Bloggers Kevin P. Gallagher and Ilene Grabel were interviewed by The Real News Network on the G20 and capital controls, as part of our 2011 Spotlight G20 Series. Watch the full interview:
Read other Triple Crisis posts on capital controls.
Read more about GDAE’s work on capital controls.
Jose Antonio Ocampo, Stephany Griffith-Jones and Kevin P. Gallagher, part of our 2011 Spotlight G20 Series
When French President Nicolas Sarkozy took the reins as host of this year’s G-20 summit, to be held in Cannes on November 3-4, he called on the International Monetary Fund to develop an enforceable “code of conduct” for the use of capital controls (or capital-account regulations, as we prefer to call them) in the world economy. The IMF followed through by publishing a preliminary set of guidelines this past April.
Regulation of cross-border capital flows has been strangely absent from the G-20’s agenda, which is aimed at strengthening financial regulation. But they are a central element in the financial volatility that incited calls for stronger regulation in the first place. The IMF has shown that those countries that deployed capital-account regulations were among the least hard-hit during the worst of the global financial crisis. Since 2009, it has accepted and even recommended that such regulations are useful to manage the massive inflows of “hot money” into emerging markets.
That said, while the IMF’s proposed code is a step in the right direction, it is misguided. So, the G-20’s endorsement of the Fund’s guidelines would not be wise for a world economy trying to recover from one financial crisis while preventing the next one.
Richard Tol, guest blogger
Over the last 20 years, I have developed (and later co-developed) an integrated assessment model of climate change called FUND. Model code and documentation used to be available to anyone on request. It can now be freely downloaded. Reproducibility and transparency are cornerstones of scientific inquiry.
Some modelers prefer to keep their code private. There are a number of reasons for this. One reason is the potential for abuse. Someone may borrow your model, do something inappropriate or silly with it, and use the results to embarrass you.
I have borrowed other people’s models. I have found bugs in their codes, or what seemed to be bugs. I always discuss this with the modeler in question. If there really was an error – more often it is a misunderstanding on the part of the outsider – I left it to the modeler to correct this and whatever results that were affected.
Nuria Molina-Gallart, Guest Blogger, part of our 2011 Spotlight G20 Series
The G20 are turning more and more to the private sector as the solution to public sector malaises, but there need be binding rules in place to ensure that private finance can contribute to sustainable and equitable development.
G20 governments are increasingly pushing for greater private sector involvement in developing countries, ranging from infrastructure financing, investment in food and agriculture, or climate finance.
Private sector finance could be the answer; it just depends on what is the question. If the question is “Can private sector investment play a role in creating jobs and paying taxes and contribute to sustainable and equitable development?” The answer is probably yes. If the question is “Can the private sector fill in public sector financial and regulatory gaps?” Then the answer is probably not.
Nancy Alexander, guest blogger, part of our 2011 Spotlight G20 Series
As is customary now, the days of the business summit – the B20 – overlap with the Leaders’ Summit. In Cannes, the B20 is on November 2-3; the G20 is on November 3-4. At these Summits, the Presidents of the business confederations of the G20 countries, as well as 120 CEOs and Chairmen from global companies are delivering messages on 12 themes to the G20.
Many of these Ultra-High Net Worth Individuals (HNWIs) live in a rarified world according to the World Wealth Report 2011. A world far from the “99%” of the population represented by the “Occupy” protests or the civil society mobilizations in Nice on 2-3 November.
The G20 Advisory Group of the International Chamber of Commerce (ICC) is already working closely with its counterparts on the June 18-19 G20 Summit in Los Cabos, Mexico. That Summit will focus on seven themes: financial regulation and supervision; IFI, especially IMF, reform; the International Monetary System; financial inclusion; commodity price volatility and food security; green growth; and challenges for economic growth.
As G20 heads of state prepare to gather in Cannes, France for their annual summit, Triple Crisis will continue its ongoing series, “Spotlight G20,” with new analysis both from our bloggers and from guest writers. The G20 meets at a time when the three crises identified in our name — finance, development, and environment — face critical policy decisions. Join the discussion on Triple Crisis at Spotlight G20.
Previous Spotlight G20 posts include:
Matías Vernengo, What should developing countries demand?
