Showing papers on "Economic stagnation published in 1998"
Book•
01 Sep 1998
TL;DR: The authors argued that economic stagnation in the 1990s is the result of mistaken policies of fiscal austerity and financial laissez-faire, rather than any structural failures of the Japan Model.
Abstract: This text explains why a shift in Japanese fiscal and monetary policies would be in Japan's interest. It demonstrates that economic stagnation in the 1990s is the result of mistaken policies of fiscal austerity and financial laissez-faire, rather than any structural failures of the Japan Model.
180 citations
Posted Content•
01 Jan 1998
TL;DR: The authors argues that Japanese economic stagnation is the result of mistaken fiscal austerity and financial laissez-faire rather than any supposed structural failures of the "Japan Model" and draws broader lessons to be learned from the recent Japanese policy actions that led to the country's continuing stagnation.
Abstract: Will the Japanese government take the decisive but manageable policy actions needed to bring about economic recovery? Despite claims to the contrary, macroeconomic expansion has yet to be seriously tried in Japan. Criticism of current Japanese macroeconomic and financial policies is so widespread that the reasons for it are assumed to be self-evident. In this volume, Adam Posen explains in depth why a shift in Japanese fiscal and monetary policies, as well as financial reform, would be in Japan's own self-interest. He demonstrates that Japanese economic stagnation in the 1990s is the result of mistaken fiscal austerity and financial laissez-faire rather than any supposed structural failures of the "Japan Model." The author outlines a program for putting the country back on the path to solid economic growth--primarily through permanent tax cuts and monetary stabilization--and draws broader lessons to be learned from the recent Japanese policy actions that led to the country's continuing stagnation. The book will be a useful supplementary text for both undergraduate and postgraduate courses in macroeconomics, comparative political economy, Japan or East Asian studies, public finance, and international relations.
128 citations
TL;DR: Pritchett et al. as discussed by the authors show that per capita GDP in most developing countries does not follow a single time trend: for a given country, there is great instability in growth rates over time, relative to both average level of growth and to cross-sectional variance.
Abstract: The recent growth literature has underestimated the importance - and ignored the implications - of the instability and volatility of growth rates. In particular, the use of panel data to investigate the effects of long-term growth in developing countries - especially with fixed effects estimates - is potentially more problematic than helpful. Except during the Great Depression, the historical path for per capita GDP in the United States has been reasonably stable exponential trend growth, with modest cyclical deviation. Graphically, growth in the United States displays as a modestly sloping, only slightly bumpy, hill. But almost nothing that is true about per capita GDP for the United States (or for other OECD countries) is true for developing countries. First, per capita GDP in most developing countries does not follow a single time trend: For a given country, there is great instability in growth rates over time, relative to both average level of growth and to cross-sectional variance. These shifts in growth rates lead to distinct patterns. Some countries have had steady growth (hills and steep hills); others have had rapid growth followed by stagnation (plateaus); others have had rapid growth followed by declines (mountains) or even catastrophic declines (cliffs); still others have experienced continuous stagnation (plains) or even steady decline (valleys). Second, volatility - however measured - is much greater in developing than in industrial countries. These stylized observations about growth rates, Pritchett concludes, suggest that it may be useless to use panel data to investigate long-term growth rates in developing countries. Perhaps more can be learned about developing countries by investigating what initiates (or halts) episodes of growth. There is something of a professional split in growth literature, Pritchett observes. Macroeconomists studying industrial countries discuss steady-state growth and ponder whether all countries in the convergence club will reach the same happy level in the end. Development economists, on the other hand, are the pathologists of economics, having discovered that developing countries are most emphatically not all alike. Developing countries have found ways to be ecstatic but they have also discovered many different ways to be unhappy. This paper - a product of the Development Research Group - is part of a larger effort in the group to understand the determinants of economic growth.
85 citations
Journal Article•
TL;DR: The authors explored the question whether and to what extent the economic relations between the Netherlands and its former colony Indonesia could be crucial to explaining ''metropolitan" economic development and ''peripheral" underdevelopment.
