Search

The purpose of the study was to assess the determinants of the balance of payment in Tanzania. The nature of this study was quantitative where secondary time series data covering a period of thirty-one years between 1990 and 2020 were collected. The study performed descriptive statistics and diagnostic tests such as normality test, unit root test for stationarity, Pearson’s Correlation matrix to check if there is a multicollinearity problem in the data. The diagnostic tests revealed that the data bring unbiased results, therefore the ordinary least square regression was performed and we found that foreign direct investment and inflation rate have a negative and significant influence on the balance of payment, whereas exchange rate has a positive and insignificant influence on the balance of payment, and the interest rate has an insignificant negative influence on the balance of payment. Finally, we recommend that a country have to introduce relative prices of imports in order to improve the inflows of FDI in order to have a favourable balance of payment in a country like Tanzania. Also, Tanzania's central bank must be cautious in its monetary policy and take some beneficial steps to regulate the money supply. To attract the new internal investor, it must keep an eye on interest rates and charge a low-interest rate.

Traditional GDP calculations exclude the ecological environment and natural resource depletion, arguing that sustained economic growth can lead to sustained welfare improvements. The Index of Sustainable Economic Welfare (ISEW) is a monetary measure of sustainability and economic welfare aimed at overcoming some of the limitations of GDP. Given the significant impact of industrial development, the demographic composition, and the balance of payments in economic growth and sustainable economic well-being, we propose an improved ISEW method (SE-ISEW), where the structural index is used instead of the Atkinson index as a measure of structural imbalance. This study calculates and compares the ISEW and SE-ISEW for 30 provinces in mainland China from 1997 to 2017 and discusses highly controversial methodological assumptions related to income inequality, long-term environmental damage, and nonrenewable energy consumption. Findings show that China's GDP is larger than ISEW and SE-ISEW respectively. Moreover, the “relative threshold effect”—increases in social welfare are slower than the expansion of economic scale—has been found in many provinces. In the case of rapid economic growth, the gap between GDP and ISEW or SE-ISEW has increased over time. This study reveals an unbalanced development of China's economic growth and sustainable welfare growth and provides a new way of thinking about structural transformation.

This paper investigates the dynamic relationship between perceived corruption and foreign direct investment (FDI) in Egypt during the period 1970–2019. Using a novel back-casting methodology, it extrapolates perceived corruption time series between 1970 and 1980. The results of the Johansen cointegration technique and the multivariate vector error correction model show a positive relationship between perceived corruption and FDI, supporting the “greasing the wheels” effect of corruption. This positive association can be explained by several factors, such as the cross-interdependence of rent-generating assets with perceived corruption and FDI, and the use of FDI data based on the balance of payments that has growing financial-flows and phantom-FDI components. The findings of this paper have important policy implications. Improving the fundamental governance structure in Egypt should be accompanied by a comprehensive investment facilitation strategy to compensate for the removal of “grease” from the “wheels”.

The purpose of this study is to analyze what factors affect foreign exchange reserves in Indonesia. The focus in this study is the variables that affect changes in foreign exchange reserves in the 1999-2019 period are non-oil and gas exports, the rupiah exchange rate, foreign debt and inflation as independent variables. Using an open economy model and Keynes's balance of payments, the analytical tools used in this study are the PAM regression model (Partial Adjustment Model) and the adaptive expectation model to see the long-term and short-term effects of the independent variable on the dependent variable. The results of this study show that simultaneously non-oil and gas exports, the rupiah exchange rate, foreign debt and inflation affect Indonesia's foreign exchange reserves, while partially non-oil exports and the rupiah exchange rate significantly and positively affect Indonesia's long-term and short-term foreign exchange reserves, while debt foreign exchange and inflation are not significant and negatively affect long-term and short-term foreign exchange reserves. Non-oil exports, rupiah exchange rate, foreign debt and inflation can explain Indonesia's foreign exchange reserves of 97%, of which the remaining 3% is explained by other variables not included in this study.

Foreign direct investment are the net inflows of investment to acquire a lasting management interest which is 10 percent or more of voting stock in an enterprise operating in an economy other than the investor. It is the sum of equity capital, reinvestment of earnings, other long-term capital, and short-term capital as shown in the balance of payments. This paper will discuss the definitions and findings of previous studies regarding Foreign Direct Investment. This paper also will explain about forecasting techniques used in previous studies in forecasting Foreign Direct Investment. Time Series Analysis is used to determine a good model that can be used to forecast business metrics.

This study empirically analyzed external debt management and economic development in Nigeria. The data employed in this study were collected from the CBN statistical bulletin annual report. The study employed Real Gross Domestic Product as the independent variable, while External Debt service, Balance of Payment, External Debt, and Exchange Rate were used as independent variables. The estimation technique employed in this study was Ordinary least squares (OLS) multiple regression method. The findings of this study revealed that external debt management recorded a positive and significant impact on economic development in Nigeria over review period. The study recommended that government of Nigeria should strike a balance between the acquisition of external debt and usage of same for projects that will culminate to enhancement of economic growth and development in Nigeria.

The article analyzes the current state of Russian foreign trade and its impact on the development of the economy. The main changes that occurred in the global economy during the crisis caused by the new coronavirus pandemic are considered. It is concluded that most of the trends that formed in the global economy before the crisis are likely to receive additional acceleration after its end. In this regard, additional restrictions may be imposed on traditional Russian exports. It is stated that foreign trade should become one of the key factors that ensure the stability of the Russian economy in the medium and long term. The requirements for the balance of payments and the exchange rate that ensure the stability of the macroeconomic dynamics and parameters of foreign trade are determined. Given the current trends in the parameters of the world economy and trade, it should be assumed that the structure of Russian exports will not undergo significant changes over the next 15 years. This means that for the next 15 years, the development of the export potential of the fuel and energy sector, the diversification of the geography of energy supplies, remains one of the key tasks of the foreign economic strategy. The key restrictions of the integration processes in the Eurasian Economic Union (EAEU) are evaluated.

Central Bank operational frameworks can be challenged during times of severe financial stress. Typical of such an instance is where policymakers attempt to heavily manage or fix a domestic exchange rate whilst faced with balance of payments pressures. However, it is claimed to be impossible for policymakers to achieve both monetary independence and exchange rate stability if the domestic economy were to post a balance of payment surplus, otherwise known as the ‘impossible trinity’. The purpose of this paper is to investigate the European Monetary System crisis through the lens of Institutional Practice, that is the day‐to‐day operations of key institutions, such as the Central Bank, Treasury and commercial banks, with a view to demonstrate why global imbalances are able to occur and persist across the international monetary system. Through both a theoretical and an empirical appraisal, this paper shows how Central Banks in economies with a balance of payments surplus can circumvent the binding constraints of the trinity within their operational frameworks.

