The following list of publications has been selected to be indicative of the recent research output of CIEPS. Further more detailed information on publications may be gathered by following the links to the Institute’s research associates under the ‘people’ tab. In all the areas identified, research at the Institute is on-going and will lead to further publications.

International capital flows: surges, reversals, financial and currency crises.

In a world with increased financial globalization it has become vitally important to better understand the international movement of capital and its consequences. While international capital flows can be beneficial, their volatility – shifting from surges of international capital into countries, to sudden stops or a capital flow reversals – can create problems for economic management within countries. Capital volatility can also threaten the stability of the international monetary system and the world economy. Large capital inflows can result in credit booms and overvalued exchange rates. Capital outflows may, in principle, contribute to banking and currency crises as well as currency crashes. Research at CIEPS has investigated the causes of surges and reversals, drawing on insights from behavioral finance, political economy and principal-agent analysis. An important part of the research has sought to improve the measurement of surges and reversals. The research has also investigated the extent to which international financial markets provide discipline over domestic macroeconomic policies, and whether currency and banking crises result in learning that reduces the future incidence of such crises. On-going research is examining the relationship between capital flow reversals, currency crises and currency crashes.

Selected recent publications
Almahmood, H., Munyif, M. A., and Willett, T.D. (2018). ‘Most Speculative Attacks Do Not Succeed: Currency Crises and Currency Crashes,’ Journal of International Commerce, Economics and Policy, 9 (01n02), 1850001.

Efremidze, L., Kim, S., Ozan, S., and Willett, T.D. (2017). ’The Relationships among Capital Flow Surges, Reversals, and Sudden Stops,’ Journal of Financial Economic Policy, 9(3): 284-301.

Amri, P.D., Richey, G., and Willett, T.D. (2016). ‘Credit Booms and Capital Surges: How Tight is the Relationship?’ Open Economies Review, 27(4): 637-660.

Bird, G. (2016). ‘Towards a Better Understanding of International Capital Volatility,’ World Economics, 17 (3): 1-24.

Efremidze, L., Rutledge, J., and Willett, T. D. (2016). ‘Capital Flow Surges as Bubbles: Behavioral Finance and McKinnon’s Over-borrowing Syndrome Extended,’ Singapore Economic Review, 61 (2): 1-27.

Crystalin, M., Efremidze, L., Kim, S., Nugroho, W., Sula, O., and Willett, T.D. (2015). ‘How Common Are Capital Flow Surges? How They Are Measured Matters A Lot,’ Open Economies Review, 26 (4): 663-682.

Willett, T.D., and Wihlborg, C. (2013). ‘Varieties of European Crises,’ in G. Caprio, ed. The Encyclopedia of Financial Globalization, New York, Academic Press.

The financial and economic crises in the Eurozone.

The Eurozone represents an experiment in monetary integration. However, the crises that have been experienced show the difficulties that are encountered in such a process. To avoid future problems, it is important to fully understand the economic and political factors that led to the crises, as well as those that influenced the effectiveness of the policy responses. Research at CIEPS has taken the crises in the Eurozone as an opportunity to examine whether financial markets are ‘efficient’ or whether they are driven by behavioral characteristics. It has also examined the relationship between fiscal imbalances in the Eurozone countries and the incidence of crises. Other contributions have examined the political economy of the Eurozone and the involvement of the IMF in the crisis. This reflects the philosophy of CIEPS in drawing on the full range of economic theory and the importance of integrating this with political and institutional analysis in order to inform the design of policy.

Selected recent publications
Bird, G., Du, W., and Willett, T. D. (2017). ‘Behavioral Finance and Efficient Markets: What Does the Euro Crisis Tell Us?’ Open Economies Review, 28 (2): 273-295.

Bird, G. (2015). ‘The IMF’s Uneasy Excursion into the Euro Zone,’ (2015). World Economics, 16 (3): 58-79.

