News and Analysis: 17-31 Mar 2014 | EmergingFrontierMarkets.com

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Posted on Wed, 31 Mar 14:

Panel report--A changing climate creates pervasive risks but opportunities exist for effective responses, UN, 31 Mar 14 [PDF]:
The Intergovernmental Panel on Climate Change issued a report today that says the effects of climate change are already occurring on all continents and across the oceans, with the world in many cases ill-prepared for risks from a changing climate. It details the impacts of climate change to date, the future risks from a changing climate, and the opportunities for effective action to reduce risks

Thomas Piketty: Save capitalism from the capitalists by taxing wealth, FT, 29 Mar 14 [courtesy Paris School Econ]:
Even if wage inequality could be brought under control, history tells us of another malign force which tends to amplify modest inequalities in wealth until they reach extreme levels. This tends to happen when returns accrue to the owners of capital faster than the economy grows, handing capitalists an ever larger share of the spoils, at the expense of the middle/lower classes, writes author of Capital in the 21st Century

The new Marxism, Part two, National Review, by J Pethokoukis 31 Mar 14 [courtesy AEI]:
Thanks to Piketty, the Left is now having a 'Galaxy Quest' moment. All that stuff their Marxist profs taught them about the 'inherent contradictions' of capitalism and about history's being on the side of the planners--well, it's all true after all. But the neo-Marxists might want to contain their enthusiasm, writes Inst columnist

Posted on Fri, 28 Mar 14:

Dani Rodrik: In praise of foxy scholars, Project Syndicate, 10 Mar 14:
The philosopher Isaiah Berlin famously distinguished between two styles of thinking, which he identified with the hedgehog and the fox. The hedgehog is captivated by a single big idea, which he applies unremittingly. The fox, by contrast, lacks a grand vision and holds many different views about the world--some of them even contradictory, writes Inst Advanced Study prof

Diane Coyle: The ups and downs of GDP, OECD Yearbook, Mar '14:
Econ policy can achieve results only if policy makers--and the voters to whom they are accountable--know what is happening to the economy. Understanding the economy as a whole depends on the available statistics. So econ statistics shape policy and events, and the most closely watched measure is the growth of gross domestic product, writes author of GDP: A brief but affectionate history (2014) / Manchester U prof

Cool head on global warming, Chronicle of Higher Educ, 4 Nov 13:
As the world's foremost economist on climate change, William Nordhaus, a Yale prof and author of The Climate Casino: Risk, uncertainty, and economics for a warming world (2013), has long held the planet's distant future in mind. But right now, paddling a canoe on a salt lagoon in late Aug, his thoughts were more immediate (Earth Hour on 29 Mar, Sat, 8:30 PM local time)

Posted on Wed, 26 Mar 14:

US lawmakers drop IMF reforms from Ukraine aid bill, Reuters, 25 Mar 14:
Senate Democrats agreed on Tue to drop language outlining reforms of the IMF from a Ukraine aid bill to increase the odds it will get through Congress, said Majority Leader Reid, after weeks of partisan bickering delayed the package. The Senate bill backs a $1 bil. loan guarantee for the govt in Kiev and provides $150 mil. in aid for Ukraine and neighboring nations (Reaction of IMF chief Lagarde)

John Cassidy: Is surging inequality endemic to capitalism?, New Yorker, 25 Mar 14:
In the stately world of academic presses, it isn't often that advance orders and publicity for a book prompt a publisher to push forward its publication date. But that's what Harvard Univ Press did for Capital in the Twenty-first Century, a sweeping account of rising inequality by Thomas Piketty of the Paris School of Economics, writes mag's staff writer / author of How Markets Fail

The new Marxism, National Review, by J Pethokoukis, 24 Mar 14 [courtesy AEI]:
"Karl Marx wasn't wrong, just early. Pretty much. Sorry, capitalism. #inequalityforevah." When trying to condense a sweeping, 700-page analysis of the past, present, and possible future of capitalism into an 85-character tweet, you're bound to miss a few things. But the above Twitter-fication of economist Piketty's much-awaited book captures the gist of his argument, writes Inst columnist

Posted on Mon, 24 Mar 14:

Anders Aslund: More severe sanctions on Russia are needed, Peterson Inst (blog), 21 Mar 14:
Washington needs to impose even more severe sanctions against Moscow and to do so quickly. An incremental approach such as the one against Iran or SAfrica will not work in this case. To deter Putin from an invasion into mainland Ukraine, the US and EU need to raise the cost of his defiance dramatically, writes Stockholm Inst East European Economics fmr founding dir / Inst senior fellow

Report calls for well-being to be at the heart of public policy design, Legatum Inst, 20 Mar 14:
An independent commission chaired by a member of the UK House of Lords proposes a radical reform of public policymaking, targeted at 'well-being', not simply econ growth. Its report, Well-being and Policy, concludes that GDP is too narrow a measure of prosperity. Instead, policy should aim at increasing people's satisfaction with their lives (4 major changes in global prosperity, Harvard Bus.Rev [blog])

Chained value, Finance & Development, by M Ruta & M Saito, Mar/May '14:
More and more final products--such as airplanes, autos and cell phones--are produced in one nation using inputs from many others. This development, what we call the growth of global value chains, is changing how world income and growth are generated. At the same time, the nature of competition has been affected. Are nations competing over the goods produced or over the labor and capital that go into production?

