Jerome L. Stein
- Published in print:
- 2006
- Published Online:
- May 2006
- ISBN:
- 9780199280575
- eISBN:
- 9780191603501
- Item type:
- chapter
- Publisher:
- Oxford University Press
- DOI:
- 10.1093/0199280576.003.0009
- Subject:
- Economics and Finance, Financial Economics
For nearly a quarter of a century, the US has persistently run significant current account deficits that transformed it from the world’s largest net creditor to its largest debtor. The stochastic ...
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For nearly a quarter of a century, the US has persistently run significant current account deficits that transformed it from the world’s largest net creditor to its largest debtor. The stochastic optimal control/dynamic programming approach provides a framework to derive the optimal debt ratio, based upon both objective variables and preferences. The following set of questions are answered: What is a sustainable ratio of external debt/GDP? What are the consequences of an “excessive” debt? By how much does the dollar need to decline in order to achieve a sustainable current account position for the US and rest of world? The deviation of the actual debt ratio from the derived optimum increases the vulnerability of the economy to external shocks.Less
For nearly a quarter of a century, the US has persistently run significant current account deficits that transformed it from the world’s largest net creditor to its largest debtor. The stochastic optimal control/dynamic programming approach provides a framework to derive the optimal debt ratio, based upon both objective variables and preferences. The following set of questions are answered: What is a sustainable ratio of external debt/GDP? What are the consequences of an “excessive” debt? By how much does the dollar need to decline in order to achieve a sustainable current account position for the US and rest of world? The deviation of the actual debt ratio from the derived optimum increases the vulnerability of the economy to external shocks.
Michael Bruno
- Published in print:
- 1993
- Published Online:
- September 2006
- ISBN:
- 9780198286639
- eISBN:
- 9780191603839
- Item type:
- chapter
- Publisher:
- Oxford University Press
- DOI:
- 10.1093/0198286635.003.0008
- Subject:
- Economics and Finance, Macro- and Monetary Economics
This chapter returns to a number of common issues that emerged from the cumulative experience reviewed in previous chapters, considers open theoretical questions, and discusses some of the policy ...
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This chapter returns to a number of common issues that emerged from the cumulative experience reviewed in previous chapters, considers open theoretical questions, and discusses some of the policy lessons. It looks at some of the theoretical arguments that have been suggested to explain the long delays in the adoption of stabilization programmes. It asks whether a universal paradigm has emerged on the necessary basic components of stabilization and structural reform programmes. It then broadens the question by asking if any generalizable lessons can be learned on the optimal sequencing of the various components of reform and whether there exists a real choice between ‘big bang’ and gradualist stabilization and reform strategies.Less
This chapter returns to a number of common issues that emerged from the cumulative experience reviewed in previous chapters, considers open theoretical questions, and discusses some of the policy lessons. It looks at some of the theoretical arguments that have been suggested to explain the long delays in the adoption of stabilization programmes. It asks whether a universal paradigm has emerged on the necessary basic components of stabilization and structural reform programmes. It then broadens the question by asking if any generalizable lessons can be learned on the optimal sequencing of the various components of reform and whether there exists a real choice between ‘big bang’ and gradualist stabilization and reform strategies.
Guillermo Perry and Luis Servén
- Published in print:
- 2004
- Published Online:
- August 2004
- ISBN:
- 9780199271405
- eISBN:
- 9780191601200
- Item type:
- chapter
- Publisher:
- Oxford University Press
- DOI:
- 10.1093/0199271402.003.0012
- Subject:
- Economics and Finance, Economic Systems
The Argentine crisis has been variously blamed on fiscal imbalances, real overvaluation, and self-fulfilling investor pessimism triggering a capital flow reversal. This chapter provides a full ...
