Credit Chains and Production Networks

Credit Chains and Production Networks

There are three kind of flows in a Supply Chain

  • Goods
  • Information
  • Financial

 

Credit Terms in a Supplier Buyer contracts determine payment delays which accumulate in current accounts of a Firm.

  • Account Receivables
  • Account Payables

 

Credit Relations

  • Bank to Bank
  • Bank to Firm
  • Firm to Firm

Dyad of Credit Relations

  • Supplier – Buyer

 

Triad of Credit Relations

  • Supplier – Bank – Buyer

Sources of Systemic Risk

  • Failure of a Firm and its impact on Suppliers and Customers (Flow of Goods)
  • Failure of a Bank and its impact on Trade Credit
  • Credit Contraction due to de-risking by the Banks
  • Decline in Correspondent Banking relations and its impact on Trade Finance

 

From Credit Chains and Sectoral Co-movement: Does the Use of Trade
Credit Amplify Sectoral Shocks?

Trade credit is an important source of short-term financing for firms, not only in the U.S., as documented by Petersen and Rajan (1997), but also around the World. For instance, accounts payables are larger than short-term debt in 60 percent of the countries covered by Worldscope. Also, across the world most firms simultaneously receive credit from their suppliers and grant it to their customers, which tend to be concentrated on specific sectors.  These characteristics of trade credit financing have led some authors to propose it as a mechanism for the propagation and amplification of idiosyncratic shocks. The intuition behind the mechanism is straightforward; a firm that faces a default by its customers may run into liquidity problems that force it to default to its own suppliers. Therefore, in a network of firms that borrow from each other, a temporary shock to the liquidity of some firms may cause a chain reaction in which other firms also get in financial difficulties, thus resulting in a large and persistent decline in aggregate activity. This idea was first formalized by Kiyotaki and Moore (1997) in a partial equilibrium setting, and has been recently extended to a general equilibrium environment by Cardoso-Lecourtois (2004), and Boissay (2006) who have also provided evidence of the potential quantitative importance of the mechanism by calibrating their models to the cases of Mexico and the U.S., respectively.

From Ontology of Bankruptcy Diffusion through Trade Credit
Channel

A supply network is a network of entities interacting to transform raw material into finished product for customers. Since interdependencies among supply network members on material, information, and finance are becoming increasingly intensive, financial status of one firm not only depends on its own management, but also on the performance and behaviours of other members. Therefore, understanding the financial flows variability and the material interactions is a key to quantify the risk of a firm. Due to the complex structure and dynamic interactions of modern supply networks, there are some difficulties faced by pure analysis approaches in analyzing financial status of the supply network members and the high degree of nonlinear interactions between them. Mathematical and operation research models usually do not function very well for this kind of financial decision making. These models always start with many assumptions and have difficulties modeling such complex systems that include many entities, relationships, features, parameters, and constraints. In addition, traditional modeling and analysis tools lack the ability to predict the impact of a specific event on the performance of the entire supply network.  Current financial data analysis with large volumes of structure data cannot offer the full picture and intrinsic insights into the risk nature of a company. Motivated by the literature gap in risk monitoring in investment background and limitations of analysis approaches for handling bankruptcy contagion phenomenon, we propose an ontological approach to present a formal, shared conceptualization of this domain knowledge.

From Inter-Firm Trade Finance in Times of Crisis

The severe recession that is hitting the global economy, with very low or even negative growth rates, has caused widespread contractions in international trade, both in developed and developing countries. World Trade Organization (WTO) has forecast that exports will decline by roughly 9% in volume terms in 2009 due to the collapse in global demand brought on by the biggest economic downturn in decades. The contraction in developed countries will be particularly severe with exports falling by 10%. In developing countries, which account for one-third of world trade, exports will shrink by some 2% to 3% in 2009.

The contraction in international trade has been accompanied by a sharp decline in the availability of trade finance. This decline is only partly explained by the contraction in demand: according to a BAFT (Banker’s Association for Trade and Finance) and International Monetary Fund (IMF) joint survey (2009), flows of trade finance to developed countries have fallen by 6% relative to the previous year, more than the reduction in trade flows, suggesting that part of the fall reflects a disruption of financial intermediation. The contraction in value of trade finance has also been accompanied by a sharp increase in its price. Fear that the decline in trade finance and the increase in its cost would accelerate the slowdown of world trade has triggered a number of government initiatives in support of trade finance (Chauffour and Farole,2009).

The situation is especially worrisome for firms operating in developing countries which rely heavily on trade finance to support both their exports and imports.1 With a restricted access to financing and an increased cost of financing, these firms may find difficulties in maintaining their production and trade activities.

 

Please see my related posts:

Supply Chain Finance (SCF) / Financial Supply Chain Management (F-SCM)

Production Chain Length and Boundary Crossings in Global Value Chains

Intra Industry Trade and International Production and Distribution Networks

Understanding Trade in Intermediate Goods

Trends in Intra Firm Trade of USA

Production and Distribution Planning : Strategic, Global, and Integrated

Development of Global Trade and Production Accounts: UN SEIGA Initiative

The Dollar Shortage, Again! in International Wholesale Money Markets

FDI vs Outsourcing: Extending Boundaries or Extending Network Chains of Firms

The Collapse of Global Trade during Global Financial Crisis of 2008-2009

Understanding Global Value Chains – G20/OECD/WB Initiative

Economics of Trade Finance

Balance Sheets, Financial Interconnectedness, and Financial Stability – G20 Data Gaps Initiative

Oscillations and Amplifications in Demand-Supply Network Chains

Contagion in Financial (Balance sheets) Networks

 

Key Sources of Research:

 

LIQUIDITY, BUSINESS CYCLES, AND MONETARY POLICY

Nobuhiro Kiyotaki
London School of Economics

John Moore
Edinburgh University and London School of Economics

27 November 2001

https://www.imf.org/external/np/seminars/eng/2008/fincycl/pdf/kimo.pdf

 

 

Credit Cycles

Nobuhiro Kiyotaki; John Moore

The Journal of Political Economy, Vol. 105, No. 2.

(Apr., 1997),

http://www.nviegi.net/teaching/master/km.pdf

 

Credit chains

Nobuhiro Kiyotaki (Princeton University)

John Moore (University of Edinburgh)

Date January 1997

http://www.econ.ed.ac.uk/papers/id118_esedps.pdf

https://www.minneapolisfed.org/research/conferences/research-events—conferences-and-programs/~/media/files/research/events/1997_01-31/Kiyotaki_CreditChains.pdf

 

 

Credit and Business Cycles

N Kiyotaki

1998

https://www.princeton.edu/~kiyotaki/papers/Credit-and-BusinessCycles.pdf

 

 

Inter-Enterprise Credit and Adjustment  During Financial Crises: The Role of Firm Size

Fabrizio Coricelli

Marco Frigerio

July, 2 2016

https://cepr.org/sites/default/files/Coricelli%2C%20Fabrizio%20paper.pdf

 

 

Credit chains and bankruptcy propagation in production networks

Stefano Battiston, Domenico Delli Gatti, Mauro Gallegati,
Bruce Greenwald, Joseph E. Stiglitz

2007

https://www8.gsb.columbia.edu/faculty/jstiglitz/sites/jstiglitz/files/2007_Credit_Chains.pdf

 

 

Trade Finance in Crisis : Market Adjustment or Market Failure ?

Jean-Pierre Chauffour

Thomas Farole

Date Written: July 1, 2009

https://papers.ssrn.com/sol3/papers.cfm?abstract_id=1437955

Resaleable debt and systemic risk

Jason Roderick Donaldson , Eva Micheler

2018

http://www.jrdonaldson.com/Papers/Donaldson-Micheler-Resaleable_Debt.pdf

 

Supply chains and credit-market shocks: Some implications for emerging markets,

Jinjarak, Yothin (2013)

ADBI Working Paper Series, No. 443

https://www.econstor.eu/bitstream/10419/101241/1/770887406.pdf

 

 

Financial Amplification Mechanisms and the Federal Reserve’s Supply of Liquidity during the Crisis

Asani Sarkar
Jeffrey Shrader

Staff Report no. 431
February 2010

https://www.newyorkfed.org/medialibrary/media/research/staff_reports/sr431.pdf

 

 

Aggregate Fluctuations and the Role of Trade Credit

Lin Shao

2017

https://www.bankofcanada.ca/wp-content/uploads/2017/09/swp2017-37.pdf

 

 

Supply Chain Disruptions and Trade Credit

LU Yi OGURA Yoshiaki

TODO Yasuyuki ZHU Lianming

2017

https://www.rieti.go.jp/jp/publications/dp/17e054.pdf

 

 

Credit Shocks and Aggregate Fluctuations in  an Economy with Production Heterogeneity

Aubhik Khan

Julia K. Thomas

September 2013

https://www.aubhik-khan.net/KhanThomasDCTsept2013.pdf

 

 

Financial Frictions in Production Networks

Saki Bigio

Jennifer La’O

February 7, 2013

https://www0.gsb.columbia.edu/faculty/sbigio/papers/FinancialFrictionsNetworks.pdf

 

Working Paper No. 67, April 2016

http://perueconomics.org/wp-content/uploads/2014/01/WP-67.pdf

 

 

The Origins of Aggregate Fluctuations in a Credit Network Economy

Levent Altinoglu

October 16, 2016
http://blogs.bu.edu/levent/files/2015/10/Altinoglu_JMP_CurrentVersion.pdf

September 30, 2015

https://pdfs.semanticscholar.org/425a/fcb800d01a5b8dce9ed13a4a200bf51f6fed.pdf

 

