The Macroeconomic Implications of Financial Globalization

Save this PDF as:
 WORD  PNG  TXT  JPG

Size: px
Start display at page:

Download "The Macroeconomic Implications of Financial Globalization"

Transcription

1 The Macroeconomic Implications of Financial Globalization Eswar Prasad, IMF Research Department November 10, 2006 The views expressed in this paper are those of the author(s) ) only, and the presence of them, or of links to them, on the IMF website does not imply that the IMF,, its Executive Board, or its management endorses or shares the views expressed in the paper.

2 Benefits of Financial Integration: Theory Efficient international allocation of capital Consumption smoothing via international risk sharing Large welfare effects for developing economies

3 Figure 4. GDP (per capita, PPP weighted): Advanced Economies 300 Emerging Markets Emerging (excluding China and India) 250 Other Developing Economies

4 Figure 5B. Change in Financial Openness and GDP Growth, Unconditional Relationship Growth rate of per capita GDP CRI KOR THA MUS CHL IND IDN MYS LKA DOM TUN ESP PRT BGDEGY TUR AUS NOR PAK NPLJPN GHA ISR URY GRC USA FIN CAN TZA TTO ITA DEU AUT DNK FRA SWE JAM IRN SLV ZMB COL NZL GTM MEX PHL BRA SEN PERBOL ECU FJI ARG HND KENMWI DZA PRYZAF VEN TGO NER ZWE CMR Change in financial openness

5 0.06 Figure 5B. Change in Financial Openness and GDP Growth, Conditional Relationship 0.05 Growth rate of per capita GDP MUS CHL 0.02 EGY MYS CRI DOM TUN IND GTM KOR 0.01 ISR SLV TUR GHA COL TTO USA BGD LKA PAK IDN URY AUS 0 TZA SEN ZAF MEX IRN FJI THA CAN ESP BOLBRA VEN ITA AUT NOR PRT HND DNK FRA FINSWE KEN PRY GRCARG ECU NZL DEU JAM NER DZA NPL ZMB CMR PHL JPN PER TGO MWI ZWE Change in financial openness

6 Growth Benefits of Financial Integration: Evidence About 25 studies of growth effects No effect: 4 Mixed: 18 Positive: 3

7 Growth: Why Such Diverse Results? Finer measures of integration, de jure or de facto, tend to yield more positive results Sample of countries: Effects much weaker in poor developing countries Time span of sample: Longer datasets yield more positive results No robust macroeconomic evidence of growth benefits

8 Financial Integration and Volatility: Evidence Capital mobility does not increase probability of sudden stops or current account reversals (Edwards) Banking crises are most disruptive and occur frequently in closed economies No evidence that financial integration by itself is proximate determinant of financial crises

9 But Two Issues on Volatility Relative volatility of consumption growth increases at low and intermediate levels of integration Developing economies, including emerging markets, have not attained better risk sharing

10 Other Ways of Looking at the Data Effects of different types of private capital flows: > Equity flows > FDI > Debt Macroeconomic vs. microeconomic evidence

11 International Financial Integration:Distribution of Gross Inflows (% of Total) Emerging Markets FDI Equity Debt

12 Equity Market Liberalizations Boost Growth Bekaert, Harvey, Lundblad big positive growth effects Henry lower cost of capital, private investment booms, productivity growth Chari and Henry allocative efficiency

13 Equity Market Liberalizations Boost Growth: Really? eally? Portfolio equity flows relatively small De jure measures not actual flows used in these studies Equity market liberalizations coincident with other reforms

14 Foreign Direct Investment Should in principle be the best > stable > transfers of technology, expertise > right sorts of incentives But difficult to detect growth effects > macroeconomic evidence mixed > microeconomic evidence also weak Evidence of vertical spillovers

15 Additional Microeconomic Evidence Capital controls result in significant efficiency losses > distortions (e.g. Forbes, 2005) > reductions in discipline > administrative costs Again use of de jure measures, but less of a problem in these cases

16 Summary of New Evidence Equity market liberalization seems to work FDI benefits becoming more apparent Benefits more evident in micro data?

17 The Traditional View Financial Globalization More efficient international allocation of capital Capital deepening International risk-sharing GDP growth Consumption volatility

18 A Different Perspective Traditional Channels Financial Globalization Potential Collateral Benefits Financial market development Institutional development Better governance Macroeconomic discipline GDP / TFP Growth Consumption volatility

19 1.2 Figure 6A. Financial Openness and Financial Development: Private Credit/ GDP 1 JPN DEU Private Credit/ GDP AUT PRT FRA ESP NZL MYS THA KOR ZAF AUS ISR FIN ITA NOR DNK CAN TUN SWE CHL MUS GRC USA SLV IDN EGY FJI TTO BOLURY PHL IND BRA BGD PAK HND DZA LKA KEN IRN SEN ECU PNG TGOJAM ZWE NPL DOM MEX GTMCOL PRY CMRPER CRI ARG TUR VEN NER GHATZAMWI ZMB Mean financial openness

20 Figure 6A. Financial Openness and Financial Development: Stock Market Capitalization/ GDP ZAF MYS Stock Market Capitalization/ GDP USA JPN FIN SWE AUS CAN CHL FRA ESP JAM DNK THAPHL ISR NZL KOR GRC TTO DEU MUS ITA NOR IND CHN ZWE BRA ARG PRT MEX IRN TUR EGY PAKCOL SLVLKA KEN IDN PER GHA AUT NPL FJI CRI ECUVEN TUN BOL MWI HND ZMB BGD GTM PRY TZAURY Mean financial openness

