Showing papers on "Real gross domestic product published in 1994"

Estimating Potential Output as a Latent Variable

Abstract: This article proposes a new method for estimating potential output in which potential real gross domestic product (GDP) is modeled as an unobserved stochastic trend, and deviations of GDP from potential affect inflation through an aggregate supply relationship. The output and inflation equations together form a bivariate unobserved-components model which is estimated via maximum likelihood through the use of the Kalman-filter algorithm. The procedure yields a measure of potential output and its standard error and an estimate of the quantitative response of inflation to real growth and the output gap.

Government spending and economic growth: the G-7 experience

Abstract: Buildig on Barro's (1990) endogenous growth model, attempts are made to untangle the nature of the relationship between government expenditure and economic growth by examining the intertemporal interactions among the growth rate in per capita real GDP, the share of government spending, and the ratio of private investment of GDP for the Group-of-Seven countries. A multivariate time series analysis is conducted, with particular attention paid to the causal pattern and the shape of impulse-response function in the context of vector autoregressions. The analysis is based on the historical data for the Group-of-Seven countries. The empirical results suggest that the relationship between government spending and growth can vary significantly across time as well as across the major industrialized countries that presumably belong to the same ‘growth club’. This finding may partly explain the differences in results among previous cross-sectional studies. Most importantly, no consistent evidence is found that govern...

The Soviet economic decline : historical and republican data

Abstract: Soviet growth for 1960-89 was the worst in the world, after controlling for investment and human capital. And relative performance worsens over time. The authors explain the declining Soviet growth rate from 1950 to 1987 by the declining marginal product of capital. The rate of total factor productivity growth is roughly constant over that period. Although the Soviet slowdown has conventionally been attributed to extensive growth (rising capital-to-output ratios), extensive growth is also a feature of market-oriented economies like Japan and Korea. One message from the authors' results could be that Soviet-style stagnation awaits other countries that have relied on extensive growth. The Soviet experience can be read as a particularly extreme dramatization of the long-run consequences of extensive growth. What led to the relative Soviet decline was a low elasticity of substitution between capital and labor, which caused diminishing returns to capital to be especially acute. (The natural question to ask is why Soviet capital-labor substitution was more difficult than in Western market economies, and whether this difficulty was related to the Soviets' planned economic systems.) Tentative evidence indicates that the burden of defense spending also contributed to the Soviet debacle. Differences in growth performance between the Soviet republics are explained by the same factors that figure in the empirical cross-section growth literature: initial income, human capital population growth, and the degree of sectoral distortions. The results the authors got with the Soviet Union in the international cross-section itself was disastrous for long-run economic growth in the Soviet Union. This point may now seem obvious but was not so apparent in the halcyon days of the 1950s, when the Soviet case was often cited as support for the neoclassical model's prediction that distortions do not have steady state growth effects. Since a heavy degree of planning and government intervention exists in many countries, especially developing countries, the ill-fated Soviet experience continues to be of interest.

South Africa - Economic performance and policies

Abstract: This study examines the challenge of promoting equitable and fiscally sustainable growth and evaluates alternative paths to growth using an econometric model developed by World Bank staff. The broad conclusion is that there needs to be greater complementarity between stimulating the economy through public investment and reviving private investment if South Africa is to achieve a sustainable growth. The prospects of success will be improved considerably if skills are upgraded and a reorientation towards exports is achieved, accompanied by a restructuring of public expenditure - within fiscally sustainable limits - for targeting the poor. The scenarios examined assume that political stability is achieved and that access to international capital markets improves.

