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Begin New Search Topic International Political Economy Publication Year within 25 Years

691. EMU Effects on International Trade and Investment

Author:
Harry Flam and Per Jansson
Publication Date:
04-2000
Content Type:
Working Paper
Institution:
United Nations University
Abstract:
The partial effect of nominal exchange rate volatility on exports from each EMU member to the rest of the EMU is estimated on annual data for 1967-97, using modern time-series methods. The long-run relations between exchange rate volatility and exports are mostly negative and in several cases insignificantly different from zero. Thus, these estimates do not provide much support for the hypothesis that the elimination of nominal exchange rate volatility will significantly increase trade within the EMU. However, the EMU will presumably lead to geographical concentration of production and therefore indirectly to increased trade within the EMU and, during a transitional stage, to increased foreign direct investment, both within the EMU and between the EMU and the rest of the world.
Topic:
Economics, Government, International Political Economy, and International Trade and Finance
Political Geography:
Europe

692. The Impact of EMU on European Transition Economies

Author:
David Begg
Publication Date:
04-2000
Content Type:
Working Paper
Institution:
United Nations University
Abstract:
An interesting theory of transition must give a convincing account of structural adjustment and supply side improvement. In this paper, I discuss the incentives for government to undertake costly supply side improvement and how these relate to incentives governing the design of monetary and fiscal policy during transition. The government cares about deviations of inflation, output and government spending from their ideal levels, is subject to a budget constraint in which inflation yields some real revenue, and recognizes the distortionary effects of excess levels of taxation. Costly structural adjustment enhances future output by reducing supply side distortions.
Topic:
Economics, Government, and International Political Economy
Political Geography:
Europe

693. EMU and the Developing Countries

Author:
Benjamin J. Cohen
Publication Date:
03-2000
Content Type:
Working Paper
Institution:
United Nations University
Abstract:
The purpose of this paper is to explore economic and political implications of Europe's Economic and Monetary Union (EMU) for developing countries. In strictly economics terms, influences will be communicated through both trade and financial channels. Economies in the developing world will be affected by changes in European growth rates as well as by EMU's impact on transaction costs and enterprise competitiveness within Europe; they will also be impacted by changes in the structure and efficiency of Europe's capital markets. Modifications may be anticipated in borrowing and investment practices at the private level as well as in reserve and debt-management policies at the official level. In political terms, developing countries will be most directly influences by the anticipated rivalry between Europe's new single currency, the euro, and the dollar, which will compel developing countries to reconsider their own national currency strategies. Three conclusions stand out. First, except for selected groups of countries with particularly close ties to the EU, most economic linkages appear marginal at best. It is much easier to enumerate possible channels of transmission than to find many that appear quantitatively significant. Second, among economic effects of EMU, financial channels seem to matter more than trade channels. And third, across the full range of possible linkages, the most lasting influences for developing countries may well turn out, notably, to be political rather than either trade or financial. Significant changes are likely in exchange-rates regimes in many parts of the developing world.
Topic:
Emerging Markets, Government, and International Political Economy
Political Geography:
Europe

694. Will the Euro Trigger More Monetary Unions in Africa?

Author:
Patrick Honohan and Philip R. Lane
Publication Date:
03-2000
Content Type:
Working Paper
Institution:
United Nations University
Abstract:
We analyse the prospects for greater monetary integration in Africa, in the wake of EMU. We argue that the structural characteristics of African economies are quite different to the EMU members but that much can be gained from monetary cooperation, as an external agency of restraint and in promoting stability in the financial sector. EMU has only a marginal impact on the net benefits of monetary cooperation but the euro would be a natural anchor for any African monetary unions. Indeed, the most likely route to new monetary cooperation in Africa is via a common peg to the euro.
Topic:
Emerging Markets and International Political Economy
Political Geography:
Africa and Europe

695. Globalization, Marginalization and Development

Author:
S. Mansoob Murshed
Publication Date:
02-2000
Content Type:
Working Paper
Institution:
United Nations University
Abstract:
This paper surveys issues related to globalization, and the obstacles to the successful integration of vulnerable economies. For many developing countries, the positive benefits of the increased globalization that has been taking place since around 1980 remain distant and elusive. The economies of many countries in the developing world remain extremely vulnerable to domestic and external shocks. They have, effectively, become marginalized from the world system. To a great extent, the obstacles to the successful participation of vulnerable developing economies in the international system are rooted in the causes of their underdevelopment and poor economic performance. Nevertheless, the new rules of the game and the international economic environment prevalent since about 1980 following accelerated globalization, leaves them vulnerable in novel ways. Developing in the arrangements for conducting multilateral trade and technology transfer have left nations in the South more vulnerable than in the past. The ability to conduct independent macroeconomic policy is severely constrained. Nations are more reliant on volatile international capital markets, for finance and investment; many developing countries are completely eschewed by international private capital markets. The problem of poverty in many developing countries seems to have been exacerbated following globalization. When we consider the obstacles to the meaningful participation of vulnerable developing economies in the international system, many are domestic in origin, but external factors beyond the control of these countries play an important part as well. Among the former are poorly designed policies to promote growth on the supply-side, macroeconomic mismanagement on the aggregate demand side and institutional failure. In the latter category protectionist tendencies in the North are the most important factor. Many of these appear in the guise of concerns for environmental and labour standards. Globalization does, however, offer new possibilities to developing countries; particularly because shifts in the international division of labour, as well as technological innovations, could favour the South.
Topic:
Development, Emerging Markets, Globalization, International Political Economy, and Third World