21 FG and Financial Development Foreign ownership of banks Inflows add to depth of equity markets Financial sector FDI has benefits

22 FG and Quality of Institutions, Governance Openness to foreign capital provides incentives for improving corporate governance (Stulz) Corruption, lack of transparency discourage FDI, portfolio flows (Wei)

23 2.5 Figure 6B. Financial Openness and Quality of Institutions: Institutional Quality Institutional Quality NZL FIN AUS NOR CAN DEU AUT USA ESP PRT JPN CHL CRI ITA MUS GRC ISRURY KOR TTO MYS ZAF THA TUN BRAMEX SLV ARG JAM IND FJI PHLGHA TUR DOM CHN LKA EGY PERSEN BOL TZAMWI HND GTM BGD NPL COL PNG NER ECU IRN PRY PAK CMR KEN IDN VEN TGO ZWE DZA FRA DNK SWE ZMB Mean financial openness

24 3 Figure 6B. Financial Openness and Quality of Institutions: Control of Corruption USA AUS NZL NOR CAN DEU FIN AUT DNK SWE Control of Corruption ESPCHL PRT JPN ISR CRI ITA GRC URY MUS ZAF MYS KOR TUN FJI TTO BRA TUR LKA EGY CHN PER IND MEX THA SEN PHL GHA JAM NPL COL DOM SLV ARG IRN DZA BGDZWE GTM PNGMWI NER TGO PAK VEN BOL HND PRY IDN ECU TZA CMR KEN FRA ZMB Mean financial openness

25 Macroeconomic Policy Discipline Capital account liberalization as commitment device Even Stiglitz is on board! Sadly, limited evidence

26 0 Figure 6C. Financial Openness and Macroeconomic Policies: Monetary Policy Log Inflation TUR ZWE ECU VEN URY BRA GHA MWI IRN MEX COL JAM DOM PRY PER GTM BOL TZA KEN ISR HND ZAFLKA DZA PAK NPL IDN EGYARG IND SLV GRC CHL PHL PNG BGDCHN MUS TTO PRT KOR TUN NERITA ESP FJI CMRTHA AUS NZL USA NOR SEN CAN TGO MYS FIN AUT DEU DNK FRA SWE ZMB JPN Mean financial openness

27 10 Figure 6C. Financial Openness and Macroeconomic Policies: Fiscal Policy Government Budget Balance (%GDP) DZA NOR KOR DOM PRY CMRTHA CHN IDN VEN JAM BGD GTM SLV ECU CHL BRA AUS NZL DEU IRN MUS PHL TTO IND COL URY MEX PER CRI GHAESP FIN AUT USA TUN TZA CAN MYS TGO PAK ZAF KEN EGY HND PNG ZWE BOL JPN FJIARG PRT TUR SEN NPL NER ITA ISR LKA MWI GRC FRA DNK SWE ZMB Mean financial openness

28 Complication: Threshold Effects Above Thresholds GDP / TFP growth Risks of Crises Financial Globalization X Threshold Conditions Financial market development Institutional Quality, Governance Macroeconomic policies Trade integration Below Thresholds GDP / TFP growth Risks of Crises?

29 TENSION!! Some evidence that financial integration catalyzes financial development, improves governance, imposes discipline on macro policies... But, in the absence of a basic pre- existing level of these supporting conditions, financial integration can wreak havoc

30 Further Work Needed Identification of thresholds Interactions/trade-offs offs among thresholds Level of integration itself is a threshold

31 Collateral Benefits Perspective Useful? Unified conceptual framework Country-specific requirements, initial conditions can be taken into account Selective approach to liberalization Can manage risks during transition to thresholds, but can not eliminate them

A Pragmatic Approach to Capital Account Liberalization. Eswar Prasad Cornell University

A Pragmatic Approach to Capital Account Liberalization. Eswar Prasad Cornell University A Pragmatic Approach to Capital Account Liberalization Eswar Prasad Cornell University Presentation partly based on my joint work with: Ayhan Kose, Kenneth Rogoff, Shang-Jin Wei (2003, 2006) Raghuram Rajan

More information

In Defense of Wall Street. The Social Productivity of the Financial System

In Defense of Wall Street. The Social Productivity of the Financial System In Defense of Wall Street The Social Productivity of the Financial System Finance is powerful Mobilizes Researches and allocates Monitors and exerts corporate control Provides risk diversification and

More information

Financial Liberalization and Capital Flows: Facts

Financial Liberalization and Capital Flows: Facts Financial Liberalization and Capital Flows: Facts Alberto Martin CREI, Universitat Pompeu Fabra and Barcelona GSE July 2014 The rise of nancial globalization Since the late 1970s Dramatic increase in nancial

More information

Finance, Growth & Opportunity. Implications for policy

Finance, Growth & Opportunity. Implications for policy Finance, Growth & Opportunity Implications for policy Today, I will make three points 1) Finance matters for human welfare beyond crises. 2) Financial innovation is associated with arguably necessary for

More information

Addressing The Marketing Problem of the Social Market Economy

Addressing The Marketing Problem of the Social Market Economy Addressing The Marketing Problem of the Social Prepared for: KAS-Conference on 60 Years of Social Market Economy Sankt Augustin, November 30, 2009 Marcus Marktanner, American University of Beirut Outline

