The Macroeconomics of Developing Countries

2020 ◽  
Author(s):  
Giovanni Andrea Cornia
Keyword(s):  
Developing Countries ◽  
Structural Adjustment ◽  
Developing Economies ◽  
External Finance ◽  
Weak Institutions ◽  
Advanced Economies ◽  
Development Goals ◽  
Short And Long Term ◽  
The Impact

The book focuses on the short- and long-term macroeconomic challenges faced by developing countries characterized by missing, incomplete, and dualistic markets and weak institutions. Such problems affect long-term growth, short-term macroeconomic equilibrium, employment, and inequality far more than in the advanced economies. A central message of the book is that ignoring these features and applying to developing countries models inspired by the reality of advanced economies may lead to wrong conclusions and policies. These challenges are discussed for a number of archetypes of developing economies dependent on land and natural resources, affected by supply rigidities in agriculture, and featuring dualistic markets, a dominant informal sector, fast population growth, and chronic dependence on the export of commodities and a volatile external finance. Finally, the book discusses the impact on growth, inequality, and poverty of the stabilization and structural adjustment reforms that were increasingly implemented during the last thirty years. These issues have taken centre stage since the launch of the Millennium Development Goals (MDGs) and Sustainable Development Goals (SDGs) initiatives that have not spelled out a clear macroeconomic approach. There is a risk, therefore, that the wrong policies and sudden shocks may derail progress towards the SDGs which might be achieved by means of social policies.

The influence of inflation targeting on the pass-through effect of the exchange rate

2018 ◽  
pp. 70-84
Author(s):  
Ph. S. Kartaev ◽  
Yu. I. Yakimova
Keyword(s):  
Developing Countries ◽  
Monetary Policy ◽  
Exchange Rate ◽  
Inflation Targeting ◽  
Policy Regime ◽  
Short And Long Term ◽  
The Exchange Rate ◽  
Pass Through ◽  
The Impact

The paper studies the impact of the transition to the inflation targeting regime on the magnitude of the pass-through effect of the exchange rate to prices. We analyze cross-country panel data on developed and developing countries. It is shown that the transition to this regime of monetary policy contributes to a significant reduction in both the short- and long-term pass-through effects. This decline is stronger in developing countries. We identify the main channels that ensure the influence of the monetary policy regime on the pass-through effect, and examine their performance. In addition, we analyze the data of time series for Russia. It was concluded that even there the transition to inflation targeting led to a decrease in the dependence of the level of inflation on fluctuations in the ruble exchange rate.

scholarly journals Impact of Foreign Direct Investment on Domestic Investment in Developing Countries

2020 ◽  
Vol 6 (9) ◽  
pp. 256-266
Author(s):  
A. Mamatkulov
Keyword(s):  
Developing Countries ◽  
Foreign Direct Investment ◽  
Direct Investment ◽  
Developing Economies ◽  
Negative Impact ◽  
Domestic Investment ◽  
Short Term ◽  
Total Investment ◽  
The Impact

Author analyzes the impact of foreign direct investment on domestic investment in host developing countries and checks whether a foreign direct investment has a “positive” or “negative” impact on domestic investment, as well as evaluating the impact of selected variables on this relationship. Using a full sample, the main conclusion of this study is that FDI does have a positive (crowding out) effect on domestic investment in this sample of developing economies. In the short term, an increase in FDI by one percentage point as a percentage of GDP leads to an increase in total investment as a percentage of the host country’s GDP of about 10.7%, while in the long term this effect is about 31% dollar terms, one US dollar represents us 1.7$ of total investment in the short term and us 3.1$ in the long term. Based on the results of this study, it was once again proved that inflation hinders domestic investment in host countries by 0.04% and 0.12% in the short and long term, respectively.

scholarly journals The New Wave of Currency Devaluations in Africa – Will the Devalued Birr Help the Coffee Exports?

2019 ◽  
Vol 12 (4.) ◽  
pp. 101-118
Author(s):  
Szabolcs Pasztor
Keyword(s):  
Developing Countries ◽  
Current Account Deficit ◽  
Balance Of Payments ◽  
New Wave ◽  
Long Run ◽  
Negative Effect ◽  
Short And Long Term ◽  
Coffee Sector ◽  
The Impact

