The political economy of decarbonisation: from green energy ‘race’ to green ‘division of labour’

This paper aims to provide an addendum to the rapidly growing concept of a global ‘green energy race’ between major states. It argues that although this framing has been useful in underscoring important dynamics in the process of decarbonisation, its narrow focus on installed capacity obscures a much broader and more complex process at play. In particular, it overlooks the critical role played by states aggressively investing in R&D and export manufacturing in the renewable energy sector. The paper thus supplements the concept of a green ‘energy race’ with that of a green ‘global division of labour’, which sees the process of decarbonisation not exclusively as an effort by individual states to install renewables domestically, but rather as a collective and interdependent process by dozens of states, all striving in different ways to promote capital accumulation on their soil. The paper provides an overview of data covering innovation, manufacturing and deployment in the clean energy sector, and offers a theoretical analysis of the trends observed.     

Determinants of persistence in innovation: evidence from the case study of the ‘Eye Microsurgery’ Complex

This study aims at determining the major factors supporting innovative persistence based on an in-depth analysis of the internal organizational processes of the state-owned medical institution, ‘Eye Microsurgery’ Complex in Moscow. I propose a systemic approach to the study of innovation activities, which incorporates aspects of evolutionary economics, institutional analysis and dynamic capabilities theory. The study explicitly incorporates the changing external environment as a factor shaping innovation dynamics. The findings suggest that at the earliest stage of the firm's development, the interaction between the nature of the technology and the nature of the demand, the presence of prolific innovators and a certain organizational structure that supports learning, effective knowledge production and accumulation are determinant of persistence in innovation. In later periods, the availability of resources (material, financial, specialized human capital), external collaborations, specific production techniques, well-organized technological diffusion, and motivational factors are the elements providing the basis for innovative persistence. Leadership plays a crucial role in supporting innovation and organizational transformation.     

Analysis of the optimal spatial distribution of natural gas under ‘transition from coal to gas’ in China

China has been attempting to realise green sustainable economic development. Thus, China has proposed and begun to implement the ‘switching from coal to gas’ policy to realise the energy structure transition but neglected to consider seasonal natural gas demand fluctuations, gas supply shortages, the backward gas transportation and storage infrastructure. This paper constructs a model of China’s natural gas distribution system by incorporating these four factors: ① supply factors including domestic natural gas fields, liquid natural gas receiving stations, internationally piped gas sources, ② demand factors including domestic regional demands, ③ real natural gas transportation pipeline systems in the country, and ④ the pricing mechanism of natural gas. Optimal spatial natural gas distribution with maximum social welfare under the three conditions are simulated, respectively: the ① fixed price system, ② market pricing mechanism, and ③ seasonal fluctuations. The simulation results indicate substantial changes would occur in China’s natural gas system during the switch from coal to gas, and the natural gas infrastructure requires further improvement. This paper also provides references for the natural gas storage facility location selection in China.     

The implications of the ‘learning curve’ for firm strategy and public policy

The objective of this paper is to examine the relationships between costs and cumulative output, and to explore the implications of these relationships for firm strategy and public policy.     

The ‘West’ against the ‘Rest’: Geopolitics after the end of the cold war

With the end of the Cold War, it seemed that we had reached the ‘end of geopolitics’. Since the mid‐1990s, however, the term ‘geopolitics’ has experienced a revival, and even regional groupings which have so far abstained from any kind of power politics, such as the European Union, have started to claim geopolitical interests for themselves. But it is not clear what constitutes this kind of power politics in the 1990s and what drives ‘the West’ to pursue geopolitics, directed against what Huntington has labelled so plainly and provocatively the ‘Rest’. The article addresses this question by analysing Western capital's need for access to markets in the South and the EU's and US’ growing dependence on oil imports. The article will argue that a Western geostrategy based on Huntington's civilisational model would be counterproductive in the long run, manoeuvring the Western states into a situation where these geopolitical goals would have to be enforced by military means instead of being pursued through a strategy of political and economic support.     

Governing stigmatised space: the case of the ‘slums’ of Berlin-Neukölln

Spatial stigmatisation – naming spaces with high concentration of poverty as a slum or ghetto – has been well covered in the critical urban geography and sociological debates. Yet, these discussions have neglected to theorise the intersection between the production of stigmatised space and the governance of its inhabitants within the context of one of Germany’s most stigmatised boroughs. By situating Berlin-Neukölln within historical processes of capital accumulation, I show how the discursive, institutional and material practices of neoliberal social policies have played a central, albeit contradictory, role in (re-)producing stigmatise spaces and subjects along racialised, gendered and class lines. This is particularly evident with regard to neoliberal governance strategies that employ and apply the power of public money to repress and integrate impoverished workers into contemporary capitalist society, or what I refer to as the ‘monetisation of socio-spatial reproduction’.     

