Balneus

Australian Lefty on Politics, Governance, Science and Info Management

VoxEU recommendations to G20 summit published: Read it Swan!

Posted by Dave Bath on 2008-11-11


Following on from VoxEU’s great book for the recent G7/8 summit (which I reviewed here, is available for browsing as HTML and PDF) comes their dummies guide analysis of issues facing the G20 summit on 2008-11-15: "What G20 leaders must do to stabilise our economy and fix the financial system"

The new effort is available for browsing individual papers here or as a downloadable PDF.

As before, the recommendations aren’t unanimous – with two papers putting arguments for a new Bretton Woods, and one opposed.

Two of the four key points in the consensus wrapper are as follows:

  • Start thinking outside the box about longer term reforms.
  • Above all, do no harm.

(Yeah, well, both of those are tricky things for populist politicians!)

One of the papers (written by a former IMF Chief Economist) has among other things, a recommendation I doubt will be even discussed:

Global financial coordination requires a broader group than the G7 or G20. The EU
should get only one chair in the “G20+” to allow broader representation.

Yep, lots of ideas for improved governance, with one paper having a "teaser" including:

creating a uniform global regulatory framework for rating agencies and for large, highly-leveraged institutions with significant cross-border activities.

Avoiding a moral hazard race to the bottom.
Unless there are binding international agreements on the kind of guarantees extended by governments to financial institutions and creditors in their jurisdictions, we will see a replay of the moral hazard explosion that followed the Irish decision to guarantee all liabilities of the six largest majority Irish-owned banks.
The result could be every creditor fully guaranteed and taxpayers taken to the cleaners. Not only would this be outrageously unfair, it would create terrible incentives for future reckless lending. The IMF should monitor and police any norms adopted.

Yep, the issues are debated well by a formidable array of economics and financial intellects (see the bios I’ve cut and pasted below the fold), and all people attending the summit should read it very carefully.

Again, if KRudd/Swan don’t read it before the summit, they should resign.

More usefully, I hope that the various economics and political journos read it, and use it to assist them with questions… hopefully to find out if our glorious leaders have actually read the debates running between the best minds in the business.

Just imagine watching our Dear Leaders squirm when asked questions in the following form:

Mr Treasurer, [Insert name of experts], [insert credentials], have recommended [insert recommendation] because of [insert reasons]. What is your rational for going the other way?

Anyway… you can judge for yourself whether our Treasurer and PM should be reading the 76 pages (including blank pages!) without reading it yourself, but by scanning the credentials of the contributors below, and note they do not always agree with each other.

