Monetary unions, external shocks and economic performance: A Latin American perspective

During the last few years there has been a renewed analysis in currency unions as a form of monetary arrangement. This new interest has been largely triggered by the Euro experience. Scholars and policy makers have asked about the optimal number of currencies in the world economy. They have analyzed whether different countries satisfy the traditional “optimal currency area” criteria. These include, among other: (a) the synchronization of the business cycle; (b) the degree of factor mobility; and (c) the extent of trade and financial integration. In this paper I analyze the desirability of a monetary union from a Latin American perspective. First, I review the existing literature on the subject. Second, I use a large data set to analyze the evidence on economic performance in currency union countries. I investigate these countries’ performance on four dimensions: (a) whether countries without a national currency have a lower occurrence of “sudden stop” episodes; (b) whether they have a lower occurrence of “current account reversal” episodes; (c) what is their ability to absorb international terms of trade shocks; and (d) what is their ability to absorb “sudden stops” and “current account reversals” shocks. I find that belonging to a currency union has not lower the probability of facing a sudden stop or a current account reversal. I also find that external shocks have been amplified in currency union countries. The degree of amplification is particularly large when compared to flexible exchange rate countries.     

多维视角下农村贫困的测度与分析

近年来,学者和政策制定者逐渐将贫困的研究视角从单一的收入贫困扩展到多维贫困。文章基于CFPS的2010年基线调查数据,采取Alkire和Foster提出的双界限方法,根据《中国农村扶贫开发纲要(2011-2020)》提出的目标任务选取贫困维度,对我国农村的多维贫困进行了测度,并对测度结果进行了稳健性分析。测度结果表明,我国农村多维贫困状况比收入贫困状况恶劣。维度分解结果表明,社会保障和生活质量等维度的剥夺情况比较严重。地区分解结果显示,西部地区被剥夺状况高于中、西部地区。稳健性分析结果显示,测度结果对权重的选取是稳健的。因此,我国在此10年中,应从多维视角识别农村贫困,有针对性地提高扶贫政策的有效性。     

GOVERNANCE INSTITUTIONS AND PRIVATE INVESTMENT: AN APPLICATION TO THE MIDDLE EAST AND NORTH AFRICA

This paper addresses the issue of the low level of private investment in the Middle East and North Africa (MENA) region, with special emphasis on the role of governance. Based on the existing published reports, we categorize what types of governance institutions are more detrimental to entrepreneurial investments. We then estimate a simultaneous model of private investment and governance quality where economic policies concurrently explain both variables. Our empirical results show that governance plays a significant role in private investment decisions. This result is particularly true in the case of “administrative quality” in the form of control of corruption, bureaucratic quality, investment‐friendly profile of administration, law and order, as well as for “political stability.” Evidence in favor of “public accountability” is also found. Our estimations also stress that structural reforms like financial development, trade openness, and human development affect private‐investment decisions directly, and/or through their positive effect on governance.     

A search for robust East Asian development models after the financial crisis: mutual learning from East Asian experiences

The purpose of this paper is to search for new robust East Asian economic development models following the financial crisis. Specifically, this paper addresses both robustness and sustainability of Korea’s Chaebol-led model, Taiwan’s SMEs-led model, and Malaysia’s FDI-led model, respectively. East Asia’s new development paradigm can be reformulated not only by adopting and learning advanced financial innovations of global standards in the framework of Gershenkron’s “advantages of backwardness,” but also in the concept of “mutual learning” from both strengths and weaknesses of development models of the three countries. East Asia has neglected too long some inherent wisdoms that are contained in its “miracle models,” yet it shows that their different paths to development may lead to a positive policy convergence.     

Future directions in development studies: The case of decentralization

The study of decentralization is used as a case study to illustrate three current conceptual and operational problems in development studies as a whole: the use of language; the relationship between theory and practice; and the legitimacy of “development” as a separate field of study. The conclusion is that future studies of decentralization — and possibly other dimensions of development studies — should include detailed empirical studies, adopt a “contingency” approach to policy evaluation and utilize “developmentalist” approaches in both the so-called developed and developing nations.     

