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Bernanke and Blanchard use a simple dynamic New Keynesian model of wage-price determination to explain the sharp acceleration in U.S. inflation during 2021–2023. They claim that their model closely tracks the pandemic-era inflation and they confidently conclude that "... we don't think that the recent experience justifies throwing out existing models of wage-price dynamics." This paper argues that this confidence is misplaced. The Bernanke and Blanchard is another failed attempt to salvage establishment macroeconomics after the massive onslaught of adverse inflationary circumstances with which it could evidently not contend. It misrepresents American economic reality, hides distributional issues from view, de-politicizes (monetary and fiscal) policy-making, and sets monetary policymakers up to deliver significantly more monetary tightening than can be justified on the basis of more realistic model analyses. [ABSTRACT FROM AUTHOR]

Economic costs of climate change are conventionally assessed at the aggregated global and national levels, while adaptation is local. When present, regionalised assessments are confined to direct damages, hindered by both data and models' limitations. This article goes beyond the aggregated analysis to explore direct and indirect economic consequences of sea level rise (SLR) at regional and sectoral levels in Europe. Using a dynamic computable general equilibrium model and novel datasets, we estimate the distribution of losses and gains across regions and sectors. A comparison of a high-end scenario against a no-climate-impact baseline suggests a GDP loss of 1.26% (€871.8 billion) for the whole EU&UK. Conversely our refined assessments show that some coastal regions lose 9.56–20.84% of GDP, revealing striking regional disparities. Inland regions grow due to the displaced demand from coastal areas, but the GDP gains are small (0–1.13%). While recovery benefits the construction sector, public services and industry face significant downturns. We show that prioritising recovery of critical sectors locally reduces massive regional GDP losses, at negligible costs to the overall European economy. Our analysis traces regional economic restructuring triggered by SLR, underscoring the necessity of region-specific adaptation policies that embrace uneven geographic impacts and unique sectoral profiles to inform resilient strategy design. [ABSTRACT FROM AUTHOR]

In the aftermath of the COVID‐19 pandemic, much of the global South has been immersed in a debt crisis of a breadth and depth not seen since the early 1980s. The debt distress was apparent before the pandemic and the situation over the last decade is best described as a slow burn, which the pandemic and war in Ukraine ignited in often sudden and dramatic ways. However, what remains a surprising feature of the ongoing situation has been the avoidance so far of a generalized domino effect, unlike previous systemic Southern debt crises. This fact does not diminish the severity of the consequences given that the containment of crisis has been achieved by regular and persistent applications of austerity and adjustment programmes with deleterious impacts on development in poor countries. This article frames the Debate by exploring these aspects of the current Southern debt crisis, focusing on its deeper structural drivers versus the role of more proximate triggers of the crisis; the similarities or differences with past crises of recent decades; and the degree to which anything has in fact changed in orthodox responses to crisis management. A theme that emerges from the more heterodox scholarship profiled by this Debate is that the current crisis and its responses are maintaining the dominant development paradigm of the last 40 years, rather than eliciting a shift away from it. There is a continued adherence to neoliberal ideology in macroeconomic policy making and to the punitive subordination of developing countries in debt distress, through crisis responses, to the Northern and especially US‐centred international financial system. Ignoring the very strong similarities to the past, especially the 1982 debt crisis that ushered in this paradigm, risks repeating the lost decades to development that followed. [ABSTRACT FROM AUTHOR]

Lance Taylor, a prominent macroeconomist, passed away in August 2022. He was known for his original and relevant work in macroeconomics and his commitment to challenging mainstream economic thinking. Taylor was a dedicated teacher, advising and mentoring many students throughout his career. He also provided policy advice to governments around the world and was critical of international agencies like the World Bank and IMF. Taylor's scholarly output was extensive, with numerous publications and prestigious lectures. Despite his accomplishments, Taylor remained grounded and maintained a farm in Maine with his wife. [Extracted from the article]

