A REVIEW OF THE CONCEPT OF THE “DUAL ECONOMY”*

The primary object of this paper is to present a methodological study which is concerned with how to clarify and evaluate the characteristics of that social and economic structure which is called “dual economy” in today's developing countries. It attempts a critical review of the concepts developed by J. H. Boeke, J. van Gelderen, J. S. Furnivall, H. Frankel, H. Myint, G. Myrdal and C. Geertz, among those who have taken the view of “social dualism.” It concludes that the concept of a dual economy should be perceived in terms of “colonial social dualism” as a system; and that it is solely from this point of view that the nature and direction of economic development in the context of economic nationalism in developing countries can adequately be explained.     

RESOURCE FLOW BETWEEN AGRICULTURE AND INDUSTRY —The Chinese Experience*—

The author has previously been engaged in a series of comparative studies on the role of the agricultural sector among the developing countries, being in doubt about the validity of the generally recognized view that in those countries much of the capital for industrialization has been supplied from this sector. For the purpose of re-examining this view, in this article the author analyses the resource outflow-inflow position of the agricultural sector in the Chinese economy and presents a grave question: Can the agricultural sector provide sufficient capital for industrial development in developing countries?     

“Post‐Truth,” “Alternative Facts” and “Fakenomics”

South African companies are accused of hoarding profits to accumulate large amounts of “idle” cash, as well as of being the perpetrators of massive illegal capital flight. This paper argues that much of the claimed corporate cash is either offshore or belongs to banks. It reminds that bank deposits increase when companies borrow, not when they retain profits. It shows, too, that measures of massive capital flight actually reflect data errors. Exaggerating, through faulty methodology the extent to which companies have cash or may be involved in illegal capital flight is unhelpful. It exacerbates already‐fraught government‐business relations, and complicates the search for solutions to South Africa's economic problems.     

汇率、经济增长与流动性过剩——基于经济全球化的考察

改革开放以来我国经济社会发展发生了深刻变化。过去三十年世界经济格局也发生了深刻变化。经济全球化深化了世界各国的经济联系,也创造了一种不稳定的双赢模式。发展中国家和发达国家均在全球产业转移中获得了要素生产力递增的收益。要素生产率递增可能使采取固定汇率的货币经历从高估到低估的转变,全球产业转移支持了发展中国家广泛而持续地保持这一优势,并以经常性项目和资本项目间跨国补偿机制实现了全球经济不稳定的平衡,也创造了全球流动性过剩。     

人力资本边际收益递减、后发优势与经济增长——基于国家间面板数据的实证分析

学术界一般认为人力资本边际收益是递增的。本文利用一般动态模型根据世界银行提供的国别数据的实证分析得出的结论刚好相反:人力资本边际收益是递减的。从长期来看,世界的人力资本边际收益呈递减趋势;从国别比较来看,发展中国家的人力资本边际收益高于发达国家。而且从国家层面来看,人力资本存量与经济增长呈负相关关系:人力资本存量低的国家经济增长较快,而人力资本存量高的国家经济增长较慢。人力资本从穷国流向富国而不是相反,这是因为富国的总量劳动生产率高所带来的高工资所致,这并不意味着富国的人力资本边际收益比穷国更高。     

Commercial bank lending to developing countries: Supply constraints

Middle-income developing countries rely heavily on commercial bank borrowing for the bulk of their financing requirements, but borrowing from this source cannot be projected with confidence. Privately owned financial institutions are subject to a number of capital and regulatory constraints which can adversely affect (will heavily influence) the level and direction of future lending to developing countries. Moreover, the volatility and short-term character of commercial bank lending suggests an urgent need to reduce the role of commercial banks in recycling the OECD and OPEC surplus, and to create new mechanisms designed to ensure more stable and longer term sources of capital to developing countries.     

Capital Flows,Exchange Rates,and the New International Financial Architecture: Six Financial Crises in Search of a Generic Explanation

Exchange-rate history can be divided into two periods: the Bretton Woods period and the period of floating exchange rates since the early 1970s. In this second period, financial crises and the roles played by institutions, rules, and commitments in international finance have been of central importance. Many proposals for changing the international financial architecture have been presented to reduce the likelihood of crises, but the source of the problem is in variable capital flows and the floating exchange-rate system. Based on six major financial crises of the last 25 years, the wide range in movements in the exchange rate, which might also be inferred from differences in national inflation rates, reflects changes in the ex-ante cross-border capital flows. As long as currencies are floating, economic conditions among countries are likely to be more variable and diverse: the greater variability in economic conditions suggests greater variability in capital flows.     