“Sustainable development” in Pacific micro-economies

This paper argues that the central economic problem for a number of very small Pacific Island economies is the preservation and enhancement of their status as rentier societies, and the relatively high living standards (vis-à-vis other developing countries) which go with the status. The thrust of most development planning in the region, with its focus on “sustainable” expansion of productive activity, is misdirected in these small countries. It is not productive activity, but rent entitlements, which must be sustained and reproduced over time. Aid, philately, and migrant remittances are not merely supplements to local incomes; they are the foundations of the modern economy. Insofar as conventional “development projects” crowd out aid and remittance entitlements, their impact is immiserizing. Criticism is offered of a recent argument for returning to sustainable subsistence economies.     

Understanding the investment of renewable energy firms in the face of economic policy uncertainty – Micro-evidence from listed companies in China

With the development of renewable energy, the current support for China's renewable energy industry has gradually shifted from “helping its development and expansion” to “helping it resists systemic risks and strengthens market competition”. Therefore, there is an urgent need to study how the strategic investment of renewable energy companies is affected by economic policy uncertainty. This paper first robustly explores the non-linear relationship between strategic investment and economic policy uncertainty of Chinese renewable energy enterprises. Then from the three perspectives of the relationship between the government and renewable energy enterprises, the characteristics of renewable energy enterprises, the response of the product market and financial market to renewable energy, this paper innovatively explores how different dimensions will adjust the non-linear relationship between strategic investment of renewable energy enterprises and economic policy uncertainty. The analysis in this paper closely relies on the characteristics of the renewable energy industry at this stage, so our conclusion can provide a reference for the government to formulate the development plan of renewable energy enterprises scientifically and prudently.     

The sophistication of exports: Is China special?

Recent studies have found that China is “special” in exporting highly sophisticated goods not comparable with its income level. In this paper we identify two measurement biases that account for this “China is special” observation. First, product quality has not been fully considered in the measurement of sophistication, which has caused an overestimation of the sophistication of China's exports. Second, the average income of China has been used to measure the export capability of China, which has caused an underestimation of China's capability of exporting sophisticated goods. After correcting the two measurement biases, China appears much less as an outlier in the cross-country comparison of the sophistication of exports.     

从“国际政治”到“国际关系”——审视世界强联结时代的国际关系本体论北大核心

以新现实主义为代表的主流国际关系理论建立在单一本体论基础上,在单元层次上趋于把构成国际体系基本单位的国家视为权力单位,在关系层次上把国际关系简化为一种权力关系,在体系层次上把国际体系视为一种更接近物理系统的简单系统。而在批评新现实主义基础上形成的各种国际关系理论流派也未能很好地解决国际关系本体论的单一性问题。作者在梳理学术界对国际关系本体论思考的基础上,探索性地提出一个逻辑上自洽的国际关系本体论基础,从而使国际关系研究跳出“政治学囚笼”,置于一个新的本体论基础之上。新本体论三个层次的特点是:在单元层次,构成国际关系的单元是考虑了文明体与组织体两个侧面的多元国家;在关系层次,国际关系是一种由人类多维活动构成的复杂网络;在体系层次,国际关系是人类在国际场域中多元社会共现的演化系统。世界强联结时代出现的一些新特点支持新的本体论思考:人类多维活动被深度卷入国际场域的现实支持从多元、多样的视角看待国际行为体;国家行为体强联结的现实支持把国际关系模式视为一种多维复杂的关系网络;国家间因深度互动而出现“共同体化”的趋势支持把国际体系视为“多元社会共现”的文明演化过程。     

Does information technology raise Japan's productivity?

A standard growth accounting exercise indicates that, after Japan's “lost decade,” its overall total-factor-productivity (TFP) growth has increased notably since 2000. This productivity revival has been limited, however, to information technology (IT) production—has not been a broad-based productivity acceleration like that seen in the United States after the mid-1990s. This paper examines the relationship between IT and productivity gains by employing the “augmented” growth accounting framework for Japanese industry-level data from 1975 through 2005. In particular, we estimate “purified” technology change at industry level by accounting for cyclical mismeasurement of inputs. We find that the post-2000 increase in overall TFP growth does indeed appear to arise from an increase in technological change. Furthermore, the pickup in technology growth has occurred not only in the production of IT but also in the industries that use IT intensively. Our results suggest the possibility that stories of IT as a general purpose technology (GPT) could apply to Japan as well as to the United States.     

