Distribution of Wealth in Turkey, 2005–2019

This review summarizes the empirical literature on the effects of natural disasters and weather variations on international trade and financial flows. Regarding the effects on trade, I summarize 21 studies of 18 independent research teams and show that there is a large diversity in terms of motivations, data sets used, methodologies, and results. Still, some overarching conclusions can be drawn. Increases in average temperature seem to have a detrimental effect on export values, mainly on manufactured and agricultural products. Given climate change, this finding is important when it comes to projecting long-term developments of trade volumes. Imports seem to be less affected by temperature changes. Findings on the effects of natural disasters on trade are more ambiguous, but at least it can be concluded that exports seem to be affected negatively by the occurrence and severity of disasters in the exporting country. Imports may decrease, increase, or remain unaffected by natural disasters. Regarding heterogeneous effects, small, poor, and hot countries with low institutional quality and little political freedom seem to face the most detrimental effects on their trade flows. The literature on international financial flows is more limited. This part of the review includes 12 empirical studies. All but one focus on the effect of disasters. The majority of these studies finds that remittances and foreign aid inflows increase slightly after disasters. Potential future research could analyze spillover effects (in terms of time, space, and trade networks), consider adaptation, and use more granular data.

The Integration of Western Balkan Economies in Global Economic Flows

Financial liberalisation can promote economic development in developing and emerging economies (DEEs). Especially international financial flows pose risks to the stability of their financial system though, as recurrent foreign debt crises in DEEs show. How can DEEs benefit from international financial flows while safeguarding financial stability? The case of South Korea shows how DEEs can develop domestic policy frameworks to manage international financial flows while maintaining a high degree of financial openness. With the experience of the foreign debt crisis of 1997/98 in mind, Korean policymakers have interlinked policies (monetary policy, foreign exchange policy and financial regulation), public financial institutions and the development of domestic capital markets to develop a financial stability-oriented policy framework that has served as protection against risks attached to international financial flows. While this policy change substantiates a turn towards a finance-led accumulation regime, the case of Korea illustrates that DEEs are not passive bystanders in financialisation processes.

Each household's “total wealth” is defined here as its “fungible wealth” (i.e., net worth) plus its “social security wealth” (i.e., the present actuarial value of its potential social security benefits). Analysis of fungible wealth and total wealth from a 1963 national household survey finds that (1) the distribution of total wealth is much less concentrated than the distribution of fungible wealth; (2) the concentration of total wealth has decreased sharply since 1920, and (3) the life cycle theory of wealth accumulation is more consistent with the age-income distribution of total wealth than with the distribution of fungible wealth.

Each household's “total wealth” is defined here as its “fungible wealth” (i.e., net worth) plus its “social security wealth” (i.e., the present actuarial value of its potential social security benefits). Analysis of fungible wealth and total wealth from a 1963 national household survey finds that (1) the distribution of total wealth is much less concentrated than the distribution of fungible wealth; (2) the concentration of total wealth has decreased sharply since 1920, and (3) the life cycle theory of wealth accumulation is more consistent with the age-income distribution of total wealth than with the distribution of fungible wealth.

The study evaluates the significance of cross-border banking and international financial flows in enhancing financial deepening in the Southern African Development Community (SADC), including isolating the impact of regional, or pan-African, banks. The study also attempts to estimate the responses of the domestic financial sector to shocks in foreign banks and financial flows. Dynamic panel and general method of moments (GMM) estimations established that cross-border bank slows down development of domestic financial markets, although there are traces of positive effects in some measures. Pan-African Banks support credit development in domestic markets although diluting profitability. Impulse response and variance decomposition shows a largely negative reaction of domestic financial markets to shocks in foreign banks and financial flows in the short run, with the reaction turning positive in the long run. Indicatively, the results are demonstrating limited, but positive, financial spill-overs effects of foreign banks on financial development of other SADC countries. PanAfrican Banks are still to have a significant impact in the SADC countries.

We estimate the level and distribution of global household wealth. The levels of assets and debts for 39 countries are measured using household balance sheet and survey data centred on the year 2000. The determinants of mean financial assets, non-financial assets, and liabilities are studied empirically, and the results used to estimate average wealth holdings for countries lacking direct evidence. Data on the pattern of household distribution of wealth are assembled for 20 countries, which together account for 59 per cent of the global population and 75 per cent of global wealth. The observed relation between wealth and income distribution in these 20 countries allows estimates of wealth inequality to be produced for many other nations. Combining the figures for individual countries reveals that net worth averaged US$44,024 per adult in PPP terms across the globe. Wealth of US$8,635 was needed to be in the top half of the global distribution, and US$518,364 to be in the top one per cent. The top 10 per cent owned 71 per cent of world wealth, and the Gini coefficient for the global distribution of wealth is estimated to be 0.802, indicating greater inequality than that observed in the global distribution of consumption or income.

How well do countries cope with the aftermath of natural disasters? Do international financial flows buffer countries in the wake of disasters? This paper examines the impact of hurricanes on resource flows to developing countries. Using meteorological data, I construct a time-varying storm index taking into account the fraction of a country's population exposed to storms of varying intensities. Overall, hurricanes lead to large increases in foreign aid. For other types of international financial flows, the impact of hurricanes varies according to income level. For poorer countries, hurricanes lead to increases in migrants' remittances, so that total inflows from all sources in the three years following hurricane exposure amount to roughly four-fifths of estimated damages. For richer countries, by contrast, hurricanes stimulate inflows of new lending from multilateral institutions, but offsetting declines in private financial flows are so large that the null hypothesis of zero damage replacement cannot be rejected.

