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  • Author: Giuseppe Martinico
  • Publication Date: 12-2015
  • Content Type: Working Paper
  • Institution: Istituto Affari Internazionali
  • Abstract: Asymmetry has frequently been experimented within federalising processes, especially in those federal or quasi-federal contexts characterised by the coexistence of different legal and cultural backgrounds (Canada, for instance). By adopting a comparative approach, this paper offers a reflection on asymmetry as an instrument of differentiated integration in the current phase of the EU integration process. It aims to show the potential of the concept and some of the risks connected to its use.
  • Topic: Markets, Regional Cooperation, Culture, European Union
  • Political Geography: Europe
  • Publication Identifier: 978-88-98650-73-6
  • Publication Identifier Type: DOI
  • Author: Daniele Ciani, Paolo Finaldi Russo, Valerio Vacca
  • Publication Date: 12-2015
  • Content Type: Working Paper
  • Institution: Istituto Affari Internazionali
  • Abstract: This paper describes the main features of European SMEs’ financial behaviour and the policies recently put in place to support their funding. European SMEs are structurally more leveraged and charged with higher interest rates than large firms. Moreover, the crisis has deeply affected their fund-raising capacity, as banks reduced credit supply while non-bank funding was unavailable to most SMEs. Against this background, EU has focussed its policies on long-term investment and on a more favourable environment for SMEs financing, including through the launch of the Capital Markets Union. At the national level, most governments have provided guarantees and enhanced the role of national development banks. Nevertheless, key issues are still outstanding, such as the funding of innovative firms and the improvement of transparency and of the legal and regulatory frameworks.
  • Topic: Economics, International Trade and Finance, Markets, European Union
  • Political Geography: Europe
  • Publication Identifier: 978-88-98650-71-2
  • Publication Identifier Type: DOI
  • Author: Riccardo Alcaro
  • Publication Date: 11-2015
  • Content Type: Working Paper
  • Institution: Istituto Affari Internazionali
  • Abstract: British Prime Minister David Cameron has pledged to campaign for the UK to stay in the EU in the incoming in-or-out referendum on the UK’s EU membership, but only if London succeeds in recalibrating its relationship with the Union. As the EU’s fourth largest country, Italy will play a crucial role in the negotiation. The challenge for Rome is to balance its long-standing commitment to strengthening European integration with the interest in keeping a country the size and influence of the UK in the EU. Matteo Renzi’s government should be supportive of British proposals about competitiveness, pragmatic as far as sovereignty issues are concerned, constructive but cautious regarding economic governance, and understanding of British concerns but also firm about immigration.
  • Topic: Markets, Regional Cooperation, Immigration, European Union
  • Political Geography: United Kingdom, Europe
  • Publication Identifier: 978-88-98650-70-5
  • Publication Identifier Type: DOI
  • Author: Zhao Minghao
  • Publication Date: 10-2015
  • Content Type: Working Paper
  • Institution: Istituto Affari Internazionali
  • Abstract: The European Council has mandated the High Representative of the Union for Foreign Affairs and Security Policy, Federica Mogherini, to draft a Global Strategy by June 2016. Given Europe’s status as a global power, such a strategy must respond to Europe’s own challenges as well as to the new grand strategies of other major players in world politics, like China. To better understand the central tenets of the Chinese leadership’s strategic thinking, two keywords are most important – the “Four Comprehensives” and the “One Belt and One Road” (OBOR). As an initiative mainly focusing on promoting Eurasian integration and reshaping Chinese geo-economic advantages, the OBOR is highly consequential to China’s interactions with Europe and the rest of the world at large in the decades to come. How to take advantage of the OBOR, create new EU-China synergies, and tackle relevant challenges are questions the EU leaders should be attentive to.
  • Topic: Economics, International Cooperation, International Trade and Finance, Markets, Bilateral Relations
  • Political Geography: Europe, Asia
  • Publication Identifier: 978-88-98650-61-3
  • Publication Identifier Type: DOI
  • Author: Alex Cobham, Petr Janský, Alex Prats
  • Publication Date: 01-2014
  • Content Type: Working Paper
  • Institution: Center for Global Development
  • Abstract: This paper assesses the role of Switzerland as the leading hub for global commodities trading, in terms of the patterns of prices received by original exporting countries and subsequently by Switzerland and other jurisdictions. We find support for the hypotheses that (i) the average prices for commodity exports from developing countries to Switzerland are lower than those to other jurisdictions; and that (ii) Switzerland declares higher (re-)export prices for those commodities than do other jurisdictions. This pattern implies a potential capital loss for commodity exporting developing countries and we provide a range of estimates of that loss - each of which suggests the scale is substantial (the most conservative is around $8 billion a year) and that the issue merits greater research and policy attention. An important first step would be a Swiss commitment to meet international norms of trade transparency.
  • Topic: Economics, Industrial Policy, International Trade and Finance, Markets, Developing World
  • Political Geography: Europe, Switzerland
  • Author: Stefan Lehne
  • Publication Date: 02-2014
  • Content Type: Working Paper
  • Institution: Carnegie Endowment for International Peace
  • Abstract: Through its European Neighborhood Policy (ENP), the European Union (EU) aims to support the structural transformation of its Eastern and Southern neighbors, promoting democracy, the rule of law, and successful market economies. Ten years after the ENP's launch, it is clear that the policy is not working. Adjusting the ENP to the changing reality on the ground, sharpening its tools, and rebuilding its credibility should be a top priority for the EU's foreign policy leadership.