More information

Export Survival and Comparative Advantage

Export Survival and Comparative Advantage Export Survival and Comparative Advantage (Work in progress) Regional Seminar on Export Diversification, October 27-28, 2010 Bolormaa Tumurchudur, UNCTAD Miho Shirotori, UNCTAD Alessandro Nicita, UNCTAD

More information

Figure 1.1 The Parade of World Income. Copyright 2005 Pearson Addison-Wesley. All rights reserved. 1-1

Figure 1.1 The Parade of World Income. Copyright 2005 Pearson Addison-Wesley. All rights reserved. 1-1 Figure 1.1 The Parade of World Income Copyright 2005 Pearson Addison-Wesley. All rights reserved. 1-1 Copyright 2005 Pearson Addison-Wesley. All rights reserved. 1-2 Growth and Development: The Questions

More information

Lecture 12 The Solow Model and Convergence. Noah Williams

Lecture 12 The Solow Model and Convergence. Noah Williams Lecture 12 The Solow Model and Convergence Noah Williams University of Wisconsin - Madison Economics 312 Spring 2010 Recall: Balanced Growth Path All per-capita variables grow at rate g. All level variables

More information

Financial services and economic development

Financial services and economic development GDP per capita growth 03/11/2014 Financial services and economic development Thorsten Beck Finance why do we care? 0.04 BWA 0.02 0.00-0.02 COG SLE ALB GAB IND KOR TUR SGP MUS SDN MOZ IRLLUX IDN MAR EGY

More information

Economic Growth: the role of institutions

Economic Growth: the role of institutions ECON 184 Economic Growth: the role of institutions ECON 184: Institutions and Growth January 26, 2010 1 Contents 1 Institutions and growth: initial analysis 3 2 How can institutions affect economic growth?

More information

The new gold standard? Empirically situating the TPP in the investment treaty universe

The new gold standard? Empirically situating the TPP in the investment treaty universe Graduate Institute of International and Development Studies Center for Trade and Economic Integration Working Paper Series Working Paper N IHEIDCTEI2015-08 The new gold standard? Empirically situating

More information

Lecture 21: Institutions II

Lecture 21: Institutions II Lecture 21: Institutions II Dave Donaldson and Esther Duflo 14.73 Challenges of World Poverty Institutions II: Plan for the lecture Discussion of assigned reading (Acemoglu, Johnson and Robinson) Causes

More information

A new metrics for the Economic Complexity of countries and products

A new metrics for the Economic Complexity of countries and products A new metrics for the Economic Complexity of countries and products Andrea Tacchella Dept. of Physics, La Sapienza - University of Rome Istituto dei Sistemi Complessi, CNR Roma CRISISLAB ANALYTICS FOR

More information

Financial Liberalization and Capital Flows: Facts

Financial Liberalization and Capital Flows: Facts Financial Liberalization and Capital Flows: Facts Alberto Martin CRE, UPF, Barcelona GSE, MF July 6, 2015 Martin (CRE, UPF, Barcelona GSE, MF) CRE Macroeconomics Summer School July 6, 2015 1 / 46 The rise

More information

Macroeconomics II. Growth

Macroeconomics II. Growth Macroeconomics II Growth Growth Possibilities We previously referred to the aggregate production function Y = A K α L 1- α. The growth rate of real GDP, Y, is generated by the contributions of A, K and

More information

Economic Complexity and the Wealth of Nations

Economic Complexity and the Wealth of Nations Economic Complexity and the Wealth of Nations Cesar A. Hidalgo ABC Career Development Professor MIT Media Lab Faculty Associate, Center for International Development Harvard University EARTH WIND WATER

More information

Bringing Up Incentives: A Look at the Determinants of Poverty. Alice Sheehan

Bringing Up Incentives: A Look at the Determinants of Poverty. Alice Sheehan Bringing Up Incentives: A Look at the Determinants of Poverty Alice Sheehan Outline presentation What s going on out there? Growth, Human Development indicators, Poverty rates, etc. A look at determinants

More information

Overview of Growth Research in the Past Two Decades

Overview of Growth Research in the Past Two Decades Overview of Growth Research in the Past Two Decades by Pete Klenow Stanford University and NBER September 21, 2010 Early Growth Research 1950s Solow (1956) 1960s Nelson and Phelps (1966) 1970s Dark Ages

More information

Trade and International Integration: A Developing Program of Research

Trade and International Integration: A Developing Program of Research Trade and International Integration: A Developing Program of Research World Bank Development Economics Research Group Geneva, June 2013 Three areas of focus I. Implications of the changing patterns of

More information

The Effects of Infrastructure Development on Growth and Income Distribution

The Effects of Infrastructure Development on Growth and Income Distribution The Effects of Infrastructure Development on Growth and Income Distribution César Calderón Luis Servén (Central Bank of Chile) (The World Bank) ALIDE - The World Bank - Banco BICE Reunión Latinoamericana

More information

Life-cycle Human Capital Accumulation Across Countries: Lessons From U.S. Immigrants

Life-cycle Human Capital Accumulation Across Countries: Lessons From U.S. Immigrants Life-cycle Human Capital Accumulation Across Countries: Lessons From U.S. Immigrants David Lagakos, UCSD and NBER Benjamin Moll, Princeton and NBER Tommaso Porzio, Yale Nancy Qian, Yale and NBER Todd Schoellman,

More information

Ken Jackson. January 31st, 2013

Ken Jackson. January 31st, 2013 Wilfrid Laurier University January 31st, 2013 Recap of the technology models Do the models match historical data? growth accounting Estimating technology change through history A revised model of technology