Exchange Rate is one of the economic indicators in the Philippines. It is the value of the nation’s currency versus the currency of another country or economic zone. This study aims to forecast the monthly Exchange Rate (y) of the Philippines from November 2018 to December 2023 using Multiple Linear Regression and Multi-Layer Feed Forward Neural Network. The researchers investigate the behaviour of each independent variables – Inflation Rate (x1), Balance of Payments (x2), Interest Rate (x3), Producer’s Price Index (x4), Export (x5), Import (x6), Money Supply (x7), and Consumer’s Price Index (x8) from Philippine Statistics Authority (PSA) starts from January 2007 up to October 2018. Multiple Linear Regression (MLR) was used to identify significant predictors among these independent variables. The Exchange Rate (y) had undergone first difference transformation. Upon running the regression analysis, it has concluded that only two independent variables are significant predictors, namely: Balance of Payments (x2) and Import (x6). Through these significant predictors, the MLR model was formulated. On the other hand, Multi-Layer Feed forward Neural Network (MFFNN) was also used to determine the forecasted values of Exchange Rate (y) for the next five years (2018-2023) given the said independent variables and obtained a model. The researchers compared the model of Multiple Linear Regression and Multi-Layer Feed Forward Neural Network by evaluating the forecasting accuracy of each method.It was concluded that Multi-Layer Feed forward Neural Network is the best fitting model for forecasting the Exchange rate (y) in the Philippines. This paper will serve as a tool of awareness for the government to forsee the trend of Exchange Rate in the Philippines on the next five years (2018-2023) for Monetary Policy making and to prevent the possible depreciation of peso vs. dollar.

The Brazilian economy struggled throughout the 1980s with a severe balance of payments crisis and high inflation, interrupting thirty years of rapid growth and structural change. Simultaneously, Br...

Research background: Poland is a significant recipient of intercompany loans as a part of foreign direct investment (FDI) debt instruments reported in the Balance of Payments. Most of them come from the developed West European countries ? Netherlands, Luxembourg, France, Germany, and Belgium. Igan et al. (2020) confirm debt-based FDI inflows to emerging markets had a higher impact on the industries? growth in the pre-crisis period 1998?2007 than after (till 2010). Purpose of the article: We aim to identify withholding tax (WHT) impact on intercorporate loans inflow to Poland and analyse the relationship between trade credit and intercompany loans to assess the importance of the profit-shifting role of FDI after 2010. Methods: To reflect the impact of withholding tax and trade credit on inter-company loans (inward debt-based FDI) in 2011?2017 to Poland, we use Arellano-Bond and random effects panel model estimators. The estimated specification is derived from the knowledge-capital model and includes two types of capital: human and physical. Findings & value added: We show that WHT on interests reduces profit-shifting by multinational companies? intercompany lending to Poland. But intercompany loans are positively related to foreign trade credit. Unlike in the case of total FDI inward to Poland (Cieślik, 2019), we identified that vertically integrated multinational enterprises are more likely to provide loans to Polish firms. This study is the first to confirm that withholding tax of interests reduces international profit-shifting by FDI and to provide evidence on the relation-ship between foreign trade credit and intercompany loans provided by multi-national companies.

During a decade of stagflation in the 1970s, a sea of changes on the interna-tional stage led to major macroeconomic imbalances that gave central bankers a different role in relation to governments and policy-makers. In Europe, this coin-cided with the relaunching of the project for European integration. The Italian case shows how governments and central bankers interacted in shaping adjustment strategies. The Bank of Italy had a pivotal role in shaping the country's economic policies, relying on its capacity for economic analysis. The adjustment strategy formulated in the "Pandolfi Plan" of 1978 was conceived largely by an economist at the Bank of Italy, Tommaso Padoa-Schioppa. Further developing analyses conducted jointly with Franco Modigliani the previous year, the plan focused on the macroeconomic effects of high labour costs in the wake of a full ("100% and plus") wage indexing and rising government deficits. The policy proposal revolved around a few targets, namely investments and economic growth, and an explicit principle of fairness in the labour market. The Pandolfi Plan pledged to Italy's en-during participation in the European integration process by combining economic development with adhesion to the "European choice", which meant joining the European Monetary System (EMS). The European agreements governing EMS membership replaced the standard external economic constraints, i.e. the balance of payments and exchange rate, with a new kind of semi-legal external constraint ingrained in the governance structure of the European Community. The nature of this new semi-legal external constraint as a fiscal discipline mechanism eventually emerged more clearly with the Maastricht Treaty.

Multinational enterprises apply aggressive tax planning (ATP) to optimize global tax liability usually by combining parameters of different tax systems in both national jurisdictions and double tax treaties. At a macroeconomic level, the implementation of various optimization schemes affects the given values of the balance of payments. By conducting econometric analysis, the present paper examines the extent to which selected optimization schemes can be traced in the Czech Republic's balance of payments. The results show that payments for counselling services and royalties flow mostly to locations with low corporate tax rates, which may suggest an attempt to shift the tax base. Moreover, dividend and interest yields tend to move to countries with high foreign direct investments (FDIs) and balanced ratios between FDIs received and made, indicating that they are only conduit (transit) countries through which profits are transferred to another destination.

This study aims to analyze the effect of the clearance tax on the level of public debt and the deficit of the balance of payment in Palestine for the years 1996-2019. Data was collected from the Palestinian Monetary Authority and the Ministry of Finance. The study applies the ordinary least square to test the effect of the clearance tax on the public expenditures (current and budgeted) from one side and on the balance of payment from the other side. Findings show that current expenditures and budget deficit are positively associated with the clearance tax while budgeted expenditures are not correlated with the reported tax. The study stresses on the importance to restructure the economic agreements with Israel, more specifically the Paris Economic Protocol. The study concludes with important recommendations. Palestinian authorities and relevant policymakers should reinforce their strategies to improve the tax system and the efficiency of tax collection. They should diversify their revenues, rationalize their spending, and undertake new projects to reduce the public debt level.