Consolidated Bibliography

WTO

https://www.wto.org/english/res_e/booksp_e/aid4tradesupplychain13_biblio_e.pdf

 

 

Propagation of Financial Shocks in an Input-Output Economy with Trade and Financial Linkages of Firms

Shaowen Luo

December 4, 2015

http://www.economics.illinois.edu/seminars/documents/Luo.pdf

 

FDI, Trade Credit, and Transmission of Global Liquidity Shocks:
Evidence from Chinese Manufacturing Firms

Shu Lin and Haichun Ye

http://www.econ.cuhk.edu.hk/econ/images/content/news_event/seminars/2016-2017-2nd-semester/Lin–Ye_paper.pdf

 

 

Trade Credit, Financing Structure and Growth

Junjie Xia

October 27, 2016

http://www.junjiexia.com/uploads/7/6/7/2/76726065/jmp_oct16.pdf

 

The impact of corporate distress along the supply chain: evidences from United
States

Lucia Gibilaro

Gianluca Mattarocci

http://www.efmaefm.org/0EFMAMEETINGS/EFMA%20ANNUAL%20MEETINGS/2017-Athens/papers/EFMA2017_0526_fullpaper.pdf

 

 

Does credit crunch investments down?
New evidence on the real eects of the bank-lending channel

Federico Cinganoz Francesco Manaresix Enrico Settex

December 2013

http://www.federicocingano.eu/Credit_crunch_investments.pdf

 

Interwoven Lending, Uncertainty, and Liquidity Hoarding

Adam Zawadowski

December 13, 2017

http://www.personal.ceu.hu/staff/Adam_Zawadowski/papers/credit.pdf

 

 

Trade credit: Elusive insurance of rm growth

DENNIS BAMS, JAAP BOS and MAGDALENA PISA*

October 5, 2016

http://www.research.mbs.ac.uk/accounting-finance/Portals/0/Users/002/02/2/Trade%20credit%20Elusive%20insurance%20of%20firm%20growth%202016.pdf

 

 

Chain Reactions, Trade Credit and the Business Cycle

Miguel Cardoso-Lecourtois

http://fmwww.bc.edu/RePEc/esNASM04/up.4593.1075462930.pdf

 

From production networks to geographical economics.

Gérard Weisbuch, Stefano Battiston.

Journal ofEconomic Behavior and Organization, Elsevier, 2007, 64 (3- 4), pp.448

https://hal.archives-ouvertes.fr/hal-00531863/document

 

 

Production networks and failure avalanches

Gerard Weisbuch
Stefano Battiston

March 5, 2018

https://arxiv.org/pdf/physics/0507101.pdf

 

 

Self-organised patterns in production networks

Gerard Weisbuch

October 10, 2005

http://www.lps.ens.fr/~weisbuch/gwcomplexus.pdf

 

 

Networks : Propagation of Shocks over Economic Networks

Daron Acemoglu

July 22, 2014.

https://economics.mit.edu/files/9790

 

 

Debt-Rank Analysis of Financial Distress Propagation on a Production Network in Japan

FUJIWARA Yoshi
University of Hyogo
TERAI Masaaki
RIKEN
FUJITA Yuji
Turnstone Research Institute, Inc.
SOUMA Wataru
Nihon University

https://www.rieti.go.jp/jp/publications/dp/16e046.pdf

 

 

Operational causes of bankruptcy propagation in supply chain

Zhongsheng Hua ⁎, Yanhong Sun 1, Xiaoyan Xu

2011

http://isiarticles.com/bundles/Article/pre/pdf/48280.pdf

 

 

Propagation of Financial Shocks in an Input-Output Economy with Trade and Financial Linkages of Firms

Shaowen Luo
September 20, 2015

http://www.econ.vt.edu/seminars/Seminar%20Papers/2016/10-02-15Luo.pdf

 

 

From Micro to Macro via Production Networks

Vasco M. Carvalho

http://www.crei.cat/wp-content/uploads/users/working-papers/carvalho_from_micro.pdf

 

 

Trade Credit and the  Propagation of Corporate Failure: An Empirical
Analysis

Tor Jacobson and Erik von Schedvin
August 2012

https://www.econstor.eu/bitstream/10419/81882/1/723939764.pdf

 

CREDIT MARKET DISRUPTIONS AND LIQUIDITY SPILLOVER EFFECTS IN THE SUPPLY CHAIN

Anna M. Costello

August 8, 2017

https://www.gsb.stanford.edu/sites/gsb/files/costello-anna-acctgcamp2017_0.pdf

 

Modeling defaults of companies in multi-stage supply chain networks

Kamil J.Mizgier, StephanM.Wagner,, JanuszA.Holyst

2010

http://mars.if.pw.edu.pl/~jholyst/Mizgier_etal_InPress_Modeling_defaults_of.pdf

 

 

 

The origins of scale-free production networks

Stanislao Gualdizand Antoine Mandelx

June 28, 2015

http://www.siecon.org/online/wp-content/uploads/2015/10/Gualdi.pdf

 

 

Optimization of order policies in supply networks

S. GÄottlich¤ M. Hertyy C. Ringhoferz

August 18, 2008

https://www.ki-net.umd.edu/pubs/files/FRG-2008-Ringhofer-Christian.FRG_Ringhofer_Orders080814.pdf

 

Financial Instability after Minsky: Heterogeneity, Agent Based Models and Credit
Networks

Domenico Delli Gatti

April 10, 2012

https://www.ineteconomics.org/uploads/papers/delli-gatti-domenico-berlin-paper.pdf

 

Measuring the Systemic Risk in Inter firm Transaction Networks

Makoto Hazama
And
Iichiro Uesugi

http://hermes-ir.lib.hit-u.ac.jp/rs/bitstream/10086/28392/1/wp066.pdf

 

Systemic Risk Assessment in Complex Supply Networks

Anna Ledwoch, Alexandra Brintrup, J¨orn Mehnen, Ashutosh Tiwari

https://pure.strath.ac.uk/portal/files/66716085/Ledwoch_etal_SJ_2016_Systemic_risk_assessment_in_complex_supply_networks.pdf

 

TRADE CREDIT DEFAULTS AND LIQUIDITY PROVISION BY FIRMS

Reint Gropp
Frédéric Boissay

2007

https://www.ecb.europa.eu/pub/pdf/scpwps/ecbwp753.pdf

 

The future of agent-based modelling.

Matteo Richiardi

Institute for New Economic Thinking and Nuffield College, Oxford, United Kingdom
Collegio Carlo Alberto, Moncalieri, Italy

This draft: June 2015

https://www.nuffield.ox.ac.uk/media/1702/abmfuture-v12.pdf

 

 

Financially Constrained Fluctuations in an Evolving Network Economy

Domenico Delli Gatti
Mauro Gallegati
Bruce Greenwald
Alberto Russo
Joseph E. Stiglitz

http://terna.to.it/ABM-BaF09/presentations/DelliGatti%28presentation%29_ABM.pdf

 

 

Credit Chains and Sectoral Comovement: Does the Use of Trade Credit Amplify Sectoral Shocks?

Claudio Raddatz

The World Bank
March, 2007

http://www.webmeets.com/files/papers/LACEA-LAMES/2007/335/Credit_chains_051707_withtables.pdf

 

 

Linkages and spillovers in global production networks: firm-level analysis of the Czech automotive industry

Petr Pavlinek

Pavla Žížalová

https://digitalcommons.unomaha.edu/cgi/viewcontent.cgi?article=1039&context=geoggeolfacpub

 

Ontology of Bankruptcy Diffusion through Trade Credit
Channel

Lin Cheng

Huaiqing Wang

Huaping Chen

https://50years.acs.org.au/content/dam/acs/50-years/journals/jrpit/JRPIT44.4.401.pdf

 

OPTIMAL ORDER AND DISTRIBUTION STRATEGIES IN PRODUCTION NETWORKS

Simone Gottlich, Michael Herty, and Christian Ringhofer

https://math.la.asu.edu/~chris/SpringerOpt10.pdf

 

Profitability, Trade Credit and Institutional Structure of Production

Michael Gofman
December 9, 2013

http://gofman.info/TC/Supplier-Customer%20Network.pdf

 

The Economics of Information and Financial
Networks

Stefano Battiston
July 22, 2016

https://simpolproject.eu/download/simpol-initiative-research/battiston2016information.pdf

 

Supply Chain Perspectives and Issues: A Literature Review

Albert Park
Gaurav Nayyar
Patrick Low

http://www.asiaglobalinstitute.hku.hk/en/wp-content/uploads/2016/06/supply-chain-perspectives-and-issues.pdf

 

 

LIAISONS DANGEREUSES: INCREASING CONNECTIVITY, RISK SHARING, AND SYSTEMIC RISK

Stefano Battiston
Domenico Delli Gatti
Mauro Gallegati
Bruce C. Greenwald
Joseph E. Stiglitz

http://www.nber.org/papers/w15611.pdf

 

 

Inter-Firm Trade Finance in Times of Crisis

Anna Maria C. Menichini

http://documents.worldbank.org/curated/en/649481468314087810/pdf/WPS5112.pdf

 

 

Reducing the Probability of Bankruptcy Through Supply Chain Coordination

Xiaoyan Xu, Yanhong Sun, and Zhongsheng Hua

2010

https://www.researchgate.net/profile/Yanhong_Sun5/publication/220508846_Reducing_the_Probability_of_Bankruptcy_Through_Supply_Chain_Coordination/links/573eac9d08ae298602e6e77a.pdf