Abstract: This paper explores the question whether and to what extent the economic relations between the Netherlands and its former colony Indonesia could be crucial to explaining `metropolitan' economic development and `peripheral' underdevelopment. It first surveys the literature on economic explanations for imperialism and the historiography involving Netherlands-Indonesia relations. The paper then generalises the broad economic importance to the Dutch economy of having Indonesia as a colony. The paper argues that the economic relevance shifted from trade to financial relations since ca.1900. Ready access to the Dutch capital market is likely to have advantaged economic development in Indonesia, albeit at the price of a shift in company ownership and a continuous transfer of dividend and interest payments to the Netherlands. The Dutch economy benefited from the relations with Indonesia, but was not particularly dependent on this relationship. This is demonstrated by the fact that after the decolonisation of Indonesia the economic ties between the two countries were severed during the 1950s. The Dutch economy entered a period of rapid growth, while the loss of ready access to the Dutch capital market contributed to economic stagnation in Indonesia.
37 citations
TL;DR: The authors argues that the historical moment has arrived for the renewal of shorter hours and guaranteed income rather than pretending that full employment is possible, and locates chances for the program in social movements, in the first place the labor movement rather than political parties.
23 citations
TL;DR: In this article, the authors discuss the privatization schemes of Chile and Argentina following a review of three alternatives to privatization and conclude that for many countries it would make more sense to reform existing public pension schemes than to replace them with privatized schemes, at least until one has a better idea how privatised schemes perform in adverse financial environments.
Abstract: We discuss the privatization schemes of Chile and Argentina following a review of three alternatives to privatization. Our major conclusions are as follows: (1) the Chilean scheme has performed very well during much of the past 15 years, but it is not yet clear what will happen during an extended period of economic stagnation and declining financial markets; (2) for many countries it would make more sense to reform existing public pension schemes than to replace them with privatized schemes, at least until one has a better idea how privatized schemes perform in adverse financial environments; (3) privatized schemes have important distributional effects that deserve more attention.
16 citations
TL;DR: The evolution of macroeconomic policies in Latin America since the early 1970s has been by any standard remarkable, even if in some countries observers are not entirely sanguine about the sustainability of the macroeconomic reforms as discussed by the authors.
Abstract: The evolution of macroeconomic policies in Latin America since the early 1970s has been by any standard remarkable, even if in some countries observers are not entirely sanguine about the sustainability of the macroeconomic reforms. Only in a few countries, however, has growth matched the vigour with which governments have attacked macroeconomic distortions. Chile’s average annual per capita growth of 10.6 per cent per year between 1985 and 1993 stands in stark comparison to Bolivia’s growth rate of 0.9 per cent a year from 1989 to 1993.1 Although both countries adopted similar macroeconomic policies over the period, growth in each has clearly followed distinct patterns. Nor is Latin America the only continent where the puzzling persistence of macroeconomic stability and slow growth still has to be understood. Ghana, for example, has generally followed sound macroeconomic policies since 1985, but its average per capita growth rate was only 2.6 per cent from 1984 to 1993. This might seem reasonable at first glance, roughly the same as industrialized countries over the period. However, the problem is precisely that at such a rate of growth, Ghanaian per capita income will not converge with income levels in industrialized countries.
15 citations
01 Jan 1998
TL;DR: The Middle East and North Africa entered a period of economic stagnation around 1985 as discussed by the authors, which was led by public sector investments in manufacturing, particularly in the Mashreq region (Egypt, Jordan, Lebanon, and Syria).
Abstract: After a quarter–century of strong output growth the economies of the Middle East and North Africa entered a period of economic stagnation around 1985. During the 1960s output across the region had grown by about 6.2 percent a year. Growth was led by public sector investments in manufacturing, particularly in the Mashreq region (Egypt, Jordan, Lebanon, and Syria). Development was concentrated in modern, capital–intensive production. Public enterprises were focused on the production of undifferentiated goods, including raw materials and intermediate goods. These enterprises remained economically viable under the protection of high trade barriers; firms that were unable to cover costs with operating revenue received generous subsidies. This development strategy generated a respectable rate of growth, but it also consumed inordinate amounts of capital while producing relatively few jobs.