This study discusses monetary policy, the function and impact of monetary policy as well as the factors that influence the money supply. Monetary policy is a policy or regulation issued by the Central Bank which is used to manage a number of money supplies in a country to be able to create a specific purpose. The functions and impacts of monetary policy include maintaining an investment climate that occurs within the country, increasing the stability of economic growth in a country, overcoming high levels of unemployment and opening up a number of large employment opportunities, increasing the number of the balance of payments, maintaining the stability of value. the existing currency exchange is able to maintain a number of stability of the price of goods on the market. Factors that affect the amount of money circulating in society include the size of state spending, the fast and slow rate of money circulation, the motive for having cash, the transaction motive, the precautionary motive, and the speculative motive.

We develop a probabilistic approach to measure a country's external debt sustainability. Using data on international investment position and balance of payments from the International Monetary Fund, we estimate a vector autoregressive model for 38 countries (11 developed and 27 developing). Using the estimated parameters, we perform a Monte Carlo simulation to compute the distribution of the capacity to repay for each country. A large portion of the projected distribution to the right of current debt is a warning indicator, signalling the need for devaluation. We provide simulations for each country. One scenario is where the discount factor is lower than 1. According to the literature, this situation should prevail in the medium and long run. A quite different situation is where external sustainability is achieved because of a simulated discount factor of more than 1. Here, interest on debt is lower than GDP growth. This situation is associated with dynamic inefficiency. The results suggest that flight to safety is penalising some developing countries, whilst benefiting some developed countries.

The study aimed to identify the most salient and critical factors influencing the Stock yield and causing this sharp fluctuation, and clarifying which factors are more influential than others on the Stock yield in the Amman Stock Market – Jordan. The study population consisted of all listed companies in the Amman Stock Market. The sample of the study is random stratified and includes 30% of the original population. The study sample numbered 60 companies of the companies listed on the Amman Stock Market. The main findings are the positive relationship between inflation rates, interest rate, number of employees and capital shares with income shares. The results also showed no relationship between the deficit and surplus of balance of payments and stock yield, as well as no relationship between the level of gross domestic product (GDP) and the stock yield in Amman Stock Market in Jordan. Keywords: Stock yield, inflation rate, interest rate, number of employees, balance of payment, gross domestic product.JEL Classifications: E44; G10DOI: https://doi.org/10.32479/ijefi.10415

The advent of the new corona virus hinders the fragile welfare of migrant workers Those economic sectors with a large migrant workforce appear to be those hit hardest during the lockdown, resulting in surge in migrant unemployment and a plunge in the volume of remittances This has become yet another factor putting pressure on the gross domestic product (GDP) growth, balance of payments, and budgets of countries that are net remittance recipients, while also triggering rising poverty levels This paper evaluates the impact of the current pandemic (and respective economic downturn) on remittance inflows to recipient countries and tackles the potential contribution that international financial institutions could make to alleviate the adverse economic aftermath In Central Asia and Southern Caucuses (except Azerbaijan) emergency financing granted by the International Monetary Fund (IMF) and the World Bank covers 9– 20% of the overall size of the annual remittances received This financial support could be rendered insufficient due to the sharp decrease in the volume of remittances, decline in tourism revenue, and weakening economic activity, while the poor quality of state institutions may hinder the efficient distribution of accumulated resources In Europe, the IMF and the World Bank provided approximately $7 7 billion in financing to low- and middle-income countries for such purposes as economic stabilization, support for population welfare, and financing of internal/external deficit, of which $5 billion is represented by the new Ukraine-IMF Stand-By Agreement With the exception of Ukraine, Macedonia, and Bulgaria (the latter having received no loans/grants so far), the cover index for European remittance-recipients stands within a range of 2–18% over 2019 remittance inflows Therefore, it is most feasible that the current 2020 GDP growth forecasts made by the IMF, the World Bank, and local governments are inaccurate in the light of the insufficient financial support provided by international financial organizations Additional pressure on the GDP figures might stem from further extension and/or toughening of the lockdown period, as well as from uncertainty regarding the revival of regular business activity and the timeline for resuming migrant remittances © 2020 All rights reserved

This paper examines the similarities and contrasts of strategies adopted by the larger South American economies - Argentina, Brazil and Chile - in dealing with the problems raised by the fall of their export revenues coupled with the almost complete interruption of the inflow of foreign capital in the late 1920s and early 1930s. The characteristics of foreign indebtedness of these countries in the late 1920s and the ways the external shock affected their balance of payments from 1928-29 to 1933-34 are also considered. Their differentiated adjustment processes including debt adjustment schemes adopted during the 1930s and early 1940s are compared. Permanent debt settlements are described and discussed. Finally, it considers the links between growth performance of these countries and differentiated foreign debt policies. RESUMO Este artigo examina as semelhanças e contrastes das estratégias adotadas pelas grandes economias da América do Sul - Argentina, Brasil e Chile - ao lidar com os problemas levantados pela queda de suas receitas de exportação, juntamente com a interrupção quase completa do influxo de capital estrangeiro no país. final da década de 1920 e início da década de 1930. Também são consideradas as características do endividamento externo desses países no final da década de 1920 e as formas como o choque externo afetou sua balança de pagamentos entre 1928 e 29 a 1933 e 1934. Seus processos de ajuste diferenciado, incluindo esquemas de ajuste de dívida adotados durante os anos 1930 e início dos anos 1940, são comparados. Os acordos de dívida permanente são descritos e discutidos. Por fim, considera os vínculos entre o desempenho de crescimento desses países e políticas diferenciadas de dívida externa.

The paper empirically explores the impact of external public debt in Ukraine on key macroeconomic indicators such as real GDP growth, real effective exchange rate, and current account balance. The problem of increasing external debt affects not only the problems of balance of payments fluctuations but also economic security and economic growth. We have tested the hypotheses regarding the impact of Ukraine’s external public debt on these indicators in the short and long run. As an empirical tool for hypotheses testing vector autoregression models (VaR models) have been chosen. The results of constructed models show the acceleration of the external public debt growth provokes the GDP growth rate to fall with subsequent macrostabilization. The reaction of the GDP growth rate to the shock of the real effective exchange rate is more noticeable. The shock of real effective exchange rate has led to increase in external public debt with a further dampening to zero.Empirical data from the VaR model confirm that external debt has a negative impact on GDP and essentially behaves similarly to the shock of REER strengthening. Research results confirm the relationship between external public debt, real effective exchange rate, and GDP growth in Ukraine. Based on the models it was analyzed the external public debt and real effective exchange rate shocks influence the real gross domestic product growth rate. The growth of external public debt leads to the GDP growth rate fall by 1% during a year and a half with subsequent stabilization in the future. GDP growth fluctuations are explained mainly by their own fluctuations while external public debt is accounting for 2,5—8% of its fluctuations. Fluctuations in external public debt of 7—10% are explained by current account fluctuations in Ukraine. The described results of the model correspond to the concept of dependent economy. Keywords: public debt, GDP, balance of payment, fluctuation, exchange rate. JEL Classification E31, E47, E52, F43, F62 Formulas: 7; fig.: 3; tabl.: 4; bibl.: 46.

