Research from the World Economy and Finance Research Programme in the last four years has contributed to the analysis of a range of current issues, including the current global financial crisis and financial stability.  With many projects completed, and others nearing completion, many results are emerging. Here we highlight the work of Professor Rhys Jenkins from School of Development Studies, University of East Anglia, on Globalization and the Impact of China on Latin America.

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Housing and the Macro-economy

Ten Years of Euro

1st January 2009 marked the tenth anniversary of the Euro.  A conference at the University of Minho (7-8 May 2009) assessed how labour and capital markets have responded to it.  In many ways the Euro has confounded the sceptics and done much better than expected.  Despite the fears that the European Central Bank's 'one size fits all' monetary policy would create widening divergences between member states, this has not happened.  Unemployment rates in Euro-zone states have fallen and indeed converged, on the whole, over the period.  The rise in unemployment in the last twelve months – including massive increases in Ireland and Spain -- cannot be pinned on the single currency.  At the same time, the Euro has not engendered the radical reforms of labour markets and social security that some commentators predicted, and some thought essential.  Instead, there have been many small piecemeal gradual reforms; in Germany, Italy, and to some degree France, which have had modest but useful effects.  German wage bargaining, for example, now allows firms to deviate from industry-level agreements in response to local conditions.  High unemployment in Germany and Italy reflects regional not nation-wide problems.  And unemployment in southern Italy has actually been falling faster than in the north.  So the overall picture is one of diverse incremental accommodation to life in the Euro zone.  Christopher Meissner, who led the WEFRP project on Exchange Rate Regimes: Choices and Consequences in a Global Economy, the WEFRP Director John Driffill, and Advisory Panel member Frank Smets (Head of DG Research at the European Central Bank) spoke at the conference.  Full details of the conference programme and papers presented can be found in the web pages of NIPE at the University of Minho

Detailed studies of Argentina, Brazil, Chile and Mexico, together with accompanying value chain studies, provide a wealth of information on the different impacts of China on individual countries. In addition the development of new measures of the effect of Chinese competition on exports to third markets offers an approach which can be used to analyse the impact of China on exports from other countries and regions.