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1. Rational Eviction: How Landlords Use Evictions in Response to Rent Control

Author:
Eilidh Geddes and Nicole Holz
Publication Date:
07-2023
Content Type:
Policy Brief
Institution:
The Cato Institute
Abstract:
As housing prices rise, cities are turning to rent control policies, hoping to ensure longterm affordable housing. Typically, rent control policies require leases to be renewed at statutorily limited rent increases. Rent control policies reduce the returns from operating in the rental market, creating well‐​studied incentives for landlords to leave the rental market. Many rent control policies—including San Francisco’s—feature vacancy decontrol provisions, which allow landlords to reset rents to market rates when tenants move. These policies limit the reductions in returns to operating in the rental market but create incentives for landlords to induce tenant turnover, possibly through evictions. The more tenants move, the more often a landlord can raise rents to market rates.
Topic:
Markets, Economy, Eviction, Housing, and Rent
Political Geography:
North America and United States of America

2. How Russia Brings Its Aggression Against Ukraine to The Global South

Author:
Ivan Ulises Klyszcz
Publication Date:
04-2023
Content Type:
Special Report
Institution:
International Centre for Defence and Security - ICDS
Abstract:
2022 was a wake-up call for the West. The response by the Global South to the war in Ukraine highlighted Russia’s enduring strengths in Africa, Latin America, the Middle East, and South and Southeast Asia. This report explores the evolution of Russia’s relations with the countries in the Global South and the ways Russia cultivates these relationships in pursuit of its foreign policy agenda. Moscow’s current interactions in the Global South are driven by the demands of its war of aggression, as well as by its long-term goal: to challenge the international order. The latter dictate several manoeuvres found throughout such engagements: strategic communications, market substitution and sanctions evasion, and regime sheltering. This report presents three case studies meant to illustrate how Russia’s relations with the Global South have evolved since 2022. First, Tunisia exemplifies a superficial partner, with Moscow’s main tool in the country being strategic communication aimed at shaping public opinion in its favour. Second, India is illustrative of a strategic partner whom Moscow tries to engage in order to substitute for lost energy markets and evade sanctions. Third, Myanmar represents a hierarchical relationship, in which the local regime depends on Moscow for diplomatic support and arms deliveries. Notwithstanding varied perspectives on and responses to Russia’s war of aggression in Ukraine, countries in the Global South have generally sought to prioritise their economy and security by attempting to strike a balance between Russia and the West. Aware of such desires, Moscow has been exploiting this situation to maintain its influence internationally. Challenging Russia in the Global South will put pressure on the Kremlin and limit its ability to conduct aggressive foreign policy – and wage war against Ukraine. The report concludes with six recommendations on how to counter Russia in the Global South.
Topic:
Cold War, Markets, Science and Technology, Communications, Arms Trade, Defense Industry, and Military
Political Geography:
Russia, Europe, Ukraine, Middle East, India, Asia, Tunisia, Myanmar, United States of America, and Global South

3. The European Union renews its offensive against US technology firms

Author:
Gary Clyde Hufbauer and Megan Hogan
Publication Date:
02-2022
Content Type:
Policy Brief
Institution:
Peterson Institute for International Economics
Abstract:
The European Union's proposed Digital Markets Act (DMA) contemplates extensive regulation of "gatekeeper" digital platforms—firms that perform a "core platform service" in the European Union (defined as online intermediation, online search, social networking, video sharing, electronic communication, cloud services, or online advertising), have a significant impact on the EU internal market, serve as an important gateway between business users and end-users, and enjoy an entrenched and durable position. Although at least one European firm could qualify as a gatekeeper, Hufbauer and Hogan say, the DMA discriminates against American technology firms by singling them out for the label of "gatekeepers." The European Commission’s proposed DMA targets both US tech giants such as Google, Amazon, Facebook, Apple, and Microsoft and smaller (albeit huge) US tech firms such as Airbnb and PayPal. The authors say the EU goal is to confer competitive advantage on European digital firms, breaching the EU commitment to national treatment of foreign firms, violating their intellectual property rights, and imposing high expenses on the "gatekeepers." At the same time, France is planning to enact its own steep barriers against US and other foreign cloud services.
Topic:
Markets, Science and Technology, European Union, Economy, and Digital Policy
Political Geography:
Europe and United States of America

4. The Army and Sea Control: Reconsidering Maritime Strategy in the Twenty-first Century

Author:
Nathan A. Jennings
Publication Date:
09-2022
Content Type:
Journal Article
Journal:
Journal of Advanced Military Studies
Institution:
Marine Corps University Press, National Defense University
Abstract:
This article argues that the U.S. Army, rather than the traditional maritime Services, has an emergent opportunity to increase relevancy by exercising sea control to guarantee American access to global markets in competitive spaces in the twenty-first century. In a strategic environment where adversaries are developing sophisticated defenses in-depth to negate American power projection, the institution has a unique capability to create forward positions of advantage with reimagined operational fires commands at scale—as the nucleus of Joint, interagency, and multinational teams—to protect economic prosperity and preserve coalition unity in Central Europe and Southeast Asia in particular, and across the world in general. Advocating for a shift in operational approach that subordinates tactical maneuver in support of operational fires, this article differs from previous scholarship by asserting that the Army should fully embrace sea control, rather than merely providing support to the U.S. Navy and U.S. Marine Corps, to better enable the Joint execution of American and coalition strategies in contested regions.
Topic:
Markets, Navy, Maritime, Oceans and Seas, Trade, Seapower, Army, and Marine Corps
Political Geography:
Russia, China, and United States of America