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The Argentine crisis has been variously blamed on fiscal imbalances, real overvaluation, and self-fulfilling investor pessimism triggering a capital flow reversal. This chapter provides a full assessment of the role of these and other ingredients in the collapse. It shows that in the final years of its Convertibility program, Argentina was not hit harder than other emerging markets in Latin America by global terms-of-trade shocks and financial disturbances. Hence the crisis reflects primarily the high vulnerability to disturbances built into Argentina’s policy framework. These fragilities reinforced each other in such a way that taken jointly they led to a much larger vulnerability to adverse external shocks than in any other country in the region.Less
The Argentine crisis has been variously blamed on fiscal imbalances, real overvaluation, and self-fulfilling investor pessimism triggering a capital flow reversal. This chapter provides a full assessment of the role of these and other ingredients in the collapse. It shows that in the final years of its Convertibility program, Argentina was not hit harder than other emerging markets in Latin America by global terms-of-trade shocks and financial disturbances. Hence the crisis reflects primarily the high vulnerability to disturbances built into Argentina’s policy framework. These fragilities reinforced each other in such a way that taken jointly they led to a much larger vulnerability to adverse external shocks than in any other country in the region.
Oscar Dancourt
- Published in print:
- 2016
- Published Online:
- September 2016
- ISBN:
- 9780231175081
- eISBN:
- 9780231541213
- Item type:
- chapter
- Publisher:
- Columbia University Press
- DOI:
- 10.7312/columbia/9780231175081.003.0005
- Subject:
- Economics and Finance, Macro- and Monetary Economics
the chapter discusses the adequate monetary policy response to management of external shocks that deteriorate the balance of payments and contracts aggregate demand. To this end the author develops ...
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the chapter discusses the adequate monetary policy response to management of external shocks that deteriorate the balance of payments and contracts aggregate demand. To this end the author develops an IS-LM-BP type of model adapted to the financial conditions of Peru, where the banking system operates in both domestic and foreign currency.Less
the chapter discusses the adequate monetary policy response to management of external shocks that deteriorate the balance of payments and contracts aggregate demand. To this end the author develops an IS-LM-BP type of model adapted to the financial conditions of Peru, where the banking system operates in both domestic and foreign currency.
Inge Kaul and Pedro Conceiçāo
- Published in print:
- 2006
- Published Online:
- October 2011
- ISBN:
- 9780195179972
- eISBN:
- 9780199850709
- Item type:
- chapter
- Publisher:
- Oxford University Press
- DOI:
- 10.1093/acprof:oso/9780195179972.003.0021
- Subject:
- Economics and Finance, International
This chapter discusses the rationale for multilateral lending. It describes three types of multilateral lending including countercyclical provision of liquidity to meet temporary current account ...
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This chapter discusses the rationale for multilateral lending. It describes three types of multilateral lending including countercyclical provision of liquidity to meet temporary current account imbalances, lending to countries facing capital account crises in order to bail out private creditors, and development finance. It explains that the rationale for countercyclical lending has become stronger in light of the increased instability of the international economic environment, the procyclical behavior of international financial markets and greater vulnerability of developing countries to external shocks.Less
This chapter discusses the rationale for multilateral lending. It describes three types of multilateral lending including countercyclical provision of liquidity to meet temporary current account imbalances, lending to countries facing capital account crises in order to bail out private creditors, and development finance. It explains that the rationale for countercyclical lending has become stronger in light of the increased instability of the international economic environment, the procyclical behavior of international financial markets and greater vulnerability of developing countries to external shocks.
Yue Chim Richard Wong
- Published in print:
- 2013
- Published Online:
- January 2014
- ISBN:
- 9789888139446
- eISBN:
- 9789888180349
- Item type:
- chapter
- Publisher:
- Hong Kong University Press
- DOI:
- 10.5790/hongkong/9789888139446.003.0004
- Subject:
- Society and Culture, Asian Studies
The Hong Kong dollar was fixed against the pound sterling until June 1972. Since 1983, it has been fixed against the US dollar. The linked exchange rate connects Hong Kong with the international ...
