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62. Monetary Policy in an Uncertain World: The Case for Rules
- Author:
- James A. Dorn
- Publication Date:
- 01-2018
- Content Type:
- Working Paper
- Institution:
- The Cato Institute
- Abstract:
- Since monetary policy operates in an uncertain world, discretionary policymaking relying on macroeconomic models of the economy is a weak reed upon which to base policy. The complexity of economic systems and constant changes in the underlying data mean errors may occur in a discretionary regime that can lead to monetary and financial instability.1 The 2008 financial crisis is a case in point: central bankers and their expert staffs failed to anticipate the crisis, and may have worsened it by keeping policy rates too low for too long (Taylor 2012). Moving to a rules‐based regime would not eliminate radical uncertainty, but it could decrease institutional uncertainty—or what Robert Higgs (1997) has called “regime uncertainty”—and thus reduce the frequency of policy errors. Higgs focused on the uncertainty caused by fiscal and regulatory policies that attenuated private property rights by decreasing expected returns on capital. A discretionary monetary regime increases uncertainty about the future purchasing power of money and thereby undermines an important property right.
- Topic:
- Economics, Monetary Policy, Economic structure, and Macroeconomics
- Political Geography:
- Global Focus
63. Global Debt Dynamics: What Has Gone Wrong
- Author:
- Andreas Antoniades and Stephany Griffith-Jones
- Publication Date:
- 01-2018
- Content Type:
- Working Paper
- Institution:
- Centre for Global Political Economy, University of Sussex
- Abstract:
- This paper analyses the nature and characteristics of global debt dynamics in the post global financial crisis (GFC) period. First, we attempt to map the ways in which debt has been moving from sector to sector, and from one group of countries to another within the global economy. By capturing this inter-sectorial, inter-national, inter-regional movements of global debt we aspire to contribute to a more comprehensive understanding of global debt and its mode of operation. Second, we attempt to analyse what is wrong with global debt dynamics, i.e. we examine the broken link between what global debt was supposed to do and what it does. Here, we point to three interrelated dynamics: the accumulation of unproductive debt, growing inequalities of income and wealth, and the increase in privately-created, interest-bearing money.
- Topic:
- Debt, Economics, Global Recession, Financial Crisis, and Global Political Economy
- Political Geography:
- United States, Global Focus, and Global Markets
64. Busier than Ever? A Data-Driven Assessment and Forecast of WTO Caseload
- Author:
- Joost Pauwelyn and Weiwei Zhangb
- Publication Date:
- 04-2018
- Content Type:
- Working Paper
- Institution:
- Centre for Trade and Economic Integration, The Graduate Institute (IHEID)
- Abstract:
- Conventional wisdom has it that, in recent years, the legalized mechanism of dispute settlement before the World Trade Organization (WTO) has been “busier than ever”, “a victim of its own success”. This paper uses count data to assess the WTO’s current caseload and examines how it has evolved since the WTO’s creation in 1995. We also forecast panel and Appellate Body (AB) caseload ten years from now using different scenarios. WTO dispute settlement does, indeed, currently experience a peak in terms of the total number of cases pending before panels and the AB (as of 30 April 2018, respectively, 18 and 8). However, this is not due to an increase in new cases filed (new consultation requests markedly reduced, from a high of 50 in 1997 to “only” 17 in 2017), but rather because pending cases take much longer to conclude as they have become more complex and are often delayed for lack of human resources. In addition, fewer cases filed get formally settled (from 20% in the first five years of the WTO to almost zero after 2014), appeal rates remain very high (on average 68%), and the share of follow-up disputes over compliance (DSU Art. 21.5) has markedly increased, all three factors leading to more (pending) caseload without actually more (new) cases filed, or more panel or AB reports issued (the number of reports produced per year has actually gone down, dropping from a peak of 26 panel reports and 13 AB reports in 2000, to “only” 13 panel reports and 6 Appellate Body reports in 2017).
