The World is Flat: A Brief History of the Twenty-First Century Thomas L. Friedman Farrar, Straus and Giroux, 2005 Thomas Friedman is a widely-acclaimed journalist, foreign affairs columnist for the New York Times, and author of four best-selling books that include From Beirut to Jerusalem (1989). His eminence as a journalist is clearly demonstrated in the way he prepared for The World is Flat. He traveled throughout the world, interviewing in depth the political and business leaders who have the most direct, hands-on knowledge of the truly incredible developments occurring in the business structures and technology of globalization. Only a journalist who moves freely at the highest levels could interview the likes of Sir John Rose, the chief executive of Rolls-Royce; Nobuyuki Idei, the chairman of Sony; Richard Koo, the chief economist for the Nomura Research Institute; Bill Gates of Microsoft; Wee Theng Tan, the president of Intel China; David Baltimore, president of Caltech; Howard Schultz, founder and chairman of Starbucks; Nandan Nilekani, CEO of Infosys in Bangalore - and many others, each of whom gave him the inside story of how, specifically, the barriers of time and space separating economies, workforces, sources of capital, and technical abilities are crumbling. The result of this unfolding story, already far along but with much farther to go, according to Friedman, is that "the world is flat." With some notable exceptions in sub-Saharan Africa and the Islamic swathe, everything is connected with everything else on a horizontal basis, with distance and erstwhile time-lags no longer mattering. Friedman describes in detail the galloping globalization that has unfolded in even so limited a time as the past five years. Under the impetus of a worldwide network of interconnectivity, the world economy is much-changed from what it was at the turn of the century a mere half-decade ago. Friedman quotes the CEO of India's Infosys: "What happened over the last [few] years is that there was a massive investment in technology, especially in the bubble era, when hundreds of millions of dollars were invested in putting broadband connectivity around the world, undersea cables," while (Friedman paraphrases him) "computers became cheaper and dispersed all over the world, and there was an explosion of software - e-mail, search engines like Google, and proprietary software that can chop up any piece of work and send one part to Boston, one part to Bangalore, and one part to Beijing...." Microprocessors today have 410 million transistors compared to the 2800 they had in 1971. And now, "wireless is what will allow you to take everything that has been digitized, made virtual and personal, and do it from anywhere." The effect on productivity is revolutionary: "It now takes Boeing eleven days to build a 737, down from twenty-eight days just a few years ago. Boeing will build the next generation of planes in three days, because all the parts are computer-designed for assembly." The most strikingly informative aspect of this book, however, is not about technology. Most especially, Friedman explores the rapidly evolving global business systems, each constantly regenerating itself to keep ahead of the others. These are systems that span the continents seeking the lowest-cost providers of everything from expert scientific and engineering work to the lowliest grunt work. Friedman points out that India produces 70,000 accounting graduates each year - and that they are willing to start at $100 a month. It is no wonder that Boeing employs 800 Russian scientists and engineers for passenger-plane design when "a U.S. aeronautical engineer costs $120 per design hour, a Russian costs about one-third of that." Friedman describes a call center in India where outbound callers sell "everything from credit cards to phone minutes," while operators taking inbound calls do "everything from tracing lost luggage for U.S. and European airline passengers to solving computer problems for confused American consumers. …

The World Is Flat: A Brief History of the Twenty-First Century

The Bootstrap and Edgeworth Expansion

Manias, Panics, and Crashes. A History of Financial Crises

Animal Spirits: How Human Psychology Drives the Economy, and Why It Matters for Global Capitalism

We examine the impact of energy consumption and tourism growth on the ecological footprints and economic growth of 38 International Energy Agency (IEA) countries, as moderated by labor and capital, over the 1995-2018 period. We develop a comprehensive empirical analysis that applies second-generation unit root and cross-section dependence analysis. The co-integration analysis indicates long-run relationships among the variables, while the fully modified least square (FMOLS) approach specifies that energy consumption promotes economic growth and degrades environmental quality in the long run, and tourism growth improves environmental quality and stimulates economic growth in the long run. In addition, the result of a pairwise Granger causality test reveals bidirectional causality between energy consumption and economic growth and unidirectional causality from the ecological footprint to energy consumption. Policy implications for theory and practice and directions for future research in the area are presented.

/pdf/the-dynamic-links-among-energy-consumption-tourism-growth-19w0e14l2j.pdf

The dynamic links among energy consumption, tourism growth, and the ecological footprint: the role of environmental quality in 38 IEA countries

The aim of this paper is to quantify institutional (political and fiscal) and non-institutional uncertainty (economic policy uncertainty, Economistsâ€™ recession index, natural disasters-related uncertainty, and several disagreement measures). The stated indicators are based on articles from highly popular Croatian news portals, the repository of law amendments (Narodne novine), and Business and Consumer Surveys. We also introduce a composite uncertainty indicator, obtained by the principal components method. The analysis of a structural VAR model of the Croatian economy (both with fixed and time-varying parameters) has showed that a vast part of the analysed indicators are significant predictors of economic activity. It is demonstrated that their impact on industrial production is the strongest in the onset of a crisis. On the other hand, the influence of fiscal uncertainty exhibits just the opposite tendencies. It strengthens with the intensification of economic activity, which partially exculpates the possible utilization of fiscal expansion as a counter-crisis tool.

