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New approach to help ease poor countries’ debt burden Many face having national credit rating downgraded Aston University expert coins the term the ‘credit rating impasse’ in new book. An Aston University financial regulation expert has suggested a new approach to help ease poor countries’ debt burden. Currently many poorer countries face having their credit rating downgraded if they ask private investors for loans. Dr Daniel Cash, senior lecturer in law and founder of the Credit Rating Research Initiative, has suggested that a temporary change to the way ratings are decided could help these countries avoid a damaging credit rating, which would prevent them borrowing money in the future. His theory is explored in his new book Sovereign Debt Sustainability: Multilateral Debt Treatment and the Credit Rating Impasse. The study details the history of multilateral debt treatment in Africa, whilst also looking at the impact of the pandemic. When vulnerable countries try to negotiate new lending terms with their lenders their credit rating is immediately downgraded, in some cases they could be labelled as in default - failing to repay a loan. Dr Cash calls this situation the ‘credit rating impasse’. To avoid this happening, he argues that other factors should be temporarily taken into account, making it easier for them to borrow money in the future to spend on improvements such as healthcare or infrastructure. The UN has identified 54 developing economies with severe debt problems. While accounting for little more than 3% of the global economy, they represent 18% of the world’s population, and more than 50% of people living in extreme poverty. The book sets out a new framework which could be used to overlie the existing credit rating system. The book suggests considering factors such as ESG (Environmental, Social and Governance) – which indicates a country’s impact on society, the environment, and how transparent and accountable it is. Taking ESG and sustainability factors into account indicates if a nation has the potential to grow while benefiting the environment and communities. Dr Cash said: “The credit rating impasse is a systemic problem, and a cure is needed to prevent the bankruptcy of countries around the world. “Lower-income states are being forced to prioritise debt payments over public spending on healthcare or access to food. “Instead, they should be offered help to enable borrowing to make vital improvements.” The book is free to read via Open Access Book and was funded by the Open Society Foundations (OSF).
MEDIA RELEASE: Manitobans can drive change by voting for Worst Roads in province
WINNIPEG, March 23, 2021 – Following a one-year hiatus due to the pandemic, CAA’s Worst Roads campaign is back and ready to give Manitobans their say on the province’s road conditions. For 9 years, CAA Manitoba’s annual Worst Roads campaign has influenced change by giving road users the unique opportunity to highlight what roadway improvements are top of mind and where they need to be prioritized by various levels of government. As Manitobans use the roads each and every day to reach their destinations, maintaining the quality of our roads is important in keeping essential workers, goods and services flowing and our communities safe. “Nobody enjoys a bumpy commute or getting stuck in traffic. Whether you are a driver, a cyclist or a pedestrian—these road conditions affect everyone,” says Heather Mack, government and community relations manager for CAA Manitoba. “Now is your chance to take action and help decision-makers understand what challenges you are facing on Manitoba roads.” Crumbling pavement and potholes continue to be the most critical concerns identified by motorists, followed by traffic congestion. Other common issues also include poor road signage and limited or non-existent cycling or walking infrastructure. “As people are encouraged to stay home and telework during the pandemic, we should take advantage of lighter traffic patterns as an opportunity for road repair,” adds Mack. CAA Manitoba continues to advocate longer-term, dedicated infrastructure funding which helps municipalities prepare, plan, budget and execute on repair backlogs and capital projects. These investments aim to reduce the wear and tear on Manitoba’s infrastructure and taxpayer expenses paving the way for safer travels and a healthy economy. Past success stories from this campaign include the new Empress Overpass constructed after taking the list’s top spot in 2018 and 2019, and the reconstruction of Victoria Ave., in Brandon, MB, which is now one of the most improved roads after taking the list’s top spot in 2013. CAA Manitoba is calling on drivers, cyclists, transit users and pedestrians to voice their concerns and participate in this campaign dedicated to improving the province’s roads. Nominations for CAA’s Worst Roads are open today and can be cast at caaworstroads.com until April 18, 2021. To encourage participants to act on their concerns, they will be entered into a grand prize draw to win a $100 CAD gas certificate, an Evercraft® Pressure Washer, a CAA Deluxe emergency car kit, three (3) piece Atlantic luggage set, a NAPA® car detailing kit and a CAA branded water bottle. Once voting closes, CAA will compile a list of the 10 worst roads in Manitoba. CAA Manitoba will present the list of 2021 Worst Roads to local and provincial officials to help inform future funding and planning decisions.
