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221. The Affordability Index

Publication Date:
01-2006
Content Type:
Working Paper
Institution:
The Brookings Institution
Abstract:
This brief describes a new information tool developed by the Urban Markets Initiative to quantify, for the first time, the impact of transportation costs on the affordability of housing choices. This brief explains the background, creation, and purpose of this new tool. The first section provides a project overview and a short summary of the method used to create the Affordability Index. The next section highlights the results from testing the index in a seven-county area in and around Minneapolis-St. Paul, MN. To demonstrate the usefulness of this tool at a neighborhood level, the third section projects the effect of transportation and housing choices on three hypothetical low- and moderate-income families in each of four different neighborhoods in the Twin Cities. The brief concludes with suggested policy recommendations and applications of the new tool for various actors in the housing market, and for regulators, planners, and funders in the transportation and land use arenas at all levels of government.
Topic:
Economics, Emerging Markets, and Government
Political Geography:
United States

222. The Russian Federation

Author:
Fiona Hill, Clifford G. Gaddy, Dmitry Ivanov, and Igor Danchenko
Publication Date:
10-2006
Content Type:
Policy Brief
Institution:
The Brookings Institution
Abstract:
Energy is at the heart of Russia's remarkable change of fortune over the past seven years. Emerging from a state of virtual bankruptcy in August 1998, the country now enjoys large surpluses, has inverted its debt burden with the outside world, and has racked up successive years of economic growth and low inflation. This dramatic turnaround is directly related to Russia's status as the world's largest producer of oil and natural gas—the country has benefited tremendously from soaring prices on the world market.
Topic:
Development, Emerging Markets, and Energy Policy
Political Geography:
Russia, Europe, and Asia

223. Reforming Personal Income Tax

Publication Date:
03-2006
Content Type:
Policy Brief
Institution:
The Organisation for Economic Co-operation and Development
Abstract:
Many OECD countries have reformed their personal income tax system over the last two decades. Yet no clear consensus has emerged on what is the ideal personal income tax. These reforms have tried to create a competitive fiscal environment, which encourages investment, risk taking and entrepreneurship and provides increased work incentives. At the same time, fairness and simplicity have become the byword of reformers. Fairness requires that taxpayers in similar circumstances pay similar amounts of tax and that the tax burden is appropriately shared. Simplicity requires that paying your taxes becomes as painless as possible and that the costs of collecting taxes are kept at a minimum.
Topic:
Development, Economics, Emerging Markets, and International Trade and Finance

224. Digitizing Services: What Stays Where and Why

Author:
Rafiq Dossani and Martin Kenney
Publication Date:
06-2006
Content Type:
Working Paper
Institution:
Berkeley Roundtable on the International Economy
Abstract:
The spatial extension and deepening of capitalism has been a topic of interest to geographers, other social scientists, and activists since, at least, Lenin. This topic has reappeared on the public agenda recently under the rubric of “globalization.” Once again, the spatial redistribution of economic activities is sparking enormous controversy and opinions from nearly every philosophical position. This paper considers two dimensions of this enormous topic and argues that neither dimension has received sufficient attention from geographers. The first dimension is the role of technological advancement in transportation and communication technologies in a capitalist system. The second dimension is the development of a global division of labor in service provision.
Topic:
Emerging Markets, Globalization, and International Political Economy

225. Roaring tiger or lumbering elephant?

Author:
Mark P Thirlwell
Publication Date:
09-2006
Content Type:
Working Paper
Institution:
Lowy Institute for International Policy
Abstract:
In the past, there has been plenty of scepticism about India's economic prospects: for many, Charles De Gaulle's aphorism regarding Brazil, that it was a country with enormous potential, and always would be, seemed to apply equally well to the South Asian economy. While the 'tiger' economies of East Asia were enjoying economic take-off on the back of investment- and export-led growth, the lumbering Indian elephant seemed set to be a perpetual also-ran in the growth stakes. Yet following a series of reform efforts, first tentatively in the 1980s, and then with much more conviction in the 1990s, the Indian economic model has been transformed, and so too India's growth prospects. High profile successes in the new economy sectors of information technology (IT) and business process outsourcing (BPO), along with faster economic growth, triggered a widespread rethink regarding India's economic prospects, and a wave of foreign portfolio investment flowed into Indian markets. Perhaps India was set to be a tiger after all.
Topic:
Economics, Emerging Markets, and International Trade and Finance
Political Geography:
South Asia, India, East Asia, Asia, and Brazil