Comparative empirical evidence for 22 OECD countries shows that country differences in cumulative mortality impacts of SARS-CoV-2 are caused by weaknesses in public health competences, pre-existing variances in structural socio-economic and public health vulnerabilities, and the presence of fiscal constraints. Remarkably, the (fiscally non-constrained) U.S. and the U.K. stand out, as they experience mortality outcomes similar to those of fiscally-constrained countries. High COVID19 mortality in the U.S. and the U.K. is due to pre-existing socio-economic and public health vulnerabilities, created by the following macroeconomic policy errors: (a) a deadly emphasis on fiscal austerity (which diminished public health capacities, damaged public health and deepened inequalities); (b) an obsessive belief in a trade-off between 'efficiency' and 'equity', which is mostly used to justify extreme inequality; (c) a complicit endorsement by mainstream macro of the unchecked power over monetary and fiscal policy-making of global finance and the rentier class; and (d) an unhealthy aversion to raising taxes, which deceives the public about the necessity to raise taxes to counter the excessive liquidity preference of the rentiers and to realign the interests of finance and of the real economy. The paper concludes by outlining a few lessons for a saner macroeconomics. [ABSTRACT FROM AUTHOR]

Sharp increases in systemically important crude oil prices have been a major cause of the recent surge in the inflation rate in the U.S. This paper investigates the extent to which the increase in oil prices can be attributed to excessive speculation in the oil futures market. Our analysis suggests that excessive speculation in the crude oil market has been responsible for 24%–48% of the increase in the WTI crude oil price during October 2020–June 2022. These estimates translate into an oil price increase of around $18-$36 per barrel and an increase in the U.S. PCE inflation rate by circa 0.75–1.5% points during the same period. We complement the analysis with an empirical investigation of the crude oil market, which shows that (speculative) long noncommercial open-interest positions in oil futures have increased considerably relative to short noncommercial positions. We further find that higher futures prices for crude oil "Granger-cause" oil spot prices, the futures prices of corn and soybeans and the fertilizer price. These econometric results show that oil speculators have to be held accountable for not just raising oil prices, but also driving up food commodity prices. We finally discuss measures to clamp down on excessive speculation in oil in order to eliminate its systemically adverse consequences for the U.S. economy. [ABSTRACT FROM AUTHOR]

This article critically evaluates debates over the causes of U.S. inflation. We first show that claims that the Biden stimulus was the major cause of inflation are mistaken: the key data series—stimulus spending and inflation—move dramatically out of phase. While the first ebbs quickly, the second persistently surges. We then look at alternative explanations for the price rises. We assess four supply-side factors: imports, energy prices, rises in corporate profit margins, and COVID. We argue that discussions of COVID's impact have thus far only tangentially acknowledged the pandemic's far-reaching effects on labor markets. We conclude that while all four factors played roles in bringing on and sustaining inflation, they cannot explain all of it. There is an aggregate demand problem. But the surprise surge in demand did not arise from government spending. It came from the unprecedented gains in household wealth, particularly for the richest 10% of households, which we show powered the recovery of aggregate US consumption expenditure, especially from July 2021. The final cause of the inflationary surge in the U.S., therefore, was in large measure the unequal (wealth) effects of ultra-loose monetary policy during 2020–2021. This conclusion is important because supply-side (and thus potentially inflationary) pressures are unlikely to subside soon. Going forward, COVID, war, climate change, and the drift to a belligerently multipolar world system are all likely to keep straining global supply chains. Our conclusion outlines how policy has to change to deal with a world of steady, but irregular supply shocks, including Covid's continuing impact on labor markets. By their nature, such shocks create problems that monetary policy can cope with only at an enormous cost; they require targeted solutions. But when supply plummets or becomes more variable, fiscal policy also has to adapt: existing explorations of ways to steady demand over the business cycle have to embrace much bolder macroeconomic measures to control over-spending when supply is temporarily constrained. [ABSTRACT FROM AUTHOR]