  • Topic: Foreign Policy, Democratization, Economics, International Trade and Finance, Markets
  • Political Geography: Europe
  • Author: Joshua Meltzer
  • Publication Date: 02-2014
  • Content Type: Working Paper
  • Institution: The Brookings Institution
  • Abstract: This paper is about the potential of the Internet as a platform for international trade. A traditional understanding of the impact of the Internet on commerce is derived from the dot.com experience of the 1990s, where Internet companies such as Pets.com and Amazon sold goods online. Since then, the impact of the Internet on commerce has grown and changed. Certainly, the ability to sell goods online remains important. However, the key development is that the Internet is no longer only a digital storefront. Instead, the Internet as described in this working paper is a platform for businesses to sell to customers domestically and overseas, and is a business input that increases productivity and the ability of businesses to compete. Understanding the Internet as a platform for trade highlights its broad economic potential. It emphasizes how the commercial opportunities are no longer limited to Internet companies, but are now available for businesses in all sectors of the economy, from manufacturing to services. Moreover, the global nature of the Internet means that these opportunities are no longer limited to domestic markets, but are embraced wherever Internet access is available.
  • Topic: Economics, International Trade and Finance, Markets, Science and Technology, Communications
  • Political Geography: Africa, United States, Europe
  • Author: Elif Burcu Günaydin
  • Publication Date: 03-2014
  • Content Type: Working Paper
  • Institution: Istituto Affari Internazionali
  • Abstract: South-Eastern Mediterranean gas findings have raised much interest in recent years. Even though the estimated quantity of reserves is not globally significant, it is enough to be a regional game changer, promising a considerable amount of gas surplus to be exported. The main export route and potential customers are still being debated. Turkey, with its growing gas consumption, geographical location and existing pipeline system, is considered to be the most feasible option both as a customer and a transport route. Nevertheless, the fact that Israel and Cyprus, with whom Turkey had difficult relations, are the first two explorers of significant resources complicates considerably the situation. Optimistically, the reserves may lead to a solution to the Cyprus conflict and restore diplomatic ties between Israel and Turkey. However, energy resources are known to be a double-edged sword that can lead to collaboration but also to conflict. Either way, gas production will find its way to the markets. It will be up to regional actors to decide whether this way will be paved via interim agreements or via a permanent settlement that could initiate regional energy cooperation in the Eastern Mediterranean.
  • Topic: Energy Policy, Markets, Oil, Natural Resources, Infrastructure
  • Political Geography: Europe, Turkey, Asia
  • Author: Ariel Cohen
  • Publication Date: 04-2014
  • Content Type: Working Paper
  • Institution: Istituto Affari Internazionali
  • Abstract: Russia's occupation of the Crimea and possible incorporation of Eastern Ukrainian regions demonstrated Europe's vulnerability to Gazprom's energy power. Whatever the EU's reactions, diversification of energy supply to diminish Russia's market share is likely to be one of them. TAP is one step towards the strategic goal of diminishing Gazprom's huge presence in Europe. But in view of the proposed construction of the Russian South Stream, how could Central Europe, and especially Bulgaria, Romania, Austria and Lithuania, ensure energy diversification? What next for the Southern Corridor? Is Russia going to accept and tolerate infrastructure growth of the Caspian and other competitors south of its borders?
  • Topic: Economics, Energy Policy, Markets
  • Political Geography: Russia, Europe, Lithuania, Bulgaria, Romania, Austria
  • Author: Paul De Grauwe, Yuemei Ji
  • Publication Date: 05-2014
  • Content Type: Working Paper
  • Institution: Centre for European Policy Studies
  • Abstract: Since the announcement of the Outright Monetary Transactions (OMT) programme by Mario Draghi, President of the ECB, in 2012, the government bond spreads began a strong decline. This paper finds that most of this decline is due to the positive market sentiments that the OMT programme has triggered and is not related to underlying fundamentals, such as the debt-to-GDP ratios or the external debt position that have continued to increase in most countries. The authors even argue that the market's euphoria may have gone too far in taking into account the same market fundamentals. They conclude with some thoughts about the future governance of the OMT programme.
  • Topic: Economics, International Trade and Finance, Markets
  • Political Geography: Europe
  • Author: David G. Blanchflower, David N. F. Bell
  • Publication Date: 07-2014
  • Content Type: Working Paper
  • Institution: Peterson Institute for International Economics
  • Abstract: This paper examines the amount of slack in the UK labor market and finds the downward adjustments made by the Monetary Policy Committee (MPC) to both unemployment and underemployment invalid. Without evidence to support its assessment of the output gap, the MPC reduces the level of unemployment based on its claim that long-term unemployment does not affect wages. The authors produce evidence to the contrary and present arguments on why the MPC's halving of the level of underemployment in the United Kingdom is inappropriate. Bell and Blanchflower set out arguments on why they believe the level of slack is greater than the MPC calibrates. Consistent with that is the fact that real wages in the United Kingdom continue to fall.
  • Topic: Economics, Markets, Labor Issues
  • Political Geography: United Kingdom, Europe
  • Author: David Bollier
  • Publication Date: 04-2014
  • Content Type: Working Paper
  • Institution: Aspen Institute
  • Abstract: The structure and character of commerce has changed dramatically since the arrival of the World Wide Web and various digital technologies, particularly mobile phones and large, interconnected databases. Consumers now have much greater market power and choice. Markets can more easily scale, often globally. Co-production and fluid producer/consumer interactions are routine. Transactions themselves have become far cheaper and more easily consummated.
  • Topic: Foreign Exchange, International Trade and Finance, Markets, Science and Technology, Communications, Monetary Policy
  • Political Geography: United States, Europe
  • Author: John Whalley, Hejing Chen
  • Publication Date: 10-2014
  • Content Type: Working Paper
  • Institution: Centre for International Governance Innovation
  • Abstract: China, in the next few years, faces the prospect of major regional and bilateral trade negotiations possibly including the Trans-Pacific Partnership (TPP), the Regional Comprehensive Economic Partnership with the Association of Southeast Asian Nations (ASEAN) and Japan, Korea, India, Australia and New Zealand and separate negotiations with India, Korea and Japan, potentially the United States and even possibly the European Union. A likely key element in such negotiations, and one already raised by the United States in the TPP negotiations, is that of trade arrangements involving state-owned enterprises (SOEs). China is viewed from outside as having a large SOE sector, and large SOEs are viewed as having a protected monopoly position in domestic Chinese markets.