More information

Addressing institutional issues in the Poverty Reduction Strategy Paper process

Addressing institutional issues in the Poverty Reduction Strategy Paper process SESSION 1 Addressing institutional issues in the Poverty Reduction Strategy Paper process Scoping notes, detailed diagnostics, and participatory processes Public Sector Reform and Capacity Building Unit

More information

Natural Resources and Development in the Middle East and North Africa: An Alternative Perspective

Natural Resources and Development in the Middle East and North Africa: An Alternative Perspective Natural Resources and Development in the Middle East and North Africa: An Alternative Perspective Daniel Lederman and Mustapha K. Nabli The World Bank Presentation at the Workshop on Natural Resources

More information

Building Capacity in PFM

Building Capacity in PFM Building Capacity in PFM Measuring economic governance in the context of national development planning LAMIA MOUBAYED BISSAT Beirut, Lebanon, 13 June 2014 The Institut des Finances Basil Fuleihan 1996

More information

Measuring the Pollution Terms of Trade with Technique Effects

Measuring the Pollution Terms of Trade with Technique Effects Measuring the Pollution Terms of Trade with Technique Effects Jean-Marie Grether, University of Neuchâtel Nicole Mathys, Swiss Federal Office of Energy and University of Neuchâtel Conference on the International

More information

Infrastructure and Economic. Norman V. Loayza, World ldbank Rei Odawara, World Bank

Infrastructure and Economic. Norman V. Loayza, World ldbank Rei Odawara, World Bank Infrastructure and Economic Growth thin Egypt Norman V. Loayza, World ldbank Rei Odawara, World Bank Motivation Questions How does Egypt compare internationally regarding public infrastructure? Is Egypt

More information

The Marginal Product of Capital. Francesco Caselli. Discussion by

The Marginal Product of Capital. Francesco Caselli. Discussion by 7 TH JACQUES POLAK ANNUAL RESEARCH CONFERENCE NOVEMBER 9-10, 2006 The Marginal Product of Capital Francesco Caselli Discussion by Chang-Tai Hsieh University of California, Berkeley The views expressed

More information

The contribution of trade in financial services to economic growth and development. Thorsten Beck

The contribution of trade in financial services to economic growth and development. Thorsten Beck The contribution of trade in financial services to economic growth and development Thorsten Beck Finance why do we care? 0.04 BWA GDP per capita growth 0.02 0.00-0.02 COG SLE ALB GAB IND KOR TUR SGP MUS

More information

The Fall of the Final Mercantilism

The Fall of the Final Mercantilism The Fall of the Final Mercantilism Labour Mobility in the Caribbean and the World, from Arthur Lewis to the 21 st Century Eastern Caribbean Central Bank Michael Clemens November 3, 2010 1 2 Migration

More information

China: How to maintain balanced growth? Ricardo Hausmann Kennedy School of Government Harvard University

China: How to maintain balanced growth? Ricardo Hausmann Kennedy School of Government Harvard University China: How to maintain balanced growth? Ricardo Hausmann Kennedy School of Government Harvard University China s growth process An unprecedented miracle China has been the fastest growing country in the

More information

Causes of Cross-country Income Gaps

Causes of Cross-country Income Gaps Causes of Cross-country Income Gaps Prof. Lutz Hendricks Econ520 January 14, 2016 1 / 24 Objectives We start looking into the question: Why are some countries rich and others poor? We think about methods

More information

Institutional Change and Growth-Enabling Governance Capabilities

Institutional Change and Growth-Enabling Governance Capabilities Institutional Change and Growth-Enabling Governance Capabilities Nicolas Meisel Strategy and Research Dept - French Development Agency (AFD) Jacques Ould Aoudia Treasury and Economic Policy Directorate

More information

Today s tips for the Country Buy Report

Today s tips for the Country Buy Report High level outline Today s tips for the Country Buy Report Stephen Malpezzi Introduction Overview of the country and economy Basic indicators (GDP, employment, etc.) Key institutions, the setting How does

More information

Accounting For Cross-Country Income Di erences

Accounting For Cross-Country Income Di erences Accounting For Cross-Country Income Di erences January 2011 () Aggregation January 2011 1 / 10 Standard Primal Growth Accounting Aggregate production possibilities frontier: where Change in output is )

More information

DEPENDENT ELITES IN POST- SOCIALISM: ARE LAND-BASED POST- COLONIAL SYSTEMS SO DIFFERENT FROM THE TRANSCONTINENTAL ONES? by Pal TAMAS [Institute of

DEPENDENT ELITES IN POST- SOCIALISM: ARE LAND-BASED POST- COLONIAL SYSTEMS SO DIFFERENT FROM THE TRANSCONTINENTAL ONES? by Pal TAMAS [Institute of DEPENDENT ELITES IN POST- SOCIALISM: ARE LAND-BASED POST- COLONIAL SYSTEMS SO DIFFERENT FROM THE TRANSCONTINENTAL ONES? by Pal TAMAS [Institute of Sociology, HAS Budapest] STRUCTURE OF THE PAPER 1. STATE

More information

The Shift to Government Banking:

The Shift to Government Banking: The Shift to Government Banking: Risks for the Netherlands and other Developed Countries Prof. Florencio Lopez de Silanes EDHEC Business School, NBER and DSF April 28, 2011 Amsterdam Outline I. The Policy

