Peterson Institute for International Economics Update Newsletter
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PIIE Update Newsletter
January 3, 2014

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  European Bank for Reconstruction and Development's Transition Report 2013
Monday, January 6, 2014
12:30–2:00 pm (EST)
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  Jeromin Zettelmeyer, nonresident senior fellow at the Peterson Institute for International Economics (PIIE) and deputy chief economist of the European Bank for Reconstruction and Development (EBRD), will present the EBRD's Transition Report 2013 on Monday, January 6. PIIE Senior Fellow Anders Åslund will provide an independent discussion following Zettelmeyer's presentation.

Reforms in most countries transitioning to market economy systems have stalled since the mid-2000s. Without a revival of reforms, living standards will remain below those in mature market economies. The 2013 Transition Report explores how resistance to reform is rooted in political, institutional, and human capital constraints. It shows that democracy has enabled reform by triggering improvements in economic institutions in some countries. Importantly, the Transition Report also assesses the extent of economic opportunities in transition countries compared to Western European benchmarks.

  Fueling Up: The Economic Implications of America's Oil and Gas Boom
Wednesday, January 8, 2014
12:30–2:00 pm (EST)
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  The Peterson Institute for International Economics will release a new book, Fueling Up: The Economic Implications of America's Oil and Gas Boom, by Trevor Houser, PIIE visiting fellow, and Shashank Mohan, Rhodium Group, on Wednesday, January 8.

New drilling techniques for oil and natural gas are propelling an energy production renaissance in the United States. As the US economy emerges from the Great Recession, many believe the energy boom could reduce unemployment and revitalize American manufacturing. Houser and Mohan assess the impact of the recent and projected increase in domestic energy production on US GDP, employment growth, manufacturing competitiveness, household expenditures, and the country's trade balance. The authors' analysis will help policymakers navigate the consequences of increased domestic oil and gas production for the environment and global warming. The book also explores whether companies should be allowed to export the energy they produce.
  Policy Brief 13-30
Five Challenges for Janet Yellen at the Federal Reserve

David J. Stockton
  David J. Stockton Janet Yellen, who will serve as the 15th chair of the Board of Governors of the Federal Reserve System faces formidable challenges as the US economy and financial system recover from the Great Recession. Stockton lists five imperatives for Yellen: (1) exercise caution in further scaling back the Fed's third round of large-scale asset purchases; (2) attend to the Fed's dual mandate of achieving maximum sustainable employment and stable prices; (3) improve integration of financial stability considerations into the monetary policy framework; (4) further improve the Fed's communications and transparency; and (5) effectively regulate the financial sector as called for in the 2010 Dodd-Frank law.

>> Read full policy brief [pdf]

  Policy Brief 13-31
Implementation of the Santiago Principles for Sovereign Wealth Funds: A Progress Report

Edwin M. Truman
  Edwin M. Truman In October 2013, the International Forum of Sovereign Wealth Funds (IFSWF) released its second evaluation of progress by sovereign wealth funds (SWFs) in implementing the Santiago Principles of transparency and accountability. The report, Truman says, exaggerates the extent of implementation of these principles. For example, it states that all of the funds participating in the survey have implemented each of the Santiago Principles at least partially, which is contrary to research conducted by Truman. Several funds that register low on his SWF scoreboard have shown little improvement. The 2013 IFSWF report does not provide the necessary impetus for greater adherence to and implementation of the principles by members and nonmembers of the IFSWF.

>> Read full policy brief [pdf]

The Fed Jumps the Gun Again

Joseph E. Gagnon
Published in USA Today
  Joseph E. Gagnon For the fifth time in less than five years, the Fed has jumped the gun in starting to scale back its support of economic recovery. Those advocating a reduction in the Fed's bond-buying program known as quantitative easing are concerned about increased inflation, but these concerns have been proven wrong repeatedly over the past five years. Inflation might return in the future, but the Fed knows how to fight it. Worries about a potential future policy error are no reason to commit a current policy error.

>> Read full op-ed

Who's the Biggest Loser in the Ukraine-Russia Deal?

Anders Åslund
Published in Foreign Policy
  Anders Aslund Russian President Vladimir Putin's meeting in Moscow with Ukraine's politically besieged president, Viktor Yanukovych, must be viewed as a victory for Putin. He successfully tied financially troubled Ukraine to the Kremlin by offering a $15 billion aid package and a significant discount in gas prices. In this deal, however, authoritarianism and corruption have triumphed over democracy. Presuming that Ukraine does not default on its bonds, Russia has not, and more likely will not, lose anything on this deal. The big losers are the Ukrainian people, but it remains to be seen whether they will tolerate being treated this way by their current rulers.

>> Read full op-ed

Putin's Conservative State Capitalism

Anders Åslund
Published in the Moscow Times
  Russian President Vladimir Putin expressed his continuing enchantment with state capitalism and Soviet economics in his annual address to the Federal Assembly. Russia's most urgent economic concern is disappearing economic growth, but only in the middle of his speech did Putin mention the need for the "renewal of sustainable economic growth." Rather than promoting higher economic growth, he wants to go after the remaining prominent private businessmen. Instead of promoting market competition, Putin advocated discretionary state intervention.

>> Read full op-ed

Recent Blog Posts

RealTime Economic Issues Watch   China Economic Watch    North Korea:  Witness to Transformation
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Calm Seas in Europe in 2014?

Canada's Patent Practices Threaten Medical Innovation

Sovereign Debt Restructuring: Red Herrings Swimming in a Sea of Confusion

Proposed Export Ban in Indonesia

Europe's Cypriot Solution for Failing Banks
  A Bad Year for Chinese Stocks

New National Audit on Local Government Borrowing in China: Three Years Later, Little Progress

A World of Known Unknowns: A Closer Look at the Allocation of China's Foreign Exchange Reserves

China's Trade Agreements: The Inside and Outside Strategy

What is Happening with the BIT?
  The New Year's Speech

Return of the Abduction Issue: The UN Role

China-DPRK and China-ROK Diplomatic Connections: Some Data

Marcus Noland's Latest Essay in Foreign Affairs

NK Witness Holiday Break

PIIE Noted in the News and on the Web

Bloomberg Surveillance
Peterson's Posen 'Confident' Fed Can Exit QE [mp3]
Adam S. Posen joins Tom Keene to look back on 2013 and discuss the economic outlook for 2014.

Fox Business
Tug of War Between Markets and the Fed in 2014?
Joseph E. Gagnon discusses how the US economy will respond to the Federal Reserve tapering its stimulus program in 2014.

NPR's Weekend Edition
Ukraine Protesters Denounce Russian Cash
Anders Åslund discusses the bailout loan that Ukraine accepted from Russia.

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