Föhrenbergkreis Finanzwirtschaft

Unkonventionelle Lösungen für eine zukunftsfähige Gesellschaft

Archive for 6. August 2018

Putting FDI on the G20 Agenda

Posted by hkarner - 6. August 2018

Karl P. Sauvant

Karl P. Sauvant is Resident Senior Fellow at the Columbia Center on Sustainable Investment at Columbia University.

Axel Berger is a senior researcher at the German Development Institute.

With the right controls, foreign direct investment can be a reliable source of external finance to help countries meet their economic goals. But with many countries discouraging new FDI flows, rule-making and policy changes are urgently needed to help avoid costly investment wars.

NEW YORK – While much of the world’s attention is focused on the economic damage being wrought by US President Donald Trump’s trade wars, global trade’s twin – foreign direct investment – has largely been neglected. And yet, with FDI flows valued at $1.43 trillion in 2017 – on top of the $28 trillion already invested – how these flows are managed matters.

International investment has become an important source of external finance for many countries; for developing economies, in particular, FDI can exceed official development assistance by wide margins. But if FDI is to contribute meaningfully to economic growth and sustainable development, existing flows must increase even more. For that to happen, international investment policies need better coordination, and we believe that the G20 is the best forum to facilitate this process. Den Rest des Beitrags lesen »

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Cryptocurrencies and monetary policy

Posted by stgara - 6. August 2018

Date: June 28, 2018

Executive summary

This Policy Contribution tries to answer two main questions: can cryptocurrencies acquire the role of money? And what are the implications for central banks and monetary policy?

Money is a social institution that serves as a unit of account, a medium of exchange and a store of value. With the emergence of decentralised ledger technology (DLT), cryptocurrencies represent a new form of money: privately issued, digital and enabling peer-to-peer transactions.

Historically, currencies fulfil their main functions successfully when their value is stable and their user network sufficiently large. So far, cryptocurrencies are arguably falling short against these criteria. They resemble speculative assets rather than money. Primarily this is because of their inherent volatility, which is the by-product of their inelastic supply, and which limits their widespread use as a medium of exchange.

Cryptocurrency protocols could theoretically evolve to limit their volatility and correct their current deficiencies. If successful, this could lead to an increase in their popularity as an alternative to official currencies. A successful alternative to official currencies could put pressure on those who manage official currencies to provide better policies. Den Rest des Beitrags lesen »

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