Timothy A.Wise, More Fodder for the Food Price Debates: Ethanol, speculation drove prices
Ilene Grabel, G20: Speeding from Hopeful to Hopeless
Kavaljit Singh (guest blogger), G20 Defers Decision on Financial Transaction Tax Despite Global Support
Edward Barbier, G20: Tax “Bads” and not “Goods”
Sophia Murphy (guest blogger), The G20’s Opportunity on food reserves
Timothy A. Wise, Identifying the Drivers of Price Volatility
Timothy A. Wise, New evidence of speculation in financialized commodities markets
Jennifer Clapp, The G20 Agricultural Action Plan: Changing the Course of Capitalism?
Jennifer Clapp, How to Add Value to the G20 Agricultural Ministers’ Meeting
As G20 heads of state prepare to gather in Cannes, France for their annual summit, Triple Crisis will continue its ongoing series, “Spotlight G20,” with new analysis both from our bloggers and from guest writers. The G20 meets at a time when the three crises identified in our name — finance, development, and environment — face critical policy decisions. Join the discussion on Triple Crisis at Spotlight G20.
Previous Spotlight G20 posts include:
Matías Vernengo, What should developing countries demand?
Timothy A.Wise, More Fodder for the Food Price Debates: Ethanol, speculation drove prices
Ilene Grabel, G20: Speeding from Hopeful to Hopeless
Kavaljit Singh (guest blogger), G20 Defers Decision on Financial Transaction Tax Despite Global Support
Edward Barbier, G20: Tax “Bads” and not “Goods”
Sophia Murphy (guest blogger), The G20’s Opportunity on food reserves
Timothy A. Wise, Identifying the Drivers of Price Volatility
Timothy A. Wise, New evidence of speculation in financialized commodities markets
Jennifer Clapp, The G20 Agricultural Action Plan: Changing the Course of Capitalism?
Jennifer Clapp, How to Add Value to the G20 Agricultural Ministers’ Meeting
Is it true that there’s no such thing as bad publicity? If so, we’re in luck. The paper that Elizabeth A. Stanton and I wrote on the social cost of carbon has been discussed on the Bishop Hill blog, a leading forum for British climate skeptics – and in comments on that blog and on Twitter by Richard Tol.
Bishop Hill cites us as estimating that the social cost of carbon – the monetary value of the present and future damage caused by emitting one ton of carbon dioxide – could be $1,000 or more. Tol calls this estimate “complete nonsense,” and Bishop Hill refers to the increase from the U.S. government’s $21 estimate to $1,000 and higher as “fairly jawdropping.”
Feel free to pick your jaw back up; we never said that the social cost of carbon is $1,000. We did say that the value should reflect important climate uncertainties, and that our modeling of those uncertainties produced a range of possible values from $28 to almost $900 for emissions today, or from $64 to about $1,500 for emissions in 2050.
Alejandro Nadal (also available in Portuguese)
Stabilizing concentrations of greenhouse gasses (GHG) in the atmosphere, and adapting to the impact of climate change, have significant economic costs. Can these costs be met under the macroeconomic policy posture currently embraced by most countries? This is an important question given the massive scale of resources that are involved in a sustained time horizon.
In spite of the global economic and financial crisis, most advanced capitalist countries still adopt a view of macroeconomic polices dominated by the overarching objectives of price stability and fiscal discipline. In fact, this is what is guiding today the policy response to the crisis in Europe and the United States. In the developing world, the picture is a bit more complicated, but it is fair to say that most countries still define their macroeconomic priorities in terms that closely resemble the dogmas of neoliberalism.
The general scorn for the Occupy Wall Street movement (OWS), now spread to hundreds of cities in the U.S., reveals a lot about Wall Street, the press, and the state of economics. I was invited to speak there early in their campaign and found the people eager to learn, courteous and hell-bent for justice, not revenge.
The scorn has subsided somewhat as the movement grows and has withstood the threat of police and Michael Bloomberg’s demand that they should clear out of the park they occupy because the owners of the park wanted to clean it. It is called Zuccotti Park because it is privately owned by the Zuccotti family with the proviso that it is made available to the public at all times. Now it has become available to all America, and arguably all the world.
The unions joined in and this week, OWS has yet another clear victory. President Obama will announce some kind of student loan relief plan. He is also proposing a more aggressive mortgage refinancing scheme for under-water homeowners. This too may be partly the result of OWS.