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Full-Text Articles in Social and Behavioral Sciences
Structural Change Ramifications Of Consumer Credit Expansion In A Two Sector Growth Model, Esra Nur Ugurlu
Structural Change Ramifications Of Consumer Credit Expansion In A Two Sector Growth Model, Esra Nur Ugurlu
Economics Department Working Paper Series
This paper analyzes the structural change implications of consumer credit expansions in a dual-sector open economy growth model. Policy-induced increases in banks’ willingness and ability to lend result in new consumer lending, boosting consumption demand and average wages in the nontradable sector. Under the assumptions of fixed relative wages and mark-up pricing, wage pressures translate into inflationary pressures. The central bank, acting under the sole target of controlling inflation, raises the interest rate to contain inflationary pressures. This intervention causes a real exchange rate appreciation, followed by a loss of international competitiveness in the tradable sector. This way, the model …
Revisiting India’S Growth Transitions, Deepankar Basu
Revisiting India’S Growth Transitions, Deepankar Basu
Economics Department Working Paper Series
This paper reconsiders two questions relating to India’s economic growth: structural breaks in growth and the impact of equipment investment on aggregate economic growth. First, statistical tests of structural change show that economic growth in post-independence India has witnessed four structural breaks: in 1964-65, in 1978-79, in 1990-91, and in 2004-05. However, substantial growth accelerations, i.e. increase of more than 1.0% per annum in the growth rate of per capita real GDP, occurred only at two points: 1978-79 and 2004-05. Second, to analyze the impact of equipment investment on growth, I use an ARDL bounds testing methodology. I find a …
The Real Exchange Rate And Development. Theory, Evidence, Issues, And Challenges, Firat Demir, Arslan Razmi
The Real Exchange Rate And Development. Theory, Evidence, Issues, And Challenges, Firat Demir, Arslan Razmi
Economics Department Working Paper Series
This paper surveys the theoretical and empirical literature on the effects of the real exchange rate (RER) on international trade, economic development and growth. We summarize the main conceptual issues, discuss the relevance of the RER as an instrument of development policy, provide an overview of the macroeconomic and microeconomic mechanisms that link the RER to trade and long run growth and development, analyze the challenges – especially the disconnect between theory and data -- that often arise in empirical applications, and present new avenues for future research. In the process, we present some updated estimates and illustrative figures. The …
Revisiting India's Growth Transitions, Deepankar Basu
Revisiting India's Growth Transitions, Deepankar Basu
PERI Working Papers
This paper reconsiders two questions relating to India’s economic growth: structural breaks in growth and the impact of equipment investment on aggregate economic growth. First, statistical tests of structural change show that economic growth in post-independence India has witnessed four structural breaks: in 1964-65, in 1978-79, in 1990-91, and in 2004-05. However, substantial growth accelerations, i.e. increase of more than 1.0% per annum in the growth rate of per capita real GDP, occurred only at two points: 1978-79 and 2004-05. Second, to analyze the impact of equipment investment on growth, I use an ARDL bounds testing methodology. I find a …
Three Essays On Governments And Financial Crises In Developing Economies, 1870-1913, Peter H. Bent
Three Essays On Governments And Financial Crises In Developing Economies, 1870-1913, Peter H. Bent
Doctoral Dissertations
This dissertation studies the factors that contribute to the onset of financial crises (Chapter 1) and the ways that economies have recovered from crises (Chapters 2 and 3). I am specifically interested in the role that governments played in financial crises and recoveries. I focus on thirty-five peripheral economies from 1870-1913. Economic historians refer to this period as the “first era of globalization” for its high degree of in- ternational capital, trade, and labor movements. This was also an economically volatile time, with relatively frequent financial crises. Other economic variables, such as com- modity prices and tariff rates, saw significant …
Real Exchange Rates And The Long‐Run Effects Of Aggregate Demand In Economies With Underemployment, Peter Skott, Martin Rapetti, Arslan Razmi
Real Exchange Rates And The Long‐Run Effects Of Aggregate Demand In Economies With Underemployment, Peter Skott, Martin Rapetti, Arslan Razmi
Peter Skott
Successful economic development to a large extent derives from the mobilization of underemployed resources. Demand policy can play an important role. It is critical, however, to consider balance of payments constraints and to ensure an expansion of investment in the modern sector. A combination of investment promotion and exchange rate intervention may be required to achieve these goals.
