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This paper attempts to provide a perspective on real exchange rate developments following the inception of the EMS. The focus is on structural determinants of real exchange rates, notably the behavior of tradables and nontradable prices and productivity. It is found that changes in the relative price of tradable goods in terms of nontradables account for a sizable fraction of real exchange rate dynamics during the EMS period. Sectoral productivity growth differential help explain the behavior of the relative price of tradable goods, especially in the long run. There is also some evidence that the EMS has extended on relative price behavior.
Currency --- Deflation --- Economic sectors --- Foreign Exchange --- Foreign exchange --- Industrial productivity --- Industries: Manufacturing --- Industry Studies: Manufacturing: General --- Inflation --- Macroeconomics --- Macroeconomics: Production --- Manufacturing industries --- Manufacturing --- Open Economy Macroeconomics --- Price Level --- Prices --- Production and Operations Management --- Production --- Productivity --- Real exchange rates --- United Kingdom
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This paper discusses progress on Sixth Five Year Plan (2011–15) of Bangladesh. For the broad picture of performance of the Sixth Plan during the first three years in terms of achieving major development targets relating to economic growth, employment and poverty reduction is generally positive. The economy has made further solid progress in these areas, which is reassuring. Progress has also been made in transforming the economy from a rural-based agrarian economy to one that is more modern urban-based manufacturing and services-based. Export performance is on track, which has provided the impetus for the expansion of the manufacturing sector.
Poverty --- Economic development --- Development, Economic --- Economic growth --- Growth, Economic --- Economic policy --- Economics --- Statics and dynamics (Social sciences) --- Development economics --- Resource curse --- Industries: Manufacturing --- Environmental Economics --- Demography --- Education: General --- Health: General --- Demographic Economics: General --- Environmental Economics: General --- Industry Studies: Manufacturing: General --- Education --- Health economics --- Population & demography --- Environmental economics --- Manufacturing industries --- Health --- Population and demographics --- Environment --- Manufacturing --- Economic sectors --- Population --- Environmental sciences --- Bangladesh
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We explore the contribution of product-quality upgrading to the export performance of six fast-growing Asian economies: China, India, Indonesia, Malaysia, South Korea, and Thailand. We focus on measuring the impact of quality upgrading on the changes in these countries’ sectoral export shares during 1970–2010. We build a multisector Ricardian trade model which allows for changes in product quality, and calibrate it to generate predictions about export volumes. Unlike previous literature, our approach allows estimation without employing domestic production data. Our results point to quality upgrading being a key driver of export shares.
Exports--Asia. --- Quality of products--Asia. --- Investments: Commodities --- Investments: Energy --- Exports and Imports --- Industries: Manufacturing --- Trade: General --- Industry Studies: Manufacturing: General --- Agriculture: General --- Energy: General --- International economics --- Investment & securities --- Manufacturing industries --- Exports --- Export performance --- Manufacturing --- Agricultural commodities --- Oil --- International trade --- Economic sectors --- Commodities --- Farm produce --- Petroleum industry and trade --- Korea, Republic of --- Industrialization.
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This paper examines the variation in life cycle growth across the universe of Mexican firms. We establish two stylized facts to motivate our analysis: first, we show that firm size matters for development by illustrating a close correlation with state-level per capita incomes. Second, we show that few firms grow as much as their U.S. peers while the majority stagnates at less than twice their initial size. To gain insights into the distinguishing characteristics of the two groups, we then econometrically decompose life cycle growth across firms. We find that firms that have financial access and multiple establishments and that are formal, part of diversified industries and located in population centers can grow at sizeable rates.
Consumption (Economics) --- Consumer demand --- Consumer spending --- Consumerism --- Spending, Consumer --- Demand (Economic theory) --- Macroeconomics --- Industries: Manufacturing --- Firm Behavior: Empirical Analysis --- Microeconomic Analyses of Economic Development --- Economic Growth and Aggregate Productivity: General --- Industry Studies: Manufacturing: General --- Labor Economics: General --- Manufacturing industries --- Labour --- income economics --- Manufacturing --- Labor --- Economic sectors --- Labor economics --- Mexico --- Income economics
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We examine the extent to which declining manufacturing employment may have contributed to increasing inequality in advanced economies. This contribution is typically small, except in the United States. We explore two possible explanations: the high initial manufacturing wage premium and the high level of income inequality. The manufacturing wage premium declined between the 1980s and the 2000s in the United States, but it does not explain the contemporaneous rise in inequality. Instead, high income inequality played a large role. This is because manufacturing job loss typically implies a move to the service sector, for which the worker is not skilled at first and accepts a low-skill wage. On average, the associated wage cut increases with the overall level of income inequality in the country, conditional on moving down in the wage distribution. Based on a stylized scenario, we calculate that the movement of workers to low-skill service sector jobs can account for about a quarter of the increase in inequality between the 1980s and the 2000s in the United States. Had the U.S. income distribution been more equal, only about one tenth of the actual increase in inequality could have been attributed to the loss of manufacturing jobs, according to our simulations.