Successful Operating Strategies in the Performance of U.S.-China Joint Ventures

Abstract: Evaluations of the performance of international joint ventures (IJVs) in China have produced mixed conclusions. This study sought to uncover performance criteria used by various groups of managers and to identify critical factors in IJV performance in China. Using in-depth case studies, matched data were collected from personal interviews with managers from Chinese and U.S. parent companies, joint venture operating managers from both partners, and government officials from both countries. The perfor mance criteria used by joint venture participants appear to be con verging, with profitability emerging as the dominant element. This exploratory study uncovered four important strategic factors in the performance of large, established U.S.-China manufacturing joint ventures. These are controlling decision making, establishing a sales network, retaining interpartner learning, and influencing gov ernment officials. The results suggest that the importance of deci sion-making control is moderated by size of the venture and nationality Whether the IJV is a part of the government's National Plan also appears to be an important contingency Managerial im plications and directions for future research are provided. Gregory E. Osland China has long fascinated business executives and researchers with the grandeur of its several-millenia-old civilization, the huge size and market potential of its population, and the dra matic changes in its political and economic situation. The previously elusive sales possibilities in the world's most populous nation are now being realized as The People's Re public of China's economy opens up and reaches new heights. The real gross domestic product (GDP) average growth rate of 8 percent per year from 1978 to 1992 out stripped the growth rate of each of the 100 largest economies (The Economist Intelligence Unit 1993). China will be the world's third largest economy by the year 2000, if the present trends continue. Looking at China's 1992 real GDP growth rate of 12 percent, an analyst for the U.S.-China Business Council in Beijing stated, "The official figures do not tell you how strong the demand is now. We're at the leading edge of a consumer boom. It's real." Managers of multinational corporations increasingly view entry and development of China's market as critical to the growth of their firms. In addition, the low cost of labor and certain materials make China an attractive and essential base for resources for certain companies, especially some from Submitted November 1993 Revised March 1994

Macroeconomic Policies, Crises, and Long-Term Growth in Indonesia, 1965-90

Abstract: This book attempts to explain why Indonesia's economic performance during the period far surpassed that of countries endowed with similar assets and subject to the same shocks. It emphasizes the role of macroeconomic policies in influencing economic growth and transformation - especially the resilience of the Indonesian economy to the external shocks of the 1980s. While this study is primarily an assessment of macroeconomic management, it also assesses trade and financial policies because of their importance in shaping the response of the economy to macroeconomic policies and to nonpolicy disturbances. It discusses the characteristics of the country, the organization of the economy, and the workings of key markets. It provides a brief history of Indonesia up to the tumultuous events of 1965 that led to significant and long-lasting changes in economic philosophy. The study reviews macroeconomic developments in the 1965-90 period, and explains the political constraints on economic policymaking arising from the strength of key interest groups. Macroeconomic and exchange rate management are analyzed and the Indonesian experience with macroeconomic management is summarized.

The Term Structure and Real Activity in Canada

Abstract: This paper examines the predictive content of the term structure of interest rates for economic activity in Canada. Recent papers for the United States and other countries find that the slope of the term structure is a very good predictor of output growth. We find a strong, positive relationship between the spread across long and short rates and future changes in real GDP in Canada. This relationship is strongest at the 1-year horizon or just beyond. The term structure also helps predict inflation at horizons beyond two years in equations including the output gap and lagged inflation. Using the theoretical framework provided in the paper, we examine the conditions under which the term spread would better reflect the stance of monetary policy than a short-term interest rate and argue that these conditions are likely to be satisfied in the data.

Nominal GDP Targeting Rules: Can They Stabilize the Economy?

Abstract: Suggested citation: Clark, Todd. "Nominal GDP Targeting Rules: Can They Stabilize the Economy?." Federal Reserve Bank of Kansas City, Economic Review, 08.01.1994.

How Large Was the Output Collapse in Russia? Alternative Estimates and Welfare Implications

Abstract: The divergence between production and consumption indicators in Russia suggests that the magnitude of the output collapse in the course of the transition is overstated by the official statistics. Alternative estimates for real GDP are derived, which reconcile the official production and consumption data. Based on cautious assumptions, real GDP appears to have declined cumulatively by no more than one third rather than by one half. The drop in household welfare is much smaller still, as the output mix shifts and deadweight losses are sharply reduced.

How Large Was the the Output Collapse in Russia? Alternative Estimates and Welfare Implications

Abstract: The divergence between production and consumption indicators in Russia suggests that the magnitude of the output collapse in the course of the transition is overstated by the official statistics. Alternative estimates for real GDP are derived, which reconcile the official production and consumption data. Based on cautious assumptions, real GDP appears to have declined cumulatively by no more than one third rather than by one half. The drop in household welfare is much smaller still, as the output mix shifts and deadweight losses are sharply reduced.

Asymmetric Effects of Economic Activityon Inflation; Evidence and Policy Implications

Abstract: This paper examines the evidence on asymmetries in the effects of activity on inflation. Data for the G-7 countries are found to strongly support the view that the inflation-activity relationship is nonlinear, with high levels of activity raising inflation by more than low levels decrease it. In the face of such asymmetries, the average level of output in an economy subject to demand shocks will be below the level of output at which there is no tendency for inflation to rise or fall, contrary to the implications of linear models. One implication of these results is that policymakers can raise the average level of output over time by responding promptly to demand shocks, thus reducing the variance of output around trend.

