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The long historical evolution of MNCs and FDI is more than a chronological timeline; it puts into perspective the larger forces that shaped, facilitated, and encouraged them. Beyond delineating distinctive eras and presenting quantitative estimates of the growth of FDI and MNCs, this chapter discusses how and why their evolution and proliferation should be viewed as the effects of continuous technological innovation. The chapter's concluding section examines the myriad quantitative and qualitative reasons that FDI and MNCs have become increasingly important variables in domestic economic policy, international commerce, international politics, and corporate strategy.

Attempts to evaluate the progress that has been made to date in reducing spatial inequality. More specifically, it aims to evaluate the pattern of regional economic development from 1975 to 2000, assess the gains, if any, in reducing regional disparities, and estimate the extent to which government policies have contributed to regional convergence. Employing convergence methodology, the study finds that there has been “alpha” convergence (a decline in overall regional inequality), and also often “beta” convergence (the poorer regions catching up to the richer ones), which is shown to correlate strongly with agricultural growth. Additionally, it draws attention to the key role of physical infrastructure in shaping regional outcomes, the country's experience with decentralization, and the vertical and horizontal fiscal imbalances among LGUs.

Historically, Japan invested, and continues to invest, a greater proportion of its gross domestic product (GDP) in gross fixed capital formation than comparable industrialized countries. General government gross fixed capital formation accounted for about a fifth of the total, but on a rising trend in the 1990s, reaching 6.7% of GDP in fiscal year 1995, as government made repeated attempts to kick-start the economy with public works spending. As private investment declined after the collapse of the bubble economy, general government claimed an increasing proportion. Public investment by central government was planned and financed partly through the General Account Budget, partly through the Fiscal Investment Loan Programme (FILP), and partly through some of the thirty-eight Special Accounts. Some of the public investment schemes financed by public banks and finance corporations, and public corporations and special companies, apart from substantial FILP funding, were self-financed and/or financed by approved borrowing in domestic and overseas capital markets. This chapter discusses how Japan had become a public works state by the 1990s.

This chapter examines the similarities and differences between output measures produced by the U.S. Bureau of Economic Analysis and the Bureau of Labor Statistics. It describes framework for the production account that incorporates data on the production of commodities by individual industries, as well as the interindustry flows available in the input-output accounts. This chapter analyzes theoretical foundation for a production account that can be used to analyze productivity and shows the relationship between gross domestic product (GDP) and the major-sector estimates using the production account framework.

In relation to the Irish Free State, later the Republic of Ireland, the general conclusion reached in this chapter may be briefly stated: assessed relative to Europe, which seems the appropriate comparative framework, Ireland's economic performance during the twentieth century was a modal rather than a mediocre experience. Over the whole period 1913–1991, the Irish growth rate for gross domestic product per capita was only marginally below the average for all the states that in 1991 comprised the European Community. In most subperiods it would seem that Irish economic growth was actually above the European average. In one decade alone — the 1950s — was Irish growth markedly lower than in western Europe, something that distorts the picture for the century as a whole. Only with respect to demographic change, and emigration in particular, does Ireland differ greatly from its European neighbours.

This chapter examines the employment effects of offshore outsourcing in the U.S. using input-output accounts data. It explains the treatment of imported services in the Bureau of Economic Analysis's (BEA) international, national, and industry accounts and describes the BEA's new framework for measuring purchased services in the industry accounts, including the role of the integrated industry accounts. This chapter highlights the need to develop a better understanding of how imported services affect industry output, employment, and contributions to gross domestic product.

This chapter reviews the performance of the Greek economy before and during the global financial crisis. It also presents policy options for Greece going forward, drawing to a significant extent on the conclusions of subsequent chapters. The chapter first studies Greece's economic performance in the decades before the crisis. It discusses the evolution of gross domestic product (GDP) per capita and productivity, debt, consumption, investment, wages and prices. The chapter then turns to the quality of the institutions pertaining to the business environment (product market regulation, justice system, access to finance, and labor market regulation), and to social protection and public good provision (pensions, welfare system, health care, and education). It also identifies interconnections between institutional quality and macroeconomic outcomes.