This is a rejoinder to the stimulating comments by David Colander, Drucilla Barker and Jeronim Capaldo on my critique of the non-progressive macroeconomic DSGE research paradigm. The three comments expand my arguments and underscore the need for a drastic change in the mainstream approach to macroeconomics. [ABSTRACT FROM AUTHOR]

The Rebuilding Macroeconomic Theory Project, led by David Vines and Samuel Wills (2020), is an important, albeit long overdue, initiative to rethink a failing mainstream macroeconomics. Professors Vines and Wills, who must be congratulated for stepping up to the challenge of trying to make mainstream macroeconomics relevant again, call for a new multiple-equilibrium and diverse (MEADE) paradigm for macroeconomics. Their idea is to start with simple models, ideally two-dimensional sketches, that explain mechanisms that can cause multiple equilibria. These mechanisms should then be incorporated into larger DSGE models in a new, multiple-equilibrium synthesis – to see how the fundamental pieces of the economy fit together, subject to it being "properly micro-founded". This paper argues that the MEADE paradigm is bound to fail, because it maintains the DSGE model as the unifying framework at the center of macroeconomic analysis. The paper reviews 10 fundamental weaknesses inherent in DSGE models which make these models irreparably useless for macroeconomic policy analysis. Mainstream macroeconomics must put DSGE models, once and for all, in the Museum of Implausible Economic Models – and learn important lessons from non-DSGE macroeconomic approaches. [ABSTRACT FROM AUTHOR]

De-carbonization to restrict future global warming to 1.5 °C is technically feasible but may impose a "limit" or "planetary boundary" to economic growth, depending on whether or not human society can decouple growth from emissions. In this paper, we assess the viability of decoupling. First, we develop a prognosis of climate-constrained global growth for 2014–2050 using the transparent Kaya identity. Second, we use the Carbon-Kuznets-Curve framework to assess the effect of economic growth on emissions using measures of territorial and consumption-based emissions. We run fixed-effects regressions using OECD data for 58 countries during 2007–2015 and source alternative emissions data starting in 1992 from two other databases. While there is weak evidence suggesting a decoupling of emissions and growth at high-income levels, the main estimation sample indicates that emissions are monotonically increasing with per-capita GDP. We draw out the implications for climate policy and binding emission reduction obligations. [ABSTRACT FROM AUTHOR]

This study analyses domestic market integration's (DMI's) dynamic influence on regional economic growth in China. The authors construct a matrix of annual DMI indices for 29 provinces for 1997–2015. They calculate the reciprocal matrix and combine it with the β-convergence model and spatial econometrics to analyse the relationships between DMI and regional economic growth. Their findings indicate that the relation between these two variables is not straightforward, and 2004 was a tipping-point year. Before 2004, the statistical relationship between DMI and regional economic growth was downward sloping, which suggests a trend of divergence and negative spillover effects across the 29 provinces. After 2004, the relationship between DMI and regional economic growth becomes positive: increased DMI now is strengthening (regional) economic growth. The authors provide the possible explanations for the unstable relationship combined with China's reality as well. [ABSTRACT FROM AUTHOR]

Using macroeconomic data for 1960–2018, this article analyzes the origins of the crisis of the "post-Maastricht Treaty order of Italian capitalism." After 1992, Italy did more than most other Eurozone members to satisfy EMU conditions in terms of self-imposed fiscal consolidation, structural reform, and real wage restraint—and the country was undeniably successful in bringing down inflation, moderating wages, running primary fiscal surpluses, reducing unemployment, and raising the profit share. But its adherence to the EMU rulebook asphyxiated Italy's domestic demand and exports—and resulted not just in economic stagnation and a generalized productivity slowdown but in relative and absolute decline in many major dimensions of economic activity. Italy's chronic shortage of demand has clear sources: (1) perpetual fiscal austerity; (2) permanent real wage restraint; and (3) a lack of technological competitiveness, which in combination with an overvalued euro weakens the ability of Italian firms to maintain their global market shares in the face of increasing competition of low-wage countries. These three causes lower capacity utilization; reduce firm profitability; and hurt investment, innovation, and diversification. The EMU rulebook thus locks the Italian economy into economic decline and impoverishment. The analysis points to the need to end austerity and devise public investment and industrial policies to improve Italy's "technological competitiveness" and stop the structural divergence between the Italian economy and that of France/Germany. The issue is not just to revive demand in the short run (which is easy) but to create a self-reinforcing process of investment-led and innovation-driven process of long-run growth (which is difficult). [ABSTRACT FROM AUTHOR]

