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

1941. Economic Survey of Italy, 2003

Publication Date:
06-2003
Content Type:
Policy Brief
Institution:
The Organisation for Economic Co-operation and Development
Abstract:
The traditional dynamism and flexibility of the Italian economy has faltered in recent years, in part because of the unfavourable developments in the international economy. Furthermore, structural reforms have not yet gone far enough to turn the tide. Despite supportive fiscal policies and monetary conditions, growth is sluggish, confidence is at a low ebb, inflation is above the euro-area average, and there are perceptions of a pervasive loss of competitiveness. As regards fiscal policy, room for manoeuvre has now been greatly reduced by tax cuts – desirable in themselves – and significant additional corrective measures will be required for some years to come, if medium-term targets are to be achieved and long-term fiscal sustainability is to be assured. Such corrective measures should be of a structural and permanent nature, with prime candidates being savings in public pensions and health care, and increased public sector efficiency. The pension system is very expensive, in large part because it still encourages early retirement, thus resulting in inefficient public spending and low employment rates. These perverse features need to be removed. Public health spending is not efficiently administered: recent agreements on standards and financing with regions are a step forward, and a more incisive control of costs could derive from the quarterly monitoring of spending that has already been implemented. In public administration, the retirement of large numbers of public employees creates opportunities for a more effective and less costly redeployment of human resources. Overall economic performance would be improved by policies that further strengthen competition in product markets, for example by not eroding the powers and independence of the sectoral regulators. Privatisations should be vigorously resumed and effective financial market monitoring of firms ensured. Speedier bankruptcy procedures should be introduced that give priority to efficient reallocation of resources. Together with less rigid employment protection legislation, this might encourage more small firms to expand to levels that would permit more investment in both human and R capital. Recent employment developments have been positive, and further improvements could be achieved by encouraging the social partners to allow wages of workers of all ages to more closely reflect their productivity and local conditions. Planned improvements in the social safety net and the functioning of employment services should also boost job creation by making employees willing to accept more flexible employment conditions. In the longer term, increasing the levels of output and living standards will also depend on raising the skills and qualifications of Italy's labour force. Proposed educational reforms could improve them both and thereby help to realise Italy's full economic potential.
Topic:
Diplomacy, Economics, International Organization, International Trade and Finance, and Political Economy
Political Geography:
Italy

1942. From Red Tape to Smart Tape: Administrative Simplification in OECD Countries

Publication Date:
06-2003
Content Type:
Policy Brief
Institution:
The Organisation for Economic Co-operation and Development
Abstract:
One of the most common complaints raised by businesses and citizens in OECD countries is the amount and complexity of government formalities and paperwork. Enterprises and citizens spend much time and devote significant resources to activities such as filling out forms, applying for permits and licences, reporting business information, notifying changes etc. In many cases, practices have become extremely complex, or irrelevant and cumbersome, generating unnecessary regulatory burdens – so-called “red tape”. The costs imposed on the economy as a whole are significant. When excessive in number and complexity, administrative regulations can impede innovation, create unnecessary barriers to trade, investment and economic efficiency, and even threaten the legitimacy of regulation and the rule of law.
Topic:
Diplomacy, Economics, International Organization, International Trade and Finance, and Political Economy

1943. The OECD Guidelines for Multinational Enterprises: A Key Corporate Responsibility Instrument

Publication Date:
06-2003
Content Type:
Policy Brief
Institution:
The Organisation for Economic Co-operation and Development
Abstract:
The OECD Guidelines for Multinational Enterprises are one of the world's foremost corporate responsibility instruments and are becoming an important international benchmark for corporate responsibility. They contain voluntary principles and standards for responsible business conduct in such areas as human rights, disclosure of information, anti-corruption, taxation, labour relations, environment, and consumer protection. They aim to promote the positive contributions multinational enterprises can make to economic, environmental and social progress.
Topic:
Economics, Environment, Human Rights, International Organization, and International Trade and Finance

