News and Analysis: 3-17 Jan 2014 | EmergingFrontierMarkets.com

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Posted on Fri, 17 Jan 14:

Who is coming to Davos 2014?, WEForum (blog), 15 Jan 14:
More than 2,500 participants, incl more than 40 heads of state/govt, will convene in Davos, Switzerland from 22 to 25 Jan. Under the theme 'The Reshaping of the World: Consequences for Society, Politics and Business', the annual meeting's program will focus on: 1) Disruptive innovation, 2) Inclusive growth, 3) Society's new expectations, and 4) A world of 9 billion

Eswar Prasad: The dollar trap, Harvard Business Review, Dec '13:
Is the US dollar in decline? Since the global financial crisis, speculation has been rampant about its looming if not imminent displacement as the world's leading currency. And yet a case can be made that the financial crisis has actually strengthened the dollar's position as the predominant store of value in the world, writes Brookings senior fellow / Cornell U prof

Coffee/Tea Room: Paul Oyer--What online dating can teach about economics, Stanford U, 7 Jan 14:
When I set up my dating profile, I was upfront about my teenage children and my sweet but impish golden retriever. But in the section where they ask some very personal questions, I checked a few boxes that were not technically accurate. I admit it. I left out details--and lied. What led me to be honest on some parts of my profile and not others?, asks Jl Labor Econ ed-in-chief / Stanford prof

Posted on Wed, 15 Jan 14:

World economy at turning point - report, World Bank, 14 Jan 14:
The world economy is projected to strengthen this year, with growth picking up in developing nations and high-income nations appearing to be finally turning the corner 5 years after the global financial crisis, says the newly-released Global Economic Prospects report (Infographics: World economy to strengthen in 2014 | Tapering and capital flows to developing nations)

The economic slowdown has failed to dim consumer optimism in emerging markets, Boston Consult.Group, 27 Nov 13:
Consumers in large emerging markets remain remarkably bullish despite slowing growth. A new report found that recent econ challenges are prompting consumers in Brazil, China, and India to trim their spending plans in the near term. Yet, consumer spending in these economies is still growing faster than in mature economies (Middle & affluent class in Vietnam & Myanmar will double in size by 2020)

Boardroom/C-suite: The elements of surprise - How professionals prepare for and respond to unexpected events, Rand, Oct '13:
Professionals today are expected to respond to more variables at a faster rate than was the case even a decade ago. Our research sought to identify some common strategies that practitioners use when responding to surprise. In the professions that our research examined, responses to surprise can be categorized according to 2 key factors: the time available to respond and the level of chaos in the environment

Posted on Mon, 13 Jan 14:

Pascal Lamy: The perilous retreat from global trade rules, Project Syndicate, 9 Jan 14:
Over the last half-century, the world has been undergoing a 'great convergence', with per capita incomes in developing nations rising faster than those in mature nations. But the open trade regime that has facilitated this is now under threat, as stalemate in global trade talks spurs the proliferation of 'preferential trade agreements', incl the 2 biggest -- across the Pacific and the Atlantic, writes World Trade Org fmr dir-gen

Are the Chinese cheating in the Prog for Intl Student Assessment or are we cheating ourselves?, OECD (blog), 10 Dec 13:
Whenever an American or European wins an Olympic gold medal, we cheer them as heroes. When a Chinese does, the first reflex seems to be that they must have been doping; or if that's taking it too far, that it must have been the result of inhumane training. There seem to be parallels to this in education, writes special advisor on educ policy to OECD sec-gen

Barth, Levine and Prabha: Regulate risk-taking rather than bank size, MarketWatch, 21 Oct 13 [courtesy Milken Inst]:
The govt tells us that never again will any bank be too big to fail. The basis for this claim is that big banks now hold more capital, undergo increased regulatory scrutiny, and face stringent restrictions. And if these do not work, regulators can now liquidate a troubled big bank without using govt funds, write Inst senior fellows and economist (World's biggest bank now also 'systemically important', Inst blog, Nov '13)

Posted on Fri, 10 Jan 14:

David Wessel: Surprises from 25 years covering the economy, Wall St Journal, 1 Jan 14 [courtesy Brookings Inst]:
I arrived in the Washington bureau of the Wall Street Journal shortly after the stock-market crash of 1987. Except for a stint as Berlin bureau chief, I've been tracking the economy from that perch ever since. Looking back over that quarter century, four surprises stand out, writes Inst's Hutchins Center on Fiscal and Monetary Policy dir

NYU business school dean offers three pillars for principled economic growth, Ctr Intl Gov Innov, 11 Dec 13:
Just as parents can learn from their children, NYU business school dean Peter Blair Henry believes--drawing from his recent book, Turnaround: Third World lessons for First World growth--the world's "aging economies" should show some humility and take a few lessons from some of the third-world countries they once lectured on the fundamentals of economic growth