5. The Regulatory Costs of Being Public

Author:
Michael Ewens, Kairong Xiao, and Ting Xu
Publication Date:
05-2022
Content Type:
Policy Brief
Institution:
The Cato Institute
Abstract:
An important explanation for the significant decline in the number of publicly listed companies in the United States is the increased burden of disclosure and governance regulations. Indeed, practitioners often point to heightened regulatory costs as the culprit of the disappearing public firms, while major deregulations such as the 2012 Jumpstart Our Business Startups (JOBS) Act were directly motivated by perceived costs of being public. Thus, understanding the role of regulations in the cost of being public and the decline in the number of public firms can address concerns about possible capital market dysfunction.
Topic:
Markets, Governance, Regulation, and Business
Political Geography:
North America and United States of America

6. The European Banks’ Role in the Financial Crisis of 2007-8: A Critical Assessment

Author:
Photis Lysandrou
Publication Date:
03-2022
Content Type:
Working Paper
Institution:
City Political Economy Research Centre (CITYPERC), University of London
Abstract:
Since the outbreak of the financial crisis in 2007, opinion has been divided over whether its root cause was credit arbitrage or safe asset demand. New research on the European banks' role in the crisis may finally help to resolve the issue. Far from being peripheral players in the crisis, European banks were deeply implicated in its causal origins as evidenced by their activities in the two US debt markets that were at the heart of the crisis: those for collateralised debt obligations (CDOs) and for asset backed commercial paper (ABCP). These activities would seem to lend weight to the credit arbitrage story, a conclusion that has been reached by several authors. However, it is a conclusion only made possible by ignoring the connection between the federal funds rate and the rate of ABCP demand from the institutional money market mutual funds (MMMFs) in the pre-crisis era. This paper argues that when this connection is closely examined, it turns out that the evidence surrounding the European banks' role in the financial crisis gives greater weight to the safe asset demand explanation of the crisis.
Topic:
Markets, Financial Crisis, Banks, Debt Securities, Assets, and Federal Funds Rate
Political Geography:
Europe and United States of America

7. Microchips and Semiconductors: The U.S. Seeks Autonomy

Author:
Andrzej Dąbrowski
Publication Date:
11-2022
Content Type:
Working Paper
Institution:
The Polish Institute of International Affairs
Abstract:
The United States has turned to support of the domestic microchip industry in response to the increased risk of Chinese aggression against Taiwan, one of the leading producers, as well as to address disruptions in supply chains caused by the COVID-19 pandemic. A law on this passed with bipartisan consent and is intended to help finance a more resilient American sector towards global changes in manufacturing these components. Thanks to the CHIPS Act, the U.S. can reduce its dependence on microchip imports and undermine China’s ability to dominate the market.
Topic:
Markets, Science and Technology, Autonomy, Industry, Supply Chains, Semiconductors, and Microchips
Political Geography:
China, Asia, North America, and United States of America

8. Brothers in arms: The value of coalitions in sanctions regimes

Author:
Sonali Chowdhry, Julian Hinz, Katrin Kamin, and Joschka Wanner
Publication Date:
10-2022
Content Type:
Working Paper
Institution:
Kiel Institute for the World Economy (IfW)
Abstract:
This paper examines the impact of coalitions on the economic costs of the 2012 Iran and 2014 Russia sanctions. By estimating and simulating a quantitative general equilibrium trade model under different coalition set-ups, we (i) dissect welfare losses for sanction-senders and target; (ii) compare prospective coalition partners and; (iii) provide bounds for the sanctions potential — the maximum welfare change attainable — when sanctions are scaled vertically, i.e. across sectors up to an embargo, or horizontally, i.e. across countries up to a global regime. To gauge the significance of simulation outcomes, we implement a Bayesian bootstrap procedure that generates confidence bands. We find that the implemented measures against Iran and Russia inflicted considerable economic harm, yielding 32 – 37% of the vertical sanctions potential. Our key finding is that coalitions lower the average welfare loss incurred from sanctions relative to unilateral implementation. They also increase the welfare loss imposed on Iran and Russia. Adding China to the coalition further amplifies the welfare loss by 79% for Iran and 22% for Russia. Finally, we quantify transfers that would equalize losses across coalition members. These hypothetical transfers can be seen as a sanctions-equivalent of NATO spending goals and provide a measure of the relative burden borne by coalition countries.
Topic:
Globalization, International Trade and Finance, Markets, Sanctions, Alliance, and Embargo
Political Geography:
Russia, China, Europe, Asia, North America, and United States of America

