News and Analysis: 2-16 July 2014 | EmergingFrontierMarkets.com

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Posted on Wed, 16 July 14:

Can BRICS development bank become a rival to the World Bank?, CSMonitor, 16 July 14:
Brazil, Russia, India, China, and SAfrica have founded a 'New Development Bank' that will lend to members and other developing nations. And in a rebuff to Beijing's efforts over 2 years of negotiations to win a dominant position in the new bank, the leaders announced Tues at their summit in Fortaleza, Brazil, that all 5 nations would contribute equally to capitalizing the bank

New BRICS bank to be based in China, India to have presidency, AFP, 16 July 14 [via Times of India]:
The development bank will have an initial capital of $50 bil. that could rise to $100 bil,, funded equally by each nation. To ease worries of any nation getting more power than the other, BRICS leaders agreed to put the bank's headquarters in Shanghai. The 1st pres will be Indian while the 1st board chair will hail from Brazil

Coffers: Cecchetti/Schoenholtz--VIX index: The only thing to fear is the lack of fear itself, Money & Banking, 14 July 14:
The VIX, a gauge of what is called implied volatility, has been called the 'fear index'. Like similar options-based measures of implied volatility, it tracks financial conditions pretty well. Today, volatility is unusually low, write fmr Bank for International Settlements monetary & econ dept head; and NYU prof

Posted on Mon, 14 July 14:

What is the secret of Germany's success?, WEForum (blog), by T Hirst, 14 July 14:
Germany's extra time victory over Argentina in the World Cup final marked a significant upset of pre-tournament predictions. With the country continuing to build on its success both on and off the field many are asking -- what is the secret of German success?, writes WEF digital content commissioning editor

Brazil's path to inclusive growth, McKinsey, May '14:
The recent econ slowdown has exposed the more fundamental issue of the country's long-term weakness in income growth. Although Brazil has become the world's 7th-largest economy, it ranks 95th in the world for GDP per capita. Having successfully lifted millions out of extreme poverty, Brazil must now deliver on the promise of a middle-class life

Strategic infrastructure - Steps to prepare and accelerate public-private partnerships, Boston Consulting Grp, May '13:
Given the large infrastructure deficit in many nations, govts are increasingly turning to the private sector for support. In this setting, public-private partnerships (PPPs) can accelerate infrastructure programs. A recent World Economic Forum report, developed in collaboration with BCG, outlines govt best practices for overcoming the challenges of preparing PPPs

Posted on Fri, 11 July 14:

Mohamed El-Erian: The three-track Middle East, Project Syndicate, 10 July 14:
During a recent trip to the Mideast, I was struck by the growing gap between nations and came away convinced that it makes no sense today to talk of the region as a coherent whole. This important part of the world is now following at least three paths, characterized by large divergences that will persist -- and likely grow -- for years to come, writes Pres Obama's Global Development Council chair

Tokyo, Delhi, Shanghai, Mexico City, and Sao Paulo are world's most populous cities, UN News, 10 July 14 [PDF]:
Tokyo remains the world's largest city with 38 mil. inhabitants, followed by Delhi with 25 mil., Shanghai with 23 mil., and Mexico City, Mumbai and Sao Paulo, each with around 21 mil. Today, 54% of the world's population lives in urban areas, a proportion that is expected to increase to 66% by 2050, acc. to the 2014 revision of the World Urbanization Prospects produced by the UN Population Division

Does innovation lead to prosperity for all?, International Economy Mag, June '14 [PDF]:
The word "innovation" has become the new mythical silver bullet to fix the world economy. The battle lines are drawn. Some theorists believe new technological innovations that lead to productivity increases are actually the economy's growth and job killers. Others argue that the economy benefits from as many innovative startup jobs as possible. A symposium of views by noted experts

Posted on Wed, 9 July 14:

Indonesia has moved up -- but not for everyone, World Bank, 23 June 14:
Indonesia has managed to sustain its econ growth and reduce the poverty rate by half, from 24% to less than 12% between 1999 to 2012. However, 65 mil. people still live below the national poverty line of $1.25 a day. A new study claims that Indonesia can climb the income ladder and join the rank of high-income economies within two decades--and do so in an inclusive manner--with a few critical reforms

First int'l financial literacy test finds many young people confused by money matters, OECD, 7 July 14
Around one in seven students in some of the economies that took part in the 1st int'l assessment of financial literacy are unable to make even simple decisions about everyday spending. Some 29,000 15 year-olds in 18 economies took part in the test. Shanghai-China had the highest score, followed by Belgium (Flemish Community) and Estonia (Snapshot of results) [PDF]

