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Scissors: Chinese global investment growth pauses

1500px-Flag_of_the_People's_Republic_of_China.svg

Key Points  Chinese foreign investment declined through mid-2014 for the first time since the financial crisis.  By sector, energy draws the most investment, but a slump in energy spending means that metals and real estate have been more prominent so far in 2014.

Secunda: Litigating for the Future of Public Pensions

pension

ABSTRACT: Public pensions are horribly unfunded, millions of public employees are being forced to make greater contributions to their pensions, retirees are being forced to take benefit cuts, retirement ages and service requirements are being increased, and the list goes on and on. These alarming

Goda, Onaran & Stockhammer: A case for redistribution? Income inequality and wealth concentration in the recent crisis

Currency-Revaluation

ABSTRACT: Several Nobel laureates economists have called for redistributive policies. This paper shows that there is a strong case for redistributive policies because the global increase of income inequality and wealth concentration was an important driver for the financial and Eurozone crisis. The high levels

Sedighikamal & Talebnia: A Review of Privatization in Iran

private

ABSTRACT: Privatization has become a popular panacea for solving the organizational problems of governments by reducing the role of the state and encouraging the growth of the private sector enterprises. However, privatization takes a number of forms and has been approached in various ways during

Woelfel & Weber: Searching for the FED’s Reaction Function

Marriner_S._Eccles_Federal_Reserve_Board_Building

ABSTRACT: There is still some doubt about those economic variables that really matter for the FED’s decisions. In comparison to other estimations, this study uses the approach of Bayesian Model Averaging (BMA). The estimations show that over the long run inflation, unemployment rates, and long-term

Scissors: Chinese global investment growth pauses

1500px-Flag_of_the_People's_Republic_of_China.svg

Key Points
 Chinese foreign investment declined through mid-2014 for the first time since the
financial crisis.
 By sector, energy draws the most investment, but a slump in energy spending
means that metals and real estate have been more prominent so far in 2014.
 The United States has received the most Chinese investment since 2005, followed
by Australia, Canada, and Brazil. China invests first in large, resource-rich nations
but has also diversified by spending more than $200 billion elsewhere.
 Chinese investment benefits both China and the recipient nation, but host
countries must consider thorny issues like Chinese cyberespionage and subsidies.

 

Available for download here.

Secunda: Litigating for the Future of Public Pensions

pension

ABSTRACT:

Public pensions are horribly unfunded, millions of public employees are being forced to make greater contributions to their pensions, retirees are being forced to take benefit cuts, retirement ages and service requirements are being increased, and the list goes on and on. These alarming developments involve all level of American government, from the recent move to require new federal employees to contribute more to their pensions, to the significant underfunding of state and local public pension funds across the country, to the sad spectacle of the Detroit municipal bankruptcy where the plight of public pensions plays a leading role in that drama. The underfunding of public pension plans has led not only to a number of bankruptcy proceedings, but has also led various states to reduce promised pension payouts to retired plan members or to increase pension contribution requirements for active employees.

As a result, government officials, employees, and retirees are in the midst of litigating for the future of American public pensions. This article, for the first time, focuses on all three levels of American government (federal, state, and local), and reviews the current status of pension litigation at each level. After discussing the federal employee pension system in the United States, the article then considers one state’s (Wisconsin) recent experience with pension reform legislation and litigation, and one city’s experience (Detroit) with the municipal bankruptcy process to illustrate emerging trends in public pension litigation that are currently playing out throughout the United States.

The start of a solution lies with harmonizing and standardizing the existing hodge-podge of American public pension law. Although ERISA is far from perfect in regulating private-sector pension plans in the United States, it nevertheless has provided uniform standards for management and administration of employer-sponsored retirement plans. To replicate that same consistency, this article proposes a hybrid approach which seeks to avoid some of the federalism pitfalls of previous public pension reform proposals. By applying ERISA to federal employee pension plans, and by permitting states to adopt uniform, state-wide pension legislation, public pension plans can take advantage of reliable and stringent pension frameworks that will make future underfunding and plan fiduciary lapses less likely.

 

Available for download here.

Goda, Onaran & Stockhammer: A case for redistribution? Income inequality and wealth concentration in the recent crisis

Currency-Revaluation

ABSTRACT:

Several Nobel laureates economists have called for redistributive policies. This paper shows that there is a strong case for redistributive policies because the global increase of income inequality and wealth concentration was an important driver for the financial and Eurozone crisis. The high levels of income inequality resulted in balance of payment imbalances and rising debt levels. Rising wealth concentration contributed to the crisis because the increasing asset demand from the rich played a key role in the rise of the structured credit market and enabled poor and middle-income households to accumulate increasing amounts of debt. To tame the inherent instability of the current mode of capitalism it is necessary to reduce inequality.

 

Available for download here.

 

Sedighikamal & Talebnia: A Review of Privatization in Iran

private

ABSTRACT:

Privatization has become a popular panacea for solving the organizational problems of governments by reducing the role of the state and encouraging the growth of the private sector enterprises. However, privatization takes a number of forms and has been approached in various ways during the move away from state control to other forms of ownership in developing and industrialized countries. Based on Iranian constitution, No.144, public companies must change to the private companies. The government of Iran urgently needs expanded and more dynamic private sectors, more efficient and effective
infrastructure/utility provision, and increased investment from both domestic and foreign sources. The most important purpose of privatization in Iran is increasing the proficiency. In this article we will discuss about the reasons of this policy, forms and trends, privatization process and volume will be surveyed, article 44 and at the end performance of the government on privatization will be explained.

 

Available for download here.

