Pro-poor Growth

1 Televised speech by Nelson Mandela on the occasion of the worldwide Live‐8 concerts in July 2005.
[There] are two paradigms for Human Development: one that believes in the overwhelming power of economic growth, another that emphasises the design of pro‐poor policies. Jan Vandemoortele (2005 )

Pro‐poor growth is often advocated but seldom defined. Some proposed definitions and associated measures are reviewed in this paper. Much of this literature stresses the importance of reducing economic inequality. A basic source of confusion is whether inequality reduction is desired as a means for reducing poverty or as an end in itself. This paper argues that if it is the former, as is usually said, the pro‐poor growth literature tends to overstate the importance of reducing inequality, or avoiding an increase. Growth that is most effective at reducing poverty does not necessarily coincide with growth that reduces inequality. This literature is overly pre‐occupied with statistical evaluation of the outcomes of economic events, based on changes in the distribution of household incomes or expenditures. What is most needed is solidly based empirical research on the manner and extent to which alternative growth strategies influence the rate of poverty reduction.     

Growth slowdowns redux

We analyze the incidence and correlates of growth slowdowns in fast-growing middle-income countries, extending the analysis of an earlier paper (Eichengreen et al., 2012a). We continue to find dispersion in the per capita income at which slowdowns occur. But in contrast to our earlier analysis which pointed to the existence of a single mode at which slowdowns occur, in the neighborhood of $15,000–16,000 2005 purchasing power parity dollars, new data suggest the possibility of two modes, one at $10,000–11,000 and another at $15,000–16,000. A number of countries appear to have experienced two slowdowns, consistent with the existence of multiple modes. We suggest that growth in middle-income countries may slow down in a succession of stages rather than at a single point in time. This implies that a larger group of countries is at risk of a growth slowdown and that middle-income countries may find themselves slowing down at lower income levels than implied by our earlier estimates. We also find that slowdowns are less likely in countries where the population has a relatively high level of secondary and tertiary education and where high-technology products accounts for a relatively large share of exports, consistent with our earlier emphasis of the importance of moving up the technology ladder in order to avoid the middle-income trap.     

论贫益式增长与包容性增长的内涵及其政策要义

贫益式增长与包容性增长是人的发展经济学领域最新提出的两个概念,旨在重铸第三世界国家新世纪以来的发展目标。消除贫困,促进穷人的全面发展和倡导全社会机会平等、成果共享分别是贫益式增长和包容性增长的本质要求。第三世界各国政府可通过实施一揽子益贫式和包容性政策工具改变原有发展路径,彻底打破贫困恶性循环和两极分化的发展格局。     

Reexamining Growth Effects: Are All Types of Asset Growth the Same?

Asset growth has been shown to be negatively associated with future returns. Cooper, Gulen, and Schill (2008) argue that an aggregation of all asset growth components as total asset (TA) growth leads to the strongest association with future negative returns. Based on their study, the literature now employs TA growth as an umbrella proxy for “the growth effect.” I hypothesize that not all types of growth imply negative future returns. Specifically, I show that growth financed by suppliers is positively associated with future performance and returns. Removing this growth component from TA growth makes it evident that the TA growth anomaly is simply a noisy manifestation of the net operating asset growth anomaly. Consequently, I suggest caution when using TA growth to control for the growth effect.     

On Export Composition and Growth

The hypothesis that exports in technology-intensive industries have a higher potential for positive externalities coupled with higher productivity levels (due to higher rates of capitalization) is tested using a comprehensive and detailed data set, covering 45 industrialized and developing countries and including exports of 33 industries over the time period 1981–1997. The estimation results, using a random effects model and employing an instrumental variables estimator, support the hypothesis of qualitative differences between high- and low-tech exports with respect to output growth. The superior performance of high-tech exports stems from their positive productivity differential to the domestic sector, while the externality effect is not significant at any meaningful level of significance. The positive productivity differential is only significant for the subsample of developing countries. No significant effects were found to be present in the subsample of OECD member countries. JEL no. O41, O50, C23, F14     

Forecasting Employment Growth in Indonesia

This note discusses the dangers of using the employment-output elasticity to forecast employment creation in Indonesia. It demonstrates the unreliability of employment-output elasticity estimates for Indonesia obtained using various methods, and argues, that, in addition to the estimation problems, the elasticity method has inherent weaknesses that should preclude its use to forecast employment growth in a dynamic world.     