MEDIA RELEASE: Empress Street tops list for second year running
WINNIPEG, May 8, 2019 – The votes are in, and Manitoba’s Worst Road for 2019 is Empress Street in Winnipeg for the second consecutive year. “Manitoba’s Worst Roads campaign is about uniting the public in sharing their views,” says Tim Scott, president of CAA Manitoba. “Even with construction taking place on Empress Street at this moment, voters identified it as the Worst Road once again. Empress is a major arterial road that many Winnipeggers rely on to get where they are going. Properly maintained roads lead to safer travels and a healthy economy, but the public understands that further delay leads to a direct financial impact on them. We’re proud to give a voice to Manitobans who want to pave the way for better roads in the province.” Over 2,700 votes were cast for more than 400 roads. Road users of all types voted for the streets they wanted to focus on. Potholes and crumbling pavement continue to be the most critical issue identified by motorists, followed by traffic congestion. Cyclists pointed to potholes and poor cycling infrastructure as their top gripes, while pedestrians cited inadequate walking infrastructure as their biggest problem. Seven of the top ten Worst Roads are in Winnipeg, while three are rural roads. In second place is Provincial Trunk Highway 34 found in western Manitoba near Austin. Eighth place is Provincial Trunk Highway 23, which passes through numerous communities in southern Manitoba, and tenth is Provincial Trunk Highway 32 by Winkler. Some of the Winnipeg roads that have appeared on the Worst Roads list in previous years include Saskatchewan Avenue, Sherwin Road and St. James Street. Earlier this year, both the federal and provincial governments announced that a combined total of approximately $300 million will be spent to improve 350 kilometers of the highway network across Manitoba, and the City of Winnipeg recently announced that one-time federal gas tax funding will be spent on road repairs, road safety initiatives and the promotion of active transportation. “We know that CAA’s ongoing advocacy efforts are working and that governments are listening,” says Scott. “CAA will continue to bring the voice of Worst Roads voters to government and work with stakeholders on how to create infrastructure and transportation that we can all be proud of.”
MEDIA RELEASE: Manitobans can vote on Worst Roads in province
WINNIPEG, March 20, 2019 – Manitobans from across the Province rely on the existing road network to travel each and every day. Whether you are driving, cycling, walking or taking public transit, many of these roads are in a state of disrepair. Today, representatives from Bike Winnipeg join CAA Manitoba in encouraging all road users to focus on safety and infrastructure challenges when they vote on their Worst Roads for 2019. “Everyone has a role to play in making our roads safer, and that’s why we want to hear from all Manitobans about their concerns,” says CAA Manitoba president Tim Scott. “Our annual CAA Worst Roads campaign has influenced change for over seven years by taking input and bridging the public’s interest in the state of good repair of our roads and bridges. In fact, a recent survey of CAA Manitoba members showed that 90 per cent of respondents were concerned about the state of Manitoba’s roads. Moreover, nearly 75 per cent of CAA Members believe that not enough is being done to maintain roads, and that repairs are not occurring in a timely fashion.” Best in class asset management includes prioritizing connectivity for commuters, fixing infrastructure, focusing on safer roads, and includes cycling lanes and increasing transit options. A well-balanced road user program will reduce the wear and tear on Manitoba’s infrastructure and taxpayers’ pocketbooks. “Properly maintained roads and a healthy transportation system translates into safer travels, a healthier economy, and efficient delivery of goods and services,” says Raymond Chan, Government Relations, CCG Club Group. “From our analysis, further delay in road repairs leads to greater costs for governments and has a direct financial impact to the public.” Worst Roads are classified as having potholes, crumbling pavement, poor road signage, limited or nonexistent cycling or walking infrastructure, traffic congestion, or limited crossing opportunities. Mark Cohoe, Executive Director of Bike Winnipeg, sees a variety of issues that need attention. “When people vote in the CAA Worst Roads campaign, they should think of how the roads affect people walking and cycling along our streets as well as those driving along them. Potholes are very dangerous for someone on a bike, and new bike facilities provide a tremendous improvement in safety, comfort, and connectivity. That’s where CAA’s Worst Roads campaign comes in – people on bikes can have their voice heard on infrastructure safety by nominating roads,” says Cohoe. Voting runs until midnight on April 16, 2019. Manitobans can nominate their Worst Road online at caaworstroads.com or through the CAA app. Voters can identify themselves as motorists, cyclists, pedestrians or transit riders and pinpoint a particular stretch of the road for crumbling infrastructure, safety and congestion.