For an inflation targeting Central Bank, a precise estimate of the threshold inflation in the economy is important. Existing studies provide estimates without any coherent theory of growth and threshold inflation and hence suffer from several limitations about concept and measurement. The present paper attempts to develop such a theory to establish a stable steady state growth solution. It also operationalizes the theory through a model with support from the Indian data for specific components of the model to derive the required functional form. Final estimates in India with annual data from 1995–96 to 2017–18 show that the threshold inflation and associated optimal growth vary considerably as rates of fiscal deficit and current account deficit on the balance of payments vary. The current combinations of the long term four policy targets of 4% inflation; 8% growth; 6% fiscal deficit (to GDP); and 2% current account deficit (to GDP) are internally inconsistent and hence not achievable. Now that there is an opportunity to revise the inflation target for the period after March 2021, the present paper argues for choosing from the menu of internally consistent options for all these four policy targets to avoid unnecessary costs.

Ukraine became a member of the IMF in 1992. Since then, the cooperation follows a systemic transformation loan program, under which Ukraine has received about 700 million USD to support the country's balance of payments. Then cooperation becomes more systematic, and loans are estimated at billions USD. In total, for over 25 years of cooperation, Ukraine and the IMF have concluded 10 loan agreements. Two of them provided for the application of the mechanism of expanded financing, and the remaining eight were the Stand-By arrangements. The main fundamentals and principles of Ukraine's cooperation with the International Monetary Fund are described, as well as the main problems in the process of cooperation between two parties, identification of the main advantages and disadvantages of lending to Ukraine, and determination of the impact of IMF loans on the overall economic and financial condition of our country. The stages of cooperation between Ukraine and the IMF are analyzed. Further cooperation between Ukraine and the International Monetary Fund should be based on deep structural reforms and be aimed at improving internal and external stability, easing the hryvnia devaluation, and covering the budget deficit. Mutual settlements with the International Monetary Fund are considered with special attention to such components as funds raised from the IMF, repayment of the principal amount of debt and payment of interest on debt. It should be noted that loans from the International Monetary Fund are primarily a kind of "safety cushion", or, in other words, a reliable partner to whom you can turn for help in case of financial problems. All the years of cooperation have proven that the IMF is ready to continue to support us, conclude agreements on new programs, provide new tranches, if necessary. However, one cannot ignore the shortcomings and problems of such cooperation, these are, first of all, the conditions set by the IMF for Ukraine to receive further assistance. The main directions of the IMF financing in Ukraine and their shares in the total amount of loans are studied. It has been found that the largest share of the IMF loans in the entire period of its cooperation with Ukraine has been aimed at replenishing the reserves of the National Bank. Also, a significant share in the structure of loans is the replenishment of the State Budget of Ukraine. Recommendations for their cooperation in order to improve the activities of the state in the field of economy and finan ce are offered.

This study to determine the money supply, interest rates, inflation, and imports toward rupiah exchange rates. The analysis method in this study used a quantitative approach that applies multiple regression models. Data used secondary data in the form of time series during the period of August 2016 until June 2019. The finding's results show that jointly money supply, interest rates, inflation, and imports have a significant effect on the rupiah exchange rate. While partially, the variable of money supply, interest rates, and imports has a positive and significant effect on the rupiah exchange rate. But the inflation rate has an insignificant effect on the Rupiah exchange rate. From the results of this study the government is expected to control the money supply and maintain the balance of payments by minimizing the amount of imports.

The problem of theoretical bases of monetary regulation of economic growth is investigated in the article. In the system of levers that stimulate economic growth in the country, the leading role belongs to monetary regulation. The study of tasks, goals and instruments of monetary regulation, which are used in their practice by the central bank, at the present stage is extremely relevant.The purpose of the article was to consider the theoretical foundations of monetary regulation of economic growth, to determine its goals and objectives, as well as to study the instruments of monetary policy of the central bank and its implementation.The following methods were used in the study, namely: scientific-theoretical and analytical (in determining views on monetary regulation and monetary policy goals, as well as in studying the current state of monetary policy and monetary regulation in Ukraine); abstraction and logical interpretation (specification of the main categories of research); system-structural method (when developing proposals for improving monetary regulation of economic development of the banking system of Ukraine, determining the prospects for its development and directions of their implementation in the context of economic growth).The results of the study substantiate and analyze the importance of monetary policy instruments that form the goals of monetary regulation aimed at economic growth.Monetary regulation of economic growth occupies an extremely important place in the state regulation of economic processes in the country. It is aimed at ensuring the sustainable development of the country through the formation and implementation of strategic goals, the main of which are monetary stability, GDP growth, balance of payments, stability of the exchange rate of the national currency, employment, welfare and more.

The purpose of this study is to determine the relationship between monetary policy and the exchange market pressure index in Turkey for the 2002–2018 period with monthly data. To obtain the foreign exchange market pressure index, this study uses the model developed by L. Girton and D.E. Roper and is based fundamentally on the monetary approach to exchange rate determination and the balance of payments. The calculated exchange market pressure index is in accordance with the developments lived in financial markets and changes in monetary policy during the period under investigation. As for the relation between exchange market pressure index and monetary policy, a VAR model was set up and a Granger type causality analysis was carried out. According to Granger causality test results, there is a unidirectional causality running from domestic credit expansion to exchange market pressure and from domestic credit expansion to interest rate differential while there is a bidirectional causality between exchange market pressure and interest rate differential. Since increasing exchange market pressure means a depreciation of the Turkish Lira, the estimated VAR model’s results support the view that the Central Bank will increase the interest rate to temper the exchange market pressure.