This chapter compares the expenditure estimates of gross domestic product (GDP) with value added estimates derived by adding over industries. It shows that conflicting measurements of deliveries to final demand and value added in a few problem industries explain most of the aggregate statistical discrepancy. This chapter also provides a consistent, integrated set of estimates of industry gross output, deliveries to final demand, intermediates used and value added.

The 1970s saw a sharp deterioration in Tanzania’s trade balance, met by reductions in reserves and support from the IMF and World Bank. Inflation averaged 2.1% per annum between 1961 and 1971, but 22.5% between 1971 and 1977. Meanwhile government income was buoyant, as a percentage of the Gross Domestic Product. This deterioration was greatly exacerbated by the rise in world oil prices in 1973—there was little compensating rise in the prices of Tanzania’s agricultural exports. The incomes of both workers on the minimum wage and farmers fell substantially, and malnutrition and poverty became very real for many Tanzanians in both urban and rural areas. The price of cloves rose in this period, so Zanzibar was not so badly hit.

This chapter considers aggregate measures of gross domestic product (GDP) obtained from the GDP-by-industry accounts. It identifies some of the causes of discrepancies between estimates based on the GDP-by-industry accounts and estimates based on the national income and product accounts (NIPAs) and provides recommendations for bringing the U.S. Bureau of Economic Analysis' aggregate real output measures into closer alignment. This chapter also evaluates the feasibility of short-run and long-run options for bringing the aggregate real output measures into closer alignment using newly developed data sets.

Economically developed societies devote considerable resources to collecting economic and social indicators to help policy makers in their deliberations about how to best increase quality of life. These measures have had notable successes, and yet they suffer from substantial limitations. The reasons that economic and social indicators cannot reflect the full range of factors that affect quality of life are described. For example, no complete list of factors affecting quality of life can be created, and the way people weight these factors differs. Furthermore, it is often not clear which set of measures best reflects desirable states in various areas such as the economy. In the context of the economy, there is disagreement about which forms of goods and services need to be counted, for example whether housework should be part of the gross domestic product (GDP). Because of the shortcomings of economic and social indicators, additional information is required for wide policy making.

This chapter focuses on the perception of the world as it is, its totality, and the theories behind such perception. The contemporary world has many different dimensions that can be characterized by either differentiation or interdependence. Differentiation can best be seen in comparing the affluence of people and societies or, more precisely, the wealth of some with the misery of others (Gross Domestic Product and Gross World Product), as well as global income inequality. The interdependence of events and processes, on the other hand, can be seen in the case of the natural environment. Interdependence in the global economy is particularly visible in the sphere of international finance, in connection with trade and the flow of capital. The chapter analyzes the economic condition of humankind and how the global economy is changing the world into a different world.

Mexico enjoyed a miracle of sorts when its gross domestic product tripled from 1940 to 1960, with manufacturing taking the lead. Much of this heady progress stemmed from the adoption of import substitution, begun earlier as simple ad hoc measures taken to shield particular local industries. The architects of these halcyon days were the magnates of industry and banking, and their allies in politics. With industrialization, Mexico would be proudly capitalistic, a paradise for private enterprise and a haven for the laws of supply and demand. Manuel Ávila Camacho, a disciple of the “free market,” went out of his way to restore the confidence of foreign investors. It was a rosy era for the burguesía, when admirers saw Mexican capitalism on the front lines of the battle against underdevelopment. All the same, the road was rocky. Corruption, never absent from the Mexican scene, took on a life of its own. Ultimately, the limited size of the Mexican market, more than any other roadblock, drove a spike into the heart of the miracle.

This chapter focuses on the measurement of high-tech assets in the national accounts, including the current treatment of software. It outlines areas in which the Bureau of Economic Analysis (BEA) hopes to make future progress and discuss recent changes in the methods the BEA uses to measure information processing equipment. This chapter also discusses the relationship between private fixed investment in information processing equipment and software and gross domestic product and explains how the current- and constant-dollar estimates are prepared.

