Economic Development under Alternative Trade Regimes

How does openness affect economic development? This question is answered in the context of a dynamic general equilibrium model of the world economy, where countries have technological differences that are both sector-neutral and specific to the investment goods sector. Relative to a benchmark case of trade in credit markets only, consider (i) a complete restriction of trade, and (ii) a full liberalization of trade. The first change decreases the cross-sectional dispersion of incomes only slightly, and produces a relatively small welfare loss. The second change, instead, decreases dispersion by a significant amount, and produces a very large welfare gain.

A Sensitivity Analysis of Cross-Country Growth Regressions: Is 1990-2010 Different?

Cet article étudie la sensibilité des estimations de certaines variables explicatives de la croissance économique dans des régressions en coupe transversale sur un ensemble de pays. Il applique un modèle modifié de l’analyse de sensibilité de Leamer (1983, 1985). Mes résultats confirment la conclusion de Levine and Renelt (1992), toutefois, je montre que plus de variables sont solidement corrélées à la croissance économique. Entre 1990-2010, je trouve que huit sur vingt cinq variables ont des coefficients significatifs et sont solidement corrélées à la croissance de long terme, notamment, les parts de l’investissement et des dépenses étatiques dans le PIB, la primauté du droit et une variable dichotomique pour les pays subsahariens. Je trouve aussi une preuve empirique solide de l'hypothèse de la convergence conditionnelle, ce qui est cohérent avec le modèle de croissance néoclassique.

Tropical economic miracles

Este documento presenta un Estudio de Caso sobre el buen desempeño económico de Botswana y Singapur durante la segunda mitad del siglo XX. La metodología de Estudio de Caso nos permite complementar la evidencia estadística sobre los determinantes del crecimiento económico, e identificar las particularidades del rápido desarrollo de estos dos países.

Labor's shares - aggregate and industry: accounting for both in a model of unbalanced growth with induced innovation

The relative stability of aggregate labor's share constitutes one of the great macroeconomic ratios. However, relative stability at the aggregate level masks the unbalanced nature of industry labor's shares – the Kuznets stylized facts underlie those of Kaldor. We present a two-sector – one labor-only and the other using both capital and labor – model of unbalanced economic development with induced innovation that can rationalize these phenomena as well as several other empirical regularities of actual economies. Specifically, the model features (i) one sector ("goods" production) becoming increasingly capital-intensive over time; (ii) an increasing relative price and share in total output of the labor-only sector ("services"); and (iii) diverging sectoral labor's shares despite (iii) an aggregate labor's share that converges from above to a value between 0 and unity. Furthermore, the model (iv) supports either a neoclassical steadystate or long-run endogenous growth, giving it the potential to account for a wide range of real world development experiences.

Violence and growth in colombia : a review of the quantitative literature

This is a critical review of the empirical literature on the relationship between violence and economic growth in Colombia: an interesting case study for social scientists studying violence, conflict, crime and development. We argue that, despite the rapid development of this literature and the increasing use of new techniques, there is still much room for research. After assessing the contribution of the most influential papers on the subject, we suggest directions for future research.

Gross Inequality and Inequality of Opportunities in Basic Education: Were they affected by Latin America’s Economic Boom?

In the context of economic growth and recovering socio-economic conditions, many Latin American countries have implemented deep educational reforms since the beginning of the century. This paper aims to analyse whether these changes have promoted equality of educational opportunities in the region. Both the access and knowledge and skills dimensions are evaluated for six important countries, deepening the analysis for Argentina, Brazil and Colombia, in order to better understand the trends observed. Results point to reasonable progress in access, but reflect an unsatisfactory evolution of the level and distribution of knowledge and skills as reflected by PISA test scores.

Alternative Development in Ecuador: Prospects for Equitable Growth

Realiza un análisis de la economía ecuatoriana y de sus políticas de desarrollo económico como la sustitución de importaciones e impulso a la industrialización interna y los impactos en la economía de los ajustes estructurales y las reformas neolibarales. Estudia las estrategias de desarrollo en el Ecuador incluyendo la dolarización y expone la precaria situación de vida de la sociedad. Analiza la forma en que se distribuye la riqueza en el país y compara su situación económica con otros países de la región, dando a conocer los coeficientes Gini y los niveles de inequidad. Analiza modelos alternativos de desarrollo más equitativos y sustentables para el país. Finalmente estudia el contexto político del país bajo la presidencia de Rafael Correa, su política económica y social, particularmente el desarrollo de la economía solidaria.