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The Hong Kong dollar was fixed against the pound sterling until June 1972. Since 1983, it has been fixed against the US dollar. The linked exchange rate connects Hong Kong with the international economy, and provides an anchor which maintains the community's faith in the currency and people's confidence in the government's management of monetary policy. However, the linked exchange rate also narrows the policy options available to the authorities to withstand external shocks. The opening of China, the Asian financial crisis and the global financial tsunami placed conflicting requirements on the direction of price adjustments. The public and quasi-public sector have not adjusted well in response to these events, and the property wealth has become more unevenly distributed. The domestic economy and its numerous sectors therefore have to possess a higher degree of flexibility and agility in an attempt to accommodate and absorb the external impacts.Less
The Hong Kong dollar was fixed against the pound sterling until June 1972. Since 1983, it has been fixed against the US dollar. The linked exchange rate connects Hong Kong with the international economy, and provides an anchor which maintains the community's faith in the currency and people's confidence in the government's management of monetary policy. However, the linked exchange rate also narrows the policy options available to the authorities to withstand external shocks. The opening of China, the Asian financial crisis and the global financial tsunami placed conflicting requirements on the direction of price adjustments. The public and quasi-public sector have not adjusted well in response to these events, and the property wealth has become more unevenly distributed. The domestic economy and its numerous sectors therefore have to possess a higher degree of flexibility and agility in an attempt to accommodate and absorb the external impacts.
JAMES E. VESTAL
- Published in print:
- 1995
- Published Online:
- October 2011
- ISBN:
- 9780198290278
- eISBN:
- 9780191684814
- Item type:
- chapter
- Publisher:
- Oxford University Press
- DOI:
- 10.1093/acprof:oso/9780198290278.003.0007
- Subject:
- Business and Management, International Business, Political Economy
This chapter summarizes Japan's more recent experience with industrial policy, of interest because Japan's economic performance continues to surpass that of other major OECD nations. Although ...
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This chapter summarizes Japan's more recent experience with industrial policy, of interest because Japan's economic performance continues to surpass that of other major OECD nations. Although recovery from the first oil crisis was both difficult and protracted, the economy had largely adjusted to higher energy costs by 1978, and the second oil crisis presented few serious difficulties. Between 1973 and 1990, real GNP rose at an average annual rate slightly in excess of 4%, less than half the rate of the previous two decades but quite favourable for any developed nation. Finally, more efforts were devoted to helping industries adjust to a changed environment; measures to that end came to combine elements of anti-growth policy with those of pro-growth policy. Finally, the scope of pro-growth policy was limited almost solely to the promotion of new technologies.Less
This chapter summarizes Japan's more recent experience with industrial policy, of interest because Japan's economic performance continues to surpass that of other major OECD nations. Although recovery from the first oil crisis was both difficult and protracted, the economy had largely adjusted to higher energy costs by 1978, and the second oil crisis presented few serious difficulties. Between 1973 and 1990, real GNP rose at an average annual rate slightly in excess of 4%, less than half the rate of the previous two decades but quite favourable for any developed nation. Finally, more efforts were devoted to helping industries adjust to a changed environment; measures to that end came to combine elements of anti-growth policy with those of pro-growth policy. Finally, the scope of pro-growth policy was limited almost solely to the promotion of new technologies.
F. Gerard Adams and Lawrence R. Klein
- Published in print:
- 1991
- Published Online:
- October 2011
- ISBN:
- 9780195057720
- eISBN:
- 9780199854967
- Item type:
- chapter
- Publisher:
- Oxford University Press
- DOI:
- 10.1093/acprof:oso/9780195057720.003.0002
- Subject:
- Economics and Finance, Econometrics
This chapter focuses on the response of the various econometric models to a number of alternatively specified external shocks. Altogether, 11 model groups supplied simulation results for the model ...
