Volume 1 Part 1 Introduction: empirics of development development in historical perspective. Part... more Volume 1 Part 1 Introduction: empirics of development development in historical perspective. Part 2 Underdevelopment and development: low-level traps and the big push theories of growth poverty, inequality and development. Volume 2 Part 1 Resources in development: labour and human resources capital accumulation the environment. Part 2 Sectoral issues in development: agriculture industry. Volume 3 Part 1 Open economy issues in development: trade international factor movements north-south issues. Part 2 Economic policies and institutions: inflation and stabilization the state, markets and development. Part 3 Conclusion.
This article complements Ha-Joon Chang's critique, entitled ‘Institutions and Economic Develo... more This article complements Ha-Joon Chang's critique, entitled ‘Institutions and Economic Development: Theory, Policy and History’, of the ‘dominant discourse’ on institutions and economic development which takes the view that getting the institutions right (by strengthening private property rights and market freedoms) is a prerequisite for development. It does so by commenting on the concepts of economic development and institutions, discussing the theory of how institutional change affects development, and examining the possibility and desirability of such institutional change as a prerequisite of development.
This paper examines loanable fund models with a stabilized interest rate, in which the banking sy... more This paper examines loanable fund models with a stabilized interest rate, in which the banking system bridges the gap between the flow of demand and the provision of funds. A typical Mickselian model is developed to emphasize the importance of credit and inflation (deflation) in closing the gap between savings and investment. Substituting the nominal interest rate for the real - an appropriate modification in a model whose inflation is relevant - and using the Robertsonian definition of income, we realize that, depending on the reaction of ‘lacking’ and investment to inflation, there is the possibility of the system become unstable. By introducing unemployment into the system, we realize that investment is more sensitive than the lack of inflation, the greater the degree of wage flexibility, the greater the level of unemployment balance, in the face of the demand shock, and the greater the chances of macroeconomic instability. Finally, we demonstrate that if we replace the Robertson...
... Krugman, Paul (1993),'Toward a Counter-counterrevolution in Development Theory', Pr... more ... Krugman, Paul (1993),'Toward a Counter-counterrevolution in Development Theory', Proceedings of the World Bank Annual Conference on Development Economics, 1992, supplement to The World Bank Economic Review and The World Bank Research Observer, pp. 15-38. ...
Volume 1 Part 1 Introduction: empirics of development development in historical perspective. Part... more Volume 1 Part 1 Introduction: empirics of development development in historical perspective. Part 2 Underdevelopment and development: low-level traps and the big push theories of growth poverty, inequality and development. Volume 2 Part 1 Resources in development: labour and human resources capital accumulation the environment. Part 2 Sectoral issues in development: agriculture industry. Volume 3 Part 1 Open economy issues in development: trade international factor movements north-south issues. Part 2 Economic policies and institutions: inflation and stabilization the state, markets and development. Part 3 Conclusion.
Volume 1 Part 1 Introduction: empirics of development development in historical perspective. Part... more Volume 1 Part 1 Introduction: empirics of development development in historical perspective. Part 2 Underdevelopment and development: low-level traps and the big push theories of growth poverty, inequality and development. Volume 2 Part 1 Resources in development: labour and human resources capital accumulation the environment. Part 2 Sectoral issues in development: agriculture industry. Volume 3 Part 1 Open economy issues in development: trade international factor movements north-south issues. Part 2 Economic policies and institutions: inflation and stabilization the state, markets and development. Part 3 Conclusion.
It has long been argued that an increase in inequality increases the rate of economic growth by i... more It has long been argued that an increase in inequality increases the rate of economic growth by increasing the share of income going to profit recipients, whose saving contributes to capital accumulation, so that growth is profit-led. A more recent tradition argues that an increase in equality and a rise in the wage share can increase growth by increasing consumption and investment demand, so that growth is wage-led. Bhaduri and Marglin and others argue, however, that even if economic activity is demand-determined, a shift in income distribution towards profits can increase output and growth. This paper examines how a reduction in inequality affects economic growth, thereby contributing to the debate on wage-led and profit-led growth and broadening it to focus on inequality rather than the profit share. It does so by reviewing and re-examining the cases in which workers save, the determinants of investment, and the open economy, three issues that have been emphasized in the literature.
The process of economic growth is often viewed as a dynamic and path-dependent one in which histo... more The process of economic growth is often viewed as a dynamic and path-dependent one in which history matters, but the theories and models of economic growth normally invoke the concept of equilibrium, albeit, a dynamic one. Recently there have been attempts to introduce path dependence into theories and models, including models of economic growth, which allow history to have an important role in determining the path of the economy. This chapter discusses why path dependence may be a desirable property of models and, to do so, it develops a taxonomy of different methods with which path dependence has been or can be incorporated in models. Using this taxonomy, it discusses how the introduction of path dependence in growth models can change our understanding of the nature and determinants of, and policies for, economic growth.
If, as we have argued in the previous chapter, value-free economics is impossible, what ethical v... more If, as we have argued in the previous chapter, value-free economics is impossible, what ethical values should inform the discipline? If people do not behave simply as self-interested optimizers, what moral theories might guide their actions? What moral theory should be used to answer public policy questions? Finally, if individual preferences are not accepted as the overriding goal of the economic system, what ethical benchmarks or objectives should take its place? None of these issues can be understood, much less resolved, without some sort of ethical theory as a guide.
Any person who does any unauthorized act in relation to this publication may be liable to crimina... more Any person who does any unauthorized act in relation to this publication may be liable to criminal prosecution and civil claims for damages.