Securing EU growth from services. CEPS Special Report No. 67, October 2012

This report explores the untapped growth that could result from the better functioning of services markets in the EU and aims to bridge the gap between the policy debate and the latest empirical economic analysis in this field. The authors find ample scope for further economic growth in the EU, both from the reform of domestic services and from the deepening of the ‘single services market’. Domestic and EU-level services reforms are so intertwined economically that indeed we may speak of a ‘double dividend’ and, for the eurozone, a ‘triple dividend’.

Resilience planning, economic change and the politics of post-recession development in London and Hong Kong

For much of the 1990s and 2000s, the emphasis of urban policy in many global cities was on managing and mitigating the social and environmental effects of rapid economic growth. The credit crunch of 2008 and the subsequent recession have undermined some of the core assumptions on which such policies were based. It is in this context that the concept of resilience planning has taken on a new significance. Drawing on contemporary research in London and Hong Kong, the paper shows how resilience and recovery planning has become a key area of political debate. It examines what is meant by conservative and radical interpretations of resilience and how conservative views have come to dominate ‘recovery’ thinking, with élite groups unwilling to accept the limits to the neo-liberal orthodoxies that helped to precipitate the economic crisis. The paper explores the implications of such thinking for the politics of urban development.

Human capital and growth under political uncertainty

In this paper we show how political uncertainty may impede economic growth by reducing public investment in the formation of human capital, and how this negative effect of political uncertainty can be offset by a government contract. We present a model of growth with accumulation of human capital and government investment in education. We show that in a country with an unstable political system the government is reluctant to invest in human capital. Low government spending on education negatively affects productivity and slows growth. Furthermore, a politically unstable economy may be trapped in a stagnant equilibrium. We also demonstrate the role of a government retirement contract. Public investment in education and economic growth are higher when the future retirement compensation of the government depends on the future national income, in comparison with investment under zero or fixed retirement compensation.

A complex system perspective on the emergence and spread of infectious diseases: integrating economic and ecological aspects

The emergence and spread of infectious diseases reflects the interaction of ecological and economic factors within an adaptive complex system. We review studies that address the role of economic factors in the emergence and spread of infectious diseases and identify three broad themes. First, the process of macro-economic growth leads to environmental encroaching, which is related to the emergence of infectious diseases. Second, there are a number of mutually reinforcing processes associated with the emergence/spread of infectious diseases. For example, the emergence and spread of infectious diseases can cause significant economic damages, which in turn may create the conditions for further disease spread. Also, the existence of a mutually reinforcing relationship between global trade and macroeconomic growth amplifies the emergence/spread of infectious diseases. Third, microeconomic approaches to infectious disease point to the adaptivity of human behavior, which simultaneously shapes the course of epidemics and responds to it. Most of the applied research has been focused on the first two aspects, and to a lesser extent on the third aspect. With respect to the latter, there is a lack of empirical research aimed at characterizing the behavioral component following a disease outbreak. Future research should seek to fill this gap and develop hierarchical econometric models capable of integrating both macro and micro-economic processes into disease ecology.

Sustaining growth and profits in a rapidly changing world - a Chinese perspective

The aim of this paper is to stimulate discussion about how Chinese construction and professional service companies can best equip themselves and grow sustainably and profitably in a rapidly changing world. It identifies some of the issues and risks faced by Chinese construction and professional service companies operating domestically and overseas. China has experienced a period of rapid economic growth which is also reflected in the annual construction output. China’s population is the largest in the world, but the demographic profile is changing with an ageing population and a changing dependency ratio. The population is urbanising at a fast rate, putting pressure on housing, and infrastructure. The government must plan for the future and the construction sector must be involved in that planning. The paper considers the drivers shaping China’s construction market, how companies are responding by embracing change and internationalising by seeking to exploit their skills overseas. The drivers are globalisation, urbanisation, demographic change, sustainability, safety and health, and the evolution of professional services as a core part of construction activity. Clients/owners are driving change by demanding more certainty and more sustainable projects.