The Afghan people have been promised a lot in the last two years. New rules for a new world would be written in their country. Regime change would deliver Afghans, finally, from oppression and violence, while a Marshall Plan would give them a chance to rebuild their lives.
Topic:
Development, Economics, and International Cooperation
Businesses throughout the US economy continue to transform even after the technology boom has faded. The key sources of this continuing transformation are investment in the information technology (IT) package (hardware, software, and business-service applications) and reorientation of business activities and processes to use both information and technology effectively.
Topic:
Economics, Globalization, International Trade and Finance, and Science and Technology
In May 2004, ten countries are due to join the European Union. They are therefore obliged to join the European Monetary Union (EMU) and adopt the euro as their national currency. Most of them, moreover, have been eager to do that. None of them sought an opt-out of the sort that Britain and Denmark obtained in 1991, when the Maastricht Treaty was drafted. Membership in EMU is not automatic, however, because the accession countries must first satisfy the preconditions contained in the Maastricht Treaty. Although those preconditions are rigorous, and some of the accession countries are still far from meeting them, most of those countries have indicated that they want to enter EMU at the earliest possible date.
A good proposal to eliminate tariffs must take into account both the pain and gain that developing countries are likely to experience. The authors take the measure of these costs and benefits and urge rich countries to maximize the benefits to developing countries while giving them ample time to accept, and adjust to, the changes that trade liberalization will require. But trade liberalization should not stop with tariff proposals. The United States and other industrial countries should generously reduce subsidies to farmers and eliminate nontariff barriers on agricultural imports. The United States should offer more concessions on services trade, particularly in its allowances for temporary foreign workers. Unless rich countries put more on the table, a WTO agreement to eliminate tariff barriers may be postponed for years.
Topic:
Economics, International Trade and Finance, Political Economy, and Third World
The tax-driven expatriation of US corporations is a troubling phenomenon. In a “corporate inversion,” a new foreign corporation, typically located in a low-tax or no-tax country, replaces the existing US parent corporation of a multinational enterprise (MNE). The US corporation then becomes a subsidiary of the new foreign parent. Since the US tax treatment of an MNE operating in the United States is significantly less favorable when the top-tier parent corporation is a domestic rather than a foreign corporation, the inversion transaction averts a substantial amount of US tax. Inversions have attracted adverse attention from tax specialists, media, the US Treasury Department, and Congress. In the wake of September 11, it seemed downright unpatriotic for US firms to invert as a way of skimping on their tax payments.
Topic:
Economics, Government, and International Trade and Finance
With the end of the Cold War, the focus of US foreign policy changed—and so did that of economic sanctions. Partly because of increased cooperation within the UN framework, economic sanctions were imposed so routinely in the early 1990s that scholars called that period the sanctions decade. This proliferation sparked intense debate about the effectiveness of sanctions as a policy tool and moved US sanctions policy to the center of public discourse.
Topic:
Economics, International Trade and Finance, and Political Economy
Almost a decade ago, as the last nuclear crisis with North Korea was reaching a peak, I concluded the following about the potential utility of economic sanctions: The debate over US policy toward North Korea boils down to one deceptively simple question: what does Kim Il-sung want? No one can be sure of the answer and different interpretations have quite different policy implications. If the Great Leader views a nuclear weapons option as important to the survival of his regime, economic sanctions are unlikely to force him to give it up. But if he views the threat of developing nuclear weapons as a bargaining chip, some combination of carrots and sticks may induce him to trade it away.
Topic:
Diplomacy, Economics, and International Trade and Finance
Observers have relied increasingly on simple reaction functions, such as the Taylor rule, to assess the conduct of monetary policy. Applying this approach to deflationary or near-zero inflation environments is problematic, however, and this paper examines two shortcomings of particular relevance to the Japanese case of the last decade. One is the unusually high degree of uncertainty associated with potential output in an environment of prolonged stagnation and deflation. Consequently, reaction function-based assessments of Japanese monetary policy are so sensitive to the chosen gauge of potential output as to be unreliable. The second shortcoming is the neglect of policy expectations, which become critically important as nominal interest rates approach zero. Using long-term bond yields, we identify five episodes since 1996 characterized by abrupt declines in Japanese inflation expectations. Policies undertaken by the Bank of Japan during this period did little to stabilize expectations, and the August 2000 interest rate increase appears to have intensified deflationary concerns.
Topic:
Climate Change, Economics, and International Trade and Finance
A growing number of countries have anchored their monetary policy to an explicit numerical rate or range of inflation since such an inflation targeting framework was first adopted by New Zealand in 1989. This paper empirically investigates issues associated with inflation targeting using a dataset of 66 countries for the 1980–2000 period.
Topic:
Development, Economics, Emerging Markets, and International Trade and Finance