  • Alberto Alesina is the Nathaniel Ropes Professor of Political Economy at Harvard University and was Co-editor of the Quarterly Journal of Economics for eight years. He has published extensively in all major academic journals in economics, written five books, most recently The Future of Europe: Reform or Decline, MIT Press (2006). He is a CEPR Research Fellow.
  • Guido Tabellini is Rector of Bocconi University where he is also Professor of Economics, having taught at Stanford University and UCLA. He is currently President of the European Economic Association, and Associate Editor of the Journal of the European Economic Association, having been Associate Editor of the Journal of Public Economics, and the European Economic Review. He is joint recipient of the Yrjö Jahnsson award from the European Economic Association, and has published numerous scholarly journal articles and two books. He has acted as an economic consultant to the Italian government, the European Parliament and the Fiscal Affairs Department of the International Monetary Fund. He is a CEPR Research Fellow.
  • Refet Gürkaynak is Assistant Professor of economics at Bilkent University, having previous been an economist at the Monetary Affairs Division of the US Federal Reserve Board. He did his PhD in economics at Princeton. His research interests are monetary economics, financial markets and international economics. In particular, he has worked on extracting information from asset prices that help answer monetary policy related questions. His research has been published in the Journal of Monetary Economics, International Journal of Central Banking and American Economic Review. He has received awards from the Central Bank of Turkey, the European Central Bank and the Turkish Academy of Sciences. His is a CEPR Research Affiliate.
  • Michael Spence, winner of the 2001 Nobel Memorial Prize in Economic Sciences, is Senior Fellow at the Hoover Institution, and Philip H. Knight Professor Emeritus of Management in the Graduate School of Business at Stanford University, having served as Dean of the Stanford Business School and Dean of the Faculty of Arts and Sciences at Harvard (where he was also a Professor of Economics). He is a member of the boards of directors for General Mills. From 1991 to 1997, he was chairman of the National Research Council Board on Science, Technology and Economic Policy. He is a Fellow of the American Academy of Arts and Sciences and of the Econometric Society.
  • Dani Rodrik is Rafiq Hariri Professor of International Political Economy at Harvard’s John F. Kennedy School of Government. He has published widely in the areas of economic development, international economics, and political economy and authored several books, including Has Globalization Gone Too Far? (1997), and, most recently, One Economics, Many Recipes: Globalization, Institutions, and Economic Growth (2007). In 2007 he was awarded the inaugural Albert O. Hirschman Prize of the Social Sciences Research Council. He is a CEPR Research Fellow.
  • Willem Buiter is Professor of European Political Economy at the European Institute of the London School of Economics and Political Science, having taught at Princeton, Yale and Cambridge. He was a member of the Monetary Policy Committee of the Bank of England (1997-2000), Chief Economist and Special Adviser to the President at the European Bank for Reconstruction and Development (EBRD) (2000-2005), and a consultant and advisor to the International Monetary Fund, The World Bank, The Inter-American Development Bank, the EBRD, the European Union and a number of national governments and government agencies. Since 2005, he is an Advisor to Goldman Sachs International. He has published widely on subjects such as open economy macroeconomics, monetary and exchange rate theory, fiscal policy, social security, economic development and transition economies. He is a CEPR Research Fellow.
  • Raghuram Rajan is the Eric J. Gleacher Distinguished Service Professor of Finance at the University of Chicago’s Graduate School of Business, having been the IMF’s Chief Economist (Economic Counsellor and Director of Research) between 2003 and 2006. He currently chairs a high-level committee set up by the Indian Planning Commission on Indian financial sector reform. He has published widely in scholarly journals and recently written (with Luigi Zingales) the book Saving Capitalism from the Capitalists. He has served on the editorial board of the American Economic Review and the Journal of Finance. In 2003, he won the American Finance Association’s Fischer Black Prize.
  • Barry Eichengreen is the George C. Pardee and Helen N. Pardee Professor of Economics and Professor of Political Science at the University of California, Berkeley, having been Senior Policy Advisor at the IMF (1997-1998). He is a fellow of the American Academy of Arts and Sciences, and the convener of the Bellagio Group of academics and economic officials. He has published widely in scholarly journals and is the author of 15 books including Elusive Stability: Essays in the History of International Finance 1919-1939 (1990), Financial Crises and What to Do About Them (2002), Global Imbalances and the Lessons of Bretton Woods (2006), Globalizing Capital: A History of the International Monetary System (Second Edition), 2008, An Independent and Accountable IMF (1999), International Monetary Arrangements for the 21st Century (1994), and Toward A New International Financial Architecture: A Practical Post-Asia Agenda (1999). He is a CEPR Research Fellow.