The ‘compensation’ thesis,as exemplified by the case of the Chinese central bank

This paper extends the theory of demand-led money supply endogeneity to the case of an open economy with a fixed exchange rate. This theory is contrasted to the standard Mundell-Fleming view. In the compensation approach advocated here, central banks are able to set interest rates, even in a fixed exchange rate regime, either because there are automatic market mechanisms that will induce the private sector to act in such a way that changes in foreign reserves will be compensated by opposite changes in central bank claims over the domestic economy, or because the central bank will engage in endogenous sterilization operations in its efforts to enforce its benchmark interest rate. Analyzing the balance sheet of the Chinese central bank, we find that the large rise in foreign reserves on the asset side is compensated by large positive changes in items of the liability side, mainly bonds issued by the central bank. Foreign reserves are not cointegrated with the monetary base, meaning that there is no long-run relationship between foreign exchange reserves and the supply of base money. We also find no long-run relation between foreign exchange reserves and the consumer price index.     

The international spillover of china’s monetary policy: a case study of a developing country

This paper aimed to investigate the evidence on the transmission of China’s monetary policy shocks to macroeconomic variables in Iran. Since 1990, China has become one of the main trading partners of Iran; therefore, it is expected that China’s macroeconomic shocks have some consequences on Iran’s Economy. In this study, a structural vector autoregressive model is used to explore such a transmission. The findings of the study reveal that the China’s monetary policy changes significantly affect the Consumer Price Index (CPI) as Iran’s CPI meaningfully increases with the expansion of China’s money supply. Furthermore, it was found that Iran’s other economic variables, including the real GDP, real effective exchange rate, and interest rate, do not significantly reflect the China’s monetary shocks; even though confirm the expected sign and direction.     

Andre Gunder Frank: ‘Unity in Diversity’ from the Development of Underdevelopment to the World System

The purpose of this article is to critically review the work of Andre Gunder Frank. This is no easy task given the prolific and controversial nature of his life work. His main distinction is as a paradigm breaker and a paradigm maker. Frank is one of the founders of contemporary world system theory. He coined some memorable expressions such as the ‘development of underdevelopment’ and ‘Re-Orient’. Indeed, these two concepts highlight two distinct phases in his work. His first phase is characterised by his writings on dependency theory and his initial understanding of world system theory broadly in line with Amin, Arrighi and Wallerstein. His second phase is distinguished by what he considers to be the ‘Eurocentric’ interpretation of world system theory of Wallerstein and others as well as by his critique of his own earlier work. While some of Frank's analyses and assertions proved to be wrong, he provided much inspiration to a new generation of scholars and activists, some of whom provided the necessary empirical evidence and theoretical rigour lacking in parts of Frank's work. But he excelled in his mission of providing the big picture, asking the unimaginable questions and exploring hitherto inconceivable interrelationships.     

The role of price risk in China’s agricultural and fisheries exports to the US

This article explores the effect of price risk on the US importers’ optimal allocation of agriculture imports between the major supplier, China, and other competing countries. We first modify a demand system to account for the impacts of own-price risk and cross-price risk, and then apply the model to 16 agricultural and fisheries commodities exported to the US. The estimation results show that importers are sensitive to price risks of 14 Chinese commodities. Comparisons between price risk–trade relations of agricultural and fisheries products and between trade effects of cross-price risk on Chinese goods and substitutes provide strong evidence for explaining the observed trade patterns. Our study highlights the importance of price stability in promoting international trade, especially from developing countries to developed countries.     

A History of Violence: Mearsheimer and Walt's Writings from ‘An Unnecessary War’ to the ‘Israel Lobby’ Controversy

Realist academics wrote some of the most lucid critiques of the geopolitics of anger initiated after 9/11 by the Bush administration: John Mearsheimer and Stephen Walt, in particular, began to interrogate the War on Terror with lines of inquiry that lead back to the critiques of U.S. foreign policy—and the ‘fantasies’ and ‘self-deception’ of policy makers—developed in the 1960s by Hans Morgenthau and Hannah Arendt. But then Walt and Mearsheimer published controversial essays on ‘The Israel Lobby’ based on arguments developed in Walt's Taming American Power. What interests me in the paper is accounting for a curious move that occurs in the writings of Mearsheimer and Walt since 9/11. By the time that we arrive at Walt's Taming American Power and the essays on ‘The Israel Lobby’, critical commentary on the ‘self-deception’ of policy makers and the problems with neo-conservatism has largely disappeared, replaced with an anxiety over the Israel lobby that appears overstated. It is argued that the emphasis on foreign ‘penetration’ is a means of postponing a broader interrogation of the domestic, internal problems of democracy and war in the United States.     