Paradox of Empowerment: Reflections on a Case Study from Northern Ghana

In recent years the “development” industry has began to incorporate into its vocabulary notions about the “empowerment of the poor,” “participatory democracy,” “gender in development” etc. as part of a strategy for poverty alleviation in the developing world. This paper critically examines the notion of participation as the basis of empowerment in the context of a joint Canadian–Ghanaian financed rural development project in the Northern Region of Ghana. The paper argues that because of the inherent goodness of the notion of participation, it has become a substitute for the structural reforms needed for social change. The paper raises questions not just about the terms and mode of participation but further points out that reference to the term “village” or “community” as the basis of participation is simplistic and problematic. The paper also questions the feasibility of the institutional and administrative structures within which such concepts may be realized.     

CEO Overconfidence and Management Forecasting

This paper examines how overconfidence affects the properties of management forecasts. Using both the “over‐optimism” and “miscalibration” dimensions of overconfidence to generate our predictions, we examine three research questions. First, we examine whether overconfidence increases the likelihood of issuing a forecast. Second, we examine whether overconfidence increases the amount of optimism in management forecasts. Third, we examine whether overconfidence increases the precision of the forecast. Using both options‐ and press‐based measures to proxy for individual overconfidence, we find support for all three research questions.     

Between micro and macro — what economic history can learn from modern economics

Abstract

The aim of this paper is to discuss the role of economic history to modern economic theory. Taking my point of departure from the division that still haunts economic history — between micro and macro approaches — the paper argues that economic theory today is significantly different from what it was only twenty or thirty years ago. Hence, for example, the division between micro and macro has been upset in modern economics. Also the development of institutional economics, the use of concepts like “bounded rationality” or “path dependence” makes it necessary for economic historians to learn from and confront modern economic theorizing. Many economic historians criticise a version of (neo-classical) economics) that belongs rather to the past than to the present.     

Does financial development help to align growth opportunities with growth? Evidence from industry-level data

Financial institutions are expected to play a crucial role in reallocating resources in favor of industries facing greater global and local shocks to growth opportunities. Fisman and Love, in their paper entitled “Financial development and intersectoral allocation: A new approach”, argue that growth opportunities are unobservable and propose a new methodology to test the capital allocation hypothesis. The methodology is based on correlations in the patterns of intra-industry growth between two countries and similarities in the level of financial development and income. This paper extends their methodology by proposing direct and forward-looking measures of local and global growth opportunities, obtained by interacting the country’s patterns of industrial specialization with industry-level price-earnings ratios, as in the paper “Global growth opportunities and market integration” by Bekaert et al. The results, obtained in a cross-section framework including 37 developed and developing countries over the period 1992–2006, confirm the relevance of financial development to promote economic growth and to help industries in taking advantage of global and local growth opportunities. They also show that the methodology developed by Fisman and Love can be extended to include direct measures of growth opportunities.     

“中国道路”的接续探索与时代价值

“中国道路”的发展“奇迹”引起了国内外专家学者热议,有赞誉,有指责;有肯定,也有否定,呈现出多种思考与议论。针对这些热议,需要坚持“历史与逻辑”相统一的辩证唯物主义立场来认识“中国道路”演化的系统性和必然性,进而领会“中国道路”的时代价值。“中国道路”创新和丰富了世界现代化发展模式。将“中国道路”的“历史起点和逻辑起点”放在宏观时空环境中来观察分析,以期深刻揭示选择走“中国道路”的必然性;同时秉持历史唯物主义基本立场和观点,坚决批判历史虚无主义,树立“道路自信”。     

Understanding the role of leadership in economic policy reform

A demand for coherent policy leadership characterized by its commitment to advance a consistent set of policy principles arises from the various sources of “governance failure” that account for the observed unevenness in implementing the “Washington consensus.” This paper examines how a “conspiratorial” network established itself as a collective source of such leadership in New Zealand by interacting in a way which developed a high level of mutual trust and by penetrating and reconstituting a fragmented structure of insulated policy networks.     

Poverty Alleviation and Tropical Forests—What Scope for Synergies?

