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2942. Campaign Season Begins in Israel (Part I): Ariel Sharon Bolts from Likud
- Author:
- David Makovsky
- Publication Date:
- 11-2005
- Content Type:
- Policy Brief
- Institution:
- The Washington Institute for Near East Policy
- Abstract:
- On Monday, November 21, Israeli prime minister Ariel Sharon announced that he is bolting the Likud Party and forming a new National Responsibility Party. The Knesset took a preliminary vote to dissolve itself. While wrangling may continue, a final date will soon be set for elections in March 2006. Sharon remains prime minister during the interregnum.
- Topic:
- Development, Government, and Politics
- Political Geography:
- Middle East and Israel
2943. Assessing Palestinian Security Reform
- Author:
- Mohammed Yaghi
- Publication Date:
- 06-2005
- Content Type:
- Policy Brief
- Institution:
- The Washington Institute for Near East Policy
- Abstract:
- Palestinian security reform was high on the agenda during Secretary of State Condoleezza Rice's recent visit to Ramallah. A spike in armed clashes, crime, and demonstrations in the territories has highlighted the issue of law and order among the Palestinian people, who are increasingly concerned about their daily security. On June 14, Palestinian Authority (PA) prime minister Ahmed Qurei threatened to suspend the work of the cabinet "if the security forces fail to put an end to the trespasses and anarchy."
- Topic:
- Conflict Prevention, Security, and Development
- Political Geography:
- Middle East and Palestine
2944. Sources and Effectiveness of Financial Development: What We Know and What We Need to Know
- Author:
- Panicos O. Demetriades and Svetlana Andrianova
- Publication Date:
- 12-2005
- Content Type:
- Working Paper
- Institution:
- United Nations University
- Abstract:
- Drawing on recent literature, the paper argue s that institutions and political economy factors hold the key to understanding why some countries have succeeded in developing their financial systems while others have not. The paper also reviews new evidence which suggests that institutional quality may influence the effectiveness of financial development in delivering economic growth. These new findings highlight the possibility that poor countries may be stuck in a bad equilibrium, in which weak institutions inhibit growth both directly and indirectly, through under-developed, low- quality finance. In addition, the paper identifies a number of unanswered questions in the financial development literature, including the precise role of important institutions like law in finance, and the influence of geographical factors.
- Topic:
- Development, Economics, Political Economy, and Third World
2945. The Poverty Macroeconomic Policy Nexus: Some Short-run Analytics
- Author:
- George Mavrotas and S. Mansoob Murshed
- Publication Date:
- 12-2005
- Content Type:
- Working Paper
- Institution:
- United Nations University
- Abstract:
- The present paper utilises a short-run theoretical macroeconomic model of a small open economy to look at the impact of macroeconomic policies and financial deepening upon poverty through sectoral changes. This is because an expansion in certain sectors may cause greater poverty reduction. The model involves a non-traded and a traded sector on the formal side of the economy. The former is more capital intensive and the latter more unskilled labour intensive. Increased employment in the traded sector is more pro-poor compared to a similar rise in the non-traded sector as the former draws workers out of poverty in the informal sector. The model in our paper analyses short-run effects of devaluation, a rise in the money supply induced by financial deepening, and taxation to discourage non-traded goods consumption. Financial deepening can induce greater output and reduce poverty. Other results are mixed and taxonomic. We also attempt to differentiate between the stylised experiences of East Asia and Latin America. East Asian economies have relied more heavily on labour-intensive manufactured exports, whereas Latin America has had a relatively greater share of capital intensive and natural resource based exports. In recent decades countries in these two regions have had differing experiences in poverty reduction, with poverty arguably declining more in East Asia.
- Topic:
- International Relations, Development, Economics, and Poverty
- Political Geography:
- East Asia and Latin America
2946. Does Financial Openness Promote Economic Integration? Some Evidence from Europe and the CIS
- Author:
- Fabrizio Carmignani and Abdur Chowdhury
- Publication Date:
- 12-2005
- Content Type:
- Working Paper
- Institution:
- United Nations University
- Abstract:
- We study whether financial openness facilitates the economic integration of formerly centrally planned economies with the EU- 15. Two dimensions of economic integration are considered: cross-country convergence of per-capita incomes and bilateral trade in goods and services. We find that more financially open economies effectively catch-up faster and trade more with the EU-15. These integration-enhancing effects occur over and above any effect stemming from domestic financial deepening and other factors determining growth and trade.
