News and Analysis: 4-15 July 11 | EmergingFrontierMarkets.com

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Posted on Fri, 15 July 11:

Lawrence Summers: Time is of the essence, any US budget deal will do, Financial Times, 12 July 11 [courtesy Harvard]:
As the debt negotiators square off in Congress, much attention will focus on the size of the 10-year budget deal they come up with. Usually the media and Wash. take too short a view. Now is the rare time when all need to remember that you only get to the long run through the short run. Given the current weakness of the US economy what is most important is that any budget deal be pushed forward as soon as possible, says fmr Nat'l Econ Council dir/ Harvard prof

Coffee/Tea Room: "World's best airline" awarded in ceremony at Paris Air Show, Skytrax, 22 June 11:
Qatar Airways has been named the world's best airline in a ceremony at the French Air and Space Museum, as part of the Paris Air Show. Known as the Passengers Choice Awards, Singapore Airlines was ranked 2nd, with Asiana Airlines 3rd. Cathay Pacific came in 4th, and Thai International 5th. Over a 10-month survey period, 18.8 mln airline customers from more than 100 nationalities participated in the customer satisfaction survey (Awardees | Survey methodology)

Anne Krueger: Letting the evidence speak, Finance & Development, June-Aug '11:
The most significant increase in understanding in dev't economics in recent years has come from the growth of Randomized Control Trials to learn about the behavior of individuals in poor nations. The intellectual entrepreneurs/ founders of RCTs, Banerjee and Duflo, have synthesized a large number of results and proceeded to draw inferences for policies designed to lift the poor out of poverty in this important book. Turning some of their findings into policy by reallocating current resources can certainly yield large benefits, but the desirability of many of their policy conclusions is worth examining, as are the trade-offs, relative costs, and macro implications, says fmr No.2 at the IMF/ Johns Hopkins U prof (Life on a dollar a day, MIT News, Apr '11)

Posted on Wed, 13 July 11:

Angola's Luanda is world's most expensive city for expats, Karachi is cheapest, Mercer, 12 July 11:
Luanda in Angola is the world's most expensive for the 2nd year running, acc to the latest annual cost of living survey. Tokyo remains in 2nd place and N'Djamena in Chad in 3rd. Moscow follows in 4th place with Geneva in 5th. Karachi is ranked as the world's least expensive city. Two main factors determine a city's ranking: the relative strength or weakness of the relevant currency vs the US dollar, and local price movements over the past year

Jeffrey Frankel: The US gov't races to the cliff, Weblog at Harvard, 11 July 11:
In the '55 movie Rebel Without a Cause, James Dean and a teenage rival race 2 cars to the edge of a cliff in a game of 'chicken'. Both intend to jump out at the last moment. But the other guy miscalculates, and goes over the cliff with the car. This is the game that is now being played out in Wash. over the debt ceiling, says Nat'l Bur Econ Res Bus. Cycle Dating Cmte member/ Harvard prof (Reflection on the nat'l budget talks | Mankiw: Some advice for the Republican Party, 29 June | The blur between spending and taxes, NY Times, Nov '10) [PDF, courtesy Harvard]

Amartya Sen: Quality of life - India vs China, New York Rev of Books, 12 May 11:
The steadily rising rate of econ growth in India has recently been around 8% per year, and there is much speculation about whether and when it may catch up with and surpass China's 10% growth rate. However, while econ growth is important for enhancing living conditions, its reach and impact depend greatly on what we do with the increased income. The relation between econ growth and the advancement of living standards depends on many factors, incl econ and social inequality and, no less importantly, on what the gov't does with the public revenue that is generated by econ growth, says Nobel Laureate '98/ Harvard prof

Posted on Mon, 11 July 11:

EU holds crisis meeting as concern grows over Italy, Der Spiegel, 11 July 11:
There is mounting concern that the debt crisis could spread to Italy, due partly to the nation's high gov't debt and sluggish economy, but also to worries that PM Berlusconi may be trying to thwart efforts by his finance minister to cut spending and get the budget deficit under control. Nervous markets on Fri pushed the risk spread between 10-year Italian gov't bonds and their German equivalents (used as a benchmark) to the highest level since the launch of the single currency. Also, the shares of Italian banks plunged. And it was reported that major hedge funds are targeting the nation

Global shocks to become more frequent, says new study, OECD, 27 June 11:
Disruptive shocks to the global economy are likely to become more frequent and cause greater econ and societal hardship. The econ spillover effect of events like the financial crisis or a potential pandemic will grow due to the increasing interconnectedness of the global economy and speed with which people, goods and data travel, acc to a new report "Future Global Shocks". It analyzes 5 potential major risks in the years ahead: a pandemic, a cyber attack disrupting critical infrastructure, a financial crisis, socio-economic unrest and a geomagnetic storm

Alex Pollock: The bubbles, busts, and bailouts are doomed to repeat, American Banker, 23 June 11 [courtesy Amer Enterprise Inst]:
It is 5 years since the '06 peak of the great housing bubble and time to restate the repetitive lessons of financial history. The panics and crises of 2007/09 and the ensuing post-bubble housing doldrums present a striking case of the recurring patterns. The events have already filled dozens of books in this cycle, but the debates go back at least to 1802, when Henry Thornton ("The Nature and Effects of the Paper Credit of Great Britain") discussed the 'moral hazard', as we now call it, necessarily involved. Our recent financial adventures are memorable, but will they be sufficiently remembered?, asks AEI resident fellow/ fmr Fed Home Loan Bank of Chicago pres