The shift in financial intermediation from banks to financial markets, and the introduction of financial market logic into areas and domains where it was previously absent, have not just led to negative developmental impacts, but also changed the 'rules of the game' and facilitated rent-seeking practices of a self-serving global elite. Establishment (financial) economics has helped to depoliticize and legitimize this financialized mode of social regulation by invoking Hayek's epistemological claim that (financial) markets are the only legitimate, reliably welfare-enhancing foundation for a stable social order and economic progress. This article forms the Introduction to a set of 10 articles which assess the logic and consequences of 'financialization' across a range of geographic, economic and social scales, and confront Hayek's grotesque claim--deep down, at the level of 'ideas', but also by providing 'knock-out evidence' on the social inefficiency of a capitalism 'without compulsions' for finance. The authors in the Debate challenge the 'ruling ideas' and expose how establishment economics has been hiding its reactionary political agenda behind the pretence of scientific neutrality. The financial emperor wears no clothes. [ABSTRACT FROM AUTHOR]

Mainstream climate economics takes global warming seriously, but perplexingly concludes that the optimal economic policy is to almost do nothing about it. This conclusion can be traced to just a few 'normative' assumptions, over which there exists fundamental disagreement amongst economists. This paper explores two axes of this disagreement. The first axis ('market vs. regulation') measures faith in the invisible hand to adjust the natural thermostat. The second axis expresses differences in views on the efficiency and equity implications of climate action. The two axes combined lead to a classification of conflicting approaches in climate economics. The variety of approaches does not imply a post-modern 'anything goes', as the contradictions between climate and capitalism cannot be wished away. [ABSTRACT FROM AUTHOR]

This is a rejoinder to the challenging comments by Professors James K. Galbraith and William Lazonick on my article “The New Normal: Demand, Secular Stagnation, and the Vanishing Middle Class.” Professor Galbraith favors an evolutionary approach to the issue instead of my approach but admittedly not on very convincing grounds. His characterization of actual conditions in the U.S. economy (including his view of what drove voters to Trump) appears to focus more on the current state than on underlying structural trends (which are all more negative than he seems to think). Professor Lazonick usefully extends my macroeconomic analysis by his microeconomic emphasis on the impacts of the change to predatory value extraction under a “downsize-and-distribute” corporate governance regime, legitimated in the name of shareholder-value maximization. However, even when we extend the analysis to include micro-level financialization, it is still insufficient aggregate demand that is underlying the twin diseases—secular stagnation and a growing dualization—afflicting the U.S. economy at the macro level. [ABSTRACT FROM PUBLISHER]

The U.S. economy is widely diagnosed with two “diseases”: a secular stagnation of potential U.S. growth and rising income and job polarization. The two diseases have a common root in the demand shortfall, originating from the “unbalanced” growth between technologically “dynamic” and “stagnant” sectors. To understand how the short-run demand shortfall carries over into the long run, this article first deconstructs the notion of total-factor-productivity (TFP) growth, the main constituent of potential output growth and “the best available measure of the underlying pace of exogenous innovation and technological change.” The article argues that there is no such thing as a Solow residual and demonstrates that TFP growth can only be meaningfully interpreted in terms of labor productivity growth. Because labor productivity growth, in turn, is influenced by demand factors, the causes of secular stagnation must lie in inadequate demand. Inadequate demand, in turn, is the result of a growing segmentation of the U.S. economy into a “dynamic” sector that is shedding jobs and a “stagnant” and “survivalist” sector that acts as an “employer of last resort.” The argument is illustrated with long-run growth-accounting data for the U.S. economy (1948–2015). The mechanics of dualistic growth are highlighted using a Baumol-inspired model of unbalanced growth. Using this model, it is shown that the “output gap,” the anchor of monetary policy, is itself a moving target. As long as this endogeneity of the policy target is not understood, monetary policy makers will continue to contribute to unbalanced growth and premature stagnation. [ABSTRACT FROM PUBLISHER]

