Charles B. Garrison

The effect of macroeconomic variables on economic growth rates: A cross-country study☆

Abstract The paper studies the impact of macroeconomic variables on economic growth during the period 1960–1987. We find no evidence for the view that countries which pursue macroeconomic policies that result in high inflation, large budget deficits, and high levels of government consumption spending suffer low rates of growth of per capita output. We find weak evidence, however, for a negative effect of high marginal tax rates on growth. Further, we find strong evidence that countries which achieve low variability of output growth and which expand their foreign trade have high rates of economic growth.

Industrial Growth in the Tennessee Valley Region, 1959 to 1968

Shift analysis and the technique of entropy indicate an increase in the strength of rural and small-town counties competing with urban areas for manufacturing employment during the study period. Increase in the strength of the most rural counties apparently was confined to labor-oriented industries, but small towns and small cities were successful in attracting industries of varying orientations. Despite the rapid rate of industrialization, rural counties experienced slow or negative population growth; this is attributed to the absence of sizeable employment multiplier effects and to offsetting employment declines in extractive industries. The implication is that considerable potential exists for further rural industrialization.