The minister for tech and the digital economy met with representatives from Aston University’s College of Engineering and Physical Sciences and Solihull College & University Centre during a visit to the new Greater Birmingham and Solihull Institute of Technology (GBSIoT) Hub on 2 August. Damian Collins MP was given a tour of the new facility by Rosa Wells, executive director for employment and skills and IoT at Solihull College & University Centre. The Institute of Technology focuses on engineering and advanced manufacturing and is a partnership between local further education colleges, universities and industry partners. It will support learners from across the region to progress to high-skill technical jobs in industry through clear, supported pathways. Construction of the GBSIoT Hub building is nearing completion and will be welcoming students in the coming weeks. During the visit, the minister was shown the cyber physical manufacturing rig, a scaled-down version of a factory of the future, which will create a simulated working environment for IoT learners. The minister then met with executive dean Professor Stephen Garrett and deputy dean Professor Kate Sugden for a tour of Aston University’s Advanced Prototyping Facility conducted by senior project manager Paul Gretton. The facility supports businesses by increasing awareness of the opportunities available through 3D printing to improve the efficiency and effectiveness of existing designs, and to develop new products all the way through to producing prototypes. The visit also included a showcase of Aston University’s Autopod, a state-of-the-art autonomous vehicle funded by the Greater Birmingham and Solihull Local Enterprise Partnership and the Institute of Technology which is used for research and as a teaching tool. Professor Garrett said: “Aston University has a proud history of delivering high-quality technical education and world-leading research. We were delighted to be able to showcase our facilities to Damian Collins MP, whilst discussing our commitment to equipping students with the knowledge and skills they need to succeed in STEM careers.” Damian Collins MP said: “It’s been brilliant to visit the pioneering facilities at Aston University today, especially seeing the cyber rig which will give students first class training to enter the industry with confidence. “Having these opportunities will help young people gain skills they need for future jobs, supporting the UK’s world leading advanced manufacturing and digital industries.” The minister toured the facilities at Aston University as part of his wider visit to the Birmingham 2022 Commonwealth Games. For more information about the College of Engineering and Physical Sciences please visit our website.
