The Instability of the Emerging Market Assets Demand Schedule

This paper addresses the nature of the demand schedule for emerging market assets in both its macroeconomic and microeconomic dimensions. The former is usually analysed in terms of the 'push factors' (such as interest rates or contagion) determining international capital flows; while the latter is normally approached through the portfolio composition decisions (such as herding or risk appetite) of investment managers. Bringing these two perspectives together contributes to an understanding of how sudden shifts in the demand schedule can cause large and asymmetric shocks for emerging market countries. Official interventions by agencies such as the IMF focus on 'supply' interventions (such as improving information or avoiding default) and neglect the need to stabilise demand. The chapter suggests that official intervention is required in order to stabilise and lengthen demand schedules, and thus construct an orderly international market in emerging market assets.

Why is there debt?

Most loan repayment agreements are largely noncontingent, and yet standard economic theory predicts that they should be highly contingent. An explanation is offered that relies on imperfect information and collateral. The theory suggests that perhaps all debt contracts are implicitly collateralized.Debt

Regional governmentality: neoliberalization and the Caribbean community single market and economy

Formally launched on 30 January 2006, the Caribbean Community (CARICOM) Single Market and Economy (CSME) is, like many other regional economic initiatives, designed to create an economic space in which the uninhibited flow of goods, capital and skills across the borders of member states is anticipated to generate competitive business opportunities and external investment. Despite the intensification of such regional programmes, promoters and critics alike continue to consider CARICOM to be an intergovernmental organization dependent on the political will of member states as they negotiate the pressures of neoliberal globalization. In this paper, I argue that such a framing of regional integration in the Caribbean misses some of the tangible ways that CARICOM works beyond the sovereign intent of member states to enable the encroachment of neoliberal-style economic orders across the space of the region. I adopt a Foucauldian analytics of governmentality to unhinge CARICOM from the governments of its member states. Once freed from a persistent statism it becomes possible to consider the technical competencies through which CARICOM initiatives increasingly connect and cohere with neoliberal rationalities. My goal in developing such an analytics is not to suggest CARICOM operates as a superstate but rather to broaden the sites considered relevant to understanding the encroachment of neoliberalism in the Caribbean

The role of trust in financial sector development

In any economic environment where decisions are decentralized, agents consider the risk that others might unfairly exploit informational asymmetries to their own disadvantage. Incomplete results, especially, lies at the heart of financial transactions in which agents trade real claims for promises of future real claims. Agents thus need to invest considerable resources to assess the trustworthiness of others with whom they know they can interact only under conditions of limited and asymmetrically distributed information. Thinking of finance as the complex of institutions and instruments needed to reduce the cost of trading promises among anonymous individuals who do not fully trust each other, the author analyzes how incomplete trust shapes the transaction costs in trading assets, and how it affects resource allocation and pricing decisions from rational, forward-looking agents. His analysis leads to core propositions about the role of finance and financial efficiency in economic development. He recommends areas of financial sector reform in emerging economies aimed at improving the financial system's efficiency in dealing with incomplete trust. Among other things, the public sector can improve trust in finance by improving financial infrastructure, including legal systems, financial regulation, and security in payment and trading systems. But fundamental improvements in financial efficiency may best be gained by eliciting good conduct through market forces.Payment Systems&Infrastructure,Economic Theory&Research,Environmental Economics&Policies,International Terrorism&Counterterrorism,Decentralization,Economic Theory&Research,Environmental Economics&Policies,International Terrorism&Counterterrorism,Banks&Banking Reform,Insurance&Risk Mitigation

Vaccine innovation, translational research and the management of knowledge accumulation

What does it take to translate research into socially beneficial technologies like vaccines? Current policy that focuses on expanding research or strengthening incentives overlooks how the supply and demand of innovation is mediated by problem-solving processes that generate knowledge which is often fragmented and only locally valid. This paper details some of the conditions that allow fragmented, local knowledge to accumulate through a series of structured steps from the artificial simplicity of the laboratory to the complexity of real world application. Poliomyelitis is used as an illustrative case to highlight the importance of experimental animal models and the extent of co-ordination that can be required if they are missing. Implications for the governance and management of current attempts to produce vaccines for HIV, TB and Malaria are discussed. Article Outlin