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This paper provides a perspective from evolutionary economic theory on recent growth differences in the OECD area. The empirical analysis contained in the paper offers a number of findings. First, the United States seems to be diverging from the other OECD countries, while the latter are still, by and large, converging to the OECD average. Second, the estimated model of evolutionary growth suggests that convergence based on the assimilation of foreign technology is becoming a more active process. R&D now seems to be crucial for catching-up and is no longer an activity that is unequivocally associated with moving the world technological frontier. Third, differences between countries in terms of pure technological competencies, i.e. patenting, have become more important in explaining growth differentials. These trends suggest that the absorption of foreign technology requires more active efforts, and that technological differences between countries translate more easily ...
This paper discusses growth performance in the OECD countries over the past two decades. Special attention is given to developments in labour productivity, allowing for human capital accumulation, and multifactor productivity (MFP), allowing for changes in the composition and quality of physical capital. The paper suggests wide (and growing) disparities in GDP per capita growth, while differences in labour productivity have remained broadly stable. These patterns are explained by different employment growth rates across countries. In the most recent years, a rise in MFP growth in ICT-related industries has boosted aggregate growth in some countries (e.g. the United States) ...
This paper discusses links between policy settings, institutions and economic growth in OECD countries on the basis of cross-country time-series regressions. The econometric approach allows short-term adjustments and convergence speeds to vary across countries, imposing restrictions only on the long-run coefficients. In addition to the ‘primary’ influences of capital accumulation and skills embodied in the human capital, the results confirm the importance for growth of R&D activity, the macroeconomic environment, trade openness and well developed financial markets. They also confirm that many of the policy influences operate not only ‘directly’ on growth but also indirectlyviathe mobilisation of resources for fixed investment. The paper also reports some bivariate correlations between OECD indicators of product regulation and growth. They provide some supporting evidence that the negative impact of stringent regulations and administrative burden on the efficiency of product ...
In recent years, there has been a rapid spread of economic instruments (EIs) in environmental policies of OECD Member countries. The application of EIs has gained wider political acceptability and, in a growing number of cases, they have come to have incentive rather than merely revenue-raising effects. In Sweden, eco-taxes have been introduced as part of a broad fiscal reform, while in other countries the approach is more piecemeal. Virtually without exception, EIs are employed in combination with regulations and other policy instruments.
Developing countries stand to learn from the OECD experience with EIs, but they often face unique challenges as well as opportunities in applying such instruments. Resource and other prices have historically been distorted in such economies, so correcting such distortions is a prerequisite to the effective use of EIs. Also, underdeveloped markets, public enterprises with soft budget constraints, and high rates of inflation can all undermine the ...
Economic integration in the Pacific region — which includes the United States, Canada and Mexico — is rapidly occurring, primarily as a result of intra-regional capital flows. Private-sector business opportunities between the west and east coasts and the northern and southern rims of the Pacific region are stimulating ever-larger flows of goods, services, capital, technology, and people among these economies.
Seven trends in the world economy are likely to strengthen these regional business relationships. They are: (1) the evolution of US-Soviet relations from conflict to co-operation, (2) the collapse of communism in the Soviet Union and eastern Europe, (3) the reversal of the "locomotive" role of the United States, (4) the ascendancy of Japan as the world's banker, (5) the econornic integration of Europe, (6) the economic integration of North America, and (7) the declining relevance of the GATT. However, a regional trend, the growing friction between Japan and the United ...
A basic feature of development dynamics is the reallocation of labour from low– productivity to higher–productivity activities (generally more capital–intensive and also often more skill–intensive). The expansion of skilled labour supply that accompanies rising per capita incomes is both cause and effect of this shift in skills demand. Over long periods, if skills supply and demand grow apace, skill premia would show little secular change; over shorter periods, however, inevitable lags may show up as growing or shrinking premia.
A policy reform like trade liberalisation can accelerate structural change in an economy, causing an exogenous shift in relative factor demands. For some developing countries, the result may be an increase in skills demand associated with the adoption of newly available foreign technology and lower cost imported capital goods. This demand shift may be permanent or only temporary, but in either case the skills supply should eventually increase in response to ...
In analysing Argentina's variable growth record over the period 1913 to 1984, the study develops a comprehensive framework which disaggregates the economy into three sectors: agriculture, nonagriculture and government. The aim is to examine the relative performance of these sectors in the context of macro-economic policies.
The study focuses on the role of the real exchange rate. This is related not only to taxation and trade, as is often the case, but also to macro-economic policies. The differential impact of changes in the real exchange rate on the different sectors is examined, according to their degree of tradability. This analysis is then developed to show how sectoral prices are affected by macro and trade policies, as well as world terms of trade and how this affects sectoral output and hence, resource allocation and productivity.
The analysis is presented in terms of a single dynamic model which simulates the growth of the Argentine economy over the entire 1913-1984 period ...
We assess the prospects for growth of African economies up to the year 2010 by modelling structural and policy determinants of growth, under different scenarios for changes in the exogenous factors and economic policies which shape the projections. To this end we estimate a growth model for 39 African economies, during seven five-year periods from 1960 through 1995. The model emphasises two engines of growth: i) investment and ii) growth of exports. Using a composite indicator of “emerging economies” iiset up on the basis of the economic performance, quality of policies and political stability of African countries ppwe identify 14 African economies that stand better chances to achieve a lasting improvement in their policies and growth performance in the years ahead. These “emerging economies” can be mostly found in the Southern-Eastern and the Western parts of Africa. Our growth simulations involve two policy scenarios: a baseline scenario which extends policy trends observed ...