1944. MAgricultural Policies in OECD Countries: A Positive Reform Agenda

Publication Date:
06-2003
Content Type:
Policy Brief
Institution:
The Organisation for Economic Co-operation and Development
Abstract:
OECD countries have recently agreed to a positive reform agenda for agricultural policies. Central to this agenda is the need to set out clearly the objectives of agricultural policies, and to monitor the performance of alternative policies in attaining them. In most cases, the best way to achieve an objective is to target it directly. Thus, where agriculture is deemed to provide public services, such as a pleasing countryside or environmental benefits, any required support for those services could be provided directly, rather than through policies that stimulate output. Conversely, environmental degradation could be taxed or regulated at source. Where agricultural households have low incomes, there may be a case for policies that concentrate benefits among poorer households, as opposed to blanket support measures that pay more to larger (and typically wealthier) farmers and to landowners. Reform along these lines would improve the cost-effectiveness of government programmes, and would greatly reduce disruptions to international markets. At the same time, not everyone will gain from reform, at least in the short term. There may therefore be a need for temporary adjustment assistance for farm households that are negatively affected. The broader opportunities to improve economic well-being call for policies that respond explicitly to a more diverse range of societal interests.
Topic:
Agriculture, Economics, Environment, and International Trade and Finance

1945. Feasible Financing Strategies for Environmentally Related Infrastructure

Publication Date:
05-2003
Content Type:
Policy Brief
Institution:
The Organisation for Economic Co-operation and Development
Abstract:
An important obstacle to achieving environmental goals in many countries has been the failure to adequately address the associated financial issues: the costs of achieving goals; how those costs could be minimised; and the challenge of matching costs with available resources. The need for a fresh approach has become evident as central European countries come to terms with mobilising substantial financial resources to comply with challenging EU environmental requirements, and as the countries of Eastern Europe, Caucasus and Central Asia (EECCA) struggle to maintain even the low levels of services currently delivered by environmentally-related infrastructure.
Topic:
Economics, Environment, and International Trade and Finance
Political Geography:
Europe, Central Asia, and Eastern Europe

1946. Territorial review of Öresund,2003

Publication Date:
03-2003
Content Type:
Policy Brief
Institution:
The Organisation for Economic Co-operation and Development
Abstract:
The Öresund project which is intended to develop jointly Skåne (Malmö) in Sweden and Zealand (Copenhagen) in Denmark is a major endeavour for the Danish and Swedish governments, given the potential economic growth that can be derived from the integration of one of the most highly populated and productive regions on the Baltic Sea. The significance of the project is reflected not only in the regional policy focus given to Öresund in both countries but also in the EU's support, notably through INTERREG, which considers Öresund a flagship programme. While progress has been achieved to better link the two regional economies, much remains to be done to remove barriers to integration and to define the strategic positioning of the area for the future. Four key policy challenges need to be addressed. First, regarding physical accessibility, the pricing policy for the crossing of the new bridge can be made more efficient and secondary infrastructure optimised to fully exploit the opportunities brought about by the fixed link. A cross-border committee could be created to allow integrated spatial planning. Second, labour mobility should be increased by removing bureaucratic and legislation obstacles through a new package of active labour market policies. Third, networking and co-operation between firms and educational institutions should be enhanced. Fourth, asymmetries of the two fiscal systems will need to be tackled by a new tax agreement. Most important is the governance framework of the region. While there are numerous common Danish/Swedish regional institutions and rightfully the creation of a heavily bureaucratic governing body has been avoided, the potential for public/private partnerships is far from tapped. Furthermore, the system in place does not provide an appropriate framework for the private sector to fully involve all relevant actors. These conditions will need to be fulfilled and forms of “light institutionalisation” of cross-border relations developed in order to trigger a new dynamism in the integration process.
Topic:
Emerging Markets, International Trade and Finance, Political Economy, and Regional Cooperation
Political Geography:
Denmark and Sweden

