1,721,402 research outputs found
Economic development, structural change and natural resources booms: A structuralist perspective
No full textIn this paper we present a structuralist two-sector model on economic development, structural change and natural resource booms. We describe a multiple equilibria scenario, in which manufacturing development is the main source of economic progress. Natural resource booms, by modifying the productive structure of the economy, may set destabilizing forces. De-industrialization processes may take place, confining developing countries in poverty traps. Public intervention in the economic sphere, both through short-run macro policies and through long-run development strategies, may help to free the economy from poverty traps and to foster the development process
Carmen Reinhart and Kenneth Rogoff in a time of austerity. A critique of the expansionary austerity theory
No full textIn quest’articolo si propone un’analisi critica della teoria dell’austerità
espansiva. In primo luogo, si analizza il ben noto e assai dibattuto articolo di Carmen
Reinhart e Kenneth Rogoff circa la possibile correlazione negative tra crescita economica
e debito pubblico che potrebbe emerge in presenza di uno stock di debito pubblico
superiore al 90 percento del PIL. Si analizzano quindi i contributi empirici che
più direttamente sostengono i possibili effetti espansivi di politiche di consolidamento
fiscale. Nella parte finale dell’articolo, si propone un semplice modello teorico di
breve periodo attraverso il quale si mostrano le circostanze economiche assai estreme,
specifiche e tutt’altro che scontate in virtù delle quali l’austerità espansiva potrebbe
aver luogo. La teoria dell’austerità espansiva appare difficilmente applicabile a economie
sovrane dal punto di vista monetario, ovvero in presenza di politiche monetarie
accomodanti, ovvero in sistemi economici chiusi e poco integrati sui mercati internazionali
dei beni.In this paper, we provide a critical analysis of the theory of the expansionary austerity. We take the hotly debated contribution by Carmen Reinhart and Kenneth Rogoff on the supposedly negative relationship between public debt and economic growth (when the debt-to-GDP ratio overcomes the 90 percent threshold) as the starting point of our analysis. We then move to analyze those contributions that more directly point to the possible expansionary outcomes of tough fiscal retrenchments. We eventually criticize the main conclusions of the expansionary austerity theory by presenting a simple short-run theoretical model. We show that fiscal consolidation might have expansionary outcomes only under pretty extreme, or very specific and uncertain
circumstances. Expansionary austerity would hardly take place in the context of monetarily sovereign economies, or in presence of an accommodative monetary policy like that implemented by the ECB since late 2011, or into economic systems that are poorly
integrated on international goods markets
Is Latin American Structuralism still Relevant? A Theoretical Dissertation on Structural Change and Economic Development
No full textThe book is an analysis of the current relevance of Latin American Structuralist Theory to expain the process of economic development and of possible constraints set to it. After an initial sketch on the historical origins of the Structuralist Theory and its appeal for nowadays economic problems of developing countries, the book considers some formal milestone structuralist models in order to analytically describe traditional structuralist issues such as the connection between decreasing terms of trade of raw materials and economic growth potential in peripheral economies; the external constraint to growth; the search for structural changes and sustained industrialization as the long-run main way to feed economic development and close the development gap between developing countries and the developed ones
A proposito di Eurobonds
No full textIn this article, I first note that most eurobond proposals basically aim to cut debt service costs and favor the reduction of outstanding public debt stocks. While this perspective is consistent with the well-known “debt intolerance” theory and the idea that tough austerity is required to restore macroeconomic solidity, it totally neglects the Keynesian-type uncertainty that currently seems to affect the eurozone economy. In such a context, I argue expansionary fiscal policies instead of fiscal austerity are needed to end the crisis. Accordingly, eurobonds should be conceived as financing instruments of anti-cyclical fiscal policies carried out, hopefully, by a eurozone federal government. I also stress that the in-deep roots of the existing difficulties lie in the incompleteness and fragility of the eurozone institutional building with respect to monetarily sovereign countries, rather than in “bad” fundamentals in peripheral economies. Therefore, a decisive step out of the crisis would entail the reconciliation of monetary and fiscal policy through the creation of a definitive eurozone federal entity
Structural Asymmetries at the Roots of the Eurozone Crisis. What's New for Industrial Policy in the EU?
