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Property Rights Reform And Development: A Critique Of The Cross-National Regression Literature, Osvaldo Gómez Martínez, Lawrence King
Property Rights Reform And Development: A Critique Of The Cross-National Regression Literature, Osvaldo Gómez Martínez, Lawrence King
PERI Working Papers
The legal protection of property rights is increasingly viewed as a crucial, if not the crucial, condition for economic growth and pro-poor development. Empirical support is generally based on cross-national correlations between measures of secure property rights and good development outcomes in the long-run. However, whether these associations hold in the short- and medium-run has, to our knowledge, not been studied. In this paper, we evaluate the relationship between the protection of property rights and growth using three property rights indices from the Heritage Foundation, Fraser Institute and World Economic Forum covering the experience of 162 countries between 1995 and …
Is There A Case For Formal Inflation Targeting In Sub-Saharan Africa?, James Heintz, Léonce Ndikumana
Is There A Case For Formal Inflation Targeting In Sub-Saharan Africa?, James Heintz, Léonce Ndikumana
PERI Working Papers
This paper examines the question of whether inflation targeting monetary policy is an appropriate framework for sub-Saharan African countries. The paper presents an overview of inflation targeting, reviews the justification for the regime, and summarizes some major critiques. Monetary policy responses to inflation depend on the source of inflationary pressures. Therefore, the determinants of inflation in African countries are investigated, using dynamic panel data, and the implications for inflation targeting are discussed. These issues are examined in greater detail for the two African countries which have formally adopted inflation targeting, South Africa and Ghana. The analysis is placed in the …
Capital Controls And 21st Century Financial Crises: Evidence From Colombia And Thailand, Bruno Coelho, Kevin P. Gallagher
Capital Controls And 21st Century Financial Crises: Evidence From Colombia And Thailand, Bruno Coelho, Kevin P. Gallagher
PERI Working Papers
In the run up to the financial crisis of 2007-2009 many developing nations fell victim to massive inflows of capital, capital that their financial systems found difficult to absorb. One of a number of policy options to respond to such inflows is unremunerated reserve requirements (URR). Two countries, Colombia and Thailand, deployed URR in the second half of the decade. This paper analyses the extent to which those URRs were successful in reducing the overall level and composition of capital inflows, reducing exchange rate appreciation and volatility, stemming asset bubbles, and granting more independence for monetary policy. We find that …
The International Circuit Of Key Currencies And The Global Crisis: Is There Scope For Reform?, Lilia Costabile
The International Circuit Of Key Currencies And The Global Crisis: Is There Scope For Reform?, Lilia Costabile
PERI Working Papers
The causes of the global crisis are still hotly debated among economists, and for a good reason: the remedy crucially depends upon the diagnosis, and we still need a recipe to exit this crisis, which, in spite of early optimism, is still plaguing the world and Europe, with its sequel of financial disorder, sovereign risks and, above all, mass unemployment . Even more importantly, we need to devise methods by which global crises may be avoided in the future. This paper contributes to this debate by exploring a possible causal link running from our international monetary system to global imbalances, …
The Troubling Economics And Politics Of Paying Interest On Bank Reserves: A Critique Of The Federal Reserve’S Exit Strategy, Thomas I. Palley
The Troubling Economics And Politics Of Paying Interest On Bank Reserves: A Critique Of The Federal Reserve’S Exit Strategy, Thomas I. Palley
PERI Working Papers
The Federal Reserve has recently activated its newly acquired powers to pay interest on reserves of depository institutions. The Fed maintains its new policy increases economic efficiency and intends it to play a lead role in the exit from quantitative easing. This paper argues it is a bad policy that (1) has a deflationary bias; (2) is costly to taxpayers and that cost will increase as normal conditions return; and (3) establishes institutional lock-in that obstructs desirable changes to regulatory policy. The paper recommends repealing the Fed’s power to pay interest on bank reserves. Second, the Fed should repeal regulation …
Falling Into The Liquidity Trap: Notes On The Global Economic Crisis, Thomas R. Michl
Falling Into The Liquidity Trap: Notes On The Global Economic Crisis, Thomas R. Michl
PERI Working Papers
This paper examines the underlying structural imbalances leading up to the Great Recession of 2007-2009 from the vantage point of Hyman Minsky’s theory of the liquidity trap. The traditional approach to the liquidity trap focuses on the zero interest rate boundary while Minsky’s theory focuses on three conditions that make investment spending unresponsive to monetary policy: low underlying ex post profitability of capital, weak expectations about future profitability, and uncertainty about prospective yields. The paper structures an empirical investigation of profitability and accumulation around these three factors. The Great Recession was preceded by an unbalanced recovery in which residential investment …
Generating Jobs Through State Employer Tax Credits: Is There A Better Way?, Jeff Thompson, Heidi Garrett-Peltier
Generating Jobs Through State Employer Tax Credits: Is There A Better Way?, Jeff Thompson, Heidi Garrett-Peltier
PERI Working Papers
The Governors of Massachusetts, Connecticut, and several other states have recently proposed employer tax credits as measures to fight high unemployment in their states. Such policies are also being consid-ered at the federal level. The authors find that such policies, in fact, do little to increase aggregate de-mand, and instead only modestly reduce the after-tax cost of labor in an economy with high unemployment, falling wages, and weak demand They suggest a more effective approach to creating jobs in the states: increasing spending in labor-intensive sectors and programs that are matched by federal funds, such as Medicaid. These expenditures would …
Economic Inequality And Environmental Quality: Evidence Of Pollution Shifting In Russia, Marina S. Vornovytskyy., James K. Boyce
Economic Inequality And Environmental Quality: Evidence Of Pollution Shifting In Russia, Marina S. Vornovytskyy., James K. Boyce
PERI Working Papers
This paper utilizes the Russian Statistical Agency's data on air pollution in Russia to analyze the impact of economic inequalities among Russia's regions on environmental degradation. Controlling for the absolute level of income, we find that regions with lower incomes relative to those of neighboring regions have more uncontrolled air pollution. Differences in uncontrolled pollution do not appear to be attributable to differences in spending on pollution control, suggesting that facility siting provides the dominant explanation. In addition, we find that greater within-region inequalities in income and in the provision of public goods are associated with greater uncontrolled air pollution.