1947. Breaks in the Variability and Co-Movement of G-7 Economic Growth

Author:
Jon Faust and Brian M. Doyle
Publication Date:
12-2003
Content Type:
Working Paper
Institution:
Board of Governors of the Federal Reserve System
Abstract:
This paper investigates breaks in the variability and co-movement of output, consumption, and investment in the G-7 economies. In contrast with most other papers on co-movement, we test for changes in co-movement allowing for breaks in mean and variance. Despite claims that rising integration among these economies has increased output correlations among them, we find no clear evidence of an increase in correlation of growth rates of output, consumption, or investment. This finding is true even for the United States and Canada, which have seen a tremendous increase in bilateral trade shares, and for the members of the euro area in the G-7.
Topic:
International Relations, Economics, and International Trade and Finance
Political Geography:
United States, Canada, and North America

1948. Interest Rate Rules and Multiple Equilibria in the Small Open Economy

Author:
Luis-Felipe Zanna
Publication Date:
12-2003
Content Type:
Working Paper
Institution:
Board of Governors of the Federal Reserve System
Abstract:
In a small open economy model with traded and non-traded goods this paper characterizes conditions under which interest rate rules induce aggregate instability by generating multiple equilibria. These conditions depend not only on how aggressively the rule responds to inflation, but also on the measure of inflation to which the government responds, on the degree of openness of the economy and on the degree of exchange rate pass-through. As an important policy implication, this paper finds that to avoid aggregate instability in the economy the government should implement an aggressive rule with respect to the inflation rate of the sector that has sticky prices. That is the non-traded goods inflation rate. As a by-product of this analysis, it is shown that "fear-of-floating" governments that follow a rule that responds to both the CPI-inflation rate and the nominal depreciation rate or governments that implement "super-inertial" interest rate smoothing rules may actually induce multiple equilibria in their economies. This paper also shows that for forward-looking rules, the determinacy of equilibrium conditions depends not only on the degree of openness of the economy but also on the weight that the government puts on expected future CPI-inflation rates. In fact rules that are "excessively" forward-looking always lead to multiple equilibria.
Topic:
International Relations, Economics, Government, and International Trade and Finance

1949. The High-Frequency Response of Exchange Rates and Interest Rates to Macroeconomic Announcements

Author:
John H. Rogers, Jonathan H. Wright, Jon Faust, and Shing-Yi B. Wang
Publication Date:
10-2003
Content Type:
Working Paper
Institution:
Board of Governors of the Federal Reserve System
Abstract:
Many recent papers have studied movements in stock, bond, and currency prices over short windows of time around macro announcements. This paper adds to the announcement effects literature in two ways. First, we study the joint announcement effects across a broad range of assets--exchange rates and U.S. and foreign term structures. In order to evaluate whether the joint effects can be reconciled with conventional theory, we interpret the joint movements in light of uncovered interest rate parity or changes in risk premia. For several real macro announcements, we find that a stronger than expected release appreciates the dollar today, but that it must either (i) lower the relative risk premium for holding foreign currency rather than dollars, or (ii) imply considerable future expected dollar depreciation. The latter implies an overshooting behavior akin to that described by Dornbusch (1976). Second, we use a longer span of high frequency data than has been common in announcement work. A longer span of high frequency data contributes to the precision of our estimates and allows us to explore the possibility that the effects of macro surprises on asset prices have varied over time. We find evidence, for example, that PPI releases had a larger effect on U.S. interest rates before about 1992 than subsequently.
Topic:
International Relations, Economics, Government, and International Trade and Finance
Political Geography:
United States

1950. Market Power and Inflation

Author:
David Bowman
Publication Date:
10-2003
Content Type:
Working Paper
Institution:
Board of Governors of the Federal Reserve System
Abstract:
This paper examines the extent to which a decline in market power could have contributed to the general decline in inflation rates experienced in developed countries during the 1990s.
Topic:
International Relations, Economics, Government, and International Trade and Finance