Angus Deaton: Unwinding inequality, Harvard Business Review, Dec '13:
I once attended a workshop discussing why it was that richer and better-educated people lived longer than poorer and less educated people, which was regarded as a great injustice. I asked about the Surgeon General's famous '64 report on the hazards of smoking. It saved a lot of lives, but better-educated people got the message 1st, so it had the unintended effect of creating inequalities in health, writes Princeton prof

Posted on Wed, 8 Jan 14:

Nancy Birdsall: Ten wishes for 2014, Ctr Global Devt, 7 Jan 14:
In 2013 life for most people in developing nations continued to get better as it has for several decades. In the mature economies, the largely self-imposed austerity following the financial crisis may finally be lifting. I think these 2 trends create an opening for a renewal of intl cooperation on some of the big barriers holding back development progress, writes Ctr founding pres / Carnegie Endowment fmr senior assoc

Is regulation, or the lack thereof, risking a 2nd Great Financial Crisis?, International Economy Mag, Dec '13 [PDF]:
Is the lack of effective financial market regulation exposing the US and the world to a 2nd crisis? Are US financial markets still something of a 'financial casino'? Or is the opposite true? A symposium of views from: A Meltzer, D Baker, G Corrigan, J Bernstein, R Johnson, J Galbraith, C Mann, M Mayer, R Kroszner, A Pollock, P Wallison, and W White

Coffee/Tea Room: Viva, Las Vegas? Chinese city Macau actually is gambling's top spot, AP, 2 Jan 13 [via Tampa Bay Times]:
The tiny Chinese city of Macau has again smashed its annual record for casino earnings as revenues last year hit a staggering $45 bil., further underlining its position as the world's biggest gambling market. The former Portuguese colony's once-lethargic casino market has thrived since the govt ended a gambling monopoly a decade ago and let in foreign players

Posted on Mon, 6 Jan 14:

Top risks for 2014, Eurasia Group, 6 Jan 14 [PDF, 2.8 MB]:
Since 2008, the world's biggest risks have been economic. Analysts have spent the past 5 years worrying about how to stave off financial implosion. In 2014, big-picture economics are stable if not yet comforting. We foresee 2 essential questions about the world's 2 largest economies this year. The other big focus is emerging--or more aptly diverging--markets, says a leading political risk consulting firm

Lawrence Summers: Washington must not settle for secular stagnation, FT, 5 Jan 14 [courtesy Harvard]:
Even on optimistic forecasts, output and employment will remain well below previous trend for many years. And even with today's high degree of slack in the economy, there are signs of eroding credit standards and inflated asset values. So the secular stagnation challenge is not just to achieve reasonable growth but to do so in a financially sustainable way, writes Pres Obama's National Econ Council fmr head / fmr Harvard pres

Inside North Korea - Could the Kaesong industrial complex give hope for the future?, Telegraph/UK, 24 Dec 13 [courtesy CIGI]:
It is an odd site for an industrial complex. To reach it, you drive through checkpoints manned by armed infantry and over the world's most heavily fortified frontier, with its tank traps, fortified observation posts and acres of minefields. It is also an odd place to do business. It has no Internet access, no mobile phones are permitted and the bank conducts transactions by fax

Posted on Fri, 3 Jan 14:

John Taylor: The economic hokum of 'secular stagnation', Wall Street Journal, 1 Jan 14 [courtesy Hoover Inst]:
The evidence continues to mount that government policy has been to blame for the disappointing economic performance in recent years. Yet many don't want to hear it, and they offer a series of alternative explanations including most recently the re-emergence of a chestnut, 'secular stagnation', writes Pres G W Bush's Treasury undersecy for intl affairs / Stanford prof

Ricardo Hausmann: The specialization myth, Project Syndicate, 30 Dec 13:
Some ideas are intuitive. Others sound so obvious after they are expressed that it is hard to deny their truth. They are powerful, because they put one in a different frame of mind when looking at the world and deciding how to act on it. One such idea is the notion that cities, regions, and nations should specialize, writes Harvard Ctr Intl Devt dir / fmr Inter-American Devt Bank chief economist

Wing Thye Woo: Will China's currency and cities rise together?, WEForum (blog), 13 Dec 13:
China is increasingly debating whether or not its currency should be internationalized, possibly joining the US dollar and the euro as a currency that other nations can use to denominate the prices of their traded goods and intl loans. A related issue is whether Shanghai can become a 1st-tier intl financial center like London and NY, writes prof at U Calif-Davis, Fudan U-Shanghai, and Central U of Fin & Econ-Beijing

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