- Topic:
- Economics, International Trade and Finance, World Trade Organization, and Global Political Economy
- Political Geography:
- Switzerland and Global Focus
65. Customs unions in international law: from concept to practice
- Author:
- Michal Ovádek and Ines Willemynsa
- Publication Date:
- 05-2018
- Content Type:
- Working Paper
- Institution:
- Centre for Trade and Economic Integration, The Graduate Institute (IHEID)
- Abstract:
- Relative to the study of free trade agreements, customs unions (CUs) have been neglected in international law scholarship, despite the fact that by no means do they constitute a recent phenomenon. The present article aims to fill this gap by conducting a scoping analysis of the concept of customs union and identifying key issues in CU designs. The article problematizes what is understood by the concept of CU and what is entailed by the foremost definition of CUs, found in Article XXIV of the General Agreement on Tariffs and Trade (GATT). It further investigates how recurrent design issues are resolved in practice by different CUs considering the inherent tension between the enactment of common rules and institutions and state sovereignty. We find variety in the historical, economic and legal conceptualizations of CUs, flexibility and lacunas in Article XXIV GATT, and diversity of CU designs along with a discernible concern for the legal arrangements’ impact on state sovereignty.
- Topic:
- Economics, International Trade and Finance, Global Political Economy, and Unions
- Political Geography:
- Global Focus
66. Gender-inclusive governance for e-commerce
- Author:
- Amalie Giødesen Thystrup
- Publication Date:
- 07-2018
- Content Type:
- Working Paper
- Institution:
- Centre for Trade and Economic Integration, The Graduate Institute (IHEID)
- Abstract:
- United Nations' 2030 Sustainable Development Goals' SDG 5 places gender equality front and centre for sustainable development. The Joint Declaration on Trade and Women's Economic Empowerment on the Occasion of the WTO Ministerial Conference in Buenos Aires in December 2017 brings gender equality to the forefront of trade policy. In the intersection of trade policy and digital technologies, this paper examines how electronic commerce can work towards gender equality, filling a knowledge gap about gender-inclusive governance. Legal-empirical analysis of key regulatory and policy challenges facing women in e-commerce, and identification of vehicles for gender equality at the regional and multilateral level are followed by policy options for promoting women participation in e-commerce. The paper presents a framework for understanding the multiplicity of gender gaps as they manifest themselves in e-commerce models, suggesting potential but also concerns, and advances a multi-level approach to incorporating gender-inclusive e-commerce regulation into trade policy.
- Topic:
- Economics, Gender Issues, International Trade and Finance, Women, Digital Economy, and Sustainable Development Goals
- Political Geography:
- Global Focus
67. Global value chains and technology transfer: new evidence from developing countries
- Author:
- Davide Rigo
- Publication Date:
- 06-2018
- Content Type:
- Working Paper
- Institution:
- Centre for Trade and Economic Integration, The Graduate Institute (IHEID)
- Abstract:
- This paper uses the World Bank's Enterprise Surveys as a sample of 18 developing and emerging economies to investigate the causal relationship between global value chains and the transfer of technology to manufacturing firms in developing nations. It focuses on one specific channel for technology transfer, namely the licensing of foreign technology. By using a propensity score matching difference-in-differences technique, I show that there is a positive and causal impact of being involved in complex international activities (i.e. being a two-way trader) on the licensing of technology. Importantly, domestic firms becoming two-way traders are more likely to acquire foreign-licensed technology than domestic firms starting to either export or import. These findings suggest that the complexity associated with the trading activity determines whether or not foreign technology is licensed.