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This chapter focuses on the response of the various econometric models to a number of alternatively specified external shocks. Altogether, 11 model groups supplied simulation results for the model comparisons. These groups represent a cross section of the currently active model operators and forecasters. They run from the now traditional Keynesian to the monetarist and the rational expectations approaches. The participating model groups and the special characteristics of their models are listed in the chapter. Early in the meetings of the model comparison seminar, the philosophy of model comparisons was a topic of some extensive discussion. The approach was to compare alternative “disturbed” model solutions to a base solution. Each model operator was instructed to prepare a so-called “tracking solution” that would approximately reproduce history over the period 1975 to 1984.Less
This chapter focuses on the response of the various econometric models to a number of alternatively specified external shocks. Altogether, 11 model groups supplied simulation results for the model comparisons. These groups represent a cross section of the currently active model operators and forecasters. They run from the now traditional Keynesian to the monetarist and the rational expectations approaches. The participating model groups and the special characteristics of their models are listed in the chapter. Early in the meetings of the model comparison seminar, the philosophy of model comparisons was a topic of some extensive discussion. The approach was to compare alternative “disturbed” model solutions to a base solution. Each model operator was instructed to prepare a so-called “tracking solution” that would approximately reproduce history over the period 1975 to 1984.
Mahani. Zainal Abidin
- Published in print:
- 2004
- Published Online:
- April 2005
- ISBN:
- 9780199275786
- eISBN:
- 9780191602160
- Item type:
- chapter
- Publisher:
- Oxford University Press
- DOI:
- 10.1093/0199275785.003.0009
- Subject:
- Economics and Finance, Development, Growth, and Environmental
This chapter examines the main differences between the development of Malaysia and that of other small resource-abundant countries that did not achieve competitive industrialisation. It discusses the ...
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This chapter examines the main differences between the development of Malaysia and that of other small resource-abundant countries that did not achieve competitive industrialisation. It discusses the high growth of Malaysian investment, public sector contribution to total investment, Malaysia’s open trade regime, industrial policy that fostered competitive industrialisation, and the accumulation of human capital. It reviews Malaysia’s capacity to manage external and internal shocks without experiencing a growth collapse.Less
This chapter examines the main differences between the development of Malaysia and that of other small resource-abundant countries that did not achieve competitive industrialisation. It discusses the high growth of Malaysian investment, public sector contribution to total investment, Malaysia’s open trade regime, industrial policy that fostered competitive industrialisation, and the accumulation of human capital. It reviews Malaysia’s capacity to manage external and internal shocks without experiencing a growth collapse.
Juan Carlos Moreno-Brid and Jaime Ros
- Published in print:
- 2009
- Published Online:
- May 2009
- ISBN:
- 9780195371161
- eISBN:
- 9780199870608
- Item type:
- chapter
- Publisher:
- Oxford University Press
- DOI:
- 10.1093/acprof:oso/9780195371161.003.0001
- Subject:
- Economics and Finance, Economic History
Chapter 1 summarizes the main theses of the book and provides an overview of the contents of each of its chapters. It argues that the episodes of rapid economic growth (during the Porfiriato and ...
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Chapter 1 summarizes the main theses of the book and provides an overview of the contents of each of its chapters. It argues that the episodes of rapid economic growth (during the Porfiriato and postwar industrialization), in addition to political stability and a favorable international economic environment, have in common the establishment of a consensus on economic policy matters, the presence of correct perceptions by the political and economic elites on the true constraints on economic development, and a very unequal distribution of the benefits of economic growth, which in turn led to the loss of consensus in the subsequent periods of stagnation. By contrast, the periods of economic stagnation tend to feature political instability and external economic shocks, together with misperceptions among the country's elites and/or the absence of consensus.Less
Chapter 1 summarizes the main theses of the book and provides an overview of the contents of each of its chapters. It argues that the episodes of rapid economic growth (during the Porfiriato and postwar industrialization), in addition to political stability and a favorable international economic environment, have in common the establishment of a consensus on economic policy matters, the presence of correct perceptions by the political and economic elites on the true constraints on economic development, and a very unequal distribution of the benefits of economic growth, which in turn led to the loss of consensus in the subsequent periods of stagnation. By contrast, the periods of economic stagnation tend to feature political instability and external economic shocks, together with misperceptions among the country's elites and/or the absence of consensus.