不同的老龄化,不同的发展模式

从人口老龄化到社会老龄化美国用71年,中国仅用21年。美国养老基金2010年达到18.89万亿美元,占全球总量的63%,是其GDP的120%;中国养老基金加总额为1.5万亿元人民币,是美国养老基金的1.27%。美国的养老基金从中国经济增长中得到了实惠;而中国养老基金由于空账运行、缺乏市场运作,没有分享到经济发展的成果。中国亟待创造条件让更多国民拥有财产性收入,特别是养老基金;应提高公民的养老金教育和管理能力,政府治理养老金市场的能力。     

Growth convergence reconsidered

Growth Rate Convergence Reconsidered. —While convergence properties lie at the heart of the endogenous-exogenous growth debate, the empirical literature on convergence to date remains ambiguous. Results appear to be particularly sensitive to the choice of income per capita or labor productivity as dependent variable. The paper shows that the dependence reflects a measurement error arising from the interdependence of human capital accumulation, labor force participation rates and development levels. Estimation of a corrected convergence equation yields results generally supporting convergence except in the manufacturing sector.     

G-W长期增长模型及其对世界经济增长的含义

G-W长期增长模型融合了新增长理论研发模型和人力资本模型的理论,尝试从世界经济长期增长的视角整合从马尔萨斯陷阱到现代增长的长期增长过程,实现了技术进步、人口增长和人口转型的内生化,不足之处在于无法解释世界经济长期增长过程中的结构转型和驼峰型增长。对于世界经济长期增长来说,G-W模型的政策意义在于指出了技术进步、人口转型和人力资本相互作用对于长期增长的重要影响,其中包括提升效率资源水平以促进长期增长。     

Exports,Inflation and Growth

This article seeks to identify some of the main determinants of exports and economic growth in cross-sectional data from the World Bank covering 160 countries for 1985–94. First, the linkages between the propensity to export and population, per capita income, agriculture, primary exports and inflation are studied by statistical methods. Then, the relationship between economic growth and some of the above-mentioned determinants of exports as well as investment are scrutinized the same way. The main conclusion is that, in the period under review, high inflation and an abundance of natural resources tended to be associated with low exports and slow growth.     

Money Growth,Output Growth,and Inflation: Estimation of a Modern Quantity Theory

This paper develops a long-run version of the quantity theory of money growth, real GDP growth, and inflation. Inflation rates, averaged for the years 1980-1993, are computed for 81 countries. These cross-section inflation rates are explained almost entirely by average M2 growth rates. In countries marked by high money growth and inflation, the estimated coefficients of M2 growth are strikingly close to one, strongly confirming the quantity theory. By contrast, in countries with relatively low money growth and inflation, the estimated money growth coefficient is only 0.69; the quantity theory offers a less complete explanation of inflation. Money growth and GDP growth are nearly orthogonal, consistent with long-run monetary superneutrality. The quantity theory is a reliable model of inflation for most countries, but not for those experiencing slow long-run money growth.     

Openness, Investment and Growth

In the empirical growth literature both investment and opennessto international trade have been identified as important determinantsof growth. These relationships appear to be robust in a numberof specifications. However, Sachs and Warner claim that opennessis such an important determinant of investment that the coefficienton investment will be insignificant in growth regressions, whichalready account for openness. I re-examine this result and canonly support it if I use their model specification and estimationmethod. I suggest that their ordinary least squares estimationsuffers from both endogeneity and omitted variable bias. Usingpanel data analysis, I show that ignoring unobserved country-specificeffects and endogeneity problems cause investment to be insignificant.Estimating the model with the Blundell and Bond system generalmethod of moments estimator, which allows me to address theomitted variable as well as the endogeneity bias, I find thatinvestment is significant in the Sachs–Warner model despitecontrolling for openness. Thus, my regressions confirm thatopenness has a significant, positive effect on income. However,this variable is not so important that it drives investmentout of the model. My re-examination of the Sachs–Warnermodel shows that results from single cross-country growth regressionscan be misleading when unobserved country-specific effects andendogeneity problems are ignored.     

