scholarly journals Demand and Defective Growth Patterns: The Role of The Tradable and Non-Tradable Sectors in an Open Economy

2014 ◽  
Vol 104 (5) ◽  
pp. 272-277 ◽  
Author(s):  
Sandile Hlatshwayo ◽  
Michael Spence
Keyword(s):  
Open Economy ◽  
Aggregate Demand ◽  
Value Added ◽  
Growth Patterns ◽  
Structural Elements ◽  
Total Income ◽  
Us Economy ◽  
The Us ◽  
Tradable Sector

This paper examines the underlying structural elements of US growth patterns, pre- and post-crisis. Prior to the recession, the US economy exhibited a defective growth pattern driven by outsized domestic demand. As domestic aggregate demand retreats to more sustainable levels relative to total income, the tradable side of the economy is a catalyst for restoring strong growth. A structural rebalancing is already underway; although it is only a third of the economy, the tradable sector generated more than half of gross gains in value-added since the start of the recovery. However, distributional issues loom on the horizon.

The Effect of New Deal Policies Revisited

2020 ◽  
Author(s):  
Yangyang Ji
Keyword(s):  
New Deal ◽  
Aggregate Demand ◽  
American Economic Review ◽  
Supply Side ◽  
Natural Rate ◽  
Jel Codes ◽  
The Great Depression ◽  
Us Economy ◽  
The Us ◽  
The New Deal

Abstract Eggertsson (2012, American Economic Review, 102, 524–55) finds that when the nominal interest rate hits the zero lower bound, the aggregate demand (AD) curve becomes upward-sloping and supply-side policies that reduce the natural rate of output, such as the New Deal implemented in the 1930s, are expansionary. His analysis is restricted to a conventional equilibrium where the AD curve is steeper than the aggregate supply (AS) curve. Recent research, however, demonstrates that an alternative equilibrium arises if the AD curve is flatter than the AS curve. In that case, the same policies become contractionary. In this article, I allow for both possibilities, and let data decide which equilibrium the US economy actually resided in during the Great Depression. Following the work of Blanchard and Quah (1989, American Economic Review, 79, 655–73), I find that there is a high probability that New Deal policies were contractionary. (JEL codes: E32, E52, E62, N12).

scholarly journals Macroeconomic policy regime in Poland

Equilibrium ◽  
2016 ◽  
Vol 11 (3) ◽  
pp. 411
Author(s):  
Milka Kazandziska Kazandziska
Keyword(s):  
Monetary Policy ◽  
Economic Policy ◽  
Industrial Policy ◽  
Open Economy ◽  
Aggregate Demand ◽  
Financial System ◽  
Value Added ◽  
Macroeconomic Policy ◽  
Wage Policy ◽  
Foreign Economic Policy

The goal of this paper is to analyse the economic development of Poland using the concept of macroeconomic policy regimes (MPRs). Six elements of a MPR will be identified: foreign economic policy, industrial policy, the financial system, wage policy, monetary policy and fiscal policy. Examining the functionality of the development of these elements applied to Poland is a further aim of this paper. The functionality of the development of the MPR elements will be analysed on the basis of the fulfilment of the objectives, as well as the use of the proposed instruments and strategy assigned to every element of MPR. Due to space limits, we are going to focus on the former in this paper. Taking into consideration that Poland is an emerging and a relatively open economy, foreign economic policy and industrial policy play very significant roles in restructuring of the economy towards production and exports of high value-added products, which would enable the country to follow a growth path consistent with an external balance. The financial needs of the manufacturing sector and particularly of the producers and/or exporters of high-end products need to be satisfied by the financial system, whose stability needs to be secured with the help of monetary policy. The latter is, moreover, in charge of providing low-cost finance and maintaining the stability of the exchange rate. Stabilising the inflation rate would be given to wage policy. Fiscal policy’s main tasks would be to correct aggregate demand shocks and reduce income inequality.