Giovanni Andrea Cornia and Vladimir Popov (eds)
- Published in print:
- 2001
- Published Online:
- October 2011
- ISBN:
- 9780199242184
- eISBN:
- 9780191697043
- Item type:
- chapter
- Publisher:
- Oxford University Press
- DOI:
- 10.1093/acprof:oso/9780199242184.003.0007
- Subject:
- Economics and Finance, Development, Growth, and Environmental
This chapter discusses the pre-1989 Cuban economic structure and examines how the post-1989 external shocks filtered through the Cuban economy. It discusses how the reform process in Cuba shifted in ...
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This chapter discusses the pre-1989 Cuban economic structure and examines how the post-1989 external shocks filtered through the Cuban economy. It discusses how the reform process in Cuba shifted in 1993–4 to a more dramatic approach to reforming the economy, including the depenalization of dollar use, legalization of self-employment, and the emergence of free markets in agricultural products. It also discusses various political blockages to economic reform. It concludes by analysing the factors that could ease a transition to some form of market economy in Cuba and sketches some likely scenarios for the future.Less
This chapter discusses the pre-1989 Cuban economic structure and examines how the post-1989 external shocks filtered through the Cuban economy. It discusses how the reform process in Cuba shifted in 1993–4 to a more dramatic approach to reforming the economy, including the depenalization of dollar use, legalization of self-employment, and the emergence of free markets in agricultural products. It also discusses various political blockages to economic reform. It concludes by analysing the factors that could ease a transition to some form of market economy in Cuba and sketches some likely scenarios for the future.
Carlos Capistrán, Gabriel Cuadra, and Manuel Ramos-Francia
- Published in print:
- 2013
- Published Online:
- January 2015
- ISBN:
- 9780262018340
- eISBN:
- 9780262305921
- Item type:
- chapter
- Publisher:
- The MIT Press
- DOI:
- 10.7551/mitpress/9780262018340.003.0009
- Subject:
- Economics and Finance, Financial Economics
Emerging economies have been subject to abrupt reversals in capital flows, which have adverse consequences for economic activity and financial stability. An important question for policymakers is how ...
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Emerging economies have been subject to abrupt reversals in capital flows, which have adverse consequences for economic activity and financial stability. An important question for policymakers is how to respond to a sudden loss of external financing and its negative effects on the domestic economy. The experience of emerging economies throughout the recent financial crisis shows that those economies with relatively better economic fundamentals were able to implement countercyclical policies. This chapter provides a simple analytical framework to rationalize this evidence. In particular, it addresses this issue by developing a small-scale macroeconomic model of the New-Keynesian type. Numerical exercises illustrate how both credible monetary and fiscal policies increase policymakers’ degrees of freedom to respond to adverse external shocks.Less
Emerging economies have been subject to abrupt reversals in capital flows, which have adverse consequences for economic activity and financial stability. An important question for policymakers is how to respond to a sudden loss of external financing and its negative effects on the domestic economy. The experience of emerging economies throughout the recent financial crisis shows that those economies with relatively better economic fundamentals were able to implement countercyclical policies. This chapter provides a simple analytical framework to rationalize this evidence. In particular, it addresses this issue by developing a small-scale macroeconomic model of the New-Keynesian type. Numerical exercises illustrate how both credible monetary and fiscal policies increase policymakers’ degrees of freedom to respond to adverse external shocks.
Francesco Cavatorta
- Published in print:
- 2009
- Published Online:
- July 2012
- ISBN:
- 9780719076169
- eISBN:
- 9781781701980
- Item type:
- chapter
- Publisher:
- Manchester University Press
- DOI:
- 10.7228/manchester/9780719076169.003.0003
- Subject:
- Political Science, International Relations and Politics
This chapter presents a framework of transitions to democracy that includes international variables (external shocks, direct active policies of international actors, and larger trends in the ...
