Challenges and Risks for the World Economy

Weltwirtschaft, Weltkonjunktur, Welt, World economy, International business cycle, World

The Next American Century: A Traditional Hard Power Problem or a New World Order?

There is a general consensus that the new world order gathered steam in response to World War II. Major institutions like the United Nations, NATO, and the Universal Declaration of Human Rights all fortified the common belief that economic, social, and political interdependence is unavoidable. This international framework in which both domestic and foreign policies have far-reaching and unclear implications is not well understood. Important debates concerning economic and military intervention in developing countries, the scope and enforceability of human rights, and the role of international governing bodies are far from settled. This raises an important question for the United States: What ought to be the values that define American foreign policy given these highly contentious circumstances? More specifically, should the United States rely primarily on its military strength as leverage? Can the U.S. maintain its superpower status? What might this look like in the future and is this desirable? These are the questions that will guide a discussion between Thomas Visco and Alex Zimmerman.\u

"Knowledge, technology and economic growth: an OECD perspective"

In this paper we present an international comparison of growth trends with special attention given to developments in labour productivity, allowing for human capital accumulation, and multifactor productivity (MFP), allowing for changes in the composition of fixed capital. In this context an attempt is made, where possible, to identify both the embodied (in particular in ICT equipment) and disembodied components of technical progress. The possible relation between improvements in MFP and the accumulation of knowledge (as proxied by R&D expenditures) is also discussed, and some tentative policy considerations are advanced, mainly with reference to general framework conditions that might have a bearing in fostering technological changes

A public guarantee of a minimum return to defined contribution pension scheme members

The recent financial crisis has clearly demonstrated the exposure of defined contribution (DC) pension scheme members to extreme financial market risks. This paper argues that the government might offer DC plan members a minimum return guarantee, funded by risk based premia. Option pricing formulas show that the guarantee could be quite expensive, but public provision could reduce the costs borne by workers. Such an arrangement would be sustainable for the government and would give workers an acceptable benefit/contribution ratio in worst-case scenarios, while still allowing them to reap the advantages of occupational or individual funded pension schemes.defined contribution pension schemes, financial market tail risks, return guarantees, exchange option, ModiglianiÂ’s Treasury CFDB swap

Do capital gains affect consumption? Estimates of wealth effects from Italian householdsÂ’ behavior

We use detailed data on housing prices in Italy available for a large number of years and with a fine geographical breakdown to compute capital gains and losses on the most widespread asset among consumers, housing, and inquire whether changes in housing values affect consumption. We find that consumer expenditures do react to capital gains, with a marginal propensity to consume out of real value changes of housing wealth of about 0.02. Reactions are different across types of consumers: while homeowners increase consumption when house prices increase, with a marginal propensity of about 0.035, the rentersÂ’ response to the higher house cost tends to be that of increased savings. For the owners of listed stocks the response to capital gains is difficult to estimate with statistical precision, even if, for the limited sample of owners of these assets, its negative sign may be indicative of prevailing substitution over income effects.wealth effects, consumption, housing, stock ownership

Novel nitrogen-based organosulfur electrodes for advanced intermediate temperature batteries

Advanced secondary batteries operating at intermediate temperatures (100 to 200 C) have attracted considerable interest due to their inherent advantages (reduced corrosion and safety risks) over higher temperature systems. Current work in this laboratory has involved research on a class of intermediate temperature Na/beta double prime- alumina/RSSR batteries conceptually similar to Na/S cells, but operating within a temperature range of 100 to 150 C, and having an organosulfur rather than inorganic sulfur positive electrode. The organosulfur electrodes are based on the reversible, two electron eduction of organodisulfides to the corresponding thiolate anions, RSSR + 2 electrons yield 2RS(-), where R is an organic moiety. Among the advantages of such a generic redox couple for battery research is the ability to tailor the physical, chemical, and electrochemical properties of the RSSR molecule through choice of the organic moiety. The viscosity, liquidus range, dielectric constant, equivalent weight, and redox potential can in fact be verified in a largely predictable manner. The current work concerns the use of multiple nitrogen organosulfur molecules, chosen for application in Na/RSSR cells for their expected oxidizing character. In fact, a Na/RSSR cell containing one of these materials, the sodium salt of 5-mercapto 1-methyltetrazole, yielded the highest open circuit voltage obtained yet in the laboratory; 3.0 volts in the charged state and 2.6 volts at 100 percent discharge. Accordingly, the cycling behavior of a series of multiple nitrogen organodisulfides as well as polymeric organodisulfides are presented in this manuscript

Knowledge technology and economic growth: recent evidence from OECD countries

This paper discusses some of the recent developments in growth theory, doing so from the perspective of a small open economy. After setting out a basic generic model, we show how it may yield two of the key models that have played a prominent role in the recent literature, the endogenous growth model and the non-scale growth model. We focus initially on the former, emphasizing how the simplest such model leads to an equilibrium in which the economy is always on its balanced growth path. One aspect of the model is the importance of fiscal policy as a determinant of the equilibrium growth rate, an aspect that is discussed in detail. We also show how the endogeneity or otherwise of the labor supply is crucial in determining the equilibrium growth rate and its responsiveness to macroeconomic policy. But transitional dynamics are an important aspect of the growth process and indeed much research has been directed to determining the speed with which the economy converges to its balanced growth path. We discuss alternative ways that such transitional dynamics may be introduced. These include (i) restricted access to the world capital market; (ii) the introduction of government capital , and (iii) the two-sector production model, pioneered by Lucas. In the original analysis, the two capital goods relate to physical and human capital and in the international context these naturally can be identified with traded and nontraded capital, respectively. Criticism of the endogenous growth model has led to the development of the nonscale growth model. This too is characterized by transitional dynamics, which are more flexible than those of the corresponding endogenous growth model. This model is much closer to the neoclassical model; in particular, the long-run growth rate is independent of macroeconomic policy. However, since such models are typically associated with slow convergence speeds, policy can influence the accumulation of capital for extended periods of time, leading to significant long-run level effects. The discussion seeks to emphasize the adaptability of the models to a wide range of issues. A final extension addresses the impact of volatililty on growth. This has been extensively analyzed empirically and a stochastic extension of the endogenous growth model provides a convenient framework within which to interpret this research.