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111. GameStop and the Rise of Retail Trading

Author:
Jennifer J. Schulp
Publication Date:
10-2021
Content Type:
Journal Article
Journal:
The Cato Journal
Institution:
The Cato Institute
Abstract:
In January 2021, a curious event in the stock market caught the attention of the media, regulators, and the public. A well‐​known struggling company dominated the headlines, not for its business model, but for the meteoric rise of its stock price. GameStop Corp. started the year trading around $19.00 a share, a pretty robust share price for a company that had been trading below $5.00 as recently as August 2020. Yet, by the end of January, GameStop’s shares were trading at over $300, at one point hitting a high of $483. GameStop’s stock price has receded from those meteoric highs, but, as of late May, it continues to trade between $160 and $180 a share.
Topic:
Markets, Economy, Investment, Stock Markets, and Equity
Political Geography:
Global Focus

112. The Impact of Public Debt on Economic Growth

Author:
Jack Salmon
Publication Date:
10-2021
Content Type:
Journal Article
Journal:
The Cato Journal
Institution:
The Cato Institute
Abstract:
Following the 2007–2008 global financial crisis (GFC) and subsequent sovereign debt crisis in Europe, there has been a renewed interest in exploring the relationship between government debt and economic growth. One of the cornerstone studies on the subject that triggered an emergence of new literature was Carmen Reinhart and Kenneth Rogoff’s “Growth in a Time of Debt” (2010), which became widely cited and influential among commentators, academics, and policymakers in the debate surrounding austerity and fiscal policy in debt‐​burdened economies. Much of the research that followed the GFC uses panel data analysis of the debt‐​growth nexus using datasets from the World Bank, International Monetary Fund (IMF), European Commission, and Organisation for Economic Co‐​operation and Development (OECD).
Topic:
Economy, Economic Growth, Survey, and Public Debt
Political Geography:
Global Focus

113. The Sydney Dialogue: Playbook

Author:
Fergus Hanson, Danielle Cave, and Madeleine Nyst
Publication Date:
11-2021
Content Type:
Special Report
Institution:
Australian Strategic Policy Institute (ASPI)
Abstract:
Major advances in technology have always been disruptive. But when they occur against a backdrop of great power competition, the stable development and deployment of these technologies becomes fraught. Few have grasped the enormity of the disruption coming our way as more and more new technologies – from increasingly sophisticated surveillance to quantum and biotechnologies – are deployed across the world. While governments grapple with foreseeing the full impacts and setting policy direction, there’s a growing realisation that emerging and critical technologies will be extraordinarily important for societies, economies and national security. We launched The Sydney Dialogue to support a more stable roll-out of the next wave of transformational technologies. It is a forum allowing for frank debate about the rapidly changing strategic landscape, and a space for governments, business and civil society to come together to focus on solutions, cooperation and policy options. The Sydney Dialogue came about because we saw big gaps in forums on technology, especially in the Indo-Pacific. There were industry events that showcased the latest technical advances and products, but they tended to eschew policy debates, and did not encompass government and civil society. There were important government multilateral discussion and policymaking forums, but these usually lagged well behind technological advances, and because they were primarily for governments, key global players – including those making the technology – weren’t part of the discussion. And there were excellent civil society initiatives, but these often focused on individual topics that were only one piece of a larger puzzle. Few of these initiatives focused on or resonated in the Indo-Pacific – the region that incubates much of the world’s technological innovation and has become a hotbed of strategic technological competition. These gaps drove us towards a dynamic where all the key actors were speaking past one another, while rarely all being in the same room. Tech companies are developing and deploying products that are revolutionary and hugely disruptive. A decade later, governments are scrambling to retrospectively legislate to address issues they did not foresee, and civil society is critiquing from the sidelines. Right now, three major problems must be addressed to ensure the stable development of advanced technologies. First, there’s the large lag between the deployment of new technologies and regulation governing them. With social media, this lag was about a decade. As we’ve seen, this doesn’t lead to good outcomes for individuals, or for societies. Second, there’s a delay between states’ use of new technologies and their consideration of the ethical questions raised by its use. Examples of this can be seen in the global surveillance industry, which has allowed its products to support some of the most egregious human rights abuses of our times. Third, a tense relationship between governments and technology companies is playing out around the world. The negative dynamic that has taken hold is hindering progress and genuine cooperation, leaving democracies at risk of being left behind. The Sydney Dialogue seeks to fill a gap and contribute towards these big challenges. By bringing world leaders, tech company CEOs and the world’s top civil society voices together for an annual dialogue, we hope the roll-out of the next wave of revolutionary technologies over the coming decade can be better managed. This collection of striking essays from some of the world’s top strategic thinkers from across business, government and civil society is a fitting way to start this dialogue. It explores timely debates at the forefront of technology and examines points of crisis and tension in the nexus of society, government and technology. Crucially, it offers innovative ideas to solve these challenges and bring about a brighter, fairer Indo-Pacific. The following pieces bring us all a much-needed dose of optimism and show that in many cases, the solutions already exist – we just need to work together to bring them to life.
Topic:
National Security, Science and Technology, Economy, Surveillance, and Society
Political Geography:
Australia and Global Focus