9. Collateral benefits? South Korean exports to the United States and the US-China trade war

Author:
Mary Lovely, David Xu, and Yinhan Zhang
Publication Date:
07-2021
Content Type:
Policy Brief
Institution:
Peterson Institute for International Economics
Abstract:
This Policy Brief assesses the extent to which the United States increased its imports from South Korea after the US imposition of tariffs on Chinese exports. Korea benefited from this shift in US imports, although the increase was relatively small in most sectors. The authors use highly disaggregated US import and tariff data to examine adjustments in US purchases of manufactured goods from its trade partners. Their analysis indicates that Korea made a small gain in the US market following the levying of US tariffs on Chinese exports, with Korea’s share of overall US manufacturing imports rising 0.9 percent and its share of US manufacturing imports subject to trade war tariffs rising 1.0 percent. Gains were spread across a variety of manufacturing sectors—such as wood products, textiles and apparel, and machinery—reflecting both the choices made by US officials regarding which Chinese exports to tax and the nature of preexisting trade relationships between South Korea and the United States.
Topic:
Markets, Economy, Trade Wars, and Exports
Political Geography:
China, Asia, South Korea, and United States of America

10. Transatlantic tools: Harmonizing US and EU approaches to China

Author:
David Barkin and Agatha Kratz
Publication Date:
11-2021
Content Type:
Special Report
Institution:
Atlantic Council
Abstract:
Close cooperation between the United States and the European Union is essential if advanced economies are to develop effective responses to the array of challenges presented by China. Washington and Brussels share concerns regarding competitive distortions arising through the state’s role in the Chinese economy, the use of advanced technologies to repress ethnic minorities and fuel its military, and the spread of authoritarian influence through the Belt and Road Initiative (BRI). However, there has been a lack of coordination and cooperation in recent years between the US and EU when it comes to responding to China’s policies and behaviors. Washington’s focus on risks to US economic and national security contrasts with an emphasis in Brussels on ensuring reciprocity and leveling the economic playing field. But, with the transatlantic relationship back on a better footing under the Biden administration, new structures for transatlantic dialogue being put in place, and a greater focus on the Indo-Pacific in both Washington and Brussels, this paper argues there is now an opportunity for the United States and Europe to learn from each other and harmonize some of their China-related efforts.
Topic:
Human Rights, Markets, Sanctions, European Union, Regulation, Trade, and Transatlantic Relations
Political Geography:
China, Europe, and United States of America

11. Directions of Innovation Policy: Contrasting Views of China and the US

Author:
Anna Jaguaribe and Kamila Aben Athar
Publication Date:
08-2021
Content Type:
Special Report
Institution:
Brazilian Center for International Relations (CEBRI)
Abstract:
At the 24th China Analysis Group Meeting, experts analyzed the contrasting views of innovation policies in China and in the United States. The 14th five-year plan continues most of the economic efforts that characterized the last decade while also challenging some certain well-established elements. Internet development is still the dominant focus, but we can also observe the shift towards a service-based economy and high investment in infrastructure. According to the participants, one of the most relevant differences between the US and China is the way non-state actors are connected to the national government. American innovation efforts heavily feature research groups and private corporations having an active role, while in China the government puts up barriers that distort the market and influence it more directly. The tension between the two countries is stronger than ever and the new Biden administration brings a new set of uncertainties to the table, but at the same time, both China and the US are heavily dependent on each other economically. China’s efforts to expand its influence worldwide by negotiating with multiple countries will most likely exacerbate the conflict and talks regarding a decoupling, which currently seems unlikable.
Topic:
Foreign Policy, Economics, Markets, Infrastructure, and Innovation
Political Geography:
China, Asia, and United States of America

12. The United States and Singapore: Indo-Pacific Partners

Author:
Jeffrey Ordaniel and Ariel Stenek
Publication Date:
12-2021
Content Type:
Special Report
Institution:
Pacific Forum
Abstract:
Authors of this volume participated in the inaugural U.S.- Singapore Next-Generation Leaders Initiative, sponsored by the U.S. Department of State, through the U.S. Embassy Singapore. With backgrounds from academia, public policy, civil society and industry, the cohort brings rich insights on the past, present, and future of the U.S.-Singapore relationship. Between September 2020 and August 2021, cohort members engaged with senior experts and practitioners as they developed research papers addressing various aspects of the bilateral relationship.
Topic:
Security, Diplomacy, International Cooperation, Markets, Bilateral Relations, Reform, and Partnerships
Political Geography:
North America, Singapore, Southeast Asia, United States of America, and Indo-Pacific

13. The State-Constituted Market Economy: A Conceptual Framework for China’s State–Market Relations

Author:
Isabella Weber and Hao Qi
Publication Date:
12-2021
Content Type:
Working Paper
Institution:
Political Economy Research Institute (PERI), University of Massachusetts Amherst
Abstract:
China has created a distinct economic system. Yet despite a growing literature with valuable contributions on the institutional arrangements under ‘capitalism with Chinese characteristics,’ the precise economic mechanisms underpinning China’s state–market relations remain undertheorised. In this paper we develop a conceptual framework of what we call China’s state-constituted market economy. We define essential as ‘systemically significant from the perspective of the state.’ We argue that the Chinese state ‘constitutes’ the market economy by creating, participating and steering markets for essentials in order to stabilise and guide the economy as a whole. We draw on China’s statecraft tradition as well as on proposals for financial policy reform in the U.S. to conceptualise the state market-constitution in China.
Topic:
Markets, Economy, and State-Market Relations
Political Geography:
China and United States of America

