PERI Newsletter

["Lee, Frederic" <leefs@xxxxxxxx>]

Dear Colleague,

The Political Economy Research Institute sends out a quarterly newsletter which is below.  The PERI is a heterodox economics institute which engages in research that may interest some of you.  If you wish to get the newsletter, you need to contact PERI at peri@xxxxxxxxxxxxxxxx

Sincerely,

Fred Lee


-----Original Message-----
From: Political Economy Research Institute [mailto:peri@xxxxxxxxxxxxxxx]
Sent: Tuesday, June 24, 2003 9:26 AM
To: PERI Newsletter Distribution List
Subject: PERI Newsletter


Political Economy Research Institute Quarterly Bulletin

The PERI Newletter of Research, Policy, and Events
03.2 (June)

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CONTENTS

(1) New Books

*   CONTOURS OF DESCENT: U.S. ECONOMIC FRACTURES AND THE LANDSCAPE OF GLOBAL
AUSTERITY, by Robert Pollin.

*   NATURAL ASSETS: DEMOCRATIZING ENVIRONMENTAL OWNERSHIP, edited by James
K. Boyce and Barry G. Shelly.

(2)  PERI Research Briefs

*    "Capital Management Techniques in Seven Developing Countries During the
1990s: Lessons for Policy Makers, by Gerald Epstein and Ilene Grabel

*    "Confronting the New York Fiscal Crisis: Raising Revenue Through Taxing
Stock Market Transactions," by Robert Pollin and James Heintz

(3)  New Working Papers and Research Reports

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The Political Economy Research Institute (PERI) is based at the University
of Massachusetts, Amherst. For general information about PERI, please visit
our website: http://www.umass.edu/peri.

If you received this e-mail by mistake or if you would like your name
removed from PERI's distribution list, please send us a message:
peri@xxxxxxxxxxxxxxxx

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(1) New Books

CONTOURS OF DESCENT: U.S. ECONOMIC FRACTURES AND THE LANDSCAPE OF GLOBAL
AUSTERITY,
by Robert Pollin (London and New York: Verso, 2003). Robert Pollin is
Co-director of PERI and Professor of Economics, University of Massachusetts.

The US economy faced the prospect of a serious recession even prior to the
September 11 terrorist attacks. The highly unstable economic conditions that
Clinton handed to Bush - wage stagnation, rising inequality, and a wildly
inflated stock market - were hardly noticed amid the near-universal praise
for the economic stewardship of Clinton and his supposed policy maestro,
Federal Reserve Chair Alan Greenspan. CONTOURS OF DESCENT shows how the
policies of Clinton and Bush in the U.S., as well as those of the IMF with
respect to developing countries, are variants of neoliberal economics -
which lavishes favors on multinationals and capitalists while allowing
living standards for ordinary people to fall. CONTOURS OF DESCENT also
explores an alternative policy approach for promoting economic growth with
increased equality.

Link:
http://www.versobooks.com/books/nopqrs/nopq-titles/pollin_contours.shtml

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NATURAL ASSETS: DEMOCRATIZING ENVIRONMENTAL OWNERSHIP,
edited by James K. Boyce and Barry G. Shelly (Washington, DC: Island Press,
2003). James Boyce is Director of the PERI program on Development,
Peacebuilding, and the Environment and Professor of Economics at the
University of Massachusetts. Barry Shelley is a doctoral candidate at the
University of Massachusetts.

Low-income communities frequently suffer from a lack of access to, or a lack
of control over, the natural resources that surround them. In many cases,
their local environment has been degraded by years of resource extraction
and pollution by distant corporations or government agencies. In such
settings, initiatives that build natural assets in the hands of the poor can
play an important role in poverty-fighting efforts. Drawing on evidence from
across the United States, NATURAL ASSETS demonstrates that safeguarding the
environment and improving the well-being of the poor can be mutually
reinforcing goals.