114. Neo-liberal Challanges and the Demise of Keynesian-Weberian State

Author:
Aziz Tuncer
Publication Date:
11-2021
Content Type:
Journal Article
Journal:
Bilgi
Institution:
Sakarya University (SAU)
Abstract:
Following the II. World War, there was a huge devastation and without state intervention it was not probable to reconstruct infrastructure and reinvigorate industry. Under these conditions in order to rejuvenate the economy and heal the havoc of the war, state intervention was pleased by large parts of society. Keynesian-Weberian structures accordingly were associated with development until mid 1970’s but in that time Weberian large bureaucracy was connected with poor performance, inefficiency and financial deficit. The proposals to rehabilitate the illnesses of Keynesian Weberian state were based upon neo-liberal principles and called New Public Management which became vogue in Europe and suggested to limit the boundary of state activities. One of its concrete outcome is huge transfers of state owned assets and public services to the private sector. Following the privatization and pervasion of the market, the boundary between public and private blurred which created a growing suspicion upon the violation of public interest on the part of citizens. This article aims at contributing to understand the nature and principles of both sides upon major areas.
Topic:
Development, Privatization, Economy, Neoliberalism, Keynes, and Welfare State
Political Geography:
Global Focus

115. After the OECD-Deal: Transatlantic Cooperation and International Corporate Tax Reform

Author:
Shahin Vallée and Ben Judah
Publication Date:
09-2021
Content Type:
Policy Brief
Institution:
German Council on Foreign Relations (DGAP)
Abstract:
Tax avoidance by multinational corporations has become a central feature of the world economy. After decades of opposition, the US wants to set a global minimum corporation tax rate and limit tax avoidance, but it will need all of Europe to stand behind it. A historic 130-country OECD tax agreement is giving some hope but both sides of the Atlantic will need to confront deeply rooted interests if they want to implement the deal and build a new cooperative tax reform framework.
Topic:
International Cooperation, Reform, Economy, Transatlantic Relations, Corporate Tax, and OECD
Political Geography:
Global Focus and United States of America

116. Headquarters-China "Co" Relations - Navigating the Very Contemporary Yins and Yangs of MNC Business in China

Author:
David Hoffman
Publication Date:
05-2021
Content Type:
Working Paper
Institution:
The Conference Board
Abstract:
Many China organizations of western multinational companies (MNCs) report increasing friction and misalignment with headquarters (HQ) across a range of China issues. We observe three primary sources of tension and misalignment: a differing appraisal of risks, including, importantly, confidence in abilities to protect IP; a differing calculus on the evaluation of opportunities; and concerns, at HQ and Board level, about the control implications of increasingly divergent, if not more autonomous, China operations.
Topic:
Economy, Business, Multinational Corporations, and Private Sector
Political Geography:
China, Asia, and Global Focus

117. Global Supply Chains: Compete, Don’t Retreat

Author:
Committee for Economic Development of the Conference Board
Publication Date:
07-2021
Content Type:
Policy Brief
Institution:
The Conference Board
Abstract:
For decades, global supply chains have become increasingly integral to the US economy and have been embraced by business and successive US Administrations because they increase efficiency and US competitiveness. But over the past several years, criticism has grown beyond the argument that US jobs are being exported to include concern about a more hostile and competitive global landscape.1 Then the COVID-19 pandemic struck, and lockdowns were imposed. Production in general was disrupted, shutting down suppliers and interrupting transportation channels; foreign governments closed their borders or hoarded crucial supplies for their own peoples.2 Prominently, lifesaving supplies—including personal protective equipment (PPE) and pharmaceutical production commodities, often sourced from abroad—were in short supply, putting frontline health care workers at even greater risk and complicating vaccine distribution.3 And then, as the pandemic began to ease and demand for goods increased, the enormous container ship Ever Given was grounded in the Suez Canal for six days, bringing much of goods transport around the world to a grinding halt and raising fears of even greater supply chain bottlenecks and commercial chaos.4 This truly unprecedented turn of events has exposed challenges to US reliance on global supply chains. Critics of the “offshoring” of jobs have assigned much of the economic and even the human pain of the pandemic to unwise and excessive dependence on global supply chains that include countries with “command” economies rather than free-market ones, or hostile nations that are unreliable sources of essential goods. The pandemic has also raised national security concerns about the reliability and resiliency of global supply chains, and businesses have been forced into workarounds of their own practices. Given the size of China’s economy, its extensive role in global supply chains, its growing military strength, and the growing tensions in its bilateral US relationship, China is at the nexus of these major concerns about supply chain resilience. The new administration has responded to this turmoil with a series of policy directives,5 studies on the subject,6 and legislative proposals under active consideration in Congress covering both short-term and medium-term responses, including a twenty-first century industrial strategy—which would be a major change of US policy direction. Global trade in materials, tools, components, and services deserves an immediate assessment of both security and economic needs for the long term.7 Security with prosperity must be the goal, and the nation must fully comprehend the bigger picture to achieve that outcome. This brief will put the role of global supply chains in the US and the world economy in perspective. It will offer recommendations to manage the economic and security challenges of global supply chains in the postpandemic economy to ensure that the US remains an innovative and competitive global leader.
Topic:
Economy, Trade, Strategic Competition, COVID-19, Commerce, and Supply Chains
Political Geography:
North America, Global Focus, and United States of America

