Financial crisis in Southeast Asia: dispelling illusion the Minskyan way

This paper extends Minsky's financial instability hypothesisto the case of the open, ‘liberalised’, economy,making it possible to put forward a specifically Minskyan accountof the road to the financial crisis in Southeast Asia (1997/1998).The analysis suggests that the threats to growth and employmentemanating from the financial sector which Minsky identifiedin the closed economy setting are much intensified in open,liberalised, developing economies. Financial liberalisationis an important key factor in this process. Rival explanationsof the crisis are examined and rejected in favour of the extendedMinskyan explanation. The policy implications are derived anddiscussed.     

Multilateral trade liberalisation helps promote export product diversification: Trade tensions damage the prospects of the poorest economies

Using a large panel dataset over a 20‐year period, this article explores the effect of multilateral trade liberalisation on export product diversification. Empirical results show that multilateral trade liberalisation is positively associated with export product diversification. However, less‐developed economies experience a greater positive effect than relatively advanced economies. This analysis suggests that if trade tensions reduce cooperation on trade matters among World Trade Organization members, it may hinder export product diversification in developing countries, and the poorest countries might be the most adversely affected.     

The Impact of Multilateral Trade Liberalisation on Economic Development: Some Empirical Evidence

This article examines the impact of multilateral trade policy liberalisation on countries' levels of economic development, proxied by their real per capita income. The study is particularly relevant in the current context of growing rhetoric against international trade, which could fuel domestic protectionism and would likely undermine multilateral trade liberalisation. The analysis has been conducted on a panel data set of 155 countries, over non‐overlapping four‐yearly sub‐periods during 1995–2014. The empirical results suggest strong support for the view that multilateral trade liberalisation promotes economic development. Hence, the rise in unilateral protectionist trade measures around the world would likely endanger the prospects of further multilateral trade liberalisation and ultimately undermine countries' prospects of economic development.     

Bad loans,soft budget constraints and the political economy of financial market reform in transition economies

Financial market imperfections and especially the bad debt problem are among the most important factors impeding economic restructuring in transition economies. This paper analyses the implications of non-performing loans for the lending policy of banks and for the ensuing allocation of credit. It is shown that a lending bias exists in favour of old debtors, which not only impedes structural change but may also counteract policies intended to harden budget constraints and to promote restructuring. The paper also discusses from a political economy perspective, why despite these negative implications financial market reforms were not pursued more forcefully in most countries.     

Trade liberalisation,market competition and wage inequality in China's manufacturing sector

Economic reforms of the late 1980s have contributed to rapid economic growth in China. While the overall standard of living has improved, economic growth has also resulted in an increase in income inequality. Rising income inequality can increase social tensions that can impede further economic growth. By making use of firm level panel data, this paper focuses on the impact of increased market competition and trade liberalisation on skilled–unskilled wage inequality in China's manufacturing sector. A theoretical model is used to argue that trade liberalisation and market competition can affect skilled–unskilled wage inequality. Based on this result, an econometric model is specified. The empirical analysis presented in this paper shows that increased trade liberalisation has contributed to an increase in skilled–unskilled wage inequality in China's manufacturing sector. However, increase in market competition has the opposite effect.     

Regional trade and food security in SADC

A number of pertinent questions on regional trade and food security in southern Africa is addressed in this paper, namely: Should a country go it alone or should it belong to a regional trade bloc? Within the SADC region, should countries be content to be cereal importers? How can free trade be phased in? How can intra-SADC trade be expanded? Potentially sensitive agricultural products are listed and the sensitivity in grain milling and cereals is discussed in detail. The major conclusion is that trade in the region can contribute substantially to provide improved food security. There is also considerable scope for greater intra-regional trade in grain and other food products, and for greater cross-border investment in agriculture and agro-industry.     

THE LIBERAL DEMOCRATS AND SUPPLY‐SIDE ECONOMICS

The coalition has given the Liberal Democrats the opportunity to demonstrate their support for – or opposition to – supply‐side economics. The person who has done most on the supply side is Ed Davey, in the Department of Business, Innovation and Skills. In a remarkable legislative achievement for a Parliamentary Under Secretary in under two years in office, Davey ensured that the privatisation of Royal Mail reached the statute books, liberalised the terms and conditions for Post Office counters, and liberalised employment and retirement laws.     

Trade liberalisation and endogenous growth: A q-theory approach

This paper introduces a new approach to the analysis of endogenous growth effects and uses it to illustrate two novel trade-and-growth links. The approach’s simplicity allows us to introduce scale economies and imperfect competition into the R&D and financial intermediation sectors of a Romer–Grossman–Helpman endogenous growth model. We show that trade liberalisation can stimulate growth via a procompetitive effect in the R&D sector and/or financial sector.     

Minimising foreign control of land in an era of globalisation prospects for St. Lucia

Although globalisation is not a recent phenomenon, it is the trend toward trade liberalisation that poses the greatest threat to small countries. The paramount question is how can small states buffeted by the forces of trade liberalisation attract foreign investment while protecting their populations from the foreign control of land. Using St. Lucia as a case study, this paper reviews the existing land tenure system, examines the force of current legislative, fiscal and land use policy instruments used to limit foreign control of land, and presents alternatives for curtailing the potentially negative effect of trade liberalisation on the foreign control of land.     

Making unilateral trade liberalisation beneficial to the poor

In this paper, we investigate the impacts of unilateral import liberalisation by a representative South Asian developing economy, Nepal, and demonstrate those conditions required to make the impacts ‘pro-poor.’ Applying the Computable General Equilibrium model to Social Accounting Matrix data, we conclude that import liberalisation is growth-enhancing but that, unfortunately, the rich benefit more than do the poor. We envisage a restructured but plausible model economy that requires a transformational period of ten years, and simulate unilateral trade liberalisation but, in the context of a dynamic model. We conclude that improvement in efficiency parameters, reorganisation of investment patterns, along with reallocation of factors of production by both household group and activity type are required to make growth accrued by import liberalisation ‘pro-poor’ in developing economies such as that of Nepal.