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This paper applies global value chain analysis to study recent trends in the global automotive industry. The authors pay special attention to the effects of the recent economic crisis on the industry in developing countries. The principal finding is that the crisis has accelerated pre-crisis trends toward greater importance of the industry in the South. More rapid growth of car ownership is the impetus, but the co-location and close interaction of suppliers and lead firms in this industry is an important catalyst. Opportunities to move up in the value chain for suppliers in emerging economies have proliferated and are likely to become even stronger now that an increasing number of new models are developed specifically for markets in developing countries. The co-location of assembly and parts plants in national and regional production systems has largely confined the impact of sales declines during the crisis to each country/region. In addition, the different development strategies followed by countries like Mexico, China, and India are slowly converging as their industries gain size and independence.

Aftermarket --- Aggregate demand --- Debt Markets --- Domestic market --- Economic Theory & Research --- Emerging market --- Emerging markets --- Finance and Financial Sector Development --- International trade --- Inventories --- Labor market --- Labor Policies --- Macroeconomics and Economic Growth --- Market share --- Markets and Market Access --- Mass market --- Microfinance --- New product development --- Purchasing --- Sale --- Sales --- Social Protections and Labor --- Substitute --- Supplier --- Suppliers --- Supply contracts --- Surplus --- World markets

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This paper uses the central tool of an investment-savings and monetary-policy model with an augmented Philips curve and presents a few extensions of that model to analyze the multiplier effects of macroeconomic policies in the United States. In doing so, the authors incorporate realistic assumptions in the model related to the recent financial characteristics of the global economy. The monetary policy reaction function embeds a new augmented Taylor-rule incorporating housing and stock prices and the credit lending rate. And the household consumption and firm investment decisions incorporate housing and stock assets and the credit market frictions. The equilibrium income is derived and compared with the actual nominal gross domestic product of the United States for the period 1990 to 2009. More importantly, fiscal and trade multipliers are derived and discussed. The main finding is that government spending, tax cut, and trade multipliers are relatively smaller in size when more realistic features are incorporated in the model. The model simulation shows that the model can track actual gross domestic product reasonably well. The model should be further improved before it could be used for policy exercises.

Access to Finance --- Aggregate demand --- Assets --- Central bank --- Central banks --- Closed economy --- Debt Markets --- Development policy --- Economic Stabilization --- Economic Theory & Research --- Emerging Markets --- Equilibrium --- Finance and Financial Sector Development --- Fiscal policy --- GDP --- Gross domestic product --- Income --- Interest rate --- Interest rates --- Macroeconomic policies --- Macroeconomics and Economic Growth --- Monetary policies --- Monetary policy --- Multiplier effects --- Multipliers --- Private Sector Development --- Stock prices --- Wealth

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In this paper the authors apply global value chain (GVC) analysis to recent trends in the global automotive industry, with special attention paid to government interventions triggered by the recent economic crisis. The authors first highlight some of the defining characteristics of GVCs in this important industry, especially the unusually strong regional structure of production and sales. National political institutions create pressure for local content, which drives production close to end markets, where it tends to be organized nationally or regionally. They then examine policy reactions to the recent economic crisis, and provide some discussion of the government interventions in the industry. The authors end with a number of policy conclusions that highlight the likely impact of the interventions on the evolution GVCs and the growth of the industry in developing countries.

Aggregate demand --- Commodity prices --- Debt Markets --- Domestic market --- Durable goods --- Economic Theory and Research --- Emerging market --- Finance and Financial Sector Development --- Industry --- International trade --- Inventories --- Labor market --- Labor Policies --- Macroeconomics and Economic Growth --- Market share --- Markets and Market Access --- Purchasing --- Sale --- Sales --- Social Protections and Labor --- Substitute --- Supplier --- Suppliers --- Supply chain --- Surplus --- Target markets --- Total sales --- Water and Industry --- Water Resources --- World markets

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This paper discusses short-run and long-run effects of "green stimulus" efforts, and compares these effects with "non-green" fiscal stimuli. Green stimulus is defined here as short-run fiscal stimuli that also serve a "green" or environmental purpose in a situation of "crisis" characterized by temporary under-employment. A number of recently enacted national stimulus packages contain sizeable "green" components. The authors categorize effects according to their a) short-run employment effects, b) long-run growth effects, c) effects on carbon emissions, and d) "co-benefit" effects (on the environment, natural resources, and for other externalities). The most beneficial "green" programs in times of crisis are those that can stimulate employment in the short run, and lead to large "learning curve" effects via lower production costs in the longer term. The overall assessment is that most "green stimulus" programs that have large short-run employment and environmental effects are likely to have less significant positive effects for long-run growth, and vice versa, implying a trade-off in many cases between short-run and long-run impacts. There are also trade-offs for employment generation in that programs that yield larger (smaller) employment effects tend to lead to more employment gains for largely lower-skilled (higher-skilled) workers, so that the long-term growth effects are relatively small (large). Ultimately, the results reinforce the point that different instruments are needed for addressing different problems.

Aggregate demand --- Carbon --- Carbon emissions --- Climate change --- Climate Change Economics --- Climate Change Mitigation and Green House Gases --- Economic activity --- Economic growth --- Energy --- Energy Production and Transportation --- Environment --- Environmental --- Environmental cleanup --- Environmental Economics & Policies --- Environmental impacts --- Environmental policy --- Environmental protection --- Expenditures --- Externalities --- Macroeconomics and Economic Growth --- Natural resources --- Policy instruments --- Political economy --- Production costs --- Shadow prices --- Sustainable development --- Tradeoffs --- Transport --- Transport Economics Policy & Planning

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This paper uses the central tool of an investment-savings and monetary-policy model with an augmented Philips curve and presents a few extensions of that model to analyze the multiplier effects of macroeconomic policies in the United States. In doing so, the authors incorporate realistic assumptions in the model related to the recent financial characteristics of the global economy. The monetary policy reaction function embeds a new augmented Taylor-rule incorporating housing and stock prices and the credit lending rate. And the household consumption and firm investment decisions incorporate housing and stock assets and the credit market frictions. The equilibrium income is derived and compared with the actual nominal gross domestic product of the United States for the period 1990 to 2009. More importantly, fiscal and trade multipliers are derived and discussed. The main finding is that government spending, tax cut, and trade multipliers are relatively smaller in size when more realistic features are incorporated in the model. The model simulation shows that the model can track actual gross domestic product reasonably well. The model should be further improved before it could be used for policy exercises.

Access to Finance --- Aggregate demand --- Assets --- Central bank --- Central banks --- Closed economy --- Debt Markets --- Development policy --- Economic Stabilization --- Economic Theory & Research --- Emerging Markets --- Equilibrium --- Finance and Financial Sector Development --- Fiscal policy --- GDP --- Gross domestic product --- Income --- Interest rate --- Interest rates --- Macroeconomic policies --- Macroeconomics and Economic Growth --- Monetary policies --- Monetary policy --- Multiplier effects --- Multipliers --- Private Sector Development --- Stock prices --- Wealth