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13191. On Currency Crises and Contagion

Author:
Morris Marcel Fratzscher
Publication Date:
12-2000
Content Type:
Working Paper
Institution:
Peterson Institute for International Economics
Abstract:
Many economists have started to concede in recent years that contagion and self-fulfilling beliefs of investors have played a crucial role in the emerging market financial crises of the 1990s. Despite the progress on the theoretical side, however, empirical models of currency crises have been shown to perform poorly (Berg and Pattillo 1998) and many economists and policy institutions have been struggling to develop adequate models to predict future financial crises (Kaminsky et al. 1997, Goldstein et al. 2000).
Topic:
Economics, International Trade and Finance, and Political Economy

13192. Strengthening the International Financial Architecture: Where Do We Stand?

Author:
Morris Goldstein
Publication Date:
10-2000
Content Type:
Working Paper
Institution:
Peterson Institute for International Economics
Abstract:
It's not easy to get senior economic officials worked up about the functioning of the international monetary system. Usually, they are preoccupied with the more immediate issues surrounding the national and global economic outlook. But the Mexican peso crisis of 1994-95 and, even more so, the Asian financial crisis of 1997-98 made crisis management important for the economic outlook and pushed many of the otherwise arcane issues in the so-called “international financial architecture” (hereafter, IFA) to the front burner of economic policy.
Topic:
Economics, International Organization, International Trade and Finance, and Political Economy
Political Geography:
Asia and Mexico

13193. Transatlantic Issues in Electronic Commerce

Author:
Catherine L. Mann
Publication Date:
10-2000
Content Type:
Working Paper
Institution:
Peterson Institute for International Economics
Abstract:
The global and dynamic e-commerce marketplace will increasingly impact the nature of national and international economic and government relations. This paper highlights three areas where the United States and European Union (EU) governments differ in their approaches as to how best to serve their domestic constituencies: treatment of trade flows, approach to tax regimes, manner of protecting personal data. Because the Internet marketplace is global but policy jurisdictions remain local, policy conflicts can develop. Policymakers on both sides need to harness technology and promote incentives for the private sector to help solve problems caused by the jurisdictional overlap. In addition to cross-border jurisdictional overlap, problems within a country can develop from issue convergence and policy overlap. That is, because the e-commerce marketplace is so integrated, the policy toward handling one issue, even within the national context, has implications for the policy set that is available to policymakers on other issues. Therefore, policies within a country must be more carefully meshed with each other with an eye toward consistency in the face of the forces of electronic commerce..
Topic:
Economics, International Trade and Finance, and Political Economy
Political Geography:
United States and Europe

13194. Inflation, Monetary Transparency, and G3 Exchange Rate Volatility

Author:
Adam S. Posen and Kenneth N. Kuttner
Publication Date:
07-2000
Content Type:
Working Paper
Institution:
Peterson Institute for International Economics
Abstract:
Short-term volatility in G3 bilateral exchange rates has been a fact of life since the beginning of the post-Bretton Woods float. It has been established, surprisingly, that this volatility is not only disproportionately large relative to the variation in relative macroeconomic fundamentals of Germany, Japan, and the United States, but is in fact largely unrelated to them. The apparent disconnect between fundamentals and dollar-yen and dollar-euro exchange rate fluctuations has led to perennial complaints about persistent exchange rate “misalignments,” and their real effects on the G3 (and other) economies, giving rise in turn to recurring proposals for government policies to limit this volatility. The idea that volatility reflects nothing more than the (perhaps rational, certainly profit-seeking) behavior of foreign exchange traders seems to give justification for a policy response. Yet, the disjunction between macroeconomic expectations and the volatility seems to indicate as well that some deviation from domestic monetary policy goals would be necessary to intervene against exchange rate swings.
Topic:
Economics, International Trade and Finance, and Political Economy
Political Geography:
United States, Japan, and Germany

13195. The New Asian Challenge

Author:
C. Fred Bergsten
Publication Date:
03-2000
Content Type:
Working Paper
Institution:
Peterson Institute for International Economics
Abstract:
The initial postwar challenge from East Asia was economic. Japan crashed back into global markets in the 1960s, became the largest surplus and creditor country in the 1980s, and was viewed by many as the world's dominant economy by 1990. The newly industrialized countries (Korea, Taiwan, Hong Kong, Singapore) followed suit on a smaller but still substantial scale shortly thereafter. China only re-entered world commerce in the 1980s but has now become the second largest economy (in purchasing power terms), the second largest recipient of foreign direct investment inflows, and the second largest holder of monetary reserves. Indonesia and most of Southeast Asia grew at 7 percent for two or more decades. The oil crises of the 1970s and the financial crises of the late 1990s injected temporary setbacks but East Asia has clearly become a third major pole of the world economy, along with North America and Western Europe.
Topic:
Economics, International Trade and Finance, and Political Economy
Political Geography:
Japan, China, Europe, Israel, Taiwan, East Asia, Asia, North America, Korea, Singapore, and Hong Kong

13196. Electronic Commerce in Developing Countries: Issues for Domestic Policy and WTO Negotiations

Author:
Catherine L. Mann
Publication Date:
03-2000
Content Type:
Working Paper
Institution:
Peterson Institute for International Economics
Abstract:
Electronic commerce and its related activities over the internet can be the engines that improve domestic economic well-being through liberalization of domestic services, more rapid integration into globalization of production, and leap-frogging of available technology. Since electronic commerce integrates the domestic and global markets from its very inception, negotiating on trade issues related to electronic commerce will, even more than trade negotiations have in the past, demand self-inspection of key domestic policies, particularly in telecommunications, financial services, and distribution and delivery. Because these sectors are fundamental to the workings of a modern economy, liberalization here will rebound to greater economic well-being than comparable liberalization in more narrowly focussed sectors. Thus, the desire to be part of the e-commerce wave can be a powerful force to erode domestic vested interests that have slowed the liberalization of these sectors.
Topic:
Development, Economics, Government, International Trade and Finance, and Political Economy