Despite the fact that currency devaluations are likely to have a negative effect on the economy in the long run, Ethiopia devalued its national currency, the birr (ETB), by 15 percent in 2017. They turned to this option in the hope of attracting more investments from abroad, decreasing import bills, improving the current account deficit and giving a boost to the exports of the coffee sector. A couple of months later, the impact seems to be promising because the export has been revived in some areas. However, it has to be stressed that the imported commodities may experience a price increase, there can be a widening balance of payments deficit and rising inflation. The paper aims to shed more light on the short- and long-term impacts of currency devaluations in the developing countries with a special emphasis on Ethiopia. Also, the recent Ethiopian measure is to be analyzed in greater detail highlighting the impacts on export earnings, import bills, the balance of payments, and on the overall competitiveness of the coffee sector.

scholarly journals Critical Exploration of Indian Economic Reforms of 1991: a lesson for Developing Economies

2019 ◽  
Vol 8 (5S3) ◽  
pp. 490-500 ◽  
Keyword(s):  
Economic Growth ◽  
Developing Countries ◽  
Economic Crisis ◽  
Developing Economies ◽  
Economic Reforms ◽  
Indian Economy ◽  
International Pressure ◽  
Critical Exploration ◽  
The Impact

The purpose of this research is to examine the impact of reforms that took place in Indian economy in 1991. Balance of payment difficulty resulted in acute economic crisis and therefore economic reforms were inevitable. Post this incident; there have been three more phases of economic reforms. Economic reforms were compelled due to international pressure of the situation post balance of payment crisis of 1991. The significance of this study lies in the derivation of various ways in which these reforms played a major role in the transformation of Indian economy in the form of its impact on poverty, education, socio-cultural mixture, economic growth etc. We have tried to revisit situation of payments crisis and tried to understand if these reforms were enough and were they concrete measures to tackle long-term problem or if they were only sufficient to handle the crisis. Finally we have tried to find out, as to what was left out of reforms or what other measures could have been taken. Balance of payment difficulties are difficulties faced by most of the underdeveloped or developing countries

Servitization impact on performance moderated by country development

2019 ◽  
Vol 27 (1) ◽  
pp. 302-318 ◽  
Author(s):  
Renata Moreno ◽  
Leonardo Marques ◽  
Rebecca Arkader
Keyword(s):  
Developing Countries ◽  
Firm Performance ◽  
Social Impact ◽  
Developing Economies ◽  
Developed Countries ◽  
Content Type ◽  
Advanced Economies ◽  
Medium Level ◽  
And Performance ◽  
The Impact

Purpose In recent years, “servitization” has been studied extensively; however, as studies of the impact of servitization on firm performance offer mixed results, the conditions under which the relationship between servitization and performance becomes more significant are contested in the literature. These mixed results have led to the term “service paradox.” The paper aims to discuss these issues. Design/methodology/approach This study investigates servitization in the assembly industry based on a multi-country survey covering 539 industry plants in 22 countries. Findings The study contributes to the research on servitization by adding a contextual perspective to this relationship, taking into account level of development of the country in which a firm is located. Besides confirming the correlation between the servitization and performance, our study unveils a counter-intuitive result: a medium level of development of the country in which a firm is based corresponds to a stronger relationship between servitization and firm performance, whereas higher levels of development seem to diminish the increase in performance. Social implications This study balances out the focus in servitization on advanced economies and help to unveil its benefits in developing countries. Fostering servitization in developing economies can lead to social impact resulting from job shifts from manufacturing to service and the correlated implications for workers’ training and higher motivation experienced in service-based jobs. Originality/value Our study unpacks the “service paradox” and indicates that industry plants in developing countries can still harness the benefits of being first-movers, whereas, in developed countries, servitization may have become an order qualifier rather than a factor of differentiation.

scholarly journals Is Military Spending Converging Across Countries? An Examination of Trends and Key Determinants

2019 ◽  
Vol 19 (196) ◽  
Author(s):  
Benedict Clements ◽  
Sanjeev Gupta ◽  
Saida Khamidova
Keyword(s):  
Sustainable Development ◽  
Developing Countries ◽  
Sustainable Development Goals ◽  
Developing Economies ◽  
Military Spending ◽  
Social Spending ◽  
The Sustainable Development ◽  
Peace Dividend ◽  
Advanced Economies ◽  
Development Goals

This paper studies the evolution of worldwide military spending during 1970-2018. It finds that military spending in relation to GDP is converging, but into three separate groups of countries. In the largest group, responsible for 90 percent of worldwide spending, outlays have remained stubbornly high. Military spending in developing economies reacts to improvements in security conditions and military spending in neighboring countries, suggesting that further increases in the peace dividend are possible. In developing economies, rising social spending tends to crowd out military outlays, but this is not the case in advanced economies. With social outlays projected to rise as developing countries look to achieve the Sustainable Development Goals (SDGs), military spending could come under pressure to fall further.