The purpose of this paper is to analyze the catching-up processes of South Korea and post-1978 reforms China, based on a new-developmentalist approach that considers four fundamental factors: 1) a complementarity relationship between the state and the market as a dynamic process that changes over time; 2) necessary complementarity between macroeconomic policy and industrial policy; 3) the key role of public and development banks in attacking the problem of “development financing”; and a particular focus on 4) the centrality of exchange rate and balance of payments administration for the development process in these countries. The paper’s fundamental question is to what extent the catching-up process in these countries can be understood as the application of a new-developmentalist strategy, taking each country’s particular historical traits into account. RESUMO O objetivo deste artigo é analisar o processo de catching-up da Coreia do Sul e da China pós-reformas de 1978 a partir de uma abordagem novo-desenvolvimentista que considere quatro fatores fundamentais: 1) uma relação de complementaridade entre Estado e mercado como um processo dinâmico que se altera ao longo do tempo; 2) necessária complementaridade entre política macroeconômica e política industrial; 3) papel fundamental do Estado dos bancos de desenvolvimento no enfrentamento do problema do “financiamento do desenvolvimento”; e destaque à 4) centralidade da taxa de câmbio e do manejo na administração do balanço e pagamentos no processo de desenvolvimentos desses países. A questão fundamental do artigo é em que medida o processo de catching-up nesses países pode ser entendido como uma aplicação de uma estratégia novo-desenvolvimentista, levando em conta as devidas mediações históricas de cada país.

Simultaneous making policy of interest rates, exchange rates and capital accounts can be extended to trilemma theory, contrary to its earlier theories, provided that the imbalances of the private sector, the government and the capital account adjusted through the policy variables such as the government expenditures, the interest rates on domestic deposits, the interest rates on domestic loans, effective exchange rates, foreign prices and foreign interest rates. On the other hand, the components of the extension of trilemma theory in the form of internal and external imbalances affect the exchange rate. In other words, if the real sector markets of the economy are not cleared through the aforementioned trilemma components, and policy variables, internal and external imbalances will be affected by opposite direction of net domestic assets (ΔNDA) and net foreign assets (ΔNFA) of the banking system. This is in accordance with the fundamental principles of the monetary approach balance of payments and exchange rate. Policy variables do not put pressure on the unofficial exchange rate as long as they have the same effect on the net changes in the domestic and foreign assets of the banking system. The purpose of this study is to consider the effect of internal and external imbalances on exchange rate through the simultaneous equations system, generating impulses in policy variables, and examining reactions in Iranian economy. In this paper, the monetary exchange rate determination model is analyzed and examined by using the extension of trilemma theory for macroeconomic data of Iran in the form of internal and external imbalances. The results of this study suggest that policy variables can stabilize the unofficial exchange rate (with other conditions being constant) through trading off internal and external imbalances. Thus, the economic policymaker can, while independently policing interest rates, capital accounts and government expenditures and other policy variables in this research, maintain exchange rate stability as a strategic variable and anchor the general level of prices.

In modern conditions of constantly arising global economic risks, which sharply affect the development of world commodity markets, the role of developing its non-resource exports is increasingly becoming more visible in strengthening the economy of the Russian Federation. This study poses a question and proposes a scenario for improving the country's balance of payments based on increase in Russian food exports. The importance and necessity of solving this issue is reflected in the Message of the President of the Russian Federation of February 20, 2019 and his instructions to the Government of the country. In this regard, the purpose of the study was to consider and forecast possible scenarios for the implementation of approved plans for the development of agricultural exports. Achieving this goal several interrelated tasks had been solved: 1) identifying the ratio of export and import of agricultural products in the Russian Federation; 2) analysis the structure of export agricultural products; 3) forecasting the real possibilities of achieving the target indicators for the export of agricultural products, as well as the processing and food industries; 4) the proposal of options for improving the system of state regulation of agricultural exports or its elements. The result of the study was the confirmation of hypothesis that state regulation of agricultural exports is, in general, effective.

This paper focused on the goals of monetary policy on how to take action to reduce the inflation rate and achieve economic stability in India. The monetary policy the arm of public policy the usual goals of monetary policy are to achieve full employment, to achieve high rate of economic growth, and to stabilize prices and wages, to maintain equilibrium the balance of payment, influencing the cost and availability of credit and increasing the repo rate by central bank and Government of India. Every country needs to achieve price stability in economic development. The inflation rate below close to 2% is low enough to allow the economy to benefit fully from price stability and avoid deflation risk and, beyond the level of inflation above 3 to 10% in any economy of the country, it’s harmful to the economy. Present India’s consumer price inflation rate was (CPI) 3.9% and the whole sale inflation rate of (WPI) 1.8% in the Financial Year of 2019. According to Econometric models estimated in 2020, India’s inflation rate is projected around 4.5%. In this study, we study whether inflation is an effective tool for controlling inflation and achieving economic stability in India?

Yemen as an oil exporting country with relatively larger populations and modest oil resources has witnessed a sharp deterioration in their public finances and current account balances in 2008-2009, as a result of financial crisis mainly lower oil prices leading to a weakening of the economy.This study targeting the global crisis impact on Yemen’s economy, by analysis the macroeconomic indicators to understand how much the government achieve in term of economic efficiency which reflected in economic growth, full employment, trade balance and price stability. Yemen has less developed monetary banking system and relatively minor exposure to foreign banks, which result in fair impact from the financial global crisis. However, the government can’t sustain exchange rate and stabilize the price the non-oil declined by 3% of the determined gross domestic product (GDP) in 2009, from 6.98% in 2008. This paper found that the crisis has negative impact on the government revenues, trade balance and significant reduction in foreign direct investment (FDI), caused reduction in spending and widened the deficits in the budget and the balance of payments. Real growth has been achieved relatively high rates and through precisely the crisis. The revenues declined more than 10% in 2009 and government expenditures reduced with regards to decline in oil revenues and service delivery. The government responses were successful in the monetary policy side, but with lots of blurred in the fiscal policies which was subject for critical discussion and assessment. This paper concluded that to improve the overall Yemen’s economy and avoid any unpleasant economic event in the future, government should have a strategic plan to achieve sustain growth rate by diverse outcome resources, support the private sector and encourage investments.

In 2015–2016, Brazil endured the deepest recession in its history. GDP fell by 7.3% in 2 years. Unlike recent crises in other emerging markets, characterized by a balance of payments emergency, domestic factors were the main reason for Brazil’s economic downfall. Brazil’s “Great Recession”, however, opened the door for a series of macroeconomic reforms aimed at reshaping the world’s eighth largest economy. This article discusses recent developments in the Brazilian economy and why they led to one of the most comprehensive reform programs in the world.

