Tropical cyclone-related socio-economic losses in the western North Pacific region

The western North Pacific (WNP) is the area of the world most frequently affected by tropical cyclones (TCs). However, little is known about the socio-economic impacts of TCs in this region, probably because of the limited relevant loss data. Here, loss data from Munich RE's NatCatSERVICE database is used, a high-quality and widely consulted database of natural disasters. In the country-level loss normalisation technique we apply, the original loss data are normalised to present-day exposure levels by using the respective country's nominal gross domestic product at purchasing power parity as a proxy for wealth. The main focus of our study is on the question of whether the decadal-scale TC variability observed in the Northwest Pacific region in recent decades can be shown to manifest itself economically in an associated variability in losses. It is shown that since 1980 the frequency of TC-related loss events in the WNP exhibited, apart from seasonal and interannual variations, interdecadal variability with a period of about 22 yr – driven primarily by corresponding variations of Northwest Pacific TCs. Compared to the long-term mean, the number of loss events was found to be higher (lower) by 14% (9%) in the positive (negative) phase of the decadal-scale WNP TC frequency variability. This was identified for the period 1980–2008 by applying a wavelet analysis technique. It was also possible to demonstrate the same low-frequency variability in normalised direct economic losses from TCs in the WNP region. The identification of possible physical mechanisms responsible for the observed decadal-scale Northwest Pacific TC variability will be the subject of future research, even if suggestions have already been made in earlier studies.

Swiss Policies for more Food Security

Resource-poor yet blissful Switzerland is also one of the most food-secure countries in the world: there are abundant food supplies, relatively low retail prices in terms of purchasing power parity, with few poverty traps. Domestic production covers 70% of net domestic consumption. A vast and efficient food reserve scheme insures against import disruptions. Nonetheless, the food security contribution by the four sectoral policies involved is mutually constrained: our agriculture is protected by the world’s highest tariffs. Huge subsidies, surface payments, and some production quotas substitute market signals with rent maximisation. Moreover, these inefficiencies also prevent trade and investment policies which would keep markets open, development policies which would provide African farmers with the tools to become more competitive, and supply policies which would work against speculators. The paralysing effect of Swiss agricultural policies is exacerbated by new “food security subsidies” in the name of “food sovereignty” while two pending people’s initiatives might yet increase the splendid isolation which in effect reduce Swiss farmer competitiveness and global food security. Is there a solution? Absent a successful conclusion of the Doha Round (WTO) or a Transatlantic Trade and Investment Partnership Agreement (TTIP) further market openings and a consequent “recoupling” of taxpayer support to public goods production remain highly un-likely. To the very minimum Switzerland should resume the agricultural reform process, join other countries trying to prevent predatory behaviour of its investors in developing countries, and regionalise its food reserve.

Disparate Wages in a Globalized World

This study uses wage data from the UBS Prices and Earnings survey to highlight Disparate Wages in a Globalized World from di↵erent perspectives. This wage data is characterised by remarkable consistency over the last 40 years, as well as unusual global comparability. In the first chapter we analyse the convergence hypothesis for purchasing power adjusted wages across the world for 1970 to 2009. The results provide solid evidence for the hypotheses of absolute and conditional convergence in real wages, with the key driver being faster overall growing wage levels in lower wage countries compared to higher wage countries. At the same time, the highest skilled professions have experienced the highest wage growth, while low skilled workers’ wages have lagged, thus no convergence in this sense is found between skill groups. In the second chapter we examine deviations in international wages from Factor Price Equalisation theory (FPE). Following an approach analogous to Engel (1993) we find that deviations from FPE are more likely driven by the higher variability of wages between countries than by the variability of di↵erent wages within countries. With regard to the traditional analysis of the real exchange rate and the Balassa-Samuelson assumptions our analysis points to a larger impact on the real exchange rate likely stemming from the movements in the real exchange rate of tradables, and only to a lesser extent from the lack of equalisation of wages within countries. In the third chapter our results show that India’s economic and trade liberalisation, starting in the early 1990s, had very di↵erential impacts on skill premia, both over time and over skill levels. The most striking result is the large increase in wage inequality of high-skilled versus low-skilled professions. Both the synthetic control group method and the di↵erence-in-di↵erences (DID) approach suggest that a significant part of this increase in wage inequality can be attributed to India’s liberalisation.