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This chapter presents a framework of transitions to democracy that includes international variables (external shocks, direct active policies of international actors, and larger trends in the international system) using theoretical assumptions drawn from international relations theories. One of the major problems in the literature on democratisation and its use of international relations theory is its over-reliance on structural economics, particularly when it comes to the Arab world. What should be analysed instead are the international economic and the geostrategic dimensions together. Thus, this chapter focuses on the interaction between structural factors and path-dependent decision-making, which means taking tools of analysis from different theories of international relations and relating them to processes of regime change. Determining where the country is inserted in the international system is vital to understanding how domestic actors and institutions are conditioned in their strategies and their decision-making abilities. For the analysis of Algeria, it is useful to look at rentierism and the geopolitics of the Mediterranean to further specify how the two dimensions work.Less
This chapter presents a framework of transitions to democracy that includes international variables (external shocks, direct active policies of international actors, and larger trends in the international system) using theoretical assumptions drawn from international relations theories. One of the major problems in the literature on democratisation and its use of international relations theory is its over-reliance on structural economics, particularly when it comes to the Arab world. What should be analysed instead are the international economic and the geostrategic dimensions together. Thus, this chapter focuses on the interaction between structural factors and path-dependent decision-making, which means taking tools of analysis from different theories of international relations and relating them to processes of regime change. Determining where the country is inserted in the international system is vital to understanding how domestic actors and institutions are conditioned in their strategies and their decision-making abilities. For the analysis of Algeria, it is useful to look at rentierism and the geopolitics of the Mediterranean to further specify how the two dimensions work.
Francesco Cavatorta
- Published in print:
- 2009
- Published Online:
- July 2012
- ISBN:
- 9780719076169
- eISBN:
- 9781781701980
- Item type:
- chapter
- Publisher:
- Manchester University Press
- DOI:
- 10.7228/manchester/9780719076169.003.0005
- Subject:
- Political Science, International Relations and Politics
The first element that needs to be analysed is the role played by the economic crisis of 1985–1986 in ‘forcing’ the ruling elites in Algeria to open up the system. Government revenues fell due to the ...
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The first element that needs to be analysed is the role played by the economic crisis of 1985–1986 in ‘forcing’ the ruling elites in Algeria to open up the system. Government revenues fell due to the oil counter-shock, resulting in widespread impoverishment among the general population, which in turn led to the October 1988 riots. The question that should be asked is whether the externally driven downturn in the economy had a causal link to the decision to liberalise. The FIS contends that it was the lack of political legitimacy rather than the economic crisis that led the ruling elites to try a new strategy of re-legitimisation. This chapter discusses external shocks and direct active policies and their impact on Algeria's transition to democracy, focusing on the war in Afghanistan and its consequences and repercussions on Islamism in the country, the 1990–1991 Gulf War, the end of the Cold War, the West's promotion of democracy, promotion of political Islam, and the role of financial institutions and multinationals.Less
The first element that needs to be analysed is the role played by the economic crisis of 1985–1986 in ‘forcing’ the ruling elites in Algeria to open up the system. Government revenues fell due to the oil counter-shock, resulting in widespread impoverishment among the general population, which in turn led to the October 1988 riots. The question that should be asked is whether the externally driven downturn in the economy had a causal link to the decision to liberalise. The FIS contends that it was the lack of political legitimacy rather than the economic crisis that led the ruling elites to try a new strategy of re-legitimisation. This chapter discusses external shocks and direct active policies and their impact on Algeria's transition to democracy, focusing on the war in Afghanistan and its consequences and repercussions on Islamism in the country, the 1990–1991 Gulf War, the end of the Cold War, the West's promotion of democracy, promotion of political Islam, and the role of financial institutions and multinationals.
Sugata Marjit and Saibal Kar
- Published in print:
- 2011
- Published Online:
- September 2012
- ISBN:
- 9780198071495
- eISBN:
- 9780199081257
- Item type:
- chapter
- Publisher:
- Oxford University Press
- DOI:
- 10.1093/acprof:oso/9780198071495.003.0003
- Subject:
- Economics and Finance, Development, Growth, and Environmental
This chapter examines the welfare implications of changing wage and employment situations in the informal sector by constructing a comprehensive model. The structure involves an agricultural sector ...
