Global economy gathering strength

Encouraged by a highly expansionary economic policy, the global economy is enjoying a rapid upturn. Utilisation of capacity is high in many sectors, particularly in the growth centres of the USA and East Asia, where China leads the field. With inflationary risks on the increase, most countries are now shifting the focus of economic policy. Fiscal policy in particular can be expected to provide little in the way of further stimulus. In addition, there has been a turnaround in interest rates in many countries. Yet how quickly can the monetary reins be tightened without jeopardising growth or endangering price stability?     

New ways of achieving debt sustainability beyond the enhanced HIPC Initiative

In 1996 the Heavily Indebted Poor Countries (HIPC) Initiative was launched by the Bretton Woods institutions to reduce the external debt burden of low-income countries (LICs) to sustainable levels in a reasonably short period of time because debt constitutes an obstacle to sustainable economic growth and poverty reduction. In some HIPCs, however, debt sustainability has been in danger despite debt relief under the HIPC Initiative. Debt relief is a necessary but not a sufficient condition for development. It can do no more than play a catalytic role. The question, then, is how to achieve debt sustainability beyond the HIPC Initiative.     

Dynamics of the federal funds target rate: a nonstationary discrete choice approach

We apply a discrete choice approach to model the empirical behaviour of the Federal Reserve in changing the federal funds target rate, the benchmark of short‐term market interest rates in the US. Our methods allow the explanatory variables to be nonstationary as well as stationary. This feature is particularly useful in the present application as many economic fundamentals that are monitored by the Fed and are believed to affect decisions to adjust interest rate targets display some nonstationarity over time. The chosen model successfully predicts the majority of the target rate changes during the time period considered (1994–2001) and helps to explain strings of similar intervention decisions by the Fed. Based on the model‐implied optimal interest rate, our findings suggest that there is a lag in the Fed's reaction to economic shocks during this period. Copyright © 2004 John Wiley & Sons, Ltd.     

COUNTERTRADE AS TRADE CREATION AND TRADE DIVERSION

This paper analyzes countertrade as a special case of a customs union in which the countertrade agreement gives rise (as in customs union theory) to both trade-creating and trade-diverting effects. The net effects on welfare are ambiguous. A detailed case study from Egypt and brief examples from other countries illustrate the relevance of this interpretation .     

Drug testing in the transportation industry: The maritime case

The maritime industry provides an interesting case study of the design and implementation of drug-testing programs in the transportation industry during the 1980s. It is clear that such programs were designed and implemented less because of empirical evidence of safety problems than for political reasons. The results in the maritime industry are indicative of a program that is expensive to operate, intrusive with regard to employee privacy, and which will have little or no impact on safety. Focusing such programs on the issue of impairment rather than on the issue of drug usage per se is likely to improve the outcome of the programs. Although, despite common belief, there is little evidence that drug usage or the “drug problem” in U.S. society as a whole had gotten worse in the preceding years (Schonsheck, 1989, 250–251).     

Judo Strategy: 10 Techniques For Beating A Stronger Opponent

The idea of judo economics, building on analogies with the sport of judo, has been around for at least 20 years. But taking these ideas further to judo strategy means that a framework of strategic principles can be developed to help companies put stronger opponents on the mat.