Analysis of problems and trends in the field of international migration development is impossible without reliable statistical data. Particular economic importance for any country including Russia are data on the flows of labor migrants, which have a great impact on the domestic labor market, gross domestic product, balance of payments. International organizations, including United Nations bodies, haven’t worked out single recommendations on proceeding migration statistics, stratification of migration flows. The universal worldwide technique with border and internal migrant calculation principles regarding flows and stocks of labor migrants is absent at the moment.The author focuses on key discrepancies of national migration statistics in different countries and widely practiced flexible interpretation of it by Western politicians and mass media, therefore, the acuteness of migration problems in the Western countries (first, in the European Union) is overestimated and, on the contrary, migration difficulties of such countries as Russia, Iran, Turkey are downgraded or fully ignored. The difficulties in the calculation of international migration, arising from the ambiguous interpretation of the concept of “migrant”, have been indicated. Three approaches – residence outside the country of birth, citizenship, place of usual daily rest – often conflict with each other, when it is necessary to establish the true country of origin of the migrant.The shortcomings of the main sources of information about immigrants: population census, administrative records, population surveys have been also analyzed in the article. New phenomena in international migration flows, such as “cross-motivation” of migrants and migration without going abroad, require their understanding.

This study has sought to assess the evolution of the French state’s monetary power in comparison with Germany and the United States since the introduction of the euro. From a macroeconomic aspect, ...

Introduction. Foreign trade operations significantly affect the development of each country's economy, in particular the value of gross domestic product, which is one of the main indicators of economic development and welfare of population. Therefore, it is necessary to study and model the impact of exports, imports and net exports on macroeconomic indicators of Ukraine. Purpose. The purpose of the article is to analyze publications that consider export-import operations of Ukraine, study of statistical information in this area, construction and analysis of econometric models of the dynamics of foreign trade operations of Ukraine and their impact on gross domestic product. Method. The article uses regression-correlation analysis as one of the main research methods; time series theory; methods of mathematical modeling. Results. The dynamics of foreign economic operations and gross domestic product of Ukraine are researched and analyzed. It is revealed that the balance of export-import operations has a significant impact on the gross domestic product of Ukraine. An econometric model of the dependence of the nominal gross domestic product on the value of exports of goods and services (coefficient of determination 0.9795) is calculated, using statistical information for 2005-2019 years. It is substantiated that with the increase in exports of goods and services by UAH 1 billion Ukraine's nominal GDP grows by an average of UAH 2.2642 billion. The value of coefficients of import dependence and coverage of import by export in foreign economic operations of Ukraine are analyzed. It is noted that the coefficient of import dependence significantly exceeds the allowable level in the study period, due to certain imbalances in foreign trade relations. The coefficient of coverage of imports by exports only in 2005 was greater than one, and during 2006-2019 it became less than one. In this regard, it is necessary to increase export operations, obtain a positive balance of payments, make effective economic and political decisions to increase exports of Ukrainian goods and services, reduce import dependence, using and implementing innovative methods of production and management.

Firstly, based on the data of international balance of payments, this paper analyzes the current situation of China’s cross-border capital flow, and finds that China’s cross-border capital flow can be divided into two stages due to its differentiated characteristics, and China’s short-term capital outflow pressure is relatively high at this stage. Secondly, in order to better manage cross-border capital flows, this paper sorts out four types of management policies (namely, structural policies, macroeconomic policies, macro-prudential measures, and capital flow management measures), and analyzes the management effects of cross-border capital flows. Finally, the paper puts forward some policy suggestions. 1) The goal of China’s macro-control is to maintain the balance of international payments, and the more foreign exchange reserves we do not pursue, the better. 2) The main objective of strengthening cross-border capital management is to buy time for necessary reforms and adjustments; 3) In the future, China should avoid excessive efforts in daily management of cross-border capital flows.

Foreign investment as the form of financing does not only reflect its importance on a global but also on a national level of individual countries' economies. In the last two decades, Serbian foreign economic and political developments have undergone a tremolous but persistent struggle for integration into the world's economic trends. Generally speaking, it could be said that there is a diversity in motivation factors among the investors, as well as in overall effects on the host country's balance of payments (BoP) depending on the types of capital investment. Serbia develops partnerships, and each partner has it's own interests and comparable advantages in the country, contributing to Serbia's better position in modern international relations. The aim of this paper is to emphasize Serbia's economic connecting with countries it cooperates with during the last several years, and lessons learned in the period of economic transition and bilateral interconnections.

The article defines the current level of stability and socio-economic development of the EAEU member states, and examines the factors constraining their economic growth. Public finances are considered: regional and consolidated budgets, budget deficits and sources of their coverage; state and state-guaranteed debts. The financial position of the countries participating in the Eurasian integration in relation to the outside world is analyzed, their deficits/surpluses and debts are revealed on the basis of balance of payments, foreign assets and liabilities.

This study aims to analyze the effect of the short and long term gross domestic product, exchange rate, and inflation on Indonesia's balance of payments. The data used in this study are secondary data which is obtained indirectly with the period of 1995 to 2015. Data sources were obtained from Bank Indonesia and the Central Bureau of Statistics. The data collection method used in this study with the indirect method is documentation through recording or copying data from Bank Indonesia and the Central Bureau of Statistics. The analysis model used is Error Correction Mechanism (ECM). The results of this study indicate that the regression model of the Autoregressive Distributed Lag Model (ARDL) for the long term and Error Correction Model (ECM) regarding the effect of independent variables such as Interest Rates, Gross Domestic Product and Inflation Against the Dependent dependent variable in Indonesia, then it can some conclusions are presented, namely from several independent variables that are tried and included in the savings equation in Indonesia using the Autoregressive Distributed Lag Model (ARDL) for the long term and Error Correction Model (ECM) for the short term, namely the gross domestic product variable, the inflation rate, and exchange rate. In the long run there are 2 (two) significant variables, namely gross domestic product and the exchange rate. While inflation is not significant. For the short term, there is 1 (one) significant variable, namely the exchange rate. Thus, only exchange rate variables are significant in both the short and long term. With only 1 (one) significant independent variable both in the long term and short term, it can be concluded that the exchange rate in the long term and short term is the main determining factor that affects the Balance of Payments in Indonesia. In the long run, Independent variables such as Gross Domestic Product and the exchange rate on the dependent variable Balance of Payments in Indonesia have a significant effect on the dependent variable Balance of Payments. Whereas in the short run, the exchange rate variable has a significant effect, and for other independent variables such as the GDP variable and the inflation rate does not have a significant effect.

