| November-December 2006
American Economy | Business | Corruption | Economic Development | Globalization | Financial & Monetary Policy | Labor & Employment | Trade |
Industries: Automobiles
Innovation: Science &
Technology
B1 - Promoting Opportunity
and Growth through Science, Technology, and Innovation
Bordoff, Jason E; Deich, Michael; Kahane,
Rebecca, Orszag, Peter R.
Brooking Institution, Economic Studies Program,
December 2006, online edition, 20p
"Americans are facing heightened
economic pressures from the effects of globalization as workers
from China, India, and other developing nations play a growing
role in the world's economy. Advances in technology and transportation
now mean that U.S. workers increasingly are competing with workers
overseas—not just in manufacturing, but also in high-skill and
high-wage sectors. Growth in information technologies, in particular,
has facilitated deeper integration of economies across the globe
while also posing both new opportunities and new challenges for
the U.S. economy." Jason E. Bordoff is Policy
Director at the Hamilton Project, Michael
Deich is Managing Director at the Hamilton Project,
Rebecca Kahane is Research Assistant at the Hamilton Project,
Peter R. Orszag is Director of the Hamilton Project. Fulltext
B2 - Can America
Still Compete or Does It Need a New Trade Paradigm?
Baily, Martin Neil; Lawrence, Robert Z.
Peterson Institute for International Economics, Policy Brief
06-9, December 2006, online edition, 9p
"The relentless increase in the US trade deficit since
the early 1990s has raised concerns about America’s ability to
compete in international markets and given rise to calls for new
ways to think about international competition and new ways of
responding to US trade deficits. This policy brief challenges
such views. It reports evidence that indeed it has become harder
for the United States to sell its goods overseas over the past
decade. However, the change has been modest and well within historical
experience. The exchange rate of the dollar is the major factor
leading to the trade deficit rather than any structural inability
of US manufacturing or services to compete in the new global environment.
Accordingly, we judge that there is no need for a new trade paradigm,
and it would be a mistake to adopt protectionist trade policies.
Two simultaneous adjustments are required to bring about a smaller
trade deficit. First, spending must switch from foreign to US
goods. In addition, since the United States must reduce its borrowing
from abroad, spending must fall relative to income. This expenditure
switching can be induced by a decline in the dollar. An increase
in national saving, public and private, or alternatively and less
desirably, a reduction in investment could both slow spending.
Trade restrictions, on the other hand, are either ineffective,
more costly, or both." Martin Neil Baily, senior fellow
at the Peterson Institute since 2001 and focuses on issues of
globalization, productivity and competitiveness, Social Security
reform, and US economic policy. Robert Z. Lawrence, nonresident
senior fellow at the Petersen Institute since 2001, is the Albert
L. Williams Professor of Trade and Investment at the John F. Kennedy
School of Government at Harvard University. Fulltext
B3 - Bolten's White House
Barnes, Fred
International Economy, Fall 2006, v20, #4, pp10-15
"Hank Paulson became Treasury Secretary last July only after
prolonged negotiations over his role as chief economic policymaker.
To lure Paulson to Washington, the President gave him extraordinary
authority to manage economic policy on both the domestic and international
fronts." One of Paulson's main tasks will be handling overall
relations with China. Another part of Paulson's portfolio is trade
especially in combating strong protectionist sentiment on Capitol
Hill. He has also been given the task of reviving Bush's entitlement
reform initiative. Fred Barnes is executive editor of The Weekly Standard and is host, along with Mort Kondracke, of “The Beltway Boys” on the Fox News Channel. Fulltext
B4 - A Fiscal Challenge for the New Congress
Crook, Clive
National Journal, November 18, 2006, v38, #46/47, pp18-19
The author says the biggest economic challenge facing Congress
is restoring the long-term balance between taxes and spending,
but the Democrats don’t appear to be any more willing to face
this challenge than the Republicans. On trade, he predicts
that the protectionism trend will continue and doubts Congress
will renew the president’s trade-negotiating authority – which
makes the prospect of a successful Doha Round of global trade
talks even more remote. He also expects Congress to pass
a minimum wage increase, despite its lack of effectiveness.
