International finance

Daron Acemoglu, Tarek Hassan, Ahmed Tahoun, 01 February 2015

Corruption and favouritism have motivated people to protest against the ruling regimes. In Egypt, in particular, the protests brought down Hosni Mubarak's government. To what extent this reduced the corruption and favouritism is less clear. This column sheds light on this problem. It present evidence that daily protest numbers were linked to variation in stocks prices of firms connected to the group in power. This suggests that popular mobilisation and protests have indeed a role in restricting the ability of connected firms to profit from favouritism and corruption.

Jean-Marie Grether, Nicole A. Mathys, Caspar Sauter, 31 January 2015

Spatial inequalities in territorial-based greenhouse emissions matter in terms of regulation, both at the international and subnational levels. This column decomposes these inequalities worldwide for the two major greenhouse gases over the period 1970–2008. Within-country inequalities are larger, and rising, while between-country inequalities are smaller and falling. Moreover, social tensions arising from the discrepancy between the distribution of emissions and the distribution of damages appear to be larger within than between countries, and larger for carbon dioxide than for methane.

Alberto Giovannini, Colin Mayer, Stefano Micossi, Carmine Di Noia, Marco Onado, Andrea Polo, 30 January 2015

Persistently low investment is dragging down European economies. This column introduces a new study that examines the symptoms and explores the possible causes of this investment dearth. The study, a ‘Green Paper’ which seeks to delineate the issues and provoke reflection, is the first output of the Assonime-CEPR project ‘Restarting European Long-Term Investment Finance’.

Paul De Grauwe, 30 January 2015

Nowhere in the developed world is secular stagnation more visible than in the Eurozone. This column explains this phenomenon with asymmetric external balances within the Eurozone. Southern countries had accumulated current-account deficits and became debtors when the Crisis hit, whereas the northern ones became creditors. The burden of the adjustments has been borne almost exclusively by the debtor countries creating a deflationary bias. Suggested fiscal policy prescriptions are government investment programmes, to be implemented by northern countries (and in particular, Germany).

Theodore H. Moran, 30 January 2015

Joining international supply chains has helped some developing nations to industrialise while leaving others by the wayside. This column discusses research that extract lessons from four case studies. It suggests the key to success is combining pro-active investment promotion with customised infrastructure improvements and public-private vocational training that allow investors to fit production from a novel site seamlessly into the company’s international supplier network.

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