Foreign Direct Investment in the Philippines: A Reassessment

Abstract: Recognizing the importance of an outward-oriented policy approach, countries such as Malaysia, Indonesia, Thailand and the Philippines have liberalized their regulation on foreign direst investment by introducing various guarantees and incentives. The Philippines, however, lagged behind its neighbors. This study identifies the factors that may explain why the Philippines has failed to capture its share of FDIs. Analysis indicates that our trade policy being strongly for import substitution has contributed to the rather unimpressive direct investments. The high level of protection in the manufacturing industry though inappropriate has encouraged the setting-up of local production that resulted to resource misallocation and loss of consumer welfare. In fact, FDI flows in the country have been concentrated in the following highly protected industries: chemicals, processed food, transport equipment, machinery and appliances, textiles and garments, basic metal products and petroleum and coal. Regression results support a positive relationship between FDI and the level of protection, stock of public investment real gross domestic product and real effective exchange rate.

Projections of health care expenditures as a share of the GDP: actuarial and macroeconomic approaches.

Abstract: STUDY QUESTION. Can the steady increases in health care expenditures as a share of GDP projected by widely cited actuarial models be rationalized by a macroeconomic model with sensible parameters and specification? DATA SOURCES. National Income and Product Accounts, and Social Security and Health Care Financing Administration are the data sources used in parameters estimates. STUDY DESIGN. Health care expenditures as a share of gross domestic product (GDP) are projected using two methodological approaches--actuarial and macroeconomic--and under various assumptions. The general equilibrium macroeconomic approach has the advantage of allowing an investigation of the causes of growth in the health care sector and its consequences for the overall economy. DATA COLLECTION METHODS. Simulations are used. PRINCIPAL FINDINGS. Both models unanimously project a continued increase in the ratio of health care expenditures to GDP. Under the most conservative assumptions, that is, robust economic growth, improved demographic trends, or a significant moderation in the rate of health care price inflation, the health care sector will consume more than a quarter of national output by 2065. Under other (perhaps more realistic) assumptions, including a continuation of current trends, both approaches predict that health care expenditures will comprise between a third and a half of national output. In the macroeconomic model, the increasing use of capital goods in the health care sector explains the observed rise in relative prices. Moreover, this "capital deepening" implies that a relatively modest fraction of the labor force is employed in health care and that the rest of the economy is increasingly starved for capital, resulting in a declining standard of living.

The role of money during the recession in Australia in 1990—92

Abstract: What role did money play during the severe recession in Australia in 1990–92? A multivariate time-series model of the Australian economy is developed and the influence of each variable–including money–on real GDP is determined. A dramatic fall in the rate of monetary expansion during 1989 accounts for the severity of the recession. Indeed, the recession would have been even more serious without mitigating foreign factors. The Reserve Bank readjusted monetary policy in 1990 and there were no further adverse monetary shocks during the downward phase of the business cycle. The time-series technique employed is known as historical decomposition.

Macroeconomic reform and growth in Africa : adjustment in Africa revisited

Abstract: The 1994 World Bank study,"Adjustment in Africa: reforms, results, and the road ahead,"assessed the extent of, and economic payoffs from, policy reform in 29 countries in sub-Saharan Africa in the mid-1980s and 1990s. Here, the authors update the results of that report with 1992 macroeconomic data and explore some issues in more detail. The conclusions of the earlier report still hold: improved policies are still associated with improved performance, but countries fall short of having sound policies. In fact, the 1991-92 policy stance was not as strong as the 1990-91 stance, reflecting the slow, fragile, and often reversal-prone nature of macroeconomic reform in Africa. Getting the real exchange rate right and reducing the fiscal deficit should be the top priority for restoring growth. Countries that significantly reduced their budget deficits and reduced the black market premium (by devaluing) enjoyed the greatest payoffs from reform. Devaluation of the CFA franc in January 1994 represents a real opportunity for the CFA franc zone countries to restore growth. Many countries have made considerable progress in moving toward competitive real exchange rates. There still remains the challenge of reducing budget deficits in ways consistent with poverty-reducing growth. Hence, the need to reorient public spending to the essential tasks of government, especially providing social services. Reform in two areas will be important to sustaining fiscal reform: implicit subsidies to public enterprises must be cut, and the cost of restructuring the banking sector must not be absorbed by the budget. Policy reforms undertaken so far have paid off in higher growth rates, but the level of growth is still too low to sustain rapid rates of poverty reduction. Increased growth seems to have come more from efficient use of existing capacity than from new investments. Only steady and increased policy reform will convince investors of the credibility of reform and thus of a more favorable investment climate.