scholarly journals The Impact of the COVID-19 Crisis on Middle-income Countries

2021 ◽  
pp. 001946622110238
Author(s):  
Sukti Dasgupta ◽  
Mauricio Dierckxsens ◽  
Sher Verick
Keyword(s):  
Developing Countries ◽  
Informal Economy ◽  
Labour Force ◽  
Middle Income ◽  
Jel Codes ◽  
Middle Income Countries ◽  
Advanced Economies ◽  
The World ◽  
The Impact

Coming on top of long-term employment challenges, the COVID-19 crisis has severely impacted economies around the world. Due to the nature of their labour markets, middle-income countries (MICs), including India, have experienced greater employment declines than advanced economies. Some sectors have been hit harder than others, while certain groups—including women, youth, migrants and those in the informal economy—have felt the brunt of the crisis even more strongly. The crisis has raised unemployment and, even more, has also pushed many out of the labour force, raising inactivity. Overall, the crisis has exacerbated existing inequalities in countries and across countries. The major challenge for MICs is to finance the continuing efforts to battle the crisis while shifting to a job-rich and inclusive recovery. Key lessons have already emerged, which are relevant for India and other developing countries, including the importance of building a more resilient and inclusive labour market through strong institutions and policies. JEL Codes: E24, E60, G01, J08, J60

Culture effect on knowledge management adoption in Nigerian hospitality industry

2018 ◽  
Vol 48 (3) ◽  
pp. 314-332 ◽  
Author(s):  
Abel Usoro ◽  
Bridget Abiagam
Keyword(s):  
Knowledge Management ◽  
Hospitality Industry ◽  
Developing Economies ◽  
Uncertainty Avoidance ◽  
Generic Model ◽  
Content Type ◽  
Short And Long Term ◽  
The Impact ◽  
Practical Implications

Purpose The effect of culture on various aspects of life, business and disciplines such as knowledge management (KM) has been much studied. Hospitality has also received much attention because it, among others, can produce and redistribute wealth whether in developed or developing economies, who often find it as an invaluable means of generating foreign income. Nonetheless, there is no combination of the three areas in a single study done in a developing economy. The paper aims to fill this gap by investigating the impact of culture on the adoption of KM in the hospitality industry of Nigeria. Design/methodology/approach Hofstede’s culture model and technology acceptance model were used as underpinning theories to develop a research model which was operationalised into a 45-item questionnaire. A five-point Likert scale that ranged from strongly disagree to strongly agree was used. The questions were closed-ended for the variables of the model, but there were also open-ended questions. Two Nigerian cities were purposely sampled and they generated 195 responses from the 400 questionnaires that were distributed. Correlation analysis was first done to establish relationships before regression analysis was performed after checking for multicollinearity. Findings and conclusions were drawn from significant hypotheses. Findings The findings showed significant collectivism, uncertainty avoidance, masculinity, femininity and short- and long-term orientations as factors that would affect adoption of KM in the hospitality industry of Nigeria. Power distance and individualism as factors, on the other hand, were not significant. Research limitations/implications The research has produced a model that can form the basis for future research. The study apparently is the first and therefore needs replication in other industries and other developing economies. A comparative study can be done too between developing countries or between a developing and a developed country. Many replicated studies could perhaps produce a generic model that would apply beyond Nigeria. Moreover, as this study is on a moving target both in terms of culture and the extent of KM adoption, subsequent studies could update the findings of this study. Practical implications Hospitality managers have to develop and maintain a conducive culture if adoption of KM is to be achieved. Managers should be sensitive to and take good advantage of cultural differences displayed in the personality traits of employees. For example, uncertainty avoidance (preference for precision) could be an asset to make knowledge explicit in computer systems, making it easier to share such knowledge in the organisation. Collectivism and nurturing orientation would encourage knowledge sharing and collaborative work, which is often nowadays done virtually. Managers should encourage knowledge workers to seek and acquire both short- and long-term views of their work. Originality/value There apparently is no systematic empirical study that combines KM, hospitality and culture in developing economies’ context. Thus, this study examines the effects of culture on KM adoption in the Nigerian hospitality industry. The findings have practical implications on how the Nigerian hospitality industry can benefit from the application of KM.

SHORT AND LONG-TERM RECOVERY IN BURNED WATERSHEDS AND THE IMPACT ON STREAMFLOW DYNAMICS

2016 ◽  
Author(s):  
Terri S. Hogue ◽  
◽  
Samuel Saxe ◽  
Ryan Logan ◽  
Kyle Knipper ◽  
...  
Keyword(s):  
Short And Long Term ◽  
The Impact
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