  • Topic: International Trade and Finance, Markets, World Trade Organization
  • Political Geography: Japan, China, Europe, India, Asia, Australia, Korea
  • Author: Malcolm D. Knight
  • Publication Date: 09-2014
  • Content Type: Working Paper
  • Institution: Centre for International Governance Innovation
  • Abstract: The global financial crisis that began in 2007 and deepened in 2008 exposed major weaknesses in financial and macroeconomic policy coordination, and profound flaws in financial risk management and regulation in a number of advanced countries. The severity of the crisis led global leaders to recognize that they must find a way to reform the global regulatory architecture to ensure that the financial system can absorb shocks while continuing to function efficiently.
  • Topic: International Trade and Finance, Markets, International Monetary Fund, Financial Crisis, Reform
  • Political Geography: United States, United Kingdom, Europe
  • Author: Giulia Rosa Maria Cavallo
  • Publication Date: 10-2014
  • Content Type: Working Paper
  • Institution: Istituto Affari Internazionali
  • Abstract: After the adoption of a single monetary policy which commits the European Central Bank to maintaining the euro's purchasing power and price stability in the Eurozone, the European Union is facing a new, but equally fundamental challenge: the implementation in a relatively short time of the so-called "Banking Union". Its purpose is twofold: (1) breaking the link between banking and sovereign risk, with the ultimate goal of achieving full protection of EU savers in the event of a crisis; and (2) ensuring uniformity of credit conditions - which are still too fragmented - within the European banking market, to ensure greater EU integration of the financial system. Starting from the Communication in which the European Commission stressed the need for a banking union, this paper intends to explore the complex process towards its establishment by looking at the EU institutional mechanisms and the legal aspects. In particular, the analysis will be based on two building blocks: (1) the Single Supervisory Mechanism, with a single supervisor at the heart of the banking union; and (2) the Single Resolution Mechanism as a new integrated resolution framework and a resolution fund to address the failure of banking institutions. The paper then assesses the next steps for a fully fledged banking union, necessary in order for this new instrument to lay the foundations for a genuine Economic and Monetary Union, thereby fostering financial and economic stability in the euro area and in the EU as a whole.
  • Topic: Economics, Markets, Monetary Policy, Financial Crisis
  • Political Geography: Europe
  • Publication Date: 11-2014
  • Content Type: Working Paper
  • Institution: Atlantic Council
  • Abstract: One of the greatest successes of our new century has been the progress made in unifying Europe. The accession of Central Europe's countries to the European Union (EU) has contributed to the end of division that wrought confrontations and conflicts. Yet this task is far from finished. Europe's economic woes, as well as new security challenges along the Union's eastern border add to the urgency of completing and consolidating the European integration project as part of our transatlantic vision of a Europe whole, free, and at peace.
  • Topic: Markets, Communications, Infrastructure
  • Political Geography: Europe
  • Author: Fritz W. Scharpf
  • Publication Date: 12-2014
  • Content Type: Working Paper
  • Institution: Max Planck Institute for the Study of Societies
  • Abstract: At the end of the postwar period, the politically shaped configurations of normatively integrated European political economies differed greatly among “social-market” and “liberal market economies.” Such differences persist even though the characteristic achievements of social market economies have since eroded under the pressures of global capitalism and of European integration. Focusing on European integration from a social-market perspective, there is no question that it has widened the range of individual options. But it has also reduced the capacity of democratic politics to deal with the challenges of global capitalism, and it has contributed to rising social inequality and the erosion of public services and transfers. This paper will first summarize those asymmetries of European integration which have done the most to constrain democratic choices and to shift the balance between capital, labor, and the state by establishing an institutional priority of negative over positive integration and of monetary integration over political and social integration. It will then explain why efforts to democratize European politics will not be able to overcome these institutional asymmetries and why politically feasible reforms will not be able to remove the institutional constraints. The changes that would be required to restore democratic capacities to shape the political economy could only have a chance if present veto positions were to be fundamentally shaken. On the speculative assumption that the aftermath of a deep crisis might indeed create the window of opportunity for a political re-foundation of European integration, the concluding section will outline institutional ground rules that would facilitate democratic political action at both the European and national levels.
  • Topic: Economics, Markets, Politics, Labor Issues, Democracy, Capitalism
  • Political Geography: Europe
  • Author: Daniel Kinderman
  • Publication Date: 11-2014
  • Content Type: Working Paper
  • Institution: Max Planck Institute for the Study of Societies
  • Abstract: Do employers in coordinated market economies (CME’s) actively defend the non-liberal, market-constraining institutions upon which their strategic coordination and competitive success depends? This paper revisits the debate over firms’ employer preferences with an in-depth examination of employers in Germany – a paradigmatic CME and crucial “test case” for Varieties of Capitalism. It is based on interviews with key officials and an in-depth examination of a large-scale campaign – the New Social Market Initiative or INMS – founded and funded by German metalworking employers to shape public opinion. The paper argues that German employers have a strong preference for liberalization: they have pushed hard for the liberalization of labor markets, the reduction of government expenditures, the expansion of market-oriented freedoms, and cuts to social protection, employment protection and benefit entitlements. I find no empirical support for the claim that the INSM is an attempt to appease discontented firms within employers’ associations. On the contrary: for many employers, the Agenda 2010 reforms did not go far enough. Following the discrediting of the Anglo-American model in the financial crisis, far-reaching concessions by employees, and the unexpected revitalization of the German economy, employers have moderated their demands – but liberalization remains their default preference. This paper also addresses the role of ideas and the conditions under which employer campaigns can influence policy.