118. The Nature of Money and the Theory of International Trade: Thornton and Ricardo

Author:
Isabella Weber
Publication Date:
10-2021
Content Type:
Working Paper
Institution:
Political Economy Research Institute (PERI), University of Massachusetts Amherst
Abstract:
A rich recent literature reinvestigates the nature of money, but little attention has been paid to the ramifications of the ways in which we theorize money for the theory of international trade. This paper examines the logical relationship between the neutrality of money and self-balancing trade based on Henry Thornton and David Ricardo as two foundational contributions to credit and commodity money theories respectively. I show that both authors theorize trade as self-balancing whenever money is conceptualized as neutral. I distinguish two notions of the neutrality of money: ex ante and ex post neutrality. In Thornton’s Paper Credit money is not neutral ex ante: there can be temporary trade imbalances. But in the long-run money is neutral ex post and international trade boils down to self-balancing barter. In Ricardo money is neutral both ex ante and ex post and international trade is always balanced unless central bank policy undermines monetary neutrality.
Topic:
International Trade and Finance, Economy, Money, and Trade
Political Geography:
Global Focus

119. The Impact of Environmental Regulations on Manufacturing Outsourcing: Re-examining the Pollution Haven Effect in Global Value Chain

Author:
An Li
Publication Date:
11-2021
Content Type:
Working Paper
Institution:
Political Economy Research Institute (PERI), University of Massachusetts Amherst
Abstract:
As countries worldwide attempt to address a series of global and domestic environmental challenges, the pollution haven effect remains an ongoing concern among trade and environment researchers and policymakers. This paper examines the pollution haven effect in the context of global value chains using inter-country input-output data at the manufacturing industry level from 1995-2009. This paper pays special attention to the issue of “doublecounting” caused by intermediate trade. The analysis utilizes two outsourcing measures and two revealed comparative advantage measures appropriate for analyzing global value chains. I propose women’s political power as a novel instrumental variable to address the endogeneity of environmental regulation. Regression results show that more stringent environmental policies are not a significant determinant of manufacturing outsourcing and competitiveness in global value chains. At the same time, women’s political power is associated with more stringent environmental policies.
Topic:
Environment, Women, Economy, Trade, Pollution, and Global Value Chains
Political Geography:
Global Focus

120. Stranded Fossil-Fuel Assets Translate into Major Losses for Investors in Advanced Economies

Author:
Gregor Semieniuk, Philip B. Holden, Jean-Francois Mercure, Pablo Salas, Hector Pollitt, Katharine Jobson, Pim Vercoulen, Unnada Chewpreecha, Neil Edwards, and Jorge E Viñuales
Publication Date:
10-2021
Content Type:
Working Paper
Institution:
Political Economy Research Institute (PERI), University of Massachusetts Amherst
Abstract:
The distribution of ownership of transition risk associated with stranded fossil-fuel assets remains poorly understood. We compute global stranded assets of US$1.4 trillion in the upstream oil and gas sector as expectations change to be consistent with stated climate policies. We trace the equity risk ownership from these 43,439 assets through a global equity network of 1.8 million companies to their ultimate owners. Most of the market risk falls on private investors, overwhelmingly in OECD countries, including substantial exposure through pension funds. Financial markets are exposed to a US$690 billion correction, comparable to the mispricing that triggered the 2007-08 crisis. The ownership distribution also shows the large stake OECD investors have in the continued operation of fossil-fuel facilities incompatible with climate change mitigation goals.
Topic:
Climate Change, Political Economy, Economy, Investment, and Fossil Fuels
Political Geography:
Global Focus