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2571. A Diplomatic Milestone for Mindanao?

Author:
Jennifer M. Keister
Publication Date:
12-2012
Content Type:
Policy Brief
Institution:
United States Institute of Peace
Abstract:
A recent framework agreement between the Philippine government and the Moro Islamic Liberation Front (MILF) leaves much yet to do in building peace in Mindanao, but does offer an opportunity for careful progress. Many of the problems that have plagued previous agreements in Mindanao's 40-year conflict still exist. The international community has an opportunity to support progress and avoid a repeat of previous agreements' disappointments. Careful foreign aid policies that empower locals and do not foster competition can be critical in building peace in Mindanao.
Topic:
Conflict Resolution, Islam, Peace Studies, Treaties and Agreements, Armed Struggle, and Insurgency
Political Geography:
Israel and Philippines

2572. Monetary Policy and Banking Supervision: Coordination instead of separation

Author:
Daniel Gros and Thorsten Beck
Publication Date:
12-2012
Content Type:
Policy Brief
Institution:
Centre for European Policy Studies
Abstract:
The June 2012 European Council decided that the legal basis for the 'Single Supervisory Mechanism' should be Article 127(6) of the Treaty, and that the SSM should 'involve' the ECB. This implies only that supervision should be concentrated within the ECB. In the policy discussion it is, however, generally taken for granted that there should be 'Chinese walls' between the supervisory and monetary policy arms of the ECB. The current legislative proposal is explicit on this account.
Topic:
Economics, International Trade and Finance, Monetary Policy, and Governance
Political Geography:
China and Europe

2573. Currency Manipulation, the US Economy, and the Global Economic Order

Author:
C. Fred Bergsten and Joseph E. Gagnon
Publication Date:
12-2012
Content Type:
Policy Brief
Institution:
Peterson Institute for International Economics
Abstract:
More than 20 countries have increased their aggregate foreign exchange reserves and other official foreign assets by an annual average of nearly $1 trillion in recent years. This buildup of official assets—mainly through intervention in the foreign exchange markets—keeps the currencies of the interveners substantially undervalued, thus boosting their international competitiveness and trade surpluses. The corresponding trade deficits are spread around the world, but the largest share of the loss centers on the United States, whose trade deficit has increased by $200 billion to $500 billion per year as a result. The United States has lost 1 million to 5 million jobs due to this foreign currency manipulation.
Topic:
Economics, Globalization, International Cooperation, International Trade and Finance, and World Trade Organization
Political Geography:
United States

2574. Europe's Single Supervisory Mechanism and the Long Journey Towards Banking Union

Author:
Nicolas Véron
Publication Date:
12-2012
Content Type:
Policy Brief
Institution:
Peterson Institute for International Economics
Abstract:
On June 29, 2012, the heads of state and government of the 17 euro area countries issued a landmark statement that started with the sentences “We affirm that it is imperative to break the vicious circle between banks and sovereigns. The Commission will present Proposals on the basis of Article 127(6) for a single supervisory mechanism shortly. We ask the Council to consider these Proposals as a matter of urgency by the end of 2012. When an effective single supervisory mechanism is established, involving the ECB [European Central Bank] for banks in the euro area the ESM [European Stability Mechanism] could, following a regular decision, have the possibility to recapitalize banks directly” (Euro Area Summit Statement 2012). This statement was received by the investor community and the European public as marking the initial step towards a European banking union, i.e., a shift of the key instruments of banking policy from the national to the European level to enable the formation and maintenance of an integrated European banking system.
Topic:
Economics, Globalization, International Trade and Finance, and Monetary Policy
Political Geography:
Europe

2575. Southern Europe Ignores Lessons from Latvia at Its Peril

Author:
Anders Åslund
Publication Date:
06-2012
Content Type:
Policy Brief
Institution:
Peterson Institute for International Economics
Abstract:
In the current financial crisis plaguing Europe, Latvia stands out for resolving its financial problems quickly and resolutely. After contracting 24 percent in 2008 and 2009, it grew at the rate of 5.5 percent in 2011. The speed and determination. with which the government carried out austerity measures in 2009 and restored confidence after suffering the worst output decline is a crucial lesson for the ailing South European countries—Greece, Italy, Portugal, and Spain. Many policy observers and economists have dismissed Latvia's crisis resolution as irrelevant to the situation in Southern Europe. The Latvian orange, they say, cannot be compared with the South European apples. I argue otherwise.
Topic:
Economics, International Trade and Finance, Monetary Policy, and Financial Crisis
Political Geography:
Europe, Greece, and Latvia

