Hassan Bougrine

Unemployment Insurance and Unemployment: An analysis of the aggregate demand-side effects for postwar Canada

Most of the theoretical and empirical literature on the effects of unemployment insurance (UI) during the last 25 years has focused on the supply-side implications. The object of this article is to argue that much of those discussions over the disincentive effects of UI is misdirected. Our intention is to bring back to the forefront a discussion of the positive macroeconomic role played by UI net injections in stabilizing aggregate demand. Our empirical results using Canadian data for the postwar period support this Keynesian view of the stabilizing effect of UI in contemporary economies.

Financing Development: Removing the External Constraint

A salient feature of the international monetary system is the existence of a hierarchy of currencies. Unlike the major industrialized countries where there exists an international market for their currencies and whose citizens are in a privileged position to be able to borrow internationally and accumulate debt that is denominated in their own national currencies, this is not the case for the vast majority of countries, especially in the developing world. Historical and empirical evidence demonstrate that exchange rates volatility hurts economic growth in developing countries, particularly when these countries are heavily indebted to the major foreign lenders with loans denominated in foreign currencies. Indeed, developing countries are often presented as typical examples of deficient saving (i.e. having trade deficits) and technological backwardness. To remedy these problems, developing countries must rely on foreign lenders to finance important projects, requiring capital imports, which are crucial to their development. The problem is that when exchange rates are volatile, these countries find themselves in a situation where they have to bear the burden of the adjustment which is crippling for domestic growth. We propose an institutional mechanism for settling international payments and imbalances that would protect poor countries without necessarily hurting the interests of international money lenders.

Capital accumulation, output growth and disparities in labour productivity among Canadian regions

This paper extends the original formulation of the Verdoorn Law and derives a productivity equation in order to measure the effects of capital accumulation, scale economies, and technical progress on growth of productivity in the manufacturing sector of six Canadian regions. Productivity growth appears to be strongly influenced by growth of output but the impact of capital accumulation, although small, is not negligible. The results also indicate that there is evidence of substantial economies of scale in all regions and, contrary to common belief, that productivity growth rate adjusted for cyclical variations continued to decline during the 1980s. The fall in the output growth rate is found to be responsible for most of this decline

Globalization, Free Trade and Economic Growth in Mexico

The fast and steady growth that characterized several East Asian countries during the 1970s and 1980s prompted policy makers from most developing countries to copy the East Asian model, in the hope of getting on the fast-track of growth and catching up with the club of the rich. International organizations such as the World Bank, IMF, GATT, etc. exaggerated the virtues of free market in order to convince policy makers around the world that “liberalization and deregulation” are the recipe for the ‘East Asian Miracle’. Under such temptations, Mexico abandoned its import-substitution strategy and began liberalizing its economy in the late 1970s.