Posted on Fri, 21 Mar 14:

Kevin Hassett: East is least, National Review, 10 Mar 14 [courtesy AEI]:
When the Soviet Union collapsed in '91, fmr Soviet and Eastern Bloc nations chose between 2 distinct paths. Ten Central/Eastern European nations made integration with the EU a top priority. The rest, like Ukraine, moved much more slowly toward Western standards, and some even settled under a new Russian umbrella, writes Inst econ policy studies dir (European devt bank pres: Stuck in transition?)

World Water Day 2014 - UN stresses water and energy issues, EurekAlert, 20 Mar 14:
Water and energy are among the world's most pre-eminent challenges. The UN predicts that by 2030 the global pop. will need at least 35% more food, 40% more water and 50% more energy. Already today 768 mil. people lack access to improved water sources, 2.5 bil. people have no improved sanitation and 1.3 bil. people cannot access electricity (22 Mar: World Water Day)

Atkinson and Morelli: The chartbook of economic inequality - 25 countries, Inst New Econ Thinking (blog), 18 Mar 14:
The long-ignored issue of inequality is now center stage in the global debate about econ policy. To make sense of this concern and offer advice on policy, we need hard evidence about the extent of inequality, how it is changing, and how it compares across nations. We present a summary of evidence in our Web site regarding the long-run changes in inequality for 25 nations, write Oxford U senior res fellow; and PhD cand.

Posted on Wed, 19 Mar 14:

Allianz insurer starts pay-outs on missing Malaysian airliner claims, Deutsche Welle, 19 Mar 14:
Allianz and other co-reinsurers of the airlines aviation hull and liability policy had made initial payments linked to the disappearance of flight MH370, the German insurance company announced late on Tue. The firm, as lead insurer, was confirming an earlier report in a German business daily (Allianz lead insurer and Willis broker for Malaysia Airlines, Reuters)

Coffers: The secret to success in a global economy, Time, by D Kadlec, 27 Jan 14:
For now, no nation seems to have a big leg up in the push to raise the financial IQ of its citizens. A case in point is Turkey, a developing economy where many citizens incorrectly still see gold and real estate as their primary investment options. Turkish officials only now are joining the global movement to boost personal financial know-how (Millions of Americans lack basic financial literacy, studies show, LA Times)

'Why is America so rich and we are so poor?'- schoolboy from Ghana, World Bank (blog), by D Lawrence, 2 Dec 13:
The question caught me by surprise. I hesitated before answering. I didn't know about the causes of poverty in Ghana. The boy who asked the question was my classmate at Prempeh College in south Ghana. It was '75. We were both 11 years old, and we wore the same uniform. Neither of us understood that donor aid was already streaming into Africa to alleviate poverty

Posted on Mon, 17 Mar 14:

Hufbauer and Cimino: Trans-Pacific Partnership 'no big deal', says Krugman, Vox EU, 17 Mar 14
We look at Krugman's main arguments in an NYT op-ed against the TPP. First, he suggests spending political capital on domestic initiatives, and not on the TPP. Second, he argues that the pay-off from TPP will be trivial since tariffs are already low. There is also a larger message in his op-ed, namely that the era of globalization and policy-driven liberalization is over, write Peterson Inst senior fellow; and res analyst

William Easterly: Stop sending aid to dictators, Time, 13 Mar 14:
Too much of America's foreign aid funds what I call authoritarian development. That's when experts from the UN and other bodies swoop into 3rd-world nations and offer technical assistance to dictatorships on how to solve poverty, writes author of The Tyranny of Experts: Economists, dictators, and the forgotten rights of the poor (Announcement of NOT speaking at the World Bank)

Emanuel Derman: Knowing the world, Financial Analysts Journal, Nov/Dec '13 [PDF]:
Some 70 years ago, cybernetics was a hot field; 30 years ago, catastrophe theory was on everyone's lips. Those Greek-derived words for disciplines that once brought hope of explaining human behavior now evoke a quaint nostalgia, like Polaroids of long-haired young people in bell-bottom jeans and tie-dyed T-shirts. The new buzzword nowadays is 'big data', writes author of My Life as a Quant: Reflections on physics and finance

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