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The central component of most economic models that analyse the transition from the Malthusian regime to self-sustaining developed economies is education. Improved health is normally envisaged as simply a by-product of economic growth. Whereas growth does, indeed, tend to improve health status, the reverse is also true, namely that health improvements are a dynamic force capable of driving economic expansion. This paper underlines the importance of health improvements in escaping from Malthusian stagnation. Further, and in contrast to existing literature, which emphasizes the effects of changes in mortality rates, this paper focuses on the relationship between health status and the efficiency of human capital technology. Through this channel, health improvements stimulate investments in child quality in terms of both nourishing and schooling and drive the economy towards the Modern Growth regime. [ABSTRACT FROM AUTHOR]

Copyright of African Development Review / Revue Africaine de Développement is the property of Wiley-Blackwell and its content may not be copied or emailed to multiple sites or posted to a listserv without the copyright holder's express written permission. However, users may print, download, or email articles for individual use. This abstract may be abridged. No warranty is given about the accuracy of the copy. Users should refer to the original published version of the material for the full abstract. (Copyright applies to all Abstracts.)

This paper models externalities of production across regional economies. Under the assumption that knowledge diffuses without political or administrative barriers, we derive externalities that affect the steady state and the process of growth of each economy. The empirical counterpart of the reduced form equation summarizing the process of growth allows us to test for the presence of regional spillovers and to measure their magnitude. Our results for a sample of European regions show that spillovers are far from negligible, are robust to the consideration of variables within each region, and may cause nondecreasing returns at the spatial aggregate level. The paper also relates previous empirical evidence on spatial dependence in growth studies to the externalities modeled here. [ABSTRACT FROM AUTHOR]

Information about several papers discussed at a lecture sponsored by JMBC on macroeconomics is presented. Topics include Schumpeterian Theory, stagnation, implementation and macroeconomics. The seminar was led by several lectors like professor Patrick J. Kehoe and Peter Howitt. It also mentions that the lectures were based on the lectors' research papers.

This paper identifies factors associated with takeoff-a sustained period of high growth following a period of stagnation. Countries that experience takeoffs average 2.3% annual growth following their stagnation episodes, while those that do not average 0%. Using probit, we find that de jure trade openness is positively and significantly associated with takeoffs. A one-standard-deviation increase in de jure trade openness is associated with a 55% increase in the probability of a takeoff in our default specification. Capital account openness encourages takeoff responses, but measures of de facto trade openness are found to be poor predictors of takeoffs. We also examine the determinants of nations achieving 'sustained' takeoffs; i.e. those lasting eight years or longer. Takeoffs in countries with more commodity-intensive output bundles are less likely to be sustained, suggesting that adverse terms-of-trade shocks may play a role in ending long-term high growth episodes. [ABSTRACT FROM AUTHOR]

Abstract: The Republic of South Africa faces the imperative of escaping economic stagnation. This article seeks to synthesise results from a series of research efforts, including but not limited to the articles presented in this special issue, and consider policy options for escaping economic stagnation. The focus is on South Africa and South African policies yielding relatively quick dividends in terms of growth and taking the rest of the world as given. Four broad implications are presented. These could form part of a concerted effort to escape from South Africa's long running economic malaise. [ABSTRACT FROM AUTHOR]

Using data from 65 countries over the period 1980-2003, this paper investigates the role that cultural dimensions play in the process of technological change, innovation and adoption and consequently on the steady state level of output per worker and its growth, using spatial econometrics techniques to account for spatial dependence between countries. Initial findings indicate that differences across cultural dimensions act as a leveling effect but not as long run growth determinants. In addition, when controlling for physical and human capital accumulation, culture plays a much smaller role in explaining differences in income per capita than initially thought, with little effect on output per worker growth along the transitional dynamics path. Spatial econometric considerations are relevant in explaining differences across rates of growth of per worker output, but not in terms of steady-state levels of income. [ABSTRACT FROM AUTHOR]

Insurance economics models of statics and comparative statics assume that the process of economic adjustment must inevitably lead to equilibrium. The question of attainability of equilibrium has not been addressed so far. This is the domain of dynamic analysis. In this article, we develop a model of economic growth for the insurance industry. The production function of the insurance industry is based on the assumption that the output, “incurred losses,” is a function of “invested assets” and “other labor and nonlabor inputs.” The latter grow at the rate n, a proxy of the growth rate of insurance expenses. The assets–inputs ratio, r, characterizes the steady-state growth path that the insurance industry eventually attains. The adjustment process takes place through the assets–losses ratio, v, which is affected by the insurance leverage, the loss ratio, and the insurance exposure of the insurance industry. An insurance industry that has reached a steady state will have its output growing at the rate n +π, where π is the growth rate of average productivity. The incremental reserve ratio, s, determines definitely a steady-state growth path for the insurance industry. An increase or decrease in s may move the insurance industry to a higher or lower growth path. We suggest that this analysis provides a stronger theoretical context for analyzing dynamic phenomena in the insurance industry. [ABSTRACT FROM AUTHOR]

