Scheherazade S. Rehman

FDI, Technology Spillovers, Growth, and Income Inequality: A Selective Survey

The present paper, restricting its attention to the empirical economics literature, attempts to gauge current thinking on the question of whether FDI causes economic growth. Since technological spillovers are a key determinant of long run economic growth, the survey begins with the firm level evidence on technological spillovers of FDI on domestic firms. The macro FDI and growth literature is covered next. Finally, we examine the effect of FDI on income inequality and/or employment, skills, or jobs. In many contexts policies that exacerbate income inequality come under special scrutiny even if they are welfare enhancing. Our major finding is that FDI is generally associated with positive technological spillovers, economic growth, and increasing income inequality. For all three of these results, however, there are significant counter examples in the literature which must be respected.

The euro as a global trade currency

The creation of the European Unions (EUs) Economic and Monetary Union (EMU) and its euro is one of the most important international monetary developments of the post-Bretton Woods era as it will cause an unprecedented change in the worlds monetary and trade structure since the collapse of the fixed exchange rate system. The implications are far from clear. A change of such a magnitude will have profound effects not only on the worlds trading system but also on foreign exchange and the distribution of central bank reserves. It is the objective of this paper to provide an analysis of the potential of the euro as a global trade currency alongside the U.S. dollar and its subsequent impact on the distribution of central bank reserves and on the foreign exchange markets. How the European EMU and its euro will affect the rest of the world depends largely on two related questions. First, will the euro challenge the U.S. dollar as the worlds main trade, reserve, and investment currency? Second, will the Europ...

Corruption and its Manifestation in the Persian Gulf

The authors of this timely book investigate various forms and measures of corruption, examine whether corruption is more acute in Persian Gulf countries than elsewhere, and illustrate the unique forms it takes in oil- and natural gas-rich economies. They also analyze the major factors that promote corrupt practices and how they impact economic growth and social development.

The Impact of Brexit on EU27 on Trade, Investments and Financial Services

Abstract On June 23, 2016, the UK decided to leave the European Union (EU), commonly known as “Brexit”. The UK has two years to conclude their new arrangement with the EU27 after evoking Article 50 Treaty of Lisbon officially, which it did on March 27, 2017. While there is a range of possible trade agreements most are unlikely as they would either imply repudiating firm EU legal principles or strong promises that the current UK government is committed to maintain. The article discusses these options. Moreover, the article focuses on the trade and investment flows between the UK and EU27 and discusses the possible short-term implications of Brexit with a specific attention to the most impacted sector, that of financial services.

Brexit: Origins and Future Perspectives

Brexit and the election of Donald Trump both seem to originate from a deep dissatisfaction with globalization and what it seemingly represents. The growing discontent against the rapid growth of global goods, services, capital and labor began during the third wave of globalization in 1979/80. This cumulated into a full-blown backlash against globalization in the aftermath of the 2007/08 global financial and economic crisis. The then combustible mix of historic disruptions to the flow of capital in the USA (and partly the UK) and the unchecked growing income gaps in the West erupted when the global immigration crisis began to unfold.

Key EMU Predicaments and Outlook

This final chapter identifies the key integration predicaments and provides insight into EMU’s likely future. The following issues are discussed: (i) the impact of the common monetary policies on EMU participants; (ii) EU financial centers: gains and losses; (iii) the “City” of London and the EMU; (iv) EMU and the global financial markets; (v) the “ERM II”; (vi) the meeting of the Maastricht Treaty convergence criteria in 1997; (vii) the British dilemma, (viii) the German predicament; (ix) the Franco-German alliance and its impact on the EMU; (x) the 1996–97 IGC negotiations; (xi) prospective EMU impediments; and (xii) the EMU blueprint for the year 2002.

The European Central Bank

The European Economic and Monetary Union (EMU) is not yet a reality but the process of economic and monetary integration has already had an impact on the global financial markets and the international monetary system. Hence, it is important to understand the nature of the EMU and of the institutions that will coordinate and administer its activities. Yet, while most member nations support the idea of a single currency and of common monetary policies, there are serious problems with the technical aspects of the transition process, the convergence criteria, and the design of the EMU institutions as well as the EMU’s membership.

Overview of European Monetary Integration

Post-World War II events provided the motivation for European integration: America offered hope and support while the Soviet Union exerted pressure and generated fear. In the end, hope conquered fear.

The Single Currency (The EURO): Costs and Benefits

Political, economic and financial market forces have prompted the EU member nations to seek ever closer economic, monetary and political integration at the end of the century — by way of the single currency. The 1989 Delors Report, the ratification of the Maastricht Treaty in 1993 and the European Council Summits held in Madrid in 1995 and Dublin in 1996, were major milestones on the road towards this objective.1 The Euro has been chosen as the new single currency, to be introduced in 1999 on a non-cash basis and in 2002 as the sole legal tender of the EMU member nations. Box 4.1 provides a brief historical overview of the evolution of the single currency, which is not an entirely new idea in Europe.

Fiscal Policy and the EMU

One of the critical issues involved in the continued integration of the EU is the fiscal policy implication of the EMU. The following discussion explores the relationship between fiscal policies and the economic and monetary integration process. Although the economic union and monetary union are two separate entities, in accordance with the Delors Report1, the Maastricht Treaty called for a simultaneous pursuit of both.