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This paper is based on expert discussions on how airport capacity could be improved to benefit the users of aviation, without building new airport infrastructure. These discussions took place at a Roundtable meeting of 34 experts held in Querétaro, Mexico in March 2017. Roundtable participants took a view that any congested airport represents a market failure with rents accruing either to airlines and/or elsewhere along the value chain. Administrative slot allocation, while it can help achieve particular connectivity outcomes, cannot allocate capacity in a market efficient way. Allocating capacity through market based instruments such as slot auctioning can achieve that goal, but it currently is both technically and politically difficult to implement without creating significant disruption to the network. The distributive impacts of slot allocation regimes and any trade-offs from potential changes to them thus need to be considered by policy makers before deciding on any capacity allocation measures. Participants agreed that a multi-faceted approach is needed to improve welfare of aviation users, which in particular needs to take advantage of technological change in the sector.

Reflecting the critical outcome of the Millennium Declaration and theWorld Summit 2005 which highlighted democratic governance as a requirement for inclusive development and the achievement of the Millennium Development Goals, countries are increasingly pressed to assess and measure their progress towards democratic governance as both end and means. As a direct effect of this encouraging trend, UNDP Country Offices register a rising demand to assist national counterparts develop their capacity to engage in nationally owned and driven democratic governance assessments.

This note provides an assessment of the regional capacity of 27 EU countries, Switzerland, Turkey and the United States to transition to remote working during a lockdown situation. It also shows that large cities typically have a higher share of occupations amenable to remote working. To a certain degree, this may compensate for the higher economic impact of COVID-related measures on cities. Capacity for remote working can affect lockdown costs differently across places.

Capital services measures have long been recognised as the appropriate concept to capture capital input in production and productivity analysis. However, only few countries’ statistical agencies construct and publish such capital services measures. This paper describes capital services measures developed by OECD and presents estimation methods and results for the G7 countries. By way of example, the consequences of applying capital services measures instead of measures of gross or net capital stocks in the computation of rates of multi-factor productivity growth are examined for three countries, the United States, France and Australia ...

The results of an IMF study on controls on capital inflows in emerging economies, using a probit regression approach, are first replicated and tested for stability. The IMF results, downplayed by the authors, have been used by others to suggest controls can be helpful in a crisis situation. However, the stability findings suggest the results are not sufficiently robust to make strong claims in this regard. The same 37 countries and the IMF capital control measures are then used in a panel regression study to examine the impact of capital inflows on annual real GDP growth around the Global Financial Crisis. The results between the pre-crisis and the crisis periods are inconsistent with the IMF study – finding that capital restrictions on inflows (particularly debt liabilities) are most useful in good times when inflows to emerging markets are strong and upward pressure on managed exchange rates and reserves accumulation is greatest. However, lower controls on bonds and on FDI inflows seem to be associated with better growth outcomes during the crisis period studied. These findings are more consistent with studies that see capital controls as part of exchange rate targeting policies and concerns about excess reserves accumulation.
JEL Classification: C23, C25, F21, F43, G01
Keywords: Capital controls, economic growth, emerging economies, financial crisis

In a financially interconnected world, individual countries’ policy choices affect other economies and can become a source of international shocks. Leveraging on a new quarterly dataset of capital control adjustments, we find renewed evidence that the introduction of capital controls in one economy increases capital inflows to other similar borrowing economies.

This paper assesses whether current policy environments are appropriate for the emergence of cloud computing technology. In particular, this research uses firm level data for Germany and the United Kingdom to examine the impact of capital incentive programmes (a common policy present in most OECD countries) on cloud adoption. The design for many of these policies target investments in physical capital while excluding digital services like the cloud. Firms view digital investments and digital services as substitutes, therefore narrowly defined incentive programmes may actually discourage the use of emerging tools like cloud computing, which are found to enable the growth and performance of young entrants. Overall, the results find that while capital incentive policies encourage firm investments in ICT and other forms of capital, they actually reduce the probability of cloud adoption. Policy makers may therefore need to reconsider the design of capital incentive programmes within their jurisdictions.

This paper analyses how technological progress embodied in capital goods raises productivity and income, while at the same time it can modify the allocation of consumption, investment and the capital stock. With capital-embodied technological progress, new capital goods become more productive, thus more valuable, but the production capacity of the existing capital goods declines comparatively and they become less valuable. In a dynamic and stochastic general equilibrium framework, a shock to the process of capital-embodied technological progress is shown not to raise investment as much as could be expected, allowing the owners of capital goods mainly to raise consumption instead. As a result, overall capacity taking account of the improvement in the quality of capital goods rises only modestly. The muted investment response might seem very conservative, because the owners of capital could take greater advantage of the sudden acceleration in the improvement of the quality of capital goods which allows them to raise their production capacity more than usually. However, this conservative behaviour is consistent with an anticipated faster decline in the value of capital goods which become quickly obsolete, raising the cost of capital for the owners. Finally, this paper analyses the implications of the shock to capital-embodied technological progress coinciding with other shocks, namely, a positive one to the investment accelerator mechanism and a negative one to the risk premium. With deceleration in the quality improvement of capital goods, investors would require higher rates of return while affecting negatively the valuation of the capital stock.