Willett, T.D., and Srisorn, N. (2014). ‘The Political Economy of the Euro Crisis: Cognitive Biases, Faulty Mental Models, and Time Inconsistency,’ Journal of Economics and Business, 76 (C): 39–54.

Bird, G., and Mandilaras, A. (2013). ‘Fiscal Imbalances and Output Crises in Europe: Will the Fiscal Compact Help or Hinder?’ Journal of Economic Policy Reform, 16 (1): 1-16.

Bird, G. (2012). ‘Breaking Up Is Hard to Do: the Eurozone and the Political Economy of Monetary Disintegration,’ World Economics, 13 (3): 1-12.

Willett, T.D., Wihlborg, C., and Zhang, N. (2010). ‘The Euro Debt Crisis: It Isn’t Just Fiscal,’ World Economics, 11 (4): 51-77.

Financial contagion

Economic and financial crises are not contained only within the countries in which they initially occur. Contagion from crises has become a familiar phenomenon in many parts of the world. Research at CIEPS initially focused on contagion associated with crises in Mexico, parts of Asia, and Russia in the 1990s. More recently it has examined it within the context of recent crises in the Eurozone. The research has explored the nature of contagion, and whether some countries appear to be more insulated from it than others. It also examines the factors that appear to make countries particularly vulnerable to contagion. In this regard, it analyses the extent to which contagion occurs through trade or through financial connections, as well as investigating the importance of political developments and changes in market sentiment.

Selected recent publications
Bird, G., Du, W., Pentecost, E. and Willett, T. D. (2017). ‘Was It Different the Second Time? An Empirical Analysis of Contagion during the Crises in Greece 2009-15,’ The World Economy, 40 (12): 2530-2542.

Bird, G., Du, W., Pentecost, E., and Willett, T.D. (2017). ‘Safe Haven or Contagion? The Disparate Effects of Eurozone Crises on Non Eurozone Neighbours,’ Applied Economics, 49 (59): 5895-5904.

Bird, G., Du, W., and Willett, T. D. (2017). ‘Behavioral Finance and Efficient Markets: What Does the Euro Crisis Tell Us?’ Open Economies Review, 28 (2): 273-295.

Mandilaras, A., and Bird, G. (2010). ‘A Markov Switching Analysis of Contagion in the EMS,’ Journal of International Money and Finance, 29 (6): 1062-1075.

The political economy of the IMF: its role and operations

The role and operations of the IMF are of central importance to the efficient functioning of the world economy. Its policies exert a significant effect on the well-being of billions of people world-wide. However, much of the discussion of the IMF has historically been polemic in style and has not been strongly based on sound theoretical and empirical research. Research based at CIEPS has provided an analytically rigorous foundation for informing and influencing the operations of the International Monetary Fund. The research has often challenged conventional views and has sought to offer insights by straddling traditional disciplinary boundaries and incorporating a blend of research methodologies. It has exerted a significant impact on policy. On-going research is investigating the effects of IMF programs on a range of macroeconomic variables, the design of international macroeconomic policy, and the relationship between IMF programs and poverty and income distribution in low income countries.

Selected recent publications
Bird, G., and Rowlands, D. (2017). ‘The Effect of IMF Programmes on Economic Growth in Low Income Countries: An Empirical Analysis,’ Journal of Development Studies, 53 (12): 2179-2196.

Bird, G., and Rowlands, D. (2016). The International Monetary Fund: Distinguishing Reality from Rhetoric, Edward Elgar Publishing, 224 pp.

Bird, G., Mylonas, J, and Rowlands, D. (2015). ‘The Political Economy of Participation in IMF Programs: A Disaggregated Empirical Analysis,’ Journal of Economic Policy Reform, 18 (3), pp. 221-243

Bird, G., and Rowlands, D. (2014). ‘IMF Programs: Participation, Implementation and Effects,’ in Thomas Oatley and W. Kindred Winecoff (eds) Handbook of the International Political Economy of Monetary Relations, Edward Elgar Publishing.

