidies that are now estimated to cost Iran between $70 billion and $100 billion annually. President Mahmoud Ahmadinejad won parliamentary approval for a controversial plan to phase out subsides by 2015. Under the plan, universal price controls are to be replaced with small cash payments to families and direct support of industries. Some economists are concerned that lifting price controls will trigger dramatic rises in inflation and unemployment. The cutbacks come at a time the government already faces serious economic troubles and tougher international sanctions. For the public, the change is likely to produce the most economic disruption since the revolution. Economic reforms have triggered unrest in the past. If reform succeeds, however, the program could help reduce waste, shrink state outlays and enhance efficiency and productivity.
Topic:
Economics, Labor Issues, and Monetary Policy
Political Geography:
Iraq, Iran, and Middle East

243. Alternatives to the Fed?

Author:
Bennett T. McCallum
Publication Date:
09-2010
Content Type:
Journal Article
Journal:
The Cato Journal
Institution:
The Cato Institute
Abstract:
I must begin by saying that I have been extremely disappointed— the word “appalled” may be more accurate—by several developments over the last two years involving the Federal Reserve. It was, I believe, appropriate that the Fed would respond with expansionary monetary policy in the face of a major macroeconomic downturn, which it did. But it did not have to do so by means of operations that incorporated major excursions into credit policy, as well as monetary policy, and thereby into the unauthorized exercise of fiscal policy. By engaging in such operations on a very large scale, the Fed's actions are almost certain to have detrimental effects on the Fed's independence—and thereby on its resulting ability to focus attention on what should be its principal objective, namely, price level stability. Furthermore, the Fed has not been moving quickly—if at all—to explain and correct this situation.
Topic:
Monetary Policy

244. What reforms for the credit rating industry? A European perspective

Author:
Karel Lannoo
Publication Date:
10-2010
Content Type:
Policy Brief
Institution:
Centre for European Policy Studies
Abstract:
Credit rating agencies (CRAs) continue to find themselves in the eye of the storm. Despite having singled out the industry early on in the financial crisis as needing more regulation, policy-makers seem not to be reassured by the measures that have been adopted in the meantime, and want to go further. Faced with a rapid downgrading in ratings in the context of the sovereign debt crisis, European Commissioner Michel Barnier raised the possibility last May of creating a new EU-level rating agency that would specialise in sovereign debt.
Topic:
Global Recession, Monetary Policy, and Financial Crisis
Political Geography:
Europe

245. Has the financial crisis spurred demand for stronger state regulation?

Author:
Felix Roth
Publication Date:
09-2010
Content Type:
Working Paper
Institution:
Centre for European Policy Studies
Abstract:
This paper analyses whether the financial crisis has affected citizens' confidence in the free market economy and whether it has triggered citizens' demand for a free market economy with stronger state regulations. Using panel data, the paper confirms that citizens' confidence levels in the free market economy have decreased in most of the largest economies and demand for a free market economy with stronger state regulation has increased on both sides of the Atlantic. After analysing the determinants for citizens' confidence in the free market economy and demand for a free market economy with stronger state regulation before and after the financial crisis, the author concludes that citizens' net confidence loss in the free market economy seems to have been driven by rising unemployment rates, and citizens' demand for stronger state regulation seems to have been driven by the real economic downturn in GDP growth.
Topic:
Regional Cooperation, Monetary Policy, Financial Crisis, and Governance
Political Geography:
Europe

246. Fiscal Policy Coordination and Competitiveness Surveillance: What solutions to what problems?

Author:
Daniel Gros and Cinzia Alcidi
Publication Date:
09-2010
Content Type:
Policy Brief
Institution:
Centre for European Policy Studies
Abstract:
In June 2010, both the European Commission and the European Central Bank published documents containing ideas for enhancing European economic governance. Both proposals stress the need for stronger surveillance on a country-by-country basis and the effective enforcement of surveillance through incentives and a wider spectrum of sanctions.
Topic:
Economics, Monetary Policy, and Financial Crisis
Political Geography:
Europe

247. Does intangible capital affect economic growth?

Author:
Felix Roth and Anna-Elisabeth Thum
Publication Date:
09-2010
Content Type:
Working Paper
Institution:
Centre for European Policy Studies
Abstract:
Using new international comparable data on intangible capital investment by business within a panel analysis from 1995-2005 in an EU-15 country sample, we detect a positive and significant relationship between intangible capital investment by business and labour productivity growth. This relationship is cross-sectional in nature and proves to be robust to a range of alterations. Our empirical analysis confirms previous findings that the inclusion of business intangible capital investment into the asset boundary of the national accounting framework increases the rate of change of output per worker more rapidly. In addition, intangible capital is able to explain a significant portion of the unexplained international variance in labour productivity growth and when incorporating business intangibles, capital deepening becomes an even more significant source of growth. The relationship is slightly stronger in the time period 1995-2000 and seems to be driven by the coordinated countries within the EU-15.
Topic:
Economics, International Trade and Finance, Regional Cooperation, Monetary Policy, and Financial Crisis
Political Geography:
Europe

248. Do the European Union's bilateral investment treaties matter?

Author:
Selen Sarisoy Guerin
Publication Date:
07-2010
Content Type:
Working Paper
Institution:
Centre for European Policy Studies
Abstract:
Several policy-relevant issues regarding the EU's bilateral investment treaties (BITS) are addressed in this paper. First and foremost, we explore the question of whether EU's BITs have a significantly positive impact on outflows or not. Second, we ask the question which member states and which BIT partners have had a significant experience after the implementation of the BIT. In our sample we find that both OECD BITs and EU BITs have a statistically significant and positive impact on FDI outflows. This result is robust to the inclusion of variables such as privatisation proceeds that control for the level of economic reform, the level of trade linkages, the level of democratic freedom and a measure of risk of expropriation among other standard controls. We control for endogeneity in our estimations by using the fixed-effects estimator as our preferred estimator on a large panel dataset. We also test the strict exogeneity of our results by using a method suggested by Baier and Bergstrand (2007) and we find no feedback effect in our sample.
Topic:
Economics, International Trade and Finance, Monetary Policy, and Financial Crisis
Political Geography:
Europe

249. The financial crisis and citizen trust in the European Central Bank

Author:
Daniel Gros and Felix Roth
Publication Date:
07-2010
Content Type:
Working Paper
Institution:
Centre for European Policy Studies
Abstract:
Trust in the ECB, as measured by the standard Eurobarometer (and other) surveys has fallen to an unprecedented low – especially in the larger euro area countries. The authors find that up to the start of the recession in 2008, trust in the ECB was little affected by business cycle variables such as growth and inflation. This changed radically with the recession, with trust in the ECB becoming correlated quite closely with growth. However, even the recovery of growth in 2009 was not sufficient to restore trust in the ECB to previous levels. This finding implies that European citizens seem to have placed a heavy share of the blame on the European Central Bank for the real economic downturn caused by the financial crisis.
Topic:
Economics, International Trade and Finance, and Monetary Policy
Political Geography:
Europe

250. Fiscal Policy Report Card on America's Governors: 2010

Author:
Chris Edwards
Publication Date:
09-2010
Content Type:
Working Paper
Institution:
The Cato Institute
Abstract:
State governments have had to make tough budget choices in recent years. Tax revenues have stagnated as a result of the poor economy, and that has prompted governors to take a variety of fiscal actions to close large budget gaps. Some governors have cut spending to balance their budgets, while others have pursued large tax increases.
Topic:
Economics, Government, Markets, and Monetary Policy
Political Geography:
America