Labour Costs and the Future of the Accord

This article concentrates on the wages policy aspects of the Accord. The Statement of the Accord, the National Economic Summit Communique and the Principles for National Wage Cases, are considered in the context of the rationales for wages policy. The apparent early successes of the Accord, followed by signs, such as the emergence of wage drift, that it will eventually break down, are outlined. Long-term political economy aspects of the Accord are considered, which suggest that it is unlikely to represent a long-term solution. The growing enthusiasm for decen tralisa tion and deregulation, despite the Hancock Report, is noted, as is the importance of promoting shared objectives at the grass roots level.     

Industry policy in Australia: debate and practice

This article analyses the debate over industry policy in Australia since the election of the Hawke Labor government in 1983. The social contract ‘Accord’ between that government and the union movement has been used by the latter to advance its own vision of industry policy. In contrast to most other parties associated with the formulation and implementation of industry policy, the unions have promoted interventionist mechanisms to lift output and investment. Much of the intellectual rationale, and some of the actual policy initiatives, are drawn from overseas, but the more singular union achievement has been the political strategy developed to convert ideas into innovative policy.     

Declining Strike Activity in Australia 1983–85: An International Phenomenon?*

The paper investigates the possible effect of Australian incomes policy on strike activity compared to other countries not adopting such a strategy. The chief issue is whether Australia experienced a more pronounced fall in strikes during the 1983–85 period of the Accord than a representative group of other countries. We also seek evidence for the proposition that there is a transmission of industrial restiveness between countries. The results are unambiguous: in an international context the Australian diminution of strike activities after the beginning of the Accord was most unusual, and there is no evidence of a general world-wide transmission of industrial disputation.     

Sustainable Economics: Understanding Market and Government Roles

Abstract

There has always been a debate on the roles of government and market for economic growth and development. Economic development encompasses more than just growth; it seeks the betterment of the standard of living and higher Human Development Index. There is no single strategy that would be considered the best solution for economic development. Market role and government intervention are both necessary for economic development. Since the economy is dynamic, then the policies adopted need to change according to the circumstances. It is argued that government intervention is sometimes necessary to ensure basic economic development, even if it essentially fails in economic growth in the short-term. Nonetheless, a good solution between the roles of market and government is through finding a dynamic equilibrium point between them. Therefore, the best policy is a policy that is resilient to change.     

A New Economic Strategy for the USA: A Framework of Alternative Development Notions

This paper seeks to provide a new economic strategy for the United States while considering a range of development-related impediments to the country’s recent economic performance. It is argued here that strategic industrial policy needs to come to the center stage if local production growth, competency upgrading, and competitiveness improvement are to be aggressively pursued. The first section outlines the present context of the US economy by discussing economic and socio-cultural aspects. The second main section frames an alternative development paradigm for the United States. Policy recommendations are discussed in the third section. Some brief conclusions end the paper.     

Net private capital flows and economic growth–the case of emerging Asian economies

This article makes an exploratory empirical investigation into the relationship between net private capital flows and economic growth using a panel dataset from emerging Asian countries, namely South Korea, Indonesia, Malaysia, Thailand and the Philippines, over the period 1980–2001. Overall, this article indicates that net private capital helps to promote economic growth for the countries in the sample. In addition, this article also supports the view that net private capital flows will better contribute to economic growth under a sound policy and economic environment. This article also seeks to improve the estimation results by controlling for reverse causality as an econometric method that can control, for reverse causality is very important to examining the relationship between net private capital flows and economic growth. To tackle this issue, this article employs the Generalized Method of Moments (GMM) estimation technique, which is an econometric technique that can handle the reverse causality using the lagged explanatory variables as instruments.     

