Copyright (c) 2008 Berkeley Electronic Press All rights reserved. http://www.bepress.com/gej Recent documents in Global Economy Journal en-us Fri, 06 Jun 2008 02:56:41 PDT 3600 http://www.bepress.com/gej/vol8/iss2/8 http://www.bepress.com/gej/vol8/iss2/8 Wed, 04 Jun 2008 12:49:50 PDT The South Asian Association for Regional Cooperation, SAARC, founded in 1985, has floundered since its inception due to the lack of a strong political will. This article evaluates the political-economic and strategic benefits of deeper integration in South Asia from the Indian perspective. The abysmally low level of integration witnessed so far in the region has been driven by a myriad of constraints that restrict economic interaction among the South Asian countries. Gains from regional integration can emerge only after these constraints are effectively addressed. The central argument of the article is that recent global developments and increasing openness of SAARC economies are moving the principal drivers of this process towards a more supportive stance for SAARC and this creates a new window of opportunity. This opportunity must be seized by India as it has taken on the chairmanship of the organization, because a successful SAARC directly contributes to India's strategic objectives both in the region and also globally. In this context the article discusses ten reasons for India to rejuvenate integration efforts and revive regional cooperation in South Asia. Aparna Sawhney Economic Integration http://www.bepress.com/gej/vol8/iss2/7 http://www.bepress.com/gej/vol8/iss2/7 Wed, 04 Jun 2008 12:49:47 PDT The present article is a reply to the article by John A. Tatom titled ``The US-China Currency Dispute: Is a Rise in the Yuan Necessary, Inevitable or Desirable?," recently published in this journal. We found that John Tatom seems to only give a partial description of the US-Chinese economic relations, of the main features of the Chinese economy, and also of the macroeconomic policy options available to China. We argue that the real exchange rate is not the appropriate measure for a currency undervaluation, but it is the continuous, one-directional and accelerating accumulation of foreign exchange reserves. We also argue that the likely improvement in the US trade balance deficit caused by an appreciating Yuan will not be offset by growing US trade balance deficits with other East Asian countries. Furthermore, giving up the actual currency peg will benefit rather than harm China, provided that the steps towards Yuan flexibility will be taken in the right sequence and order. We hold that a revaluation of the Yuan is necessary, inevitable and desirable just as much as it happened to be with the Deutschmark in 1969. It would not ``damage Chinese development." China needs a Yuan appreciation mainly in its own interest to assure domestic financial market stability, and to avoid an overheating of its economy and a soaring inflation. Christian M. Oberpriller Exchange Rates International Monetary Policy http://www.bepress.com/gej/vol8/iss2/6 http://www.bepress.com/gej/vol8/iss2/6 Wed, 04 Jun 2008 12:49:43 PDT The prospects of successfully concluding the Doha Development Agenda negotiations in 2008 are poor. Even a basic agreement on major issues with details to be filled in later is unlikely. Possibly, there may be an agreement this year on modalities. Deep divisions remain in all major negotiating areas--agriculture, non-agricultural market access (NAMA), services and rules. Moreover, in some respects, the Members do not even agree on the form the negotiations should take, e.g., the level of importance to be accorded to services. David S. Christy Jr. International Trade http://www.bepress.com/gej/vol8/iss2/5 http://www.bepress.com/gej/vol8/iss2/5 Wed, 04 Jun 2008 12:49:40 PDT The standard advice to those thinking of publishing in a given journal is to read it. But perhaps potential contributors might benefit from a few comments on what the editor sees when looking at the Global Economy Journal, past and present. Jannett Highfill http://www.bepress.com/gej/vol8/iss2/4 http://www.bepress.com/gej/vol8/iss2/4 Wed, 04 Jun 2008 12:49:37 PDT Integration of the global economy through trade has enabled firms to adopt new production strategies. Rather than producing in a single country, stages of production are performed in multiple countries to exploit inherent locational advantages. This practice gives rise to vertical specialization across national boundaries. Here, the U.S. exports components to a foreign (host) country that uses them to produce a product that is returned to the U.S. or is exported to other countries. This paper investigates the relationship between host country educational attainment and the extent of vertical specialization. Despite the general finding that educational attainment exerts a decreasingly negative effect on such activity in host countries, a detailed analysis suggests there may be a positive relationship between educational attainment and vertical specialization over some parts of the educational attainment scale. A country can become more attractive as a production location when its workforce is educated. Don P. Clark Commercial Policy http://www.bepress.com/gej/vol8/iss2/3 http://www.bepress.com/gej/vol8/iss2/3 Wed, 04 Jun 2008 12:49:33 PDT In this article we analyze whether US antidumping (AD) duties in the agricultural sector are effective in restricting trade. More specifically, does imposing an antidumping duty restrict imports of the named commodity or are imports deflected from countries named in the AD petition to countries not named in the petition? We find that AD duties have significantly restricted imports of agricultural commodities from countries named in the petition. However, our results also indicate that, unlike the manufacturing sector in the US, there was little trade diversion towards countries not named in the petition. Our results indicate that AD is a plausible protectionist policy in the agriculture sector. Nisha Malhotra International Trade http://www.bepress.com/gej/vol8/iss2/2 http://www.bepress.com/gej/vol8/iss2/2 Wed, 04 Jun 2008 12:49:28 PDT This article investigates two aspects of corporate income taxation: the determinants of corporate tax rates and the determinants of corporate tax revenues. In the context of theoretically informed empirical models, the analysis examines the influence of increasing economic integration on corporate tax rates and corporate tax revenues, focusing in particular on the case of European Union member and applicant countries. The investigation utilizes a data set of 36 OECD and European countries over the period from 1979 to 2002. Findings are consistent with theoretical expectations: more integrated countries chose lower corporate tax rates, while larger countries, those with bigger governments, and those with higher individual income tax rates chose higher rates. Corporate tax revenues are found to be parabolically related to tax rates. Further, this parabolic relationship is steeper as economies are more integrated, implying a lower revenue-maximizing tax rate for such countries. Kimberly A. Clausing Economic Integration Multinational Corporations http://www.bepress.com/gej/vol8/iss2/1 http://www.bepress.com/gej/vol8/iss2/1 Wed, 04 Jun 2008 12:49:24 PDT There is a belief that the Chinese economy competes with the Latin-American ones for investment flows. Here we analyze the determinants of the US FDI outflows to the most representative Latin-American economies. We develop such assessments with a double-procedure cointegration analysis based on the time-series methodologies of Toda and Yamamoto (1995) and Liu, Song and Romilly (1997). The results suggest that long-run investment to the Latin-American region mainly depends on the performance of the US economy. Furthermore, they suggest the existence of a substitution effect between the Latin American countries and China for US investment flows. Jose Luis De la Cruz Gallegos International Finance