12 citations
TL;DR: A survey of Sub-Saharan countries shows that after nearly two decades of stagnation, growth is reviving and is likely to receive additional momentum with the pursuit and judicious implementation of further fiscal adjustment efforts as mentioned in this paper.
Abstract: The survey of Sub-Saharan countries shows that after nearly two decades of stagnation, growth is reviving and is likely to receive additional momentum with the pursuit and judicious implementation of further fiscal adjustment efforts. The impact of economic stagnation on the financial management systems is evident in that they continue to be under severe strain despite a series of efforts aimed at their improvement. Lack of accountability and chronically ineffective control of expenditures are two of the major problem areas that need to be addressed. Among other areas that need to be addressed on a priority basis are the revamping of budgetary processes, including the development of a macroeconomic framework and forging more enduring links between planning and budgeting and improved management of foreign aid.
10 citations
Book•
01 Jan 1998
TL;DR: The International Economic Association (IEA) has published a survey on the state and development in developing countries as discussed by the authors, focusing on the role of institutions as investments in the development process.
Abstract: The International Economic Association - Acknowledgements - List of Contributors and Participants - Abbreviations and Acronyms - Preface - Introduction S.Borner - PART 1: THE STATE AND DEVELOPMENT - Institutions as Investments R.H.Bates - Some Lessons on the Efficiency of Democracy from a Study of Dictatorship R.Wintrobe - The Economics of Autocracy and Majority Rule: the Invisible Hand and the Use of Force M.Olson & M.McGuire - Causes of Change in Political-Economic Regimes P.Bernholz - PART 2: VOLATILITY, UNCERTAINTY, INSTITUTIONAL INSTABILITY AND GROWTH - Macroeconomic Volatility and Economic Development M.Gavin & R.Hausmann - Political Variables in Growth Regressions A.Brunetti - Political Stability and Economic Stagnation P.Keefer & S.Knack - Political Uncertainty, the Formation of New Activities and Growth J.Aizenman - Does Economic Growth Lead to Political Stability? M.Paldam - PART 3: RENT SEEKING AND CORRUPTION - Corruption and Rent Seeking J.M.Mbaku - Corruption and Countervailing Action in Pakistan M.S.Alam - PART 4: CASE STUDIES: POLICIES, COUNTRIES AND INTERNATIONAL ORGANIZATIONS - Disinflation and Overvaluation R.Dornbusch - Government Policy, Saving and Growth in Latin America V.Corbo - Growth and Political Violence in Northern Ireland, 1920-96 V.Borooah - Donor Conditionality and Policy Reform T.Killick - Institutional Analysis of Technical Cooperation D.Kattermann - PART 5: CONSTITUTIONAL AND ADMINISTRATIVE REFORM - Developing Democracy in Developing Countries B.Frey - Ethnic Rent Seeking, Stability and Institutional Reform in Sub-Sahara Africa M.S.Kimenyi - Healing Sick Institutions R.Klitgaard - PART 6: COMMENTS B.Weder, G.P.Pfeffermann & G.Shepherd
7 citations
TL;DR: In this article, a double-selectivity approach was used to estimate the post-unemployment individual earnings using a double selection approach (unemployment risk and the re-employment probability).
Abstract: The present analysis concentrates on short‐term effects of unemployment, namely on the transition from unemployment to re‐employment. This empirical analysis estimates the post‐unemployment individual earnings using a double‐selectivity approach (unemployment risk and the re‐employment probability). The data used in this paper are taken from five waves of the Swiss Labour Force Survey which has been collected by the Swiss Statistical Office since 1991.
TL;DR: The 1970s had at least as powerful an impact on the course of American public policy as the decade that preceded it as discussed by the authors, and confidence in large institutions, including government, was wearing down under the burden of crisis, complexity, scandal, and doubt.