 

 

Pathways towards instability in financial networks

Marco Bardoscia, Stefano Battiston Fabio Caccioli & Guido Caldarelli

2017

http://lims.ac.uk/wp-content/uploads/bardoscia2017pathways-1.pdf

 

 

International Credit Supply Shocks

Ambrogio Cesa-Bianchiy Andrea Ferreroz Alessandro Rebuccix

June 16, 2017

https://www.bostonfed.org/-/media/Documents/events/2017/boston-policy-workshop/AlessandroRebucci.pdf?la=en

 

Risk Propagation through Payment Distortion in Supply Chains

Alejandro Serrano

Rogelio Oliva

Santiago Kraiselburd

https://pdfs.semanticscholar.org/5b5f/0e6d7dc9d4b4f6bcada884b71562791404ed.pdf

 

 

Payment Defaults and Interfirm Liquidity Provision

https://academic.oup.com/rof/article-abstract/17/6/1853/1591419

 

SYSTEMIC RISK: A SURVEY

BY OLIVIER DE BANDT
AND PHILIPP HARTMANN

November 2000

https://www.econstor.eu/bitstream/10419/152469/1/ecbwp0035.pdf

 

 

Risk Propagation in Supply Chains

Alejandro Serrano

Rogelio Oliva

Santiago Kraiselburd

https://pdfs.semanticscholar.org/2db1/f3278ab2a75ff11b0142fba19a4cf223805a.pdf

 

 

How Inventory Is (Should Be) Financed: Trade Credit in Supply Chains with Demand
Uncertainty and Costs of Financial Distress

Song (Alex) Yang, John R. Birge

http://faculty.chicagobooth.edu/workshops/omscience/past/more/pdf/YangBirge_trade%20credit.pdf

https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2746645

https://papers.ssrn.com/sol3/papers.cfm?abstract_id=1734682

 

 

The Supply Chain Effects of Bankruptcy

S. Alex Yang

John R. Birge, Rodney P. Parker

https://pdfs.semanticscholar.org/6efb/86a8667f24af2c6a5cd7eb52bbd12b39697b.pdf

http://citeseerx.ist.psu.edu/viewdoc/download?doi=10.1.1.715.5812&rep=rep1&type=pdf

 

Supply Chain Management: Supplier Financing Schemes and Inventory Strategies

Min Wang

https://www8.gsb.columbia.edu/programs/sites/programs/files/abstracts/Min_Wang_Dissertation.pdf

 

Foreign Investment and Supply Chains in Emerging Markets: Recurring Problems and Demonstrated Solutions

Theodore H. Moran

PIIE

2014

https://piie.com/publications/wp/wp14-12.pdf

 

Improving cash flow using credit management
The outline case

http://www.cimaglobal.com/Documents/ImportedDocuments/cid_improving_cashflow_using_credit_mgm_Apr09.pdf.pdf

 

CREDIT CHAINS AND THE PROPAGATION OF
FINANCIAL DISTRESS

2006

by Frederic Boissay

http://sdw.zentral-bank.eu/pub/pdf/scpwps/ecbwp573.pdf

 

Exposure to international crises: trade vs. financial contagion

Everett Grant

2016

https://www.esrb.europa.eu/pub/pdf/wp/esrbwp30.en.pdf?7b7cc950c1a2286d395ed8489bfde5c7

 

 

Credit Contagion and Trade Credit Supply:
Evidence from Small Business Data in Japan

TSURUTA Daisuke

https://www.rieti.go.jp/jp/publications/dp/07e043.pdf

 

 

The Price of Complexity in Financial Networks

Joseph Stiglitz

2017

https://www8.gsb.columbia.edu/faculty/jstiglitz/sites/jstiglitz/files/The%20Price%20of%20Complexity%20in%20Financial%20Networks.pdf

 

 

The Price of Complexity in Financial Networks

S. Battiston

2017

https://www.jbs.cam.ac.uk/fileadmin/user_upload/research/centres/risk/downloads/160913_slides_battison.pdf

 

 

 

Advertisements

Instant, Immediate, Real Time Retail Payment Systems (IIRT-RPS)

Instant, Immediate, Real Time Retail Payment Systems (IIRT-RPS)

 

There are Five different kinds of Payments

  • B2C Business to Consumer
  • C2B Consumer to Business
  • B2B Business to Business
  • Domestic P2P Peer to Peer
  • Cross Border P2P Peer to Peer

 

From Real-time payments are changing the reality of payments

IMPS

Existing Real Time Retail Payment Systems around the Globe

From THE U.S. PATH TO FASTER PAYMENTS FINAL REPORT PART ONE: THE FASTER PAYMENTS TASK FORCE APPROACH

IMPS2

Planned Real Tine Retail Payments Systems around the Globe

 

From Global Trends and Developments in Instant Payments

imps3

Current Payments Ecosystem

  • Faster Payments
  • ACH
  • Cards
  • Closed Loop
  • Distributed Ledger

 

From 2017 Advanced Payments Report

IMPS4

Evolving Landscape of Payment Systems

From 2017 Advanced Payments Report

imps5

 

New RTP Developments

 

From Federal Reserve Payment Trends Update

imps6

USA – The Clearing House RTP System

From Federal Reserve Payment Trends Update

imps7

USA – How Payment Platforms Compare?

  • Wires
  • Next Day ACH
  • NACHA Same Day ACH
  • EWS Zelle
  • TCH RTP
  • Mastercard Send

 

From Federal Reserve Payment Trends Update

imps8

Key Sources of Research:

 

 

Real-time payments are changing the reality of payments

Deloitte

https://www2.deloitte.com/content/dam/Deloitte/us/Documents/strategy/us-cons-real-time-payments.pdf

 

 

 

THE U.S. PATH TO FASTER PAYMENTS
FINAL REPORT PART ONE: THE FASTER PAYMENTS TASK FORCE APPROACH

Federal Reserve

2017

https://www.federalreserve.gov/newsevents/press/other/US-path-to-faster-payments-pt1-201701.pdf

 

 

Zelle

https://www.zellepay.com

 

 

 

Real-Time Payments for P2P
.
Eric Foust
Early Warning
Mike Wolf

2017

http://www.rtpsummit.com/wp-content/uploads/2017/10/12.10-Zelle-53-RTP-conference-deck-005.pdf

 

 

Banks Re-enter the P2P Payments Fray: With Mobile, Will this Time Be Different?

By Terri Bradford, Payments Research Specialist

Fed Reserve

https://www.kansascityfed.org/~/media/files/publicat/psr/briefings/psr-briefingjan2017.pdf

 

 

 

Faster Payments Finds Its Future

NACHA

2016

https://web.nacha.org/system/files/resource/2017-08/Faster-Payments-Tracker-December-2016.pdf

 

 

 

Faster payments: Building a business, not just an infrastructure

McKinsey

https://www.mckinsey.com/~/media/McKinsey/Industries/Financial%20Services/Our%20Insights/Faster%20payments%20Building%20a%20business%20not%20just%20an%20infrastructure/Faster%20payments.ashx

 

 

The Road to Faster Payments

As Real-Time Payments Rise, Payment Hubs See a Resurgence

The Clearing House

2017

https://www.theclearinghouse.org/research/banking-perspectives/2017/2017-q4-banking-perspectives/payment-hubs

 

 

 

Real-Time Payments and Settlement Comes to the United States

How U.S. Banks Can Realize the Full Opportunities of Immediate Payments for Their Customers

D+H

2016

https://www.pnc.com/content/dam/pnc-ideas/articles/D+H-US-Real-Time-Payments-and-Settlement-whitepaper-coauthored-PNC-TCH-15-April%202016.pdf

 

 

 

Real-Time, Cross-Border Payments Survey

2017

IPFA

http://ipf-a.org/wp-content/uploads/Real-time-Cross-Border-Payments-Final.pdf

 

 

 

Strategies for Improving the U.S. Payment System Federal Reserve Next Steps in the Payments Improvement Journey

Federal Reserve

2017

https://www.federalreserve.gov/newsevents/pressreleases/files/other20170906a1.pdf

 

 

 

Strategies for Improving the U.S. Payment System

Federal Reserve

2015

https://fedpaymentsimprovement.org/wp-content/uploads/strategies-improving-us-payment-system.pdf

 

 

 

Strategies for Improving the U.S. Payment System
Feb 2016 Progress Report

Fed Reserve

2016

https://www.w3.org/2016/02/usfed-criteria.pdf

 

 

Strategies for Improving the U.S. Payment System

Progress Report | January 2017

Federal Reserve

https://www.federalreserve.gov/newsevents/press/other/sips-progress-report-201701.pdf

 

 

 

Strategies for Improving the U.S. Payments System

Claudia Swendseid

2016

https://www.minneapolisfed.org/~/media/files/news_events/events/payments-swendseid.pdf?la=en

 

Strategies for Improving the U.S. Payment System

2015

http://aftweb.com/aws/AFT/asset_manager/get_file/110552

 

 

Making Payments Faster in the United States

Clearing House

2015

https://www.theclearinghouse.org/~/media/puertoricosamedayach2015/making%20payments%20faster%20in%20the%20us%20tim%20mills.pdf?la=en

 

 

 

The Clearing House RTP System “Back to The Future”: Emerging Payment Systems Legal and Regulatory Issues

2017

https://www.calbankers.com/sites/main/files/file-attachments/back_to_the_future_emerging_payment_systems_-_krebs.pdf

 

 

The Federal Reserve Faster Payments and Secure Payments Task Forces
2016 Smart Card Alliance Payments Summit