- Topic:
- Development, Economics, and International Trade and Finance
- Political Geography:
- Europe
2947. The Effects of (within and with EU) Regional Integration: Impact on Real Effective Exchange Rate Volatility, Institutional Quality and Growth for MENA Countries
- Author:
- Iftekhar Hasan and Leonardo Becchetti
- Publication Date:
- 12-2005
- Content Type:
- Working Paper
- Institution:
- United Nations University
- Abstract:
- We analyse two potential effects arising from regional (and with EU) integration—increased quality of institutions (including the quality of financial institutions) and, economic policies and reduced multilateral exchange rate volatility— in a conditional convergence growth framework for MENA countries. To this purpose we outline an ad hoc methodology which implements the traditional bilateral exchange rate measures to test effects of multilateral exchange rate volatility on growth of per capita GDP. Our estimates show that both factors (quality of institutions and reduction of multilateral volatility) significantly and positively affect growth and conditional convergence. We observe that MENA countries are not far from EU and OECD countries in terms of exchange rate volatility, but much below in terms of institutional quality. We finally simulate the potential effects of an improvement in institutional quality in MENA countries on their process of growth and conditional convergence. We conclude arguing that regional integration may be highly beneficial for such countries, mainly because of its effects on institutional quality.
- Topic:
- Development, Economics, and Regional Cooperation
- Political Geography:
- Europe
2948. Education, Financial Institutions, Inflation and Growth
- Author:
- Iftekhar Hasan, Leonardo Becchetti, and George Mavrotas
- Publication Date:
- 12-2005
- Content Type:
- Working Paper
- Institution:
- United Nations University
- Abstract:
- Our paper investigates the unexplored impact of education on inflation and of this relationship on economic growth. By using a sample of 102 countries observed on non-overlapping five-year data spells over the period 1963-2001, we find that average schooling years of the working population have a significant negative impact on inflation rates after controlling for the effects of the stance of domestic monetary policy. We also show that the negative impact of inflation on growth in conditional convergence estimates is significantly increased when the former is instrumented by educational variables. Our findings outline a third potential role of human capital on conditional convergence. They show that education is not only a production factor or a variable which may reduce demographic pressures, but also an important antidote against inflationary pressures which, in turn, negatively affect economic growth and conditional convergence. We interpret our findings by identifying three potential rationales for the education-inflation nexus: (i) education raises consumers' awareness of their power in contrasting producers' inflationary pressures; (ii) more educated individuals have lower inflationary expectations when they are also wealthier and their consumption bundle is relatively less (more) intensive in inferior (superior) goods with higher (lower) inflation potential; (iii) more (less) educated and wealthier (less wealthy) individuals tend to be net creditors (debtors) in their maturity, thereby contributing to increase (reduce) the power of anti-inflationary lobbies.
- Topic:
- International Relations, Development, Economics, and Education
2949. Financial Sector Development, Savings Mobilization and Poverty Reduction in Ghana
- Author:
- Peter Quartey
- Publication Date:
- 12-2005
- Content Type:
- Working Paper
- Institution:
- United Nations University
- Abstract:
- The paper primarily investigates the interrelationship between financial sector development and poverty reduction in Ghana. This is done using time-series data from the World Development Indicators from 1970-2001. The main findings are, first, that even though financial sector development does not Granger-cause savings mobilization in Ghana, it induces poverty reduction; and second, that savings do Granger-cause poverty reduction in Ghana. Also, the effect of financial sector development on poverty reduction is positive but insignificant. This is due to the fact that financial intermediaries in Ghana have not adequately channelled savings to the pro-poor sectors of the economy because of government deficit financing, high default rate, lack of collateral and lack of proper business proposals. Another interesting finding is that there is a long-run co integration relationship between financial sector development and poverty reduction.
- Topic:
- Development, Economics, and Poverty
- Political Geography:
- Africa and Ghana
2950. Financial Markets and R Investments: A Discrete-Time Model to Interpret Public Policies
- Author:
- Marco Mazzoli
- Publication Date:
- 12-2005
- Content Type:
- Working Paper
- Institution:
- United Nations University
- Abstract:
- This paper introduces a discrete-time intertemporal investment model in which the flow of profits affects the risk premium on the cost of finance, and, as a consequence, the rate of discount of future profits. While public investments, according to a consolidated literature, constitute the main bulk of innovation policies, this model is used to comment and interpret the potential use of another, secondary, public policy, consisting of tax incentives for firms performing R expenditures and issuing securities in the stock market. Linking public policies for innovation to the stock market might help to reduce the problems of discretionality and the monitoring of public expenditure used to finance R and technical innovation.
- Topic:
- Security, Development, Economics, and Emerging Markets