More information

Political Economy of Growth

Political Economy of Growth 1 Political Economy of Growth Daron Acemoglu Department of Economics, MIT Milan, DEFAP June 11, 2007 The Wealth of Nations Vast differences in prosperity across countries today. Income per capita in sub-saharan

More information

Deep Roots of Comparative Development

Deep Roots of Comparative Development Deep Roots of Comparative Development Oded Galor AEA Continuing Education Program Lecture III - AEA 2014 Oded Galor Roots of Comparative Development Lecture III - AEA 2014 1 / 41 Deep Roots of Comparative

More information

THE QUALITY OF GOVERNMENT CA FOSCARI INTERNATIONAL LECTURE

THE QUALITY OF GOVERNMENT CA FOSCARI INTERNATIONAL LECTURE THE QUALITY OF GOVERNMENT CA FOSCARI INTERNATIONAL LECTURE Andrei Shleifer December 12, 2012 1 Richer countries almost always have better governments Less corrupt More efficient Quality of government improves

More information

Economic Growth: The Neo-classical & Endogenous Story

Economic Growth: The Neo-classical & Endogenous Story Density of countries Economic Growth: The Neo-classical & Endogenous Story EC307 ECONOMIC DEVELOPMENT 1960 Dr. Kumar Aniet University of Cambridge & LSE Summer School Lecture 4 1980 2000 created on July

More information

Lecture 9: Institutions, Geography and Culture. Based on Acemoglu s L. Robbins lectures

Lecture 9: Institutions, Geography and Culture. Based on Acemoglu s L. Robbins lectures Lecture 9: Institutions, Geography and Culture Based on Acemoglu s L. Robbins lectures 1 The Wealth of Nations Vast differences in prosperity across countries today. Income per capita in sub-saharan Africa

More information

Governance, Rule of Law and Transparency Matters: BRICs in Global Perspective

Governance, Rule of Law and Transparency Matters: BRICs in Global Perspective Governance, Rule of Law and Transparency Matters: BRICs in Global Perspective Daniel Kaufmann * Senior Fellow, Brookings Institution http://www.brookings.edu/experts/kaufmannd.aspx Panel on Transparency

More information

Trade Policy Restrictiveness in Transportation Services

Trade Policy Restrictiveness in Transportation Services Trade Policy Restrictiveness in Transportation Services Ingo Borchert, Batshur Gootiiz and Aaditya Mattoo Development Research Group Trade and International Integration, The World Bank OECD Expert Meeting

More information

Incen%ves The Good, the Bad and the Ugly

Incen%ves The Good, the Bad and the Ugly Incen%ves The Good, the Bad and the Ugly Vale Columbia Center Interna%onal Investment Conference New York, Nov 13-14, 2013 Sebas%an James The World Bank Group 1 Prevalence of Tax Incen%ves around the Number

More information

Infrastructure investment and growth

Infrastructure investment and growth Infrastructure investment and growth Luis Servén The World Bank IMF, November 2010 Background How important is infrastructure for economic growth? Old question even in Adam Smith s Wealth of Nations Empirically

More information

Estimating Global Migration Flow Tables Using Place of Birth Data

Estimating Global Migration Flow Tables Using Place of Birth Data Estimating Global Migration Flow Tables Using Place of Birth Data Guy J. Abel Wittgenstein Centre (IIASA, VID/ÖAW, WU) Vienna Institute of Demography/Austrian Academy of Sciences 1 Introduction International

More information

Rodolfo Debenedetti Lecture

Rodolfo Debenedetti Lecture Rodolfo Debenedetti Lecture Andrei Shleifer March 2005 Legal Origin Distribution Legal Origins = English = French = German = Scandinavian = Socialist Institution Procedural Formalism Outcomes Time to evict

More information

Subjective Well-Being, Income, Economic Development and Growth

Subjective Well-Being, Income, Economic Development and Growth Subjective Well-Being, Income, Economic Development and Growth Dan Sacks, Betsey Stevenson and Justin Wolfers Wharton School, University of Pennsylvania and NBER Annual Bank Conference on Development Economics--Stockholm,

More information

Technology Choice. Francesco Caselli. Summer School 2005

Technology Choice. Francesco Caselli. Summer School 2005 Technology Choice Francesco Caselli Summer School 2005 1 Motivation All of the evidence and all of the models we have studied so far assume that cross-country technology differences are factor-neutral.

More information

NGO PERSPECTIVE: FROM WORDS TO DEEDS

NGO PERSPECTIVE: FROM WORDS TO DEEDS MMSD & IIED Managing Mineral Wealth NGO PERSPECTIVE: FROM WORDS TO DEEDS Miguel Schloss Executive Director Transparency International Issues Policy distortions Institutional incentives Governance Implications

More information

A Survey of Securities Laws and Enforcement

A Survey of Securities Laws and Enforcement A Survey of Securities Laws and Enforcement Preliminary Draft By Florencio Lopez-de-Silanes YALE University and NBER October 2003 *I am indebted to Patricio Amador, Jose Caballero and Manuel Garcia-Huitron

More information

Tripartite Agreements for MEPC.2/Circ. Lists 1, 3, 4 received by IMO following issuance of MEPC.2/Circ.20

Tripartite Agreements for MEPC.2/Circ. Lists 1, 3, 4 received by IMO following issuance of MEPC.2/Circ.20 The following is a list of tripartite agreements reported to IMO during the period between the issuance of the annual MEPC.2/Circular, disseminated in December of each year. Any countries wishing to join

More information

FACTSHEET. Figure [1]: Economic Complexity Index vs. Opportunity Value (Positive Product Complexity Index, 2011) 2 ESP ITA POL BEL DNK PRT

FACTSHEET. Figure [1]: Economic Complexity Index vs. Opportunity Value (Positive Product Complexity Index, 2011) 2 ESP ITA POL BEL DNK PRT Opportunity Value Median = -0.06 FACTSHEET Knowledge Economy Assessment of Tunisia - Identifying and addressing capability and innovation gaps in the Southern and Eastern Mediterranean region (SEMED) Overriding

More information

Rethinking the Wealth of Nations. Daron Acemoglu, MIT FEEM Lecture, December 14, 2009.