Les provinces canadiennes et la convergence : une évaluation empirique

Abstract: This paper examines whether the hypothesis of economic convergence holds for the Canadian provinces Using data on real gross domestic product per capita and on factor productivity from 1966 to 1992, the paper shows, using two different methods, that the convergence hypothesis cannot be rejected This evidence supports the findings of other authors who have studied convergence among Canadian provinces

Political Cycles and Cyclical Policies. A New Test Approach Using Fiscal Forecasts

Abstract: We test how government revenue and expenditure depend on economic activity, elections, and ideology. We show how the use of fiscal forecasts makes it possible better to understand the determinants of fiscal variables and to separate fiscal policy rules from discretionary policies. The approach is illustrated using a unique, unpublished Swedish data set of fiscal forecasts and forecasts of economic activity. Revenue varies positively with nominal earnings, expenditure varies negatively with real GDP. We find partisan effects, but no political business cycle effects. Revenue and expenditure are lower with non-Social democratic governments. The partisan effect on revenue is stronger than on expenditure. Using another unique data set, we find that there are autonomous decisions behind the reaction of expenditure, but not of revenue, to activity.

Service as a major source of growth in Russia and other former Soviet states

Abstract: Private services could contribute greatly to economic growth in Russia and the other former Soviet states. The authors use econometric analysis to identify the gap between expected and actual levels of service activities in these countries and simulate the effect on GDP and employment of closing the gap. The gap is particularly wide for business and consumer services. Transport and publicly provided services are comparable to, or higher than, those in other countries. Traditionally, the Marxist doctrine of socialist economies has labeled services"nonproductive."And there is continuing evidence that national policies in these countries favor producers of goods over producers of services. In Russia, for example, there was until recently a 25 percent ceiling on trade margins for some products, and the enterprise profits tax is higher for producers of services than for producers of goods. Also, coefficients for real estate lease payments are sometimes higher for service firms. It will be important for Russia and the other former Soviet states to identify a policy agenda to facilitate the rapid expansion of services. The policy agenda should entail legal, economic, and institutional changes to eliminate the current bias against services, so that service firms can operate on a level playing field. It should also include proactive programs to stimulate a rapid increase in the level of service activity. Appropriate measures may include: (a) changes in the tax law, the regulatory framework, and other economic incentives; (b) government programs to accelerate private sector development and the privatization of government distribution and service activities; (c) training for enterprise employees to facilitate their transfer from production to service activities; (d) action to support the orderly development of input and output markets; (e) creation of a modern banking system that will use appropriate criteria to provide credit to service enterprises; and (f) consideration of service activities as priorities for international technical assistance and direct foreign investment.

Explaining Pakistan's high growth performance over the past two decades : can it be sustained?

Abstract: Using standard statistical growth analysis, the author shows that Pakistan's growth is the result of: (a) rapid capital accumulation. Pakistan's investment rate was relatively low but its fixed investment rate grew steadily in the 1970s, stabilizing at about 17 percent of the Gross Domestic Product (GDP) in the mid-1980s; (b) growth of the labor force, which offset a tendency toward capital intensity of production; (c) more competition from external trade; and, (d) a policy of economic liberalization since 1978. Pakistan was able to sustain high growth and avoid a financial crisis - despite large deficits - because real interest rates on debts were substantially negative in the 1970s, so debt-to-GDP ratios continued to decline. But real interest rates turned positive in the 1980s. If Pakistan continues to have fiscal deficits of the same magnitude as in the past, a financial crisis will quickly emerge. Pakistan cannot avoid a debt crisis by creating money. Higher inflation will hurt resource allocation and income distribution. To guard against reduced growth, weakened export performance, and higher real interest rates, Pakistan should reduce its fiscal deficit to below 4.5-5 percent of GDP and phase out quasi-fiscal deficits. Pakistan needs more balanced use of fiscal, monetary and exchange rate policies. Putting the burden of external adjustment fully on the real exchange rate, as Pakistan tried to do in the past, is inconsistent with improvements in external balance. Real exchange rate depreciation imposes capital losses on the stock of external debt. The real exchange rate should be set at an appropriate level, and monetary and fiscal policies should be used to adjust demand. A substantial adjustment effort will be needed to increase domestic savings and investment rates. National savings should increase from 14 percent of GDP to 20-22 percent of GDP. Raising public revenues and reducing public investment should focus on areas (such as physical infrastructure and human development) that promote private investment, economic growth, and equity. To contain the fiscal cost of domestic borrowing, Pakistan has pursued a policy of financial repression, which has repressed the private credit and investment needed for long-term growth. Also needed is more rapid progress in human capital development, especially investments in women's health and education. To complete internationally in manufacturing requires more skilled production and a better educated workforce than Pakistan has had.