Link: http://www.umass.edu/peri/nademoenv.html

In addition, the PERI Publication - "The New Environmental Activists:
fighting pollution, poverty, and racism by building natural assets" has been
released and is currently available on-line at:
http://www.umass.edu/peri/newenviron.htm.

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(2) PERI Research Briefs

APRIL: "Capital Management Techniques in Seven Developing Countries During
the 1990s: Lessons for Policy Makers," by Gerald Epstein and Ilene Grabel.

Following the Asian crisis of the late 1990's, there has been a renewed
interest in the role of capital controls in developing countries. Even
strong proponents of capital account liberalization have acknowledged that
many countries that avoided the worst effects of recent financial crises
were also those that used capital controls, including China, India, Malaysia
and Chile. Despite this apparent increase in support, most mainstream
economists remain skeptical about the desirability of controls in the
long-run. This RESEARCH BRIEF critically examines this position by
summarizing seven intensive case studies of developing countries that
maintained a variety of controls over capital inflows and outflows during
the 1990s.

JUNE: "Confronting the New York Fiscal Crisis: Raising Revenue Through
Taxing Stock Market Transactions," by Robert Pollin and James Heintz.

New York State and New York City face an enormous fiscal crisis that
currently threatens delivery of education, health care, and basic services.
Furthermore, the proposed cuts to balance the budget will undermine job
creation and economic growth. However, New York could reduce the severity of
this crisis by reintroducing a low-level Stock Transfer Tax on all shares
exchanged on Wall Street. This RESEARCH BRIEF evaluates just such a
proposal. In particular, it evaluates two potential negative consequences of
the Stock Transfer Tax: (1) a reduction in employment in the securities
industry that could then lead to broader cuts in private sector employment
in the region and (2) the relocation of the New York Stock Exchange to
alternative trading platforms or northern New Jersey as a means of enabling
traders to circumvent the tax.

Link to PERI Research Briefs: http://www.umass.edu/peri/researchbrief.html


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(3) New Working Papers and Research Reports

A number of new working papers and research reports have been released since
the last edition of this newsletter. Short descriptions of each of these new
research studies and links for downloading the papers off the PERI website
are listed below.

To see a full list of PERI's research studies, go to
http://www.umass.edu/peri/research.html

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WP 56. "Capital management techniques in developing countries: an assessment
of experiences from the 1990s and lessons for the future." Authors: Gerald
Epstein, Ilene Grabel, and K.S. Jomo.

Abstract: Capital management techniques refer to two complementary types of
financial policies: those that govern international capital flows and those
that enforce prudential management of domestic financial institutions. This
paper presents seven case studies of diverse capital management techniques
employed in Chile, Colombia, Taiwan Province of China, India, China,
Singapore and Malaysia during the 1990s. The study reveals that policymakers
were able to use capital management to achieve critical macroeconomic
objectives. In addition, the paper examines the structural factors that
supported these achievements, weighs the costs of these measures relative to
their benefits, and considers broad policy lessons that can be derived from
these experiences.

Link: http://www.umass.edu/peri/pdfs/WP56.pdf

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WP 57. "Rentier incomes and financial crises: an empirical examination of
trends and cycles in some OECD countries." Authors: Gerald Epstein and
Dorothy Power.

Abstract: This paper demonstrates that, in general, the rentier share of
national income for OECD countries from 1960 to 2000 increased significantly
during the last several decades, coinciding with the shift to neo-liberal
monetary policies initiated in the U.S. and U.K. There is no evidence of a
negative correlation between rentier shares and non-financial corporate
shares of income. However, rentier shares declined in developing countries
that experienced financial crises. These findings support the view that
financial liberalization has increased the power of an international rentier
class, whose interests are aligned with those of non-financial corporations
in the richer countries, but conflict with rentiers in developing economies.

Link: http://www.umass.edu/peri/pdfs/WP57.pdf

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WP 58a. "Trends in the rentier income share in OECD countries, 1960-2000."
Authors: Dorothy Power, Gerald Epstein, and Matthew Abrena.