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This chapter examines the welfare implications of changing wage and employment situations in the informal sector by constructing a comprehensive model. The structure involves an agricultural sector and incorporates several allied issues central to the considerably neglected analytical relationship between agriculture and informal activities. It is well known that better prospects for agricultural exports and productivity should increase agricultural wages. However, such an outcome depends on capital movement between the formal and informal manufacturing sectors. The inter-relationship sought between the agricultural and manufacturing sectors offers added value to a general set of results that focus on effects of external shocks to movements in informal wages and employment.Less
This chapter examines the welfare implications of changing wage and employment situations in the informal sector by constructing a comprehensive model. The structure involves an agricultural sector and incorporates several allied issues central to the considerably neglected analytical relationship between agriculture and informal activities. It is well known that better prospects for agricultural exports and productivity should increase agricultural wages. However, such an outcome depends on capital movement between the formal and informal manufacturing sectors. The inter-relationship sought between the agricultural and manufacturing sectors offers added value to a general set of results that focus on effects of external shocks to movements in informal wages and employment.
Xavier Duran, Aldo Musacchio, and Gerardo della Paolera
- Published in print:
- 2017
- Published Online:
- March 2017
- ISBN:
- 9780198753643
- eISBN:
- 9780191815232
- Item type:
- chapter
- Publisher:
- Oxford University Press
- DOI:
- 10.1093/acprof:oso/9780198753643.003.0013
- Subject:
- History, Economic History, World Modern History
This chapter uses new time series data to examine the industrialization in Argentina, Brazil, Chile, and Colombia since the early twentieth century. This allows the authors to uncover variation ...
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This chapter uses new time series data to examine the industrialization in Argentina, Brazil, Chile, and Colombia since the early twentieth century. This allows the authors to uncover variation across countries and over time that the literature has overlooked. Rather than providing a single explanation of how specific shocks or policies shaped the industrialization of the region, their argument is that the timing of the industrial take-off was linked to initial conditions, while external shocks and macroeconomic and trade policy explain the variation in the rates of industrialization after the 1930s, and favourable terms of trade and liberalization explain de-industrialization after 1990.Less
This chapter uses new time series data to examine the industrialization in Argentina, Brazil, Chile, and Colombia since the early twentieth century. This allows the authors to uncover variation across countries and over time that the literature has overlooked. Rather than providing a single explanation of how specific shocks or policies shaped the industrialization of the region, their argument is that the timing of the industrial take-off was linked to initial conditions, while external shocks and macroeconomic and trade policy explain the variation in the rates of industrialization after the 1930s, and favourable terms of trade and liberalization explain de-industrialization after 1990.
Eswar Prasad and Boyang Zhang
- Published in print:
- 2014
- Published Online:
- December 2014
- ISBN:
- 9780199678204
- eISBN:
- 9780191788635
- Item type:
- chapter
- Publisher:
- Oxford University Press
- DOI:
- 10.1093/acprof:oso/9780199678204.003.0030
- Subject:
- Economics and Finance, South and East Asia
This chapter examines the state of monetary and exchange rate policies in China. China’s increasing openness to trade and financial flows and the economy’s gradual transition to a market-oriented ...
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This chapter examines the state of monetary and exchange rate policies in China. China’s increasing openness to trade and financial flows and the economy’s gradual transition to a market-oriented policy has increased the importance of developing an effective monetary policy framework. Monetary policy plays a crucial role in macro-economic and financial stability, helps to promote the efficient allocation of resources, and serves as a buffer against internal and external shocks. Despite the evolution of China’s monetary policy framework over time, it remains constrained by a managed exchange rate regime, institutional weaknesses, and an underdeveloped financial system that reduces the potency of the monetary transmission mechanism.Less
This chapter examines the state of monetary and exchange rate policies in China. China’s increasing openness to trade and financial flows and the economy’s gradual transition to a market-oriented policy has increased the importance of developing an effective monetary policy framework. Monetary policy plays a crucial role in macro-economic and financial stability, helps to promote the efficient allocation of resources, and serves as a buffer against internal and external shocks. Despite the evolution of China’s monetary policy framework over time, it remains constrained by a managed exchange rate regime, institutional weaknesses, and an underdeveloped financial system that reduces the potency of the monetary transmission mechanism.