  • Topic: Economics, Markets, Labor Issues, Capitalism
  • Political Geography: Europe, Germany
  • Author: Louis Brennan, Rakhi Verma
  • Publication Date: 03-2013
  • Content Type: Working Paper
  • Institution: Columbia Center on Sustainable Investment
  • Abstract: Despite the global financial and economic crises and a sharp downturn in the domestic economy between 2008 and 2009, Ireland managed to attract large inflows of foreign direct investment (FDI) in 2010. Inward FDI (IFDI) flows in 2010 were at a similar level to those in 2009, the second highest in Ireland's FDI history. However in 2011, there was a decline in such flows. While Ireland's economy has been greatly affected by the global crisis, Irish government initiatives have further fostered the country's attractiveness as an investment location for the world's firms. All indications are that Ireland's IFDI performance will continue to surpass that of most countries into the near future.
  • Topic: Economics, International Trade and Finance, Markets, Foreign Direct Investment
  • Political Geography: Europe, Ireland
  • Author: Thomas Jost
  • Publication Date: 04-2013
  • Content Type: Working Paper
  • Institution: Columbia Center on Sustainable Investment
  • Abstract: In 2011 and the first half of 2012, inward FDI (IFDI) flows to Germany continued to be relatively strong. Germany attracte market-seeking MNEs, as its economy showed remarkable economic growth despite the ongoing problems in many other countries of the Eurozone. In the second half of 2012, IFDI flows turned sharply negative, declining for the year as a whole to only US$ 7 billion, compared with US$ 49 billion in 2011. This decline reflects the difficult financial situation of many companies, including banks in the Eurozone, and could also dampen inflows in 2013. In the longer-term, Germany could profit again from rising FDI as its economy has successfully implemented reforms over the past decade, and the German Government has continued to keep its investment policy regime open.
  • Topic: Economics, International Trade and Finance, Markets, Foreign Direct Investment
  • Political Geography: United States, Europe, Germany
  • Author: Jørgen Mortensen
  • Publication Date: 08-2013
  • Content Type: Working Paper
  • Institution: Centre for European Policy Studies
  • Abstract: This paper first takes a step backwards with an attempt to situate the recent adoption of the Treaty on Stability, Coordination and Governance in the Economic and Monetary Union in the context of discussions on the Stability and Growth Pact (SGP) and the 'Maastricht criteria', as fixed in the Maastricht Treaty for membership in the Economic and Monetary Union (EMU) in a longer perspective of the sharing of competences for macroeconomic policy-making within the EU. It then presents the main features of the new so-called 'Fiscal Compact' and its relationship to the SGP and draws some conclusions as regards the importance and relevance of this new step in the process of economic policy coordination. It concludes that the Treaty on Stability, Coordination and Governance in the Economic and Monetary Union does not seem to offer a definitive solution to the problem of finding the appropriate budgetary-monetary policy mix in EMU, which was already well identified in the Delors report in 1989 and regularly emphasised ever since and is now seriously aggravated due to the crisis in the eurozone. Furthermore, implementation of this Treaty may under certain circumstances contribute to an increase in the uncertainties as regards the distribution of the competences between the European Parliament and national parliaments and between the former and the Commission and the Council.
  • Topic: Economics, Markets, Regional Cooperation, Treaties and Agreements, Monetary Policy
  • Political Geography: Europe
  • Author: Anna-Elisabeth Thum, Miroslav Beblavý, Galina Potjagailo
  • Publication Date: 05-2013
  • Content Type: Working Paper
  • Institution: Centre for European Policy Studies
  • Abstract: Adult learning is seen as a key factor for enhancing employment, innovation and growth, and it should concern all age cohorts. The aim of this paper is to understand the points in the life cycle at which adult learning takes place and whether it leads to reaching a medium or high level of educational attainment. To this end we perform a synthetic panel analysis of adult learning for cohorts aged 25 to 64 in 27 European countries using the European Labour Force Survey. We find, as previous results suggest, that a rise in educational attainment as well as participation in education and training happens mostly at the age range of 25-29. However, investment across the life cycle by cohorts older than 25 still occurs: in most countries in our sample, participation in education and training as well as educational attainment increases observably across all cohorts. We also find that the decline with age slows down or is even reversed for older cohorts, for both participation in education and educational attainment. Finally, we can identify a Nordic model in which adult learning is achieved through participation in education and training, a Central European model in which adult learning occurs in the form of increasing educational attainment and a liberal model in which both approaches to adult learning are observable.
  • Topic: Economics, Education, Markets, Labor Issues
  • Political Geography: Europe
  • Author: Nicolò Sartori
  • Publication Date: 07-2013
  • Content Type: Working Paper
  • Institution: Istituto Affari Internazionali
  • Abstract: The European Union launched the Southern Gas Corridor initiative with the twofold aim of strengthening the diversification of Europe's gas sources and transportation routes, and reducing the role of upstreamers in the European gas market. The clear preference expressed by the European Commission - the corridor's mastermind - for Nabucco was expected to weigh in heavily, allowing the EU-backed project to easily win the competition. However, other factors, beyond political support, ended up tilting the balance decisively in favour of Nabucco West's final rival, the Trans-Adriatic Pipeline (TAP). These do not include only the technical and commercial criteria set out by the Shah Deniz II consortium, but also more mundane considerations. Nabucco West' s complex organizational and decision-making procedures, the attractiveness of the exemption from Third Party Access (TPA) granted by the EU to TAP, and SOCAR's specific interest in the Greek market also influenced the consortium's final decision. An analysis of the Southern Gas Corridor competition suggests that when it comes to energy, political support and institutional involvement do not always represent the decisive element, and may be counterproductive at times.
  • Topic: Energy Policy, Markets, Oil, Natural Resources
  • Political Geography: Europe
  • Author: David G. Blanchflower, David N. F. Bell
  • Publication Date: 08-2013
  • Content Type: Working Paper
  • Institution: Peterson Institute for International Economics
  • Abstract: One of the factors that may inhibit reductions in unemployment as the economy recovers is the extent to which existing workers would like to work more hours and employers may prefer to let them work longer hours before making new hires. This phenomenon suggests that the unemployment rate does not capture the full extent of excess capacity in the labor market. But how should it be measured? In this paper we argue that the United States does not have the necessary statistical tools to calibrate this form of underemployment. We describe an index that captures the joint effects of unemployment and underemployment and provides a more complete picture of labor market excess capacity. We show how this index can be implemented using British data and describe its evolution over the Great Recession. Comparisons of our index with unemployment rates suggest that unemployment rates understate differences in labor market excess capacity by age group and overstate differences by gender. We also show that being unable to work the hours that one desires has a negative effect on well-being. Finally, we recommend that the Current Population Survey conducted by the US Bureau of Labor Statistics might be extended to enable the construction of an equivalent US index.