With inflation rampant, everyone is concerned about money and the economy -- not just the prices on everyday goods and services, but their investments as well. The situation has people on edge. Rick Franza, dean of Hull College of Business at Augusta University, said there are differences between the economy and the markets. “Part of that is in the economy, we worry about now and the stock market is more forward-looking, so there’s always some disconnect between the financial markets and the economic reality," Franza said. "The disconnect seems to be worse than ever. There’s less correlation between the economic news and where the stock market goes.” “We used to think that a good jobs report would make a good economy, and typically it does, but in the last couple of months when the jobs report was good, the market has tanked. People are reading it as the strong job market means inflation is not under control." Franza indicated there is a fear factor when it comes to the stock market and its steady decline over the last nine months. Younger investors in the market haven’t seen many bad times, so they are fearful. He also said people nearing retirement are fleeing the market as well. When it comes to the drop in the stock market, it affects anyone who has investments. “Most of us have some kind of investments, especially in retirement accounts,” Franza added. Inflation though, has been the dominating factor in the market right now. "The impact of inflation will be more on small businesses. The large businesses will find a way to weather the storm. If inflation continues and companies can’t be profitable, they’ll start laying off people. Then we’ll have a recession, which will reduce inflation.” It could also have a rippling affect on consumer choices and ultimately costs. “If more companies go out of business, it’ll give us fewer choices, which means the supply chain will be restricted. Then, you’ll pay higher prices because of fewer options. In the long run, if the Fed sticks to its plan to keep raising rates, it will reduce inflation.” If you're looking to know more about this important topic, then let us help. Franza is available to speak with media about trending issues like inflation, small business and the economy – simply click on his icon now to arrange an interview today.
Driving the Ambitious $30M Plan for an Autonomous Vehicle Test Track and Research Center
Innovation and the automobile industry are on the move at UConn -- after four years of planning, coordinating, and developing, a major project is moving closer to reality in Connecticut: UConn’s Board of Trustees recently approved an option agreement to sell 105 acres in the southwest portion of the school’s Mansfield Depot Campus to a private company — Promesa Capital LLC — headed by Cortese, who would lead a group of investors in developing the site as the region’s first-ever connected and autonomous vehicle test track and research facility. Such a facility, Jackson and Cortese said, would be a boon for the university and region, helping make UConn a leader in autonomous vehicle research, technology and safety. “My goal is to raise the stature of UConn to a school where world-class research takes place on this technology, and students come to UConn specifically to work with leading faculty on projects that will change the way we travel,” Jackson said. “UConn will be transformational in terms of research and will provide a world-class facility to open opportunities we’ve never had before for the future of transportation.” August 15 - Hartford Business Journal The endeavor has the potential for lasting positive impact in areas including innovation, research, investment, and the economy, and Eric Jackson -- director of the Connecticut Transportation Safety Research Center at UConn -- is at the forefront of this exciting development. If you are a journalist looking to know more, let us help. Simply click on Jackson’s icon to arrange an interview today.
Politics, policy and public safety: Experts explain why a popular Atlanta festival was canceled
A sad tune is being hummed in Atlanta, where it was announced the popular annual Music Midtown festival is not happening, possibly in part due to the state’s laws surrounding guns in public parks. The event's cancellation, which brought tens of thousands of music lovers to the city -- along with the tourism dollars they spend -- has caused disappointment and drawn local and national media coverage. Calling it a “sad day” for the city, Atlanta City Council President Doug Shipman wrote on Twitter that: “Public policy has real impacts and, in this case, economic and social implications on a great tradition.” And state Democrats chastised Republicans for adopting a raft of pro-gun legislation, including a 2022 law that allows Georgians to carry concealed handguns without first getting a license from the state. The governor, who is seeking a second term, did not immediately comment on the festival’s decision. But state Rep. Rick Jasperse, a Jasper Republican who sponsored the 2014 law, said the measure is designed with public safety in mind. He said those intent on “causing chaos and crime in Georgia” won’t care if the festival bans firearms and would try to bring them in regardless. “Good Georgians who can qualify for a permit and carry a weapon do so to protect themselves from that element in our society,” he said. -- The Atlanta Journal Constitution, Aug. 1, 2022 Organizers of events like Music Midtown could look at Georgia’s gun laws and regulation of firearms as a potential legal liability. If there is a firearms incident, organizers may fear being held legally accountable and sued for any potential damages. The companies and their risk management advisors might think twice about holding large events in Georgia. Augusta University's Dr. William Hatcher, an expert when it comes to public administration and social, economic and political institutions in local communities, agrees that event organizers might be rethinking their plans in the state. "Yes. I think so. These types of laws have an impact on the economy and the business decisions of firms. We may see future effects on the economic behavior of individuals and firms." This topic could have further economic impact beyond canceled events, including affecting property values and home prices. If you're a journalist looking to know more, then let us help with your stories. Dr. William Hatcher is a professor of political science and chair of Augusta University’s Department of Social Sciences. He is an expert in the areas of public administration and social, economic and political institutions. Hatcher is available to speak with media regarding this topic. To arrange an interview today, simply click on his icon now.