Bird, G., and Mandilaras, A. (2011). ‘Once Bitten: The Effects of IMF Programs on Subsequent Reserve Behavior,’ Review of Development Economics, 15 (2): 264-278.

Bird, G., and Rowlands, D. (2010). ‘The Episodic and Unpredictable Nature of IMF Lending: An Empirical Analysis,’ The World Economy, 33 (10): 1280-1301.

Arpec, O., and Bird, G. (2009). ‘Turkey and the IMF: A Case Study in the Political Economy of Policy Implementation,’ Review of International Organizations, 4 (2): 135-157.

Bird, G. (2009). ‘Reforming IMF Conditionality: From Streamlining to Major Overhaul,’ World Economics, 10 (3): 81-104.

Bird, G., and Rowlands, D. (2009). ‘A Disaggregated Empirical Analysis of the Determinants of IMF Arrangements: Does One Model Fit All?’ Journal of International Development, 21: 915-931.

Bird, G., and Rowlands, D. (2009). ‘The IMF’s Role in Mobilizing Private Capital Flows: Are There Grounds for Catalytic Conversion?’ Applied Economics Letters, 16 (17): 1705-1708.

International macroeconomic policy, the trilemma and exchange rate regimes

The selection of international macroeconomic policy is frequently presented in terms of the international policy trilemma that argues that countries cannot simultaneously have a pegged exchange rate, monetary independence and an open capital account. In analyzing the policies adopted, it is likely that there will be a number of factors at work. Research based at CIEPS has investigated the stability of the choices made and the impact of the global economic and financial crisis in 2008/09. The research has, in particular, investigated the choice of exchange rate regimes and the conduct of monetary policy, across a range of emerging and developing economies. Where countries can sterilize capital flows they may, in the short run, be able to circumvent the constraints imposed by the trilemma, and research at CIEPS has investigated the extent to which emerging economies have been able to do this. It has also examined the behavior of these countries in terms of the accumulation and depletion of international reserves. As in other areas, an important element of the research conducted at CIEPS has been to try and improve the measurement of the relevant variables, particularly in terms of policy regimes and financial interdependence.

Selected recent publications
Bird, G., and Mandilaras, A. (2015). ‘Transitions in Exchange Rate Regimes in the Aftermath of the Global Economic Crisis,’ Applied Economics Letters, 22 (7): 567-571.

Popper, H., Mandilaras, A., and Bird, G. (2013). ‘Trilemma Stability and International Macroeconomic Archetypes,’ European Economic Review, 64: 181-193.

Bird, G., Mandilaras, A., and Popper, H. (2012). ‘Is There a Beijing Consensus on International Macroeconomic Policy?’ World Development, 40 (10): 1933-1943.

Willett, T.D., and Angkinand, P. eds, (2011, 2012), International Comparisons of Financial Policies and Their Interactions, Journal of Financial Economic Policy, Special Issues, 4 and 1.

Willett,T.D., Kim,Y. and Nitihanprapas, I. (2012). ‘Measuring Exchange Rate Flexibility: a Two-Parameter Exchange Market Pressure Approach,’ Global Journal of Economics, 1(1): 701-728.

Bird, G., and Mandilaras, A. (2010). ‘Revisiting Mrs. Machlup’s Wardrobe: The Accumulation of International Reserves, 1992-2001,’ Applied Economics Letters, 17 (5): 467-471.

Willett, T.D., Al-Barwani, K., and El Hag, S. (2010). ‘The GCC’s Fixed Exchange Rate: A Major Anomaly of OCA Analysis,’ The World Economy, 33 (12): 1702-1717.

Ouyang, Y-F, Rajan, R., and Willett, T.D. (2010). ‘China as a Reserve Sink,’ Journal of International Money and Finance, 29 (5): 951-972.

Bird, G., and Rowlands, D. (2009). ‘Exchange Rate Regimes in Developing and Emerging Economies and the Incidence of IMF Programs,’ World Development, 37 (12): 1839-1848.