  • Topic: Economics, International Trade and Finance, Markets, Labor Issues
  • Political Geography: United States, Europe
  • Author: Xavier Vanden Bosch
  • Publication Date: 05-2013
  • Content Type: Working Paper
  • Institution: EGMONT - The Royal Institute for International Relations
  • Abstract: Both the Commission's proposal for a 'Competitiveness and Convergence Instrument' and the 'contractual arrangement' presented by President Van Rompuy share a common concept: associating EU money with national structural reforms under a binding arrangement.
  • Topic: Economics, Markets, Regional Cooperation, Labor Issues, Monetary Policy, Reform
  • Political Geography: Europe
  • Author: Richard Youngs
  • Publication Date: 10-2013
  • Content Type: Working Paper
  • Institution: Carnegie Endowment for International Peace
  • Abstract: The euro crisis has mobilized the masses and unleashed vitally important debates about changing the model of European integration, both economically and politically. Yet, as European governments deepen economic cooperation and the crisis appears to have calmed, European Union (EU) member states feel increasingly confident that fundamental political changes are not necessary. This is a dangerously short-sighted calculation. To build a truly democratic EU, citizens need to have a greater voice in decision making.
  • Topic: Debt, Economics, Markets, Regional Cooperation, Monetary Policy, Financial Crisis, Reform
  • Political Geography: Europe
  • Author: Bernard Delbecque
  • Publication Date: 10-2013
  • Content Type: Working Paper
  • Institution: Centre for European Policy Studies
  • Abstract: This paper argues that it should be possible to complement Europe's Economic and Monetary Union with an insurance-type shock absorption mechanism to increase the resilience of member countries to economic shocks and reduce output volatility. Such a mechanism would neither require the establishment of a central authority, nor would it lead to permanent transfers between countries. For this mechanism to become a reality, however, it would be necessary to overcome certain technical problems linked to the difficulty of anticipating correctly the position of an economy in the business cycle.
  • Topic: Economics, Markets, Monetary Policy
  • Political Geography: Europe
  • Author: Nicolas Véron
  • Publication Date: 01-2012
  • Content Type: Working Paper
  • Institution: Peterson Institute for International Economics
  • Abstract: This paper aims to take stock of global efforts towards financial reform since the start of the financial crisis in 2007–08, and to provide a synthetic (if simplified) picture of their status as of January 2012. Underlying dynamics are described and analyzed both at the global level (particularly G-20, IMF, and FSB) and in individual jurisdictions, as well as the impact the crisis has had on these regions. The possible next steps of financial reform are then reviewed, including: the ongoing crisis management in Europe, the new emphasis on macroprudential approaches, the challenges posed by globally integrated financial firms, the implementation of harmonized global standards, and the links between financial systems and growth.
  • Topic: Economics, International Trade and Finance, Markets, Global Recession, Financial Crisis
  • Political Geography: Europe
  • Publication Date: 02-2012
  • Content Type: Working Paper
  • Institution: Economist Intelligence Unit
  • Abstract: Africa is drawing increasing attention, not only from the perspective of businesses based in China and Europe, but also from operators in Africa itself. In particular, closer economic ties between Africa and China have been covered extensively by the media recently—with fairly mixed reviews. This paper highlights the potential, challenges and risks for doing business in Africa over the next few years.
  • Topic: Development, International Trade and Finance, Markets, Foreign Aid, Foreign Direct Investment
  • Political Geography: Africa, China, Europe
  • Author: Elena Gnedina, Evghenia Sleptsova
  • Publication Date: 01-2012
  • Content Type: Working Paper
  • Institution: Centre for European Policy Studies
  • Abstract: Ukraine has long been castigated for its noncommittal attitude to cooperation with the EU, this being part of its 'multi-vector' foreign policy. Such a policy was widely attributed to the failings of domestic elites, which delay reform for fear of losing rents and power. This CEPS Working Document suggests, however, that the recent setback in EU-Ukraine relations highlights more complex reasons behind this. First, it asserts that a pro-European vector is not a self-evident choice for Ukraine, which is economically interdependent with both Russia and the EU. Second, it finds that the economic crisis has made the EU less attractive in the short term. In good times business was looking to Europe for opportunities to develop. But in times of crisis, it is looking to Russia for cheap resources to survive. Despite these unfavourable short-term trends, the authors conclude that an association agreement with the EU stands out as the only alternative that promises to put the shaky Ukrainian economy back on track towards long-term sustainable economic growth.
  • Topic: Economics, International Trade and Finance, Markets
  • Political Geography: Russia, Europe, Ukraine
  • Author: Elnur Soltanov
  • Publication Date: 01-2012
  • Content Type: Working Paper
  • Institution: Istituto Affari Internazionali
  • Abstract: The South East Europe Pipeline (SEEP), proposed by BP in late September 2011, could eventually be the pipeline carrying Azeri gas to European markets. Compared to its competitors in the Southern Corridor concept - Nabucco, TAP and ITGI - it goes furthest in terms of optimality for all the parties involved. The combined advantages of its size, scalability, usage of existing gas infrastructure in Europe and direction, promises a more reasonable economic and political value for the Shah Deniz Consortium, Azerbaijan, Turkey and Europe, while posing a bearable challenge to Russia. The SEEP seems to offer a greater value to a greater number of actors.