Following an analysis of the relation between a standard Steindlian model of stagnation and Steindl’s own analysis, we modify the standard model by introducing endogenous changes in the mark-up and a reformulation of the investment function. These extensions, which address significant weaknesses of the standard model, find support in Steindl’s writing and leave intact some of Steindl’s key results. In a further extension, we add a labour market and analyse the stabilizing influence of a Marxian reserve-army mechanism. The implications of the extended model for the effects of increased oligopolization are largely in line with Steindl’s predictions. [ABSTRACT FROM AUTHOR]

Copyright of Kyklos is the property of Wiley-Blackwell and its content may not be copied or emailed to multiple sites or posted to a listserv without the copyright holder's express written permission. However, users may print, download, or email articles for individual use. This abstract may be abridged. No warranty is given about the accuracy of the copy. Users should refer to the original published version of the material for the full abstract. (Copyright applies to all Abstracts.)

Humans exhibit a fundamental propensity to interact for social, cultural, technological, and other reasons. In this paper we seek to determine when the propensity to interact, expressed in the form of a spatial externality, becomes strong enough to induce agglomeration. We design an abstract world where the only possible reason for agglomeration is the spatial externality. In this world the uniform population distribution is a steady-state. Then to ask under what circumstances does a spatial externality induce agglomeration is to ask under what circumstances does it induce an instability of the steady-state: anything other than a uniform steady-state implies some agglomeration. [ABSTRACT FROM AUTHOR]

This paper discusses the asymptotic behavior of the neoclassical two-sector growth model when the steady-state conditions are not fulfilled, and derives the asymptotic growth rates for cases in which Hicks neutral technical progress occurs in the investment sector, or Harrod neutral technical progress occurs at different rates in the two sectors. The last section compares the asymptotic properties of this model with the standard steady-state properties of the two-sector growth model. [ABSTRACT FROM AUTHOR]

This paper explains current problems in the housing and banking industries by reviewing the history of the post-New Deal U. S. banking system as it relates to housing finance. Current problems in banking and housing are seen as the result of the interaction of long waves of growth and decline in the U.S. economy and structured conflict over financial regulation between large commercial banks and a shifting alliance of other social groups. Contemporary problems of affordability, price volatility, and credit 'crunches' flow from increasing financial fragility and economic stagnation. Policies to democratize finance and create new financial institutions are considered. [ABSTRACT FROM AUTHOR]

Railroads in general, and those of the United States in particular, have been the subject of considerable controversy and debate for many years. At least four groups of economists have shown special interest in the economic and social role played by this often troubled industry. Economic historians have debated for many years the extent of the railways' contribution to economic progress. The purpose of the present paper is two-fold: first, authors apply to the railroads the tools of modern risk analysis, using for this purpose a comparatively neglected data set-the long-term series of holding period rates of return on railroad shares-in order to derive an operational measure of secular stagnation. Clearly, the U.S. railroads constitute a propitious subject for such an experiment. Second, the risk analysis will be used to gain additional insights into the industry's transition from growth to stagnation. The various stages of the industry's development are examined against the background of the data on rates of return.

Between 2003 and 2010, Latin America experienced a solid record of economic growth, coupled with a notable reduction in income inequality. The regional Gini coefficient fell from 0.556 to 0.521 and declined in all 15 out of 17 countries in which frequent data are available. However, previous studies have warned about problems in the sustainability of the decline in income inequality and this study presents evidence of stagnation on this front between 2010 and 2013. The results are robust to various measures of income inequality, but differ across the region. While largely attributable to the recovery from the global financial crisis in Mexico and some countries in Central America, the results are also supported by the demonstrated slowdown in inequality reduction in other countries, including Brazil, Ecuador and Bolivia. [ABSTRACT FROM AUTHOR]

While secular stagnation has won many adherents, Toby Nangle offers an alternative understanding of global economics and demography - one that points towards persistently falling inequality and a future that belongs more to workers than to capital. But should we hold our breath for that inflection point? [ABSTRACT FROM AUTHOR]