London, Bangkok, Paris, Singapore and Dubai are top 5 most visited, Global Destination Cities Index, 9 July 14:
Now in its 4th year, the index ranks 132 cities in terms of the number of their total international visitor arrivals and the cross-border spending by these same visitors in the destination cities, and gives visitor and passenger growth forecasts for '14. This index and the accompanying reports are not based on MasterCard volumes or transactional data

Posted on Mon, 7 July 14:

John Cochrane: The failure of macroeconomics, Wall Street Journal, 2 July 14 [courtesy Hoover Inst]:
Prominent macroeconomists of all stripes bemoan our slow growth. Where they differ sharply is on the causes of the post-recession slump and which policies might cure it. Broadly speaking, is the slump a lack of 'demand', which monetary or fiscal stimulus can address, or one of structural sand-in-the gears that stimulus won't fix?, asks U Chicago prof

Paul Krugman: Macro debates and the relevance of intellectual history, NY Times (blog), 4 July 14:
One of the interesting things about the ongoing econ crisis is the way it has demonstrated the importance of historical knowledge. But it's not just econ history that turns out to be very relevant; intellectual history--the history of econ thought--turns out to be relevant too. Cochrane has opened his mind a bit over the past 5 years; now he's at least aware that New Keynesian economics exists, writes Nobel Laureate '08 / Princeton prof

Schmukler/Didier: Finance and growth in China and India, World Bank (blog), 2 June 14:
China and India are hard to ignore. Over the past 20 years they have risen as global econ powers. Their financial systems have also developed rapidly and have become much deeper. Do the cases of China and India show that the policies to promote capital-market development might be conducive to growth? Or are the two cases of growth without finance?, ask WB lead and research economists

Posted on Fri, 4 July 14:

Boosting productivity key for developing economies to close income gap with advanced nations-report, OECD, 2 July 14:
Income levels in most developing and emerging nations will not catch up with advanced economies for many decades without efforts to boost productivity, acc. to a new report, Perspectives on Global Development 2014. Diversification into higher value-added areas in agriculture, manufacturing and services, along with econ reforms and a greater focus on innovation, could help remedy this

Gregory Mankiw: Why inheritance is not a problem, NY Times, 22 June 14 [PDF, courtesy Harvard]:
Is inherited wealth making a comeback? Yes, says Thomas Piketty, who concludes that individuals' living standards will be determined less by their skill and effort and more by bequests they receive. But it raises the question: So what? What's wrong with inherited wealth? Let's first consider why parents leave bequests to their children, writes Pres G W Bush's Council Econ Advisers chair / Harvard prof

Gutman: Rallying for reform -- Public procurement, good governance, and development impact, Brookings, 20 June 14:
All too often, the global development community sees public procurement as either administrative minutiae, or a hotbed of fraud and corruption. As a result, they either fail to engage in the discussion at all, or they aggressively push for increased safeguards in the policies and procedures governing bid and award, writes Inst senior fellow

Posted on Wed, 2 July 14:

Jeffrey Sachs: Universal basic education is the millennium goal everyone forgot, WashPost, 22 June 14:
In the fight against extreme poverty, we face a puzzle. When the UN's Millennium Devt Goals were set in 2000, they included both health and education objectives. The health goals were pursued with vigor--and money--and great progress was achieved. Yet the pursuit of basic education languished. The US govt and others dropped the ball on an agenda that should have been a no-brainer, writes Columbia U Earth Inst dir

Truman: Making official forex reserves more open, Global Public Investor, June '14 [PDF, courtesy Petersen Inst]:
Lack of clarity on the scope and activity of many types of govt investment bodies is holding back a better understanding of the world economy. Changes in the asset or currency composition of foreign exchange reserves have the potential to destabilize exchange rates and financial markets. Greater transparency would help to counter this tendency, writes Inst senior fellow

Brynjolfsson, Manyika & McAfee: Are you ready for the second machine age?, Huff Post, Jan '14 [courtesy McKinsey]:
When we look past the current business cycle, we are convinced that the next 30 years will deliver even greater innovation and econ bounty to the US and the world. We're in the early stages of what we're calling the 2nd machine age; the 1st was the Industrial Revolution, which changed the world like nothing before or since, write MIT profs; and McK senior fellow (MIT brief: Race against the machine) [PDF]

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