2576. The Trans-Pacific Partnership and Asia-Pacific Integration: Policy Implications

Author:
Peter A. Petri
Publication Date:
06-2012
Content Type:
Policy Brief
Institution:
Peterson Institute for International Economics
Abstract:
The Trans-Pacific Partnership (TPP), currently at an advanced stage of negotiation, began as a small agreement but now has big implications. The TPP would strengthen ties between Asia and the Americas, create a new template for the conduct of international trade and investment, and potentially lead to a comprehensive free trade area (FTA) in the Asia-Pacific. It could generate large benefits—greater than those expected from the World Trade Organization's (WTO) global Doha Development Agenda. This Policy Brief reports on our ongoing quantitative assessment (with FanZhai) of the TPP and other Asia-Pacific integration efforts.
Topic:
Economics, Emerging Markets, International Trade and Finance, and Treaties and Agreements
Political Geography:
America, Europe, Israel, Asia, and Australia/Pacific

2577. Restoring Fiscal Equilibrium in the United States

Author:
William R. Cline
Publication Date:
06-2012
Content Type:
Policy Brief
Institution:
Peterson Institute for International Economics
Abstract:
Halfway through this presidential election year, there is great uncertainty about how, when, and even whether the United States will restore fiscal sustainability. As shown by the near-default because of the impasse over the debt ceiling in July 2011, the two parties have been in sharp opposition on this issue. The Republicans have insisted that adjustment be accomplished by spending cuts rather than tax increases. Two hundred and thirty eight Republican congressmen and 41 Republican senators have signed the Grover Norquist pledge to oppose any attempt to raise marginal tax rates or reduce deductions without implementing offsetting tax reductions. In contrast, Democratic lawmakers have tended to emphasize the maintenance of social and entitlement programs and expressed a willingness to restore higher tax rates if necessary.
Topic:
Economics, Monetary Policy, Financial Crisis, Governance, and Law
Political Geography:
United States

2578. Estimates of Fundamental Equilibrium Exchange Rates, May 2012

Author:
William R. Cline and John Williamson
Publication Date:
05-2012
Content Type:
Policy Brief
Institution:
Peterson Institute for International Economics
Abstract:
This Policy Brief updates our estimates of fundamental equilibrium exchange rates (FEERs) to the latest available data. For exchange rates, we apply the average rates of April 2012, while for the International Monetary Fund's balance of payments forecasts, we use the April 2012 issue of the World Economic Outlook (henceforth WEO; see IMF 2012a). This study is the fifth in an annual series, begun in 2008, in which we have used the spring WEO as the basis for drawing out implications for exchange rate changes needed if the world is to approach a reasonably satisfactory medium-run position. In addition, in semiannual updates (most recently in November 2011), we have tracked interim changes in exchange rates but not reestimated the underlying FEERs for the year in question.
Topic:
International Relations, Economics, Foreign Exchange, International Trade and Finance, and Financial Crisis

2579. Right Idea, Wrong Direction: Obama's Corporate Tax Reform Proposals

Author:
Gary Clyde Hufbauer and Martin Vieiro
Publication Date:
05-2012
Content Type:
Policy Brief
Institution:
Peterson Institute for International Economics
Abstract:
The need for US corporate tax reform is blindingly obvious. Conservatives contend that the top corporate tax rate— whether measured in statutory or effective terms—is the second highest in the Organization for Economic Cooperation and Development (OECD). Liberals argue that the US corporate tax system is riddled with complex “loopholes,” enabling many firms—whether incorporated or not—to pay less than their fair share.
Topic:
Economics, International Trade and Finance, Monetary Policy, and Governance
Political Geography:
United States

2580. Japan Post: Anti-Reform Law Clouds Japan's Entry to the Trans-Pacific Partnership

Author:
Gary Clyde Hufbauer and Julia Muir
Publication Date:
05-2012
Content Type:
Policy Brief
Institution:
Peterson Institute for International Economics
Abstract:
Our last policy brief on this long-running saga recounted political machinations, late in 2011, to reverse the Koizumi era reforms of Japan Post, a giant among state-owned enterprises (SOEs). As a brief background: Japan Post is a conglomerate of five companies: the parent, Japan Post Holdings; two subsidiaries concerned with operating post offices and delivering mail, namely Japan Post Network and Japan Post Services; and two giant financial arms, Japan Post Bank and Japan Post Insurance.
Topic:
Economics, International Trade and Finance, Treaties and Agreements, and Law
Political Geography:
Japan and Israel