News and Analysis: 17-28 June 2013 | EmergingFrontierMarkets.com

Based in: Manila, Philippines

Posted on Fri, 28 June 13:

Joseph Stiglitz: Lessons for Africa from Japan and East Asia, Proj Syndicate, 5 June 13 [via Bus.Day/SAfrica]:
Some manufacturing will move out of China, and Africa has a chance of capturing a fraction of it. This is esp. significant, given that over the past 30 years, sub-Saharan Africa has suffered from de-industrialisation. But a manufacturing boom will not happen by itself. African govts must have industrial policies to help restructure their economies. Such policies have been controversial, writes Nobel Laureate '01/ fmr World Bank chief economist

Coffers: Greg Mankiw--What stock to buy? Hey, mom, don't ask me, NY Times, 19 May 13 [PDF, courtesy Harvard]:
Over the last few weeks, as the stock market has reached new highs, my thoughts have turned to my 85-yr-old mother. "OK, Mr Smarty Pants," she often asks me, "what stock should I buy now?" She 1st asked me this when I was a Princeton undergrad/econ major. She asked again when I was an MIT econ PhD student. And she has asked it regularly during the last 3 decades when I have been a Harvard prof. Unfortunately, she has never been happy with my answers, writes fmr Pres G W Bush's Council Econ Advisers chair

America's 1% vs the globe's 1.3 billion -- 10 facts about the global economy, Globalist, 29 Oct 12:
The world's poorest 1.3 billion people live on $1.25 dollars a day. That amounts to, at most, about $460 per person a year. If you added up the income of all these people, it would equal $600 billion, an amount equal to what group of richest Americans -- the top 10%, 5%, 3% or 1%? Based on calculations by Branko Milanovic, lead economist in the World Bank's res dept / author of The Haves and the Have-Nots: A brief and idiosyncratic history of global inequality (2010)

Posted on Wed, 26 June 13:

Robert Johnson: The economics of courage, OECD Observer, 14 June 13:
Avoidance and false certainty are common afflictions of econ policy makers. Courage to take on the causes of the crisis is needed now. Nearly a century ago, Henry Louis 'HL' Mencken provided a useful lesson in this regard in his famous essay on economics. In it, he noted the example of a prof who was kicked out of the U Pennsylvania. The prof challenged the status quo by trying to speak the truth, and power did not like what it heard. He paid the price, writes Inst New Econ Thinking exec dir

Dani Rodrik: The past, present, and future of economic growth (exec sum), Global Citizen Found./Switz., 17 June 13 [PDF]:
The last decade has been an extraordinarily good one for developing nations. Can this recent performance be sustained into the future, reversing the 'great divergence' that split the world into rich and poor nations since the 19th century? Optimists would point to improvements in governance and macro policy. Pessimists would fret about the drag rich nations exert on the world economy and the obstacles facing late industrializers, writes Harvard prof / Soc Sci Res Council's inaugural Hirschman Prize awardee

Big risks remain in the financial system, Stanford Univ, 13 May 13:
People still disagree about whether the gov't could or should have saved Lehman. But there is no debate that its collapse set off a catastrophic chain reaction that almost nobody had predicted. It also revealed hidden weaknesses in the financial 'plumbing', the maze of institutions that move money between investors, savers, borrowers, and the 'real economy'. Stanford's finance prof Darrell Duffie was shaken as well. Over more than 2 decades, he had analyzed many pillars of the financial system

Posted on Mon, 24 June 13:

Jeffrey Sachs: Time to end the tax havens, Huff Post, 8 May 13:
In recent weeks, citizens in many nations suffering from gov't budget cutbacks have been learning more and more about one of the biggest and most dangerous scams in the world: the global web of tax havens that US and European politicians and bankers have nurtured over the years. The only real purpose of these havens is to facilitate tax evasion, money laundering, bribery, and lack of accountability for environmental and social calamities inflicted by int'l companies, writes Columbia U Earth Inst dir

John Kay: Don't blame the havens - Tax dodging is everyone else's fault, FT, 19 June 13 [courtesy author's site]:
Last week's Group of Eight meeting produced denunciations of secrecy and tax havens. But the sources of the problem are not to be found in Bermuda or the Channel Islands. The activities that escape taxation take place in the G8. Corporation tax is a levy on the profit a firms earns for its shareholders. It is therefore both a tax on corporate activity and on shareholders, and it is not well designed to achieve either purpose, writes Oxford U Said Business Sch founding dir

Ecuador - stability but at what price?, BBC News, 28 May 13:
Ever since Nelson Zapata started shining shoes in the shadow of Ecuador's presidential palace 33 years ago, 13 heads of state have ruled this Andean nation. Mr Zapata never liked any of them, until Rafael Correa took over in '07. Many Ecuadoreans agree with Mr Zapata. The political stability brought in by Mr Correa is in deep contrast with Ecuador's past with its deep social and econ divides and the social unrest and econ instability of the past few decades (Ecuador country profile)