Has M2 demand in the USA become unstable? evidence from an error-correction model

Abstract: The purpose of this paper is to estimate an appropriate broad-money demand function for the United States and to examine its stability after 1987, when the Federal Reserve System began using M2 as a policy guide. Special attention is paid to the model specification, its dynamic structure, and to its cointegration properties. The results from various dynamic error-correction models suggest that: (i) the money demand relationship is stable; (ii) most previously estimated models have undoubtedly misspecified the interest rate variable; (iii) interest-rate variability is another important determinant of real money demand; and (iv) in contrast of previous studies, the long-run scale variable is real GDP, whereas real consumer spending is the short-run scale variable. The sample period examined is 1953:1 to 1991:4.

Recent Research on Economic Growth

Abstract: Economic growth has been a lively area of research since the mid-1980s Important advances have been made in both theory and empirical analyses, and much of this progress has been reported on at NBER conferences on growth, which first took place in 1989 My research over the last five years has focused on growth; the main results are included in Economic Growth, coauthored with Xavier Sala-i-Martin and forthcoming this fall from McGraw-Hill(1) Aimed at the level of first-year graduate students in economics, the book combines new results with expositions of theories from the 1950s through the 1990s To appreciate the importance of growth rates, start with the observation that the US real per capita GDP, measured in 1985 dollars, grew from $2244 in 1870 to $18,258 in 1990, or by 175 percent per year This performance gave the United States the highest real per capita GDP in the world in 1990 (with the possible exception of the United Arab Emirates, an oil producer with a small population) If the US growth rate had been just one percentage point per year less--that is, 075 percent per year--then the real per capita GDP in 1990 would have been $5519, only 30 percent of the actual value Then, instead of ranking first in the world in 1990, the United States would have ranked 37th out of 127 countries with data available To put it another way, the US real per capita GDP in 1990 would have been close to that in Mexico and HUngary, and would have been about $1000 less than that in Portugal and Greece Alternatively, if the US growth rate had been one percentage point per year higher--that is, 275 percent per year--then the real per capita GDP in 1990 would have been $60,841, or 33 times the actual value A real per capita GDP of $60,841 is well outside the historical experience of any country and may, in fact, be infeasible But, in any event, a continuation of the long-term US growth rate of 175 percent per year implies that the United States would not attain a real per capita GDP of $60,841 until the year 2059 For 114 countries between 1960 and 1990 the average growth rate of real per capita GDP was 18 percent per year--nearly the same as the long-term US rate The range is -21 percent per year for Iraq to 67 percent per year for South Korea Thirty-year differences in growth rates of this magnitude have enormous consequences for standards of living South Korea raised its real per capita GDP from $883 in 1960 (rank 83 out of 118 countries) to $6578 in 1990 (rank 35 of 129), while Iraq lowered its real per capita GDP from $3320 in 1960 (rank 23 of 118) to $1783 in 1990 (rank 82 of 129) In 1990, the mean of real per capita GDP for 118 countries was $2737 The highest value--$18,399 for the United States--was 65 times the lowest value--$285 for Ethiopia To understand why countries differ this much in standards of living requires knowing why they experience correspondingly sharp divergences in long-term growth rates Even small differences in these growth rates, when cumulated over a generation or more, have much greater consequences for standards of living than the kinds of short-term business fluctuations that typically have occupied most of the attention of macroeconomists To put it another way, if we can learn about government policy options that have even small effects on the long-term growth rate, then we can contribute much more to improvements in standards of living than has been provided by the entire history of macroeconomic analysis of countercyclical policy and fine-tuning Economic growth is the part of macroeconomics that really matters Modern growth theory begins with the neoclassical model, as developed by Frank Ramsey (1928), Robert M Solow (1958), Trevor W Swan (1956), David Cass (1965), and Tjalling C Koopmans (1965) A key prediction of these models--which has been exploited seriously as an empirical hypothesis only in recent years--is conditional convergence …