April 5, 2016

https://www.securetechalliance.org/secure/events/20160404/PACIFICA-7_TUE_445_AADLAND_Smart-Card-Alliance_Faster-and-Secure-Payments-Task-Forces_4-5-16.pdf

 

 

 

Understanding and Regulating Twenty-First Century Payment Systems: The Ripple Case Study

Marcel T. Rosner
Delaware Court of Chancery
Andrew Kang
University of Michigan Law School

2016

https://repository.law.umich.edu/cgi/viewcontent.cgi?article=1239&context=mlr

 

 

 

US Retail Payment Instruments and Systems

Structure, Transformation & Public Policy

NY Fed Reserve

2015

https://www.newyorkfed.org/medialibrary/media/banking/international/15-Retail-Payments-2015-Littman.pdf

 

 

 

Digital Payments Strategy for U.S. Retail Banks

Cognizant

2015

https://www.cognizant.com/whitepapers/Digital-Payments-Strategy-for-U.S.-Retail-Banks-codex1358.pdf

 

 

US Real Time Payments Technology Playbook

The Clearing House

2016

https://www.theclearinghouse.org/-/media/tch/pay%20co/rtp/tch%20rtp%20technology%20playbook%20111716%20v1.pdf?la=en

 

 

 

16 in 2016: Trailblazing trends in global payments

McKinsey

2016

https://www.mckinsey.com/~/media/McKinsey/Industries/Financial%20Services/Our%20Insights/16%20in%202016%20Trailblazing%20trends%20in%20global%20payments/16%20in%202016%20Trailblazing%20trends%20in%20global%20payments_2015.ashx

 

 

 

Earthport

https://www.earthport.com/

 

 

 

Flavors of the Fast

A trip around the world in immediate payments

FIS

https://www.fisglobal.com/-/media/FISGlobal/Files/Report/Flavours_Of_Fast.pdf

 

 

 

Global Trends and Developments in Instant payments

Edger Dunn

14th February, 2017

http://edgardunn.com/wp-content/uploads/2017/02/MPE-Track-A-Afternoon-Session-Global-Trends-and-Developments-in-Instant-Payments-Ulf-Geismar-14-02-2017-VF-1.pdf

 

 

 

EXECUTIVE GUIDE TO IMMEDIATE/ REAL-TIME PAYMENTS

Accenture

https://www.aciworldwide.com/-/media/files/collateral/trends/executive-guide-to-immediate-payments-tl.pdf

 

 

 

INTERNATIONAL PAYMENTS IN A DIGITAL WORLD

Accenture

2017

https://www.accenture.com/t20171006T071036Z__w__/us-en/_acnmedia/PDF-62/Accenture-International-Payments-Digital-World.PDF

 

 

 

Ripple as an Innovative Solution to the Ways We Pay

RIPPLE

https://ripple.com/files/candian_comment_letter.pdf

 

 

 

Instant revolution of payments?

The quest for real-time payments

Deutsche Bank

2015

https://bravenewcoin.com/assets/Industry-Reports-2015/Deutsche-Bank-Research-Instant-revolution-of-payments-The-quest-for-real-time-payments.PDF

 

 

 

Retail payments and the real economy

ECB

Iftekhar Hasan, Tania De Renzis
and Heiko Schmiedel

https://www.ecb.europa.eu/pub/pdf/scpwps/ecbwp1572.pdf?0568b27871896eb01f54b0c4c40a8f63

 

 

 

NATIONAL RETAIL PAYMENT SYSTEMS TO SUPPORT FINANCIAL INCLUSION

AFI

2017

https://www.afi-global.org/sites/default/files/publications/2017-10/DFS_GN_29_stg4.pdf

 

 

 

Real-time payments for real-time banking
How banks can seize the full opportunities of immediate payments

Accenture

2015

https://www.accenture.com/t20151002T215256__w__/us-en/_acnmedia/Accenture/Conversion-Assets/DotCom/Documents/Global/PDF/Dualpub_22/Accenture-Banking-Realtime-Payments-Realtime-Bank.pdf

 

 

 

The New Payments Platform: Fast-Forward to the Future

Cognizant

https://www.cognizant.com/InsightsWhitepapers/the-new-payments-platform-fast-forward-to-the-future-codex1299.pdf

 

 

 

24/7 Domestic Real-time Payments

SWIFT

http://www.alfi.lu/sites/alfi.lu/files/files/16577_Expl1_SWIFT2020_2.pdf

 

 

Innovations in retail payments

Report of the Working Group on Innovations in Retail Payments

BIS

May 2012

https://www.bis.org/cpmi/publ/d102.pdf

 

 

Fast payments – Enhancing the speed and availability of retail payments

BIS

November 2016

 

https://www.bis.org/cpmi/publ/d154.pdf

 

Is a Global Real-Time Payment System Possible?

TCH

2015

https://www.theclearinghouse.org/research/2015/2015-q3-banking-perspectives/global-real-time-payments

Federal Reserve Payment Trends Update

2017

Federal Reserve Bank of Richmond

http://www.maafp.org/resources/Presentations/04192017%20Retail%20Payments.pdf

 

 

 

THE IMPORTANCE OF THE RETAIL PAYMENT SYSTEM

Hal S. Scott

Nomura Professor and Director, Program on International Financial Systems Harvard Law School

December 16, 2014

 

https://dash.harvard.edu/bitstream/handle/1/16883011/hal-scott—mastercard-retail-payment-systems.pdf?sequence=1

 

Mechanism Design for Near Real-Time Retail Payment and Settlement Systems

Zhiling GUO
Singapore Management University, ZHILINGGUO@smu.edu.sg

Robert John UFFMAN
Singapore Management University, rkau man@smu.edu.sg

Mei LIN
Singapore Management University, mlin@smu.edu.sg

Dan MA

2015

 

http://ink.library.smu.edu.sg/cgi/viewcontent.cgi?article=3494&context=sis_research

 

 

 

2017 Advanced Payments Report

Edgar Dunn & Company

2017

http://edgardunn.com/2017/06/2017-advanced-payments-report/

Network Economics of Block Chain and Distributed Ledger Technology

Network Economics of Block Chain and Distributed Ledger Technology

 

Quadruple Accounting System

Morris Copeland, and Hyman Minsky emphasized quadruple entry accounting system envisioning interrelated interlocking balance sheets of economic agents.  Interlocking balance sheets create a network of economic agents.

I attach a slide from a presentation by Marc Lavoie given at Minsky Summer school in 2010 at the Levy Institute of Economics (Bard College).

 

Minsky

 

There are several FINTECH innovations which are bringing about dramatic changes in the financial services business.

  • Block Chain and Distributed Ledgers
  • Payment Banks
  • Retail P2P Payment services
  • Mobile Payments
  • Secured Wallets
  • Domestic Real Time Payments and Transfers
  • Cross Border Near Real time Money Transfers

 

Block Chain and Distributed Ledgers, in my opinion, are/can be implementation of quadruple accounting principles envisioned by Morris Copeland and Hyman Minsky.  Two economic agents engage in financial transactions which are recorded in distributed ledgers.

Some of the key components of distributed ledger technology are:

  • Peer-To-Peer Networking
  • Cryptography
  • Distributed Data Storage

In contrast with centralized ledgers, distributed ledgers store data at each node in the P2P network.  So there is no need for an intermediating institution.  From a payment system perspective, each node in the P2P network can be thought of as a bank.   Each node will have its own ledger and balance sheet which will record assets and liabilities.

Ripple is a Cross Border money transfer solution which is based on block chain technology.

 

Recent rise of retail P2P payment services such as

  • Xoom
  • M-Paisa
  • PayTM

indicates a trend toward real time payments/money transfers domestic and international.  This trend also indicates decoupling of these services from traditional deposit/lending banks. XOOM is a service provided by PAYPAL for international Money Transfers.  Money transfers are within a few minutes.

In USA, there are new P2P services offered to facilitate faster near real time payments/money transfers through mobile and online interfaces.

  • Venmo (Paypal)
  • Zelle (clearXchange Network)
  • Square Cash
  • Braintree (Paypal)

There are also social media payments available now through which consumers can quickly send money using social media applications such as

  • Facebook (through Messanger app)
  • Snapcash (through SnapChat)
  • Apple PayCash (through imessages app)
  • TenCent via WeChat

 

Rise of payment banks such as PayTM is one such example.  Reserve Bank of India has granted PayTM a payment bank status.  But transfers are still between bank accounts of transacting consumers where deposits are kept. Payment Bank acts as a technology provider and acts as an intermediary.

As per the RBI guidelines, payments banks cannot lend they can only take deposits or accept payments.

There are four payment banks in India now.

  • PayTM Payment Bank
  • Airtel Payment Bank
  • India Post Payment Bank
  • FINO Payment Bank

 

Mobile payments using secured wallets is another such example.

  • Consumer to Business payments and transfers
  • Consumer to Consumer payments and transfers
  • Google Wallet
  • Apple Pay
  • Android Pay
  • Alipay

 

Cross Border Payment Solutions:

  • XOOM
  • Earthport
  • TransferWise
  • RIPPLE
  • Remitly
  • WorldRemit

 

 

Please see my other related posts:

Next Generation of B2C Retail Payment Systems

Cross Border/Offshore Payment and Settlement Systems

 

 

Key sources of Research:

 

Minsky and Godley and financial Keynesianism

Marc Lavoie
University of Ottawa

2010

http://www.levyinstitute.org/pubs/conf_june10/Lavoie.pdf

 

Block Chain:  A Primer

2016

https://mpra.ub.uni-muenchen.de/76562/1/MPRA_paper_76562.pdf

 

Distributed Ledger Technologies/Blockchain: Challenges, opportunities and the prospects for standards

Advait Deshpande, Katherine Stewart, Louise Lepetit, Salil Gunashekar

2017

www2.caict.ac.cn/zscp/qqzkgz/qqzkgz_zdzsq/201708/P020170818579005375876.pdf

 

Banking on Distributed Ledger Technology: Can It Help Banks Address Financial Inclusion?