International and comparative political economy

For many years there was little interaction between economists and political scientists who were interested in international issues. This was to the detriment of both disciplines. CIEPS has been one of the leaders in a successful movement to break down these disciplinary barriers. Since its inception, the Institute has been in the vanguard of developing the field of international and comparative political economy. Recent areas of investigation have included: the influence of domestic special interests on economic policy, and the ways in which limited information, faulty mental models, cognitive biases, and time inconsistency problems have contributed to the adoption of ineffective and inefficient domestic and international financial policies. A better understanding of the biases involved is essential for the design and development of practical strategies to improve policy.

Selected recent publications
Lee, D., and Rodgers, M. (2018). ‘Inter-Regional Inequality and the Dynamics of Government Spending.’ Journal of Politics, forthcoming.

Amri, P. D. and Willett, T.D. (2017). ‘Policy Inconsistencies and the Political Economy of Currency Crises.’ Journal of International Commerce, Economics and Policy, 8(4): 175-199.

Feng, Y., Jiang, W. and Yu, Z. (2015). ‘Economic, Political and Resource-Based Models of Chinese Contracts in Africa: An Empirical Analysis.’ The Chinese Economy 48 (3): 215–34.

Cohen, B.J., and Chiu, E. (2014). Power in a Changing World Economy: Lessons from East Asia, London, Routledge.

Willett, T.D., Chiu, E., and Walter, S. (2014). ‘Fixed Exchange Rates and Financial Markets as Sources of Macroeconomic Discipline,’ in Thomas Oatley and W. Kindred Winecoff (eds), Handbook of the International Political Economy of Monetary Relations, Edward Elgar Publishing.

Feng, Y. (2013). ‘Global Power Transitions and Their Implications for the 21st Century,’ Pacific Focus, 27 (4): 170-189.

Fisunoğlu, A., Kugler, J., and Yeşilada, B. (2013). ‘Consequences of Reversing the European Union Integration,’ Foreign Policy Analysis, 11 (1): 1-23.

Bird, G., (2012). ‘Dealing with Global Economic Imbalances: the Political Economy of Policy Coordination,’ Global Economic Review, 41 (4): 299-317.

Willett, T.D., and Chiu, E. (2012). ‘Power Relationships and the Political Economy of Global Imbalances,’ Global Economic Review, 41 (4): 341-360.

Walter, S., and Willett, T.D. (2010). ‘Delaying the Inevitable: A Political Economy Approach to Currency Defenses and Depreciation,’ Review of International Political Economy, 19 (1): 114-139.

Bird, G., and Willett, T.D. (2008). ‘Why Do Governments Delay Devaluation: The Political Economy of Exchange Rate Inertia,’ World Economics, 9 (4): 55-74.

China and the world economy

China’s economic resurgence has lifted hundreds of millions of people out of poverty and has had a large impact on the global economy. At times this has generated serious global adjustment problems which in turn have resulted in major policy disputes. China also faces many important domestic challenges. Economic growth at the level achieved in the early 2000s is unlikely to be sustainable, and China also faces many issues in developing efficient financial markets as well as the international role of the renmimbi. In addition, the interactions between Chinese and global macroeconomic and financial developments have become prominent issues. Claremont faculty and students, and CIEPS, have been undertaking research and policy analysis on such issues for many years. Topics in recent CIEPS research have included: China’s exchange rate, monetary and financial policies, the behavior of the financial sector, international economic and financial interdependence, and China’s foreign investment.

Selected recent publications
Burdekin, R. and Siklos, P. (2018). ‘Quantifying the Impact of the November 2014 Shanghai-Hong Kong Stock Connect,’ International Review of Economics and Finance, 57: 156-163.

Feng, Y., Gao, Z., and Jiang, W. (2018). ‘An Empirical Study of the Determinants of Chinese Contracts,’ Economic and Political Studies. 6 (1): 91-117.

Burdekin, R. and Tao, R. (2017). ‘An Empirical Examination of Factors Driving the Offshore Renminbi Market,’ China Economic Journal, 10 (3): 287-304.