  • Topic: Energy Policy, Markets, Natural Resources
  • Political Geography: Russia, Europe, Turkey, Azerbaijan
  • Author: Fulvio Castellacci, Arne Fevolden, Martin Blom
  • Publication Date: 01-2012
  • Content Type: Working Paper
  • Institution: Norwegian Institute of International Affairs
  • Abstract: The paper presents an agent-based simulation model of the defence industry. The model resembles some of the key characteristics of the European defence sector, and studies how firms in this market will respond to the challenges and opportunities provided by a higher degree of openness and liberalization in the future. The simulation analysis points out that European defence firms will progressively become more efficient, less dependent on public procurement and innovation policy support, and more prone to knowledge sharing and inter-firm collaborations. This firmlevel dynamics will in the long-run lead to an increase in the industry's export propensity and a less concentrated market.
  • Topic: Defense Policy, Arms Control and Proliferation, Markets, Weapons of Mass Destruction, Governance
  • Political Geography: Europe
  • Publication Date: 04-2012
  • Content Type: Working Paper
  • Institution: Economist Intelligence Unit
  • Abstract: Three years after the global economy reached its lowest point in three-quarters of a century, the recovery remains incomplete and the outlook uncertain. On March 9th 2009, the capitalisation of Morgan Stanley\'s global stockmarket index fell to US$26trn, nearly 60% below its 2007 peak. Today, the value of the world\'s stockmarkets has yet to return to the pre-crisis level—nor has the confidence of most consumers and businesses. The excesses of the last ten years—the personal debt accumulated early in the last decade and the public debt added during the recession—have saddled many countries with weak economic foundations and little or no resilience to shocks. This has left the US economy, in particular, struggling for a third straight year to lock in faster growth. It has left debt-ravaged Europe in recession and China manoeuvring unsteadily to deflate a bubble. On the brighter side, the global economy will grow again this year and the imbalances that built up over the past decade will continue to unwind. But global growth will be slower this year than last, and a host of risks—from elevated oil prices to war in the Middle East, to the collapse of Europe\'s single currency—will weigh on confidence and reduce spending and investment.
  • Topic: Economics, Globalization, Markets, Global Recession, Financial Crisis
  • Political Geography: United States, China, Europe, Middle East
  • Author: Tiago Fernandes
  • Publication Date: 03-2012
  • Content Type: Working Paper
  • Institution: Kellogg Institute for International Studies
  • Abstract: This paper explains variations in patterns of civil society among third-wave democracies by comparing the cases of Portugal and Spain. In the former a civil society developed that had a tendency to be more oriented toward national issues and politics, whereas in the latter civil society tended to be more local, social, and disconnected from politics. Portugal, although having both a less developed economy and historically a weaker democratic tradition than Spain's, was a democracy that between the early 1970s and the mid-1990s offered more opportunities for the organized civic expression of popular interests.
  • Topic: Civil Society, Democratization, Government, Human Rights, Markets
  • Political Geography: Europe, Spain, Portugal
  • Author: Dieter Ernst
  • Publication Date: 02-2012
  • Content Type: Working Paper
  • Institution: East-West Center
  • Abstract: For its proponents, America's voluntary standards system is a "best practice" model for innovation policy. Foreign observers however are concerned about possible drawbacks of a standards system that is largely driven by the private sector. There are doubts, especially in Europe and China, whether the American system can balance public and private interests in times of extraordinary national and global challenges to innovation.
  • Topic: Democratization, Economics, Globalization, International Trade and Finance, Markets, Governance
  • Political Geography: United States, China, Europe
  • Author: Fulvio Castellacci, Martin Blom, Arne Martin Fevolden
  • Publication Date: 05-2012
  • Content Type: Working Paper
  • Institution: Norwegian Institute of International Affairs
  • Abstract: The paper investigates the trade-off between innovation and defence industrial policy. It presents an agent-based simulation model calibrated for the Norwegian defence industry that compares different policy scenarios and examines the effects of a pending EU market liberalization process. The paper points to two main results. (1) It finds that a pure scenario where national authorities focus on, and provide support exclusively for, either a) international competitiveness or b) national defence and security objectives, is more Pareto efficient than a corresponding mixed strategy where policy makers simultaneously pursue both international competitiveness and defence and security objectives. (2) Under the conditions of the new EU liberalization regime, it finds that a stronger and more visible trade-off will emerge between international competitiveness and national defence and security objectives. Policy makers will have to choose which to prioritise, and set a clear agenda focusing on one of the two objectives.international competitiveness or b) national defence and security objectives, is more Pareto efficient than a corresponding mixed strategy where policy makers simultaneously pursue both international competitiveness and defence and security objectives. (2) Under the conditions of the new EU liberalization regime, it finds that a stronger and more visible trade-off will emerge between international competitiveness and national defence and security objectives. Policy makers will have to choose which to prioritise, and set a clear agenda focusing on one of the two objectives.
  • Topic: Security, Defense Policy, International Trade and Finance, Markets
  • Political Geography: Europe
  • Author: Daniel Gros
  • Publication Date: 07-2012
  • Content Type: Working Paper
  • Institution: Centre for European Policy Studies
  • Abstract: This paper presents a simple model that incorporates two types of sovereign default cost: first, a lump-sum cost due to the fact that the country does not service its debt fully and is recognised as being in default status, by ratings agencies, for example. Second, a cost that increases with the size of the losses (or haircut) imposed on creditors whose resistance to a haircut increases with the proportional loss inflicted upon them.
  • Topic: Debt, Economics, International Trade and Finance, Markets, Financial Crisis
  • Political Geography: Europe
  • Author: Arne Melchior
  • Publication Date: 08-2012
  • Content Type: Working Paper
  • Institution: Norwegian Institute of International Affairs
  • Abstract: Using data for more than 200 countries, split into nine regions, we study world trade in goods during 1970-2010. The largest changes are the declining relative importance of Western Europe, and the increasing role for Asia. The intra-regional trade of Asia grew particularly fast; from 4 to 16% of world trade. Due to growing intra-regional trade in Europe and Asia, world trade became more intra-regional until 1995. Manufacturing trade is more regionalised, whereas commodity trade is more globalised. After 1995, extra-regional trade flows grew faster so there was “globalisation” with trade travelling longer distances and a rising share for commodities. From 2000, smaller trade regions such as Africa and Latin America have increased their shares of world trade; reversing the trend over the 30 preceding years.
