News and Analysis: 1-15 Nov 2013 | EmergingFrontierMarkets.com

Based in: Manila, Philippines

Posted on Fri, 15 Nov 13:

Yellen says stronger job growth a Fed imperative, Reuters, 15 Nov 13:
Fed Vice Chair Janet Yellen on Thu robustly defended the Fed's bold steps to spur econ growth, calling efforts to boost hiring an 'imperative' at a hearing into her nomination to become the 1st woman to lead the US central bank. She made plain she would press forward with the Fed's ultra-easy monetary policy until officials were confident a durable recovery was in place that could sustain job creation

Typhoon to drag Philippine growth below 7 percent, AP, 15 Nov 13 [via Times of India]:
The Philippine govt said Fri that due to the damage caused by the typhoon, 4th qtr growth will slow to 4.1% from 7.1% last year. The econ aftermath may linger into next year due to reduced production capacity. A govt task force will prepare a detailed plan for reconstruction due in 2-3 weeks (Typhoon to create $19 bil. in econ losses, IBTimes | Forensic disaster analysis, Ctr Disaster Mgmt/Risk Reduct. Tech in Germany)

Author details 'lamentable deficiencies' of international financial institutions, Ctr Intl Governance Innov, 21 Oct 13:
Author/journalist Paul Blustein presented the findings from his new book, Off Balance: The travails of institutions that govern the global financial system. Based on interviews with scores of policy makers and on thousands of pages of confidential documents, it focuses mainly on the IMF and Financial Stability Forum in the run-up to the global financial crisis (Policy brief)

Posted on Wed, 13 Nov 13:

Barry Eichengreen: Chinese industrialization and its discontents, Project Syndicate, 8 Nov 13:
As the party leadership meets, China stands at a crossroads. The nation has sustained its output growth by investing fully one-half of its output. Associated with this low level of consumption is widening inequality--between the countryside and the cities, and between the political elites and the masses, writes UC-Berkeley prof (Q&A with econ historian Eichengreen, Cleveland Fed)

Martin Feldstein: A weak euro is Europe's best means of beating deflation, FT, 7 Nov 13 [courtesy Harvard]:
The European Central Bank responded correctly to recent news of very low euro zone inflation by loosening policy further. The big question now is whether its decision will have a big enough impact to move inflation from less than 1% a year back close to the ECB's target of 2%. The answer to this question lies in the forex markets, writes Pres Reagan's Council Econ Advisers chair / Harvard prof

How long will emerging markets stay cheap?, PwC (blog), by J Hawksworth, 7 Oct 13:
The wage gap between advanced nations like the US and UK and emerging markets such as China and India will shrink significantly by 2030, acc. to new analysis extending our study of emerging economies. Places like Turkey, Poland, and Mexico will therefore become more valuable as consumer markets, while low cost production could shift to other locations such as Philippines, writes PwC chief economist for UK (How big is the global pay gap?)

Posted on Mon, 11 Nov 13:

Experts fear repeat of '04 tsunami relief fiasco, AFP, 11 Nov 13 [courtesy Japan Times]:
Disaster experts warned Mon. that mistakes made in the relief effort after the catastrophic '04 Indian Ocean tsunami must not be repeated with the super typhoon in the Philippines. The humanitarian response to the tsunami sparked heated debate about the size, form and deployment of assistance (Tsunami lessons unheeded, RMIT Univ/Aussie | Creating risk-resilient societies worldwide, PwC, Sep '13)

Eswar Prasad: The capital-flow conundrum, Project Syndicate, 8 Nov 13 [courtesy Brookings Inst]:
In recent months, emerging economies have experienced capital-flow whiplash. Now that the 'taper' has been postponed, capital is flowing back in some cases. But, with little influence, much less control, over what comes next, emerging markets are still struggling to figure out how to protect themselves from the impact of a Fed policy reversal, writes Inst senior fellow / Cornell U prof

US, Europe have not practiced what they preached in Asian financial crisis of late '90s, Peterson Inst, 11 Oct 13:
The financial crisis and econ downturn that have engulfed the US and Western Europe came nearly a decade after the Asian financial crisis. A new book, Responding to Financial Crisis: Lessons from Asia then, the US and Europe now, concludes that one cause of the most recent crisis was that the West failed to heed the very recommendations that they had urged on Asia in the late '90s

Posted on Fri, 8 Nov 13:

Developing world attains new record share of global foreign direct invest. inflows, Unctad Global Invest. Trends, 31 Oct 13:
Global FDI inflows rose by 4% in the 1st half of 2013, with a diverging trend appearing between developing/transition nations and developed nations. While flows to developed nations declined, this was more than offset by a rise in flows to the developing world, which accounted for more than 60% of global FDI flows (World Investment Prospects Survey 2013-15, 29 Oct [PDF])