Feng, Y., Jiang, W. and Yu, Z. (2015). ‘Economic, Political and Resource-Based Models of Chinese Contracts in Africa: An Empirical Analysis,’ The Chinese Economy, 48 (3): 215-234.

Burdekin, R. and Tao, R. (2014). ‘Bank Lending Margins in China and the Effects of the June 2012 Liberalization,’ Journal of International Commerce, Economics and Policy, 5 (2): 1450003.

Bird, G., Mandilaras, A., and Popper, H. (2012). ‘Is There a Beijing Consensus on International Macroeconomic Policy?’ World Development, 40 (10): 1933-1943.

Li, L., Willett, T.D., and Zhang, N. (2012). ‘The Effects of the Global Financial Crisis on China’s Financial Market and Macroeconomy,’ Economic Research International, Vol 2012, 961694: 1-6.

Burdekin, R. ed. (2011). Special Issue on ‘China after the Global Financial Crisis,’ Economics Research International.

Burdekin, R. and Tao, R. (2011). ‘An ABC Guide to Provincial Lending Patterns in China: Progress and Prospects’ The Chinese Economy, 44 (5): 34-54.

Ouyang, Y-F, Rajan, R., and Willett, T.D. (2010). ‘China as a Reserve Sink,’ Journal of International Money and Finance, 29 (5): 951-972.

Liang, P. Ouyang, A. and Willett, T.D. (2009). ‘The RMB Debate and International Influences on China’s Money and Financial Markets,’ in James Barth and John Tatom, eds., China’s Emerging Financial Markets: Challenges and Opportunities, Milken Institute: 267-301.

Burdekin, R. and Siklos, P. (2008). ‘What Has Driven Chinese Monetary Policy Since 1990? Investigating the People’s Bank’s Policy Rule,’ Journal of International Money and Finance, 27 (5): 847-859.

Burdekin, R. (2008). China’s Monetary Challenges: Past Experiences and Future Prospects, New York, Cambridge University Press.

International Development and Development Policy

Development studies is a broad field, incorporating a range of disciplines and methodologies. Even at the disciplinary level there are sub divisions. In economics there are both micro and macro dimensions of development. Whilst CIEPS does not aim to be comprehensive in its research into development, it has nevertheless made important contributions to the literature and policy discussions in the following areas: the impact of IMF programs on economic growth, poverty and income distribution in low income countries; foreign aid and external debt; measures to help in achieving the Sustainable Development Goals; the sources of economic growth; corruption and its effects on economic and social development.

Selected recent publications
Feng, Y., Gao, Z., and Zhang, H. (2018). ‘What Leads to Official Corruption in China? A Politico-Economic Analysis of Economic Opportunities and Government Corruption across China’s Provinces,’ Journal of Post-Communist Economies, 30 (3): 273-289.

Bird, G., and Rowlands, D. (2017). ‘The Effect of IMF Programmes on Economic Growth in Low Income Countries: An Empirical Analysis,’ Journal of Development Studies, 53 (12): 2179-2196.

Klitgaard, R. (2017). ‘Corruption,’ in Battersby, P., Roy, R., and Guevara, J.R., eds, International Development: Inquiries in Global Development Practice, Sage Press.

Feng, Y., and Baig,S. (2016). ‘Democracy-Governance-Corruption Nexus: Evidence from Developing Countries,’ Journal of Pakistan Applied Economics, (Special Issue): 43-70.

Feng, Y., Azam, M. (2016). ‘Does Military Expenditure Increase External Debt? Evidence from Asia, Defence and Peace Economics. 28 (5): 550-567.

Klitgaard, R., Fedderke, J.W., and Napolioni, V. (2016). ‘Development Given Geography, Climate and Genes,’ World Bank Economic Review: Papers and Proceedings.

Bird, G. (2010). ‘The SDR Aid Link: It’s Now or Never,’ Development Policy Review, 28 (1): 63-74.