/pdf/economic-uncertainty-and-its-impact-on-the-croatian-economy-1m4d5v882n.pdf

Economic uncertainty and its impact on the Croatian economy

This paper builds upon the renowned media reports-based “Economic policy uncertainty” (EPU) index and analyzes its Granger-causal interrelationships with consumer confidence and aggregate economic activity. Employing a heterogeneous panel Granger causality test on data from 13 world countries, the authors find that: (1) the analyzed countries are quite heterogeneous in terms of the found causality patterns; (2) the EPU index does not Granger-cause the overall economic activity in the vast majority of the analyzed economies; (3) consumer confidence is confirmed as a significant predictor of aggregate output in all countries; (4) news media uncertainty and consumer confidence largely represent two distinct psychological transmission channels. The evidence presented in this paper suggests that consumer confidence (i.e. first moment, expectation) is considerably more important for the aggregate economic activity than economic uncertainty (i.e. second moment, variance). Two robustness checks are provided (an alternative lag structure of the Granger causality test, and the usage of monthly (industrial production) instead of quarterly (GDP) economic activity data). The obtained inferences are quite robust to both model alternations. Additionally, the leading characteristics of EPU index are found to be less pronounced than those of GARCH uncertainty and forecast disagreement.

A Note on the “Economic Policy Uncertainty Index”

This paper offers a pioneer attempt to unveil the time-varying impact of consumer confidence on GDP growth. The empirical analysis is based on a state space model with time-varying coefficients, which is employed on a dataset from 11 New EU Member States. It is shown that the impact of consumer confidence (reflecting the overall uncertainty level in the country) skyrockets in the 2008 Great Recession, providing evidence that the recent crisis was to some extent psychologically governed. After that, the influence of consumer confidence on GDP mostly stabilizes at earlier levels. The EU accession seems not to play an important role in the observed relationship. The obtained conclusions are quite robust across countries and remain intact upon the inclusion of additional control variables in the model. A possible solution for keeping the psychological determinants of the crisis under control is a prompt, coherent, and clearly communicated crisis management policy, which might help preventing a momentous drop of consumer confidence and overall uncertainty.

Consumer confidence as a GDP determinant in New EU Member States: a view from a time-varying perspective

Theory states that the foreign direct investments (FDI) have multiple positive effects on a countryâ€™s economy. Evidence can be sought from Central and Eastern European countries where FDI is seen as one of the main contributors to GDP growth. This paper examines the relationship between FDI and GDP growth rate in Croatia and other chosen European transition countries using bivariate VAR models. Based on the research conducted, it was found that FDI Granger causes GDP growth in most countries. This is especially true in Poland, Czech Republic and Hungary which have attracted a significant amount of FDI starting from 1990. The estimated VAR models for Latvia and Slovenia provide evidence that GDP causes FDI, corroborating the theory that investor are prone to stable macroeconomic conditions. This paper tries to make a comparative analysis of FDI-GDP link in New EU member states. Further research should certainly include other aspects such as the quality of the legislative system, labor productivity and labor costs, access to capital markets, etc

/pdf/the-interrelationship-of-fdi-and-gdp-in-european-transition-3zmmo0k3iq.pdf

The Interrelationship of FDI and GDP in European Transition Countries

This paper is a follow-up on the Economic Policy Uncertainty (EPU) index, developed in 2011 by Baker, Bloom, and Davis. The principal idea of the EPU index is to quantify the level of uncertainty in an economic system, based on three separate pillars: news media, number of federal tax code provisions expiring in the following years, and disagreement amongst professional forecasters on future tendencies of relevant macroeconomic variables. Although the original EPU index was designed and published for the US economy, it had instantly caught the attention of numerous academics and was rapidly introduced in 15 countries worldwide. Extensive academic debate has been triggered on the importance of economic uncertainty relating to the intensity and persistence of the recent crisis. Despite the intensive (mostly politically-motivated) debate, formal scientific confirmation of causality running from the EPU index to economic activity has not followed. Moreover, empirical literature has completely failed to conduct formal econometric testing of the Granger causality between the two mentioned phenomena. This paper provides an estimation of the Toda- Yamamoto causality test between the EPU index and economic activity in the USA and several European countries. The results do not provide a general conclusion: causality seems to run in both directions only for the USA, while only in one direction for France and Germany. Having taken into account the Great Recession of 2008, the main result does not change, therefore casting doubt on the index methodology and overall media bias.

/pdf/economic-policy-uncertainty-index-and-economic-activity-what-arh7snzea1.pdf

Economic policy uncertainty index and economic activity: what causes what?

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