No full textIn this paper, we analyze and try to measure productive and technological asymmetries between central and peripheral economies in the eurozone. We assess the effects such asymmetries would likely bring about on center–periphery divergence/convergence patterns, and derive some implications as to the design of future industrial policy at the European level. We stress that future European Union (EU) industrial policy should be regionally focused and specifically target structural changes in the periphery as the main way to favor center–periphery convergence and avoid the reappearance of past external imbalances. To this end, a wide battery of industrial policy tools should be considered ranging from subsidies and fiscal incentives to innovative firms, public financing of R&D efforts, sectoral policies, and public procurements for home-produced goods. All in all, future EU industrial policy should be much more interventionist than it currently is, and dispose of much larger funds with respect to the present setting in order to effectively pursue both short-run stabilization and long-run development goals
The macroeconomics of a financial dutch disease
No full textIn this paper we describe the medium-run macroeconomic effects and long-run development consequences of a financial Dutch disease that may take place in a small developing country with abundant natural resources. The first move of such a peculiar Dutch disease is on financial markets. An initial surge in FDI targeting domestic natural resources sets in motion a perverse cycle between exchange rate appreciation and mounting short-term capital flows. Such a spiral easily gives rise to exchange rate volatility, foreign capital reversals, and sharp macroeconomic instability. In the long run, such acute macroeconomic instability as well as overdependence on natural resource exports all dampen the development of non-traditional tradable good sectors and curtail labor productivity dynamics. We advise the introduction of constraints to short-term capital flows, in the form of taxes on exchange rate-based capital gains, to tame exchange rate/capital flows boom-and- bust cycles. We also provide support to a developmentalist monetary policy that targets competitive nominal and real exchange rates in order to favor the process of production and export diversification. Such a policy stand can be particularly effective to counter-act the long- run negative effects of the financial Dutch disease we describe
A structuralist North–South model on structural change, economic growth and catching-up
No full textThis paper presents a structuralist North–South model on structural change, industrializa- tion and economic convergence. In a balance-of-payments-constrained macro-setting, we assume a cumulative process between industrialization and growth. Differently from the traditional post-Keynesian models, we endogenize the productive structure of developing countries. We enquire how industrialization affects uneven development and convergence processes. Multiple growth paths and a long-run path-dependent equilibrium emerge. Industrialization proves to be a necessary but not sufficient condition for catching-up. Good management by the domestic institutions of domestic industrialization is a complementary requirement
Conflicting claims in the eurozone? Austerity's myopia and the need for a European Federal Union in a post-Keynesian eurozone center–periphery model
Full text linkIn this paper we study the role of the eurozone’s institutional design in determining the sovereign debt crisis of the peripheral euro countries by means of a post-Keynesian euro- zone center–periphery model. Within this framework, three points are formally addressed: (1) the incomplete nature of the eurozone with respect to a fully fledged federal union has significantly contributed to generating diverging trends and conflicting claims between central and peripheral eurozone countries in the aftermath of the 2007–2008 financial meltdown; (2) center–periphery diverging trends may disappear and a systemic crisis may occur should financial turbulences deepen in big peripheral economies, possibly spreading to the center; and (3) fiscal austerity does not address the core problems of the eurozone. The creation of a European federal government, capable of implementing anti-cyclical fiscal policies through a federal budget, and of a government banker consti- tutes the most promising solution to stabilize the macroeconomic picture of peripheral countries and to tackle the crisis. The unlimited bond-buying program recently launched by the ECB is a positive albeit mild step in the right direction away from the extreme mon- etarism that has shaped eurozone institutions thus far
The complex inequality-innovation-public investment nexus: what we (don’t) know, what we should know, and what we have to do
No full textIn this paper, we deal with the complex relationship connecting inequality to innovation, and the ways through which public investment can affect it. We first stress that inequality and innovation may interact in many different ways. The positive relation that part of the economic theory often assumes to exist between (initially) rising inequality and improving innovation performances emerges as only one among many other far less virtuous dynamic trajectories. We then analyse the specific case of the US. We put emphasis on the possible perverse effects that the financialization of the US economy may have on the inequality–innovation nexus. We note that the US developmental state—very often neglected by the economic literature—can effectively mitigate such undesirable outcomes. According to our interpretation of recent developments in the US economy, the widespread belief in the positive pro-innovation effects of fierce cut-throat remuneration systems may prove to be ungrounded
Households' liquidity preference, banks' capitalization and the macroeconomy: a theoretical investigation
No full textIn this paper we build a simple model on the role of households’ liquidity preference in the determination of economic performance. We postulate, for the sake of the argument, a purely “horizontalist” environment, i.e., a world of endogenous money where the central bank is able to fix the interest rate(s) at a level of its own willing. We show that even in such a framework liquidity preference, while obviously not constituting anymore a theory for the determination of the interest rate, continues to be a key element for the determination of both the level and evolution over time of aggregate income and capital accumulation. In our model, this happens because of the working of a mechanism so far unexplored in the literature, i.e., the endogenous variations of banks’ policy of profits’ distribution in response to changes in the liquidity preference of the public
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