Codrina Rada

Growth and policy in developing countries : a structuralist approach

Economic structuralists use a broad, systemwide approach to understanding development, and this textbook assumes a structuralist perspective in its investigation of why a host of developing countries have failed to grow at 2 percent or more since 1960. Sensitive to the wide range of factors that affect an economys strength and stability, the authors identify the problems that have long frustrated growth in many parts of the developing world while suggesting new strategies and policies to help improve standards of living. After a survey of structuralist methods and post-World War II trends of global economic growth, the authors discuss the role that patterns in productivity, production structures, and capital accumulation play in the growth dynamics of developing countries. Next, it outlines the evolution of trade patterns and the effect of the terms of trade on economic performance, especially for countries that depend on commodity exports. The authors acknowledge the structural limits of macroeconomic policy, highlighting the negative effects of financial volatility and certain financial structures while recommending policies to better manage external shocks. These policies are then further developed through a discussion of growth and structural improvements, and are evaluated according to which policy options-macro, industrial, or commercial--best fit within different kinds of developing economies.

Empty Sources of Growth Accounting, and Empirical Replacements à la Kaldor with Some Beef

SINCE I93I foreign loans have been under strict Treasury control in Great Britain. Indeed, foreign lending has been virtually abandoned. Severe restrictions and at times complete prohibition-have been imposed upon the flotation of new foreign issues in the London market. For more than five years, therefore, the financial world has been wondering whether or not Great Britain will again enter the foreign loan market or whether she has definitely made up her mind to become merely the banker for herself and the British Empire. With the continued progress of world economic recovery and the increasingly widespread discussion of the possibility of development in various parts of the world, this question has assumed new significance.2 On April 7th, 1936, Mr. Neville Chamberlain, Chancellor of the Exchequer, announced the appointment of an expert Advisory Committee on Foreign Loans,3 with Lord Kennet as its Chairman.4 The Committee contains representatives

FORMAL AND INFORMAL SECTORS IN CHINA AND INDIA

This paper discusses the estimation of a social accounting matrix that distinguishes between formal and informal activities for China and India for 2000 and 1998–99 respectively. Wage shares for formal/informal employment in China and net domestic product shares for organized/unorganized sectors in India are used as weights to calculate the size of the two sectors. The proposed methodology is a first step towards an integrated approach to account for the dualism of many economies in the developing world. The results can serve as data input for any policy-driven CGE model for developing countries.

Distribution-Utilization Interactions: A Race-to-the-Bottom Among Oecd Countries

We explore four decades of short and long run interactions between income distribution and real economic activity for a panel of OECD countries. Allowing for predator-prey dynamics, we find a convergent, rather than persistent, cycle exhibiting profit-led dynamics. Our regressions suggest that the dynamic interaction of these two variables is rather complicated. Estimating the long run point, we argue that this equilibrium has been shifting as a matter of public policy. We hypothesize that a race to the bottom arises from a need to be competitive in globalized markets. We report evidence that globalization does have a negative long-run effect on the wage share, and perhaps a positive effect on utilization. We also find that other factors have been important: unionization has been pro-labor, while contractionary monetary policy and R&D spending have been anti-labor.

CAN THE POOR COUNTRIES CATCH UP? MIXED RESULTS FROM EXTENDED SOURCES OF GROWTH PROJECTIONS FOR THE EARLY 21st CENTURY

Illustrative projections of per capita income gaps between two groups of developing economies and the rich economies for the period 1998-2030 are made on the basis of an extended sources of growth equation which accounts for interactions between trends in capital and labor productivity. The equation takes into consideration Kaldor-Verdoorn effects, possible impacts on labor productivity of trade liberalization andsor astute industrial policy, human and physical capital accumulation, employment and population growth, shifting shares of labor in income and traded goods in output, shifts in capital productivity, productivity growth retardation due to convergence and specific regional effects. Under optimistic assumptions about all these factors and in the historically unprecedented absence of adverse macroeconomic shocks over three decades, relative and absolute convergence of both regions to the rich countries may be possible. Copyright

Social Security Tax and Endogenous Technical Change in an Economy with an Aging Population

This paper presents a classical model of economic growth which incorporates class conflict and induced technological change to show how demographic changes can affect future income distribution and production relations in industrialized countries. Specifically, I use an extended real wage Phillips curve to account for the effects of a social security tax on income distribution and therefore on capital accumulation and employment. In this framework output growth is determined from the supply side by available savings. Analytical and simulation results indicate that the sustainability of an economy with fast population aging over transient paths hinges upon improvements in labor productivity, hence, the specific mechanism of technical progress in place.

A Gendered Model of the Peasant Household: Time poverty and Farm Production in Rural Mozambique

ABSTRACT Using insights from a case study on the allocation of labor in subsistence households in Mozambique, this study develops a conceptual framework for examining linkages between time poverty and farm production. An unexpected event such as a health crisis increases the demand for labor provided by women, thus making them more time poor. The model and numerical simulations show that a deterioration in a womans time constraint will have an adverse effect on agricultural output of the household. This occurs because most women respond to an increase in household work by reducing their work hours on the farm and by reducing their leisure time. The latter outcome is expected to have a negative effect on womens physical and mental health, which will then cause a decline in their productivity on the farm.