Economics, Finance, Governance

Assessing the BOJ’s yield curve control policy

Assessing the BOJ’s yield curve control policy
The Bank of Japan (BOJ) announced in September last year that it would be switching the focus of its quantitative easing program from monetary base targeting to controlling the shape of the yield curve (Bank of Japan, 2016). A brief comparison of the two frameworks is as follows. The previous monetary easing framework, Quantitative and Qualitative Monetary Easing (QQE) with a Negative Interest Rate, set out three policy dimensions: quantity, quality, and interest rates. Read more.

Economics, Education, Governance, Poverty Reduction

Why is Income Distributed Unequally? A Comparison of Japan and the United States

Why is Income Distributed Unequally? A Comparison of Japan and the United States
Japan and the United States (US) are at similar levels of economic development, yet their income distributions are considerably different. Whereas Japan has a relatively equal income distribution, the US is marked by a high level of income inequality. What are the sources of income inequality in both countries? Our latest research aims to uncover the sources on income inequality in both countries by exploiting detailed household panel survey. Read more.

Economics, Finance, Governance

Ultra-low interest rates and wandering overinvestment cycles in East Asia

Ultra-low interest rates and wandering overinvestment cycles in East Asia
In the 1960s, Kaname Akamatsu (1961) described the gradual relocation of industries from the advanced industrialized countries in East Asia to the less advanced countries during the latter’s economic catch-up process as the “flying geese” pattern. For instance, the textile industry was clustered in Japan in the 1950s but then successively relocated to the newly industrialized economies (Hong Kong, China; Taipei,China; Singapore; and the Republic of Korea), the new generation of tiger countries (Indonesia, Malaysia, the Philippines, and Thailand), the People’s Republic of China (PRC), and now increasingly to Viet Nam. Read more.

Economics, Finance, Governance

The brief for cash

The brief for cash
Cash is an extremely useful social contrivance. Two possible drawbacks of high-denomination cash have recently been discussed by Kenneth Rogoff (2016) in his book, The Curse of Cash, and echoed by other economists. They are the extensive use of high-denomination cash by criminals and others engaged in illicit and corrupt activities, and the role that cash plays in avoiding deeply negative nominal interest rates imposed on bank accounts. Rogoff and others call for a phasing-out of high denomination cash over a long period. Read more.

Finance

One year after the Fed liftoff: Consequences for emerging markets

One year after the Fed liftoff: Consequences for emerging markets
The Federal Open Market Committee, the official policy making body of the Board of Governors of the Federal Reserve System (Fed), announced the long-awaited increase, or liftoff, in the federal funds rate of 0.25% just over a year ago in December 2015. This action represented the beginning of a “return to normalcy” from the period since 2008 when the Federal Reserve had been operating at the zero lower bound. With the liftoff already 1 year behind us, market watchers widely expect continued, even abrupt, increases in United States (US) interest rates in the coming year. Read more.

Economics

Market failure or low-skills equilibrium?

Market Failure or Low-Skills Equilibrium
As we know from countless growth accounting studies, the ability of a country to educate and train its citizens is a key determinant of economic development. There is also fairly strong evidence at the company level that a workforce with higher human capital generates higher productivity. In other words, not only are there strong incentives for governments to educate and train people, but there are also incentives at the firm level for companies to hire more educated workers and to offer training to their existing workers. Read more.

Trade

How trade can promote SDG goal 3: Duty-free market access for health products

How Trade Can Promote SDG Goal 3 Duty-FreeMarket Access for Health Products
Trade in health products has increased substantially over the past 2decades, and tariffs on health products have been lowered, making, for example, medicines more affordable for many.Indeed, Sustainable Development Goal (SDG) 3 calls upon countries to ensure healthy lives and to promote well-being for all ages. Yet in several developing countries, substantial tariffs still persist, inflating the prices of health products. The most direct and immediate contribution of the trade community toward achieving SDG 3 couldbe to open up trade unilaterally or to negotiate a plurilateral trade agreement, which would guarantee free market access for health products, like much-needed medicines. Read more.

Infrastructure, Trade

Why poor countries should invest first in national trade infrastructure

Why poor countries should invest first in national trade infrastructure
Low-income countries are often advised to prioritize investment in their trade infrastructure to better connect to international markets, and garner the benefits of a more open trade regime. The World Bank’s Trade Facilitation Support Program and the World Trade Organization (WTO)’s Trade Facilitation Agreement, for example, promote investment in trade infrastructure to boost development prospects by improving competitiveness and lowering trade costs. Read more.

Urban

Housing policies under the New Urban Agenda

Housing policies under the New Urban Agenda
The biggest intergovernmental conference on housing and urbanization, Habitat III, took place in Quito, Ecuador, in October 2016. The main outcome of the conference was the adoption of the New Urban Agenda (NUA). The NUA does not consider urbanization as an obstacle to development but rather a key development driver. Providing adequate and affordable housing is one key theme in the NUA. It stresses the need to promote not only homeownership but also other types of tenure, such as cohousing. Read more.

Trade

The impact of trade on employment in the Sustainable Development Goals

The impact of trade on employment in the Sustainable Development Goals
Employment was an afterthought in the Millennium Development Goals (MDGs). It was not part of the original goals but was added in 2008, halfway through the implementation period. It is, however, a key element of the Sustainable Development Goals (SDGs). Goal 8 encourages countries to “promote sustained, inclusive and sustainable economic growth, full and productive employment and decent work for all.” There are eight employment-related targets and ten specific indicators (United Nations 2015). Read more.