The poorly designed Alternative Minimum Tax (AMT) is another issue
on the Democratic agenda. A fix for the AMT is long overdue,
he explains, but legislators have procrastinated because, without
an offset of spending cuts, fixing it will mean increasing the
federal deficit. Overall, Crook is pessimistic that the new Congress
will have the discipline to implement the higher taxes and lower
public spending needed for fiscal recovery. Clive Crook is
a staff writer at the "National Journal". Fulltext
B5 - State Tax Policy and Entrepreneurial Activity
Bruce, Donald; Deskins, John
Small Business Administration, Office of Advocacy, Report No. 284, November 2006, 44p
Higher top tax rates on individual income, higher sales tax rates, and the existence of state-level inheritance or gift taxes all tend to slightly reduce a state’s share of the national entrepreneurial stock, according to a study by the U.S. Small Business administration. The report also discovered that top marginal tax rates on individual and corporate income do not have statistically significant effects on state entrepreneurship rates, but states with higher sales tax rates tend to have higher entrepreneurship rates. Donald Bruce, University of Tennessee, Knoxville. John Deskins, Creighton University. Fulltext
B6 - Small Business Survival Index 2006
Keating, Ronald J.
Small Business and Entrepreneurship Council, October 2006, online edition
The SBE Council has released its eleventh annual rankings of the
states according to their public policy climates for small business
and entrepreneurship. It compares the tax, spending, regulatory,
and litigation burdens of the states. As explained in the study,
economic common sense and a large body of economic literature
show that these policies matter to entrepreneurs, businesses,
employees and therefore, to the overall economic well-being of
each state. The Index analyzes 29 major government-imposed or
government-related costs affecting small businesses and entrepreneurs.
These measures are added together to compute an overall rating.
Ronald J. Keating is Chief Economist at the Small Business
& Entrepreneurship Council. Fulltext
B7 - Who Cares About Corruption?
Cuervo-Cazurra, Alvaro
Journal of International Business Studies, November 2006, v37, #6, pp807-822
"The author analyzes the relationship
between corruption and foreign direct investment (FDI). Many empirical
studies support the premise that corruption in a host country
has a negative relationship with FDI, he writes. However, he adds,
some scholars argue that corruption can have a positive impact
on investment by facilitating transactions in countries with excessive
regulation. His analysis compares countries that had signed the
OECD Convention on Combating Bribery of Foreign Public Officials
versus those countries that did not sign it. Countries that signed
the OECD Convention attracted more FDI from other countries with
strong anti-corruption laws, he says. And, the composition of
FDI from non-signers of the OECD Convention primarily came from
countries with weaker anti-corruption regulation." Alvaro
Cuervo-Cazurra is a professor of international business at the
University of South Carolina. Order
article
B8 - Transforming the Culture of Corruption
eJournals USA, December 2006, online edition
"In recent years, through a series
of international agreements, a global framework for combating
corruption has begun to emerge. Individual countries can now make
their anticorruption efforts more effective by vigorously implementing
anticorruption commitments and relying on international cooperation.
