News and Analysis: 22 Oct-2 Nov 12 | EmergingFrontierMarkets.com

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Posted on Fri, 2 Nov 12:

Wagner and Weitzman: Was Hurricane Sandy the 'fat tail' of climate change?, Wall Street Journal, 1 Nov 12:
Call them 'black swans', 'unknown unknowns', 'fat tails', or '10-foot women'. Whatever you call them, they’re bizarre events. They shouldn't happen. Usually they don't happen, but every once in a while they do happen, and then their impact makes daily events mere noise. This week, one did happen. Sandy and its aftermath have all the characteristics that make fat tails such unique and frightening events, say Environmental Defense Fund economist, and Harvard prof

How economist Jonathan Gruber became 'Mr.(Health) Mandate', MIT News, 29 Oct 12:
Earlier this year, the NY Times called Jonathan Gruber 'Mr. Mandate'. And with good reason: his in-depth modeling of health-insurance markets helped create the legislation for mandatory private insurance that is near the center of the US pres'l election. Gruber's work helped convince Romney, then governor of Massachusetts, to sign an '06 bill mandating insurance, with subsidies if needed, for all state residents. And when Pres Obama took office in '09, the White House enlisted Gruber as a key numbers-cruncher on health care

Resurrecting industrial policy, OECD Observer, 3 Aug 12:
The term 'industrial policy' is divisive: to some it means meddling govts, choosing national champions and cramping markets, to others it means simply that govts will sometimes need to make strategic choices about where to invest, be it in research and innovation, infrastructure or skills. For a variety of reasons, there is a resurgence of interest in industrial policy, with some of it moving away from the promotion of national champions, to 'softer' forms of support or encouragement (Bhagwati: Free trade ad nauseam, Proj Syndicate) [courtesy Amer Interest]

Posted on Wed, 31 Oct 12:

FDI flows retreated in the 1st half of '12, Unctad revises down its f 'cast, Global Investment Trend Monitor, 23 Oct 12 [PDF]:
Global foreign direct investment (FDI) inflows declined by 8% in the 1st half of '12, as the econ recovery suffered new setbacks in the 2nd quarter. Unctad now projects that FDI flows will, at best, level-off in '12. The slow and bumpy recovery of the global economy, weak global demand and elevated risks related to regulatory policy changes continue to reinforce the wait-and-see attitude of many transnational companies toward investment abroad

Making a stamp on the world, Univ Chicago, Oct-Dec '12:
Some economists have the reputation of providing insight only in hindsight--when it's too late to be useful--or of labeling the world's enormous socio-economic problems as too big to solve. That's not good enough, say the young crop of economists who are out to tackle the intractable. Of that breed, Dean Karlan, a Yale prof, has taken on perhaps the largest and most elusive problem: global poverty (Q&A with Karlan)

The expanding global middle class (Infographic), Reuters, Jan '12:
For the 1st time in history, a truly global middle class is emerging. By 2030, it will more than double in size, from 2 bln today to 4.9 bln. Brookings Inst's Homi Kharas estimates that Europe's and US middle classes will shrink from 50% of the total to just 22%. Rapid growth in Asia will cause its share of the new middle to more than double from its current 30%. By 2030, Asia will host 64% of the global middle class and account for over 40% of global middle-class consumption (Surging BRIC middle classes are eclipsing global poverty, CSMonitor)

From our archive (20 June 11): Kharas--Can the Asian middle class come of age?, East Asia Forum/Australia, 12 June 11
Most South/East Asian economies have passed the World Bank's threshold of a per capita GDP of $1,000 to become classified as middle-income nations. A global middle class is best defined by the spending of households, not the income available to the economy. When households can afford small luxury items, when they can purchase consumer durables like cellphones, cars, motorcycles, refrigerators, maybe own their house, then they can be classified as members of a global middle class, says Brookings Inst senior fellow

Posted on Mon, 29 Oct 12:

Hassett and Mathur: Consumption and the myths of inequality, Wall St Journal, 25 Oct 12 [courtesy Amer Enterp Inst]:
Inequality has been a central theme to Democratic campaigns across the US this year. We hear that the gains from econ growth accrue to the highest-income earners while the standard of living of the poor and middle America stagnates, and the gap between the richest and the poorest grows ever wider. That portrait of the nation is wrong, say Romney adviser/Inst econ policy dir, and Inst resident scholar (A conversation on the economy: Stiglitz and Krugman, Inst New Econ Thinking)

Reverse brain drain: Economic shifts lure migrants home, CSMonitor, 21 Oct 12:

[Ed.'s note: The "censorship gremlin" is again upon us. While we can link to the articles above/below, it is causing our software NOT to be able to do so here. So pls copy/paste this link to your browser.] <www.csmonitor.com/content/view/full/590175>

'Brain drain'--the flow of intellect and skilled labor from poor to rich nations--has been so constant in modern times that the Nigerian cabdriver who was educated as a doctor back home is just as much a fixture of NY City's landscape as a fledgling Broadway actress or Wall St banker. College-educated engineers from Brazil to China to Poland have long set off for the developed world for better opportunities, sometimes in their own fields, often behind steering wheels or in restaurant kitchens. But now that tide is turning