By Jesse Leigh Maniff and W. Blake Marsh

2017

https://www.kansascityfed.org/~/media/files/publicat/econrev/econrevarchive/2017/3q17maniffmarsh.pdf

 

 

Distributed ledger technology in payments, clearing, and settlement

Mills, David, Kathy Wang, Brendan Malone, Anjana Ravi, Jeff Marquardt, Clinton
Chen, Anton Badev, Timothy Brezinski, Linda Fahy, Kimberley Liao, Vanessa Kargenian,
Max Ellithorpe, Wendy Ng, and Maria Baird (2016).

Finance and Economics Discussion
Series 2016-095. Washington: Board of Governors of the Federal Reserve System,

2016

https://www.federalreserve.gov/econresdata/feds/2016/files/2016095pap.pdf

 

 

Distributed Ledger Technology: beyond block chain

A report by the UK Government Chief Scientific Adviser

https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/492972/gs-16-1-distributed-ledger-technology.pdf

 

Bitcoin, Blockchain & distributed ledgers: Caught between promise and reality

Deloitte

https://www2.deloitte.com/content/dam/Deloitte/au/Images/infographics/au-deloitte-technology-bitcoin-blockchain-distributed-ledgers-180416.pdf

 

 

Distributed ledger technology in payment, clearing and settlement
An analytical framework

BIS

2017

https://www.bis.org/cpmi/publ/d157.pdf

 

 

The Truth About Blockchain

HBR
January–February 2017 Issue

 

https://hbr.org/2017/01/the-truth-about-blockchain

 

THE USE OF BLOCKCHAIN IN CLEARING AND SETTLEMENT

MARECHAL Baptiste

 

 

Peer-to-peer payments: Surveying a rapidly changing landscape

By Jennifer Windh

August 15, 2011

 

https://www.frbatlanta.org/-/media/documents/rprf/rprf_pubs/110815wp.pdf

Global Liquidity and Cross Border Capital Flows

Global Liquidity and Cross Border Capital Flows

 

Types of Cross Border Capital Flows

  • Intra Bank Flows (Intra Firm Transfers)
  • Inter Bank Flows (wholesale Money Markets)
  • International Shadow Banking
  • Euro Dollar Market
  • International Bond and Equity Portfolio Flows

Growth of Capital Flows and FX Reserves

From INTERNATIONAL MONETARY RELATIONS: TAKING FINANCE SERIOUSLY

Capitalflows

 

From INTERNATIONAL MONETARY RELATIONS: TAKING FINANCE SERIOUSLY

Capital Flows 2

From Stitching together the global financial safety net

Cap Flows 6

 

Decline in Global Trade and Cross Border Capital Flows since 2008

 

From Global Liquidity and Cross-Border Bank Flows

Cap Flows 7

 

US DOLLAR FLOWS – Inter regional Flows

  • Not all dollar flows are from USA.
  • Through Eurodollar Market, firms in many countries are engaged in US Dollar transactions.
  • US Dollar dominates cross border capital flows.

 

From External dimension of monetary policy

Cap Flows 4

 

 

From Economic resilience: a financial perspective

 

Cap Flow 15

 

 

ALL CURRENCIES

From Breaking free of the triple coincidence in international finance

Cap Flows 10

 

Who is Involved in Cross Border Capital Flows

From The shifting drivers of global liquidity

Cap Flows 8

 

Recent Trends in Capital Flows

 

From The shifting drivers of global liquidity

Cap Flows 9

 

Problem of Boundaries

From Breaking the Triple Coincidence in International Finance

Capital Flows 3

Cross Border (International) Capital Flows (Networks) for

  • Intra Bank Flows
  • Inter-bank Lending
  • Debt and Securities Flows
  • International Shadow Banking

Capital Flows are not confined to National Boundaries.

Boundaries for

  • Monetary Policy
  • National Income Accounting
  • National Currencies

Types of Flows

From From Breaking the Triple Coincidence in International Finance

Cap Flows 11

 

A. Round tripping of Capital Flows

From Breaking the Triple Coincidence in International Finance

Cap Flows 12

B. International Debt Issuance by Non Financial Corporates in Emerging Markets

 

From From Breaking the Triple Coincidence in International Finance

Cap Flows 13

From Global dollar credit: links to US monetary policy and leverage

Cap flow 14

 

From  What does the new face of international financial intermediation mean for emerging market economies?

capflows 16

 

 

From Economic resilience: a financial perspective

 

Cap Flow 16

Please see my other related posts:

The Dollar Shortage, Again! in International Wholesale Money Markets

Currency Credit Networks of International Banks

Low Interest Rates and International Capital Flows

Low Interest Rates and International Investment Position of USA

Economics of Trade Finance

External Balance sheets of Nations

 

Key Sources of Research:

 

 

Breaking the Triple Coincidence in International Finance

Hyun Song Shin

Bank for International Settlements
Keynote speech at seventh conference of
Irving Fisher Committee on Central Bank Statistics

Basel, 5 September 2014

http://www.bis.org/ifc/publ/ifcb39_keynote-rh.pdf

 

 

Breaking free of the triple coincidence in international finance

Hyun Song Shin, BIS

Eighth IFC Conference on “Statistical implications of the new financial landscape”
Basel, 8–9 September 2016

http://www.bis.org/ifc/publ/ifcb43_zp_rh.pdf

 

 

 

Breaking free of the triple coincidence in international finance

by Stefan Avdjiev, Robert N McCauley and Hyun Song Shin

Monetary and Economic Department

BIS

October 2015

http://www.bis.org/publ/work524.pdf

 

 

 

Global Liquidity and Cross-Border Bank Flows

Eugenio Cerutti (International Monetary Fund)
Stijn Claessens (Federal Reserve Board)
Lev Ratnovski (International Monetary Fund)

Economic Policy
63rd Panel Meeting
Hosted by the De Nederlandsche Bank

Amsterdam, 22-23 April 2016

http://www.economic-policy.org/wp-content/uploads/2016/04/Global-liquidity-and-cross-border-bank-flows.pdf

 

 

 

Stitching together the global financial safety net

Edd Denbee, Carsten Jung and Francesco Paternò

Financial Stability Paper No. 36 – February 2016

BOE

http://www.reinventingbrettonwoods.org/sites/default/files/fs_paper36.pdf

 

 

 

Gross Capital Inflows to Banks, Corporates and Sovereigns

Stefan Advjiev

Bryan Hardy

Sebnem Kalemli-Ozcan

Luis Serven

January 2017

http://www.econweb.umd.edu/~kalemli/GrossFlows_jan17_final.pdf

 

 

External dimension of monetary policy

Hyun Song Shin

Remarks at the Board of Governors of the Federal Reserve System conference
“Monetary policy implementation and transmission in the post-crisis period”

Washington DC, Friday 13 November 2015

https://www.bis.org/speeches/sp151113.pdf

 

 

 

 

Financial deglobalisation in banking?

Robert N McCauley, Agustín S Bénétrix,
Patrick M McGuire and Goetz von Peter

TEP Working Paper No. 1717

July 2017

http://www.tcd.ie/Economics/TEP/2017/tep1717.pdf

 

 

Monetary policy spillovers and currency networks in cross-border bank lending

by Stefan Avdjiev and Előd Takáts
Monetary and Economic Department

March 2016

https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2749311

 

 

 

Accounting for global liquidity: reloading the matrix

Hyun Song Shin
Economic Adviser and Head of Research

IMF-IBRN Joint Conference “Transmission of macroprudential and monetary policies across borders”

Washington DC, 19 April 2017

https://www.bis.org/speeches/sp170419.pdf

 

 

 

 

INTERNATIONAL MONETARY RELATIONS: TAKING FINANCE SERIOUSLY

Maurice Obstfeld
Alan M. Taylor
May 2017

http://econ.sciences-po.fr/sites/default/files/file/w23440.pdf

 

 

 

The Currency Dimension of the Bank Lending Channel in International Monetary Transmission

BIS Working Paper No. 600

Posted: 2 Jan 2017

Előd Takáts

Judit Temesvary

 

https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2891530

https://www.researchgate.net/profile/Elod_Takats/publication/311451202_The_Currency_Dimension_of_the_Bank_Lending_Channel_in_International_Monetary_Transmission/links/587dd04808ae9a860ff2723a/The-Currency-Dimension-of-the-Bank-Lending-Channel-in-International-Monetary-Transmission.pdf

 

 

 

The Second Phase of Global Liquidity and Its Impact on Emerging Economies

Hyun Song Shin
Princeton University

November 7, 2013

 

http://www.frbsf.org/economic-research/events/2013/november/asia-economic-policy-conference/program/files/The-Second-Phase-of-Global-Liquidity-and-Its-Impact-on-Emerging-Economies.pdf

 

 

 

 

BIS Quarterly Review

September 2017

International banking and financial market developments

 

http://www.bis.org/publ/qtrpdf/r_qt1709.pdf

 

 

 

 

The Three Phases of Global Liquidity

https://www.springer.com/cda/content/document/cda_downloaddocument/9789812872838-c2.pdf?SGWID=0-0-45-1490720-p177066168

 

 

 

 

The Shifting Drivers of Global Liquidity

Stefan Avdjiev
Leonardo Gambacorta
Linda S. Goldberg
Stefano Schiaffi

Staff Report No. 819
June 2017

https://www.newyorkfed.org/medialibrary/media/research/staff_reports/sr819.pdf?la=en

 

 

 

How Do Global Liquidity Phases Manifest Themselves in Asia?