THE ROLE OF EDUCATION SIGNALING IN EXPLAINING THE GROWTH OF THE COLLEGE WAGE PREMIUM

2017 ◽  
Vol 23 (3) ◽  
pp. 1247-1286 ◽  
Author(s):  
Yu Zheng
Keyword(s):  
College Graduates ◽  
The United States ◽  
Skill Premium ◽  
Simultaneous Increase ◽  
Unskilled Labor ◽  
Signaling Mechanism ◽  
College Degrees ◽  
Us Economy ◽  
The Us

This paper incorporates an education signaling mechanism into a dynamic model of production and asks if “higher education as a signal” helps explain the simultaneous increase in the supply and price of skilled relative to unskilled labor in the United States since 1980. The key mechanism is that if college degrees serve as a signal of unobservable talent and talent is productive at the workplace, then improved access to college will enable a higher fraction of the population to signal talent by completing college, resulting in degrees being a better signal about talent and a widening skill premium. When I assess the contribution of signaling in the model calibrated to the US economy from 1980 to 2003, I find that about 10% of the increase in the skill premium can be attributed to the signaling mechanism, after adjusting for the potential decline in the quality of college graduates.

scholarly journals Economic Uncertainty And The Role Of Organizational Development

2010 ◽  
Vol 8 (4) ◽  
Author(s):  
Martin D. Carrigan
Keyword(s):  
Organizational Behavior ◽  
Organizational Development ◽  
Stock Markets ◽  
Economic Uncertainty ◽  
Us Economy ◽  
The Us

The US Economy has entered an era of economic uncertainty.  Stock markets are down. Unemployment is up.  This paper examines the effect of economic uncertainty on organizational behavior. 

scholarly journals Statistical Analysis of the Performance of a Big and Open Economy: The Case of the U.S.

2018 ◽  
pp. 10-17
Author(s):  
O. V. Zhuravliov ◽  
О. М. Simachova
Keyword(s):  
United States ◽  
Open Economy ◽  
Developing Economies ◽  
Negative Impact ◽  
The United States ◽  
Us Economy ◽  
The Us ◽  
The World ◽  
Macroeconomic Indicators ◽  
The Impact

The US economy is one of the richest and most diversified economies in the world and keeps its leadership in the global economy for the past 100 years. The United States is a global leader in computer technology, pharmaceuticals and the manufacture of medical, aerospace and military equipment. And although services make up about 80% of GDP, the US remains the second largest producer of industrial goods in the world and is a leader in research and development. President Donald Trump was elected in November 2016, promising a big gap with his predecessor’s regulatory, tax and trade policies. Therefore, the current socio-economic status of the USA and the possible ways of its development in the future are interesting for studying the impact on other economies, in particular, on the Ukrainian economy and the search for new and optimal ways of developing relations between the United States and Ukraine. Key macroeconomic indicators of the US economy in 2011–2018 are analyzed, demonstrating the influence of Donald Tramp’s new policy on changes in the indicators of the economy, the labor market, trade, etc., as well as possible ways of development in the coming years. The review of key macroeconomic indicators gives grounds for classifying the American economy as healthy one. Rates of GDP growth will remain in the range of 2 to 3%. These rates of growth in the world’s largest economy are callable to ensure a substantial increase in the global activity. But uncertainties in the politics may hinder global growth and have clearly negative impact on the investment growth in developed and developing economies.

Market structure and knowledge acquisition by firms

2020 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Pedro Hemsley ◽  
Rafael Morais ◽  
Karinna Di Iulio
Keyword(s):  
Knowledge Acquisition ◽  
Open Economy ◽  
Perfect Competition ◽  
Content Type ◽  
Firm Theory ◽  
Market Structures ◽  
Us Economy ◽  
The Us ◽  
Main Input ◽  
The Relationship

PurposeRecent models in firm theory assume that problems have to be solved for production to take place and that knowledge is the main input for problem-solving. This paper characterizes the relationship between the predictability of production prcesses and investment in knowledge.Design/methodology/approachThis paper uses a theoretical model of firm theory to study investment in knowledge by a simplified one-layer firm with a stochastic technology, across different market structures, and develops a calibration exercise to illustrate the results.FindingsFirms working closer to the production frontier (those with a larger efficient scale in perfect competition, facing a higher demand in monopoly or more competitive internationally in an open economy) react more in terms of investment in knowledge when problem predictability changes. Investment in knowledge becomes nearly insensitive to such changes for firms with a low output, i.e. those far from the frontier. A calibration exercise suggests that the elasticity of knowledge with respect to the predictability of problems was around 0.59 for the US economy for the period 1980–2020.Originality/valueThese are the first nonambiguous results on the relationship between the predictability of production processes and investment in knowledge and help understanding knowledge acquisition by different firms in distinct competitive environments.

