31. Analysis drawn from data at “2018 Key Findings: Prosperity Is Growing, but Not Equally,” Legatum Prosperity Index 2018, www.prosperity.com.
32. The subcomponents of intangible infrastructure are as follows: in education: secondary and tertiary enrollment ratio; in health care: infant mortality, life expectancy, and health spending per capita; in technology: cellphone users (per 100), telephone lines (per 100), secure servers (per million), internet users (per 100), research-and-development expenditure (percent of GDP); in financial services: credit information score, legal rights score, lending risk premium, equity market capitalization (percent of GDP); in business services: ease of doing business rank, import delays, mean tariff rates, procedures needed to register a business.
33. Diamond, “Facing Up to the Democratic Recession.”
34. Data collected from World Bank World Governance Indicators, http://info.worldbank.org/governance/wgi/?xyzallow#home.
35. On the UN Human Development Index, see United Nations Development Programme, “Human Development Reports,” http://hdr.undp.org/en/composite/HDI. Quality of governance is expressed by the average of Transparency International’s Corruption Perceptions Index and the Center for Systemic Peace’s State Fragility Index. In assessing an economy’s macroeconomic volatility, two variables are important: standard deviation of GDP growth rates and inflation, taken from the World Bank database, from 1960 onward. World Bank, “Open Data,” https://data.worldbank.org/?xyzallow.
36. Fukuyama, Political Order and Political Decay, 14.
37. The miniconference was the Credit Suisse Entrepreneur Summit, June 2017.
38. Harvard Law School, Access to Justice Lab, “Spotlight: Drug Courts” (blog), February 6, 2018, http://a2jlab.org/spotlight-drug-courts/; P. Waldmeir, “None of These People Ever Gave Up on Me: America’s Drug Courts,” Financial Times Magazine, August 24, 2018, https://www.ft.com/content/8a1ee8f0-a593-11e8-926a-7342fe5e173f.
Chapter 7: A Westphalia for Finance
1. US Securities and Exchange Commission, A Plain English Handbook: How to Create Clear SEC Disclosure Documents, August 1998, https://www.sec.gov/pdf/handbook.pdf.
2. Meiksins Wood, “Why It Matters.”
3. M. El-Erian, The Only Game in Town: Central Banks, Instability and Avoiding the Next Collapse (Yale University Press, 2016).
4. Mallaby, The Man Who Knew.
5. “What’s in Greenspan’s Briefcase?,” Fall 2000, Inside the Vault, Federal Reserve Bank of St. Louis, https://www.stlouisfed.org/publications/inside-the-vault/fall-2000/whats-in-greenspans-briefcase.
6. “Verbatim of the Remarks Made by Mario Draghi,” speech at the Global Investment Conference in London, July 26, 2012, European Central Bank, https://www.ecb.europa.eu/press/key/date/2012/html/sp120726.en.html.
7. P. L. Siklos, Central Banks into the Breach: From Triumph to Crisis and the Road Ahead (Oxford University Press, 2017), 188.
8. J. Bhagwati, In Defense of Globalization (Oxford University Press, 2007), 4.
9. Even the Riksbank has struggled in recent years. See M. Goodfriend and M. King, “Review of the Riksbank’s Monetary Policy, 2010–2015,” http://data.riksdagen.se/dokument/RFR-201516-RFR7.pdf.
10. Here is a modern interpretation of the dictum: B. F. Madigan, “Bagehot’s Dictum in Practice: Formulating and Implementing Policies to Combat the Financial Crisis,” speech at Federal Reserve Bank of Kansas City Annual Economic Symposium, Jackson Hole, Wyoming, August 21, 2009, https://www.federalreserve.gov/newsevents/speech/madigan20090821a.htm.
11. The “Committee to Save the World,” with Alan Greenspan as the architect, was the subject of a Time magazine cover story in the February 15, 1999, edition, http://content.time.com/time/magazine/0,9263,7601990215,00.html.
