New Economics Papers
on Central and South America
Issue of 2010‒02‒20
six papers chosen by

  1. Politics and trade: lessons from past globalisations By Kevin O'Rourke
  2. No Green Growth Without Innovation By Philippe Aghion; Reinhilde Veugelers; David Hemous
  3. Problemas fiscales y redistributivos en Colombia By Fernando, Estrada; Jorge Ivan, Gonzalez; Alberto, Castrillon; Mauricio , Perez
  4. Risk and Global Economic Architecture: Why Full Financial Integration May Be Undesirable By Joseph E. Stiglitz
  5. Political Limits to Globalization By Daron Acemoglu; Pierre Yared
  6. Further Comments on The Impact of the Asian Miracle on the Theory of Economic Growth By Robert W. Fogel

  1. By: Kevin O'Rourke
    Abstract: After tracing the link between politics and trade over a millennium, KevinO'Rourke identifies permanent features of international economic relations. His timing is perfect. The crisis has switched the balance of power. Government is back in the driving seat and corporations look fragile. No one can predict how the cards will fall, but politics is making a come-back and will inevitably play a bigger role in shaping our future.
    Date: 2009–01
  2. By: Philippe Aghion; Reinhilde Veugelers; David Hemous
    Abstract: This Policy Brief, co-written by Senior Non-Resident Fellow Philippe Aghion, Senior Resident Fellow Reinhilde Veugelers and David Hemous of Harvard University, attempts to change the terms of the debate surrounding climate change policy. The authors argue that policymakers should do more to encourage innovation and investment in green? research and development rather than focusing solely on the setting of a carbon price. Using a model developed by Aghion in a previous paper, they argue that a carbon price would have to be about 15 times higher in the first five years and 12 times higher in the next five years if innovation is not properly subsidized by governments. The authors also provide several policy recommendations for incentivising this type of green growth? in the private sector.
    Date: 2009–11
  3. By: Fernando, Estrada; Jorge Ivan, Gonzalez; Alberto, Castrillon; Mauricio , Perez
    Abstract: From a general perspective, one could argue that large State transformations are reflect-ed in income, expenditure and employment. The information that the National Bureau of Statistics (Dane) have on income (tax and nontax) is accessible and more orderly than spending and employment. This difference is explained, in part because the collection of taxes is more centralized (national, municipal and departmental), and while expenditure on transfers is diversified.
    Keywords: Tax Power; Colombia; State; Latin American; Fairness.
    JEL: E62 E0 A1 C0 E01 E6
    Date: 2010
  4. By: Joseph E. Stiglitz
    Abstract: This paper provides a general framework for analyzing the optimal degree and form of financial integration. Full integration is not in general optimal: faced with a choice between two polar regimes, full integration or autarky, autarky may be superior. The intuition is simple: if underlying technologies are not convex, then risk-sharing can lower expected utility. The simplistic models arguing for financial integration typically employed in economics assume convexity; but the world is rife with non-convexities, e.g. associated with bankruptcy. The architecture of the credit market can, for instance, affect the likelihood of a bankruptcy cascade, “contagion,” and systemic risk.
    JEL: F33 F36 G32
    Date: 2010–02
  5. By: Daron Acemoglu; Pierre Yared
    Abstract: Despite the major advances in information technology that have shaped the recent wave of globalization, openness to trade is still a political choice, and trade policy can change with shifts in domestic political equilibria. This paper suggests that a particular threat and a limiting factor to globalization and its future developments may be militarist sentiments that appear to be on the rise among many nations around the globe today. We proxy militarism by spending on the military and the size of the military, and document that over the past 20 years, countries experiencing greater increases in militarism according to these measures have had lower growth in trade. Focusing on bilateral trade flows, we also show that controlling flexibly for country trends, a pair of countries jointly experiencing greater increases in militarism has lower growth in bilateral trade.
    JEL: F01 F10 F52
    Date: 2010–01
  6. By: Robert W. Fogel
    Abstract: This paper addresses three issues related to the relative rates of growth in the United States, the European Union, and China during the four decades between 2000 and 2040. The first concerns the source of the factors which make it likely that China will continue to grow at a high rate for another generation. The paper argues that this growth will be the result of both favorable economic and political conditions. The second concerns the source of declining GDP growth in the original fifteen nations of the European Union. For these countries, the underlying cause is due in large measure to low fertility rates and an increase in the dependency ratio. The third issue is the projection of long-term U.S. growth in GDP at a rate of 3.7 percent per annum.
    JEL: F47 O53
    Date: 2010–02

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