  • Topic: Globalization, International Political Economy, International Trade and Finance, Markets, Regional Cooperation, International Affairs
  • Political Geography: Europe, Asia, Western Europe
  • Author: Andrea Renda, Fabrizio Cafaggi
  • Publication Date: 10-2012
  • Content Type: Working Paper
  • Institution: Centre for European Policy Studies
  • Abstract: Private governance is currently being evoked as a viable solution to many public policy goals. However, in some circumstances it has shown to produce more harm than good, and even disastrous consequences as in the case of the financial crisis that is raging in most advanced economies. Although the current track record of private regulatory schemes is mixed, policy guidance documents around the world still require that policy-makers give priority to self-and co-regulation, with little or no additional guidance being given to policymakers to devise when, and under what circumstances, these solutions can prove viable from a public policy perspective. With an array of examples from several policy fields, this paper approaches regulation as a public-private collaborative form and attempts to identify possible policy tools to be applied by public policy-makers to efficiently and effectively approach private governance as a solution, rather than a problem. We propose a six-step theoretical framework and argue that IA techniques should: i) define an integrated framework including both the possibility that private regulation can be used as an alternative or as a complement to public legislation; ii) involve private parties in public IAs in order to define the best strategy or strategies that would ensure achievement of the regulatory objectives; and iii) contemplate the deployment of indicators related to governance and activities of the regulators and their ability to coordinate and solve disputes with other regulators.
  • Topic: Economics, International Trade and Finance, Markets, Regional Cooperation
  • Political Geography: Europe
  • Author: Arie Krampf
  • Publication Date: 10-2012
  • Content Type: Working Paper
  • Institution: Kolleg-Forschergruppe "The Transformative Power of Europe"
  • Abstract: During the 1990s, a consensus consolidated among policy makers and economists worldwide regarding the desirability of very low inflation targeting. So far, this process has been explained on the basis of a domestic- functional thesis, according to which commitment to very low inflation provides local economic gains with no costs. In this paper, I present an alternative explanation, according to which the global norm of very low inflation targeting was consolidated as a political solution to the problem of exchange rate misalignment and volatility. I argue that policy makers in Germany and the US believed that convergence of monetary policies and inflation rates, in addition to liberalization of financial markets, will stabilize exchange rates without the need for direct coordination. The paper employs the theory of liberal intergovernmentalism as a benchmark to explain the choice of the European and the G-5/7 countries to establish a low-inflation rule-based international monetary regime. The paper concludes that the regime of very low inflation targeting was consolidated as a politically viable solution to a political problem rather than as an economic best practice. Furthermore, it concludes that the norm of very low inflation targeting was a “corer solution” that neglected the problem of exchange rate stability.
  • Topic: Economics, Markets, Political Economy, Monetary Policy, Financial Crisis
  • Political Geography: United States, Europe
  • Author: Ulrike Lorenz
  • Publication Date: 06-2012
  • Content Type: Working Paper
  • Institution: Kolleg-Forschergruppe "The Transformative Power of Europe"
  • Abstract: In the past ten years, the long-standing trade relations between the European Union (EU) and the African, Caribbean, and Pacific (ACP) countries have experienced radical transformations. The negotiations of the Economic Partnership Agreements (EPAs) between the EU and seven regional groupings formed by the ACP countries have led to the EU being maneuvered into an unexpectedly weak position. For the first time, European negotiators had to substantially leave their pre-agreed negotiation path and positions due to the immense pressure from ACP countries, regional organizations, and non-state actors – and still have not been able to finalize negotiations that had initially been expected to only take five years until the end of 2007.
  • Topic: Economics, International Trade and Finance, Markets, Foreign Direct Investment
  • Political Geography: Africa, Europe, Asia, Australia/Pacific, Caribbean
  • Author: Douglas J. Elliott
  • Publication Date: 11-2012
  • Content Type: Working Paper
  • Institution: The Brookings Institution
  • Abstract: European leaders have committed to moving toward a banking union, in which bank regulation and supervision, deposit guarantees, and the handling of troubled banks will be integrated across at least the euro area and possibly across the wider European Union. This is quite positive for two reasons. Most immediately, it will help solve the euro crisis by weakening the link between debt-burdened governments and troubled banks, where each side has added to the woes of the other. In the longer run, it will make the “single market” in European banking substantially more effective.
  • Topic: Debt, Economics, International Trade and Finance, Markets, Monetary Policy, Financial Crisis
  • Political Geography: Europe
  • Author: Anders Åslund
  • Publication Date: 04-2012
  • Content Type: Working Paper
  • Institution: Peterson Institute for International Economics
  • Abstract: The response of the ten new eastern members of the European Union to the global financial crisis has valuable lessons of crisis resolution for the euro area. These countries were severely hit by the crisis in the fall of 2008 and responded with extensive reforms. Crisis made the unthinkable possible. This paper outlines the main reform measures that the ten Central and East European (CEE) countries carried out. It then quantifies to what extent the CEE countries resolved the macroeconomic crisis and explores the effects of the reforms on future growth prospects. The fourth and major section discusses how the political economy of the crisis resolution actually worked. Finally, the author examines what lessons euro area countries can learn from the crisis resolution of the newest members of the European Union.
  • Topic: Debt, Economics, International Trade and Finance, Markets, Political Economy, Financial Crisis
  • Political Geography: Europe
  • Author: Taran Fæhn, Brita Bye
  • Publication Date: 12-2012
  • Content Type: Working Paper
  • Institution: Norwegian Institute of International Affairs
  • Abstract: Evidence points to relatively low supply elasticities for workers skilled for research and development (R), which can hamper innovation and growth. Increasing the supply of R skills will expand an economy's innovative capacity. A simultaneous effect of increased education, which is particularly important for small, open economies, is to raise final goods producers' capacity to absorb cross-border knowledge spillovers. In a calibrated endogenous growth model for Norway, we find that increasing the share of highly educated workers has pronounced absorptive capacity effects that partially crowd out R innovation. Both innovative and absorptive capacity expansions contribute to higher growth and welfare.