Iwan J. Azis
Asian Development Bank and Cornell University
Hyun Song Shin
Princeton University
August 2013

http://www.iwanazis.com/files/documents/Iwan-Azis-Paper-Shin-Global-Liquidity2013.pdf

 

 

 

 

GLOBAL LIQUIDITY—ISSUES FOR SURVEILLANCE

2014

IMF

http://www.imf.org/external/np/pp/eng/2014/031114.pdf

 

 

 

 

The shifting drivers of global liquidity

Stefan Avdjiev, Leonardo Gambacorta, Linda S. Goldberg and Stefano Schiaffi

May 2017

FED NY

 

https://www.chapman.edu/business/_files/faculty-research/2017-conference-presentations/linda-goldberg.pdf

 

 

 

CAPITAL FLOWS AND GLOBAL LIQUIDITY

IMF Note for G20 IFA WG
February 2016

 

http://g20chn.org/English/Documents/Current/201608/P020160811536051676178.pdf

 

 

 

 

Capital Flows, Cross-Border Banking and Global Liquidity∗

Valentina Bruno

Hyun Song Shin

March 15, 2012

http://www.igier.unibocconi.it/files/capital_flows_global_liquidity.pdf

 

 

Cross-Border Banking and Global Liquidity

Valentina Bruno

Hyun Song Shin

August 28, 2014

 

http://www.bis.org/publ/work458.pdf

 

 

The international monetary and financial system: a capital account historical perspective

by Claudio Borio, Harold James and Hyun Song Shin

2014

 

http://www.bis.org/publ/work457.pdf

 

 

Banks and Cross-Border Capital Flows: Policy Challenges and Regulatory Responses

 

https://www.tcd.ie/policy-institute/assets/pdf/CIEPR_banking_capital_flows_report_Sept12.pdf

 

 

 

Global dollar credit and carry trades: a firm-level analysis

Valentina Bruno

Hyun Song Shin

August 2015

 

http://www.bis.org/publ/work510.pdf

 

 

Global dollar credit: links to US monetary policy and leverage

by Robert N McCauley, Patrick McGuire and Vladyslav Sushko

2015

 

http://www.bis.org/publ/work483.pdf

 

 

 

Global liquidity and procyclicality

Hyun Song Shin

Bank for International Settlements

“The State of Economics, The State of the World” World Bank conference,

8 June 2016

 

http://pubdocs.worldbank.org/en/710301465395290548/Shin-Son-Shin-Presentation.pdf

 

 

 

 

Economic resilience: a financial perspective

Note submitted to the G20 on 7 November 2016

December 2016

 

http://www.g20.utoronto.ca/2017/2017-Germany-BIS-economic-resilience.pdf

 

 

Emerging Market Nonfinancial Corporate Debt: How Concerned Should We Be?,

Beltran, Daniel, Keshav Garud, and Aaron Rosenblum (2017).

IFDP Notes. Washington: Board of Governors of the Federal Reserve System, June 2017.

 

https://www.federalreserve.gov/econres/notes/ifdp-notes/emerging-market-nonfinancial-corporate-debt-how-concerned-should-we-be-20170601.pdf

 

 

 

 

International capital flows and financial vulnerabilities in emerging market economies: analysis and data gaps

By Nikola Tarashev, Stefan Avdjiev and Ben Cohen

Note submitted to the G20 International Financial Architecture Working Group

August 2016

 

https://www.bis.org/publ/othp25.pdf

 

 

 

Recent trends in EME government debt volume and composition

Corporate Debt in Emerging Economies: Threat to Financial Stability

Viral Acharya et al
2015

 

 

 

 

 Dollar credit to emerging market economies

Robert N McCauley Patrick McGuire Vladyslav Sushko

2015

 

https://www.bis.org/publ/qtrpdf/r_qt1512e.pdf

 

 

 

 

What does the new face of international financial intermediation mean
for emerging market economies?

Hyun song shin and PhiliP Turner, Bank for International Settlements

2015

 

https://publications.banque-france.fr/sites/default/files/medias/documents/financial-stability-review-19_2015-04.pdf

Trends in Cross Border Mergers and Acquisitions

Trends in Cross Border Mergers and Acquisitions

 

From The Location of Cross-Border Mergers & Acquisitions in the USA

The vast majority of foreign direct investment (FDI) takes place in the form of cross-border mergers and acquisitions (M&As), see Evenett (2004). Analyzing the determinants and consequences of M&As is part of a large and growing literature in both (international) economics and (international) business. In economics, the dominant industrial organization (IO) literature does, however, typically not deal with the cross-border aspect of M&As, but instead concentrates on national M&As (Salant et al., 1983; O’Brien and Shaffer, 2005; Davis and Wilson, 2008; Egger and Hahn, 2010). A relatively small literature explicitly tries to include the cross-border aspect of M&As, but neglects the role of country factors that are central in international economics and international business to explain the structure and variation of cross-border transactions (Anand and Delios, 2002; Nocke and Yeaple, 2007, 2008, Bertrand and Zitouna, 2006; Fugmagalli and Vasconcelos, 2009, Halverson, 2012). The impact of country wide differences on cross-border M&As is taken explicitly into account by Neary (2004, 2007) who focuses on differences in comparative advantage between countries in a general equilibrium model to explain the occurrence of cross-border M&As. Empirical support for this idea is found by Brakman et al (2013), see also Blonigen et al (2014). In the international business literature – ever since the introduction of Dunning’s Ownership-Location-Internalization (OLI) framework – the mode of foreign entry and the choice of a foreign location have been central, but not explicitly modelled, as the OLI framework is more a taxonomy of relevant elements for location choice than a model (see for example Dunning, 2000).2

Both for the modern international business and international economics literature, however, whenever the location of cross-border M&As is taken into account, it usually refers to the host country as a whole. Where to locate the M&A within the host country is not analyzed. This amounts to assuming that if foreign firms have decided to engage in an M&A they choose a country but are indifferent regarding the target location within that country. This observation is the starting point for the present paper. In contrast to this observation with respect to cross-border M&As, the within country location choice with respect to greenfield FDI has been analyzed in depth. The seminal study by Head et al. (1995) was pivotal, and initiated a large and growing body of literature; see for example Fontagne and Mayer (2005); Basile et al., (2008); Defever, (2006); or Mataloni, (2011). Similar analyses for cross-border M&As are largely absent and this is striking because the bulk of FDI is in the shape of cross-border M&As. A priori, there is no reason to assume that the location decision of greenfield investments and M&As are similar. M&As, by definition, merge with or acquire existing firms at a specific location, whereas greenfield investments can, in principle, locate anywhere.

 

From Economic and Financial Integration and the Rise of Cross-Border M&As

FDI8

 

From CROSS-BORDER MERGERS & ACQUISITIONS: THE FACTS AS A GUIDE FOR INTERNATIONAL ECONOMICS

FDI

  • Most of the Foreign Direct Investment (FDI) is in the form of Cross Border M&A.

 

The motivation for Cross Border M&A can be several:

  • Horizontal Integration ( Seeking Market Share)
  • Vertical Integration ( Control of Supply Chain)
  • Diversification (Market Seeking)

Research indicate that most of the cross border M&A are for seeking markets.

 

From CROSS-BORDER MERGERS & ACQUISITIONS: THE FACTS AS A GUIDE FOR INTERNATIONAL ECONOMICS

FDI2

  • Cross Border Mergers have been rising since 1985.

 

From CROSS-BORDER MERGERS & ACQUISITIONS: THE FACTS AS A GUIDE FOR INTERNATIONAL ECONOMICS

FDI3

 

  • Europe and North America dominate regions in which cross borders M&A are taking place.

 

From CROSS-BORDER MERGERS & ACQUISITIONS: THE FACTS AS A GUIDE FOR INTERNATIONAL ECONOMICS

FDI4

From CROSS-BORDER MERGERS & ACQUISITIONS: THE FACTS AS A GUIDE FOR INTERNATIONAL ECONOMICS

FDI6

 

From CROSS-BORDER MERGERS & ACQUISITIONS: THE FACTS AS A GUIDE FOR INTERNATIONAL ECONOMICS

FDI5

From CROSS-BORDER MERGERS & ACQUISITIONS: THE FACTS AS A GUIDE FOR INTERNATIONAL ECONOMICS

FDI7

 

From  M&A Today: A Quick Pre-Financial Crisis Comparison

FDI9FTD10FDI11

Sources of M&A Data:

From Exploration of Mergers and Acquisitions Database: Deals in Emerging Asian Markets

There are four popular mergers and acquisitions databases,

  • SDC Platinum Mergers & Acquisitions (M&A) database,
  • Bloomberg M&A database,
  • Mergerstat M&A database,
  • ZEPHYR M&A database.

The SDC Platinum M&A Database covers domestic deals from 1979 to present and international deals from 1985 to present. Thomson Reuters states that the SDC includes more transactions than any other source and is widely used by the industry professionals and academic researchers.