Real Exchange Rates And The Long-Run Effects Of Aggregate Demand In Economies With Underemployment, Peter Skott, Martin Rapetti, Arslan Razmi
Real Exchange Rates And The Long-Run Effects Of Aggregate Demand In Economies With Underemployment, Peter Skott, Martin Rapetti, Arslan Razmi
Economics Department Working Paper Series
Successful economic development to a large extent derives from the mobilization of underemployed resources. Demand policy can play an important role. It is critical, however, to consider balance of payments constraints and to ensure an expansion of investment in the modern sector. A combination of investment promotion and exchange rate intervention may be required to achieve these goals.
Comparative Growth Dynamics In A Discrete-Time Marxian Circuit Of Capital Model, Deepankar Basu
Comparative Growth Dynamics In A Discrete-Time Marxian Circuit Of Capital Model, Deepankar Basu
Economics Department Working Paper Series
This paper develops a discrete-time formalization of the circuit of capital model presented by Marx in Volume II of Capital Marx (1993) as a tool for aggregate economic analysis of capitalist economies. The discrete-time formalization closely follows and extends the continuous-time formalization in Foley (1982, 1986a). The discrete-time model is used to address two important issues of interest to the heterodox economic tradition: profit-led versus wage-led growth, and the growth-reducing impact of non- production credit. First, it is demonstrated that both profit-led and wage-led growth regimes can be accommodated within the Marxian circuit of capital model. Second, it is demonstrated …
Gender, Distribution, And Balance Of Payments Constrained Growth In Developing Countries, Stephanie Seguino
Gender, Distribution, And Balance Of Payments Constrained Growth In Developing Countries, Stephanie Seguino
PERI Working Papers
An unresolved debate in the development literature concerns the impact of gender inequality on economic growth. Previous studies have found that the effect varies, depending on the measure of inequality (wages or capabilities). This paper expands that discussion by considering both the short- and long-run, evaluating the effects of gender equality in two types of economies—semi-industrialized economies (SIEs) and low-income agricultural economies (LIAEs). Further, it incorporates the effect of gender equity on the balance of payments constraint to growth. These preliminary results suggest that gender equality is more likely to stimulate growth in LIAEs than in SIEs in both the …
External Shocks, Structural Change, And Economic Growth In Mexico, 1979–2006, Robert A. Blecker
External Shocks, Structural Change, And Economic Growth In Mexico, 1979–2006, Robert A. Blecker
PERI Working Papers
This paper estimates the effects of external constraints on growth and investment in the Mexican economy, and how those effects have changed since the economic liberalization of the 1980s and the formation of NAFTA in 1994. Shocks to net financial inflows, world oil prices, the U.S. growth rate, and the real value of the peso explain most of the fluctuations in Mexico’s annual growth since 1979 (with structural breaks in some of these effects due to liberalization or NAFTA). Both Hausman weak exogeneity tests and simultaneous equations estimates generally support the view that growth drives investment but not the other …
Inflation And Economic Growth: A Cross-Country Non-Linear Analysis, Robert Pollin, Andong Zhu
Inflation And Economic Growth: A Cross-Country Non-Linear Analysis, Robert Pollin, Andong Zhu
PERI Working Papers
This paper presents new non-linear regression estimates of the relationship between inflation and economic growth for 80 countries over the period 1961 – 2000. We perform tests using the full sample of countries as well as sub-samples consisting of OECD countries, middle-income countries, and low-income countries. We also consider the full sample of countries within the four separate decades between 1961 – 2000. Considering our full data set we consistently find that higher inflation is associated with moderate gains in GDP growth up to a roughly 15 – 18 percent inflation threshold. However, the findings diverge when we divide our …