News and Analysis: 2-20 Dec 2013 | EmergingFrontierMarkets.com

Based in: Manila, Philippines

Posted on Fri, 20 Dec 13:

B Eichengreen and P Gupta: Fed tapering and emerging markets, Vox EU, 19 Dec 13:
Fed tapering has started. We discuss our new research into who was hit and why by the taper-talk shock last June. Those hit hardest had relatively large and liquid financial markets, and had allowed large rises in their currency values and their trade deficits. Good macro fundamentals did not provide much insulation, nor did capital controls, write UC-Berkeley prof; and World Bank senior economist

The distribution of income among the world's citizens, World Bank (blog), by Christoph Lakner, 17 Dec 13:
How has globalization affected inequality in incomes around the world? And where do the poorest and richest people in the world live? To answer these questions, Branko Milanovic and I recently compiled a new database of more than 550 household surveys between 1988 and 2008 (Globalization's winners and losers--Finding a path to shared prosperity)

Bethlehem's Church of the Nativity renovation underway, AP, 12 Dec 13 [courtesy Huff Post]:
Visitors descending upon Bethlehem this holiday season will notice a different look for the church. Located at the traditional site of Jesus' birth, it is undergoing a much-needed facelift. The World Monuments Fund and Unesco have both placed it on their lists of endangered sites (World Monuments Fund's watchlist | Unesco's world heritage list | Resurrecting the glory of Bethlehem, Al Jazeera) [courtesy Bethlehem U]

Posted on Wed, 18 Dec 13:

Lawrence Summers: Why stagnation might prove to be the new normal, FT, 15 Dec 13 [courtesy Harvard]:
Is it possible that the US and other major global economies might not return to full employment and strong growth without the help of unconventional policy support? I raised that notion--the old idea of 'secular stagnation'--recently in a talk at an IMF conference, writes Pres Obama's National Economic Council fmr head / fmr Harvard pres

Branko Milanovic: After Lampedusa -- Should the world be composed of gated communities?, Globalist, 22 Oct 13:
What is the message one may take from the latest tragedy in the Mediterranean? Perhaps a better way to look at the issues of migration is in the context of globalization. Then we have to begin adjusting our way of thinking. If factors of production are free to move, then this must apply to labor as well, writes a World Bank lead economist / author of The Haves and the Have-Nots: A brief and idiosyncratic history of global inequality

Odds and Ends: Chance encounters -- The man who invented modern probability, Nautilus, by S Gerovitch, 22 Aug 13:
If 2 statisticians were to lose each other in an infinite forest, the 1st thing they would do is get drunk. That way, they would walk more or less randomly, which would give them the best chance of finding each other. Such considerations belong to the statistical theory of "random walk" or "drunkard's walk", writes MIT lecturer on math history

Posted on Mon, 16 Dec 13:

Foreign investors increasingly cautious amid ongoing global turbulence -- report, World Bank Group, 5 Dec 13:
Foreign investors are increasingly cautious about investing in developing nations in the face of continued turbulence, finds the latest World Investment and Political Risk. Despite this, a survey for the report finds nearly half of respondents expect to increase their investments over the next 12 months--which increases to 70% when the horizon is extended to 3 years (Story on launch event)

Michael Boskin: Chile versus Argentina, Project Syndicate, 21 Nov 13:
Economists often compare similar economies to isolate the impact of a particular difference. This approach provides a compelling picture of the role of specific factors in driving or undermining an economy's success. This can be used to understand why Chile is prospering, while neighboring Argentina is floundering, writes Pres George H.W. Bush's Council Econ Advisers chair / Stanford prof

Coffee/Tea Room: Facebook's Sandberg, author of 'Lean In', praises powerful ad, NY Daily News, 10 Dec 13:
"This is one of the most powerful videos I have ever seen illustrating how when women and men do the same things, they are seen in completely different ways. Really worth watching. Lean In prize of the day for sure!," writes Sheryl Sandberg on her Facebook page

Posted on Fri, 13 Dec 13:

Exhausting its reserves? NKorea's sources of finance, Johns Hopkins U (blog), by R Frank, 12 Dec 13:
Ever since Kim Jong Un took power, the improvement of the people's living has been his top econ priority. In addition to a number of renovated or newly built entertainment facilities, the nation is witnessing a construction boom. However, the one key question I am constantly asked is where does the money come from?, writes U Vienna's East Asian Studies dept head / frequent visitor to NKorea

Richard Baldwin: WTO agreement -- The Bali ribbon, Vox EU, 12 Dec 13:
The WTO signed a mini-package of trade initiatives in Bali last week which, while welcome, is not enough. Without some new initiative, the WTO looks set to drift for the next few years. It cannot move ahead until the trans-Pacific and trans-Atlantic 'mega-regionals' are done or dead. It should now focus on 21st-century trade issues, writes Graduate Inst (Geneva) prof / Vox EU ed-in-chief

The pragmatic idealist -- Interview with NYU business school dean, Finance & Development, Dec '13:
As a child in Jamaica, Peter Blair Henry would watch in quiet puzzlement as a woman from the neighborhood came to his grandma's gate from time to time, asking for food. He wondered why his family always had enough to eat while this woman did not. This contrast between the haves and the have-nots became even starker a few years later, when he emigrated with his parents to the US

Posted on Wed, 11 Dec 13:

Martin Feldstein: Saving the Fed from itself, New York Times, 8 Dec 13 [courtesy Harvard]:
The Federal Reserve is pursuing a very risky monetary policy. Its leaders are correct that the US economy needs more stimulus, and they believe that the central bank is the only game in town. But if Congress and the Obama admin could agree on a fiscal stimulus that goes beyond a short-term budget deal, the Fed would not have to take such risks, writes Pres Reagan's Council Econ Advisers chair / Harvard prof

Heeding contagion -- preventing another economic crisis, MIT (blog), 19 Nov 13:
"You cannot entirely prevent another crisis, but you can prevent a crisis from spiraling out of control by learning from our past failures," says MIT's Kristine Forbes, who did a joint study with MIT's Roberto Rigobon. "And by setting up a system to monitor econ stress while ensuring that countries are working together rather than defensively isolating"

Who's smiling now?, OECD Observer, Sep/Nov '13:
Case studies of specific products, esp. in the electronics industry, show that value creation along a global value chain tends to be unevenly distributed among activities. This is the basic idea behind the so-called 'smiling curve', originally used by a founder of a PC maker in Taiwan to illustrate the problems of IT manufacturers there, which found itself along the bottom of the curve

Posted on Mon, 9 Dec 13:

US and India compromise to give birth to WTO deal, Independent/SAfrica, 9 Dec 13:
The World Trade Org has agreed in Bali to the 1st major accord in its 18-year history, a pact designed to smooth commerce at borders and safeguard food security programs in developing nations. It emerged after the US and India compromised on food subsidies, and a LatAm bloc led by Cuba dropped its earlier opposition to a draft agreement (NGOs hit out at trade deal in Bali, Deutsche Welle)

Paul Seabright: Microeconomics for all, Project Syndicate, 5 Dec 13:
Micro textbooks have remained practically unchanged for at least 2 decades. As a result, undergrads struggle to understand even the abstracts of papers on the complex representations of micro reality that fill econ journals. While it is true that realistic micro models are more complex than those in textbooks, grasping them does not necessarily require years of experience, writes Toulouse (France) Sch Econ prof

Schooling ain't learning -- and what to do about it, Ctr Global Devt, 27 Sep 13:
A global push to get all kids enrolled in school has been largely successful--most nations will meet or nearly meet the Millennium Devt Goal that each child "complete a full course of primary schooling" by 2015. But a new book by economist Lant Pritchett documents a deeply disturbing reality: for millions of children in the developing world schooling is not producing 'education' in any real sense

Posted on Fri, 6 Dec 13:

Charles Kenny: Remembering Nelson Mandela's unsung economic legacy, Businessweek, 5 Dec 13:
Mandela was the most important leader in SAfrica's history and one of the global giants of his time. What people often overlook, however, is the role he played in building up Africa's largest economy. Nearly as consequential as Mandela's moral example was his skill in managing the transition from apartheid without widespread violence, repression, or econ collapse, writes Ctr Global Devt senior fellow

Jagdish Bhagwati: Dawn of a new system -- global trade's uncertain course, Finance & Development, Dec '13:
We have two options. If we treat Doha as dead, that would distress many govts, whose negotiated benefits, however small, would disappear. It would certainly imply an end to any future multilateral trade negotiations. And it would definitely damage the WTO. Or we could settle Doha at the Bali meet with a minimum agreement, writes NY Council Foreign Relations senior fellow / Columbia U prof

Coffers: Outcome bias and the interpreter, Credit Suisse, 18 Nov 13:
Investors demonstrate a clear tendency to buy the hottest funds or asset classes and to avoid the latest laggards. Something known as the outcome bias may help explain this. The 'interpreter' module in our brains takes any effect and rapidly creates a cause to explain it. But when luck plays a large role in shaping a result, we should focus on the true quality of the decision-making process, rather than the outcome

Posted on Wed, 4 Dec 13:

Asian nations top latest survey on state of education of world's 15-year olds, OECD, 3 Dec 13:
Asian countries outperform the rest of the world in the latest Prog for Intl Student Assessment (PISA) survey, which evaluates the knowledge/skills of 15-year-olds. It tested more than 510,000 students in 65 territories on math, reading and science, with the focus on math. Shanghai and Singapore were top in maths, while Hong Kong, Taiwan, SKorea, Macau, Japan, Liechtenstein and Switzerland were also in the top group

Reimagining Asia's "other superpower" -- Q&A with MIT's Yasheng Huang, McKinsey, Nov '13:
India is known globally for the rise of its information technology and software industry. There are many analysts and scholars and observers who believe that India can skip the sort of normal, sequential economic-development model and leapfrog directly into the information age, the IT age. I think there are 2 kinds of leapfrogging, and one is more plausible than the other

Richard Thaler: Financial literacy, beyond the classroom, NY Times, 5 Oct 13 [PDF, courtesy U Chicago]:
A popular approach to this problem is to include household finance in the basic high school curriculum. One reason to think this solution will have big payoffs is that people who are more knowledgeable about financial matters perform better at tasks like staying out of debt. This may seem a straightforward argument in support of such courses. Unfortunately, it isn't, writes Amer Econ Assn pres-elect / U Chicago prof

Posted on Mon, 2 Dec 13:

World Trade Org's Bali package hanging in the balance, Intl Ctr Trade & Sust. Devt, 28 Nov 13:
Trade ministers are set to meet in Bali, Indonesia from 3-6 Dec for the WTO's 9th ministerial conference, in a meeting that has been touted--for better or worse--as a turning point for the 159-member org. Yet on the eve of the conference, what will actually be on the agenda in Bali remains fluid (WTO Bali meet--Prospects and new horizons, Brookings [blog])

Jeffrey Sachs: Cities and sustainable development, Project Syndicate, 25 Nov 13:
Tacloban in the Philippines has now joined the growing list of cities--incl New Orleans, Bangkok, New York, Beijing, Rio de Janeiro, and Port-au-Prince, to name just a few--pummeled in recent years by climate catastrophes. Many of the world's largest cities, built on seacoasts and rivers, face the threat of rising sea levels and intensifying storms, writes Columbia U's Earth Inst dir

William Easterly: The failure of Jeffrey Sachs' "Millennium Villages", Reason Mag, 4 Oct 13:
The simplicity of Sachs' formula for ending poverty made it ideal for a successful advocacy campaign. He would demonstrate his ideas by deploying these comprehensive tech fixes in a dozen or so 'Millennium Villages' in Africa. In the new book, The Idealist: Jeffrey Sachs and the quest to end poverty, Nina Munk follows him around as he tries to make all this happen, writes NYU Devt Res Inst co-dir

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