The Bloomberg M&A database began putting the mergers and acquisitions product together in January 1998, with the intention of providing “100 percent coverage of all global deals as they were announced” (Ide, 2001). Bloomberg states that it has mergers and acquisitions staff in 12 offices worldwide compiling M&A data and relationships with over 800 legal and financial firms.

According to the Zimmerman (2006), the Mergerstat database covers both acquisitions and divestitures where at least one significant party is a U.S. company.

the ZEPHYR database covers transactions both inside and outside the U.S. and is particularly useful to study M&A deals in Europe (from 1997 forward for European transactions; from 2000 forward for North American transactions; global coverage begins in 2003).

 

Academic Libraries

 

Deloitte Consulting M&A Services

https://www2.deloitte.com/us/en/pages/mergers-and-acquisitions/solutions/merger-and-acquisition-services.html

 

KPMG Consulting

https://advisory.kpmg.us/content/kpmg-advisory/deal-advisory/ma-spotlight/ma-spotlight-june-2017.html?gclid=CjwKCAjwo4jOBRBmEiwABWNaMQAFeh6oDkE3FAlfCTiA8yKJkpHwuRPwcvBQlnZpFbm_JpODEt1AuRoC8t4QAvD_BwE

 

Thomson Reuters

https://financial.thomsonreuters.com/en/markets-industries/investment-banking-financial-advisory/mergers-and-acquisitions.html

 

PITCHBOOK.COM

http://get.pitchbook.com/mergers-and-acquisitions-data/?utm_term=mergers%20and%20acquisitions&utm_source=adwords&utm_campaign=ma&utm_content=ma&_bt=166828976390&_bm=p&_bn=g&gclid=CjwKCAjwo4jOBRBmEiwABWNaMSspbwSShK79f6OskgjShGv0_8c8qgrnqF35qv2Fu9t9ZvgwfzfTpxoCaa8QAvD_BwE

White and Case

http://mergers.whitecase.com

 

IMAA-Institute.org

https://imaa-institute.org/mergers-and-acquisitions-statistics/

FACTSET / MERGERSTAT

https://www.factset.com/data/company_data/mergers_acq

 

Bureau Van Dijk/ZEPHYR

https://www.bvdinfo.com/bvd/media/reports/global-fy-2016.pdf

 

STATISTA

https://www.statista.com/topics/1146/mergers-and-acquisitions/

UNCTAD / World Investment Report

http://unctad.org/en/Pages/DIAE/World%20Investment%20Report/World_Investment_Report.aspx

Wilmer and Hale Law Firm

https://www.wilmerhale.com/uploadedFiles/Shared_Content/Editorial/Publications/Documents/2017-WilmerHale-MA-Report.pdf

 

Dealogic.com

http://www.dealogic.com/insight/ma-outlook-2017/

Please also see other related posts:

Mergers and Acquisitions – Long Term Trends and Waves

External Balance sheets of Nations

Low Interest Rates and International Investment Position of USA

 

Key sources of Research:

CROSS-BORDER MERGERS AND ACQUISITIONS:
ON REVEALED COMPARATIVE ADVANTAGE AND MERGER WAVES

Steven Brakman
Harry Garretsen
Charles van Marrewijk

2008

https://papers.ssrn.com/sol3/papers.cfm?abstract_id=1087886https://papers.ssrn.com/sol3/papers.cfm?abstract_id=1087886

 

Cross-Border Mergers & Acquisitions: The Facts as a Guide for International Economics

CESifo Working Paper Series No. 1823

 

Steven Brakman

Harry Garretsen

Charles van Marrewijk

 

Date Written: October 2006

https://papers.ssrn.com/sol3/papers.cfm?abstract_id=940348

 

Cross-border Mergers and Acquisitions: Their Role in Industrial Globalisation

2000

Nam-Hoon Kang and Sara Johansson

 

http://www.oecd-ilibrary.org/docserver/download/137157251088.pdf?expires=1505877469&id=id&accname=guest&checksum=BA90C157DC1196BE6E7C3CE1726D31FF

 

 

Theoretical foundations of cross-border mergers and acquisitions: A review of current research and recommendations for the future

Katsuhiko Shimizua,*, Michael A. Hittb,1, Deepa Vaidyanathc,2, Vincenzo Pisanod,3

Available online 24 July 2004

 

 

 Determinants of Cross-Border Mergers and Acquisitions

Isil Erel / Rose C. Liao /  Michael S. Weisbach

March 15, 2011

https://fisher.osu.edu/supplements/10/9864/ELW_JFRound3Revision.pdf

The Cross-Border Mergers and Acquisitions Wave of the Late 1990s

Simon J. Evenett

 

http://www.nber.org/chapters/c9545.pdf

 

 

 

The Macroeconomic Determinants of Cross Border Mergers and Acquisitions and Greenfield Investments

Paula Neto; Antonio Brandão; António Cerqueira

2010

 

https://www.researchgate.net/profile/Antonio_Brandao3/publication/46466162_The_Macroeconomic_Determinants_of_Cross_Border_Mergers_and_Acquisitions_and_Greenfield_Investments/links/0912f50c5ab64daab5000000.pdf

 

 

The Impact of FDI, Cross Border Mergers and Acquisitions and Greenfield Investments on Economic Growth

Paula Neto; Antonio Brandão; António Cerqueira

2010

https://www.researchgate.net/profile/Antonio_Brandao3/publication/24111675_The_Impact_of_FDI_Cross_Border_Mergers_and_Acquisitions_and_Greenfield_Investments_on_Economic_Growth/links/0912f50c5ab651626b000000.pdf

 

Exploration of Mergers and Acquisitions Database: Deals in Emerging Asian Markets

 

http://www.myacme.org/ijmtp/IJMTPV14N1/3%20IJMTP14005%20Draft%203%20final.pdf

 

 

Cross Border Mergers and Acquisitions

Scott Whitaker

2016

 

 

Economic and Financial Integration and the Rise of Cross-Border M&As

STEVEN BRAKMAN

GUS GARITA

HARRY GARRETSEN

CHARLES VAN MARREWIJK

March 2009

 

 

 

The Location of Cross-Border Mergers & Acquisitions in the USA

Steven Brakman
Harry Garretsen
Charles Van Marrewijk

CESIFO WORKING PAPER NO. 5331

APRIL 2015

 

 

M&A Today: A Quick Pre-Financial Crisis Comparison

2017

 

https://financial.thomsonreuters.com/content/dam/openweb/documents/pdf/financial/pre-financial-crisis-comparison.pdf

 

 

 

 

Cross-Border Mergers and Acquisitions and Financial Development:
Evidence from Emerging Asia

Douglas H. Brooks and Juthathip Jongwanich

No. 249 | February 2011

 

https://www.adb.org/sites/default/files/publication/28703/economics-wp249.pdf

 

 

 

MERGERS AND ACQISITIONS (M&As)

Prepared by
Directorate for Financial and Enterprise Affairs, Investment Division, OECD

May 2004

 

https://www.imf.org/External/NP/sta/bop/pdf/diteg4a.pdf

 

 

 

OECD BENCHMARK DEFINITION OF FOREIGN DIRECT INVESTMENT:

FOURTH EDITION –

ISBN 978-92-64-04573-6 – © OECD 2008

 

https://www.oecd.org/daf/inv/investmentstatisticsandanalysis/40193734.pdf

 

 

 

Economic and Other Impacts of Foreign Corporate Takeovers in OECD Countries

 

https://www.oecd.org/daf/inv/investment-policy/40476100.pdf

 

 

 

A Comparative Analysis of the Economic Effects of Cross-Border Mergers and Acquisitions in European Countries

Anita Maček

 

https://cdn.intechopen.com/pdfs-wm/38482.pdf

 

 

Trading Down: NAFTA, TPP, TATIP and Economic Globalization

Trading Down: NAFTA, TPP, TATIP and Economic Globalization

Top Institutions and Economists Now Say Globalization Increases Inequality

World Bank, IMF, BIS, NBER, McKinsey Now Admit that Globalization Increases Inequality

We’ve all heard that globalization lifts all boats and increases our prosperity …

But mainstream economists and organizations are now starting to say that globalization increases inequality.

The National Bureau of Economic Research – the largest economics research organization in the United States, with many Nobel economists and Chairmen of the Council of Economic Advisers as members –  published,  a report in May finding:

Recent globalization trends have increased U.S. inequality by disproportionately raising top incomes.

***

Rising import competition has adversely affected manufacturing employment, led firms to upgrade their production and caused labor earnings to fall.

NBER explains that globalization allows executives to gain the system to their advantage:

This paper examines the role of globalization in the rapid increase in top incomes. Using a comprehensive data set of thousands of executives at U.S. firms from 1993-2013, we find that exports, along with technology and firm size, have contributed to rising executive compensation. Isolating changes in exports that are unrelated to the executive’s talent and actions, we show that globalization has affected executive pay not only through market channels but also through non-market channels. Furthermore, exogenous export shocks raise executive compensation mostly through bonus payments in poor-governance settings, in line with the hypothesis that globalization has enhanced the executive’s rent capture opportunities. Overall, these results indicate that globalization has played a more central role in the rapid growth of executive compensation and U.S. inequality than previously thought, and that rent capture is an important part of this story.

A World Bank document says globalization “may have led to rising wage inequality”. It  notes:

Recent evidence for the US suggests that adjustment costs for those employed in sectors exposed to import competition from China are much higher than previously thought.

***

Trade may have contributed to rising inequality in high income economies ….

The World Bank also cites Nobel prize-winning economist Eric Maskin’s view that globalization increases inequality because it increases the mismatch between the skills of different workers.