Proponents of the Comprehensive Economic and Trade Agreement (CETA) emphasize its prospective economic benefits, with economic growth increasing due to rising trade volumes and investment. Widely cited official projections suggest modest GDP gains after about a decade, varying from between 0.003% and 0.08% in the European Union and between 0.03% and 0.76% in Canada. However, all these quantitative projections stem from the same trade model, which assumes full employment and neutral (if not constant) income distribution in all countries, excluding from the outset any of the major risks of deeper liberalization. This lack of intellectual diversity and of realism shrouding the debate around CETA’s alleged economic benefits calls for an alternative assessment grounded in more realistic modeling premises. In this paper, we provide alternative projections of CETA’s economic effects using the United Nations Global Policy Model (GPM). Allowing for changes in employment and income distribution, we obtain very different results. In contrast to positive outcomes projected with full-employment models, we find CETA will lead to intra-EU trade diversion. More importantly, in the current context of tepid economic growth, competitive pressures induced by CETA will cause unemployment, inequality, and welfare losses. At a minimum, this shows that official studies do not offer a solid basis for an informed decision on CETA. [ABSTRACT FROM PUBLISHER]

The Eurozone crisis has been wrongly interpreted as either a crisis of fiscal profligacy or of deteriorating unit-labor cost competitiveness (caused by rigid labor markets), or a combination of both. Based on these diagnoses, crisis countries have been treated with the bitter medicines of fiscal austerity, wage reductions, and labor market deregulation—all in the expectation that these would restore cost competitiveness and revive growth (through exports), while at the same time allowing for fiscal consolidation and private debt deleveraging. The medicines did not work and almost killed the patients. The problem lies with the diagnoses: the real cause of the crisis resides in unsustainable private sector debt leverage, which was aided and abetted by the liberalization of European financial markets and a “global banking glut.” [ABSTRACT FROM PUBLISHER]

Intra-Eurozone current-account imbalances (and divergent external debt positions) cannot be attributed to the deterioration of cost (or price) competitiveness in Europe’s periphery vis-à-vis its core. Imbalances were driven by high domestic demand growth in the periphery, which was financed by capital flows from the core. The external finance – following capitalist logic – ended up in non-traded medium-low-tech activities (e.g. construction). This points to a structural problem in pan-European financial integration – which we locate in the economic ideology guiding the EMU: NAIRU economics. We zoom in on the reasons why NAIRU-based monetary policy deepened the already existing structural heterogeneity in the Eurozone, locking the Southern-European economies up in low- and medium-technology activities often in direct competition with China. The only way out is a rethink of Eurozone macroeconomic and industrial policies which – going beyond often-made calls for broad-based fiscal stimulus or a clearing arrangement – fundamentally reconsiders the role of the ECB in light of what needs to be done to create Europe’s non-price comparative advantage of tomorrow. [ABSTRACT FROM AUTHOR]

ABSTRACT Development economics appears to have come full circle, as interest in and concern for industrialization have made a comeback, echoing major concerns of the early development economists. However, when it comes to the practice of industrialization strategy and industrial policy, the default recommendation is still the market and static comparative advantage - the main task of governments, in the new view, is to impose institutional reforms and improve governance so as to allow markets to perform more efficiently. History is thus about to repeat itself, but this time as farce, because no country has managed to climb the industrial ladder just by 'getting prices and institutions right'. We have to re-learn the old lessons of how to industrialize, learning from past mistakes and taking into account new challenges posed by today's global realities. [ABSTRACT FROM AUTHOR]