Rethinking the Wealth of Nations. Daron Acemoglu, MIT FEEM Lecture, December 14, 2009. Rethinking the Wealth of Nations Daron Acemoglu, MIT FEEM Lecture, December 14, 2009. 1 The Failure of Nations Vast differences in prosperity across countries today. Income per capita in sub-saharan Africa

More information

ECON 260 Theories of Economic Development. Instructor: Jorge Agüero. Fall 2008. Lecture 1 September 29, 2008 1

ECON 260 Theories of Economic Development. Instructor: Jorge Agüero. Fall 2008. Lecture 1 September 29, 2008 1 ECON 260 Theories of Economic Development. Instructor: Jorge Agüero. Fall 2008. Lecture 1 September 29, 2008 1 General information Time and location: TR 2:10-3:30 p.m. SPR 3123 Office hours: T 10am-11am,

More information

Fear of flying: Policy stances in a troubled world economy

Fear of flying: Policy stances in a troubled world economy Fear of flying: Policy stances in a troubled world economy UNCTAD G-24 Technical Meeting Luxor, 10-11 March 2014 Session 1 Global Economy A weakening economic performance reflects inability to address

More information

ECONOMIC DIVERSIFICATION: BUILDING RESILIENCE TO CLIMATE CHANGE

ECONOMIC DIVERSIFICATION: BUILDING RESILIENCE TO CLIMATE CHANGE ECONOMIC DIVERSIFICATION: BUILDING RESILIENCE TO CLIMATE CHANGE Sarwat Jahan Bonn September 7 th, 2015 The team also comprises Chris Papageorgiou (lead), Giang Ho, Ke Wang, Lisa Kolovich, Camelia Minoiu,

More information

Agriculture and Aggregate Productivity: A Quantitative Cross-Country Analysis

Agriculture and Aggregate Productivity: A Quantitative Cross-Country Analysis Agriculture and Aggregate Productivity: A Quantitative Cross-Country Analysis Diego Restuccia University of Toronto Dennis Tao Yang Virginia Polytechnic Institute Xiaodong Zhu University of Toronto March

More information

Measuring Services Trade Restrictions

Measuring Services Trade Restrictions Measuring Services Trade Restrictions Aaditya Mattoo (based on research with Ingo Borchert and Batshur Gootiiz) Development Research Group The World Bank 11 March 2012 Motivation: Policy Transparency and

More information

Subjective Well Being, Income, Economic Development and Growth

Subjective Well Being, Income, Economic Development and Growth Subjective Well Being, Income, Economic Development and Growth Dan Sacks, Betsey Stevenson and Justin Wolfers Wharton School, University of Pennsylvania and NBER CSLS ICP Conference on Happiness December

More information

Tripartite Agreements for MEPC.2/Circ. Lists 1, 3, 4 received by IMO following issuance of MEPC.2/Circ.21

Tripartite Agreements for MEPC.2/Circ. Lists 1, 3, 4 received by IMO following issuance of MEPC.2/Circ.21 The following is a list of tripartite agreements reported to IMO during the period between the issuance of the annual MEPC.2/Circular, disseminated in December of each year. Any countries wishing to join

More information

Metrics Matters: Measures of Governance and Security and the Business Perspective An initial empirical exploration

Metrics Matters: Measures of Governance and Security and the Business Perspective An initial empirical exploration Metrics Matters: Measures of Governance and Security and the Business Perspective An initial empirical exploration Daniel Kaufmann, World Bank Institute www.worldbank.org/wbi/governance For presentation

More information

TRADE WATCH DATA JANUARY T RVSFRRTVL

TRADE WATCH DATA JANUARY T RVSFRRTVL Public Disclosure Authorized TRADE WATCH DATA JANUARY T RVSFRRTVL Public Disclosure Authorized A C F D H T W B DECRG Public Disclosure Authorized Public Disclosure Authorized *TRADE WATCH is a monthly

More information

Does Absolute Latitude Explain Underdevelopment?

Does Absolute Latitude Explain Underdevelopment? AREC 345: Global Poverty and Economic Development Lecture 4 Professor: Pamela Jakiela Department of Agricultural and Resource Economics University of Maryland, College Park Does Absolute Latitude Explain

More information

Malaysia is rich in natural resources

Malaysia is rich in natural resources WORLD BANK 1 Malaysia is rich in natural resources Composition of Malaysia s national wealth, 2005 19.7 Intangible Capital 13% 8% Subsoil assets 26.0-1.2 55.5 Net Foreign Assets Produced Capital Natural

More information

2006/SOM1/ACT/WKSP/007a Recasting Governance for the XXI Century - Presentation

2006/SOM1/ACT/WKSP/007a Recasting Governance for the XXI Century - Presentation 2006/SOM1/ACT/WKSP/007a Recasting Governance for the XXI Century - Presentation Submitted by: Miguel Schloss, Managing Partner DamConsult Ltd. APEC Workshop on Anti-Corruption Measures for the Development