A report by the International Monetary Fund notes:

High trade and financial flows between countries, partly enabled by technological advances, are commonly cited as driving income inequality …. In advanced economies, the ability of firms to adopt laborsaving technologies and offshoring has been cited as an important driver of the decline in manufacturing and rising skill premium (Feenstra and Hanson 1996, 1999, 2003) ….

***

Increased financial flows, particularly foreign direct investment (FDI) and portfolio flows have been shown to increase income inequality in both advanced and emerging market economies (Freeman 2010). One potential explanation is the concentration of foreign assets and liabilities in relatively higher skill- and technology-intensive sectors, which pushes up the demand for and wages of higher skilled workers. In addition, FDI could induce skill-specific technological change, be associated with skill-specific wage bargaining, and result in more training for skilled than unskilled workers (Willem te Velde 2003). Moreover, low-skill, outward FDI from advanced economies may in effect be relatively high-skilled, inward FDI in developing economies (Figini and Görg 2011), thus exacerbating the demand for high-skilled workers in recipient countries. Financial deregulation and globalization have also been cited as factors underlying the increase in financial wealth, relative skill intensity, and wages in the finance industry, one of the fastest growing sectors in advanced economies (Phillipon and Reshef 2012; Furceri and Loungani 2013).

The Bank of International Settlements – the “Central Banks’ Central Bank” – also notes  that globalization isn’t all peaches and cream.  The Financial Times explains :

A trio of recent papers by top officials from the Bank for International Settlements goes further, however, arguing that financial globalisation itself makes booms and busts far more frequent and destabilising than they otherwise would be.

McKinsey & Company notes:

Even as globalization has narrowed inequality among countries, it has aggravated income inequality within them.

The Economist points out:

Most economists have been blindsided by the backlash [against globalization]. A few saw it coming. It is worth studying their reasoning ….

***

Branko Milanovic of the City University of New York believes such costs perpetuate a cycle of globalisation. He argues that periods of global integration and technological progress generate rising inequality ….

Supporters of economic integration underestimated the risks … that big slices of society would feel left behind ….

The New York Times reported:

Were the experts wrong about the benefits of trade for the American economy?

***

Voters’ anger and frustration, driven in part by relentless globalization and technological change [has made Trump and Sanders popular, and] is already having a big impact on America’s future, shaking a once-solid consensus that freer trade is, necessarily, a good thing.

“The economic populism of the presidential campaign has forced the recognition that expanded trade is a double-edged sword,” wrote Jared Bernstein, former economic adviser to Vice President Joseph R. Biden Jr.

What seems most striking is that the angry working class — dismissed so often as myopic, unable to understand the economic trade-offs presented by trade — appears to have understood what the experts are only belatedly finding to be true: The benefits from trade to the American economy may not always justify its costs.

In a recent study, three economists — David Autor at the Massachusetts Institute of Technology, David Dorn at the University of Zurich and Gordon Hanson at the University of California, San Diego — raised a profound challenge to all of us brought up to believe that economies quickly recover from trade shocks. In theory, a developed industrial country like the United States adjusts to import competition by moving workers into more advanced industries that can successfully compete in global markets.

They examined the experience of American workers after China erupted onto world markets some two decades ago. The presumed adjustment, they concluded, never happened. Or at least hasn’t happened yet. Wages remain low and unemployment high in the most affected local job markets. Nationally, there is no sign of offsetting job gains elsewhere in the economy. What’s more, they found that sagging wages in local labor markets exposed to Chinese competition reduced earnings by $213 per adult per year.

In another study they wrote with Daron Acemoglu and Brendan Price from M.I.T., they estimated that rising Chinese imports from 1999 to 2011 cost up to 2.4 million American jobs.

“These results should cause us to rethink the short- and medium-run gains from trade,” they argued. “Having failed to anticipate how significant the dislocations from trade might be, it is incumbent on the literature to more convincingly estimate the gains from trade, such that the case for free trade is not based on the sway of theory alone, but on a foundation of evidence that illuminates who gains, who loses, by how much, and under what conditions.”

***

The case for globalization based on the fact that it helps expand the economic pie by 3 percent becomes much weaker when it also changes the distribution of the slices by 50 percent, Mr. Autor argued.

And Steve Keen – economics professor and Head of the School of Economics, History and Politics at Kingston University in London – notes:

Plenty of people will try to convince you that globalization and free trade could benefit everyone, if only the gains were more fairly shared. The only problem with the party, they’ll say, is that the neighbours weren’t invited. We’ll share the benefits more equally now, we promise. Let’s keep the party going. Globalization and Free Trade are good.

This belief is shared by almost all politicians in both parties, and it’s an article of faith for the economics profession.

***

It’s a fallacy based on a fantasy, and it has been ever since David Ricardo dreamed up the idea of “Comparative Advantage and the Gains from Trade” two centuries ago.

***

[Globalization’s] little shell and pea trick is therefore like most conventional economic theory: it’s neat, plausible, and wrong. It’s the product of armchair thinking by people who never put foot in the factories that their economic theories turned into rust buckets.

So the gains from trade for everyone and for every country that could supposedly be shared more fairly simply aren’t there in the first place. Specialization is a con job—but one that the Washington elite fell for (to its benefit, of course). Rather than making a country better off, specialization makes it worse off, with scrapped machinery that’s no longer useful for anything, and with less ways to invent new industries from which growth actually comes.-

Excellent real-world research by Harvard University’s “Atlas of Economic Complexity” has found diversity, not specialization, is the “magic ingredient” that actually generates growth. Successful countries have a diversified set of industries, and they grow more rapidly than more specialized economies because they can invent new industries by melding existing ones.

***

Of course, specialization, and the trade it necessitates, generates plenty of financial services and insurance fees, and plenty of international junkets to negotiate trade deals. The wealthy elite that hangs out in the Washington party benefits, but the country as a whole loses, especially its working class.

Some Big Companies Losing Interest In Globalization

Ironically, the Washington Post noted in 2015 that the giant multinational corporations themselves are losing interest in globalization … and many are starting to bring the factories back home:

Yet despite all this activity and enthusiasm, hardly any of the promised returns from globalization have materialized, and what was until recently a taboo topic inside multinationals — to wit, should we reconsider, even rein in, our global growth strategy? — has become an urgent, if still hushed, discussion.

***

Given the failures of globalization, virtually every major company is struggling to find the most productive international business model.

***

Reshoring — or relocating manufacturing operations back to Western factories from emerging nations — is one option. As labor costs escalate in places such as China, Thailand, Brazil and South Africa, companies are finding that making products in, say, the United States that are destined for North American markets is much more cost-efficient. The gains are even more significant when productivity of emerging countries is taken into account.

***

Moreover, new disruptive manufacturing technologies — such as 3-D printing, which allows on-site production of components and parts at assembly plants — make the idea of locating factories where the assembled products will be sold more practicable.

***

GE, Whirlpool, Stanley Black & Decker, Peerless and many others have reopened shuttered factories or built new ones in the United States.

 Key Sources of Research

 

Trading Down: Unemployment, Inequality and Other Risks of the Trans-Pacific Partnership Agreement

 

Jeronim Capaldo and Alex Izurieta

with Jomo Kwame Sundaram

January 2016

 

http://www.ase.tufts.edu/gdae/Pubs/wp/16-01Capaldo-IzurietaTPP.pdf

 

 

The Trans-Atlantic Trade and Investment Partnership: European Disintegration, Unemployment and Instability

Jeronim Capaldo

October 2014

 

http://ase.tufts.edu/gdae/Pubs/wp/14-03CapaldoTTIP.pdf

 

 

 Revisiting the Link between Trade, Growth and Inequality:
Lessons for Latin America and the Caribbean

by Kimberly Beaton, Aliona Cebotari, and Andras Komaromi

 

 

ECONOMIC GLOBALIZATION AND INCOME INEQUALITY IN THE UNITED STATES

 

http://www.colorado.edu/ibs/intdev/johno/papers/inequality.pdf

 

 

Data Fail: The Divergence between Rosy International Trade Commission Projections and U.S. Trade Agreements’ Actual Outcomes

Tradewatch.com

May 2016

https://www.citizen.org/sites/default/files/usitc-tpp-prebuttal.pdf

 

Globalization, Outsourcing, and Wage Inequality

Robert C. Feenstra, Gordon H. Hanson

NBER Working Paper No. 5424
Issued in January 1996

http://www.nber.org/papers/w5424

Economic Inequality in the United States

Janet Yellen

2006

http://www.frbsf.org/our-district/press/presidents-speeches/yellen-speeches/2006/november/economic-inequality-in-the-united-states/

http://www.frbsf.org/economic-research/publications/economic-letter/2006/december/economic-inequality-in-the-united-states/

 

 

What’s caused the rise in income inequality in the US?

WEF

2015

https://www.weforum.org/agenda/2015/05/whats-caused-the-rise-in-income-inequality-in-the-us/

 

Worsening American Income: Inequality: Is world trade to blame?

Gary Burtless

https://www.brookings.edu/articles/worsening-american-income-inequality-is-world-trade-to-blame/

 

 

Income inequality in the United States: What do we know and what does it mean? Issues by the Numbers, July 2017

Dr. Daniel Bachman

July 12, 2017

https://dupress.deloitte.com/dup-us-en/economy/issues-by-the-numbers/july-2017/rising-income-inequality-gap-united-states.html

 

 

Top Institutions and Economists Now Say Globalization Increases Inequality

August 20, 2017

Washington Post Blog

http://www.washingtonsblog.com/2017/08/globalization-increases-inequality-destabilizes-economies-political-systems.html