Exports Growth and Industrial Development: Some Further Evidence from South Korea

Abstract: This article reexamines the causative relationship between export growth and industrial development. Unlike its predecessors, the present paper includes a measure of the extent of development using the ratio of currency to money supply. A vector autoregressive technique incorporating South Korean annual data on real GDP, real exports, manufacturing output, and the degree of development, has been employed. Most variables proved to possess bidirectional causality. However, contrary to popular belief, the exports-manufacturing causal relationship has been found to be only indirect via the development variable.

Small firms and the prospect of recovery: a note on policy

Abstract: There has been a trickle of recent evidence that the current recession is coming to an end. From a number of perspectives it may be argued that it is fortunate that the pace of recovery from the longest post‐war recession is faltering and slow. How can slow recovery from the longest recession since the war be welcome when almost 44% of the small businesses responding to the National Westminster Bank / Small Business Research Trust surveys report low turnover or lack of business as the major constraint, with the smallest businesses being affected most? The reason is that the economic and social policy cocktail which offers the prospect of sustained growth has yet to be discovered in the UK, if indeed such policies exist. Over the past thirty years (excluding the oil shock of the early 1970s) two periods of decline in real GDP have occurred, both since 1980 (Budget Statement 1990/1). It thus appears that the downside swings in the economy are becoming more pronounced. Recent reductions in interest rates are helpful in encouraging recovery but policies which smooth rather than accentuate fluctuations in the levels of economic activity are what is really required. These policies need to be established within the context of a strategy for managing the UK economy. Such a strategy must incorporate the role of small firms which, as recent evidence shows, continue to be a very important segment of industry and commerce despite the ravages of recession.

IMF Stabilization Policies in Developing Countries: A Disaggregated Quantitative Analysis

Abstract: This study examines the impact of the IMF programs on balance of payments, inflation, and economic growth of the program countries. The policy instruments used: currency devaluation, reduction in government budget and domestic credit, and increase in real interest rate. The findings show that Fund, in general, improve the rate of growth in real GDP, the inflation rate, and the current account balance in the short-run. As to their effectiveness, real interest rate targeting appears to be the most effective tool. The second important variable is the growth in domestic credit. Fiscal policy and devaluation come next in terms of effectiveness [F32].

South Africa : stimulating economic growth

Abstract: South Africa has begun a new phase in its history. This article reports on a study examining the challenge of promoting equitable and fiscally sustainable growth, and evaluating alternative paths to growth using an econometric model developed by World Bank staff. The broad conclusion is that there needs to be greater complementarity between stimulating the economy through public investment and reviving private investment if South Africa is to achieve a sustainable growth. The prospects of success will be improved considerably if skills are upgraded and a reorientation towards exports is achieved, accompanied by a restructuring of public expenditure - within fiscally sustainable limits - for targeting the poor. The scenarios examined assume that political stability is achieved and that access to international capital markets improves.