Net private capital flows to emerging markets set for modest decline in 2012, Inst Int'l Finance, 13 Oct 12:
Private flows to emerging markets are forecast to reach $1,026 bln in '12, rising modestly to $1,100 bln in '13. This represents an upward revision of the forecasts in June, but total private flows nevertheless remain significantly lower than their historic high of '07. "The '13 forecasts reflect a balance of 2 opposing factors---a weaker global growth environment, countered by more monetary stimulus. On balance, the institute projects the 1st increase in private capital flows to emerging economies since '10," says its chief economist

Posted on Fri, 26 Oct 12:

Wolf and Godges: What drives income inequality?, Rand Review, Oct-Dec '12:
Income inequality, which became the principal concern of the Occupy Wall St movement, has remained a prominent issue throughout a presidential campaign season focused on the economy. Unfortunately, the ongoing debate emphasizes its magnitude and the changes in it. The debate neglects why it occurs, which reasons are good and which are not, and what, if anything, to do about it, say Rand's chair in int'l econ, and Review editor (Obamanomics: A counterhistory, NY Times) [PDF, courtesy Harvard]

Emerging markets--Politics is back, with more divergence, Eurasia Group, 18 Oct 12:
Politics will increasingly dominate policy in emerging markets (EMs) over the next several years. As global growth slows, EM policy makers must adjust to a harsher econ environment while juggling new domestic political and socioeconomic challenges. Their trajectories are set to diverge significantly. As EMs grapple with slower econ growth and rising political challenges, the critical variable for anticipating the quality of their policy responses is the level of political capital their leaders currently enjoy

The OECD strategy on development: Giving fresh impetus to a core mission, OECD Observer, 3 Aug 12:
In May '12, OECD's ministerial council endorsed the "strategy on dev't", describing it as an essential tool for adapting the org's work to fast changing realities. What are the factors behind the new strategy and what are the aims? A key to the answer lies in understanding the founding mission of the org. In fact, the word 'development' in the org's title was chosen precisely to underline the point that, as well as boosting growth in member nations, a key goal would be to share the lessons of the post-war era beyond the developed world

Posted on Wed, 24 Oct 12:

Entrepreneurship getting easier globally, says 'Doing Business Report', Int'l Fin Corp/World Bank, 22 Oct 12:
Entrepreneurs around the world are finding it's easier to do business today than at any time in the last 10 years--a trend likely to result in more jobs. That's a key message of the just-released joint IFC-WB 2013 Doing Business report, an annual measure of 185 economies on the ease of starting and operating a local business. Singapore tops the rankings, followed by Hong Kong, New Zealand, US, and Denmark (Full rankings)

Slow progress in closing global economic gender gap--report, World Economic Forum, 24 Oct 12:
The latest annual Global Gender Gap Report ranks Nordic countries in top spots, with Iceland (1st), Finland (2nd), Norway (3rd) and Sweden (4th) having closed over 80% of their gender gaps. At the bottom of the rankings, some nations still need to close gender gaps of almost 50%. The report ranks 132 nations on their ability to close the gender gap in 4 key areas: access to health care, access to education, political participation and econ equality

Romney gains, but Obama still favored by electronic markets, Univ Iowa, 18 Oct 12:
Romney has been making a comeback on the Iowa Electronic Markets in recent weeks, but Obama is still a 2-to-1 favorite to win the popular vote in Nov. A contract for Romney was selling for 34.5 cents on the 'Winner Take All' market, which means traders believe there is a 34.5% chance that he will win, while Obama was selling for 66 cents, which means traders believe there is a 66% chance he will win the popular vote (Latest Iowa data | Intrade's data [in Ireland]: Obama versus Romney | How to make money on the pres'l prediction markets, PBS)

Posted on Mon, 22 Oct 12:

Side effects of Fed's monetary easing: Asian policy makers fight back, CNBC, 22 Oct 12:
The troubling side effects of 'quantitative easing' in the US are fast becoming evident in Asia, with policy makers in the region facing increasing pressure to step in and stem the rise in their currencies. The Hong Kong central bank was the latest to intervene in the currency market. Currencies incl the Chinese yuan, Korean won and Singapore dollar have seen the greatest appreciation in their value vs the US dollar (Hong Kong to embark on journey of monetary easing?, MarketWatch) [via Oanda]

Romney adviser John Taylor and Nobel laureate Kenneth Arrow diverge on economy, Stanford Daily, 10 Oct 12:
The two economists engaged in a freewheeling and disjointed conversation about a host of issues, ranging from budgetary concerns to assessments of US health care. Taylor was reticent to comment on specific issues, such as the particular tax loopholes that would be closed under a Romney admin. Arrow then began a discussion of the need for gov't spending at a time when interest rates bottom out, as in the '08 financial crisis (Obama/Romney advisers debate economy, Columbia Daily Spectator) [courtesy Hubbard's site]

Honduras 'model city' plan in the spotlight, Council on Hemispheric Affairs, 4 Oct 12:
US economist Paul Romer developed the idea of the 'charter city', which would be separate from the rest of a nation and administered by foreign gov'ts, comparable to Hong Kong. The plan is moving forward in Honduras, following a '11 constitutional amendment to allow for the new cities, but Romer and the rest of a transparency commission that was meant to oversee the process resigned en masse in Sep (Romer on what happened in Honduras, Marginal Revol. | Can importing well-run cities into poorly-run nations lift the world from poverty?, Fast Co.)

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