Robert Shiller: Is economics a science?, Project Syndicate, 6 Nov 13:
I am one of the winners of this year's Nobel Memorial Prize in Econ Sciences, which makes me acutely aware of criticism of the prize by those who claim that econ--unlike chemistry, physics, or medicine, for which Nobel Prizes are also awarded--is not a science. One problem with econ is that it is necessarily focused on policy, rather than discovery of fundamentals, writes Yale prof

Emanuel Derman: Is economics a science?, Frankfurter Allgemeine Zeitung, 5 Nov 13:
Fama and Shiller have made contribution to the field of finance, a branch of econ that focuses on the management and valuation of assets. That means that math comes naturally to it. I am willing to call finance a science, though I think Thomas Kuhn's definition of a protoscience is probably more appropriate. A protoscience is not a pseudoscience, like astrology, writes author of My Life as a Quant: Reflections on physics and finance

Posted on Wed, 6 Nov 13:

Rich man, poor man - Are 'the 1%' worth it?, OECD (blog), by B Keeley, 24 Oct 13:
Today's set of top earners--the 1%--which as one writer has written, "consists, to a notable degree, of 1st- and 2nd-generation wealth. Its members are hardworking, highly educated, jet-setting meritocrats who feel they are the deserving winners of a tough, global econ competition …". Several factors have worked in their favor, but here's a question: Are all these jet-setting meritocrats really worth it?

Dani Rodrik: The perils of premature de-industrialization, Project Syndicate, 14 Oct 13 [via Social Europe Jl]:
Most of today's advanced economies became what they are by traveling the well-worn path of industrialization. A progression of manufacturing industries emerged from the ashes of the traditional craft and guild systems. Over time, manufacturing ceded its place to services. But the developing world's pattern of industrialization has been different, writes Inst for Advanced Study prof

Why you will be blindsided by the next financial crisis, Forbes, by R Lenzner, 6 June 13:
"The global financial crisis that began in the US in '07 was triggered by a bank run, just like the bank runs of the pre-Federal Reserve era." That's the theme of Yale's Gary Gorton's Misunderstanding Financial Crises: Why we don't see them coming (2012), writes fmr investment banker (The problem behind financial crisis was not what we think--Gorton, Boston Globe)

Posted on Mon, 4 Nov 13:

Report tracks dirty money from piracy off the Horn of Africa, World Bank-UN Drugs & Crime Ofc-Interpol, 1 Nov 13:
The amount of US$339-413 mil. was taken in ransom from the hijacking of ships off the coast of Somalia from 2005-12, acc. to a new report, Pirate Trails. Tracing a pattern that it calls the 'pirate money cycle' [infographic, PDF], it analyzes the investments made by a sample of 59 pirate 'financiers' to reveal the range of sectors--incl both legitimate and criminal ventures--that were funded

The bankers' addiction to borrowing, NY Times, by E Andrews, 29 Oct 13 [courtesy Stanford]:
Anat Admati has already become famous--infamous, in some quarters--for her scathing criticism of banking reforms and her outspoken calls for drastically tougher regulations on how much debt financial institutions should be allowed to take on. In the coauthored book, Bankers' New Clothes, the finance prof argued that reckless bank borrowing was a central cause of the financial crisis

2013 Aid Transparency Index, Brookings Inst (blog), by G Ingram, 24 Oct 13:
We are hosting the public release of the only global measure of donors' aid transparency. The Millennium Challenge Corp is to be celebrated, not just for leading the US pack, but for coming in 1st in the overall global rankings. As aid transparency is a departure from business as usual (the typical opaqueness of govt), the initial decision to make aid data publicly available was not an easy one, writes Inst senior fellow

Posted on Fri, 1 Nov 13:

UK aims to become center for Islamic finance, Al Jazeera English, 1 Nov 13:
UK is set to the become the 1st non-Muslim nation to raise money by issuing a govt bond-style 'Sukuk' compliant with Sharia law as part of a bid to transform London into a global capital of the Islamic finance industry (Banking on the ummah--Malaysia leads the charge in Islamic fin, Economist | Islamic fin for beginners, Guardian [blog]) [courtesy Islamic Fin M'sia blog]

Managing risk for development - The inside story of the World Devt Report 2014, World Bank (blog), by N Loayza, 6 Oct 13:
The King of Egypt dreamt that 7 strong cows were eaten by 7 scrawny ones. Then, he dreamt that 7 hearty ears of corn were replaced with 7 scorched ones. He didn't know what to make of these dreams and none of his advisors could interpret them. From his prison cell, Joseph learned of the King's dreams and interpreted them. This story presents in a nutshell the report's message

Emerging Asian economies expected to remain resilient but structural reform critical, OECD, 8 Oct 13:
The economic outlook for Emerging Asia (SEAsia, China and India) remains robust over the medium term, anchored by the steady rise in domestic demand, acc. to a new report from the OECD Devt Center. GDP growth in Emerging Asia is projected to moderate gradually but stay resilient over the 2014-18 period. The region will continue to play an important role in global growth

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