Balance of payments dominance : its implocations for macroeconomic policy

This paper defines “balance of payments dominance” as a macroeconomic regime in which the short-term macroeconomic dynamics is essentially determined by external shocks, positive or negative. It argues that this is the predominant regime in emerging and developing countries. Trade shocks play an important role but the major procyclical shocks are associated with boom-bust cycles in external financing. Policy challenges are associated not only with the management of such shocks but also with the need to enhance the space for countercyclical macroeconomic policies, as boom-bust cycles tend to pressure macroeconomic policies to behave in a procyclical way. Under these conditions, the best bet is to design policies to reduce external vulnerabilities through a mix of administered exchange rate flexibility, very active foreign exchange reserve management, reduced reliance on external borrowing, and macroprudential regulations, including those directly affecting capital flows. Countercyclical fiscal policy can also play a role but face strong economic and political economy challenges.

Possible transmission of adverse shocks from the recent financial crisis to Central America through trade finance

Includes Bibliography

Trade policy within the context of the World Trade Organization

Includes bibliography

The fiscal impact of trade liberalization and commodity price fluctuation: the case of Costa Rica, 1980-1998

Includes bibliography

The United States-Central American Free Trade Agreement: fiscal implications for the Central American countries

Includes bibliography

The Netherlands Antilles: trade and integration with CARICOM

Introduction The Netherlands Antilles is an autonomous entity within the Kingdom of the Netherlands and comprises a federation of five Caribbean islands: Bonaire and Curacao (the Leeward islands) which comprise 80 per cent of the population of 211,000 and Saba, St. Eustatius and the southern part of St. Maarten (the Windward islands). Like the other countries in the Kingdom, it enjoys full autonomy in internal matters as, for example, education, public health, justice and customs. It has a per capita income of about US$ 12,000. The Leeward Islands and the Windward Islands account for about 75 per cent (Curacao (70 per cent) and Bonaire (5 per cent)) and 25 percent respectively of the economy of the Netherlands Antilles. The Netherlands Antilles has its own currency, the Netherlands guilder, which is pegged to the United States dollar at a fixed rate since 1971. The economy has some unique features that stem from its close relations with the Netherlands, its undiversified nature and heavy dependence on tourism, offshore finance, oil refining and shipping, the high share of trade (exports of goods and services of about 75 per cent of GDP), its geographical characteristics, its common border with the French Republic on St. Maarten, its duty-free access for imports from Aruba, its de facto free trade zone (FTZ), partial dollarization, especially for the Windward Islands, and its highly regulated labor market (1). Adverse economic shocks in the last two decades affected particularly the offshore financial sector and the oil refinery and, to a lesser extent, tourism. The repeal of withholding taxes in the United States in the 1980s indirectly caused the collapse of a number of highly profitable offshore financial activities in Curacao, leading to significant drops in government revenue and contributions to foreign exchange earnings. The withdrawal of Shell from Curacao in 1986 and the (temporary) closure of the oil refinery which had been a mainstay of the Curacao economy for almost three quarters of a century was the second major shock. It was subsequently leased to the Venezuelan State Company, Petroleos de Venezuela Sociedad Anonima (PDVSA), which resumed operations and preserved employment. In the 1990s, the Windward Islands were bit by several devastating hurricanes, which destroyed much of the economic infrastructure on the islands, including about half of the number of available hotel rooms in St Maarten. Further negative shocks were related to the discontinuation of certain trade privileges on European markets for Overseas Countries and Territories (OCTs), the withdrawal by the Netherlands of certain tax privileges for Dutch pensioners residing in the Netherlands Antilles and disruptions in the availability of Solidarity Fund resources for the smaller islands. National income has been on the decline since 1997. GDP declined by about 6 per cent between 1997 and 1999. Underlying fiscal imbalances and structural weaknesses have also impacted negatively on the economy. In recent years, with recession high unemployment and migration have been experienced (2). The Netherlands Antilles has been able to survive thanks to additional aid from the Netherlands, large-scale spontaneous emigration (mostly to the Netherlands), some drop in international reserves, an increase in domestic debt and arrears and reduced outlays for the maintenance of public assets. From 1986 onwards, successive efforts at restoring macroeconomic balance, particularly with regard to public finance, were made, but were unsuccessful. Adjustment was also attempted in 1996 and 1997, but failed to meet the desired targets. In 1999, the government launched a new National Recovery Plan" (NRP). The NRP contains important medium-term structural adjustment measures aimed at restoring macroeconomic balance and conditions for revitalizing the economy. The NRP subsequently served as an important input into a comprehensive adjustment plan drawn up with the assistance of the International Monetary Fund (IMF) and reflected in the government's Memorandum of Economic Policies dated 15 September 2000. Beyond restoring macroeconomic balance and reforming the economic incentive framework, the government aims at establishing a Comprehensive Development Framework (CDF) for the formulation and implementation of a sustainable long-term growth strategy. It is against the above background that this study is undertaken. Its main objective is to assess the integration options facing the Netherlands Antilles (3) vis-a-vis the Caribbean Community (CARICOM). A secondary objective is to examine the above taking into account, inter alia, the level of trade between the Netherlands Antilles and CARICOM, the barriers to trade between the two groups of countries and the requirements for increasing trade between the two groups of countries. The Consultant was given an initial Draft Terms of Reference (Annex 1) with the intention of modifying it in the course of the interviews with all the stakeholders. The main idea that emerged from these interviews was a concern with some possible form of association with CARICOM. The Consultant was asked to exam the costs and benefits of various forms of association and to recommend an option. This adjustment of the Terms of Reference (TOR) was substantial and involved the Consultant having to do some interviews and collect documentation in CARICOM. The study essentially revolves around the search for a road map for the Netherlands Antilles. It is tackled in the first instance by describing the existing system of trade of the Netherlands Antilles with a view to determining the import and export structures and the specific nature and extent of trade in goods and services between the Netherlands Antilles and CARICOM. 1 Netherlands Antilles: Elements of a Strategy for Economic Recovery and Sustainable Growth. Interim Report of the World Bank Mission, 5-20 December 2000. 2 IMF, IMF Country Report No. 01/73 Kingdom of the Netherlands-Netherlands Antilles-Recent Development, Selected Issues and Statistical Appendix. May 2001 3 The Netherlands Antilles is a country within the Kingdom of the Netherlands. It contains five islands. Curacao and Bonaire (Leewards) and St Eustatius, Saba and St Maarten (The Windwards)"