The Russian-Belarusian disputes on economic issues are based on many objectively existing and subjective problems. The interdependence of the both economies is indeed great. The attempt to treat this dependency in the categories of classical balance-of-payments analysis does not always make it possible to draw correct conclusions concerning bilateral balances of goods and services. Methods of calculations, analysis of efficiency and practice of implementation of economic programs in the Union State and the EAEU are not always an accessible object for research. It is the situation, which cannot be effectively studied only by methods of economic sciences; it requires meaningful training in the field of history, sociology, and politics. Decisions taken exclusively from an economic perspective may not be convincing in terms of integrated regional studies. This is the subject of the article.

Este artículo trata sobre la política de control de cambios implementadaen Chile desde 1931 hasta mediados de los años 1950s, a raíz de la crisisde balanza de pagos que sufrió el país producto de la gran depresión. En particular se analiza el rol jugado por el Consejo de Comercio Exterior, organismo estatal creado en 1942 para ejercer control del tipo de cambio, de las divisas, así como establecer cuotas y licencias de importación, y autorizaciones para exportar. Aunque la política de control de cambios aplicada por Chile era conocida a grosso modo, poco y nada sabíamos del modus operandi de esta institución pública. Para ello, hemos consultado por vez primera las actas del directorio del CONDECOR para 1942-1952, dando a conocer el modo de obrar de este consejo, sus principales protagonistas, y la evaluación que hicieron contemporáneos de este organismo de la administración pública chilena. Asimismo, el estudio pone de manifiesto los conflictos entre estructuras burocráticas en torno a la delimitación de políticas de intercambio exterior y control de cambios delineadas por el gobierno.

Protectionism is an economic doctrine that consists of protecting the national economy by limiting or prohibiting the import of foreign products. A country can filter foreign exchange through various protectionist, tariff (involves the use of customs barriers) and non-tariff (using barriers such as quotas, technical rules, administrative formalities, etc.). Governments resort to trade policy measures in a wide variety of situations: to balance the balance of payments, for a better allocation of resources (by promoting certain industries or sectors considered promising), to redistribute the national income, etc. Most commonly, however, they are used when domestic industries cannot cope with external competition. The main cause is their lack of competitiveness concerning foreign producers. For this reason, states often prefer to protect their domestic industries through trade policy measures, despite the negative effects they have on the economy as a whole. This paper outlines some issues specific to protectionist theories in foreign trade and their impact on a small country like Romania also protectionist theories, trade policies, and arguments in support of and against protectionism.

This chapter examines the relationship between Foreign Direct Investment (FDI) and levels of income inequality. It focuses on the period following the Great Recession to understand the role of changing institutional set up in the global financial sector and the world economy after the 2007 crisis. A quantitative analysis of a panel of developed and developing countries is undertaken, investigating trends in income inequality, balance of payments, and the outflows and inflows of FDI over time. The analysis considers measures of both within-country and between-country income inequality, paying explicit attention to regional differences in the analysed phenomena. The quantitative study in the chapter is interpreted through the lens of a textual analysis of the institutional changes in the global economy after the 2007 crisis and in the wake of the COVID19 pandemic

The article deals with the economic and statistical analysis of trends in the development of statistical data on the balance of payments and the international investment position of Russia over the past 15 years, indicating the sustainable development of the foreign economic sector of the Russian economy.The article begins with addressing the scope and subject matter of the study of the balance of payments and the international investment position of the country. Then the author examines external economic activities for each of the three periods depicting the influence of the crisis phenomena in the global economy in 1998, 2008 and 2014. Within these periods the author considers the interaction of the world and Russian economies, serious reduction of the external sector of the Russian economy in these periods of crisis and generally the deterioration of the results of foreign economic activity of the country. Comparing the balance of payments and international investment position before and after crisis periods it is possible to note the good state government management of the external sector of the Russian economy, which helped to restore the balance of payments of the country and to increase its net international investment position after the crisis.On a final note, it is concluded that the most effective and efficient for external regulation in a crisis is the so called profitable method when the expense of centralized redistribution of income and cash management of financial flows, is formed in the margin in the markets, determines the scale and direction of cash flows, are governed by incorporated in the cost of exported products yield. The market method with the help of tariff pricing and regulation does not allow to fully control and predict the vector of cash flows in a crisis, redistribute profitability between sectors of the economy and even “save” borrowers in crisis situation.

The paper monitors the balance of payments in the Republic of N. Macedonia, which determines the amount of the exchange rate through the supply and demand of foreign currency, as well as the impact of the exchange rate on the balance of payments movements. Real exchange rates are essentially equilibrium exchange rates. exchange rate that will keep the balance of payments in balance without taking measures for foreign exchange control, without pronounced inflation and deflationary tendencies and without constant expectation of monetary and foreign exchange reserves.There are several methods by which balance of payments can be established: by devaluation, by currency control and by deflation. When considering the relationship between the national currency exchange rate and the balance of payments of a national economy in terms of their interconnections, one should depart from their causal link of impacts. The exchange rate affects the balance of payments, as well as the balance of payments affects the exchange rate.The first part of the paper elaborates in detail the key activities of the balance of payments adjustment and the exchange rate adjustment, as well as their mutual impact.We use the adjustment mechanism to restore balance once the initial equilibrium has been disturbed. The payment adjustment process takes two different forms. One, under certain conditions, has adjustment factors that automatically contribute to balancing. Second, in the event that automatic adjustment fails to strike a balance, the government adopts a discretionary policy to achieve this goal.

Subject and topic. Currently, the decrease in payments on foreign debts and a decrease in imports have an impact on the demand in the foreign exchange market. As a result, a situation has arisen due to the actions of the Bank of Russia, caused by threats of sanctions that provoked the absence of excessive demand and adequate supply in the foreign exchange market and led to a decrease in ruble exchange rate fl uctuations due to oil price movements.The subject of research is to determine the role of oil prices in the formation of monetary policy, which can be a key driver of economic growth.Objective. Identifi cation of exchange rate management practices with the search for the relationship between the current account of the balance of payments and the volatility of the national currency exchange rate.Research methods, the main provisions. Methods used grouping, comparing and summarizing economic indicators to study the characteristics and trends of the monetary policy of China, South Korea and Latin American countries.A critical analysis of the various points of view of leading scientists on the negative or positive impact of the exchange rate on the development of the economy was carried out. At the same time, it is interesting to analyze the views of individual economists that the dependence of the ruble exchange rate on oil prices has recently largely decreased.The main results of the study. Determination of the theoretical relationship between the price of oil and the exchange rate, based on the shock component, either in oil prices or in the exchange rate, with testing the response of the economic variable to this shock.Main conclusions. It was concluded that in the conditions of the economic situation of the last decade, the main problem of export-oriented and import-oriented countries is the imbalance of the current account of the balance of payments, as well as its relationship, primarily with the prices of export goods.