This issue of eJournal USA highlights the important roles
that the public sector, private sector, and non-governmental organizations
play in eradicating corruption worldwide"
Fulltext
B9 - Developing Countries and the Collapse of the Doha Round
Milberg, William; Wade, Robert
Challenge, November-December 2006, v49 #6, pp6-19
This article offers a look at the opinions of three observers on why the Doha Round--negotiations established at Doha, Qatar, in 2001 by the World Trade Organization--failed and what the consequences may be. Yilmaz Akyüz comments on whether the Doha Round represents missed opportunities or a narrow escape of disaster and suggests that developing countries should resist resuming the negotiations on the basis of the same framework and modalities. William Milberg says that the gains from globalization are being distributed too narrowly. The Uruguay Round is mentioned. Robert Wade argues that although the Doha deal was bad, it is not certain that its demise will be costly for developing countries. and chief economist of the United Nations Conference on Trade and Development (UNCTAD). William Milberg is associate professor of economics at the New School and faculty research fellow at the Schwartz Center for Economic Policy Analysis. Robert Wade is professor of political economy at the London School of Economics and author of Governing the Market (2004), winner of Best Book in Political Economy award from the American Political Science Association. Order Article
Financial & Monetary Policy
B10 - Getting Inflation-Fighting Right
Interview with Alan Blinder
Challenge, September/October 2006, v49, #5, pp6-18
The article presents an interview with Alan Blinder, former vice
chairman of the United States Federal Reserve, about inflation
in the United States. The interview touches on several of the
keys issues of the day including the value of transparent inflation
targeting and wage stagnation in the U.S. economy. When asked
about what economists learned from the inflation of the 1970s,
Blinder mentioned the roles of stagflation, energy shock, and
the Federal Reserve. Alan Blinder is the Gordon S. Rentschler
Porfessor of Economics at Princetion University. Order
Article
B11 - An Agenda for Harnessing Globalization
Ghani, Ashraf, Lockhart, Clare
Washington Quarterly, Autumn 2006, online edition, 14p
"Sixty years ago, U.S. policymakers confronted an unimaginable series of global crises. Articulating an inclusive vision of a democratic and prosperous order for friends and former foes alike, the U.S. government marshaled the imagination, resources, and stamina to spearhead the formation of institutions that brought democratic stability and prosperity to allies in Europe and Asia... Just as there was in 1945, there is now an open historical moment that contains the opportunity for ordered liberty or the threat of descent into prolonged crisis. Today, there is a need for new rules regarding the state, the market, and global institutions to respond to the challenges of globalization." Ashraf Ghani is chancellor of Kabul University and a senior nonresident fellow at the Brookings Institution. Clare Lockhart is a director of the State Effectiveness Program in London. Fulltext
B12 - Issues in International Political Economy - The U.S. Midterm Elections and Globalization
Weintraub, Sidney
Institute for Strategic & International Studies, CSIS Report, November 16, 2006, online edition, 2p
“Control of both houses by the Democratic Party when the new U.S. Congress convenes early next year will almost certainly make U.S. trade policy more protectionist than it has been under Republican domination. The Democrats on the whole are less amenable than Republicans to open trade, and many of the Democrats who were elected to Congress expressed this sentiment.” Sidney Weintraub holds the William E. Simon Chair in Political Economy at CSIS. He is also professor emeritus at the Lyndon B. Johnson School of Public Affairs of the University of Texas at Austin. Fulltext
B13 - Women in the Labor Force – A Databook (2006 Edition)
U.S. Department of Labor, Bureau of Labor Statistics, September 2006, Web-posted November 2006
The past several decades have been marked by several notable changes in women’s labor force activities compared to men’s, including rising labor force participation, employment growth in higher-paying occupations, and earnings increases. In 1970, about 43 percent of women age 16 and older were in the labor force. By the late 1990s, the labor force participation rate of women had risen to 60 percent. Though it is still well above the rates that prevailed throughout the 1970s, 1980s, and much of the 1990s, the rate has receded slightly since 1999, to 59.3 percent in 2005. This report presents historical and current labor force and earnings data for women and men from the Current Population Survey (CPS). Fulltext
B14 - Age, Women, and Hiring: An Experimental Study
Lahey, Joanna