More information

Infrastructure and Economic Growth in Egypt

Infrastructure and Economic Growth in Egypt Public Disclosure Authorized Policy Research Working Paper 5177 WPS5177 Public Disclosure Authorized Public Disclosure Authorized Infrastructure and Economic Growth in Egypt Norman V. Loayza Rei Odawara

More information

Institute for Development Policy and Management (IDPM)

Institute for Development Policy and Management (IDPM) Institute for Development Policy and Management (IDPM) Development Economics and Public Policy Working Paper Series WP No. 33/212 Published by: Development Economics and Public Policy Cluster, Institute

More information

Employment, Structural Change, and Economic Development. Dani Rodrik March 15, 2012

Employment, Structural Change, and Economic Development. Dani Rodrik March 15, 2012 Employment, Structural Change, and Economic Development Dani Rodrik March 15, 2012 A remarkable reversal in fortunes since 1990s -.04 -.02 0.02.04.06 1950 1955 1960 1965 1970 1975 1980 1985 1990 1995 2000

More information

Explaining Educational Attainment across Countries and over Time

Explaining Educational Attainment across Countries and over Time Explaining Educational Attainment across Countries and over Time D. Restuccia 1 G. Vandenbroucke 2 1 University of Toronto 2 University of Southern California Review of Economic Dynamics Vol. 17, No. 4,

More information

EC 2725 April 2009. Law and Finance. Effi Benmelech Harvard & NBER

EC 2725 April 2009. Law and Finance. Effi Benmelech Harvard & NBER EC 2725 April 2009 Law and Finance Effi Benmelech Harvard & NBER Broad Picture A market economy is not only laissez faire but it also requires a set of institutions that allow markets to work their magic.

More information

Geography and Economic Transition

Geography and Economic Transition Global Spatial Analysis at the Grid Cell Level Mesbah Motamed Raymond Florax Will Masters Department of Agricultural Economics Purdue University March 2009 Urbanization at the grid cell level Growth regimes

More information

Movement and development. Australian National University Jan. 17, 2013 Michael Clemens

Movement and development. Australian National University Jan. 17, 2013 Michael Clemens Movement and development Australian National University Jan. 17, 2013 Michael Clemens ? 60% Benefits Little Haiti Cap-Haïtien Gibson and McKenzie 2010 Tongan seasonal workers in NZ NZ$1,400/family

More information

Outline 4/22/2011. Koc University April, 2011

Outline 4/22/2011. Koc University April, 2011 4/22/211 Koc University April, 211 Outline Main messages Crisis experience and focus Reserves trends Review of existing approaches Proposed new approach and metric Cost of reserves Reserve alternatives

More information

Informality in Latin America and the Caribbean

Informality in Latin America and the Caribbean WPS4888 Policy Research Working Paper 4888 Informality in Latin America and the Caribbean Norman V. Loayza Luis Servén Naotaka Sugawara The World Bank Development Research Group Macroeconomics and Growth

More information

Non-market strategy under weak institutions

Non-market strategy under weak institutions Lectures 5-6 Non-market strategy under weak institutions 1 Outline 1. Does weakness of institutions matter for business and economic performance? 2. Which institutions matter most? 3. Why institutions

More information

Gender Inequality, Income, and Growth: Are Good Times Good for Women?

Gender Inequality, Income, and Growth: Are Good Times Good for Women? POLICY RESEARCH REPORT ON GENDER AND DEVELOPMENT Working Paper Series, No. 1 Gender Inequality, Income, and Growth: Are Good Times Good for Women? David Dollar Roberta Gatti Gender differentials in education

More information

Growing Together with Growth Polarization and Income Inequality

Growing Together with Growth Polarization and Income Inequality Growing Together with Growth Polarization and Income Inequality Sudip Ranjan Basu, Ph.D. Economist, United Nations ESCAP UN DESA Expert Group Meeting on the World Economy (LINK Project) United Nations

More information

Econ 1340: World Economic History

Econ 1340: World Economic History Econ 1340: World Economic History Lecture 16 Camilo Gracía-Jimeno University of Pennsylvania April 4, 2011 Camilo Gracía-Jimeno (University of Pennsylvania)Econ 1340: World Economic History April 4, 2011

More information

The Role of Trade in Structural Transformation

The Role of Trade in Structural Transformation 1 The Role of Trade in Structural Transformation Marc Teignier UNIVERSIDAD DE ALICANTE European Summer Symposium in International Macroeconomics 23 May 2012, Tarragona Question Contributions Road Map Motivation

More information

Human Resources for Health Why we need to act now

Human Resources for Health Why we need to act now Human Resources for Health Why we need to act now Progress towards the MDGs, particularly in Africa is slow, or even stagnating. Poor people cannot access basic services for want of doctors, nurses and

More information

Diversification versus Polarization: Role of industrial policy in Asia and the Pacific

Diversification versus Polarization: Role of industrial policy in Asia and the Pacific TOWARDS A RETURN OF INDUSTRIAL POLICY? ARTNeT SYMPOSIUM 25-26 JULY 211 ESCAP, BANGKOK Diversification versus Polarization: Role of industrial policy in Asia and the Pacific Sudip Ranjan Basu* International

More information

The geography of development within countries

The geography of development within countries The geography of development within countries J. Vernon Henderson Brown University & NBER June 2012 GDN 13TH ANNUAL GLOBAL DEVELOPMENT CONFERENCE Urbanization and Development: Delving Deeper into the Nexus