The dominant view, both on the mainstream right and on the left, holds that the Eurozone crisis is a crisis of labour-cost competitiveness--with trade imbalances (and hence foreign indebtedness) being driven by divergences in relative unit labour costs (RULCs) between surplus and deficit countries. To re-balance Eurozone growth, the mainstream solution is a deflationary policy of 'internal devaluation' (i.e. cutting the wage share by as much as 30%) in the deficit countries. The 'progressive' view holds that the surplus countries should adjust by raising their wage shares. We argue that both sides of this debate are wrong and unhelpful. Europe's trade imbalances are determined by domestic and world demand--whilst RULC divergences play only a negligible role. Eurozone growth can only be revived when Eurozone demand growth is restored, not by lowering wages here and/or raising them there. The current deflationary adjustment forced on the wage-led economies of Greece, Italy, Portugal and Spain is self-destructive: it is a 'confidence killer', not only deepening the free fall of southern European incomes but also damaging their productive base and productivity growth. The outlook is depressing--further increases in already high unemployment rates, inequality measures and poverty rates inconceivable in prosperous Europe just a few years ago--and arguably dystopian. [ABSTRACT FROM AUTHOR]

The article discusses Keynesian economic theory. It references the article "Varieties of Keynesianism" by Duncan K. Foley, which appears elsewhere in the issue. The author critiques Foley's analysis of economist John Maynard Keynes's theories, in which he focused on information economics. It is suggested that Foley failed to note that Keynes's economic macroanalysis included a theory of individual rational decision-making emphasizing uncertainty. Other topics include demand management and interest rates.

This study aims to explore the impact of transport capital stock on economic growth in Chinese regions. Using panel data for a sample of 28 provinces and municipalities over the period 1978-2008, the empirical findings show that there is significant spatial variation in the productivity effects of transport infrastructure in China. The highest output elasticity in the connection provinces of the central region means that transport investments there will yield the highest economic returns, which is in line with "the emergence of new economic center" theory. From a policy perspective, China had best give priority to the development of transport facilities in the backland region to realize the rise of Central China. [ABSTRACT FROM AUTHOR]

China's transport infrastructure distribution and its economic activities have largely the same pattern of spatial clusters. This paper aims to determine whether causal linkages exist between transport infrastructure investment and economic growth in China at national and regional levels. We examine causality in a panel cointegration and a Granger causality framework using time series data throughout the 1978–2008 period. The empirical findings show that in the long run, at the national level, there is unidirectional Granger causality from economic growth to transport infrastructure; at the regional level, there exists bidirectional causality in the affluent eastern region while the low-income central and western regions exhibit unidirectional Granger causality from economic growth to transport infrastructure. These results imply that an improvement in transport infrastructure alone is not sufficient for stimulating economic growth in the underdeveloped areas of China. To better realize the economic benefits brought by transport infrastructure, the Chinese government should pay serious attention to the development of complementary factors in the central and western provinces. [ABSTRACT FROM AUTHOR]

The article discusses the effects of wage-led growth on productivity and investment. The authors believes that wage inequality and unstable growth process is the root of the crisis based on the non-accelerating inflation rate of unemployment (NAIRU) theory. Low wages resulting to increased inequality caused the lowering of interest rates and brought the rise of corporate debt beyond sustainable levels. Financial markets collapsed due to the instability and inequality-driven imbalances.

The article examines a report entitled “World Development Report 2010: Development and Climate Change,” which was published by The World Bank.