14. Platform mergers and antitrust

Author:
Geoffrey Parker, Georgios Petropoulos, and Marshall Van Alstyne
Publication Date:
06-2021
Content Type:
Working Paper
Institution:
Bruegel
Abstract:
Platform ecosystems rely on economies of scale, data-driven economies of scope, high quality algorithmic systems, and strong network effects that frequently promote winner-takes-most markets. Some platform firms have grown rapidly and their merger and acquisition strategies have been very important factors in their growth. Big platforms’ market dominance has generated competition concerns that are difficult to assess with current merger policy tools. We examine the acquisition strategies of the five major US firms—Google, Amazon, Facebook, Apple and Microsoft—since their inception. We discuss the main merger and acquisition theories of harm that can restrict market competition and reduce consumer welfare. To address competition concerns about acquisitions in big platform ecosystems we develop a four step proposal that incorporates: (1) a new ex-ante regulatory framework, (2) an update of the conditions under which the notification of mergers should be compulsory and the burden of proof should be reversed, (3) differential regulatory priorities in investigating horizontal versus vertical acquisitions, and (4) an update of competition enforcement tools to increase visibility into market data and trends.
Topic:
Markets, Digital Economy, Internet, Economy, and Innovation
Political Geography:
Global Focus and United States of America

15. How Misaligned Incentives Hinder Foster Care Adoption

Author:
Isabella M. Pesavento
Publication Date:
01-2021
Content Type:
Journal Article
Journal:
The Cato Journal
Institution:
The Cato Institute
Abstract:
Adoption, particularly adoption out of foster care, has not been well studied within the field of economics. Researchers may avoid this topic because the adoption market greatly deviates from a typical market, and the system and data collection are highly fragmented, with relatively little federal coordination. Rubin et al. (2007) and Thornberry et al. (1999) show that instability in foster care placements produces negative welfare outcomes, and Hansen (2006), Barth et al. (2006), and Zill (2011) demonstrate that adoption out of foster care is socially and financially beneficial. Yet, children waiting to be adopted out of foster care are in excess supply, which has been exacerbated in recent years. I hypothesize that this is, in part, due to misaligned incentives of government officials and the contracted foster care agencies. I show that earnings are prioritized over ensuring permanent child placement, which hinders the potential for adoption, and government oversight fails to correct such iniquities because of career interests.
Topic:
Economics, Government, Markets, Children, Incentives, Foster Care, and Adoption
Political Geography:
North America and United States of America

16. U.S. Trade Policy toward China: Learning the Right Lessons

Author:
Scott Lincicome
Publication Date:
01-2021
Content Type:
Journal Article
Journal:
The Cato Journal
Institution:
The Cato Institute
Abstract:
Labor market and cultural disruptions in the United States are real and important, as is China’s current and unfortunate turn toward illiberalism and empire. But pretending today that there was a better trade policy choice in 2000—when Congress granted China “permanent normal trade relations” (PNTR) status and paved the way for broader engagement—is misguided. It assumes too much, ignores too much, and demands too much. Worse, it could lead to truly bad governance: increasing U.S. protectionism; forgiving the real and important failures of our policymakers, CEOs, and unions over the last two decades; and preventing a political consensus for real policy solutions. Indeed, that is happening now.
Topic:
International Relations, Economics, Markets, Bilateral Relations, Trade, and Protectionism
Political Geography:
China, Asia, North America, and United States of America

17. Financial Markets and Social Media: Lessons From Information Security

Author:
Claudia Biancotti and Paolo Ciocca
Publication Date:
11-2021
Content Type:
Working Paper
Institution:
Carnegie Endowment for International Peace
Abstract:
On January 28, 2021, stocks in U.S.-based video game retailer GameStop Corp. reached an all-time high of $483. Two weeks earlier, they had been trading at $20. Two weeks later, they were down again, and a congressional hearing on the matter was underway in Washington. Wild swings are hardly uncommon in financial markets. This episode, however, had novel characteristics. In a recent report, the U. S. Securities and Exchange Commission states that “GameStop Corp and multiple other stocks experienced a dramatic increase in their share price in January 2021 as bullish sentiments of individual investors filled social media.” 1 Retail traders congregating on the Reddit platform were key in both price formation and the emergence of a “Main Street versus Wall Street” narrative around the stock.2 The influence of social media on financial markets is here to stay, as younger generations start saving and investing. This carries both opportunities and risks. Information sharing and discussion on internet platforms can improve market transparency and efficiency. On the other hand, social media platforms are known vehicles of disinformation and manipulation of human behavior. They could be weaponized by malicious actors, ranging from state-sponsored groups to crime syndicates, looking to compromise market integrity and financial stability. For liberal democracies with independent financial watchdogs, a complex policy challenge follows. In order to fight information operations, financial authorities will need to cooperate with intelligence communities and other relevant parts of executive branches. This requires rules that clearly define each party’s role and encourage reciprocal trust. In many jurisdictions, cybersecurity statutes provide a starting point. They are, however, limited in scope, only covering cooperation vis-& agrave;-vis traditional cyber attacks. In this paper, we argue that the model must evolve to help prevent or defend against malicious information operations.3 We highlight, as a first step, the importance of organizational modules that allow entities with different levels of access to classified information to work together to assess and inform responses to hostile operations.
Topic:
Security, Markets, Finance, and Social Media
Political Geography:
Global Focus and United States of America