Migration,FDI, and Welfare

We investigate migration and foreign direct investment (FDI) for a small trading economy. Historically, immigration in small countries has been accompanied by FDI inflows (complementary capital movements). Based on the skill composition of migrants, empirical evidence finds that skilled immigration is accompanied by FDI inflows but unskilled immigration is accompanied by FDI outflows (substitutable capital movements). We prove that the Heckscher-Ohlin model cannot reconcile these apparently contradictory observations. We introduce a theoretical model in which capital and unskilled labor are sector specific, and demonstrate that this model can reconcile the historical and empirical observations on migration and FDI.     

SARIT AND THAILAND'S “PRO-AMERICAN POLICY”

The idea of “pro-Americanism,” appearing at the same time as America's sense of world mission, is a phenomenon of the post World War II period, and for this reason has a very short history. The basic point is that “pro-Americanism”fluctuates according to American conditions, but fundamentally it is controlled by the internal conditions of the “pro-American”country. At the same time, as in most diplomatic relations, “pro-Americanism”is too a basically unstable condition and by trying to stabilize it and make it permanent, both American and the other countries undergo severe stresses. The “pro-American”relationship which ties the United States with numerous small countries in a chiefly bilateral relationship is certainly not immutable. How should the changes be measured and in what context should they be viewed? I shall take the case of Thailand, the most “pro-American”of the Southeast Asian countries. I shall be looking at political leadership as the basic key to the changes, and from this angle the main problem of this article is how to evaluate the part played by Sarit.     

Gains and losses from trade when countries differ in public knowledge stock

Following the insight from endogenous growth theory, this paper assumes that countries with advanced production structures have high levels of public knowledge. The purpose of this paper is to analyze whether a developing country should trade with countries that are more or less advanced than itself. It is argued that it is particularly harmful to trade with advanced countries if international transaction costs are high and capital is internationally immobile, in which case welfare may be higher in autarchy than with trade. For low levels of transaction costs, it may be more beneficial to trade with relatively advanced countries, particularly if capital is internationally mobile.     

Human Capital and FDI Inflows to Developing Countries: New Empirical Evidence

Despite the dramatic increase in total foreign direct investment (FDI) flows to developing countries in the last few years, the bulk of the inflows has been directed to only a limited number of countries. It has been argued that developing countries might enhance their attractiveness as locations for FDI by pursuing policies that raise the level of local skills and build up human resource capabilities. Nevertheless, the empirical evidence in the literature in support of this recommendation for a large sample of developing countries is scant. This paper evaluates this argument in the light of the evolution in the structural characteristics of FDI and empirically tests the hypothesis that the level of human capital in host countries may affect the geographical distribution of FDI. The empirical findings are: (a) human capital is a statistically significant determinant of FDI inflows; (b) human capital is one of the most important determinants; and (c) its importance has become increasingly greater through time.     

Unit root tests of capital mobility in the less developed countries

Conclusions This article contributes to the ongoing debate on international capital mobility in the LDCs. The extent of capital mobility has been assessed in a time-series context, performing unit root tests on the adjusted current account for thirty-seven developing countries. The results show that the hypothesis of capital mobility cannot be rejected in a large number of countries.     

Real Exchange Rates, Valuation Effects and Growth in Emerging Markets

We compare the relationship between net capital inflows, real exchange rate movements and growth for twenty emerging markets and twelve developed countries over the period 1985–2004. In developed countries low real exchange rates are associated with faster growth, but in emerging markets depreciations depress growth, even outside crisis periods, and are closely correlated with declines or reversals in net capital inflows. To investigate valuation effects of currency movements, we construct debt-weighted real exchange rate indices for emerging markets, which are more closely correlated with growth than trade-weighted indices.     

Private capital flows,stock market and economic growth in developed and developing countries: A comparative analysis

Empirically we investigate how three types of private capital flows could promote economic growth in recipient developed and developing countries. Our focus is on the role of stock markets as a channel through which foreign capital flows could promote growth. The findings reveal that FDI exhibits a positive impact on growth, while both foreign debt and portfolio investment have a negative impact on growth in all sample countries. However, our results indicate that stock markets might be a significant channel or leading institutional factor through which capital flows affect economic growth. The findings provide clear implications that the negative impact of private capital flows can be transformed into a positive one if the stock market development has attained a certain threshold level, regardless of whether it is in developed or developing countries.     