226. XBRL and U.S. Financial Market Leadership

Author:
Peter J. Wallison
Publication Date:
03-2006
Content Type:
Policy Brief
Institution:
American Enterprise Institute for Public Policy Research
Abstract:
In December, the London Stock Exchange celebrated a record year for foreign company new issues, with 129 new listings by companies from twenty-nine different countries. In contrast, the New York Stock Exchange registered a net gain of six foreign listings (a gain of nineteen and a loss of thirteen) in 2005, and NASDAQ gained a net of fourteen. According to a press report by the London Stock Exchange on its success, “about 38 per cent of the international companies surveyed said they had considered floating in the United States. Of those, 90 per cent said the onerous demands of the new Sarbanes-Oxley corporate governance law had made London listing more attractive.” By now, it is well-known what harm Sarbanes-Oxley has done to the attractiveness of the U.S. securities markets, but what is not well- known is that the lack of resources available to a relatively obscure accounting group—engaged in the development of a technical-sounding disclosure system called XBRL—may also threaten not only the current primacy of the U.S. financial markets, but also the future competitiveness of U.S. companies.
Topic:
Economics, Emerging Markets, and International Trade and Finance
Political Geography:
United States, New York, and London

227. Stock Market Development and Economic Growth

Author:
Salvatore Capasso
Publication Date:
09-2006
Content Type:
Working Paper
Institution:
United Nations University
Abstract:
Since the 1990s economists have devoted considerable attention to the study of the relationship between financial markets development and economic growth. In particular, the emergence of stock markets with economic development is an intriguing and interesting aspect of such a relationship, and yet relatively unexplored. This paper examines the most recent findings in the theoretical and empirical literature trying to determine the rationale behind the development of stock markets along the path of growth and the nature of the interrelationship between real and financial variables.
Topic:
Development, Economics, Emerging Markets, and Markets

228. Estimating the Balance Sheet of the Personal Sector in an Emerging Market Country: South Africa 1975-2003

Author:
Johan Prinsloo, John Muellbauer, and Janine Aron
Publication Date:
09-2006
Content Type:
Working Paper
Institution:
United Nations University
Abstract:
Official balance sheet estimates for the household sector are not currently available in South Africa, yet, with the country's well developed financial sector and deep capital markets, asset market channels are likely to be important determinants of aggregate consumer spending and saving, consumer demand for credit and their broad money holdings. The current paper aims to produce comprehensive estimates of household balance sheets for South Africa. The paper draws, where feasible, on best practice from the Office of National Statistics of the UK and assesses the quality of the data sources and suggests areas where additional surveys or improvements in data collection procedures would be helpful to further improve the quality of the balance sheet estimates. Furthermore, quarterly balance sheet measures to 2003 are provided, and linked to quarterly measures. The main balance sheet categories are liquid assets, household debt and various categories of illiquid financial and tangible assets, including pension wealth, directly held shares and bonds, and housing. Revised debt estimates and new estimates of tangible assets for households and unincorporated businesses are provided. The paper describes the trends of the estimates of the household sector's balance sheets and of total net wealth. The paucity of data for developing and emerging market countries is illustrated by means of a survey, and lessons are drawn from the South African research for the compilation of household sector balance sheets.
Topic:
Development, Emerging Markets, and Third World
Political Geography:
Africa, United Kingdom, and South Africa

229. International Risk Tolerance, Capital Market Failure and Capital Flows to Emerging Markets

Author:
Valpy FitzGerald
Publication Date:
04-2006
Content Type:
Working Paper
Institution:
United Nations University
Abstract:
The level, tenor and instability of capital flows from global financial markets towards developing countries are a major source of concern for macroeconomic managers, while their causes remain largely unexplained by economic theory. Country 'fundamentals' (such as economic growth, monetary stability and institutional capacity) as sources of default risk have been the main focus of economic research and policy prescriptions. However, recent empirical research on the determinants of capital flows and the roots of market failure indicate that much of the explanation lies in the nature of the home (that is, the developed country) demand for emerging market assets. In this paper, the microeconomic roots of home bias and demand instability are explained in terms of investor risk perception and credit rationing, exacerbated by traders' behaviour. The consequences for host country macroeconomic balances and income distribution of varying investor risk tolerance are then demonstrated. Although the net impact also depends upon the host policy response, this transmission mechanism means that host 'fundamentals' are themselves strongly affected by capital flows and thus cannot be considered as to be independent of home asset demand. The paper concludes by examining the implications of these findings for the future of development economics in general and for policy response in particular.
Topic:
Development, Emerging Markets, Markets, and Third World

230. Capital Adequacy vs. Liquidity Requirements in Banking Supervision in the EU

Author:
Karel Lannoo and Jean-Pierre Casey
Publication Date:
10-2005
Content Type:
Policy Brief
Institution:
Centre for European Policy Studies
Abstract:
The debate on banking supervision over the last decade has largely focused on capital requirements and solvency of financial institutions. The interaction between solvency and liquidity has been much less debated. Traditionally, it was assumed that once solvency was under control, liquidity should pose no problem. Banks with sufficient capital should be able to obtain extra liquidity from the central bank against adequate collateral if needed. Furthermore, the aim of the New Basel Accord to create a better alignment of regulatory capital with the risk to which banks are exposed, and the stronger focus on diversification, should eventually reduce mismatches between solvency and effective liquidity.
Topic:
Development, Economics, and Emerging Markets
Political Geography:
Europe