From Receding to Reseeding: Industrial Policy,Governance Strategies and Neoliberal Resilience in Post-crisis Britain

ABSTRACT

Industrial policy has been on the agenda of British policy elites since the 2008 financial crisis, particularly since Theresa May became Prime Minister in 2016. This has been seen as a challenge to pre-crisis norms of economic governance associated with neoliberalism. This article explores key aspects of industrial policy development in post-crisis Britain – new forms of vertical support for industry, local government reform, and the public financing of private sector R&D – in order to sketch a new understanding of political and ideological change. It focuses on the institutional mechanisms through which industrial strategy will ostensibly be implemented, including subnational and private spheres of governance. The article argues that recent industrial policy developments do not represent the receding of neoliberalism, but rather have provided opportunities for the reseeding of neoliberal norms in British economic statecraft. The strategy has reinforced forms of state machinery through which pre-crisis elite practice can be maintained and legitimated. By demonstrating that the apparent revival of state intervention in the wake of capitalist crises must not be assumed automatically to challenge pre-crisis economic orders, and highlighting the crucial role of exigent political circumstances, the article makes an important contribution to the literature on neoliberal resilience.     

How does capital regulation react to monetary policy? New evidence on the risk-taking channel

Before the subprime crisis, financial stability was a microprudential issue addressed by capital regulation and unrelated to monetary policy. The financial crisis put this paradigm to the test and turned the spotlight on the relationship between financial stability and monetary policy. Hence, the following question arises: how does capital regulation react to monetary policy? This article seeks to answer this question. We analyze the link involving monetary policy and capital regulation through the risk-taking channel in Brazil. The findings suggest that banks react to monetary policy by changing the amount of loan provisions as well as the capital adequacy ratio (CAR). An important novelty of the study is the evidence that there is no trade-off between provisions and CAR, which are important tools used by banking supervisors. The key result of the article is that banks react to the macroeconomic environment differently from what is expected by banking supervision, i.e., there exists a paradox between the microprudential view and the macroprudential view. Thus, in terms of practical implication, a banking supervision strategy for financial stability must take into account the effects of monetary policy.     

Union Membership and the Legal and Institutional Environment: Labour Market Policy in Australia and the United Kingdom

This article examines how the political and institutional environment impinges upon unionisation. Changes in policy towards trade unions in two countries are contrasted: the United Kingdom under the Conservative government where the industrial relations legal environment shifted in a direction antithetical to unionism, and Australia under the Labor administration where the union movement was incorporated into the labour policy process through a corporatist, centralised wage-fixing system—the Accord. How these changes in the legal and institutional environment in the two countries affect the propensity to unionise is examined. It is found that in both the United Kingdom and Australia union density has declined from what it otherwise would have been in the absence of these radically different policies. It is argued that the extremes of corporatist centralisation and laissez-faire decentralisation, perhaps paradoxically, make it difficult for unions to increase their membership.     

Structural change and macroeconomic policy: the case of Greece (1981–85)

This article examines one aspect of ‘alternative economic strategies’ which seek to introduce planning and other interventionist economic policies in order to promote structural change. Experience has shown, most recently in France and Greece in the 1980s, that such strategies are often abandoned because of macro-economic imbalances, such as current account crises. Thus it seems that a crucial aspect of such strategies should be the co-ordination of short-term, or macro-economic, policies with longer-term supply-side policies. The interest in the Greek experiment (1981–85) lies in the fact that the Greek socialists were aware of the need for such co-ordination and their strategy for ‘stabilization through development’ and ‘gradual adjustment’ was formulated for this purpose. This article looks at the economic theory underlying this approach and the implementation of the strategy. However it is argued that the degree of control necessary for the successful implementation of the strategy was lacking. The failure of macroeconomic policy once more contributed to the abandonment of an alternative economic strategy. I investigate the reasons behind this failure and draw some lessons of more general relevance for the successful co-ordination of macroeconomic and supply-side policies.

Accumulation involves a process of continual structural transformation, a qualitative change, in which the scale, content and location of economic activity are progressively transformed. There is no automatic mechanism ensuring that this takes place in a desirable manner or at a desirable pace (Eatwell and Green, 1984: 202).     