18. The Organizational Roots of Market Design Failure: Structural Abstraction, the Limits of Hierarchy, and the California Energy Crisis of 2000/01

Author:
Georg Rilinger
Publication Date:
12-2021
Content Type:
Working Paper
Institution:
Max Planck Sciences Po Center on Coping with Instability in Market Societies (MaxPo)
Abstract:
Economic sociologists have rarely studied organizational reasons why market design processes fail. Drawing on the organizational literature on mistakes and accidents, the paper identifies such reasons for a fatal design decision during the creation of California’s first electricity markets. Designers proposed weak oversight structures even though their models called for active and permanent regulatory control. Sellers like Enron could therefore manipulate the market without fear of detection, prolonging the western energy crisis. A process of “structural abstraction” explains this mistake. Designers were split into three groups that worked in different divisions and relied on local frames to understand the oversight requirements. Each group missed information the others were aware of and arrived at the conclusion that minimal oversight would suffice. Higher levels of the hierarchy should have discovered and resolved these discrepancies. However, these levels considered the issue at a higher level of abstraction. Such structural abstraction made room for ambiguities that obscured the local disagreements.
Topic:
Economics, Markets, Sociology, Hierarchy, and Energy Crisis
Political Geography:
California, North America, and United States of America

19. Overcoming Taiwan’s Energy Trilemma

Author:
Evan A. Feigenbaum and Jen-Yi Hou
Publication Date:
04-2020
Content Type:
Working Paper
Institution:
Carnegie Endowment for International Peace
Abstract:
Taiwan needs to look not just to the energy it needs right now but also to the energy it will need ten to twenty years from now if it is to power its future. This paper focuses on two elements of the paradigmatic transformation that are especially relevant to Taiwan’s future: (1) the rise of new energy and storage technologies, and (2) the dynamics of liquefied natural gas pricing. In particular, it looks at several ways in which new investment partnerships between Taiwan and U.S. players could bolster Taiwan’s ambitious effort to build out renewable energy as a source of industrial and residential power.
Topic:
Energy Policy, Markets, Science and Technology, Investment, and Fossil Fuels
Political Geography:
Middle East, Taiwan, and United States of America

20. On the Origins of Entrepreneurial Alertness: Did Bauer and Yamey Precede Kirzner?

Author:
J. Robert Subrick
Publication Date:
10-2020
Content Type:
Journal Article
Journal:
The Cato Journal
Institution:
The Cato Institute
Abstract:
After the Second World War, the entrepreneur virtually disappeared from economic analysis (Baumol 1968). This neglect followed from the emerging models of general equilibrium that formed one aspect of the core of economic theory. By assumption, the Walrasian auctioneer knew the appropriate prices necessary to equate quantity supplied with quantity demanded in each market. In addition, the auctioneer knew when and by how much to adjust prices when an exogenous factor changed such as income or production technology. Trade only occurred at equilibrium prices so that markets cleared. No market participant chose or changed prices; it occurred exogenously. Kenneth Arrow recognized the lack of real world mechanisms to determine and adjust prices in competitive markets. He identified a logical gap in the perfectly competitive model. He wrote that “there is no place for a rational decision with respect to prices as there is with respect to quantities” (Arrow 1959: 42). Prices exist independent of consumer and firm behavior. A complete model would have to provide a solution to the conundrum.
Topic:
Markets, History, Entrepreneurship, and Economy
Political Geography:
North America and United States of America