Posted on Fri, 8 July 11:

One Family: Stepping up to the Horn, UN Food Agric Org/ UN World Food Program/ Oxfam, 8 July 11:
From mega-emergencies to headline-grabbing humanitarian crises, the int'l community has stepped up to help those impacted by disaster and tragedy over the last few years. However, 'slow-onset' humanitarian crises, such as the worsening drought in the Horn in Africa, have not received the same attention, leaving millions of people vulnerable to devastating hunger and malnutrition. Unfortunately, we are already behind the curve (East Africa crisis could have been prevented with early action, Guardian)

Joseph Stiglitz: The ideological crisis of Western capitalism, Proj Syndicate, 7 July 11 [courtesy Daily News Egypt]:
Just a few years ago, a powerful ideology - the belief in free and unfettered markets - brought the world to the brink of ruin. Even in its heyday, from the early '80s until '07, US-style deregulated capitalism brought greater material well-being only to the very richest in the richest nation of the world. I was among those who hoped that, somehow, the financial crisis would teach all of us a lesson about the need for greater equality, stronger regulation, and a better balance between the market and gov't, says Nobel Laureate '01/ Columbia U prof

Michael Spence: Globalization and unemployment, Foreign Affairs, 2 June 11 [courtesy author‘s site]:
By relocating some parts of int'l supply chains, globalization has been affecting the price of goods, job patterns, and wages almost everywhere. It is changing the structure of individual economies in ways that affect different groups within those nations differently. In the advanced economies, it is redistributing employment opportunities and incomes. The structural evolution of the global economy today and its effects on the US economy mean that, for the 1st time, growth and employment in the US are starting to diverge, says Nobel Laureate '01/ author of The Next Convergence: The future of economic growth in a multispeed world (2011)

Posted on Wed, 6 July 11:

Raghuram Rajan: Lagarde's challenges, Weblog at Univ Chicago, 6 July 11:
Now that the dust has settled over the selection of the IMF’s managing director, the IMF can return to its core business of managing crises. It is perhaps the central global multilateral econ institution at a time when such institutions are needed more than ever.  Christine Lagarde arrives to lead it at a difficult time. She will have her hands full with 3 important challenges.  We all have a stake in her success, says fmr IMF chief economist/ U Chicago prof    (Terms of appointment of new IMF chief)

Fmr Obama economic adviser warns on debt limit, Marketplace, 1 July 11:
In one of his first interviews since leaving the White House, fmr National Econ Council director Larry Summers says he believes "reason will prevail" in negotiations over the debt limit because a default would spark a second, scarier economic crisis, a "Lehman Brothers on steroids."    (Taylor: In praise of debt limit 'chicken', Wall St Journal, 2 June) [PDF, courtesy Hoover Inst]

One Family: Regional drought causing 'alarming' overcrowding at Kenyan refugee camp, UN News, 30 June 11:
The UN humanitarian agency reported Thu that the number of new arrivals of Horn of Africa drought victims at an already overcrowded refugee camp in northeastern Kenya is growing "at alarming rates." Earlier in the week it estimated that 10 mln people across the Horn of Africa are facing a severe food crisis following a prolonged drought in the region, with some areas of Djibouti, Ethiopia, Kenya, Somalia, Ethiopia and Uganda, experiencing their worst drought conditions in 60 years    (Millions facing severe food crisis amid worsening drought in Horn of Africa)

Posted on Mon, 4 July 11:

Thailand seen holding onto crown of 'Detroit of Asia', Reuters, 6 Mar 11 [courtesy Moneycontrol/ India]:
Half a world away from the streets of Michigan, General Motors is getting ready to roll its first diesel engine out of a recently opened factory in eastern Thailand. Welcome to the 'Detroit of Asia', a vast area 120 km east of Bangkok, where durian orchards have given way to car plants over the past decade and vehicles are made for export to more than 200 nations (Thailand's election and the rural debt trap, BBC News, 29 June | The rich complexity of village life, Minneapolis Fed, June '11)

Jagdish Bhagwati: Why free trade matters, Project Syndicate, 25 June 11 [courtesy Malaysian Star]:
The argument that historical experience supports the case for protectionism is flawed. The econ historian Douglas Irwin has challenged the argument that 19th-century protectionist policy aided the growth of infant industries in the US. He has also shown that many of the 19th century's successful high-tariff nations, such as Canada and Argentina, used tariffs as a revenue source, not as a means of sheltering domestic manufacturers, says NY Council on Foreign Relations senior fellow/ Columbia U prof

What they don't tell you about capitalism - Q&A with Cambridge U's Ha-Joon Chang, European Financial Rev, Feb-Mar '11 [courtesy World Fin Rev]:
The author of 23 Things They Don't Tell You About Capitalism (2010), Bad Samaritans: Rich nations, poor policies and the threat to the developing world (2007), and Kicking Away the Ladder: Development strategy in historical perspective (2002) answers some of the most important questions on the history of capitalism, the free market myth, his views on the effect of neo-liberal economics on the world's poorer countries, and the future of the world system and international development

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