General Meeting (9.23.2013)

Undergraduate Economics AssociationFirst Meeting(9/12/13)

Undergraduate Economics Association

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Announcements

Econ Talk Sunday, Sept. 15, 12:00pm in GSU Starbucks

Writing Committee + STATA Workshop Sunday, Sept. 29, 1:00-2:00 pm in CAS 322

UEA Article Competition Tuesday, Oct. 22

Undergraduate Economics Association

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Announcements

Luke Rebecchi’s Article: The Ironic Implications of Relativism

Undergraduate Economics Association

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Opportunities

Sales Development ProgramVirtual Info Session: Thurs, 9/269pm – 10pm PST

https://attendee.gotowebinar.com/register/5362629723283066368 Learn the retail structure of the many

brands Attain sales and corporate experience 3-5 year program

Field Sales Leadership ProgramVirtual Info Session: Thurs, 9/262pm – 3pm PST

https://attendee.gotowebinar.com/register/1461167743259911680 Help in the selling and promoting of the

best brands Real-time decision making Coaching and developing your team 1 year program

Undergraduate Economics Association

Platform for gaining insights into today’s economic issues

Platform for generating discussions on economic issues

Platform for showcasing your talent

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Our mission is to socially, academically, and professionally develop Boston University students interest in the economics field.

Mission

Undergraduate Economics Association?

Undergraduate Economics Association

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UEA Website

Student Writers Article Competition

UEA Journal

Database Events

Gallery Constitution

Presentations

Economics Calendar

Case Competition

BUUEA.com

Undergraduate Economics Association

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UEA Event

Résumés, Cover Letters and CVs

Tuesday, Oct. 1st, 7-8 p.m. at CAS 211 To learn the differences between résumés & CVs How to write a formal and perfect cover letter Very important skills for jobs, research positions and life! You require CVs for UROP or any research positions Don’t miss it!

The World Bank

The International

Monetary Fund

and

Bretton Woods, 1944• How can we prevent another depression?

• Control the (new) international financial markets

• How can we contain the spread of communism?

• Link the world markets to the US

• Peg world currencies to dollar (+- 1%)

• Dollar stays linked to gold at price of $35 per ounce

Washington Consensus, 1980

• Breakdown of Bretton Woods system

• Liberalization of international financial system

• Debt Crisis

• The need to meet interest payments was lead by IMF

• Protect the international financial system (banks)

• Ensure Payment

• New loans to help meet these payments

• Net income for IFI’s

Hard Power vs. Soft

Power

The IMF – “Hard Power”• The “Fire Brigade”

• Emergency Financing

• Balance of payments assistance

• Fundamental Disequilibrium

• Debt rollover

• Bridge the gap between payments

The IMF – “Soft Power”• Signaling / Surveillance

• Publishing country reports

• Provides potential investors with information

confidence

• Lock-in Effect

• Conditionality allows countries to push blame

onto IMF

• Think-Tank

• Publishes Working Papers

• Controls Data

• The IMF Institute

• Created for foreign government officials (technocrats)

• Helps find interlocutors in potential clientele

IMF Projects

• Mexico

• 1980’s

• Series of economic reforms

• 1990’s

• Widening of exchange rate band

• Rapid capital outflow

• Greece, Ireland, Portugal

• Late 2000’s

• Sovereign Debt Crisis, Banking Crisis

• Governments took on private debt

• IMF called in

The World Bank (Group)

The World Bank

Three World Bank Agencies

• The IBRD

• Lends to creditworthy low and middle income countries

• The IDA

• Provides interest-free loans (credits) to the lowest income countries

• The IFC

• Works exclusively with development in the private sector

The World Bank – “Hard Power”

• “Potholes and Pipes”

• Structural Adjustment Lending

• Initially:

• Infrastructure Development

• Now:

• Many general projects (environmental, societal issues)

• “Only Economic considerations shall be relevant to their decisions”

• (Article IV, section 5)

• Non-GNP Based goals (McNamara, 1968)

The World Bank – “Soft Power”