21. Canada’s Historical Search for Trade Markets

Author:
David J. Bercuson
Publication Date:
08-2020
Content Type:
Working Paper
Institution:
Canadian Global Affairs Institute (CGAI)
Abstract:
When U.S. President Donald Trump was elected in 2016 on a promise to cancel the North American Free Trade Agreement (NAFTA), Canada risked losing the free-trade regime that it had enjoyed with the U.S. since the original U.S.-Canada Free Trade Agreement took effect in 1989. Those who came to Canada’s rescue, by persuading the Trump administration to eventually make a new deal, the United States-Mexico-Canada agreement, were Canada’s trading partners in the United States, whose interests were threatened: Nearly two-thirds of U.S. states now have Canada as their most important trading partner. This was indicative of a long-term trade pattern of an ever-increasing closeness in trade between the U.S. and Canada. It is a pattern that started since before Confederation and in spite of not a few attempts in Canada to diversify exports away from the U.S. However, that simply cannot happen in any meaningful way: The 170-year-old pattern of Canada-U.S. trade is now so permanent as to be utterly irreversible. Since the decision by Britain to end tariff preferences for its colonies in the mid-19th century, Canada has naturally sought to penetrate the U.S. market for its exports. The desire has not always been mutual: American protectionism has, at times, hampered the export of Canadian products to the U.S., although tariff barriers have failed to stop what is a seemingly natural and, in many ways, necessary north-south flow of goods and services. Even Canadian attempts to reorient its own trade emphasis to enhance domestic east-west trade, or to expand into countries beyond the United States have made little difference. The trading relationship between Canada and the U.S. has endured through wars and in peacetime, through Republican administrations and Democratic ones. It will only continue to grow. Fantasizing about some markedly different trading future is therefore a waste of Canada’s time and energy, which should instead be expended on further penetrating the American marketplace and solidifying ties with state and local governments, local manufacturing associations, Congress and new industries. Canada should take advantage of its new trade deal with the U.S. to integrate the Canadian economy as fully into that of the U.S. as possible. There may be others like President Trump or some like him in Canada, who try to disrupt the trade relationship. That even Trump eventually was persuaded to agree to free trade with Canada is evidence, however, that an ever-closer trading relationship is simply a reality that cannot be stopped.
Topic:
Markets, History, Trade, and Donald Trump
Political Geography:
Canada, North America, and United States of America

22. Trade trends show China should take the opportunity to diversify its market

Author:
Dong Yan, Ma Yingying, and Xu Tingting
Publication Date:
05-2019
Content Type:
Policy Brief
Abstract:
The China-US trade row has been drawing a lot of attention. A detailed review of the bilateral trade situation between China and the US from January through April is a good reference for the future trend. Also, as uncertainties loomed amid tariff hikes, some related US industries were afflicted, such as plants, minerals and precious metal in the first quarter.
Topic:
Markets, Tariffs, Trade Wars, Diversification, and Trade
Political Geography:
China, Asia, North America, and United States of America

23. Petro Dollar. Petro Yuan. Petro Rupee?

Author:
Amit Bhandari
Publication Date:
08-2019
Content Type:
Working Paper
Institution:
Gateway House: Indian Council on Global Relations
Abstract:
Over the last two decades, every component of the global energy scenario has changed: demand, supply and energy-type. The only constant has been the U.S. Dollar as the currency of energy trade. Lately, the Chinese Yuan has emerged to challenge the Dollar. Can the Indian Rupee be a third player? India is now the world’s third-largest consumer and second-largest importer of energy. Its open market, transparent regulation and growing demand give it an opportunity to become the hub of a vibrant new oil market, simultaneously ensuring its energy security and raising the international profile of the Rupee. This paper explores the possibility the Rupee could be the third currency in which energy is traded, and the challenges and opportunities it presents.
Topic:
Security, Energy Policy, Markets, Oil, Currency, and Trade
Political Geography:
China, South Asia, India, Asia, North America, and United States of America

24. The Stupendous US Record Gets Suppressed

Author:
Amity Shlaes
Publication Date:
03-2018
Content Type:
Special Report
Institution:
Center for Social and Economic Research - CASE
Abstract:
In recent years, the consensus regarding the American past has slipped leftward, and then leftward again. No longer is American history a story of opportunity, or of military or domestic triumph. America’s has become, rather, a story of wrongs, racial and social. Today, any historical figure who failed at any time to support abolition, or, worse, took the Confederate side in the Civil War, must be expunged from history. Wrongs must be righted, and equality of result enforced. The equality campaign spills over into a less obvious field, one that might otherwise provide a useful check upon the non-empirical claims of the humanities: economics. In a discipline that once showcased the power of markets, an axiom is taking hold: equal incomes lead to general prosperity, and point toward utopia. Teachers, book club presidents, and especially professors withhold any evidence to the contrary. Universities lead the shift, and the population follows. Today, millennials, those born between 1982 and 2000, outnumber baby boomers by the millions, and polls suggest that they support redistribution specifically, and government action generally, more than their predecessors. A 2014 Reason/Rupe poll found 48 percent of millennials agreeing that government should “do more” to solve problems, whereas 37 percent said that government was doing “too many things.” A full 58 percent of the youngest of millennials, those 18-24 when surveyed, held a “positive” view of socialism, in dramatic contrast with their parents: only 23 percent of those aged 55 to 64 viewed socialism positively.
Topic:
Government, Markets, History, Economy, Economic Growth, Tax Systems, Free Trade, and Welfare
Political Geography:
North America and United States of America

25. American Constitutional Theory and History: Implications for European Constitutionalism

Author:
Roger Pilon
Publication Date:
10-2018
Content Type:
Journal Article
Journal:
The Cato Journal
Institution:
The Cato Institute
Abstract:
It is perhaps not impertinent to suggest that American constitutional theory and history, owing to the longevity of the document that is their subject, hold lessons for constitutionalism everywhere, but especially for European constitutionalism—the more recent and ever evolving treaties that serve as a “Constitutional Charter” for the European Union. An American constitutionalist looking east today, seeing everything from Brexit to Grexit plus the reactions in European capitals, must be struck by the tension in the EU between exclusion and inclusion in its many forms, including individualism and collectivism. Those themes underpin my discussion here. The issues surrounding them are universal. They are at the heart of the human condition.
Topic:
Markets, History, European Union, and Constitution
Political Geography:
Europe, North America, and United States of America