- Topic:
- Development, Economics, International Trade and Finance, Science and Technology, World Bank, and Global Political Economy
- Political Geography:
- Global Focus
68. Soft vs Hard Governance for Labour and Environmental Commitments in Trade Agreements: Comparing the US and EU Approaches
- Author:
- Vandana Gyanchandani
- Publication Date:
- 08-2018
- Content Type:
- Working Paper
- Institution:
- Centre for Trade and Economic Integration, The Graduate Institute (IHEID)
- Abstract:
- Three methodologies are used to enforce labour and environmental commitments in the US and EU trade agreements: cooperative, sanctions and composite. In-depth analysis of the scope of commitments, level of protection, institutional framework as well as types of informal and formal dispute processes elucidates the pros and cons of such methodologies. Sanctions approach weakens cooperation by misjudging the complexity of domestic policy adjustments through transnational governance. Cooperative mechanism within the NAAEC's composite design emerges as the best approach: Submission on Enforcement Matters (SEM). As it provides for an independent secretariat supported by civil society group and factual records as a sunshine remedy to review citizen submissions. However, the process is constrained by political clout, lack of managerial capacity and legal dilemmas around informal lawmaking (IN-LAW) procedures.
- Topic:
- Economics, Environment, International Cooperation, International Trade and Finance, Labor Issues, Sustainable Development Goals, and Global Political Economy
- Political Geography:
- United States, Europe, Global Focus, and European Union
69. The evolution of the EU law against criminal finance: the "hardening" of FATF standards within the EU
- Author:
- Leonardo Borlinia and Francesco Montanaro
- Publication Date:
- 03-2018
- Content Type:
- Working Paper
- Institution:
- Centre for Trade and Economic Integration, The Graduate Institute (IHEID)
- Abstract:
- This article examines the recent evolution of the EU anti-money-laundering (AML) and counter-terrorist financing (CTF) legislative framework, focusing on the relationship between the main international standards in the field and the newest EU legislation. It suggests that international soft law norms—in particular, the Financial Action Task Force (FATF) Recommendations—have had a decisive influence on the latest development of legislation at the EU level and within its member states. It further argues that mainly the preventive component of the AML/CTF legislation will be strengthened by the EU instruments adopted in mid-2015. However, this Article concludes that the adoption of global soft standards has posed significant challenges to the EU legislative framework. The arguments are developed in four parts. The Article first highlights the main regulatory prescriptions that stem from the study of the phenomenology and the economics of AML/CTF regulation and underpin the current international regulatory paradigm. Second, it explores the evolution of the main international instruments in the field with a special focus on the role played by the FATF Recommendations. It also illustrates the relation between these instruments and the adoption of the new EU AML/CTF legislation from two different, but complementary, angles: (1) noting that the current international AML/CTF framework has a multidisciplinary approach, the Article focuses on the framework's repressive component and assessing the limits of the EU criminal approach against money laundering and terrorist financing; and (2) examining the recent EU preventive legislation and addressing the main challenges posed to the EU legislative framework when attempting to accommodate global standards, especially regarding tensions with fundamental freedoms and human rights protected within the EU.
- Topic:
- Corruption, Crime, Economics, International Trade and Finance, Law, Finance, and Global Political Economy
- Political Geography:
- Global Focus
70. Drivers of Economic Growth in Africa
- Publication Date:
- 10-2017
- Content Type:
- Special Report
- Institution:
- The African Capacity Building Foundation (ACBF)
- Abstract:
- The paper produced by the African Capacity Building Foundation (ACBF) shows that investment, human capital formation, debt, and overseas development assistance drive Africa’s economic growth. It recommends paying attention to capacity, which is critical to making Africa’s growth sustainable and inclusive. Continental, regional, and national long-term growth plans require stronger capacities to improve economic governance, align national and subnational institutions, coordinate planning and financing ministries, and cultivate a culture of committed leadership to stir economies when times are hard and execute recovery plans without policy reversals. The paper provokes discussion, encourages further investigation, and defines the critical capacity challenges to tackling the growth-equality disconnect in Africa.
- Topic:
- Economics, Economic growth, Capacity, and Economic Development
- Political Geography:
- Africa and Global Focus