  • Stijn Claessens is Assistant Director in the Research Department of the International Monetary Fund where he leads the Financial Studies Division. He is also a Professor of International Finance Policy at the University of Amsterdam, having taught at New York University business school, before moving to the World Bank, finishing as Senior Adviser in the Financial and Private Sector Vice-Presidency of the World Bank (2004-2006). He has provided policy advice to emerging markets in Latin America and Asia and to transition economies. His research has been published in the Journal of Financial Economics, Journal of Finance, and Quarterly Journal of Economics, and he has edited several books, including International Financial Contagion (2001), and Resolution of Financial Distress (2001). He is a CEPR Research Fellow.
  • Daniel Gros is the Director of the Centre for European Policy Studies (CEPS), having worked at the IMF (1983-1986), been an Economic Advisor to the Directorate General II of the European Commission (1988-1990), advisor to the European Parliament (1998-2005), member of the Council of Economic Advisors of the French Minister of Finance (2003-2005); member of the French Conseil d’Analyse Economique (2001 – 2003). Since April 2005, he serves as President of San Paolo IMI Asset Management. He has taught at the European College (Natolin) as well as at various universities across Europe. His PhD is from the University of Chicago. He is editor of Economie Internationale and editor of International Finance, having published widely in international academic and policy-oriented journals, and has authored numerous monographs and four books.
  • Paul De Grauwe is Professor of international economics at the University of Leuven, Belgium, having been a visiting scholar at the IMF, the Board of Governors of the US Federal Reserve, and the Bank of Japan. He is a member of the Group of Economic Policy Analysis, advising the EU Commission President Manuel Barroso, and was a member of the Belgian parliament (1991 – 2003). His research interests include international monetary relations, monetary integration, foreign-exchange markets, and open-economy macroeconomics. His books include The Economics of Monetary Union (Oxford), International Money. Post-war Trends and Theories (Oxford), and The Exchange Rate in a Behavioural Finance Framework (Princeton). He obtained his PhD from the Johns Hopkins University in 1974 and honoris causae of the University of Sankt Gallen (Switzerland), of the University of Turku (Finland), and the University of Genoa. He is a CEPR Research Fellow.
  • Takatoshi Ito is Professor at the University of Tokyo’s Graduate School of Economics, having taught at the University of Minnesota, Hitotsubashi University, and Harvard (where he received his PhD in economics in 1979). He also served as Senior Advisor in the Research Department at the IMF (1994-97) and Deputy Vice Minister for International Affairs at Japan’s Ministry of Finance (1999-2001). He was a member of the Council of Economic and Fiscal Policy (2006-2008), which decides the framework of the budget each year and includes the Prime Minister and the Finance Minister. He has authored numerous scholarly articles and many books including: The Japanese Economy, The Political Economy of the Japanese Monetary Policy, and Financial Policy and Central Banking in Japan. He is a CEPR Research Fellow.
  • Wendy Dobson is Professor at the University of Toronto and Director of the Institute for International Business (Rotman School of Management), having previously been President of the C.D. Howe Institute (Canada’s leading independent economic policy research organization). She was Associate Deputy Minister of Finance in Ottawa and is a non-executive director for Canadian companies in finance, energy and life sciences, as well as Vice Chair of the Canadian Public Accountability Board. Her research focuses on emerging market economies, economic integration in North America, the international financial system, regional and global governance, and Canadian public policy issues.
  • Yung Chul Park is Research Professor at Seoul National University where he is also Director of the Center of International Commerce and Finance (Graduate School of International Studies). He previously taught at Harvard, Boston University and MIT, after finishing his PhD at Minnesota. He has been a member of the National Economic Advisory Council, Office of the President (Korea); Ambassador for International Economy and Trade (Korean Ministry of Foreign Affairs and Trade); Chairman of the Board of Directors (Korea Exchange Bank); Member of the Presidential Commission on Financial Reform; President of the Korea Development Institute; Member of the Monetary Board (Bank of Korea); Senior Secretary to the President for Economic Affairs (Office of the President, Korea); President of the Korea Institute of Finance; and Economists at the IMF (1968-1972). He has published widely in scholarly journals and is the author of several books, most recently Economic Liberalization and Integration in East Asia: A Post-Crisis Paradigm (2006).