26. “Triple punch” policies to bring years of trade tensions

Author:
Su Qingyi
Publication Date:
07-2018
Content Type:
Policy Brief
Abstract:
US President Donald Trump has adopted a hard-line trade policy and recklessly instigated the trade conflict with China. This is the result of a combination of adjustments to his trade, foreign, and fiscal policies. These intertwined policies will likely stretch China-US trade frictions throughout Trump's presidency. First of all, the adjustment to the trade policy includes a shift from multilateral free trade to regional free trade and pressuring other countries to open their markets.
Topic:
International Trade and Finance, Markets, Trade Wars, Trade, and Economic Development
Political Geography:
China, Asia, North America, and United States of America

27. China will further open up but not due to US pressure

Author:
Dong Yan
Publication Date:
04-2018
Content Type:
Policy Brief
Abstract:
China will take measures to further open up to the outside world, Xi said in his highly-anticipated keynote address at the Boao Forum for Asia. But amid the escalating China-US trade conflict, some people have wrongly assumed Xi made the remarks with the Trump administration's accusations in mind. But a review of China's policies shows the country will deepen reform and opening-up because of its practical development needs, not because of any other country's demand or coercion. As for the expansion of imports, China shifted its focus from exports to striking the right balance between imports and exports long ago, because the increase in imports will offer more choices to Chinese consumers and help improve their living standards, aside from giving foreign companies easier access to the Chinese market.
Topic:
Markets, Trade Wars, and Imports
Political Geography:
China, Asia, North America, and United States of America

28. US Supermarket Supply Chains: Ending the Human Suffering Behind our Food

Author:
Oxfam Publishing
Publication Date:
06-2018
Content Type:
Policy Brief
Institution:
Oxfam Publishing
Abstract:
Inequality is rampant across the global economy, and the agro-food sector is no exception. At the top, big supermarkets and other corporate food giants dominate global food markets, allowing them to squeeze value from vast supply chains that span the globe, while at the bottom the bargaining power of small-scale farmers and workers has been steadily eroded in many of the countries from which US supermarkets and others from around the world source. The result is widespread human suffering among the women and men producing our food.
Topic:
Markets, Food, Farming, and Supply Chains
Political Geography:
North America and United States of America

29. Predictive Macro-Impacts of PLS-Based Financial Conditions Indices: An Application to the USA

Author:
Duo Qin
Publication Date:
01-2016
Content Type:
Working Paper
Institution:
School of Oriental and African Studies - University of London
Abstract:
This investigation seeks to construct financial conditions indices (FCIs) by the partial least squares (PLS) method with the aims (i) that the FCIs should outperform interest rate, which is conventionally used in small VAR (Vector Auto-Regression) models to present the predictive macro-impacts of the financial markets, and (ii) that the FCIs are adequately invariant during regular updates to resemble non-model based aggregate indices. Both aims are shown to be attainable as long as the FCIs are tailor-made with carefully selected components and suitably targeted macro variables of forecasting interest. The positive outcome sheds light on why the widely used principal component analysis (PCA) approach is ill-suited to the tasks here whereas why the PLS route promises a fruitful way forward.
Topic:
Economics, Markets, Finance, and Macroeconomics
Political Geography:
North America and United States of America

30. The New Energy Innovation Economy

Author:
Dave Grossman, Roger Ballentine, and Andy Karsner
Publication Date:
12-2015
Content Type:
Policy Brief
Institution:
Aspen Institute
Abstract:
The 2015 Clean Energy Innovation Forum, “The New Energy Innovation Economy,” was co-chaired again this year by Roger Ballentine of Green Strategies and Andy Karsner of Manifest Energy. Topics discussed included the ongoing transformation of the energy user experience; distributed generation and disruption incumbent electricity business model; challenges in bridging the energy technology gap between development and adoption; and the impact of climate concerns on accelerating change.
Topic:
Climate Change, Economics, Energy Policy, Markets, and Science and Technology
Political Geography:
United States of America

31. Creative Success and Network Embeddedness: Explaining Critical Recognition of Film Directors in Hollywood, 1900–2010

Author:
Mark Lutter
Publication Date:
07-2014
Content Type:
Working Paper
Institution:
Max Planck Institute for the Study of Societies
Abstract:
This article analyzes how social network structures affect career success in a project based labor market. The literature on team success has shown that teams perform well if they integrate both weak and strong ties simultaneously. Applying the literature to careers in the creative industries, the study suggests that creative artists are more likely to receive critical recognition if they build their careers in both familiar project networks and heterogeneous sets of creative conventions. It is argued that familiarity and diversity operate as complementary elements in the development of innovative ideas. While diversity is important to maximize the flow of new ideas, it needs to be embedded within trustworthy and familiar network structures in order to fully develop its creative potential. The suggested mechanism is tested by means of full career data of 55,097 film directors, covering 478,859 directing jobs in 330,142 film productions during the years 1900–2010. It is shown that familiarity and diversity explain a considerable part of a director’s critical success. Results from interaction effects show that diversity has greater effects on critical success if it is socially embedded within familiar social structures. The article contributes to the emerging understanding of the role of group processes and network structures in explaining individual career success.
Topic:
Economics, Human Welfare, Markets, and Labor Issues
Political Geography:
United States of America