Labor --- Macroeconomics --- Industries: Manufacturing --- Industries: Service --- Aggregate Factor Income Distribution --- Industry Studies: Manufacturing: General --- Wages, Compensation, and Labor Costs: General --- Industry Studies: Services: General --- Personal Income, Wealth, and Their Distributions --- Manufacturing industries --- Labour --- income economics --- Income inequality --- Manufacturing --- Wages --- Services sector --- Personal income --- National accounts --- Economic sectors --- Income distribution --- Service industries --- Income --- United States --- Income economics
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In this paper, we assess whether recent economic developments in Russia are symptomatic of Dutch Disease. We first provide a brief review of the literature on Dutch Disease and the natural resource curse. We then discuss the symptoms of Dutch Disease, which include (1) real exchange rate appreciation; (2) slower manufacturing growth; (3) faster service sector growth; and (4) higher overall wages. We test these predictions for Russia while carefully controlling for other factors that could have led to similar symptoms. We conclude that, while Russia has all of the symptoms, the diagnosis of Dutch Disease remains to be confirmed.
Foreign Exchange --- Macroeconomics --- Economic Theory --- Industries: Manufacturing --- Industries: Service --- Energy: Demand and Supply --- Prices --- Industry Studies: Manufacturing: General --- Industry Studies: Services: General --- Resource Booms --- Manufacturing industries --- Currency --- Foreign exchange --- Economic theory & philosophy --- Oil prices --- Manufacturing --- Real exchange rates --- Services sector --- Dutch disease --- Service industries --- Economic forecasting --- Russian Federation --- Foreign exchange rates --- Economic development
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We develop a theory-based model of equilibrium exchange rates incorporating factors that have been found to matter empirically. The model provides insights into how variables should be measured and what are appropriate cross-country restrictions. We estimate this model using a panel of 12 industrial countries. The model fits the data relatively well, implying relatively fast adjustment to equilibrium and outperforming a random walk at longer horizons. Furthermore, we find that the rate of adjustment depends on the distance from equilibrium, suggesting that part of the explanation for slow adjustment is inaccurate measures of equilibrium.
Electronic books. -- local. --- Equilibrium (Economics). --- Foreign exchange rates -- Econometric models. --- Exports and Imports --- Foreign Exchange --- Industries: Manufacturing --- Industry Studies: Manufacturing: General --- International Investment --- Long-term Capital Movements --- Currency --- Foreign exchange --- Manufacturing industries --- International economics --- Real exchange rates --- Exchange rates --- Manufacturing --- Foreign assets --- Purchasing power parity --- Investments, Foreign --- United Kingdom --- Foreign exchange rates --- Equilibrium (Economics) --- Econometric models.
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This paper assesses Germany's external competitive position from several angles. It first examines movements in several real exchange rate indices. The analysis of competitiveness is then supplemented by using the so-called constant market share approach, and finally by examining briefly both pressures on profit margins in the tradable goods sector as well as export prospects. A key conclusion of the analysis is that the deterioration of Germany's external competitiveness suggested by some commonly used indicators of the real appreciation of the deutsche mark, such as those based on relative unit labor costs in manufacturing, is generally exaggerated.
Exports and Imports --- Finance: General --- Labor --- Industries: Manufacturing --- Trade: General --- Empirical Studies of Trade --- Trade: Forecasting and Simulation --- Wages, Compensation, and Labor Costs: General --- Industry Studies: Manufacturing: General --- General Financial Markets: General (includes Measurement and Data) --- International economics --- Labour --- income economics --- Manufacturing industries --- Finance --- Labor costs --- Exports --- Manufacturing --- Export performance --- Competition --- International trade --- Economic sectors --- Financial markets --- Germany --- Income economics
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Widespread shortages in key inputs are common in mixed economies of developing countries. These shortages appear to occur at the same time that relatively high rates of capacity underutilization in manufacturing industries are observed. This paper develops a simple model which explains the existence of excess capacity when there are quantitative restrictions on key inputs. This model is tested using data for manufacturing industries in India, and the results indicate that shortages in domestic rather than imported inputs imposed binding constraints on capacity utilization rates.
Investments: Energy --- Exports and Imports --- Industries: Manufacturing --- Production and Operations Management --- Market Structure and Pricing: General --- Trade: General --- Industry Studies: Manufacturing: General --- Macroeconomics: Production --- Trade Policy --- International Trade Organizations --- Electric Utilities --- Macroeconomics --- International economics --- Manufacturing industries --- Investment & securities --- Capacity utilization --- Trade barriers --- Manufacturing --- Import licensing --- Electricity --- Production --- International trade --- Economic sectors --- Commodities --- Industrial capacity --- Commercial policy --- Import quotas --- Electric utilities --- India
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This paper shows that deindustrialization is explained primarily by trends internal to the advanced economies. These include the combined effects on manufacturing employment of a relatively faster growth of productivity in manufacturing, the associated relative price changes, and shifts in the structure of demand between manufactures and services. North-South trade explains less than one fifth of deindustrialization in the advanced economies. Moreover, the contribution of North-South trade to deindustrialization has been mainly through its effects in stimulating labor productivity in Northern manufacturing. It has had little enduring effect on total manufacturing output in the advanced economies.
Labor --- Macroeconomics --- Industries: Manufacturing --- Production and Operations Management --- Industry Studies: Manufacturing: General --- Employment --- Unemployment --- Wages --- Intergenerational Income Distribution --- Aggregate Human Capital --- Aggregate Labor Productivity --- Macroeconomics: Production --- Personal Income, Wealth, and Their Distributions --- Human Capital --- Skills --- Occupational Choice --- Labor Productivity --- Manufacturing industries --- Labour --- income economics --- Manufacturing --- Productivity --- Personal income --- Labor productivity --- Economic sectors --- Production --- National accounts --- Economic theory --- Industrial productivity --- Income --- Japan --- Income economics
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