  • Guillermo Calvo is Professor of Economics, International and Public Affairs at Columbia University having taught previously at the University of Pennsylvania and Maryland. He is President of the International Economic Association until 2008, and was Chief Economist of the Inter-American Development Bank (2001-2006), Senior Advisor in the Research Department of the IMF (1988-1993), and has advised several governments in Latin America and Eastern Europe. He won the King Juan Carlos Prize in Economics in 2000, and the Carlos Diaz-Alejandro Prize in 2006. He has published widely in scholarly journals and is the author of several books, most recently Emerging Capital Markets in Turmoil: Bad Luck or Bad Policy? (2005).
  • Vijay Joshi is a Fellow of St John’s College, Oxford, and Emeritus Fellow of Merton College, Oxford. Previously, he has served as Economic Adviser, Ministry of Finance, Government of India, and Special Adviser to the Governor, Reserve Bank of India in which capacities, he worked closely with Manmohan Singh, the architect of India’s economic reforms and currently India’s Prime Minister. Since 1996, he has been a director of the JPMorgan Indian Investment Trust. He has published widely and in scholarly journals and is currently writing (with Robert Skidelsky) on the economics and politics of globalisation and the changing balance of power.
  • David Vines is Professor of Economics in the Economics Department, Oxford University, and a Fellow of Balliol College, Oxford as well as Director of the Centre for International Macroeconomics at Oxford’s Economics Department. Formerly a Houblon-Norman Senior Fellow at the Bank of England, he has advised a number of international organisations and governmental bodies. He has published numerous scholarly articles and several books, most recently The Asian Financial Crisis: Causes, Contagion and Consequences: Causes, Contagion and Consequences, with Pierre-Richard Agénor, Marcus Miller, and Axel Weber.
  • Erik Berglöf is Chief Economist at the EBRD since 2006, having previously been Professor of Economics at the Stockholm School of Economics, Université Libre de Bruxelles and Stanford University. He was Director of the Stockholm Institute of Transition Economics (SITE), Director of the Center for Economics and Financial Research (CEFIR) in Moscow, and the Baltic International Center for Economic Policy Studies (BICEPS) in Riga. He has served as special advisor to the Prime Minister of Sweden and on several government commissions and EU-related panels as well as serving as a consultant to the World Bank and the IMF. He has written extensively on financial contracting and corporate governance. In particular, he has applied theoretical insights to the study of differences between financial systems, and specific ownership and control arrangements. More recently, his work has focused on bankruptcy. He is a CEPR Research Fellow.
  • Jeromin Zettelmeyer is Director for Policy Studies at the EBRD, having previously been Deputy Head of regional studies in the Western Hemisphere Department of the IMF, and an economist in the IMF Research Department for over ten years. His PhD is from MIT. His research interests include financial crises, sovereign debt, international financial architecture and economic growth. He is the author, together with Federico Sturzenegger of Debt Default and Lessons from a Decade of Crises (2007). He is a CEPR Research Fellow.
  • Ernesto Zedillo is Professor of International Economics and Politics at Yale University, where he did his PhD in economics, and Director of the Yale Center for the Study of Globalization. He was elected President of Mexico (1994-2000), guiding the nation through the 1997/8 financial crisis and bold democratic and electoral reforms that opened the door to greater political pluralism. He has held several positions at the Central Bank of Mexico, including Deputy Manager of economic research, General Director of the trust fund for the renegotiation of private firms’ external debt, and Deputy Director. He was Undersecretary of the Budget, Secretary of the Budget and Economic Planning, and Secretary of Education in the 1987-1993 Mexican government. Since leaving office in 2000, he served as Chairman of the United Nations High Level Panel on Financing for Development (2001) and is Co- Coordinator of the Task Force on Trade for the UN Millennium Project; was Co-Chair of the Commission on the Private Sector and Development, Co-Chairman of the International Task Force on Global Public Goods (sponsored by the Governments of Sweden and France), and is a member of the Trilateral Commission. With decorations from the Governments of 32 countries, including the Franklin D. Roosevelt Freedom from Fear Award, the Gold Insigne of the Council of the Americas, the Tribuna Americana Award of the Casa de America of Madrid, and the Berkeley Medal, UC Berkeley’s highest honour.
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