Can climate change be stopped while fossil fuel capitalism remains the dominant system? What has to be done and what has to change to avoid the worst-case consequences of global warming? These questions are debated in the six contributions which follow. This introduction to the debate sets the stage and puts the often widely diverging views in context, distinguishing two axes of debate. The first axis (‘market vs. regulation’) measures faith in the invisible hand to adjust the natural thermostat. The second axis expresses differences in views on the efficiency and equity implications of climate action. While the contributions do differ along these axes, most authors agree that capitalism's institutions need to be drastically reformed and made fundamentally more equitable. This means a much broader agenda for the climate movement (going beyond carbon trading and technocratic discussion of mitigation options). What is needed for climate stability is a systemic transformation based on growth scepticism, a planned transition to a non-fossil fuel economy, democratic reform, climate justice, and changed global knowledge and corporate and financial power structures. [ABSTRACT FROM AUTHOR]

We present empirical evidence for a cross section of twenty OECD countries (1984–2004) that a relatively regulated and coordinated (“rigid”) industrial relations system promotes long-run labor productivity growth. This conclusion is reinforced when we differentiate between (three) categories of OECD industrial relations systems and test for differences in productivity performance. [ABSTRACT FROM AUTHOR]

The widespread belief in the natural rate of unemployment among economists has been extraordinary. Debate is more over why it fluctuates than whether policy should use it as a target. But these Dutch economists argue that allegiance to the NAIRU could well reduce potential productivity growth and therefore make inflation more likely than is necessary. Do economists have it dead wrong? [ABSTRACT FROM AUTHOR]

We argue that the conventional NAIRU (non-accelerating inflation rate of unemployment) model is a special case of a larger model of equilibrium unemployment, in which demand, investment, and endogenous technological progress do have lasting effects on steady-inflation unemployment. It follows that the labor market policy prescriptions (i.e. to drastically deregulate), following from the conventional NAIRU model, cannot be generalized. Empirical support for the extended model is provided by an econometric analysis for 20 OECD countries (1984–2004): demand factors are the dominant determinants of OECD unemployment.Eastern Economic Journal (2009) 35, 309–337. doi:10.1057/eej.2008.15 [ABSTRACT FROM AUTHOR]

The article reports on the development of productive capacities and technology in the least developed countries (LDCs) with commentary on "The Least Developed Countries Report 2006: Developing Productive Capacities," "The Least Developed Countries Report 2007: Knowledge, Technological Learning and Innovation for Development," and "World Investment Report 2007: Transnational Corporations, Extractive Industries and Development," published by the United Nations Conference on Trade and Development (UNCTAD). UNCTAD does not believe that the development policy approved by the U.S. government is benefiting LDCs and that productive capacities should be based on the production capacity of a country.

According to the mainstream theory of equilibrium unemployment, persistent unemployment is caused mainly by 'excessive' labour market regulation, whereas aggregate demand, capital accumulation and technological progress have no lasting effect on unemployment. We show that the mainstream non-accelerating inflation rate of unemployment (NAIRU) model is a special case of a general model of equilibrium unemployment, in which aggregate demand, investment and endogenous technological progress do have long-term effects. It follows that labour market deregulation does not necessarily reduce steady-inflation unemployment. Theoretically, if the decline in real wage growth claims owing to deregulation is smaller than the ensuing decline in labour productivity growth and in the warranted real wage growth, then in that case steady-inflation unemployment may increase. Empirical evidence for 20 Organisation for Economic Cooperation and Development (OECD) countries (1984-1997) indicates that the impact of labour market deregulation on OECD unemployment is zero, and possibly negative (causing a higher rate of unemployment). [ABSTRACT FROM AUTHOR]

The article examines the development planning approach of intellectual Sukhamoy Chakravarty of India, which aims to integrate economic growth with social justice and ecological sustainability. It outlines Chakravarty's approach to planning theory and the major lessons he learned from his policy-related work in the country's Planning Commission. It discusses his views and perceptions concerning economic progress, agriculture-led growth and the main barriers to Indian growth. Moreover, the article analyzes whether Chakravarty's approach to development planning is still relevant despite changes in various aspects of the nation.