The ‘real’ explanation of the PPP puzzle

This article shows that global financial markets cannot, by themselves, achieve net transfers of financial capital and real interest rate equalization across countries and that the integration of both global financial markets and global goods markets is needed to achieve net transfers of capital and real interest rate equalization across countries. Thus, frictions (barriers to mobility) in one or both of these markets can impede the net transfer of capital between countries, produce the Feldstein and Horioka (1980) finding of high-saving-investment correlations and prevent real interest rates from being equalized across countries. Moreover, frictions in global goods markets can explain why real exchange rates deviate from purchasing power parity (PPP) for extended periods of time and can therefore also explain the PPP puzzle. Consequently, we are able to resolve two of Obstfeld and Rogoff’s (2000) ‘6 major puzzles in macroeconomics’ with essentially the same explanation.     

The ‘Value’ of Europe: The Political Economy of Culture in the European Community

During the 1970s and 1980s the “cultural sector” became one of the primary motors for wealth creation in the European Community. At the European and national scales, a group of actors helped transform Europe's vast array of practices and services (tourism, heritage, books, audio-visual products, etc.) into “cultural industries” and pushed the EC to develop a common cultural policy to support these industries. Documenting these changes at the European scale, I argue that the perceived impact of cultural policy for particular national economic competitiveness was also significant. Italian MEPs and members of Italy's national government were especially important, as they fought to protect the country's historical heritage and promote tourism. France pushed the strongest and I show how that country's efforts were primarily intended to protect its audio-visual and publishing industries from the EC internal market's liberalisation policies, which were vocally supported by Britain because they would have served that county's national economic interests.     

Richard Kahn's fellowship dissertation: The fate of ‘The Economics of the Short Period’

Abstract

In 1930, Richard Kahn became a fellow of King's College, Cambridge, on the basis of his book-length dissertation ‘The Economics of the Short Period.’ It was finally published in the 1980s. Why did he not publish his thesis in the 1930s, when it would have made a substantial impact? We present two arguments. In 1932/33, Joan Robinson published many of Kahn's main ideas, rendering subsequent publication by him derivative. And by the mid-1930s, Kahn discovered that parts of his dissertation left untouched by Robinson were no longer new or distinctive because of rapid progress in research on imperfect and monopolistic competition.     

Trade policy,market ‘distortions’, and agriculture in the process of economic development Brazil, 1950–1974

Brazilian agriculture was heavily and increasingly taxed during the 1950–1974 Import Substitution Industrialization process as a consequence of ‘distortions’ in the price structure. The subsidized rural credit policy from the mid 60's benefited only those segments of producers already well-off and more technologically advanced. Thus, the economic policy package of the period was highly selective and discriminatory both between sectors and within agriculture. The article systematically analyses the size and direction of the income transfers involved in this process.     

Does PPP hold in the transition economies? The case of poland Hungary

This paper uses non-stationarity and cointegration of time series to investigate the validity of long-run purchasing power parity for Poland and Hungary for the period 1981:1-1993:2. Long-run PPP is examined vis-à-vis three countries, the United States, United Kingdom and Germany. Although the nominal exchange rates and relative price ratios between Poland and Hungary and each of the three countries are non-stationaary, they are not cointegrated indicating a rejection of the hypothesis. This conclusion is supported by the real exchange rate, which follows a random walk.     

A possible explanation of the ‘Exchange Rate Disconnect Puzzle’: a common solution to three macroeconomic puzzles?

Meese and Rogoff (1983) and subsequent studies find that economic fundamentals are apparently not able to explain exchange rate movements, but we argue that this so-called ‘Exchange Rate Disconnect Puzzle’ arose because researchers such as Meese and Rogoff (1983) did not use the right fundamentals and because they did not allow for the forward-looking nature of exchange rate determination. Further, because they apparently were not aware that financial markets by themselves could not equalize interest rates across countries, they did not properly appreciate that the exchange rate is strongly influenced by agents’ expectations of aggregated differences in local returns. Thus, we believe that the same underlying explanation provided by Ford (2015) and Ford and Horioka (2016a, 2016b) for the Feldstein-Horioka (1980) Puzzle and the PPP Puzzle – namely that financial markets alone cannot achieve net transfers of financial capital and cannot equalize real interest rates across countries – also helps explain why previous attempts to connect changes in the exchange rate to economic fundamentals have not been successful and so can also be said to contribute to solving the Exchange Rate Disconnect Puzzle.