Beginning with the global financial crisis (2008) the correlation between crude oil prices and medium-term and forward inflation expectations increased leading to fears of their un-anchoring. Using the first principal component of commodity prices as a measure for global aggregate demand, we decompose nominal oil prices to a global demand factor and remaining factors. Using a Phillips Curve framework we find a structural change after the collapse of Lehman Brothers when inflation expectations reacted more strongly to global aggregate demand conditions embedded in oil prices. Within this framework we cannot reject the hypothesis that expectations remained anchored.
The increasing globalization of trade in goods and services and the deepening of financial markets have reduced frictions that may impede the operation of the PPP and UIP relationships in the short run. In this paper, we estimate the short term relative PPP and UIP relationships. Using data from Israel, which has a deep market for inflation expectations for 12 months, we show that relative PPP and UIP cannot be rejected. Deviations from equilibrium last less than a year. Data from Israel’s capital account of the balance of payments shows that the deviations are not destabilizing. Our findings suggest that greater globalization and financial deepening contribute to the effectiveness of monetary policy.
We use tax and historical records to analyze the Parisian taille - an institution that resolved the tax compliance problem. The taille’s essential features were; an agreement between the king and city government to collect a fixed amount of revenue and a sequential collection process that included public revelation of individual tax assessments prior to their collection. Modelling the taille tax game shows both features are necessary for a unique equilibrium of efficient tax compliance. A social norm that allocated this tax mainly to the elites provided for its peaceful collection. Data from 14th century Paris show the desired revenues were efficiently collected with high levels of compliance, despite minimal bureaucratic machinery.
Access to formal banking is increasing across the world and may transform how people manage their finances. We report from a field experiment that randomly provides access to a bank account to a representative sample of villagers in rural India. The treated respondents save actively into the account and their individual savings increase. There is, however, no significant impact on mean household savings nor on average expenditures, income, loans or transfers. Based on weekly data from financial diaries, we show the control households partially smooth consumption through transfers received from others. The treated households smooth consumption (and nutrition) better than the control households, thanks to pro-cyclical saving on the account. The latter result provides an important new insight into the role of banking in low and middle-income countries.
Alors que l'Organisation internationale du travail (OIT) célèbre son centenaire, le principe fondateur de l'organisation demeure pertinent : les menaces sur la paix prennent racine dans les injustices et inégalités inhérentes aux grandes transformations économiques. Dans le contexte de mutations rapides et profondes qui affectent le monde du travail et de l'emploi, l'OIT suscite de vives critiques quant à sa capacité d'action, son mode de fonctionnement tripartite et ses outils. Ce chapitre introduit le onzième numéro thématique de la Revue internationale de politique de développement. Treize chapitres mettent en lumière les tensions inhérentes à l'OIT et ses actions, ainsi que les stratégies déployées par l'organisation pour tenter de remplir ses mandats. L'ouvrage porte un regard diachronique sur l'OIT. Certains chapitres examinent les actions de l'OIT à ce jour, mettant en lumière les lacunes et les progrès accomplis. Ils interrogent les capacités d'action de l'organisation, ses modes de fonctionnement et la pertinence de ses orientations et programmes. D'autres chapitres proposent des analyses prospectives sur la base du contexte et des contraintes dans lesquels l'OIT et ses parties prenantes évoluent et innovent pour relever les défis posés par la "4ème révolution industrielle".
As the International Labour Organization (ILO) celebrates its centenary, its founding precept remains as relevant as ever: the main breeding grounds for threats to peace are the injustices and unequal opportunities that result from ongoing economic transformation. The moral idea that forged the ILO still lies at the heart of the international efforts for peace and development driving the Agenda for Humanity, the Agenda for Sustainable Development and the consensus on the need for inclusive growth that will "leave no one behind". This introductory chapter explains the rationale behind the 11th special issue of International Development Policy, which addresses questions around the ILO's capacity for action and its effectiveness, the relevance of its programmes and ability to adapt to a world of work undergoing profound change. The volume of thirteen chapters highlights the tensions that constitute the ILO and its action, the changing and different environments in which the Organization operates, and the initiatives taken by the ILO to respond to these challenges. The need for adaptation is especially pronounced today in view of the acceleration of technological developments and radical changes in the organisation of employment and work, and the consequent impact on social protection systems.
Following the onset of the global financial crisis (2008) we witness a strengthening of the correlation between crude oil prices and medium-term inflation expectations. Using the first principal component of commodity prices as a measure for global aggregate demand, we decompose oil prices into a global demand factor and idiosyncratic factors that include supply side effects and weather conditions. The decomposition of oil prices allows us to show that since the crisis, global five-year breakeven inflation rates react quite strongly to global aggregate demand conditions embedded in oil prices. One explanation for this finding is that in recent years monetary authorities put greater emphasis on macro-prudential issues. Alternatively, it may be that market participants perceive inflation targeting as either less aggressive when inflation deviates below target or less effective around the effective lower bound.
Au cours de la crise financière mondiale, la politique monétaire israélienne a eu recours à des mesures non conventionnelles parallèlement à des réductions énergiques du taux d’intérêt de la banque centrale. L’expérience acquise par Israël dans l’utilisation de ce type de mesures pendant la crise, leur suppression aux premiers signes de reprise et l’usage prolongé de l’une d’entre elles offre des indications et des enseignements susceptibles d’intéresser d’autres pays. Cet article dépeint les circonstances dans lesquelles ces mesures non conventionnelles ont été mises en oeuvre et arrêtées, se penche sur certains détails de leur élaboration et de leur mise en oeuvre, et s’intéresse aux leçons qui peuvent être tirées de cette expérience. Il s’articule comme suit : la première partie présente plusieurs caractéristiques de l’économie israélienne et de sa performance pendant la crise mondiale et dans les années qui ont suivi. Ces caractéristiques sont importantes afin de comprendre les circonstances dans lesquelles la politique monétaire – en particulier sa partie non conventionnelle – a été conduite. Les détails de ces mesures non conventionnelles sont abordés dans la deuxième partie. Enfin, les leçons à tirer de cette politique monétaire non conventionnelle sont exposées dans la troisième partie.
We develop a model of cross-border acquisitions in which the foreign acquirer's ownership choice reflects a trade-off between easing the target's credit constraints and the costs of operating in an environment with weak institutions. Data on domestic and foreign acquisitions in emerging markets over the period 1990–2007 support the model predictions. The share of full foreign acquisitions is higher in sectors more reliant on external finance, in countries with lower financial development, and in countries with higher institutional quality. Sectoral external finance dependence accentuates the effect of country-level financial development and institutional quality. By contrast, the level of foreign ownership in partial acquisitions is insensitive to institutional factors and depends weakly on financial factors.
The last few decades witnessed a dramatic change in public opinion towards gay people. This paper uses a difference-in-difference empirical strategy to investigate the hypothesis that the AIDS epidemic and the ensuing endogenous political process led to this transformation. We show that the process of change was discontinuous over time and show suggestive evidence that the '92 presidential election followed by the "don't ask, don't tell" debate led to a change in attitudes. In accordance with our hypothesis, this change was greater in states with high-AIDS rate. Our analysis suggests that if individuals in low-AIDS states had experienced the same average AIDS rate as a high-AIDS state, the change in their approval rate from the '70s to the '90s would have been 50 percent greater.