A Law and Economics Analysis of Trade Secrets: Optimal Scope of Law, Misappropriation and Alternative Damages Regimes

This thesis is primarily based on three core chapters, focused on the fundamental issues of trade secrets law. The goal of this thesis is to come up with policy recommendations to improve legal structure governing trade secrets. The focal points of this research are the following. What is the optimal scope of trade secrets law? How does it depend on the market characteristics such as degree of product differentiation between competing products? What factors need to be considered to balance the contradicting objectives of promoting innovation and knowledge diffusion? The second strand of this research focuses on the desirability of lost profits or unjust enrichment damage regimes in case of misappropriation of a trade secret. A comparison between these regimes is made and simple policy implications are extracted from the analysis. The last part of this research is an empirical analysis of a possible relationship between trade secrets sharing and misappropriation instances faced by firms.

Marginal Return of Infrastructure Investment on Bilateral Trade Performance

Investing in transport infrastructures such as roadways, airports and seaports has proven to improve a country's trade performance through reduction of transportation costs and providing access to production and market. This research investigates the diminishing return of infrastructure investment and also the rate of return of two types of infrastructure investment strategies on trade. An augmented gravity model is used with econometric analysis methods in this study. The results have shown that as roadway and airport densities increase, the marginal returns on trade decrease. Empirical evidence from the United States and China with all their trading partners from the past twenty years has also suggested existence of diminishing return of infrastructure investment on roadways and airports. Infrastructure investment strategy that focuses on increasing roadway and airport density experiences smaller diminishing return on trade. In contrast, seaport investment that focuses on port quality and efficiency generates higher return on trade. A trade benefiting infrastructure investment strategy that best utilizes financial resources must balance between quality and quantity based on a country's current level of infrastructure asset.

Rezension zu: Inge Govaere and Hanns Ulrich (eds.): Intellectual Property, Public Policy and International Trade

The contemporary intellectual property rights (IPR) system is not a simple, smoothly working block of rules but is complex and full of ambiguities, and as many argue, imperfections. Some deficits relate on the one hand to the inherent centrality of authorship, originality and mercantilism to the ‘Western’ IP model, which leaves numerous non-Western, collaborative or folkloric modes of production outside the scope of protection. On the other hand, some imperfections stem from the way IPR are granted, whereby creators acquire a temporary monopoly over their works and thus exclude the public from having access to them. In this sense, it is often uncertain whether the existent IPR model appropriately reflects the precarious balance between private and public interests, and whether the best incentives to promote creativity and innovation - the initially stated objectives of intellectual property protection - are offered. The matter becomes still more complicated when one considers that the IPR system is not domestically contained but is globalised and strongly affected by rules at the regional and international levels. The question of whether the balance between private interests and public values is sustained within the international legal framework, epitomised by the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS) of the World Trade Organization (WTO), is precisely the topic of the book reviewed here. Review of Intellectual Property, Public Policy, and International Trade, edited by Inge Govaere and Hanns Ullrich, P.I.E. Peter Lang, 2007.