Abstract: The 1970s had at least as powerful an impact on the course of American public policy as the decade that preceded it. Polls showed that confidence in large institutions—including government—was wearing down under the burden of crisis, complexity, scandal, and doubt. Inflation, economic stagnation, and severe oil shortages directly disrupted individual lives. Faith in the future of the nation, its economy, its institutions, and its government eroded.
Journal Article•
TL;DR: Data reviewed in this article show a decrease of the suicide rate despite of severe unemployment as a concomitant of economic stagnation, which may be attributable to the efficiency of local preventive measures in the field of medical care and social welfare.
Abstract: The study presented includes all cases of suicide in Geneva from 1991 to 1995. Data reviewed in this article show a decrease of the suicide rate despite of severe unemployment as a concomitant of economic stagnation. This fact may be attributable to the efficiency of local preventive measures in the field of medical care and social welfare. Language: de
TL;DR: It turns out that Schumpeter's contention of an inverse relationship between the level of scientific and technological activity on the one side and economic growth on the other side is correct for 1500 to 1900, and an indirect proof is furnished for the existence of long economic growth cycles in the last centuries.
Abstract: In times of economic stagnation, the debate about “long waves” of economic growth typically refreshes. This has also been the case in the period of the world-wide economic stagnation since 1970. But the results concerning the existence of long-term cycles of economic activity are still controversial. In this contribution, the “ups and downs in the pulse of science and technology” (Price) are related to economic growth cycles. It turns out that Schumpeter's contention of an inverse relationship between the level of scientific and technological activity on the one side and economic growth on the other side is correct for 1500 to 1900. Thereby also an indirect proof is furnished for the existence of long economic growth cycles in the last centuries.
Posted Content•
01 Jan 1998
TL;DR: In this article, what did Keynes means by full employment, what did he mean by budgets deficits, and how did he propose to deal with the problem of what Alvin Hansen called'secular stagnation'?
Abstract: What did Keynes means by full employment? What did he mean by budgets deficits? and how did he propose to deal with the problem of what Alvin Hansen called 'secular stagnation'?
Posted Content•
TL;DR: In this article, what did Keynes means by full employment, what did he mean by budgets deficits, and how did he propose to deal with the problem of what Alvin Hansen called'secular stagnation'?
Abstract: What did Keynes means by full employment? What did he mean by budgets deficits? and how did he propose to deal with the problem of what Alvin Hansen called 'secular stagnation'?
01 Jan 1998
TL;DR: In the Middle Eastern and North African region, the opportunities facing the region have never been greater as discussed by the authors, and regional integration options are many as a result of the evolving peace process and the European Union's proposal for a free trade area in the Mediterranean.
Abstract: Middle Eastern and North African countries face enormous economic challenges as the twenty-first century approaches. Stagnant real wages, deteriorating competitiveness, and rapidly growing populations and labor forces have left most countries in the region unable to deliver higher living standards to much of society. Yet the opportunities facing the region have never been greater — world trade is growing rapidly, capital flows to developing countries have never been higher, and regional integration options are many as a result of the evolving peace process and the European Union’s proposal for a free trade area in the Mediterranean. Why, after nearly a decade of negative per capita income growth, has the region been unable to muster sufficient reform momentum to sustain economic progress? Do important differences across countries hold lessons for the future? What are the social consequences of economic stagnation, and how might future adjustment costs be managed to protect the poor? How have individual countries in the region defined the challenges ahead? And what issues must be addressed to realize a more prosperous future?
01 Jan 1998
TL;DR: The end of the Cold War presented a tremendous opportunity for rededication of much U.S. Government spending on military R&D as mentioned in this paper, which would provide solutions both to America's economic stagnation and its environmental problems.
Abstract: The end of the Cold War presented a tremendous opportunity for rededication of much U.S. Government spending on military R&D. Around $35 billion in fiscal 1995, the military R&D budget is a significant public investment, supporting thousands of projects in hundreds of facilities and leveraging significant private-sector resources. If rededicated, these resources might provide solutions both to America’s economic stagnation — four out of five Americans are experiencing relative economic decline — and its environmental problems. But rededication would mean shifting a substantial portion of military R&D resources to other pressing national and global needs.