Path dependence, the COVID-19 crisis, and inequality in the United States

2021 ◽  
Vol 18 (2) ◽  
pp. 198-206
Author(s):  
Daniele Tavani
Keyword(s):  
Great Recession ◽  
Path Dependence ◽  
The United States ◽  
Economic Security ◽  
The Great Recession ◽  
Us Economy ◽  
Long Run ◽  
The Us ◽  
Historical Trajectory

This paper considers both secular and medium-run trends to argue that the US economy was already vulnerable to shocks before the COVID-19 crisis. Long-run trends have shown a pattern of secular stagnation and increasing inequality since the 1980s, while the economy has displayed hysteresis during the sluggish recovery from the Great Recession. The immediate policy response through the Coronavirus, Relief and Economic Security (CARES) Act highlighted the coordinating role of fiscal policy on the economy, but also showcased limits, especially with regard to the paycheck protection program. The historical trajectory of the US economy before the COVID-19 crisis cast serious doubts on recent cries of ‘overheating’ and inflationary pressures that should supposedly arise from the $1.9 trillion relief package just signed into law by President Biden. Projecting forward to the long run, redistribution policies may provide useful first steps in reversing the trends of rising inequality and declining productivity growth that the US economy has seen over the last few decades.

Corporate life and death: who succumbs, who survives during disruption?

2018 ◽  
Vol 41 (6) ◽  
pp. 11-17 ◽  
Author(s):  
Amy Blitz
Keyword(s):  
Six Sigma ◽  
Low Cost ◽  
Value Added ◽  
Lean Six Sigma ◽  
Good News ◽  
Content Type ◽  
Life And Death ◽  
Us Economy ◽  
Realistic Option ◽  
The Us

Purpose This paper provides a disruption survival guide for companies during times of macro transformation. Design/methodology/approach The research compared the S&P 500 – as proxy for the US economy – from 1996 and 2018. Of companies no longer on the list, 12 died, including two from manufacturing: Bethlehem Steel and Outboard Marine Corporation (OMC). Still, some US manufacturers survived or even thrived during the period. To understand why, the paper compares Bethlehem, which died in 2003, to US Steel, which has survived but was removed from the S&P 500 list in 2014, and to Nucor, which has stayed on the list. POSCO is also used for comparison. The OMC case adds a different industry perspective. Findings The main findings from these cases are as follows: stay fit financially and avoid overreaching in good times, use operation strategies such as Lean and Six Sigma to build a culture of continual innovation and stay close to customers to compete on the basis of differentiation, particularly if competing on price is not a realistic option. The good news is differentiation is possible even in seemingly commoditized sectors like steel. Research limitations/implications This paper contributes to the literature on differentiation as a strategy for competing with low-cost disruptors. Practical implications This paper provides insights into the use of Lean, Six Sigma and other strategies for creating a culture of continual innovation among employees, customers, suppliers and other strategic partners. And, building on this culture, to compete on the basis of value-added differentiation, particularly if competing on price is not a realistic option. Originality/value The paper cuts through complex, fast-changing, transformative macro issues – e.g., Chinese competition and trade uncertainties related to new tariffs – and provides practical, timeless insights for navigating in such times. The focus here is on strategies for competing on the basis of value-added differentiation, particularly if competing on price is not a viable option. The good news is such competition is possible even in seemingly commoditized sectors like steel.

SOVEREIGN DEBT IN THE UNITED STATES AND GROWTH EXPECTATIONS

2018 ◽  
Vol 24 (2) ◽  
pp. 447-477
Author(s):  
Juan Equiza-Goñi
Keyword(s):  
Open Economy ◽  
Sovereign Debt ◽  
Federal Budget ◽  
The United States ◽  
Revenue Growth ◽  
Us Economy ◽  
The Us ◽  
Us Government ◽  
Business Cycle Model

This paper shows empirical evidence and theory consistent with the US government using debt optimally to adjust the federal budget to news about long-term growth. First, using historical forecasts from the Congressional Budget Office (CBO) since 1984, I find that government purchases and deficits are positively correlated with expectations about long-term productivity, real gross domestic product, and tax revenue growth, whereas tax receipts are negatively correlated. A structural vector autoregression estimated with US quarterly data in 1955–2015 identifies permanent and transitory productivity shocks and points to “trend” shocks as the source of these correlations. Second, I present an open economy real business-cycle model with stochastic productivity trend and optimal public purchases and taxes. Calibrating the model to the US economy, the Ramsey planners' allocation yields moments aligned with those observed in the data.

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