Volume 4 Issue 2

Our paper investigates the FDI attracting potential of emerging markets by in terms of their location attributes. We use Statistical cluster analysis to study the dynamic evolution of emerging markets' clusters, based on country attributes that are relevant for the MNEs location decision. We find that countries tend to be grouped at a geographical level or depending on the various resources they possess, except for China that clusters independently. Also, there are numerous countries' transitions from one cluster to another over the years, which indicate a natural process of changing location attributes and market development for many emerging economies.

Using a preliminary investigation and analysis on the latest data on GDP (Gross Domestic Product) performance, GOI (Global Opportunity Index), Vulnerability Score, Readiness Score, and the number of resources of economic importance, exploratory or preliminary SEM (structural equation modelling) was prompted on the recent available data of the 131 countries (n=131). The model was robust, addressing concerns about multivariate assumptions and other measures on the goodness of fit. It was found that the number of natural resources of economic importance plays a large role in the GDP performance. Thus, the preliminary symptom of Dutch disease continues to manifest for as long as each country aims for development, with their resources as ultimate enticing factors for foreign direct investment (FDI). In addition, economic growth is so far observed to be associated with the vulnerability of the country to climate change. Finally, economic growth was found to be linked to the negative impacts argued by the dependency theory. Implication on governance was discussed.

This study seeks to empirically explore the impact of key monetary policy variables on the economic growth in the CEMAC zone from the period of 1981 to 2015. Carried out using the Ex post facto research design based on the principal components selection approach, the study interacts money supply, interest rate, economic growth, and inflation rate, among themselves and their lagged values using the Vector Auto-regressive (VAR) analytical technique. The Classical quantity theory of money, the Cambridge Cash Balanced, the liquidity preference theory and the Monetarists as theoretical frameworks were explored to appreciate the time trends of the selected variables on the economic growth of the CEMAC zone. Based on the (VAR) methodology, the study reveals that key monetary policy variables influence economic growth of the CEMAC zone in different ways with inflation rate as the impact factor. On the basis of the above findings and the evidence from other studies, lending and inflation rate generated substantial destabilizing impacts on the economic growth, suggesting that the monetary authorities should play a critical role in creating an enabling environment for growth. The determination of the optimal lending rate should reflect the overall internal rate of returns in the productive sectors with due attention to market fundamentals. In line with this, the Central Bank of CEMAC should be given complete instrumental autonomy to operate depending on a set of in-built targets by the individual countries of the zone. Effective monetary targeting and accommodating monetary policies should be designed and implemented as the need arises with little or no political motives.

The last four decades have been marked by growing inequality. The inequality of income and wealth is one of the most important macroeconomic issues of our time. Inequality contributed to Global Savings Glut and Global Financial Crisis through riskiness channel and a greater propensity to borrow for poor people. This paper presents evidence that besides structural factors, monetary policy, high leverage and the development of new money substitutes are critical in explaining the inequality trend in advanced countries. Increasing economic inequality acts as financial instability enhancer and if left untreated it poses a significant threat to economic sustainability.