Coping with deflation and the liquidity trap in the eurozone: A post Keynesian approach

The ghost of deflation is once again one of the main worries of policymakers. Recently deflation is indeed characterizing the eurozone. The renewed concern about deflation is due in part to the historical association of deflationary episodes with financial crises, recession, stagnation, and even depression. In deflationary conditions, nominal interest rates are more volatile because uncertainty increases and they may come close to their lower limit of zero: If a “liquidity trap” is at work, monetary policy is incapable of stimulating aggregate demand. This article seeks to show that to avoid a “Japanization” of the eurozone it is urgent to implement adequate economic policies in accordance with the post Keynesian approach. The European Central Bank in recent times has tried to do its best to save the situation through espansive monetary policies adopting both quantitative and qualitative easing. Unfortunately, these kinds of policies have tended more to prevent the recession from becoming far worse than enabling a significant fight against deflation and promoting economic recovery. Conventional and unconventional approaches in economic policy are investigated with a critical eye and contrasted with the theoretical insights suggested by post Keynesians.     

Financial imbalances and gradualism

In the last years, in the major OECD economies, while inflation has become lower and more stable, episodes of financial instability and large cycles in asset prices have shown up with (often) non-negligible effects on economic activity. These facts should call for a larger concern with financial imbalances by the central bank. Adapting the model by Caplin and Leahy (1996)—where a central bank, which is uncertain about the state of the economy and its reaction to policy, seeks an optimal search strategy to influence private agents' responses—by substituting the central bank's price stability objective with a financial stability one, we find that the monetary authority should follow a less aggressive policy than the one suggested by the original model. However, initial conditions play a crucial role in determining the degree of gradualism by the policy maker with the policy becoming more and more aggressive as the initial interest rate shrinks.     

AGE AS A DETERMINANT OF LABOR'S TRADE POLICY INTERESTS

This paper shows that workers with identical innate abilities have heterogeneous trade policy interests, whereby age of the worker and industry of employment are most critical in explaining this heterogeneity. A modified specific factor model, with overlapping generations and a retraining requirement for job switchers, is developed to demonstrate how trade policies affect the economic interests of older workers far more than of younger workers, regardless of whether they gain or lose from the policy. Accordingly, older workers tend to have stronger incentives to become politically active than younger workers.     

On the political economy of skill in the advanced industrial nations

The importance of education and training policy is being enhanced by its increasingly high profile as a competitive strategy in the age of global capitalism. This article argues that human–capital theory, because it objectifies skill and fails to uncover its social context, offers an inadequate framework for understanding the relationship between the economy and skill systems. An adequate economic framework for understanding changes in education and training systems must be linked to a theory of institutional change in the economy. The article used one such theory, in building on the contributions of the regulation school but concludes that, contra the ideology of post–Fordism and of liberal political economists, a high–wage/high–skills strategy is only one route for capital accumulation in the 1990s, and that this route will only be achieved through conflict. The article concludes that, this used alongside other policies, a progressive education strategy which could be linked with the usage of high skills in industry would have some chance of success in the current era.     

Max Weber's critical response to theoretical economics

Abstract

Max Weber's work currently forms the centre of a strategy to rebuild heterodox thought around economic sociology. The instrumentalisation of Weber is based on a lack of understanding of his response to economic theory. This article seeks to fill this gap. It will show that Weber extended Menger's work by correcting its naturalism and that his critical response rests on a Kantian approach, as explained below. It appears that a pure non-Walrasian theory is therefore possible and that the heterodox reclaiming of Weber is based on a misinterpretation of his work.     