12. Greenwood, Shleifer, and Yang, “Bubbles for Fama.” See also B. Jones, “Asset Bubbles: Re-thinking Policy for the Age of Asset Management,” International Monetary Fund Working Paper WP/15/27, February 2015, https://www.imf.org/external/pubs/ft/wp/2015/wp1527.pdf.
13. Though the Bank of Japan adopted quantitative easing in 2001, the wave of QE that has come to dominate markets started with the Federal Reserve’s first QE program in November 2008, when they bought close to USD 600 million in mortgage-backed securities. The second program started in November 2010, and a third and final round, begun in September 2012, was then slowly disengaged or “tapered.” In the United Kingdom, the Bank of England launched its QE program in March 2009, followed some five years later by the European Central Bank (they also bought covered bonds in 2011). A helpful guide to QE comes from the Federal Reserve Bank of Richmond: R. Haltom and A. L. Wolman, “A Citizen’s Guide to Unconventional Monetary Policy,” economic brief, December 2012, https://www.richmondfed.org/~/media/richmondfedorg/publications/research/economic_brief/2012/pdf/eb_12-12.pdf.
14. D. Greenlaw, J. Hamilton, E. Harris, and K. West, “A Skeptical View of the Impact of the Fed’s Balance Sheet,” Chicago Booth Working Paper, February 2018, https://research.chicagobooth.edu/igm/usmpf/usmpf-paper.
15. D. Andrews, M. A. McGowan, and V. Millot, “Zombie Firms and Weak Productivity: What Role for Policy?,” OECD Ecoscope (blog), Organization for Economic Cooperation and Development, December 6, 2017, https:// oecdecoscope.blog/2017/12/06/zombie-firms-and-weak-productivity-what-role-for-policy/.
16. Central banks are beginning to be better at communicating with the public. The Bank of England has begun to send its officers to cities around the United Kingdom to explain its policies and has started to experiment with “public friendly” press releases.
17. A paper from staff at the Chicago Federal Reserve shows that unequal access to financial liquidity can carry through to later wealth inequality. Amromin, De Nardi, and Schulze, “Inequality and Recessions.”
18. B. M. Smith, The Equity Culture: The Story of the Global Stock Market (Farrar, Straus and Giroux, 2003), 5.
19. J. Carville, “The Bond Vigilantes,” Wall Street Journal, February 25, 1993, A1.
20. M. Fox, “‘Bond Vigilantes’ Are Saddled Up and Ready to Push Rates Higher, Says Economist Who Coined the Term,” February 9, 2018, US Markets, CNBC, https://www.cnbc.com/2018/02/09/bond-vigilantes-saddled-up-and-ready-to-make-a-comeback-ed-yardeni.html.
21. One such proposal comes from Mike Konczal and J. W. Mason of the Roosevelt Institute: Konczal and Mason, “A New Direction for the Federal Reserve: Expanding the Monetary Toolkit,” November 30, 2017, http://rooseveltinstitute.org/expanding-monetary-policy-toolkit/.
22. One example of this thinking is Kiley and Roberts, “Monetary Policy in a Low Rate World.”
23. R. Wrigglesworth, “US Student Debt Balloons Past $1.5tn,” Financial Times, August 26, 2018, https://www.ft.com/content/18530da6-a637-11e8-926a-7342fe5e173f; S. Claessens and M. A. Kose, “Financial Crises: Explanations, Types, and Implications,” IMF Working Paper WP/13/28, January 2013, https://www.imf.org/external/pubs/ft/wp/2013/wp1328.pdf.
24. Claessens and Kose, “Financial Crises: Explanations, Types, and Implications”; Bank of Korea–IMF Workshop, “Managing Real Estate Booms and Busts,” April 11–12, 2011, http://www.imf.org/external/np/res/seminars/2011/bok/041111.pdf.