Inflation: Simple Causes But a Complicated Cure JULY 2022 We face a wave of strikes, intended to restore the purchasing power of wages in face of inflation. But strikes cannot succeed in restoring everyone’s purchasing power. In the near term, inflation’s impact on living standards can be significantly mitigated only by importing more and so increasing our trade deficit, financed by foreign borrowing. Unwillingness to do that means we are likely to prolong the wave of strikes and so suffer a bruising recession created by restrictive monetary policy. This will cause yet more damage to living standards. However, debt-funded importing of consumption items in order to maintain living standards is poor policy longer-term. It can’t stop the harmful redistribution effects of inflation that are already emerging. Most important, it doesn’t address the longstanding source of our lagging living standards – too little economic growth and economic resilience due to our failure to grow productivity. Without increased productivity, debt-funded consumption repair will cumulate to tomorrow’s fiscal crisis. Therefore, we face a very difficult policy challenge. We must act to support living standards over the next year or two, mitigate the social problems that inflation is already causing and, simultaneously, divert our priorities (and our continuing borrowing) to foster much improved productivity growth. Causes This is a simple story. Today’s inflation demonstrates that we are poorer than we were three years ago. The value of what we, collectively, produce and earn, has shrunk, relative to the cost of the things that we seek to consume. Inflation constricts our consumption options to what we can now afford. We are poorer for two reasons. First, because we produce and earn less domestically, and second, because the things that we don’t produce but import have become scarcer, forcing us to pay more to get them. • Brexit caused an immediate and seemingly permanent devaluation of Sterling, raising the costs of everything that we import. It also seemingly permanently reduced our exports to the EU, our largest trading partner. No new trade possibilities are similar in scale, so there is a long-term loss of income. Moreover, increased non-tariff barriers have raised the cost of imports from the EU beyond the exchange rate effect. • The pandemic has reduced the worldwide supply of all sorts of goods, therefore raising their prices. This is due to supply chain problems, the zero-Covid China lockdown, the reduction in UK output because a significant portion of the population is out with Covid at any time. Crops are left rotting in the fields because there aren’t enough domestic agricultural workers and, of course, no more EU farm workers. • The war in Ukraine has escalated the costs of energy and food grains. In the future it will propel redirection of domestic resources to the production of war material, which is not edible. Consequences Inflation not only makes us, collectively, poorer, it differentially distributes the pain. • Everyone in the UK could go on strike to try to raise their wages enough to maintain their real consumption. But as the pie has shrunk, that is impossible. The extra money people get will simply chase the same, smaller amount available and the prices of goods and services will rise further. If the ensuing price rises provoke further wage increases, we chase our tails. This is the wage/price spiral that the Bank of England fears. • Some groups have more wage bargaining power than others. Perhaps the railway unions can indeed hold the country to ransom and regain their purchasing power. But then others, less empowered than railway workers, will become greater losers. • Inflation causes a flight to real assets – houses, commodities – whose values float up with the price level. Because ownership of real assets is very unequally distributed, the asset-rich minority is likely to come out better than before while the asset-poor majority lose even more. The purchasing power of people living on fixed-return assets such as retirement annuities would be devastated by a wage/price spiral. Similarly, as interest rates rise with the price level (or even faster if the Bank of England has its way), debtors on floating rate loans will be hit hard. • Different geographic areas have different mixes of people who would be gainers and losers from a wage/price spiral, exacerbating our substantial regional inequalities. Cure Part 1: Near-Term Mitigation How is it possible to offset the fall in current consumption which is provoking