Powell, R., and Bird, G. (2010). ‘Aid and Debt Relief in Africa: Have They Been Substitutes or Complements?’ World Development, 38 (3): 219-227.

Contemporary issues in economic policy

An important part of the role of the CIEPS is to offer informed and rigorous analysis of contemporary issues of economic policy, both at the level of individual countries and the world. In addition to the publications already listed, an outlet for much of this work has been the journal World Economics. This was established by the Oxford Institute of Economic Policy at the University of Oxford and aims to provide the ‘best current thinking on a range of important policy issues in a way that combines rigor and readability.’ The areas where CIEPS has made a contribution include: the design of financial and fiscal policy in the aftermath of the global economic and financial crisis in 2008/09; the international coordination of macroeconomic policy by the IMF and G20; currency wars; global economic imbalances; the evolution of global reserves and the role of the US dollar and Special Drawing Rights; the design of a global financial safety net; and monetary integration in Europe.

Selected recent publications
Bird, G. (2019). ‘Designing a Global Financial Safety Net,’ World Economics, 19 (1).

Bird, G. (2018). ‘Trumponomics and Taxation,’ World Economics, 18 (1): 173-191.

Bird, G. (2017). ‘Assessing the G20’s Mutual Assessment Process: A MAP but Little Direction,’ World Economics, 18 (2): 83-106.

Bird, G. (2016). ‘Now You See Them, Now You Don’t: The Case of the Shrinking Global Economic Imbalances,’ World Economics, 17 (4):

Bird, G. (2016). ‘Fiscal Policy and the Global Crisis,’ World Economics, 17 (1): 147-176.

Bird, G. (2014). ‘Macroeconomic Policy in Open Economies: Why Do Economists Disagree?’ World Economics, 15 (3): 121-141.

Massoud, A., and Willett, T.D. (2014). ‘Egypt’s Exchange Rate Policies After the Float,’ International Journal of Social Science Studies, 2 (4): 1-16.

Bird, G. (2013). ‘Managing a Changing World Economy: Challenges and Scenarios,’ World Economics, 14 (4): 99-122.

Bird, G. (2013). ‘The Collapse of Consensus: the Contemporary Confusion over Macroeconomic Policy,’ World Economics, 14 (1): 141-152.

Bird, G. (2012). ‘Managing Capital Surges,’ World Economics, 13 (1): 173-188.

Willett, T.D. (2012). ‘The Role of Defective Mental Models in Generating the Global Financial Crisis’, Journal of Financial Economic Policy, 4 (1): 41-57.

Bird, G. (2011). ‘Prospects for the Evolution of Global Reserves,’ World Economics, 12 (3): 191-212.

Bird, G. (2011). ‘Fault Lines and Fractures Threatening the World Economy,’ World Economics, 12 (3): 219-224.

Bird, G. (2011). ‘The G20 After the Seoul Summit: G Force or G String,’ World Economics, 12 (1): 193-202.

Bird, G., and Willett, T.D. (2011). ‘Currency Wars: Rhetoric and Reality,’ World Economics, 12 (4): 121-136.

Bird, G., and Rowlands, D. (2010), ‘The IMF and the Challenges it Faces,’ World Economics, 11 (4): 131 – 156.

Bird, G. (2010). ‘The Eurozone: What Now?’ World Economics, 11 (3):41-59.

Bird, G. (2010). ‘Special Drawing Rights: How Fashions Change,’ World Economics, 11 (1): 83-98.

Willett, T.D. (2010). ‘Some Lessons for Economists from the Financial Crisis,’ Indian Growth and Development Review, 3(2): 186-208.

Bird, G. (2009). ‘So Far So Good, But Still Some Missing Links: A Report Card on the G20 London Summit,’ World Economics, 10 (2): 1-10.

Bird, G. (2009). ‘The Dangers of Déjà Vu Economics,’ World Economics, 10 (1): 157-16.

Bird, G. (2008). ‘Unwinding Global Economic Imbalances: What’s Growth Got to Do with It?’ World Economics, 9 (3): 211-215.