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Begin New Search Topic International Trade and Finance Publication Year within 25 Years

1721. What Determines Interest Rates?

Author:
John H. Makin
Publication Date:
01-2005
Content Type:
Policy Brief
Institution:
American Enterprise Institute for Public Policy Research
Abstract:
The pundits who have been predicting higher interest rates based on large U.S. budget and current account deficits have some explaining to do. Beyond the fact that very little systematic empirical evidence exists of a close link between deficits of any kind and interest rates, many high-profile commentators such as Robert Rubin and Pete Peterson, not to mention Pimco's Bill Gross, have consistently warned that long-term interest rates would rise as America's budget and current account deficits rose. Actually, U.S. longterm interest rates have been falling-from 4.8 percent in early June to 4.1 percent at year-end. Despite this stellar performance, Gross has even gone so far as to suggest that U.S. government liabilities should be downgraded from their top rating of AAA to AA.
Topic:
Economics, International Trade and Finance, and Political Economy
Political Geography:
United States

1722. Market Comrades

Author:
R. Glenn Hubbard
Publication Date:
09-2005
Content Type:
Policy Brief
Institution:
American Enterprise Institute for Public Policy Research
Abstract:
Ceremonial gift-giving is an integral part of doing business in China. The value lies not so much in the gift (whose packaging is often more elaborate), but in the possibility of cementing a mutually beneficial relationship. And so it was a few weeks ago with the headline-grabbing announcement that China would revalue the yuan against the U.S. dollar. The modest gesture may make more possible a comprehensive economic dialogue between China and the United States in the interest of both nations. The announcement on July 21 by the People's Bank of China that it would revalue the yuan, abandoning the eleven-year-old peg of 8.28 yuan per U.S. dollar, caught financial markets by surprise. The jolt led market participants to gauge effects of current (and perhaps future) revaluations on currency values and interest rates. And, some U.S. political leaders claimed a victory in the campaign to blame Chinese “market manipulation” for external imbalances facing the United States.
Topic:
Economics, Emerging Markets, and International Trade and Finance
Political Geography:
United States, China, and Asia

1723. Yuan Answers?

Author:
Phillip L. Swagel
Publication Date:
06-2005
Content Type:
Policy Brief
Institution:
American Enterprise Institute for Public Policy Research
Abstract:
If China decides to adopt a flexible exchange rate, as many U.S. policymakers have urged, gains in U.S. exports and national savings in the long term will be offset by higher prices on Chinese goods and higher interest rates in the short term.
Topic:
Economics, International Trade and Finance, and Politics
Political Geography:
China and Asia

1724. 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

1725. Does Financial Liberalization Influence Saving, Investment and Economic Growth? Evidence from 25 Emerging Market Economies, 1973-96

Author:
Robert Lensink and Niels Hermes
Publication Date:
12-2005
Content Type:
Working Paper
Institution:
United Nations University
Abstract:
This paper aims to investigate the relationship between financial liberalization on the one hand and saving, investment and economic growth on the other hand, using a new dataset for measuring financial liberalization for a sample of 25 developing economies over the period 1973-96. We find no evidence that financial liberalization affects domestic saving and total investment (although there are some signs to believe that liberalization may actually reduce rather than increase domestic saving), whereas it is positively associated with private investment, as well as with per capita GDP growth. We find a negative relationship between financial liberalization and public investment. These results suggest that financial liberalization leads to a substitution from public to private investment, which may contribute to higher economic growth.
Topic:
Development, Economics, Emerging Markets, and International Trade and Finance

1726. Financial Sector Development and Productivity Growth

Author:
George Mavrotas and Subal C. Kumbhakar
Publication Date:
12-2005
Content Type:
Working Paper
Institution:
United Nations University
Abstract:
Recent years have witnessed important structural changes around the world as a result of the globalization process, the creation of new economic blocks and the liberalization of financial sector in many countries. Responding to these changes many sectors of the industrialized countries have gone through major deregulatory changes to acclimate themselves to new environments. At the same time, many countries have undertaken institutional reforms to build a market-orientated financial system in the hope that transition towards market economy will improve productivity. In the face of uncertainty resulting from changes in regulatory structure and the development of financial institutions to foster market economy, many countries may not be able to achieve their maximum growth potential. In other words, productivity growth is likely to depend on the development of financial institutions and the stage of economic development That is, a less developed country is likely to benefit more (in terms of output growth rate) from the development of financial institutions than a developed economy with well-developed financial system. In this paper we document this by using data covering 65 countries, varying substantially in term s of level of development and geographic location, and spanning the period 1960-1999. Empirical results obtained from the estimation of two different empirical models regarding the measurement of total factor productivity growth seem to confirm a priori expectations about the overall positive influence of financial systems on productivity in line with previous work on this front. Our results remain robust with respect to alternative definitions of financial sector development we tried.
Topic:
Development, Economics, Globalization, and International Trade and Finance