Center for Retirement Research at Boston College, Work Opportunities for Older Americans Series, Working Paper #4, Released November 2006, online edition, 50p
“As the baby boom cohort reaches retirement age, demographic pressures on public programs such as Social Security may cause policy makers to cut benefits and encourage employment at later ages. This prospect raises the question of how much employer demand exists for older workers. This paper reports on a labor market experiment to determine the hiring conditions for older women in entry-level jobs in Boston, MA and St. Petersburg, FL. Differential interviewing by age is found for these jobs. A younger worker is more than 40 percent more likely to be offered an interview than is an older worker. No evidence is found to support taste-based discrimination as a reason for this differential, and some suggestive evidence is found to support statistical discrimination.” Joanna Lahey is an assistant professor of public policy at Texas A&M University. Fulltext
B15 - U.S. Labor Market Dynamics Revisited
Yashiv, Eran
Institute for the Study of Labor, Discussion Paper No. 2455, November 2006, online edition
The picture of U.S. labor market dynamics is opaque. Empirical studies of U.S. gross worker flows have yielded contradictory findings, and it is not easy to get a sense of the key moments of the data. Debates have emerged regarding the implications of these flows for the understanding of the business cycle. This paper aims at clarifying the picture, trying to determine what facts can be established, what are their implications for the business cycle, and what remains to be further investigated. Eran Yashiv teaches at the Tel Aviv University, CEPR and IZA Bonn. Fulltext
B16 - Agricultural Trade Liberalization
Congressional Budget Office [CBO], November 20, 2006, online edition,
"The United States and other countries have benefited from
agreements which have reduced the tariffs and subsidies on international
trade of manufactured goods. According to studies reviewed by
the Congressional Budget Office, if similar subsidies for agricultural
products were applied, U.S. agriculture would gain more from increased
exports than it would lose from increased imports. According to
CBO’s review, all major developed countries and most developing
countries would see a net economic benefit from the reduction
of agricultural tariffs. By 2015, the likely total annual benefit
would be roughly estimated to be $50 billion to $185 billion."
Fulltext
Industries:
B17 - Alternatives for the 'Clean Car"
Evolution
Merrill Lynch and World Resources Institute, released November 6, 2006, 41p.
“The report presents a framework for understanding the regulatory and market dynamics driving the demand for more fuel efficient and less polluting automobiles, and highlights investment ideas that are levered to this long-term theme. The report argues that the auto industry is not well served by weak and vacillating regulations, which only perpetuate regulatory uncertainty as the need to address rising GHG emissions is intensifying. The report goes on to state that it is better for the industry, and for investors, for Washington to develop a clear, coherent and long term regulatory path for the industry to reduce oil consumption.” Fulltext
B18 - Driven: Are China’s Car Manufacturers Ready to Compete in the U.S. and Europe?
Economist Intelligence Unit, 2006, 27p
“China’s car manufacturers may not have taken the world by storm yet, but will they soon be competing successfully in the US and Europe markets? The Chinese automotive industry has the political and financial support of its government, which is encouraging automakers to develop a made–in–China vehicle and take it international. The government wants the industry to contribute strongly to the economy by 2010, and envisages a robust increase in vehicle exports from 2005 onwards that would translate conservatively to about US$1.2bn in export sales. China also wants China–made vehicles to hold 10% of worldwide automotive trade by 2020–35.”… is it possible for China’s carmakers to take on their muscular Western, Japanese and South Korean rivals in the highly competitive and highly regulated markets of the US and Europe? No—not yet, say automotive industry analysts, manufacturers, suppliers and consultants” interviewed for this report. Founded in 1946, when a director of intelligence was appointed to serve The Economist, the Economist Intelligence Unit is now a leading research and advisory firm with more than 40 offices worldwide. Fulltext
Innovation:
Science & Technology
B19 - Sharing Science: Global Partnerships
eJournal USA, Global Issues, October 2006,v11, #3, online edition
On the following pages, scientists, engineers, researchers, and educators who work with international colleagues at the leading edge of this global movement to share knowledge describe their work and preview the future of international collaboration. Fulltext
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