News and Analysis: 30 July-10 Aug 12 | EmergingFrontierMarkets.com

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Posted on Fri, 10 Aug 12:

Global economy ripe for 'spillovers'; IMF urges action by 'Systemic 5', Deutsche Boerse MNI News, 2 Aug 12:
Having taken on the challenge of directly addressing how major economies pose risks to each other and their smaller neighbors, the IMF said Europe needs 'urgent' and far reaching policy changes, the US should fix its fiscal policy, China must brace for any slowdown, Japan should speed up its escape from deflation and the UK should rebuild confidence in its financial institutions. The IMF's annual spillover reports examine the external effects of domestic policies in these 'Systemic 5' economies

Amartya Sen: What happened to Europe?, New Republic, 2 Aug 12:
About 50 years ago, Jean-Paul Sartre complained about the state of Europe. "Europe is springing leaks everywhere," he wrote. He went on to remark that "it simply is that in the past we made history and now history is being made of us." He was undoubtedly too pessimistic. Many major achievements of great significance have occurred in the last half-century since his lament, incl the emergence of the European Union. There is indeed a long-run historical contrast to which Sartre could have pointed, says Nobel Laureate '98/Harvard prof

US, too, wants to bolster investment in a continent's economic progress, NY Times, 9 Aug 12 [courtesy Ctr Glob Dev't]:
When Secy of State Clinton landed in South Africa this week, she brought along a hefty delegation of execs from some of America's leading companies and a message: America is ready to invest in Africa. There was a time in the not-too-distant past when a trip to Africa by a senior US official would focus largely on humanitarian aid and dev't assistance to hopelessly poor, war-torn nations. No more. These days, the continent is widely seen as the next frontier for econ growth

Posted on Wed, 8 Aug 12:

Eight of the world's top young economists discuss: where is economics going?, Big Think, 25 July 12:
The past few years have been tough on economics and economists. To get the pulse of a field in flux, we asked 8 of the world's top young economists to identify the biggest unanswered questions in economics and predict what breakthroughs will define it a decade or two hence. Here are the views of Nicholas Bloom (Stanford), Raj Chetty (Harvard), Gauti Eggertsson (NY Fed), Xavier Gabaix (NYU), Gita Gopinath (Harvard), Peter Leeson (George Mason), Glen Weyl (Chicago), and Justin Wolfers (Pennsylvania)

Richard Florida: For creative cities, the sky has its limit, WSJ, 27 July 12 [PDF, courtesy Creative Class]:
Ours is the century of the city. For the 1st time in history, more than half of the people in the world live in cities. Over the next 50 years we will spend trillions of dollars on city building. The question is: How should we build? For many economists and urbanists, the answer is simple: We should build up. But it's not enough to build tall if people aren't thrown together to interact--just look at Shanghai vs New York, says author of a new book The Rise of the Creative Class, Revisited /U Toronto's Martin Prosperity Inst dir

Playing Field: Medals table - The alternative rankings for London 2012, BBC News, 30 July 12:
Every 4 years, about 200 nations compete at the summer Olympics. But statistically, the playing field is uneven. The bigger a nation's population, for example, the bigger its pool of potential athletes. Wealth is important too, not only because a rich nation can provide better sports facilities. So here is an interesting thought experiment. Based on its size and wealth, how many medals should we expect a nation to win? (Numbers game, Foreign Policy)

Posted on Mon, 6 Aug 12:

Joseph Stiglitz: America's prosperity requires a level playing field, Los Angeles Times, 22 July 12:
Despite what the debt and deficit hawks would have you believe, we can't cut our way back to prosperity. No large economy has ever recovered from serious recession through austerity. Any solution to today's problems requires addressing the economy's underlying weakness: a deficiency in aggregate demand. Firms won't invest if there is no demand for their products. And one of the key reasons for lack of demand is the level of inequality, says Nobel Laureate '01/fmr World Bank chief economist

John Cochrane: Myths and facts about the gold standard, WSJ, 28 July 12 [courtesy Stanford's Hoover Inst]:
While many people believe the US should adopt a gold standard to guard against inflation or deflation, and stabilize the economy, there are several reasons why this reform would not work. Let's start by clearing up a common misconception. Rep. Ron Paul's attraction to gold, and Fed Chair Bernanke's biggest criticism, is that a gold standard implies an end to monetary policy and the Fed. It does not, says Inst senior fellow/U Chicago prof (An anchor of gold, Richmond Fed) [PDF]

Mining could spur Africa's industrialization, but resource-curse risks persist, Engineering News/S Africa, 20 July 12:
An industrial development strategy could be built on the back of Africa's natural resources, demand for which is being underpinned by Asia's current resource-intensive growth path. But a group of leading economists have cautioned that success will depend on the implementation of policies that support both domestic value-added and domestic enterprises able to supply into the mining sector's value chain (Frankel: Why natural resources are not always a good thing, Milken Inst Rev) [DOC, courtesy Harvard]