According to the mainstream theory of equilibrium unemployment, persistent unemployment is caused (mainly) by "excessive" labor market regulation, whereas aggregate demand, capital accumulation, and technological progress have no lasting effect on unemployment. We argue that the mainstream nonaccelerating inflation rate of unemployment (NAIRU) model is only a special case of a general model of equilibrium unemployment, in which aggregate demand, investment, and endogenous technological progress have long-term effects. It follows that the labor market policy prescriptions (i.e., to drastically deregulate), following from the standard NAIRU model, can by no means be generalized. Empirical support for the general model is provided by an econometric analysis for 20 Organization for Economic Cooperation and Development (OECD) countries (1984-97): demand factors are the overriding determinants of structural unemployment in the OECD. [ABSTRACT FROM AUTHOR]

The article presents an analysis of the macroeconomic performance of Organization for Economic Cooperation and Development (OECD) countries in 1960-2000 using the Keynesian growth model. The growth model, which allows demand growth to be wage led or profit led, was applied to eight OECD countries to argue the basis of real wage restraint on weak foundations. The analysis found that the demand is wage led in six of the eight OECD economies analyzed and that the decline in world trade growth is the dominant cause of the slow growth in all economies.

East Asia's newly industrializing economies are the paragon of successful industrialization. This article investigates what lies behind this success by identifying seven ‘stylized facts’, which concern the contributions to industrialization and growth of structural change and technological change; and the role played by investment, savings and exports. Based on these stylized facts, the authors offer a new formulation of East Asian growth in terms of a cumulative-causation growth model. They discuss the impact on industrial diversification and upgrading of industrial and trade policies (including import substitution), and labour-market policies in the context of East Asia's authoritarian political regimes. Important specific factors are highlighted and the particular kinds of policies and institutions used in East Asia to finance accumulation are reviewed, before briefly considering the transferability of the East Asian growth regime. [ABSTRACT FROM AUTHOR]

Comments on economic globalization and world democracy. Increase in and the perpetuation of global income inequality and poverty; Enhancement of well-being in developing countries; Regulation of globalization by democratic institutions of global governance.

Abstract What will be the domestic growth and distributional effects of agricultural trade liberalization in India? How fast should Indian agriculture be liberalized and what policies should characterize the transition? This paper uses Indian agriculture to analyze medium-term transition problems that arise in many major economic reforms. Employing a dynamic applied general-equilibrium model, the paper focuses on the implications for policy design of the absence of efficient capital and labor markets and on the distributional consequences of economic reform in the presence of realistic limits on available intervention instruments. The key finding is that trade adjustment should be supplemented by policies that raise land productivity and, because this takes time, the adjustment should be gradual. [ABSTRACT FROM AUTHOR]

Presents a general-equilibrium evaluation of using variable trade levies on agricultural trade to stabilize foodgrain prices in response to exogenous shocks. Price stabilization as main concern of India's trade policy for agriculture; Reforms in India's trade policy for agriculture beginning year 1991; Increase in the world prices of India's crops as having positive impact on domestic inflation.

Employing a dynamic nine-sector, seven-income classes computable general equilibrium (CGE) model for the Indian economy (1985–90). this paper analyses the medium-run effects of (agricultural) trade liberalization. Its focus is on the effects of trade reform on farmers' incentives, because it is often presumed that the lack of adequate incentives constitutes the major constraint on private agricultural investment and the use of modem inputs. The simulation results suggest that, given empirically plausible price response elasticities, the improvement in farmers' incentives consequent upon trade liberalization is unlikely to increase agricultural productivity and real incomes in a broad-based and sustained manner. It is with reference to these results that major technological, social and structural, and organizational barriers to private agricultural investment are discussed and an important role is identified for government intervention in fostering agricultural development. [ABSTRACT FROM PUBLISHER]

Identifies views on agriculture's role in India's longer-term development strategy. Use of a dynamic multisector model to evaluate the views; Interdependence between industry and agriculture.