Las influencias de la financiarización sobre las economías emergentes han llamado mucho la atención sobre si estas naciones pueden o no superar sus limitaciones y promover niveles de desarrollo satisfactorios. Sin embargo, las posibilidades de superar el dominio financiero merecen mayor atención sobre lo que concierne a sus causas estructurales y las políticas alternativas. Este artículo tiene dos objetivos: a) formaliza tres características clave detrás de la financiarización de las economías en desarrollo, enfocándose en algunos elementos clave que diferencian la financiarización en las economías desarrolladas y emergentes: el comportamiento de la tasa de interés; la volatilidad del tipo de cambio y el dominio de la balanza de pagos. b) analiza algunas estrategias para que estos países superen los efectos de la financiarización en base a la hipótesis de aumentar el espacio de políticas, lo que permite a estas economías mantener la autonomía en sus políticas macroeconómicas y llevar a cabo políticas internas en un escenario integrado.

This study empirically investigates the effects of macroeconomic disequilibrium on educational development in Nigeria. The study employed time series data between 1980 and 2017. Autoregressive Distributed Lag method of estimation was employed. The result revealed that the variables stationarity test were mixed between the first difference I(I) and level I(0). The cointegration result shows that there exist long run relationship between the variables. The result revealed that Balance of payment, Poverty, Debt rate inflation and unemployment exhibited negative relationship with educational development. The estimation result showed that all explanatory variables account for 88% variation of educational development in Nigeria. It is therefore recommended that government should fast track policies that can stabilize inflation and exchange rate in the country. Also, Policies must be formulated to reduce poverty and unemployment.

Applied analysis aimed at assessing which value of the NIIP is appropriate for a given country is relatively scarce, and the few existing papers on the topic estimate one-size-fits-all NIIP benchmarks (e.g., Catao and Milesi-Ferretti, 2014). This paper estimates country-specific NIIP benchmarks on a sample of 65 advanced and emerging economies according to two different criteria: consistency with economic fundamentals (NIIP norms, obtained as cumulated current account norms) and prudence against the risk of external crises (NIIP prudential thresholds, obtained as the threshold of the NIIP variable interacted with relative income per capita that maximises signal power in predicting external crises). The median for the country-specific NIIP norms is around −17% of GDP, while the median for prudential threshold is about −44%. The two benchmarks are negatively correlated across countries, highlighting a tension between factors underpinning the scope for external borrowing and debt tolerance. Gaps between actual and NIIP benchmarks are highly persistent, but help predicting subsequent medium-term NIIP changes better than the NIIP level, thus confirming the usefulness of country-specific reference values. The adjustment of the NIIP in response to NIIP gaps is asymmetric, with a significant adjustment limited to negative gaps, with the exception of countries with a positive net position in foreign currency.

Regarding the Libyan macroeconomic framework, the petroleum sector returns caused to the government and the need to support civil service job opportunity and preserve the widespread funding system. In 2006, the increasing of the price of the Libyan price oil, around US $63.05, had a significant and positive influence on the Libyan economic situation. The price increased around 65 % compared to the corresponding value in 2004 which was in averaged around US $38.In the same context, the favorable enhancement in the oil sector donated to an observable development in balance of payment surplus, which achieved around 15.4 % of gross domestic product. Also, international reserves improved to be around 19 billion US dollars. Moreover, the Libyan authorities have decreased the bank the percentage of interest rates across the board to enhance the demand in the private sector for credit and established a strategy to update the payment system. All these monetary policies and strategies affect positively on the Libyan macroeconomic and financial situations to be satisfactory in 2004.In 2005, the performance of the macroeconomic stayed comparatively strong. The gross domestic product achieved approximately about 3.5 %. Moreover, the inflation stayed 2.5 %. On the other hand, the economic development is assessed to have been created mainly 4.5 % in the non-oil sectors. In details, the non-oil sectors such as hotels and transportation, construction and services, agriculture and manufacturing sector with respectively values 7%, 5%, 2.5 % and 1.8%. unfortunately, all these sectors showed weak performance recently because of the unstable political situation in the country.Regarding to the banking sectors, according to (Murugiah and Akgam, 2015), Libyan banking sector has realized especially after the issuance of laws. In 2005, this Central Bank of Libya has significant impact on establishing banks and reorganization assets inducing them to look for new investment chances. In our model, the variables Stock Capital, Libyan Oil PriceNumber of population in Libya and dummy variable for the political instability have significant impact on the Libyan gross domestic products at 5% significance level. The heteroscedasticity and autocorrelation tests are checked in the model.Finally, we conclude that increasing (decreasing) the oil and gas prices has a significant influence on the economic development generally in Libya and on the macroeconomic indicators, such as gross domestic product, monetary policy, the unemployment rate, and the inflation rate in the country.

Predominant objective of macroeconomic policies in developing countries has been to achieve higher level of potential economic growth and sustain it once it is achieved. Macroeconomic policy in India, on the backdrop of severe balance of payment crisis, has witnessed major shift in the early 1990s when neo-liberal economic policy on the pressure of IMF and World Bank has been adopted abandoning the socialist pattern of economic policy pursued in the post-independence period. Since implementation its scope has been consistently widening in terms of economic reform in different sectors of the economy, now its impact both positive and adverse is clearly visible. Since the last two and half decades, the serious adverse implication of the new economic policy is visible, particularly on the widening income inequality, although there has been positive effect on achieved higher aggregate economic growth. The major channel through which it is manifested is less than desired performance on labour market as employment generation has slowed down drastically when compared to the long-term trend in employment generation. In post-1991 period during 1993–1994 and 2011–2012, the growth in employment has been around 1.3% per annum against long-term growth rate of 2.11% per annum between 1977–1978 and 2011–2012. Even those employments generated are mostly in construction and low-productive services sector and are precarious and casual in nature. The paper has contributed in understanding the phenomena of rising inequality in the nature of production, through examination of structure and composition of output, employment and emerging wide disparity across sectors. We have shown by examining output per worker and concentration of workforce across sectors the problem of existing and rising income inequality.