25. Chen and Kang, “Credit Booms.”
26. Chen, Ratnovski, and Tsai, “Credit and Fiscal Multipliers in China.”
27. Mian, Sufi, and Verner, “Household Debt and Business Cycles Worldwide.”
28. Congressional Budget Office, “The 2018 Long-Term Budget Outlook,” June 26, 2018, https://www.cbo.gov/publication/53919.
29. See Mulford, Packing for India. Mulford was also US ambassador to India from 2004 to 2009.
30. On the task of paring down existing debt levels, see IMF, “Fiscal Monitor: Debt. Use It Wisely,” World Economic and Financial Surveys, October 2016, https://www.imf.org/external/pubs/ft/fm/2016/02/pdf/fm1602.pdf. One of the original proposals made during the euro crisis was the “Blue Bond” proposal set out by Jakob von Weizsäcker and Jacques Delpla for the Breugel think
tank on May 5, 2010. J. Weizsäcker and J. Delpla, “The Blue Bond Proposal,” policy brief, May 5, 2010, http://bruegel.org/2010/05/the-blue-bond-proposal/.
31. W. Maliszewski, S. Arslanalp, J. Caparusso, et al., “Resolving China’s Corporate Debt Problem,” IMF Working Paper WP/16/203, October 2016, https://www.imf.org/external/pubs/ft/wp/2016/wp16203.pdf.
32. Chen and Kang, “Credit Booms: Is China Different?”
33. J. R. Franks and C. Mayer, “Ownership and Control of German Corporations,” September 25, 2000, posted December 29, 2000, SSRN, https://ssrn.com/abstract=247501 or http://dx.doi.org/10.2139/ssrn.247501.
34. Alletzhauser, The House of Nomura.
35. One or two dissenting members of the Bank of Japan’s board have warned of the risks from the consequences of quantitative easing, notably Takahide Kiuchi. See R. Yoshida and C. Baird, “BOJ Chief Faces Tougher Second Term as Reality of Monetary Easing Program Sinks In,” Japan Times, March 5, 2018, https://www.japantimes.co.jp/news/2018/03/05/business/economy-business/boj-chief-faces-tougher-second-term-reality-easing-program-sinks/#.Wp7F2_nyubh.
36. The OECD has done excellent work in trying to develop rigorous global governance standards. See their corporate governance statement at http://www.oecd.org/corporate/.
37. Eisinger, The Chickenshit Club.
38. B. McLean and P. Elkind, The Smartest Guys in the Room: The Amazing Rise and Scandalous Fall of Enron (Penguin Books, 2003).
39. Committee on the Financial Aspects of Corporate Governance, “The Financial Aspects of Corporate Governance,” December 1, 1992, https://www.icaew.com/-/media/corporate/files/library/subjects/corporate-governance/financial-aspects-of-corporate-governance.ashx?la=en.
40. “The Agreement of the People,” October 28, 1647, Constitution Society, http://www.constitution.org/eng/conpur074.htm.
41. OECD, Toolkit for Risk Governance, https://www.oecd.org/governance/toolkit-on-risk-governance/home/.
Chapter 8: A Multipolar World
1. Rachman, Easternisation; Quah, “The Global Economy’s Shifting Centre of Gravity.”
2. D. Furceri et al., “Gone with the Headwinds: Global Productivity,” International Monetary Fund Staff Discussion Notes 17/04, April 3, 2017.
3. T. Sablik, “Are Markets Too Concentrated?,” Richmond Federal Reserve, Economic Focus, First Quarter 2018, https://www.richmondfed.org/-/media/richmondfedorg/publications/research/econ_focus/2018/q1/pdf/cover_story.pdf; G. Grullon, Y. Larkin, and R. Michaely, “Are US Industries Becoming More Concentrated?,” last revised May 31, 2015, Review of Finance, October 2018, (forthcoming), https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2612047.