We estimate that the UK has a relatively large output gap of around 2¾% of potential output. With the legacy of the financial crisis fading, the UK should see healthy growth in potential output of around 2.1% a year from 2015-24. Usually this would drive a period of strong economic growth, but we expect GDP growth to average a relatively underwhelming 2.4% a year over this period, largely due to the drag from aggressive fiscal consolidation., There is significant disagreement amongst economists about the size of the output gap. Estimation of the output gap has been problematic since the financial crisis because of the depth of the recession and relatively slow pace of the subsequent recovery, while sizeable revisions to the national accounts data have been an added complication. Our estimate of the output gap is towards the top of the range of independent forecasters surveyed by HM Treasury, but it is consistent with the literature on the impact of financial crises on potential output., We expect potential output growth of 2.1% a year from 2015-24, a faster pace than that seen since the financial crisis, but some way short of the experience of the pre-crisis decade. The shortfall relative to the pre-crisis period is largely due to a smaller contribution from growth in labour supply, which reflects the impact of an ageing population. However, labour is set to make a much stronger contribution to potential output growth in the UK than in most other major European countries over the next decade., The combination of a large output gap and healthy growth in potential output will provide the conditions for firm growth and low inflation over the medium term, with GDP growth expected to average 2.4% a year from 2015 to 2024. Growth could be stronger were it not for the sizeable drag from fiscal consolidation over the next four years and the dampening effect that this will have on activity. This will ensure that the output gap closes very slowly. The government's fiscal plans are heavily influenced by the OBR's view that there is limited scope for stronger growth to drive an improvement in the public finances. But if our view turns out to be correct, it will become apparent that the government has pursued a more austere path than is strictly necessary in order to comply with its fiscal rules. [ABSTRACT FROM AUTHOR]

Stunningly low global long-term bond yields provide some credence to a secular stagnation view of the world. We present an analytical framework - culminating in a simple scorecard - for assessing the extent to which purported drivers and manifestations of secular stagnation match global economic and financial developments and we compare with a complementary narrative focusing on balance sheet boom and bust. We find some support for each, but think global rates will not stay as low for as long as markets price in., Larry Summers has used the term to refer to a situation where demand and supply for savings deliver very low equilibrium real interest rates. The bulge in middle-aged savers, falling prices of investment goods, and flows of savings 'uphill' from emerging markets may have all led to real rates trending much lower in recent decades., Another version of the story is that slow technical progress depresses demand for borrowing, and pushes down on real rates. This is less compelling, and based more on anecdote than anything else. There are as many reasons to be optimistic, as pessimistic, about the supply side., There are holes in the secular stagnation narrative. Until very recently, G7 savings rates have trended down rather than up, partly because of another decades-long trend of financial innovation. Furthermore, few economists, nor the Fed or the BoE, expect policy rates in the US or UK to stay low for as long as is priced in to markets., A complementary narrative would stress the role of the credit-fuelled mega-boom and subsequent balance sheet blow out and Great Recession, and then the long road to financial repair. This is more consistent with the path of savings rates over recent decades, and the policy response - including QE - can explain much of the rest., We see the two explanations as complementary and reinforcing. In global terms, they appear no better or worse than each other. Comparing across countries, Japan comes closest to resembling secular stagnation, followed by EZ, US and UK, according to our scorecard., We think ultra-low long rates will not be borne out by the future path of short rates, but acknowledge a significant risk they might, for example, if monetary policy remains too tight on average because of zero bound effects on interest rates and limited scope for fiscal accommodation. [ABSTRACT FROM AUTHOR]

In contrast to rapid economic growth in the twentieth century, Korea suffered a long economic decline in the eighteenth and nineteenth centuries, with the failure accelerating from 1850 to 1890. According to 36 different harvest records, rice productivity continuously declined from the early eighteenth to the late nineteenth centuries due to deforestation and increase in natural disasters. Contraction of rural markets after the interruption of trade with Japan also contributed to the decrease in rice production. The third reason for the nineteenth-century crisis was the dissolution of the government-led grain storage and redistribution system. Finally, the ultimate culprit for the crisis could be found in Confucianism with which the Joseon Dynasty was unable to properly understand and respond to the crisis. [ABSTRACT FROM AUTHOR]

Through review of relevant studies and analysis, this article indicates that the 'middle-income trap' is in line with the framework of the mainstream economic growth theories, and, therefore, it is a useful concept through which we can analyze economic growth phenomena in specific economic growth phases. The empirical experiences of many countries also indicate that at specific middle-income stages, economies with high rates of growth tend to encounter economic slowdown or even stagnation. The article shows that China is facing the challenge of determining how to move smoothly beyond the middle-income stage of economic development, while taking into account the shifting population structure, changing resource endowment and growth patterns. The article, drawing on international experiences, puts forward several policy suggestions relating to improvement in total factor productivity, expansion of human capital accumulation and deepening of system and government function reforms. [ABSTRACT FROM AUTHOR]

