The Role of Policy in Achieving Shared, Sustainable Economic Prosperity

A Roadmap for Investment Promotion and Export Diversification: The Case of Jordan. Ricardo Hausmann, Miguel Angel Santos, December 2019, Paper, “Jordan faces a number of pressing economic challenges: low growth, high unemployment, rising debt levels, and continued vulnerability to regional shocks. After a decade of fast economic growth, the economy decelerated with the Global Financial Crisis of 2008-09. From then onwards, various external shocks have thrown its economy out of balance and prolonged the slowdown for over a decade now. Conflicts in neighboring countries have led to reduced demand from key export markets and cut off important trade routes. Foreign direct investment, which averaged 12.7% of gross domestic product (GDP) between 2003-2009, fell to 5.1% of GDP over the 2010-2017. Regional conflicts have interrupted the supply of gas from Egypt – forcing Jordan to import oil at a time of record prices, had a negative impact on tourism, and also provoked a massive influx of migrants and refugees. Failure to cope with 50.4% population growth between led to nine consecutive years (2008-2017) of negative growth rates in GDP per capita, resulting in a cumulative loss of 14.0% over the past decade (2009-2018). Debt to GDP ratios, which were at 55% by the end of 2009, have skyrocketed to 94%.” Link

Carbon Taxes vs. Cap and Trade: Theory and Practice. Robert Stavins, November 2019, Paper, “There is widespread agreement among economists – and a diverse set of other policy analysts – that, at least in the long run, an economy-wide carbon-pricing system will be an essential element of any national policy that can achieve meaningful reductions of CO2 emissions costeffectively in the United States and many other countries. There is less agreement, however, among economists and others in the policy community regarding the choice of specific carbon-pricing policy instrument, with some supporting carbon taxes and others favoring cap-and-trade mechanisms. How do the two major approaches to carbon pricing compare on relevant dimensions, including but not limited to efficiency, cost-effectiveness, and distributional equity? This paper addresses this question by drawing on theories of policy instrument choice pertaining to the attributes – or merits – of the instruments. The paper also draws on relevant empirical evidence. It concludes with a look at the path ahead.” Link

The Case for Old-Fashioned Tariff Cuts. Jeffrey Frankel, November 27, 2019, Opinion, “Had governments stood still on trade policy over the last three years, the world would be a lot better off than it is now. Today, policymakers could do worse than return to the post-World War II formula of negotiating the reciprocal elimination of tariffs.” Link

China’s economic weakness could drive ‘problematic’ nationalism. Lawrence Summers, November 8, 2019 , Video, “Weakness of the Chinese economy could generate “a certain truculence in its international relations” by driving nationalism in the country and “scapegoating of foreigners”, according to economist Larry Summers. The former World Bank chief economist and senior US Treasury Department official, also said de-escalation of trade tensions between the United States and China is not yet an indication for a substantial deal despite the progress.Summers, who has advised two past US presidents, spoke with the South China Morning Post on November 6, 2019, during Credit Suisse’s 10th China Investment Conference in Shenzhen.” Link

How to Get Past the US-China Trade War. Dani Rodrik, November 7, 2019, Opinion, “China and the United States, like all other countries, should be able to maintain their own economic model. But international trade rules should prohibit national governments from adopting “beggar-thy-neighbor” policies that provide domestic benefits only by imposing costs on trade partners.” Link

US-China ‘phase one’ trade deal won’t lead to ‘economic nirvana’. Lawrence Summers, November 6, 2019, Video, “The so-called phase one trade deal that the U.S. and China are expected to sign won’t solve all the problems the global economy faces right now, former U.S. Treasury Secretary Larry Summers said Wednesday.
U.S. President Donald Trump said both countries were looking for a location to sign the partial deal — which according to Reuters, could take place this month. That development has fueled recent optimism in financial markets.” Link

Santelli Exchange: Fed pause and a pivot. Kenneth Rogoff, October 31, 2019, Video, “Harvard University’s Kenneth Rogoff and CNBC’s Rick Santelli discuss the economy, rates & the ECB.” Link

Ferguson Says the Costs of Brexit Will Be Significant. Niall Ferguson, October 29, 2019, Video, “Hoover Institution Senior Fellow Niall Ferguson talks about his outlook for the U.K. economy, the EU, Brexit and the U.S.-China trade war. He speaks to Vonnie Quinn at the annual Robin Hood Investors Conference in New York.” Link

On Trade Justice: A Philosophical Plea for a New Global Deal. Mathias Risse, October 2019, Book, “Trade has made the world. Still, trade remains an elusive and profoundly difficult area for philosophical thought. This novel account of trade justice makes ideas about exploitation central, giving pride of place to philosophical ideas about global justice but also contributing to moral disputes about practical questions. On Trade Justice is a philosophical plea for a new global deal, in continuation of, but also at appropriate distance to, post-war efforts to design a fair global-governance system in the spirit of the American New Deal of the 1930s. This book is written in the tradition of contemporary analytical philosophy but also puts its subject into a historical perspective to motivate its relevance. It covers the subject of trade justice from its theoretical foundations to a number of specific issues on which the authors’ account throws light. The state as an actor in the domain of global justice is central to the discussion but it also explores the obligations of business extensively, recognizing the importance of the modern corporation for trade. Topics such as wages injustice, collusion with authoritarian regimes, relocation decisions, and obligations arising from interaction with suppliers and sub-contractors all enter prominently. Another central actor in the domain of trade is the World Trade Organization. The WTO needs to see itself as an agent of justice. This book explores how this organization should be reformed in light of the proposals it makes. In particular, the WTO needs to endorse a human-rights and development-oriented mandate. Overall, this book hopes to make a theoretical contribution to the creation of an exploitation-free world.” Link

We could have the first global recession without the US. Kenneth Rogoff, September 13, 2019, Video, “Harvard University economics professor Kenneth Rogoff discusses his outlook for the global economy and interest rates.” Link