East Asia - Regional Economic Integration and Implications for the United States

Abstract: On May 4, 1992, the U.S. International Trade Commission (hereinafter the Commission or the ITC) received a request from the House Committee on Ways and Means to conduct an investigation under section 332(g) of the Tariff Act of 1930 on the causes of increasing economic integration in East Asia and implications of this integration for the United States.(1) On June 30, 1992, the Commission instituted investigation 332-326 in response to the request,(2) and the Commission released its results in a nine-part report in May 1993. For the purposes of its report, the ITC defined the countries of East Asia as Brunei, China, Hong Kong, South Korea (Korea), Indonesia, Malaysia, the Philippines, Singapore, Taiwan, and Thailand.(3) The Commission examined trade, investment, and other economic data, as well as commercial and development policies of East Asian countries and their major trading partners (japan and the United States) to determine whether recent economic changes and policy measures are effectively merging East Asia's markets for goods, services, capital, and labor.(4) Case studies on three industrial sectors and the energy and environmental sectors were also undertaken to identify factors favoring or standing in the way of economic integration in the region.(5) Finally, the Commission interviewed people experienced in the regional economic and business affairs about the implications of recent trends in East Asia for U.S. trade interests and Policy.(6) What follows is a summary of the highlights of the ITC's 1993 report. 1. Interest and Concern with East Asia East Asia has been one of the fastest growing regions of the world in recent years, with annual real gross domestic product (GDP) growth for the period of 1985-1990 averaging 8.6% in the newly industrializing economies (NIEs), namely, Singapore, Taiwan, Hong Kong, and Korea; 6.8% in the ASEAN Four (Indonesia, Malaysia, Thailand, and the Philippines); and 7.9% in China.(7) East Asia has a combined GDP that is roughly 6% of the world total. Just under 80% of this GDP is divided more or less evenly between China (population 1.2 billion) and the NIEs (population approximately 72 million).(8) The countries of East Asia represent a diverse collection of economic and political systems and a broad range of indigenous resources.(9) The ITC found that each has struggled to modernize and develop its economy, often with the aid of some form of long-term planning or industrial policy. According to the ITC report, while national priorities and political differences have shaped strategies, the overall trend for East Asia in recent years has been away from import substitution, in which domestic industries are fostered behind trade barriers to serve markets that would otherwise be supplied by imports.(10) Most countries in the region are now moving toward export-led growth investment liberalization.(11) However, the ITC noted the existence of factors that could constrain future investment and growth. Infrastructure has generally not kept pace with economic development, and serious bottlenecks in communication and power systems, roads, ports, and services are occurring.(12) While tariffs on thousands of products have been reduced somewhat, they have generally not been applied to sensitive items.(13) According to the ITC's findings, nontariff barriers still hinder commerce in the region, and protection of intellectual property rights (IPR) is still regarded as lax in certain countries. Investment performance requirements, shortages of trained middle managers and engineers, and the absence of long-term capital markets essential for large-scale financing are also constraints.(14) The ITC analyzed each nation in turn, making the following major conclusions: A. Korea Historically, Korea's contact with other nations in Northeast Asia has not been favorable. Neighboring China has been seen as a threat to the independence of the Korean peninsula, and Korea has only recently established diplomatic relations with China. …

Tax-based research and data on non-profit organisations

Abstract: Tax-exempt, non-profit organisations represent a significant and growing sector within the US economy. Between 1975 and 1990, assets of tax-exempt organisations increased in real terms by over 150 per cent while the revenue increased by over 227 per cent. This compares to a growth in real GDP of 52 per cent over the same period. A variety of tax policy issues on tax-exempt organisations and the non-profit sector can be addressed using several sources of data collected by the IRS from federal information and tax returns of exempt organisations. The Statistics of Income (SOI) Division, using sample data, conducts studies of many of the different components of the tax-exempt sector, including non-profit charitable organisations, organisations exempt under sections 501(c)(4)-(c)(9), private foundations and 4947(a) charitable trusts, and the unrelated business income of tax-exempt organisations. Income statement, balance sheet and other financial data, as well as a great amount of non-financial information, are collected in these SOI studies. The primary purposes of this article are: first, to document the role of the non-profit sector in the US economy and the evolving growth and change within the sector from the mid-1970s through to the present; and, second, to describe the ongoing SOI studies of tax-exempt organisations, the products and services available through SOI, and the future statistical plans at SOI for data collection and analysis of tax-exempt organisations and the non-profit sector.

Ausencia de señoreaje y Solvencia del Gobierno ante la U.E.M ¿Puede España cumplir ambas condiciones?

Abstract: In this paper the sustainability of the Spanish fiscal policy is examined. The aim of the paper is to test whether the government's budget is balanced intertemporally in the context of a growing economy. where the variables are normalised by real GDP and population. The conclusions are, first, that the Spanish fiscal policy is not sustainable without seigniorage and second, that the Government may run into problems of marketing its debt in the future if the current fiscal policy continues without holdillg the restriction imposed on the debt/GDP ratio.

How Large Was the the Output Collapse in Russia? Alternative Estimates and Welfare Implications

Abstract: The divergence between production and consumption indicators in Russia suggests that the magnitude of the output collapse in the course of the transition is overstated by the official statistics. Alternative estimates for real GDP are derived, which reconcile the official production and consumption data. Based on cautious assumptions, real GDP appears to have declined cumulatively by no more than one third rather than by one half. The drop in household welfare is much smaller still, as the output mix shifts and deadweight losses are sharply reduced.