32. Uncovered Equity Parity and Rebalancing in International Portfolios

Author:
Stephanie E. Curcuru, Charles P. Thomas, Francis E. Warnock, and Jon Wongswan
Publication Date:
05-2014
Content Type:
Commentary and Analysis
Institution:
Board of Governors of the Federal Reserve System
Abstract:
Portfolio rebalancing is a key driver of the Uncovered Equity Parity (UEP) condition. According to UEP, when foreign equity holdings outperform domestic holdings, domestic investors are exposed to higher exchange rate exposure and hence repatriate some of the foreign equity to decrease their exchange rate risk. By doing so, foreign currency is sold, leading to foreign currency depreciation. We examine the relationship between U.S. investors' portfolio reallocations and returns and find some evidence consistent with UEP: Portfolio shifts are related to past returns in the underlying equity markets. But we argue that a motive other than reducing currency risk exposure is likely behind this rebalancing. In particular, U.S. investors may be exploiting mean reversion in underlying equity markets, rebalancing away from equity markets that recently performed well and moving into equity markets market just prior to relatively strong performance. Such behavior suggests tactical reallocations to increase returns rather than reduce risk.
Topic:
Economics, Markets, Risk, International Portfolios, and Equity
Political Geography:
North America and United States of America

33. U.S. Unconventional Monetary Policy and Transmission to Emerging Market Economies

Author:
David Bowman, Juan M. Londono, and Horacio Sapriza
Publication Date:
06-2014
Content Type:
Commentary and Analysis
Institution:
Board of Governors of the Federal Reserve System
Abstract:
We investigate the effects of U.S. unconventional monetary policies on sovereign yields, foreign exchange rates, and stock prices in emerging market economies (EMEs), and we analyze how these effects depend on country-specifc characteristics. We find that, although EME asset prices, mainly those of sovereign bonds, responded strongly to unconventional monetary policy announcements, these responses were not outsized with respect to a model that takes into account each country's time-varying vulnerability to U.S. interest rates affected by monetary policy shocks.
Topic:
Economics, Emerging Markets, Foreign Exchange, Markets, Monetary Policy, Exchange Rate Policy, Interest Rates, and Stock Markets
Political Geography:
North America and United States of America

34. The Domestic and International Effects of Interstate U.S. Banking

Author:
Matteo Cacciatore, Fabio Ghironi, and Viktors Stebunovs
Publication Date:
08-2014
Content Type:
Commentary and Analysis
Institution:
Board of Governors of the Federal Reserve System
Abstract:
This paper studies the domestic and international effects of national bank market integration in a two-country, dynamic, stochastic, general equilibrium model with endogenous producer entry. Integration of banking across localities reduces the degree of local monopoly power of financial intermediaries. The economy that implements this form of deregulation experiences increased producer entry, real exchange rate appreciation, and a current account deficit. The foreign economy experiences a long-run increase in GDP and consumption. Less monopoly power in financial intermediation results in less volatile business creation, reduced markup countercyclicality, and weaker substitution effects in labor supply in response to productivity shocks. Bank market integration thus contributes to moderation of firm-level and aggregate output volatility. In turn, trade and financial ties allow also the foreign economy to enjoy lower GDP volatility in most scenarios we consider. These results are consistent with features of U.S. and international fluctuations after the United States began its transition to interstate banking in the late 1970s.
Topic:
Markets, Monopoly, Fiscal Policy, Banking, and Interstate Cooperation
Political Geography:
North America and United States of America

35. Returns to Active Management: The Case of Hedge Funds

Author:
Maziar Kazemi and Ergys Islamaj
Publication Date:
08-2014
Content Type:
Commentary and Analysis
Institution:
Board of Governors of the Federal Reserve System
Abstract:
Do more active hedge fund managers generate higher returns than their less active peers? We attempt to answer this question. Using Kalman Filter techniques, we estimate the risk exposure dynamics of a large sample of live and dead equity long-short hedge funds. These estimates are then used to develop a measure of activeness for each hedge fund. Our results show that there exists a nonlinear relationship between activeness and performance. Using raw returns as a measure of performance, it is found that more active funds outperform the less active ones. However, when risk adjusted returns are used to measure performance, we find the opposite results; that is, activeness is inversely related to returns. Still, we find that a few very active managers outperform the moderately active funds and generate higher returns. We conclude that the most active managers use their skills to manage the riskiness of their portfolios and are, therefore, able to provide higher risk adjusted returns. Finally, we find that compared to the least active managers, the most active managers are less homogeneous and, therefore, due diligence is far more important when selecting an active manager.
Topic:
Markets, Risk, Business Management, and Stock Markets
Political Geography:
North America and United States of America