This chapter documents recent trends in international financial flows, based on a newly assembled dataset covering 40 advanced and emerging countries. Specifically, we compare the period since 2012 with the pre-crisis period and highlight three key stylized facts. First, the “Great Retrenchment” that took place during the crisis has proved very persistent, and world financial flows are now down to half their pre-crisis levels. Second, this fall can be related predominantly to advanced economies, especially those in Western Europe, while emerging markets, except Eastern European countries, have been less severely affected until recently. Third, not all types of flows have shown the same degree of resilience, resulting in a profound change in the composition of international financial flows: while banking flows, which used to account for the largest share of the total before 2008, have collapsed, foreign direct investment flows have been barely affected and now represent about half of global flows. Portfolio flows stand between these two extremes, and within them equity flows have proved more robust than debt flows. This should help to strengthen resilience and deliver genuine cross-border risk-sharing. Having highlighted these stylized facts, this chapter turns to possible explanations for and likely implications of these changes, regarding international financial stability issues.

How well do countries cope with the aftermath of natural disasters? In particular, do international financial flows help buffer countries in the wake of disasters? This paper focuses on hurricanes (one of the most common and destructive types of disasters), and examines the impact of hurricane exposure on resource flows to developing countries. Using meteorological data on storm paths, I construct a time-varying storm index that takes into account the fraction of a country's population exposed to storms of varying intensities. Across developing countries, greater hurricane exposure leads to large increases in foreign aid. For other types of international financial flows, the impact of hurricanes varies according to income level. In the poorer half of the sample, hurricane exposure leads to substantial increases in migrants' remittances, so that total inflows from all sources in the three years following hurricane exposure amount to roughly three-fourths of estimated damages. In the richer half of the sample, by contrast, hurricane exposure stimulates inflows of new lending from multilateral institutions, but offsetting declines in private financial flows are so large that the null hypothesis of zero damage replacement cannot be rejected.

International capital flows resumed in the 1970s. These international financial flows were often a driver for instability and crises instead of economic growth. The determinants of these crises varied over the years, but cross-border capital flows, fixed exchange rates were often involved. Incentive problems like moral hazard played a role, as did the structure of international lending and local policy choices. The successive waves of crises challenged the world to learn from and adapt to the new reality of financial flows with new policies. International lending and borrowing also created slow-burn, train-wreck-in-slow-motion debt crises in dozens of the world’s poorest countries. Unsustainable rises in foreign debt culminated in a powerful international movement in favor of debt relief. In these countries, odious debt—national debt piled up by despotic (and unaccountable) politicians—tended to crush the basis for economic growth for generations.

Because it justifies and supports our activities as researchers, investment advisers, traders, consultants and regulators, the level of investment in is an appropriate concern for investment professionals. As Modest Proposal explained, the working man should also care greatly about the investment level, because it determines his real wage.' There is an important link, however, between the level of wealth in and the distribution of wealth. Because poor people consume a larger fraction of their income than rich people do, an unequal distribution of wealth leads to more saving, hence more investment. Alas, the distribution of wealth is a bone of contention. A common notion is that them that has, gits, that it's hard to become rich unless you are rich to begin with. According to one influential critic of the American system, Personal savings . .. has little or nothing to do with the process [that generates a highly skewed distribution of wealth] . . . once a duke always a duke.2 The critic argues that if we could somehow spread wealth around more evenly, we could break the vicious circle of concentration begetting concentration. But he cautions: once-in-a-lifetime wealth tax . .. is too infrequent to place much of a constraint on an individual's wealth ... [ifl ... wants to prevent individuals from having massive net worths and the economic power that goes with large fortunes.3 In this view, the concentration of wealth is evidence of failure-failure of the free market system to achieve what society allegedly wants. To the extent the critic's ideas are widely shared, one would expect the poor to feel both limited responsibility for their condition and limited respect for the rich. Democratic governments' attempts to placate these feelings are costly. 1. Governments only redistribute wealth downward. 2. But poorer households save less than rich households. So redistribution reduces saving. 3. As we will show, redistribution by governments has no permanent effect. So governments redouble their efforts, again with no permanent effect, except to reduce aggregate saving, aggregate wealth and the real wage. The great Swiss-Italian economist Vilfredo Pareto discovered that, far from providing evidence of failures, actual wealth distributions for countries with widely differing emphases on redistribution had the same shape. This note offers an explanation for the observed similarity. It also argues that(1) There is no link between initial endowments and the ultimate distribution of wealth. (2) Contrary to the critic, personal savings behavior has everything to do with the ultimate distribution. (3) The distribution of wealth can never be used to document failures relating to earned income.

The EU's Emissions Trading Scheme: A Proto-Type Global System?

For a sample of low‐income countries, we analyse the behaviour of international financial flows during three periods: (i) the 2003–2007 global boom; (ii) the 2008–2009 crisis; and (iii) the 2010–2012 recovery phase. In particular, we examine aid‐adjusted net financial inflows, debt inflows, foreign direct investment inflows and official reserve outflows. We highlight the role of country characteristics in explaining the cross‐country variation in international financial flows during these different phases.

This study used the Autoregressive Distributed Lag model to investigate the impact of international financial flows on trade outwardness in Nigeria. With dataset covering the period 1999 – 2023 drawn from the World Development Indicator, which is a repository of the World Bank, official development assistance (ODA), Foreign portfolio investment (FPI) and foreign direct investment (FDI) were used as proxies for international financial flows. The quotient of the sum of export and import over gross domestic product represented trade outward which found to positively and significantly respond to changes in ODA and FPI and insignificantly and negative respond to FDI. It is recommended that trade outwardness should be tailored in the direction of international financial flows while harnessing the benefits of trade and mitigating the adverse effects of trade relations. This can be done through protective import strategies and export promotion methods.