Over the past century or so the rate of civil litigation has grown faster than the U.S. population--but slower than the Gross Domestic Product. While both state and federal civil filings have increased substantially, they have not kept up with economic growth. As a consequence, although the per capita rate of litigation has grown, compared with economic growth it has dropped. That civil litigation is driven by lawyers rather than by judges (as it is in some other legal systems). Those lawyers bear responsibility for gathering evidence and presenting it to judges and juries. Compared with 1900 today we have far more lawyers per capita. Yet, the same period, has seen an increase in the GDP dollars per lawyer; measured by this metric we have become less, not more litigious. Those lawyers settle most civil lawsuits. When they go to judgment the amounts at stake hover between $25,000 and $50,000 and take about two years from start to finish. Those averages mask a very small subset of cases with millions at stake--cases that dominate headlines but not the everyday life of lawyers and courts.

This chapter explains what we understand by ‘aggregate economic activity’, i.e. Gross Domestic Product, per capita income, population growth, and related concepts that will all be used repeatedly throughout the book. The chapter shows how economic activity has developed historically, using both US and international data. The chapter does not analyze what causes long-run economic growth to be high or low, as subsequent chapters deal with this. Instead, the chapter deals with the concepts and stylized facts such that thesecan be used when analysing their implications for asset markets in subsequent chapters.

This book has explored the reasons why Mexico is underdeveloped. The ills of underdevelopment took centuries to arise; they did not appear overnight. The gargantuan cracks in the social and economic edifice are old and deep. Exploitation by foreign powers, first Great Britain and then the United States, has played a pivotal role. The reliance on exports of primary goods has blocked any possibility of fundamental economic and social change. Mexicans have created for themselves a semicolonial economy. Like a beggar asking for alms, they rely on foreign investment and exports to generate growth. Exports alone account for almost a third of the country's gross domestic product; 90 percent of them are exported to markets on the other side of the border. The North American Free Trade Agreement (NAFTA) perpetuates this asymmetrical relationship.

Greece's trade deficit declined by 10 percent of gross domestic product (GDP) between 2007 and 2012, removing one of the great economic imbalances of the pre-crisis years. However, this reduction was achieved exclusively through import compression while exports fell over that period, thereby worsening the economic crisis. This chapter studies Greece's export underperformance in comparison to Ireland, Portugal and Spain as well as Greece's own pre-crisis experience. The main findings are that (1) given past performance, Greece's exports should have increased by 25 percent, rather than drop by 5 percent between 2007 and 2012; (2) labor markets have adjusted to the new economic environment; (3) product markets did not adjust, hindering the recovery of competitiveness; (4) export underperformance is responsible for a third of the decline in GDP since 2007. The chapter concludes that the business environment and firm size distribution in Greece are also hindering the necessary adjustment.

This chapter examines the macroeconomic adjustment following the 1997 financial crisis in East Asia from a broad international perspective. It evaluates the impacts of the crisis on gross domestic product growth using a cross-country data set and identifies the critical factors that determine the adjustment process. The analysis reveals GDP growth rates drop with the eruption of a crisis but then recover quickly to the pre-crisis level in two or three years, showing a V-pattern of adjustment. This chapter also investigates the internal and external factors responsible for the deeper crisis and the quicker recovery in East Asia.

American health policy is a paradox: it is extremely generous—as reflected by the Americans with Disabilities Act of 1990—yet neglects hard-working, low-income families such as those of poorly paid soldiers. This is probably the reason why Americans seem reluctant to debate social ethics head-on. The problems facing Medicare are tied to the wider issue of rapidly escalating health care costs that affect not only the aging but also middle-class families. Trends in health care costs could price an increasing number of American middle-class families out of the market for basic health insurance under existing policies. This chapter explores the ethics underlying the health care debate in the United States. It first provides an overview of health spending and gross domestic product (GDP) trends as well as the growth and distribution of earnings and income before turning to premiums for private health insurance. It then discusses health care for the uninsured, the social dimensions of goods and services, and externalities in health care.