Volume 1 Part 1 Introduction: empirics of development development in historical perspective. Part... more Volume 1 Part 1 Introduction: empirics of development development in historical perspective. Part 2 Underdevelopment and development: low-level traps and the big push theories of growth poverty, inequality and development. Volume 2 Part 1 Resources in development: labour and human resources capital accumulation the environment. Part 2 Sectoral issues in development: agriculture industry. Volume 3 Part 1 Open economy issues in development: trade international factor movements north-south issues. Part 2 Economic policies and institutions: inflation and stabilization the state, markets and development. Part 3 Conclusion.
This article complements Ha-Joon Chang's critique, entitled ‘Institutions and Economic Develo... more This article complements Ha-Joon Chang's critique, entitled ‘Institutions and Economic Development: Theory, Policy and History’, of the ‘dominant discourse’ on institutions and economic development which takes the view that getting the institutions right (by strengthening private property rights and market freedoms) is a prerequisite for development. It does so by commenting on the concepts of economic development and institutions, discussing the theory of how institutional change affects development, and examining the possibility and desirability of such institutional change as a prerequisite of development.
This paper examines loanable fund models with a stabilized interest rate, in which the banking sy... more This paper examines loanable fund models with a stabilized interest rate, in which the banking system bridges the gap between the flow of demand and the provision of funds. A typical Mickselian model is developed to emphasize the importance of credit and inflation (deflation) in closing the gap between savings and investment. Substituting the nominal interest rate for the real - an appropriate modification in a model whose inflation is relevant - and using the Robertsonian definition of income, we realize that, depending on the reaction of ‘lacking’ and investment to inflation, there is the possibility of the system become unstable. By introducing unemployment into the system, we realize that investment is more sensitive than the lack of inflation, the greater the degree of wage flexibility, the greater the level of unemployment balance, in the face of the demand shock, and the greater the chances of macroeconomic instability. Finally, we demonstrate that if we replace the Robertson...
... Krugman, Paul (1993),'Toward a Counter-counterrevolution in Development Theory', Pr... more ... Krugman, Paul (1993),'Toward a Counter-counterrevolution in Development Theory', Proceedings of the World Bank Annual Conference on Development Economics, 1992, supplement to The World Bank Economic Review and The World Bank Research Observer, pp. 15-38. ...
Volume 1 Part 1 Introduction: empirics of development development in historical perspective. Part... more Volume 1 Part 1 Introduction: empirics of development development in historical perspective. Part 2 Underdevelopment and development: low-level traps and the big push theories of growth poverty, inequality and development. Volume 2 Part 1 Resources in development: labour and human resources capital accumulation the environment. Part 2 Sectoral issues in development: agriculture industry. Volume 3 Part 1 Open economy issues in development: trade international factor movements north-south issues. Part 2 Economic policies and institutions: inflation and stabilization the state, markets and development. Part 3 Conclusion.
Volume 1 Part 1 Introduction: empirics of development development in historical perspective. Part... more Volume 1 Part 1 Introduction: empirics of development development in historical perspective. Part 2 Underdevelopment and development: low-level traps and the big push theories of growth poverty, inequality and development. Volume 2 Part 1 Resources in development: labour and human resources capital accumulation the environment. Part 2 Sectoral issues in development: agriculture industry. Volume 3 Part 1 Open economy issues in development: trade international factor movements north-south issues. Part 2 Economic policies and institutions: inflation and stabilization the state, markets and development. Part 3 Conclusion.
It has long been argued that an increase in inequality increases the rate of economic growth by i... more It has long been argued that an increase in inequality increases the rate of economic growth by increasing the share of income going to profit recipients, whose saving contributes to capital accumulation, so that growth is profit-led. A more recent tradition argues that an increase in equality and a rise in the wage share can increase growth by increasing consumption and investment demand, so that growth is wage-led. Bhaduri and Marglin and others argue, however, that even if economic activity is demand-determined, a shift in income distribution towards profits can increase output and growth. This paper examines how a reduction in inequality affects economic growth, thereby contributing to the debate on wage-led and profit-led growth and broadening it to focus on inequality rather than the profit share. It does so by reviewing and re-examining the cases in which workers save, the determinants of investment, and the open economy, three issues that have been emphasized in the literature.
The process of economic growth is often viewed as a dynamic and path-dependent one in which histo... more The process of economic growth is often viewed as a dynamic and path-dependent one in which history matters, but the theories and models of economic growth normally invoke the concept of equilibrium, albeit, a dynamic one. Recently there have been attempts to introduce path dependence into theories and models, including models of economic growth, which allow history to have an important role in determining the path of the economy. This chapter discusses why path dependence may be a desirable property of models and, to do so, it develops a taxonomy of different methods with which path dependence has been or can be incorporated in models. Using this taxonomy, it discusses how the introduction of path dependence in growth models can change our understanding of the nature and determinants of, and policies for, economic growth.
If, as we have argued in the previous chapter, value-free economics is impossible, what ethical v... more If, as we have argued in the previous chapter, value-free economics is impossible, what ethical values should inform the discipline? If people do not behave simply as self-interested optimizers, what moral theories might guide their actions? What moral theory should be used to answer public policy questions? Finally, if individual preferences are not accepted as the overriding goal of the economic system, what ethical benchmarks or objectives should take its place? None of these issues can be understood, much less resolved, without some sort of ethical theory as a guide.
Any person who does any unauthorized act in relation to this publication may be liable to crimina... more Any person who does any unauthorized act in relation to this publication may be liable to criminal prosecution and civil claims for damages.
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