13197. International Economic Agreements and the Constitution

Author:
Richard M. Goodman and John M. Frost
Publication Date:
02-2000
Content Type:
Working Paper
Institution:
Peterson Institute for International Economics
Abstract:
International agreements, such as the General Agreement on Tariffs and Trade (GATT) and the North American Free Trade Agreement (NAFTA), generally aim to facilitate the free flow of goods and services among nations. The U.S. Supreme Court has developed a jurisprudence similarly aiming to facilitate the free flow of goods and services among the several states. That jurisprudence has developed from litigation challenging the constitutionality of state actions on the basis of the Commerce and Supremacy Clauses of the Constitution (art. I, § 8, cl. 3, and art. VI, cl. 2). In some subject areas, Commerce Clause decisions closely align with international agreements. In other areas, either or both fall short of achieving economic integration.
Topic:
Economics, Government, International Trade and Finance, and Political Economy
Political Geography:
United States and North America

13198. The Globalization of Property Rights: An Anglo and American Frontier Land Paradigm, 1700-1900

Author:
John Weaver
Publication Date:
02-2000
Content Type:
Working Paper
Institution:
Institute on Globalization and the Human Condition, McMaster University
Abstract:
Old-world ideas accompanied European migrants, and a few changed the globe. An English obsession with landed property was implanted in settlement colonies, so that, between the late 1600s and late 1800s, private initiatives and official planning on British colonial and American frontiers interacted to frame property rights to extensive regions. This paper dwells on that interaction and the tensions between private goals and state sovereignty. The state was essential for framing property rights when these were associated with land and in situ resources. In very recent times, property rights have fostered entirely new industries, for example in software and genetically modified biota. Property rights have changed traditional activities such as art and entertainment. Do new forms of property - "less constrained by physical location" - leave the state with a reduced role in the realm of property rights? Does the paradigm of evolving property rights seen in previous centuries suggest any parallels with struggles over more recent property rights? These are questions for members of the institute to consider. We will offer several concluding thoughts.
Topic:
Globalization, Government, and Political Theory
Political Geography:
America and Europe

13199. Identity, Empathy and International Relations

Author:
Rhoda E. Howard-Hassmann
Publication Date:
03-2000
Content Type:
Working Paper
Institution:
Institute on Globalization and the Human Condition, McMaster University
Abstract:
The insertion of identity politics into international relations undermines the capacity for cosmopolitan empathy, a capacity that might be useful in ameliorating some of the world's social problems. Empathy is the capacity to put oneself into another's shoes and recognize a stranger's humanity. The useful post-modern stress on the mutability of identity has hardened in identity politics into the creation of exclusive social categories of Oppressed and Oppressor. The social creation of such categories through such devices as the politics of amnesia paves the way for isolationist indifference. Yet data drawn both from the sociology of genocide and from the author's own research shows that humanitarian empathy across lines of identity is possible.
Topic:
International Relations, Civil Society, and Imperialism

13200. Globalization as the End and the Beginning of History: The Contradictory Implications of a New Paradigm

Author:
Arif Dirlik
Publication Date:
03-2000
Content Type:
Working Paper
Institution:
Institute on Globalization and the Human Condition, McMaster University
Abstract:
This paper seeks to understand globalization as a new paradigm. It recognizes that there is much about the discourse of globalization that is ideological, that seeks to cover up the detrimental consequences of globalization for the majority of the world's population. It suggests nevertheless that there may be much to be gained from viewing it as a new paradigm, albeit a contradictory one, that has replaced an earlier paradigm of modernization. It makes an analytical distinction between globalization as historical process, which is at least as old as the history of capitalism, if not older, and globalization as a new way of looking at the world and its past, which is quite novel. To illustrate its argument, the paper contrasts present-day political and intellectual consequences of globalization with the late nineteenth-century, where several observers have identified a level of economic globalization greater than that of the present. It argues that whereas earlier globalization produced nationalism, colonialism and epistemological universalism, globalization presently is postcolonial, challenges the nation-state, and is marked by a break-down of universalism. It follows that globalization needs to be understood not just as global integration, as suggested by its ideologues and in economistic interpretations, but equally importantly as a new mode of fragmentation. An analytical distinction between globalization as process and paradigm is necessary to grasping globalization as a new mode of comprehending the world, but it is nevertheless necessary from a critical perspective to keep in mind the historical relationship between the two; globalization may be viewed as a new beginning in breaking down old hegemonies, but globalization may be viewed also as the ultimate victory of capitalist modernity. The contradictoriness may be perceived in the epistemologies of postmodernism and postcolonialism. The paper suggests that these epistemologies are best grasped as symptoms of globalization, that seek to break with modern and colonial ways of knowing, and yet are stamped by those very legacies. The discussion turns, by way of conclusion, to the relationship between globalization and history. While globalization is best understood historically, it also has produced new ways of looking at history. Three modes are selected here as products of globalization: world history writing, which is consciously motivated at the present by the idea of globalization, and seeks to understand the past in nonEurocentric ways, but may be understood also as a mode of containing the break-down of universalism; and two different perspectives on the "end of history" as we have known it. First, a EuroAmerican perspective that sees in the end of universalism(and the crowding of the past with incompatible and incommensurate cultural claims) also the end of history. Second, a conscious challenge to history as a modern way of knowing in the name of "alternatives to history." The paper concludes that these conflicts over history, too, point to the present as both an end, and a possible new beginning-but only as a possibility.
Topic:
Globalization, Political Theory, and History