4. World Bank, Multipolarity: The New Global Economy (Global Development Horizons 2011).
5. The Peterson Institute has a very useful resource on globalization that examines trade, supply chains, and other aspects of globalization; see “What Is Globalization? And How Has the Global Economy Shaped the United States?,” Peterson Institute for International Economics (PIIE), https://piie.com/microsites/globalization/what-is-globalization.html.
6. Australian Government, Department of Foreign Affairs and Trade, “Statistics on Who Invests in Australia,” https://dfat.gov.au/trade/resources/investment-statistics/Pages/statistics-on-who-invests-in-australia.aspx.
7. United Nations, “International Migration Report 2017: Highlights,” p. 14, http://www.un.org/en/development/desa/population/migration/publications/migrationreport/docs/MigrationReport2017_Highlights.pdf.
8. Max Galka Metrocosm data maps: “All the World’s Immigration Visualized in 1 Map,” June 29, 2016, Metrocosm, http://metrocosm.com/global-immigra tion-map/; and see also “Here’s Everyone Who’s Immigrated to the U.S. Since 1820,” May 3, 2016, Metrocosm, http://metrocosm.com/animated-immigration-map/.
9. UN Refugee Agency, UNHCR, “Number of Refugees and Migrants from Venezuela Reaches 3 Million,” November 8, 2018, https://www.unhcr.org/news/press/2018/11/5be4192b4/number-refugees-migrants-venezuela-reaches-3-million.html.
10. Standard Chartered Bank runs a renminbi globalization indicator, which indicates that the international use of the Chinese currency has flagged in recent years. Standard Chartered, “Renminbi Tracker: How Global Is the Renminbi?,” October 10, 2018, https://www.sc.com/en/trade-beyond-borders/renminbi-globalisation-index/. Estimates provided in the Triennial Central Bank Survey of foreign exchange turnover in April 2016, released in September 2016. “Triennial Central Bank Survey of Foreign Exchange and OTC Derivatives Markets in 2016,” Bank for International Settlements (BIS), December 2016, https://www.bis.org/publ/rpfx16.htm.
11. T. Taussig, “The Rise of Personalist Rule,” Order from Chaos (blog), Brookings, March 23, 2017, www.brookings.edu.
12. A. H. Cordesman, “Estimates of Chinese Military Spending,” Center for Strategic and International Studies, Working draft, September 21, 2016, https://csis-prod.s3.amazonaws.com/s3fs-public/publication/160928_AHC_Estimates_Chinese_Military_Spending.pdf.
13. The Space Launch Report, for example, highlights the increase in space launches from China, India, and Japan in recent years. Space Launch Report (news digest), http://www.spacelaunchreport.com/.
14. J. S. Nye Jr., Soft Power: The Means to Success in World Politics (Public Affairs, 2004).
15. J. Desjardins, “The World’s Most Respected ‘Made In’ Labels,” October 20, 2017, Visual Capitalist, http://www.visualcapitalist.com/respected-made-in-labels-country/.
16. J. G. Castaneda, “The Forgotten Relationship,” Foreign Affairs, May–June 2003, 67–81.
17. Xi Jinping, “Address,” 12th National People’s Congress, March 17, 2013.
18. The governance indicators the World Bank follows are voice and accountability, political stability and absence of violence, government effectiveness, regulatory quality, rule of law, and control of corruption.
19. Allison, Destined for War: Can America and China Escape Thucydides’s Trap?
20. See, for example, the Beijing Xiangshan Forum, http://www.xiang shanforum.cn/, which is sponsored by the Chinese military; L. Lucas and E. Feng, “China’s Push to Become a Tech Superpower Triggers Alarms Abroad,” Financial Times, March 19, 2017, https://www.ft.com/content/1d815944-f1da-11e6-8758-6876151821a6.
21. Interestingly, a similar term, “Oceana,” was coined in the immediate post-Leveller period, in James Harrington’s The Common Wealth of Oceana (1656), a book that set out a utopian republic and that was probably influenced by the Levellers, the Putney Debates, and the political climate of the pre-Cromwellian era.