Woelfel & Weber: Searching for the FED’s Reaction Function

Marriner_S._Eccles_Federal_Reserve_Board_Building

ABSTRACT:

There is still some doubt about those economic variables that really matter for the FED’s decisions. In comparison to other estimations, this study uses the approach of Bayesian Model Averaging (BMA). The estimations show that over the long run inflation, unemployment rates, and long-term interest rates are the crucial variables in explaining the Federal Funds Rate. In the other two estimation samples, also the federal deficit and M2 were of relevance. In addition, we present the best models in more detail. Finally, a model average is constructed via BMA. The model average substantially outperforms a simple Taylor rule.

Available for download here.

Hellwig: Financial Stability, Monetary Policy, Banking Supervision, and Central Banking

Currency-Revaluation

ABSTRACT:

The paper gives an overview over issues concerning the role of financial stability in monetary policy and the relation between banking supervision and central banking. Following a brief account of developments in the European Monetary Union since its creation, the systematic treatment contains four parts, first a systematic discussion of how a central bank’s operations differ from those of an administrative authority; second, a discussion of how the shift from convertible currencies to paper currencies has affected our understanding of monetary policy and the role of financial stability; third, a discussion of moral hazard in banking and banking supervision as a threat to monetary dominance and to the effective independence of central bank decision making in an environment in which financial stability is an essential precondition for reaching the central bank’s macroeconomic objective, e.g. price stability; finally, a discussion of the challenges for institution design and policy, with special attention to developments in the euro area.

Available for download here.

Blankart: From Friends to Enemies? The Euro as a Cause of New Nationalism

Flag_of_Europe

ABSTRACT:

It is often disregarded that the euro is first of all a public good based on common institutions such the European Central Bank, the Governing Council and a network for executing transactions etc. Establishing a public good is fundamentally different from trade in private goods. A public good needs a coordinated action. All participants have to join their efforts towards the same goal. The more one individual contributes to the public good, the less has to be contributed by the other individuals which is an invitation to free riding. This is an inherent weakness of a public good as compared to private goods. If the partners are badly chosen in the beginning or if they shirk on their contribution, the public good is not produced or it is badly produced and ends in a crisis. No repair is possible. The venture has to be started anew.

 

Available for download here.

Bishnu & Wang: The Political Intergenerational Welfare State

pension

ABSTRACT:

This paper characterizes an intergenerational welfare state with endogenous education and pension choice under general equilibrium-probabilistic voting. We show that politically implementing a public education program always increases the future human capital, but this higher future human capital would not help support a more generous social security in the future. The effect of implementing PAYG social security on education however crucially depends on the sources of funding for education investment. Establishing PAYG pension program depresses investment in public education. However if the source of funding for education investment is private, in both the cases when pension is the only instrument or when public pension and public education are implemented together as a package, there can be an improvement in education investment if and only if the political influence of the old is limited and so the size of the PAYG social security is small. A substantially thick pension scheme which results from a heavy influence of the old in the political process spoils the mutual benefits.

Available for download here.

Oleka, Uche & Ewah: Sovereign Wealth Fund and Economic Growth in Nigeria – An Empirical Analysis

nigeria

ABSTRACT:

This paper evaluates the sovereign wealth fund of Goodluck Jonathan of Nigeria administration with a view to empirically examine the factors that affect its creation and operations vis-à-vis its impacts on the growth of the economy. Both primary and secondary data were used in this study. The study was guided by five research objectives. All the 40 staff of Nigerian Sovereign Investment Authority (NSIA) in the state constituted the target population. A purposive sampling technique was used to select 30 staff of the establishment for the study. Mean scores and standard deviation were used to answer the research questions. Parametric statistics in forms of analysis of variance-ANOVA, co-efficient of correlation and simple linear regression were used to analyze the hypothesis. We determined the effect of SWF on the economic growth using gross domestic product as a major economic performance indicator. The study found that the link between SWF and economic growth in Nigeria is statistically significant but not positive. The reason is because the sovereign wealth fund is new in Nigeria, coupled with several challenges facing its operations hence has not contributed much to the GDP growth rate of the economy. Some remedial measures were suggested which include the need to ensure that the financial and operational independence of the organs of the NSIA be guaranteed by statute; the NSIA and its organs must be shielded from undue political influence through well defined administrative and operating procedures and that transparency and accountability in reporting must be seen as major watch words of the Fund.

 

Available for download here.

Sutherland: Making the Best of New Energy Resources in the United States

ABSTRACT:

Since around 2007, the country has been enjoying an “energy renaissance” thanks to its abundant stocks of shale oil and gas. The resurgence in oil and gas production is beginning to create discernible economic impacts and has changed the landscape for natural gas prices in the United States, boosting competitiveness. In order to reap the benefits fully, significant investment is needed. Federal and state governments capture some of the resource rents, but there are potential opportunities to increase taxation and use the revenues to support future well-being. Taxing natural resource rents with profit taxes can be less distortionary than other forms of taxation, though only one state uses this form of tax. Production of shale resources, like other forms of resource extraction, poses a number of challenges for the environment. Respecting demands on water resources requires adequate water rights are in place while state and federal regulators need to monitor the environmental impact of hydraulic fracturing closely and strengthen regulations as needed. Natural gas is a potential “bridge fuel” towards a lower carbon economy, helping to reduce emissions by leading to a substitution away from coal. Flanking measures are desirable to counter natural gas hindering renewables and low prices stymieing innovation. This Working Paper relates to the 2014 OECD Economic Survey of United States (www.oecd.org/eco/surveys/United States).

 

Available for download here.

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