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In 1991, Chile adopted a framework of capital controls focused on reducing the massive flows of foreign investment coming into the country as international interest rates remained low. Capital inflows threatened the Central Bank's ability to manage the exchange rate within a crawling band, which aimed eventually to lower Chile's rate of inflation to international levels. Until the Asian financial crisis of 1997 and the Russian debt crisis of August 1998, the Chilean economy performed spectacularly under, or perhaps in spite of, these controls. In the aftermath of the Asian and Russian crises, Chile's economy began to suffer through both trade and financial channels. Chile's current account deteriorated not only because Chile relied on Asia as a market for one-third of its exports, but also as the price of cooper, Chile's largest export product, plummeted in the face of dwindling Asian demand. Financial flows to Chile, like to emerging markets in general, fell dramatically as investors panicked. By the end of 1999, Chile had experienced Latin America's most severe "sudden stop" of external capital flows. In this new economic environment, Chile was forced to reevaluate its system of capital controls. Many observers in the private sector blamed the controls for unnecessarily adding to the strain and demanded the controls be dismantled completely. Meanwhile, Chile's Central Bank continued to defend the controls and argued that they had helped insulate the country for worse contagion.

Bain consultants Ann Chen and Vijay Vishwanath offer three key strategies multinationals can use to expand from China's premium segment into the broader market.

As multinationals decrease their direct investment in low-wage markets, they're opening the door to dangerous competitors, says Deloitte consultant Peter Koudal.

In 2002, a handful of entrepreneurs began to ship drugs from Canada into the United States, taking advantage of regulatory and price differentials across the neighboring countries. Using the Internet and a low-cost network of Canadian pharmacies, firms like Rx Depot allowed U.S. customers to order their prescription medications in the United States, purchase them at a substantial discount from prevailing U.S. prices, and deliver the medications directly to their homes. It was a powerful business model that made Rx Depot a prominent player. In November 2003, however, a U.S. court decreed that Rx Depot violated federal law. The company was forced to close, but its founder, Carl Moore, announced that he was ready to fight. Did Rx Depot simply breech U.S. laws of intellectual property? Or did its actions suggest that the laws were ready for change?

Studies the allocation of airport slots. As airline traffic increases, slots become scarce. Well-established airlines have historically determined rights to these slots, which limits the possibilities for new entrants to the market. In addition, sometimes, the airlines do not make efficient use of their slots. It is often argued that this allocation system has to be revised to ensure economic efficiency. Several countries are considering this issue, which is often met with strong opposition from well-established airlines. Congestion in Hong Kong airport is increasing and the question whether Hong Kong should liberalize its allocation system is under debate.

Since 1974, the Multifibre Arrangement (MFA) had been the systematic means for developed countries to restrict textiles and clothing imports from developing countries, which did not conform to the GATT/WTO rules. In 1994, however, the Agreement on Textiles and Clothing was signed, prescribing a 10-year progressive phase-out of the MFA and integration of GATT 1994 rules. By late 2004, the complete phase-out of the MFA on January 1, 2005 had rekindled the debate between protectionists and free-trade advocates. Meanwhile, firms in Hong Kong, one of the world's major textiles and clothing exporting nations, were gearing up for the change.

After successful litigation against tobacco companies, a handful of lawyers turned their attention to the fast food industry and its possible connection to obesity. McDonald's was a prime target. Details McDonald's response to the litigation and the question of its role in the rise of obesity in the United States. Study questions guide students in analyzing both the market and nonmarket strategies that McDonald's employed.

Describes Standard & Poor's sovereign credit ratings business. Provides background on the history of credit ratings agencies, the meaning of credit ratings, the expansion of the sovereign ratings business over recent decades, and the market for credit ratings. Also, discusses current debates in the United States and elsewhere relating to the use of credit ratings in financial and prudential regulation.

Describes Standard & Poor's sovereign credit ratings scales and the credit rating process. In particular, describes the role and function of the rating committee and the analytical categories considered in arriving at a final sovereign credit rating.