WP 58b. "Individual country technical notes for: 'Trends in the rentier
income share in OECD countries, 1960-2000.'" Authors: Dorothy Power, Gerald
Epstein, and Matthew Abrena

Abstract: These papers present the first set of estimates of the rentier
share of income for twenty-nine OECD countries spanning the period 1960 to
2000. Rentier share is defined to mean the income accruing to financial
institutions and the holders of financial assets. Overall the estimates show
that the rentier share of income rose in most countries between the 1960's
and 1970's, on the one hand, and the 1980's and 1990's, on the other. At the
same time, movements in rentier income vary from country to country and over
time. The papers also present estimates for rentier shares including capital
gains for a subset of countries in the 1980's and 1990's. Including capital
gains substantially alters the trend of rentier shares in the 1990's, in
most cases, causing them to increase.

Link: http://www.umass.edu/peri/pdfs/WP58a.pdf

Link: http://www.umass.edu/peri/pdfs/WP58b.pdf

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WP 59. "The new face of unequal exchange: low-wage manufacturing, commodity
chains, and global inequalities." Author: James Heintz

Abstract: The institutional structure of cross-border production networks
have a profound impact on how the benefits of globalized production are
distributed. This paper develops a model that combines the insights of
earlier unequal exchange theorists and new work on global commodity chains
in ordered to clarify the distributive dynamics of the expansion of low-wage
manufacturing in the developing world. In this framework, the ability of
productivity improvements to raise incomes is constrained and depends on how
the benefits of higher productivity are captured along the commodity chain -
as lower prices or higher rents. In contrast, demand-led growth contributes
to income convergence when demand for manufactured imports is sufficiently
income elastic.

Link: http://www.umass.edu/peri/pdfs/WP59.pdf

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WP 60. "Informalization, economic growth, and the challenge of creating
viable labor standards in developing countries." Authors: James Heintz and
Robert Pollin.

Abstract: Over recent decades, there has been a rise in the proportion of
people engaged in what is termed informal employment, generating a broad
trend toward "informalization", even when economic growth is proceeding.
This paper considers the relationship between the rise of informalization
and the ascendancy of neoliberal policies in developing countries, focusing
in particular on how the decline in average per capita GDP growth has
fostered informalization. In addition, the paper explores policy measures
for raising the proportion of decent jobs with core social protections in
developing countries. Policy measures in two areas are explored: raising the
rate of economic growth and improving the regulation of labor markets.

Link: http://www.umass.edu/peri/pdfs/WP60.pdf

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WP 61. "Evaluating living wage laws in the United States: good intentions
and economic reality in conflict?" Author: Robert Pollin.

This paper first examines the question "what is a living wage" and provides
a range of specific dollar amounts derived a conceptual assessment of the
term. It then provides a series of cost estimates of living wage laws in
various cities. Based on these cost estimates, the discussion turns to a set
of alternative adjustments that covered firms could make to absorb these
costs, including raising prices and productivity, redistributing the firm's
income more equally, laying off employees and relocating out of the area
covered by the law. This research draws upon both prospective and
retrospective evidence to reach an overall assessment of the benefits of
living wage laws relative to their costs.

Link: http://www.umass.edu/peri/pdfs/WP61.pdf

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RR7. "Evaluation of a Proposal to Reinstate the New York Stock Transfer
Tax." Authors: Robert Pollin and James Heintz.

Abstract: This report considers a proposal to reinstate the New York Stock
Transfer Tax (STT) that was phased out between 1979 and 1981. The proposal
would reinstate the tax at half the rate that prevailed at the time of its
repeal. The revenues from such a tax, currently at around $3.4 billion,
would be shared equally by the New York City and State governments. These
revenues could be used to ameliorate the severe fiscal crisis being
experienced by the City and State. These benefits must be weighed against
the possible costs of the policy. The report evaluates three potential
negative consequences of reintroducing the STT: (1) a reduction in
employment in the securities industry and in New York City more generally;
(2) the relocation of trading from the New York Stock Exchange to
alternative platforms or locations; and (3) the creation of distortions
within the state's broader financial markets.