• World Development Report

• Annual report on areas of important economic development

• Research Grants

• Think Tanks

• Creates civil society experts

• Field-oriented

• Ex-ante conditionality

World Bank Projects

• The IBRD

• Tunisia

• “Improving business environment by removing red tape”

• “Advancing transparency through improved public access to information”

• The IDA

• Nicaragua

• Rural development

• Gender issues

• The IFC

• Microfinance companies

Funding

• Largely determines votes

• (IMF) US 17%, EU 32%, China 4%

• IMF: Special Drawing Rights (SDRs)

• World Bank: US Dollars

• “Small Quota Policy”

• Weighted Voting

• Super-majority requirements for loan disbursement

The Polak Model

• Based on a series of conditions

• Identified crises as short-term liquidity crisis or balance of payments

• GDP growth should = money supply growth

• Easy data: banking system assets and liabilities

• Monetary targets

• Balance of payment problems?

• Buzzword: Austerity

• Reduce government spending, increase taxes, reduce domestic credit creation

Conditionality• When borrowing from IFI’s, countries agree to

specific policy prescriptions

• Loan disbursement is contingent on following the policies

• E.g., Eurozone Crisis, Greece

• Spending cuts, tax increases

• Predicted growth returning after a few years of downturn

• The problem of ex-post conditionality

• Discussions usually involve isolated economically focused governmental areas

• E.g., Central Banks, Finance Ministers, etc.

• May be blocked by parliaments or other government organs

“Western” Influences

• IMF Managing Director – European

• Christine Lagarde

• World Bank President – American

• Jim Yong Kim

“Western” Influences

• The Case of the IDA

• Special Fund

• 1970’s, Vietnam

• Influence in the IMF

• No specific injunction such as World Bank

• The Fund shall “respect the domestic social and political policies of members” (Article IV, section 3)

Collaboration

• Occasionally the IMF and World Bank will work together to create loan agreements

• Cross-Conditionality

• Sometimes this can fail

• 1988, Argentina

• Pressure from US Government

• IMF: Further Austerity

• World Bank: Wanted prioritization on its policy reforms

• “Letter of Development Policy”

The Future

• How can the IFI’s lend in an unbiased manner?

• Difficult due to sovereign interests

• Is ex-ante conditionality the future of lending?

• “Soft” Power may be easier to utilize

• Is it possible to create a technocrat based institution that is open to new ideas?

• ???

References

• Woods, Ngaire. The Globalizers: The IMF, the World Bank, and Their Borrowers. Ithaca, NY: Cornell UP, 2007. Print

• http://www.worldbank.org/en/about

• http://econ.worldbank.org/

• http://www.imf.org/external/index.htm

• http://www.imf.org/external/pubs/ft/fandd/2008/06/people.htm

• http://www.systemdynamics.org/conferences/2001/papers/Grcic_1.pdf

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Student Writers Simply write an article and send it to [email protected] or [email protected],

[email protected] All articles are eligible for the BU UEA Article Competition & BU UEA Journal

Article Competition The BU Article Competition takes place twice a semester Winners are chosen by a formula: 0.28(quantity) + 0.14(quality) + 0.58(traffic)

UEA Journal All student-written articles are eligible for the BU UEA Journal Articles are chosen based on quality each semester The Journal is virtually distributed to members, professors, and alumni

Writing Committee Email via [email protected] or [email protected], [email protected] Not required to be Student Writers If you want to present then come to the meetings as well!

How You Can Get Involved

STATA Workshop Come to the Writing Committee meetings on Sunday 1-2 pm, CAS 322 No need of prior knowledge of STATA. Experienced users are welcomed as well!

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Announcements

Econ Talk Sunday, Sept. 29, 12:00pm in GSU Starbucks

Writing Committee + STATA Workshop Sunday, Sept. 29, 1:00-2:00 pm in CAS 322

BU Career Development Office (CDO) CV + Resume Workshop Tuesday, Oct. 8th, 7:00-8:00 pm in CAS 322

Undergraduate Economics Association

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UEA Event

Résumés, Cover Letters and CVsTuesday, Oct. 1st, 7-8 p.m. at CAS 211

Undergraduate Economics Association

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