This paper explores the “state-of-the-art” of the two-way causal links between poverty alleviation and natural tropical forests. Microimpacts of rising poverty can increase or slow forest loss. At the macrolevel, poverty also has an ambiguous effect, but it is probable that higher income stimulates forest loss by raising demand for agricultural land. The second question is what potential forest-led development has to alleviate a country's poverty, in terms of producer benefits, consumer benefits and economy-wide employment. Natural forests widely serve as “safety nets” for the rural poor, but it proves difficult to raise producer benefits significantly. Urban consumer benefits from forest, an important target for pro-poor agricultural innovation, are limited and seldom favor the poor. Absorption of (poor) unskilled labor is low in forestry, which tends to be capital-intensive. Natural forests may thus lack comparative advantage for poverty alleviation. There are few “win–win” synergies between natural forests and national poverty reduction, which may help to explain why the loss of tropical forests is ongoing. This may have important implications for our understanding of “sustainable forest development” and for the design of both conservation and poverty-alleviation strategies.     

Mind the Gap: Why Do Experts Have Differences of Opinion Regarding the Sufficiency of Audit Evidence Supporting Complex Fair Value Measurements?

Reported deficiencies continue to persist in audits of fair value measurements and other complex accounting estimates (hereafter, “FVMs”), despite improvements in auditor performance observed by regulators. The persistence of reported deficiencies in audits of FVMs suggests that factors underlying this trend may be more complicated and multidimensional than previously suggested by regulators and academic research, which has focused largely on auditors' unsatisfactory performance as the principal source of reported deficiencies. Drawing from the judgment and decision‐making expertise literature, we gather field‐based data from audit experts to identify additional factors that are likely to be contributing to differences of opinion between audit and inspection experts and the persistence of reported deficiencies in audits of FVMs. We find evidence that audit experts interpret standards and evaluate audit evidence differently than inspectors, and thus perceive there to be a gap between what auditors and inspectors regard as sufficient appropriate audit evidence to support audits of FVMs (hereafter, “FVM gap”). Moreover, results highlight several areas in audits of FVMs where differences of opinion exist between auditor and inspector experts regarding what constitutes a reported deficiency. Within the contexts we examine, our results identify additional factors, beyond deficient auditor performance, that may contribute to the FVM gap. We also report audit partners' recommendations for ways to reduce the FVM gap and suggest avenues for future research. Gaining a more complete understanding of sources contributing to reported deficiencies will help regulators, standard setters, audit firms, and academics to identify ways to reduce the FVM gap and reported deficiencies in audits of FVMs.     

Economics as Theology: Adam Smith's Wealth of Nations

Adam Smith's Wealth of Nations may be read as a work of natural theology similar in general style to Newton's Principia. Smith's ambiguous use of the word “nature” and its cognates implies an intended distinction between a positive sense in which “natural” means “necessary” and a normative sense in which “natural” means “right.” The “interest” by which humans are motivated is “natural” in the first sense, but it may not bring about social outcomes that are “natural” in the second sense. It will do so only if the social institutions within which agents seek their own “interest” are well formed. Smith provides a large-scale, quasi-historical account of the way in which well-formed institutions gradually develop as unintended consequences of private “interest.” In so doing, he provides a theodicy of economic life that is cognate with St. Augustine's theodicy of the state as remedium peccatorum. “If a great book such as Smith's Wealth of Nations is read repeatedly, on even a fifth or a tenth reading one continues to learn new things. I doubt whether anyone will ever fully apprehend all the things that Smith wished to express, and there is even more to learn from an interesting mind than its owner wished to teach us.” George Stigler (1982, p. 108)     

Accountability In Practice: Mechanisms for NGOs

This paper examines how accountability is practiced by nongovernmental organizations (NGOs). Five broad mechanisms are reviewed: reports and disclosure statements, performance assessments and evaluations, participation, self-regulation, and social audits. Each mechanism, distinguished as either a “tool” or a “process,” is analyzed along three dimensions of accountability: upward–downward, internal–external, and functional–strategic. It is observed that accountability in practice has emphasized “upward” and “external” accountability to donors while “downward” and “internal” mechanisms remain comparatively underdeveloped. Moreover, NGOs and funders have focused primarily on short-term “functional” accountability responses at the expense of longer-term “strategic” processes necessary for lasting social and political change. Key policy implications for NGOs and donors are discussed.