the wage/price spiral? People can consume more than they earn only by borrowing. The key is how that borrowing is undertaken. Households could borrow from private UK lenders, or the state could sell bonds to UK citizens and give the proceeds to other UK citizens to spend. But if all they can spend it on is the total value of UK output, that pie is shrinking. More money from borrowing would only raise prices, that is, add to inflation. Total UK consumption can exceed the value of UK output only if the extra is imported. Because the imports are paid for in another currency, borrowing to pay for those imports must be borrowing from foreign sources. The debt (public and private) that the UK owes others must rise by the value of the excess consumption. However, consuming more today by adding to our overseas debt isn’t a miracle cure. • Not everything can be imported. Domestic services of all types are provided, well, domestically. GP visits and houses and hotel rooms and haircuts will cost more as a result of wage inflation, no matter the amount of net foreign borrowing. These price increases will continue to provide some impetus to a wage/price spiral and make it more likely that the Bank of England will end up pushing the economy into recession to stop it. • The problem with debt is that you have to pay it back, and in the meantime, you pay interest on it. More consumption today means surrendering a greater amount of potential consumption in the future. Only if there is strong UK productivity growth will this foreign debt repayment not cause significant future trouble. Sadly, the UK has lagged in productivity growth among advanced economies for many years. Cure Part 2: A More Productive Economy The policy most likely to maintain social cohesion in the near term, and greater prosperity in the longer term, is a tricky two-step. We need to borrow to defend most people’s consumption in the next year or two, but then switch the budget to support growth and productivity-enhancing investment. Unless we do this, our debt repayment obligations will grow to unmanageable levels and meanwhile our level of consumption will continue to shrink relative to that of our peers. Our political system has not been good at tricky two-steps. It can manage short-term stimulus, funded by debt. But for decades the UK has failed to invest sufficiently in physical, technological and human capital to create productivity comparable to our peers. The inflation crisis is a call to action. Not only to mitigate current deterioration in living standards but to build a modern economy that sustains rising living standards into the future.
Expert Sources for Federal Reserve interest rate increase: UCI faculty members available to comment
On June 15, the Federal Reserve announced its largest interest rate hike in 28 years to try to regain control over elevated consumer prices. The Fed raised its benchmark interest rate by three-quarters of a percentage point – the biggest increase since 1994 – following a quarter-point jump in March and a half-point increase in May. “We’re strongly committed to bringing inflation back down and we’re moving expeditiously to do so,” said Federal Reserve Chairman Jerome Powell. Eric Swanson – professor of economics. Swanson’s research focuses on monetary policy, interest rates and the effects on economy, including output, unemployment and inflation. Swanson previously worked at the Federal Reserve Board and Federal Reserve Bank of San Francisco from 1998-2014 as an economist and research advisor. Email: eric.swanson@uci.edu Aaron James – professor of philosophy. James co-authored the book Money from Nothing: Or, Why We Should Stop Worrying About Debt and Learn to Love the Federal Reserve, which explains the nature of money and a number of alternatives the Federal Reserve can legally employ to curb inflation other than increasing interest rates. Email: aaron.james@uci.edu Jack Liebersohn – assistant professor of economics. Liebersohn’s research focuses on banking, banking risk taking, mortgages and the housing market and he can speak to how increasing the Federal Reserve interest rate affects any of those elements of the economy. Email: cjlieber@uci.edu Christopher Schwarz – associate professor of finance and faculty director of the Center for Investment and Wealth Management. Schwarz can discuss how far the Federal Reserve will have to go and its impact on the economy and financial markets moving forward. Email: cschwarz@uci.edu Media Contact: Cara Capuano, Communications Officer, UCI | 949-501-9192 | ccapuano@uci.edu