Most ecological economists believe that the transition to a steady-state economy is necessary to ensure ecological sustainability and to maximize a nation's economic welfare. While some observers agree with the necessity of the steady-state economy, they are nonetheless critical of the suggestion made by ecological economists-in particular, Herman Daly-that a steady-state economy is compatible with a capitalist system. First, they believe that steady-state capitalism is based on the untenable assumption that growth is an optional rather than in-built element of capitalism. Second, they argue that capitalist notions of efficient resource allocation are too restrictive to facilitate the transition to an 'ecological' or steady-state economy. I believe these observers are outright wrong with their first criticism and, because they misunderstand Daly's vision of a steady-state economy, are misplaced with their second criticism. The nature of a capitalist system depends upon the institutional framework that supports and shapes it. Hence, a capitalist system can exist in a wide variety of forms. Unfortunately, many observers fail to recognize that the current 'growth imperative' is the result of capitalist systems everywhere being institutionally designed to grow. They need not be designed this way to survive and thrive. Indeed, because continued growth is both existentially undesirable and ecologically unsustainable, redesigning capitalist systems through the introduction of Daly-like institutions would prove to be capitalism's savior. What's more, it would constitute humankind's best hope of achieving sustainable development. [ABSTRACT FROM AUTHOR]

In this contribution, we show that the persistence and the time of occurrence of a terms-of-trade shock matter in determining steady-state changes: (i) a strong persistent (temporary) terms-of-trade worsening induces a long-run decline in the real expenditure greater than after a permanent disturbance; (ii) an adverse permanent shift in the terms of trade raises the real expenditure in the long run if the shock is expected to occur in the distant future. Finally, according to whether a temporary terms-of-trade worsening is anticipated or not, the current account displays a monotonic or a nonmonotonic adjustment. [ABSTRACT FROM AUTHOR]

This article examines the sources of economic growth in Australia from 1960 to 2000 by adapting a framework developed in Jones (2002), whereby long-run growth is driven by the global discovery of new ideas, which in turn is tied to world population growth. We find that, contrary to the conventional view as suggested by sustained growth rates and a stable capital–output ratio over the last several decades, Australia is clearly not on its steady–state balanced growth path. Australia has benefited from increases in educational attainment and research intensity: 42 per cent of Australian growth between 1960 and 2000 is attributable to the rise in educational attainment, about 20 to 40 per cent is attributable to increasing research intensity, while only 10 to 30 per cent is due to long-run population growth in the idea-producing countries. [ABSTRACT FROM AUTHOR]

Assesses the economic status of several countries. Information on population and income stagnation of Japan and Korea; Cost and benefits of Korean unification; Issue on unemployment in Germany; Economic growth of China.

This article provides information on the views of economist Moses Finley on the Greek and Roman economic stagnation and technological blockage. Finley's views on investment and capital required his readers to accept his proposition that new machinery was neither invented nor implemented. He then argued that failure was not attributable to lack of capital, for the Ptolemies had demonstrated the availability of sufficient capital to transform Egyptian agriculture to increase royal revenues from the third century BC. Finley then asked why no investment was directed towards increasing royal revenues, while capital was being made available on roads, public buildings, water supply, drainage, and so on, but not for production. This statement not only ignores the economic impact of spending on construction projects, provision of roads, and water supplies and drains for cities, but again flies in the face of his earlier warning about applying modern values of economic rationalism. Finley moved on next to the division of labor, largely because historical hindsight suggested that it should be important. From labor Finley turned to the rentier mentality of wealthy landowners, who were supposedly inimical to innovation.

The article presents a study on Adam Smith's Stadial analysis as a sequence of societal growth trajectory. It describes how a stadial analysis of the Smithian type can be constructed explicitly, which involves an explicit example of a single complete growth trajectory. It constructs a Smithian type of stadial analysis using a sequence of such growth trajectories. It suggests that the sequence has the characteristics that the new growth trajectories emerge for new stages of society when stable, but ultimately undesirable, stationary states are converted into unstable, but desirable growth paths. It concludes that the new societal forms will be progressive, involving cumulative growth rather than cumulative decline.

Investigates the role of money in a neoclassical growth model of a small open economy with a flexible exchange rate. Development of the model in its steady-state form; Analysis of the effects of monetary policy; Derivation of conditions for the existence, uniqueness and stability of the steady-state equilibrium.