Trade Agreements and Economic Growth

This article studies the growth effects of regional trade agreements (RTAs), taking into account the World Trade Organization (WTO) participation of RTA members. Assuming smaller preference margins of RTAs for WTO members than for nonmembers, I show in a model a stronger growth effect of RTAs for non‐WTO members than the effect for WTO members. Based on a comprehensive set of 270 RTAs and a large panel data set over the period of 1960–2007, the regression results show that RTAs promote growth for non‐WTO members, while their growth effect is weaker and often insignificantly different from zero for WTO members. This implies that, so far, the complementarity between the two approaches of trade liberalization in promoting economic growth is limited.     

Economic Systems and Economic Growth

In a planned economy, state monopoly ensures that economies of scale are exploited. However, state monopoly could not commit to reward its workers. Anticipating this, individuals will exert less effort. In a market economy, competition among firms ensures that higher effort from workers will be rewarded. However, competition means that economies of scale are not fully exploited. Per capita output growth is generated by continuous adoption of new technologies substituting labor for capital. Growth rate in a market economy is higher than that in a planned economy when the incentive to exert effort is relatively more important.     

Explaining Slow Growth in Africa

This paper critically reviews the empirical literature on growth, with a view to drawing some lessons for Africa. It illustrates the diversity of the results found by different authors, and calls for a more rigorous approach, paying attention to the identification of structural parameters and to simultaneity biases. It emphasizes the part played by openness and export orientation as the main policy variables affecting growth. Then, the choice of bad policies, which seems to be the main proximate cause of slow growth in Africa, is traced to the lack of social capital and deficient political institutions. Cet article est une critique de la littérature empirique sur le développement dont le but est d’en tirer quelques leçons sur l’Afrique. L’article démontre la diversité des conclusions tirées par plusieurs auteurs et fait appel à une démarche plus rigoureuse, prenant en compte l’identification des paramètres structurels et des penchants simultanés qui existent. L’importance du marché et son orientation vers l’export sont soulignées comme étant les deux variables principales qui touchent directement la croissance. Les auteurs démontrent ensuite que le choix de mauvaises politiques, qui semble Átre la cause principale de la faible croissance africaine, est due en effet à un manque de capital social ainsi qu’aux institutions politiques défectueuses.     

Limits to Growth in Organic Sales

The price gap between organic and conventional food might explain the low market share of organics in the Netherlands. A real-life experiment was carried out in 2006 in order to determine the price sensitivity of consumer demand for organics. Consumer prices of selected organic products were reduced by up to 40% below current market levels. The price elasticity of demand was low, because not all consumers perceived the price reductions. Moreover, the offer of organic varieties is limited, as is the consumer’s willingness to pay for the social attributes of organics.     

回归正常增长与保持稳定增长——当前国际国内宏观经济形势及政策建议

当前中国经济不会出现危机或"硬着陆",正在进入"正常的高增长"时期。中国需要积极化解消极因素,以实现7%~8%的潜在增长率(目前应该在7.5%以上)。市场经济中政府也要履行应尽的职责。目前亟需推进三方面的改革:加快资本市场建设,扩大直接融资渠道与规模;加快城市化,促进劳动力从农业向非农产业转移;通过普惠式政策鼓励企业专注、专业的发展,持续提升竞争力和创新能力。     

Agricultural Exports,Tariffs and Growth

This article presents a Ricardian model of trade with learning-by-doing to study the effect of barriers to trade in products with low growth potential on the long-run economic growth. The model shows that, when elasticity of demand for the product with a lower learning potential is lower than unitary, a reduction in the tariff imposed on this product, may shift the demand toward the product with a higher learning potential, thus enhancing economic growth in the exporter economy. Therefore, the current trend of reduction in tariffs on agricultural exports not only generates a positive welfare effect in the short run, but may similarly be beneficial for developing economies in the long run, since it also increases their incentive to develop sectors with higher growth potential.