Posted on Fri, 21 June 13:

Brazil protests tap into frustration of have-nots, Los Angeles Times, 20 June 13:
On Thu last week, Brazil's left-wing Free Fare Movement held the 4th of its street protests vs a 10-cent hike in bus fares. A few thousand people turned out. By Mon, the movement had exploded. It's clear from the wide range of signs, chants and commentary from across the nation that the movement tapped into deeper frustration within a generation that had never been given such an opportunity to take to the streets. And the protests, perhaps significantly, coincided with two other events

If you give the poor cash, does it help?, World Bank (policy note), June '13 [PDF]:
Policy makers throughout the world struggle to boost employment. In poorer nations, aid orgs and govts have traditionally relied on solutions like training vouchers or microfinance tools, which often involve extensive monitoring. An alternative is putting cash directly in the hands of the poor. Will recipients use the cash as promised? (Blattman: Why all the attention to cash transfers now?) {Ed.'s note: We had the privilege of participating this week in an int'l confab related to this issue}

Malcolm Gladwell: Albert Hirschman and the power of failure, New Yorker, 24 June 13:
The economist Hirschman, who died last Dec, loved paradoxes. He was a 'planner', the kind of economist who conceives of grand infrastructure projects and bold schemes. But his eye was drawn to the many ways in which plans did not turn out the way they were supposed to--to unintended consequences and perverse outcomes and the puzzling fact that the shortest line between two points is often a dead end, writes author of The Tipping Point and Blink

Posted on Wed, 19 June 13:

The geography of jobs, Stanford Univ, 10 June 13:
Why are some places more prosperous than others? Some places have always been more prosperous than others, but these differences have increased more rapidly over the last 30 years as the gross domestic product and patents for new technologies have concentrated in two to three dozen communities that UC-Berkeley's Moretti identifies as 'brain hubs' or 'innovation clusters' in his new book The New Geography of Jobs. So what's the situation in other regions around the world?

R Dobbs and D Suh: South Korea's stalled miracle, Foreign Policy, 16 Apr 13 [courtesy McKinsey]:
SKoreans have largely shrugged off the aggressive rhetoric from the North. And this nonchalance gives them the chance to focus on another existential threat. SKorea's econ success--the growth formula that set records for dev't, and is a model for other emerging economies--is no longer working for a great many Koreans. The nation is beset by a deep middle-class malaise that could limit the consumer spending needed to create a more balanced economy, write McK Global Inst analysts

The science of why we don't believe science, Mother Jones, by Chris Mooney, 18 June 13 [courtesy Medium]:
"A man with a conviction is a hard man to change. Tell him you disagree and he turns away. Show him facts or figures and he questions your sources. Appeal to logic and he fails to see your point." So wrote the celebrated Stanford psychologist Leon Festinger. Yes, people are reluctant to change their minds. But: on the one hand, it doesn't make sense to discard an entire belief system, built up over a lifetime, because of some new snippet of information

Posted on Mon, 17 June 13:

Barry Carin: A Brit, an Indonesian and a Liberian walk into a bar…, Ctr Int'l Governance Innov/Can., 10 June 13:
The UK PM, Indonesian pres and Liberian pres, co-chairs of the UN high-level panel on the post-2015 dev't agenda, have submitted their report. Perhaps the most serious criticism is that their package is too big. A smaller number of goals would be more likely to have an effective communication impact. Yet, it is to be commended for not ducking the contentious questions of good governance, effective institutions and an enabling environment, writes Ctr senior fellow / fmr senior Canadian gov't official

Coffers: Jeremy Siegel--Return of the bull, Allianz's Project M, Apr '13:
Five years after one of the most disastrous financial crises in econ history, investors are still shell- shocked. How else can we explain bondholders accepting negative real bond yields with stock valuations so promising. We know there is a human tendency to overreact, and I believe the pendulum has swung too far back. But not all of investing's cherished truths have disappeared. Stocks for the long run remain a reliable source of adequate pensions, writes author of '94 classic Stocks for the Long Run / U Penn prof

Coffers: Bodie--Why stocks aren't safe in the long run, PBS NewsHour (blog), 26 Sep 12:
It came as no surprise when we heard from Boston U's pensions guru Zvi Bodie, jubilant that finally the Securities and Exchange Comm. is moving against a so-called expert: "I am excited because this could indicate a turning point in the SEC's approach to investor protection. It is about time. Misleading investment info in the media is routine; and sadly, trustworthy science-based info is the rare exception. One particularly misleading proposition is that history proves that stocks are not risky in the long run"

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