Large-scale land acquisition and its effects on the water balance in investor and host countries

This study examines the validity of the assumption that international large-scale land acquisition (LSLA) is motivated by the desire to secure control over water resources, which is commonly referred to as ‘water grabbing’. This assumption was repeatedly expressed in recent years, ascribing the said motivation to the Gulf States in particular. However, it must be considered of hypothetical nature, as the few global studies conducted so far focused primarily on the effects of LSLA on host countries or on trade in virtual water. In this study, we analyse the effects of 475 intended or concluded land deals recorded in the Land Matrix database on the water balance in both host and investor countries. We also examine how these effects relate to water stress and how they contribute to global trade in virtual water. The analysis shows that implementation of the LSLAs in our sample would result in global water savings based on virtual water trade. At the level of individual LSLA host countries, however, water use intensity would increase, particularly in 15 sub-Saharan states. From an investor country perspective, the analysis reveals that countries often suspected of using LSLA to relieve pressure on their domestic water resources—such as China, India, and all Gulf States except Saudi Arabia—invest in agricultural activities abroad that are less water-intensive compared to their average domestic crop production. Conversely, large investor countries such as the United States, Saudi Arabia, Singapore, and Japan are disproportionately externalizing crop water consumption through their international land investments. Statistical analyses also show that host countries with abundant water resources are not per se favoured targets of LSLA. Indeed, further analysis reveals that land investments originating in water-stressed countries have only a weak tendency to target areas with a smaller water risk.

Body mass, flipper length, oxidative balance indices and telomere length of king penguin chicks (A. patagonicus) on Possession Island

One of the reasons for animals not to grow as fast as they potentially could is that fast growth has been shown to be associated with reduced lifespan. However, we are still lacking a clear description of the reality of growth-dependent modulation of ageing mechanisms in wild animals. Using the particular growth trajectory of small king penguin chicks naturally exhibiting higher-than-normal growth rate to compensate for the winter break, we tested whether oxidative stress and telomere shortening are related to growth trajectories. Plasma antioxidant defences, oxidative damage levels and telomere length were measured at the beginning and at the end of the post-winter growth period in three groups of chicks (small chicks, which either passed away or survived the growth period, and large chicks). Small chicks that died early during the growth period had the highest level of oxidative damage and the shortest telomere lengths prior to death. Here, we show that small chicks that grew faster did it at the detriment of body maintenance mechanisms as shown by (i) higher oxidative damage and (ii) accelerated telomere loss. Our study provides the first evidence for a mechanistic link between growth and ageing rates under natural conditions.

Agricultural trade and prosperity

In an environment where there is no communication between different social levels and which is suffering an increasing demand in agricultural production, agribusiness and quality, trade, as a regulator of the supply and demand, has a strong impact on the economic and environmental areas as well as on the farmers quality of life. This entails the need to find a sustainable and fair balance between the different parties (farmers and traders). This paper seeks to find this balance through the integration of trade with prosperity, understood not from a purely economic point of view, but as an improvement in life quality. This proposal is framed within Working With People (WWP) as the main conceptual base for achieving concrete actions that will promote a rapprochement between the parties that will lead to the sector?s sustainable resilience. This will be achieved through a exhaustive review of scientific literature in order to analyze and develop the state of the art of the concepts involved. The result is a conceptual proposal presented from the three dimensions of the WWP model: technical-entrepeneurial, ethical-social, political-contextual"

British Balance of Competence Reviews, Part II: Again, a huge contradiction between the evidence and Eurosceptic populism. EPIN Paper No. 40, June 2014

This paper is the second in a series for a CEPS project entitled “The British Question and the Search for a Fresh European Narrative”. It is pegged on an ambitious exercise by the British government to review all the competences of the European Union on the basis of evidence submitted by independent stakeholders. In all, 32 sectoral policy reviews are being produced over the period 2013-2015, as input into public information and debate leading up to a referendum on whether the UK should remain in, or secede from, the EU, planned for 2017. This second set of reviews covers a broad range of EU policies (for the single market for goods, external trade, transport policy, environment, climate change, research, asylum, non-EU immigration, civil judicial cooperation, tourism, culture and sport). The findings confirm what emerged from the first set of reviews, namely that there is little or no case for repatriation of EU competences at the level they are defined in the treaties. This does not exclude that at a more detailed level there can be individual actions or laws that might be done better or not at all. However, that is the task of all the institutions to work at on a regular basis, and hardly a rationale for secession. For the UK in particular the EU has shown considerable flexibility in agreeing to special arrangements, such as in the case of the policies here reviewed of asylum, non-EU immigration and civil judicial cooperation. In other areas reviewed here, such as the single market for goods, external trade, transport, environment, climate change and research, there is a good fit between the EU’s policies and UK priorities, with the EU perceived by stakeholders as an ‘amplifier’ of British interests.