  • Topic: Development, Education, Human Welfare, Markets, Labor Issues
  • Political Geography: Europe
  • Author: Irwin M. Stelzer
  • Publication Date: 06-2012
  • Content Type: Working Paper
  • Institution: Hudson Institute
  • Abstract: Slow growth here and in China, and recession in Europe are reducing demand for oil. Inventories in the U.S. are at a 22-year high. The Federal Reserve Board's QEs that pumped paper money into the economy and drove up the nominal price of oil have come to an end. And the twelve OPEC oil cartelists, who between them supply 40% of the world's oil, are producing 1.6 million barrels in excess of the agreed daily quota of 30 million barrels. As a result, U.S. benchmark crude oil prices are now closer to $80 per barrel than to the $110 they reached only four months ago.
  • Topic: Economics, International Trade and Finance, Markets, Oil
  • Political Geography: United States, China, Europe
  • Author: Katherine Trebeck
  • Publication Date: 01-2011
  • Content Type: Working Paper
  • Institution: Oxfam Publishing
  • Abstract: In the UK, persistent poverty exists alongside high economic prosperity, leading to significant inequalities in income and wealth, and in life chances and lifestyles, between individuals and communities. Scottish society is also deeply divided: 'wealthy and secure neighbourhoods are situated next to the most deprived and vulnerable communities [where]… inequality is tangible'.
  • Topic: Development, Economics, International Trade and Finance, Markets
  • Political Geography: Europe
  • Author: Marco Mutinelli, Lucia Piscitello
  • Publication Date: 01-2011
  • Content Type: Working Paper
  • Institution: Columbia Center on Sustainable Investment
  • Abstract: Italian companies started to invest abroad in the 1960s in search of new markets. However, Italy's outward foreign direct investment (OFDI) performance is quite modest compared with that of other European Union (EU) countries, mainly due to structural characteristics like the low number of large firms, the specialization in traditional low-and medium-technology manufacturing industries and the almost negligible activity in advanced services. The global economic and financial crisis seriously affected the Italian economy. However, the positive trend of Italian OFDI was not interrupted, and in 2009 OFDI flows remained stable compared to 2008. Habitually silent on this policy area in earlier decades, the Italian Government has recently shown a more favorable stance toward OFDI, introducing specific policy measures addressed to small and medium-sized enterprises, which have started to expand strongly abroad – these now constitute almost 90% of Italian multinational enterprises (MNEs).
  • Topic: Markets, Foreign Direct Investment
  • Political Geography: Europe, Italy
  • Author: Mark Huberty
  • Publication Date: 05-2011
  • Content Type: Working Paper
  • Institution: Berkeley Roundtable on the International Economy
  • Abstract: In the last decade, energy systems transformation has become the new and unheralded frontier of European deepening. Starting in 1996, the European Union mandated the liberalization and integration of national energy systems, put a price on greenhouse gas emissions from electricity generation, established binding targets for renewable energy adoption, mandated the breakup of state energy monopolies, and sponsored the creation of EU-level regulatory and standards-setting bodies for energy infrastructure and markets. Most recently, the Europe 2020 program has established enforceable goals for the integration, liberalization, and decarbonization of the European electricity supply system, and ambitious but aspirational targets in energy efficiency.
  • Topic: Climate Change, Energy Policy, Markets, Infrastructure
  • Political Geography: Europe
  • Author: Jyrki Ali-Yrkkö, Petri Rouvinen, Timo Seppälä, Pekka Ylä-Anttila
  • Publication Date: 02-2011
  • Content Type: Working Paper
  • Institution: Berkeley Roundtable on the International Economy
  • Abstract: Available statistics tell us little about the economic consequences of increasing global dispersion of production processes. In order to shed light on the issue, we perform grass roots detective work to uncover the geography of value added in the case of a Nokia N95 smartphone circa 2007. The phone was assembled in Finland and China. In the case when the device was assembled and sold in Europe, the value-added share of Europe (EU-27) rose to 68%. Even in the case when it was assembled in China and sold in the United States, Europe captured as much as 51% of the value added, despite of the fact that it had rather little role in supplying the physical components. Our analysis illustrates that international trade statistics can be misleading; the capture of value added is largely detached from the physical goods flows. It is rather services and other intangible aspects of the supply chain that dominate. While final assembly – commanding 2% of the value added in our case – has increasingly moved offshore, the developed countries continue to capture most of the value added generated by global supply chains.
  • Topic: Economics, Globalization, Industrial Policy, International Trade and Finance, Markets
  • Political Geography: China, Europe, Finland
  • Author: Giacomo Luciani, François-Loïc Henry
  • Publication Date: 06-2011
  • Content Type: Working Paper
  • Institution: Centre for European Policy Studies
  • Abstract: Holding strategic oil stocks is at first sight an obvious tool to address potential disturbances in supplies. Rationally defining the desirable size of stocks and designing rules for their predictable use is an elusive task, however. A key conceptual difficulty arises in the distinction between commercial and strategic stocks, because a physical shortfall in the oil supply will inevitably lead to an increase in prices. But if strategic stocks are utilised when prices increase they become indistinguishable from commercial stocks. This paper reviews the legislation in force in the US and the EU on the use of strategic oil stocks as well as the emergency response systems of the International Energy Agency. It finds that such measures have been activated rarely and in dubious circumstances. Alternative approaches are proposed consisting of encouraging companies and major consumers to hold larger stocks and seeking a cooperative agreement with oil-producing countries for mutually beneficial stock management.
  • Topic: Security, Energy Policy, Markets, Oil
  • Political Geography: United States, Europe