1727. Diamonds, Foreign Aid, and the Uncertain Prospects for Post-Conflict Reconstruction in Sierra Leone

Author:
J. Andrew Grant
Publication Date:
08-2005
Content Type:
Working Paper
Institution:
United Nations University
Abstract:
This article examines the external and internal dimensions of post-conflict reconstruction in Sierra Leone. The United Nations, bilateral donors such as the United Kingdom, and transnational non-governmental organizations and aid agencies have been instrumental in providing much-needed external assistance to Sierra Leone during the latter stages of its civil war and in the immediate post-war period. Although foreign aid is a welcome source of external support for reconstruction efforts, it is finite like any other resource. Reconstruction must also address intangible issues such as corruption as well as the healing of society through the Truth and Reconciliation Commission and the Special Court for Sierra Leone. Diamond exports hold potential as an internal source to spur economic growth and reconstruction. However, as the article illustrates, many obstacles remain, ranging from governance weaknesses in terms of capacity and domestic regulatory schemes on diamonds to the existence of illicit mining and smuggling of diamonds to regional instability.
Topic:
Foreign Policy, Debt, and International Trade and Finance
Political Geography:
Africa and United Kingdom

1728. Trade Openness and Vulnerability in Central and Eastern Europe

Author:
Pierluigi Montalbano, Alessandro Federici, Umberto Triulzi, and Carlo Pietrobelli
Publication Date:
06-2005
Content Type:
Working Paper
Institution:
United Nations University
Abstract:
This paper offers a substantive contribution to the debate on the role of international trade on the development of emerging countries. The aim is to detect empirically the phenomenon of vulnerability induced by trade openness. The methodology adopts a forward-looking approach and tries to fill a missing link in the theory between trade shocks, volatility, and the wellbeing of countries, distinguishing between 'normal' and 'extreme' volatility.
Topic:
Development, Economics, Globalization, and International Trade and Finance
Political Geography:
Eastern Europe

1729. Financial Sector Structure and Financial Crisis Burden: A Model Based on the Russian Default of 1998

Author:
George Mavrotas and Dmitri Vinogradov
Publication Date:
06-2005
Content Type:
Working Paper
Institution:
United Nations University
Abstract:
We consider an overlapping generations model with two production factors and two types of agents in the presence of financial intermediation and its application to the Russian default of August 1998. The paper focuses on the analysis of the consequences of a sudden negative repayments shock on financial intermediation capacity and consequently on the economy as a whole. The model exhibits a 'chain reaction' property, when a single macroeconomic shock can lead to the exhaustion of credit resources and to the subsequent collapse of the whole banking system. To maintain the capability of the system to recover, regulatory intervention is needed even in the presence of the state guarantees on agents' deposits in the banks (workout incentives). We compare the results for an intermediated economy with those derived under the assumption of a market economy, and draw some broad conclusions on the consequences of the crises, which are contingent on the financial sector structure.
Topic:
Development, Economics, Emerging Markets, and International Trade and Finance
Political Geography:
Russia

1730. From Local to Global and Informal to Formal: Entering Mainstream Markets

Author:
Reema Nanavaty
Publication Date:
02-2005
Content Type:
Working Paper
Institution:
United Nations University
Abstract:
This is a brief sketch of the Self Employed Women's Association's (SEWA) three-decade-long journey from the local to global and informal to formal sector in search of finding work and income for now 720,000 women workers. Though SEWA remains a local and an informal economy workers' organization, its aim has always been to mainstream its issues, hopes, and achievements.
Topic:
International Relations, Economics, Emerging Markets, and International Trade and Finance