Surges and stops in greenfield and M&A FDI flows to developing countries: analysis by mode of entry

This paper investigates the factors associated with foreign direct investment “surges” and “stops”, defined as sharp increases and decreases, respectively, of foreign direct investment inflows to the developing world and differentiated based on whether these events are led by waves in greenfield investments or mergers and acquisitions. Greenfield-led surges and stops occur more frequently than mergers-and-acquisitions-led ones and different factors are associated with the onset of the two types of events. Global liquidity is the factor significantly and positively associated with a surge, regardless of its kind, while a global economic growth slowdown and a surge in the preceding year are the main factors associated with a stop. Greenfield-led surges and stops are more likely in low-income countries and mergers-and-acquisitions-led surges are less likely in resource-rich countries than elsewhere in the developing world. Global growth accelerations and increases in financial openness, domestic economic and financial instability are associated with mergers-and-acquisitions-led surges but not with greenfield-led ones. These results are particularly relevant for developing countries where FDI flows are the major type of capital flows and suggest that developing countries’ macroeconomic vulnerability increases following periods of increased global liquidity. As countries develop they typically become more exposed to merger-and-acquisition-led surges, which are more likely than greenfield-led surges and stops to be short-lived and associated with domestic macroeconomic policies.     

Was the Asian crisis a wake-up call?: Foreign reserves as self-protection

Digging deeper into the self-protection rationale for holding reserves, this paper examines the empirical link between reserve holding patterns and crisis vulnerability, comparing the pre- and post-Asian crisis periods, and across different groups of developing countries. Analyzing data for 51 developing countries during the period 1982–2004, this paper finds evidence that the elasticity of developing country reserves with respect to certain crisis vulnerability indicators like foreign debt service and total external liabilities seems to be higher in the post-Asian crisis period, suggesting that policymakers’ precautionary responsiveness by holding more reserves has increased. Grouping countries according to their type of vulnerability (commodity, debt or sudden stop related), countries prone to sudden stops in capital inflows also seem to have adjusted their policies the most towards higher precautionary reserve holding. Furthermore, from the point of view of self-protection, China's reserve holding patterns appear consistent with what developing countries more generally seem to be undertaking.     

Trade in investment-related technological services

The paper examines the growing phenomenon of developing country exports of investment-related technological (IRT) services. Our analysis indicates that developing countries have become important players on the world market for specific IRT services. However, their success is accounted for almost entirely by a handful of countries which have been able to accumulate human capital, technological capability and physical capital. Our investigating also shows that developing country exports of IRT services are directed almost exclusively towards other developing countries, especially oil-exporting ones.     

Sovereign Credit Ratings and Private Capital Flows to Low‐income Countries

Abstract: As low‐income countries obtain sovereign credit ratings in increasing numbers, this paper examines the potential effects on the composition and volume of private capital flows. Sovereign credit ratings are unlikely to overcome the informational asymmetries that impede private capital flows, and due to new international capital adequacy rules may actually raise the costs of capital for private borrowers. Nevertheless, they could help develop local and regional securities markets and assist mature private borrowers in hitherto unrated countries. Also, there may be beneficial disciplining effects on policy makers, and a growing differentiation between countries subject to an Africa‐wide risk premium.     

利率水平、股票指数与资本的国际流动——理论模型与实证检验

传统的蒙代尔-弗莱明模型是以利率作为影响资本在国与国之间流动的主要因素甚至唯一因素为假定前提的,但这一假定具有越来越明显的局限性。在现代经济社会,金融资产的价格波动很多情况下成为影响资本国际流动的最主要因素。证券市场和房地产市场的价格走势又往往是与利率反方向变动的。本文据此论证了负斜率的BP曲线,从而拓展和丰富了蒙代尔-弗莱明模型的形态。然后以两组共计28个国家或地区的经济数据对其进行了实证检验。     

Old,not yet rich? The impact of population aging on export upgrading in developing countries

Does population aging in developing countries, which undermines their traditional export advantages, prevent them upgrading export? Using the method of instrument variables, this paper empirically shows that population aging significantly and adversely affects export upgrading in developing countries. Moreover, the negative impact of population aging is mainly channeled through innovation and human capital. Furthermore, the negative impact of population aging on export upgrading is not present in developed countries and is decreasing in recent years of developing countries. This is possibly due to the inferior institutions and slow adoption of automation in developing countries. Lastly, this paper extends the analysis to a disaggregated level, where the results suggest that an aging country indeed exports less of the products with higher quality.