Resisting Protectionism after the Crisis: Strategic Economic Discourse and the EU–Korea Free Trade Agreement

In 2006 the European Commission announced its Global Europe strategy, which proposed pursuing a series of ambitious Free Trade Agreements (FTAs) premised on exchanging the EU's remaining ‘pockets of protection’ for market access. The first of these agreements was signed with South Korea in October 2010. This article asks how the Commission's Directorate-General (DG) for Trade could successfully conclude this agreement in the aftermath of the Financial Crisis. Given a strong mobilisation of protectionists with access to policy-makers, this liberal policy outcome cannot be explained purely in terms of institutional insulation, as in much of the literature on EU trade policy, nor be simply ‘read off’ from the material interests of societal actors. This article, therefore, develops a constructivist framework which broadens our understanding of the power of strategically invoked economic discourses. By developing a novel analytical strategy to determine the intentional invocation of such discourses, it is able to show how DG Trade constructed an ideational imperative for liberalisation in Global Europe, enabling it to overcome opposition to the EU–Korea FTA. Beyond its contribution to constructivist scholarship, this article draws attention to the neglected dimension of ideas in trade policy and highlights the continued purchase of neoliberalism after the crisis.     

技术引进与外资利用：促进科技产业发展的战略与政策

本文首先通过对我国外资利用及国内外经济技术竞争的分析．作出基本的判断，在对国内外结构性调整及政策性因素的影响进行讨论后，从宏观发展视角．对我国利用外资中引进技术存在的体制、政策等作出分析；最后，根据跨国企业直接投资将成为未来我国外资主要构成的预期．提出着眼于长远发展利益的我国引进技术和利用外资的战略与政策。     

Asymmetric responses of money demand to oil price shocks in Saudi Arabia: a non-linear ARDL approach

Saudi Arabia is an open oil-based economy with fixed exchange rates; therefore, it has limited monetary policy autonomy. Using non-linear autoregressive distributed lag approach, this article investigates the asymmetric effects of oil price shocks on the demand of money in Saudi Arabia over the period 1990:Q1–2014:Q4. The empirical results show evidence of positive long run but asymmetric effects of oil price shocks on the money demand. In particular, we find that the positive oil price shocks are more important than negative shocks. Therefore, two policy responses can be considered: either sustaining the fixed exchange rate regime and following an economic diversification policy or switching towards a flexible exchange rate regime to achieve price stability. In that case, the existence of a stable money demand function in Saudi Arabia is a necessary precondition for adopting a monetary policy strategy targeted to price stability using instruments like money targeting.     

Competing at the frontier: The changing role of technology policy in Singapore's economic strategy

For an economy competing at the global frontier, an innovation-based growth strategy requires a well-developed technological infrastructure, a set of capabilities-focused technology policies, as well as an institutional environment that stimulates innovation and entrepreneurship. This paper examines the role played by science and technology policy in an economy's transition to an innovation-based growth strategy. We discuss the challenges governments face as they restructure economic institutions to deepen R&D capabilities and encourage technology creation. We review Singapore's experience in this regard and assess its ongoing efforts to remake itself to compete at the global frontier.     

Data Envelopment Analysis of different climate policy scenarios

Recent developments in the political, scientific and economic debate on climate change suggest that it is of critical importance to develop new approaches able to compare policy scenarios for their environmental effectiveness, their distributive effects, their enforceability, their costs and many other dimensions. This paper discusses a quantitative methodology to assess the relative performance of different climate policy scenarios when accounting for their long-term economic, social and environmental impacts. The proposed procedure is based on Data Envelopment Analysis, here employed in evaluating the relative efficiency of eleven global climate policy scenarios. The methodology provides a promising comparison framework; it can be seen as a way of setting some basic guidelines to frame further debates and negotiations and can be flexibly adopted and modified by decision makers to obtain relevant information for policy design. Three major findings emerge from this analysis: (i) stringent climate policies can outperform less ambitious proposals if all sustainability dimensions are taken into account; (ii) a carefully chosen burden-sharing rule is able to bring together climate stabilisation and equity considerations; and (iii) the most inefficient strategy results from the failure to negotiate a post-2012 global climate agreement.