Describes the construction of the balance of payments and defines frequently used measures taken from the balance of payments.

China's huge population and potential market had attracted foreign companies since its economy began opening in the late 1970s. Although the profit position of some foreign companies improved by 2003, China remained a frustrating and unprofitable market for many. Highlights four major multinationals that were successful in the Chinese market. Allows for a discussion on what it takes to succeed in the Chinese market, how this compares to what it takes to succeed elsewhere, and the challenges and opportunities associated with leadership positions in emerging economies.

Introduces the core principles and challenges of bankruptcy law (both individual and corporate) against the backdrop of the early 1970s, when the U.S. bankruptcy system appeared to be failing. With personal bankruptcy filings at record levels and successful corporate reorganizations relatively rare, policymakers had to decide whether the time had come to overhaul the nation's bankruptcy law and, if so, how to structure the new system.

Intellectual property rights are a major source of wealth creation in our modern global economy and continue to grow in strategic significance. For managers and entrepreneurs to take advantage of the strategic options that IPs offer, it is helpful to be conversant in the unique aspects of these legal rights regimes. Provides a comprehensive and easy-to-understand overview of the IP rights regimes, consisting of trade secrets, patents, copyrights, trade dress, and trademarks.

Provides basic economic and social indicators for 145 countries, drawn from the World Bank's World Development Indicators (2004). The data include: population, land area, GNP per capita, real GDP growth, life expectancy, adult illiteracy, fertility rate, access to sanitation, and income inequality. Reports data from 2000 whenever possible and is largely based on Basic Statistics from World Bank's World Development Report 2002 (9-703-030).

Explores the role of the U.S. military in facilitating the establishment of a spectacularly successful free trade area in one of the most devastated areas of Bosnia. NATO's imposition of law and order, plus protection from local political protection rackets, led to spontaneous growth of a market with over $100 million in annual sales.

The Consultative Group on International Agricultural Research (CGIAR) has a long, successful history at inventing solutions that help developing countries improve their agriculture. Their research centers are spread across the globe. For many years, they were funded by sponsors who took a long-term view--commensurate with the necessary horizon for R&D. Increasingly though, donors want faster, evidence-based payoffs to their donations. How should CGIAR adapt?

Provides a brief introduction to fiscal policy, including the fiscal multiplier. Uses Ireland's experience in the 1980s to explore the possibility that fiscal contractions--tax rises and expenditure costs--can stimulate economic growth (contrary to conventional Keynesian wisdom) via confidence effects and the establishment of a credible framework for fiscal stability over the medium term. A rewritten version of an earlier note.

Professor Michael W. Klein contends that countries affording women greater economic opportunities are more successful in women's international sports.

China is one of the oldest continuous civilizations in the world, with organized society existing for more than 10,000 years. Although the country has a complex and dynamic past, the scope and pace of change in China within the past 25 years have been unprecedented in the nation's long history. Since 1979, when China's reform era began, the country reduced the number of its citizens living in poverty by 200 million and achieved a sixfold increase in per capita income. China accounted for nearly 4% of the worldwide gross domestic product in 2004 and had become the sixth-largest economy and the leading recipient of foreign direct investment. While these results are impressive, this is only the beginning for China. As the most populous nation in the world, China needs to create 100 million new jobs by 2013 and quadruple its GDP by 2020 to achieve and sustain a reasonable standard of living for its people. To do so, the country must further open itself to foreign investment, trade, and the market-oriented ideas that will stimulate domestic productivity and build its competitiveness as a nation. As Michael Porter asserts, "National prosperity is created, not inherited. It does not grow out of a country's natural endowments, its labor pool, its interest rates, or its currency value. A nation's competitiveness depends on the capacity of its industry to innovate and upgrade." Over the last two and a half decades, China has proven its ability to capitalize on its innate advantages and make meaningful reforms. Whether the country can build on these successes to create a lasting competitive advantage under competition remains to be seen.

Management consultant William Dunk argues that the best new thinking resides in often overlooked nations.