More information

Informality in Latin America and the Caribbean

Informality in Latin America and the Caribbean Public Disclosure Authorized Policy Research Working Paper 4888 WPS4888 Public Disclosure Authorized Public Disclosure Authorized Informality in Latin America and the Caribbean Norman V. Loayza Luis Servén

More information

Human Rights and Governance: The Empirical Challenge. Daniel Kaufmann World Bank Institute. www.worldbank.org/wbi/governance/

Human Rights and Governance: The Empirical Challenge. Daniel Kaufmann World Bank Institute. www.worldbank.org/wbi/governance/ Human Rights and Governance: The Empirical Challenge Daniel Kaufmann World Bank Institute www.worldbank.org/wbi/governance/ Presentation at Human Rights and Development: Towards Mutual Reinforcement Conference,

More information

The distribution of household financial contributions to the health system: A look outside Latin America and the Caribbean

The distribution of household financial contributions to the health system: A look outside Latin America and the Caribbean The distribution of household financial contributions to the health system: A look outside Latin America and the Caribbean Priyanka Saksena and Ke Xu 3 November, 2008 Santiago 1 The distribution of household

More information

Does Export Concentration Cause Volatility?

Does Export Concentration Cause Volatility? Does Export Concentration Cause Volatility? Christian Busch 14. Januar 2010 Overview Countries with undiversified export structure are plausibly more vulnerable to external shocks. But difficult to evaluate

More information

Trends in global income inequality and their political implications

Trends in global income inequality and their political implications Trends in global income inequality and their political implications LIS Center; Graduate School City University of New York Talk at the Stockholm School of Economics, September 1, 2014 A. National inequalities

More information

FEDERAL RESERVE BANK of ATLANTA

FEDERAL RESERVE BANK of ATLANTA FEDERAL RESERVE BANK of ATLANTA Financial and Real Integration Scott L. Baier and Gerald P. Dwyer Jr. Working Paper 2008-14 May 2008 WORKING PAPER SERIES FEDERAL RESERVE BANK of ATLANTA WORKING PAPER SERIES

More information

Are «Good Governance» reforms a priority? Conceptual, measurement, and policy issues

Are «Good Governance» reforms a priority? Conceptual, measurement, and policy issues SOAS & Mo Ibrahim Residential School on Governance in Africa Are «Good Governance» reforms a priority? Conceptual, measurement, and policy issues Nicolas Meisel (meiseln@afd.fr) Research Department - French

More information

International Investment Patterns. Philip R. Lane WBI Seminar, Paris, April 2006

International Investment Patterns. Philip R. Lane WBI Seminar, Paris, April 2006 International Investment Patterns Philip R. Lane WBI Seminar, Paris, April 2006 Introduction What determines aggregate capital inflows and outflows? What determines bilateral patterns in international

More information

Relative Prices and Sectoral Productivity

Relative Prices and Sectoral Productivity Relative Prices and Sectoral Productivity Margarida Duarte University of Toronto Diego Restuccia University of Toronto August 2012 Abstract The relative price of services rises with development. A standard

More information

Income Differences Across Countries

Income Differences Across Countries Income Differences Across Countries Pete Klenow Stanford University Society for Economic Dynamics July 6th, 2006 Vancouver, Canada 1 2000 PPP Income per capita 90 th /10 th 25.6 75 th /25 th 8.8 S.D. of

More information

Political Economy of Development and Underdevelopment

Political Economy of Development and Underdevelopment Political Economy of Development and Underdevelopment Daron Acemoglu Department of Economics Massachusetts Institute of Technology October 10, 2005 The State of the World Economy Vast differences in prosperity

More information

Fiscal Management: Lessons from. Koshy Mathai 10 July 2013

Fiscal Management: Lessons from. Koshy Mathai 10 July 2013 Fiscal Management: Lessons from Emerging Market Economies Koshy Mathai 10 July 2013 1 Outline 1. Importance of fiscal discipline 2. Sri Lanka overview 3. Revenue 4. Expenditure 5. Fiscal space and countercylical

More information

Specialization Patterns in International Trade

Specialization Patterns in International Trade Specialization Patterns in International Trade Walter Steingress November 16, 2015 Abstract The pattern of specialization is key to understanding how trade affects the production structure of an economy.

More information

Globalization, Technology and Inequality

Globalization, Technology and Inequality Globalization, Technology and nequality Lecture 4: Trade, O shoring and nequality Gino Gancia July 5, 2012 Gino Gancia () Lecture 4 July 5, 2012 1 / 26 Trends in Wage nequality within-country wage inequality

More information

Advanced Economic Growth: Lecture 1, Introduction

Advanced Economic Growth: Lecture 1, Introduction Advanced Economic Growth: Lecture 1, Introduction Daron Acemoglu MIT September 5, 2007. Daron Acemoglu (MIT) Advanced Growth Lecture 1 September 5, 2007. 1 / 48 0.00005.0001.00015.0002.00025 Density of

More information

GLOBAL IMBALANCES, CAPITAL FLOWS, AND THE CRISIS

GLOBAL IMBALANCES, CAPITAL FLOWS, AND THE CRISIS GLOBAL IMBALANCES, CAPITAL FLOWS, AND THE CRISIS Gian Maria Milesi-Ferretti International Monetary Fund Global imbalances have declined.. Even though stock positions are still expanding 20 15 Net foreign

More information