Posted on Fri, 3 Aug 12:

Edward Lazear: Slow recovery or failed agenda?, WSJ, 30 July 12 [courtesy Hoover Inst]:
Pres Obama has a tough task ahead of him. He must convince the American voter that the economy is improving and that he deserves the credit. At the same time, he must make the case that the blame for the slowness of the recovery lies with others. How might he make his case? And what facts might Republican challenger Romney use to counter his claims?, asks fmr chair of Pres G W Bush's Council of Econ Advisers/Stanford prof (El-Erian: America's constrained choice, Proj Synd) [courtesy Mmegi/Botswana]

Frieden, Pettis, Rodrik and Zedillo: Don't count on enhanced global governance, VoxEU, 26 July 12:
We are sympathetic to the desire for substantially increased intl. cooperation, but profoundly sceptical that it will materialize. For several reasons, it is likely to be extremely difficult to achieve further advances. This makes it particularly important to pick and choose the battles most likely to be won. If govts are to spend precious political capital to attempt to expand cooperative ventures, it makes sense to try to ensure that the attempt is made where it is most needed and most likely to succeed, say profs from Harvard (2), Yale, and Carnegie Endow. senior assoc

Is manufacturing on the way back?, OECD Observer, 23 July 12:
Politicians, economists and voters in the industrial nations have stomped the boards lamenting the loss of manufacturing jobs. Some point to the shift in the econ center of gravity towards emerging markets and the need for firms to be where the demand is; others criticize outsourcing and relocation of firms from industrial nations to developing nations to cut labor costs and increase margins; still others blame labor-replacing technology. Is it a serious proposition to win back manufacturing activity after years of decline and if so, how?

Posted on Wed, 1 Aug 12:

Grid failures a 'wake up call' for aspiring India, AFP, 1 Aug 12 [courtesy Khaleej Times/UAEmirates]:
The worst power outage in India's history represents a 'wake up call' over the failure of the creaking electricity system to keep pace with the growth of Asia's 3rd-largest economy, analysts said. The govt. traced the immediate cause of Tue's outage which came just a day after a massive power failure Mon. But India's energy problems are more than simply indisciplined state electricity boards tapping an overburdened grid--they go to the heart of the nation's aspirations to be a rising econ power, experts said

From old taboo to new consensus -- 'Industrial policy' and 'competitive industries', World Bank (blog), 12 June 12 (Part 2):
Jump-starting job growth through new approaches to industrial policy was the topic of the final public event convened by WB Chief Economist Lin, assembling a distinguished group of policymakers and policy-watchers--incl Nobel Prize Laureate Stiglitz. Even the formidable intellectual firepower of Lin and Stiglitz, however, must still contend with an unreconstructed remnant of free-market dogmatists who dwell in some libertarian echo chambers of Washington and Wall St

Have free markets failed us?, Richmond Fed, Mar/May '09 [PDF]:
Is it merely a coincidence that living standards rose sharply and absolute poverty declined while the world embraced free market policies beginning in '80? That's the question Harvard's Shleifer ponders in his recent essay. He names the period between 1980 and 2005 as the 'Age of Milton Friedman' to acknowledge the adoption--at least in modified form--of many of his proposals (Rodrik: Friedman's magical thinking, Proj Synd) [courtesy Social Eur J] (Ed.'s note: These links are posted on the occasion of what would have been Friedman's 100th birthday on 31 July)

Posted on Mon, 30 July 12:

John Taylor: The road to recovery, Manhattan Inst City Journal, June-Aug '12:
Many wonder how a system of rules can work in practice, with politicians and govt. officials continually pressured to 'do something' about econ problems. Rules mean that you do nothing, say the skeptics, and that's impossible in today's charged political climate and hour-to-hour, even minute-to-minute, news cycle. My colleague George Shultz calls the problem 'the urge to intervene'. Hayek had an answer to that challenge. But Keynes took a different view, says Friedrich Hayek Prize awardee '12/Stanford prof

M Miller and R Skidelsky: How Keynes would solve the Euro zone crisis, FT, 16 May 12 [courtesy Author's Web site]:
Almost 100 years ago, a young official in the UK Treasury sought to advise European policy makers on how daunting external debts might best be managed. There was, he argued, a limit to the national capacity to service debts. When he was ignored by creditor govts, John Maynard Keynes quit his post to write the Economic Consequences of the Peace (1919), say Univ Warwick prof and emeritus prof/pre-eminent biographer of Keynes

London is top destination city, according to a global index, MasterCard Worldwide, 11 June 12:
London has established itself as the hottest city in the world right now as it ranks as the top visitor destination, ahead of New York, Bangkok, Paris, and Singapore. The Global Destination Cities Index [PDF] is a 2nd annual report that ranks the world's leading destination cities in terms of the number of their total int'l visitor arrivals and the cross-border spending by these visitors in 132 cities around the globe

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