22. Stiglitz, Globalization and Its Discontents. For example, on page xiv he states that “no one was happy about the suffering that often accompanied the IMF programs, inside the IMF it was simply assumed that whatever suffering occurred was a necessary part of the pain countries had to experience.” In a reply to Stiglitz’s book, Thomas Dawson, a director at the IMF, points out, “[The Economist] said in its review that a more accurate title for the book would have been ‘The IMF and My Discontent.’” In addition, he notes that Stiglitz’s book has some 64 references to globalization but 340 references to the IMF. See Dawson, “Stiglitz, the IMF and Globalization,” speech to the MIT Club of Washington, June 12, 2002, http://www.imf.org/external/np/speeches/2002/061302.htm.
23. H. Chisholm, ed., Encyclopædia Britannica 10, 11th ed. (Cambridge University Press, 1910–1911), 869–921.
24. Winston Churchill, “The Russia Enigma,” broadcast, October 1, 1939, The Churchill Society, http://www.churchill-society-london.org.uk/RusnEnig.html.
25. Credit Suisse Research Institute, “Global Wealth Report 2018,” https://www.credit-suisse.com/corporate/en/research/research-institute/global-wealth-report.html.
26. The influential Fu Ying, chairperson of the Foreign Affairs Committee of the National People’s Congress, has stated that “the old way is not working.” Fu Ying, “Quo Vadis,” Valdai Club, October 25, 2016. She has made similar remarks in the Western press, notably in “The US World
Order Is a Suit That No Longer Fits,” op-ed, Financial Times, January 6, 2016, https://www.ft.com/content/c09cbcb6-b3cb-11e5-b147-e5e5bba42e51.
27. T. Pakenham, The Scramble for Africa: The White Man’s Conquest of the Dark Continent from 1876 to 1912 (Random House, 1990).
28. “Cooperation between China and Central and Eastern European Countries,” http://www.china-ceec.org/eng/.
29. On the place of religion in China, see Johnson, The Souls of China.
30. E. Feng, “Security Spending Ramped Up in China’s Restive Xinjiang Region,” Financial Times, March 12, 2016.
31. World Bank Data Catalog, “Population Estimates and Projections,” https://datacatalog.worldbank.org/dataset/population-estimates-and-projections??xyzallow.
32. T. G. Ash, “Is Europe Disintegrating?,” New York Review of Books, January 19, 2017, http://www.nybooks.com/articles/2017/01/19/is-europe-disintegrating/.
33. G. Chazan, “Germany Calls for Global Payments System Free of US,” Financial Times, August 21, 2018, https://www.ft.com/content/23ca2986-a569-11e8-8ecf-a7ae1beff35b.
34. Rodrik, “The Inescapable Trilemma of the World Economy.”
35. “Out of Order: The Future of the International System,” special issue, Foreign Affairs, January–February 2017.
Chapter 9: A New World Order
1. M. O’Sullivan and D. Skilling, “Hanseatic League 2.0 Reflects Changing Shape of EU,” Irish Times, January 4, 2019, https://www.irishtimes.com/opinion/hanseatic-league-2-0-reflects-changing-shape-of-eu-1.3746896?mode=amp.
2. G. Orwell, “Boy’s Weeklies,” Orwell Foundation, https://www.orwellfounda tion.com/the-orwell-foundation/orwell/essays-and-other-works/boys-weeklies/.
3. J. C. Humes, Churchill: The Prophetic Statesman (Regnery History, 2012), 101.
4. L. H. Officer, “Dollar-Pound Exchange Rate from 1791,” MeasuringWorth, 2018, http://www.measuringworth.com/exchangepound/.
5. J. Sawyers, “Britain on Its Own Will Count for Little on the World Stage,” Financial Times, June 20, 2017.
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