{"product_id":"the-economics-of-adjustment-and-growth-9780674015784","title":"The Economics of Adjustment and Growth","description":"\u003cb\u003eBook Synopsis\u003c\/b\u003e\u003cbr\u003eThis book provides a systematic and coherent framework for understanding the interactions between the micro and macro dimensions of economic adjustment policies; that is, it explores short-run macroeconomic management and structural adjustment policies aimed at promoting economic growth.\u003cbr\u003e\u003cbr\u003e\u003cb\u003eTrade Review\u003c\/b\u003e\u003cbr\u003e\u003ci\u003eThe Economics of Adjustment and Growth\u003c\/i\u003e is an exciting book, focusing on the challenges facing researchers and policymakers in the design and implementation of macroeconomic policies in developing countries. The book is very well written, with a nice balance between a clear exposition of models and an overview of their empirical applications. It summarizes the current state of knowledge and recent experience with policies. I highly recommended it to advanced undergraduate and graduate students interested in applied policy issues, as well as practitioners interested in gaining insight into current models and applications. -- Joshua Aizenman, Professor of Economics, University of California at Santa Cruz\u003cbr\u003eRichard Agénor's book provides an excellent and comprehensive analysis of macroeconomic and structural policy issues that are highly relevant for developing countries. Its rigorous, yet intuitive, treatment makes it particularly suitable for postgraduate programmes in development macroeconomics or development finance. It is also well suited for advanced macroeconomic courses that have a development or growth focus, as well as being an excellent up-to-date reference source for policymakers in developing countries. -- Panicos Demetriades, Professor of Financial Economics, University of Leicester\u003cbr\u003eThis book brings together recent theory and fresh empirical evidence on all relevant dimensions of economic adjustment and growth. Drawing from the research frontier and the results and insights of worldwide policy experience, it presents a unified treatment in a rigorous but accessible form. Richard Agénor's new book is a primer for academic economists, policymakers, economic analysts, and students in the fields of macroeconomics, development economics, and international finance, both at undergraduate and graduate levels. -- Klaus Schmidt-Hebbel, Central Bank of Chile\u003cbr\u003e\u003cbr\u003e\u003cb\u003eTable of Contents\u003c\/b\u003e\u003cbr\u003eAcknowledgments    Introduction and Overview     1. BUDGET CONSTRAINTS AND AGGREGATE ACCOUNTS  1.1 Production, Income, and Expenditure    1.2 A Consistency Accounting Matrix   1.2.1 Current Account Transactions   1.2.2 Capital Account Transactions     1.3 Identities and Budget Constraints   1.3.1 Gross Domestic Product and Absorption   1.3.2 The Government Budget Constraint   1.3.3 The Private Sector Budget Constraint   1.3.4 The External Sector Budget Constraint   1.3.5 The Balance Sheet of the Financial System   1.3.6 The Savings-Investment Balance     1.4 Social Accounting Matrices   1.4.1 Activity, Commodity, and Factor Accounts   1.4.2 Institutions and the Capital Account   1.4.3 The Rest-of-the-World Account   1.4.4 SAMs and Economy-wide Models     1.5 Summary      2. CONSUMPTION, SAVING, AND INVESTMENT  2.1 Consumption and Saving   2.1.1 The Permanent Income Hypothesis   2.1.2 The Life-Cycle Model   The Basic Framework   Age and the Dependency Ratio   2.1.3 Other Determinants   Income Levels and Income Uncertainty   Intergenerational Links   Liquidity Constraints   Inflation and Macroeconomic Stability   Government Saving   Expectations, Taxation, and Debt   Social Security, Pensions, and Insurance   Changes in the Terms of Trade   Financial Deepening   Household and Corporate Saving   2.1.4 Empirical Evidence     2.2 Investment   2.2.1 The Flexible Accelerator   2.2.2 The User Cost of Capital   2.2.3 Uncertainty and Irreversibility   2.2.4 Other Determinants   Credit Rationing   Foreign Exchange Constraint   The Real Exchange Rate   Public Investment   Macroeconomic Instability   The Debt Burden Effect   2.2.5 Empirical Evidence     2.3 Summary  Appendix - Income Uncertainty and Precautionary Saving      3. FISCAL DEFICITS, PUBLIC DEBT, AND THE CURRENT ACCOUNT  3.1 Structure of Public Finances   3.1.1 Conventional Sources of Revenue and Expenditure   3.1.2 Seigniorage and Inflationary Finance   3.1.3 Quasi-Fiscal Activities and Contingent Liabilities     3.2 The Government Budget Constraint     3.3 Assessing the Stance of Fiscal Policy     3.4 Deficit Rules, Budget Ceilings, and Fiscal Transparency     3.5 Fiscal Imbalances and External Deficits     3.6 Consistency and Sustainability   3.6.1 A Consistency Framework   3.6.2 Fiscal and External Sustainability     3.7 Sustainability and Solvency Constraints     3.8 Commodity Price Shocks and Deficits     3.9 Can Fiscal Austerity Be Expansionary?     3.10 Summary      4. THE FINANCIAL SYSTEM AND MONETARY POLICY   4.1 The Financial System   4.1.1 Financial Repression   4.1.2 Banks and Financial Intermediation     4.2 Money Demand     4.3 Indirect Instruments of Monetary Policy     4.4 Credit Rationing     4.5 The Transmission of Monetary Policy   4.5.1 Interest Rate Effects   4.5.2 Exchange Rate Effects   4.5.3 Asset Prices and Balance Sheet Effects   Net Worth and the Finance Premium   The Financial Accelerator   4.5.4 Credit Availability Effects   4.5.5 The Role of Expectations     4.6 Monetary Policy: Inflation Targeting   4.6.1 Strict Inflation Targeting   4.6.2 Policy Trade-offs and Flexible Inflation Targeting   4.6.3 Comparison with Intermediate Target Strategies   Monetary vs. Inflation Targeting Exchange Rate vs. Inflation Targeting   4.6.4 Requirements for Inflation Targeting     4.7 Monetary Policy in a Dollarized Economy   4.7.1 Persistence of Dollarization   4.7.2 Implications of Dollarization     4.8 Summary    Appendix - Inflation Targeting with Forward-Looking Expectations      5. EXCHANGE RATE REGIMES  5.1 The Nature of Exchange Rate Regimes   5.1.1 Pegged Exchange Rate Regimes   5.1.2 Flexible Exchange Rate Regimes   5.1.3 Band Regimes   5.1.4 Multiple Exchange Rate Regimes     5.2 Evidence on Exchange Rate Regimes   5.2.1 General Trends   5.2.2 Exchange Rate Bands     5.3 Choosing an Exchange Rate Regime   5.3.1 Some Conceptual Issues   5.3.2 The Evidence   5.3.3 A Practical Guide     5.4 Trade-offs and Exchange Rate Credibility    5.5 Exchange Rates and the Trade Balance   5.5.1 Measuring Competitiveness   5.5.2 Devaluation and the Trade Balance     5.6 Devaluation with Imported Inputs     5.7 Summary      6 INFLATION AND DISINFLATION PROGRAMS  6.1 Sources of Inflation   6.1.1 Hyperinflation and Chronic Inflation   6.1.2 Fiscal Deficits, Seigniorage, and Inflation   6.1.3 Other Sources of Chronic Inflation   Wage Inertia   Exchange Rates and the Terms of Trade   The Frequency of Price Adjustment   Food Prices   Time Inconsistency and the Inflation Bias     6.2 Nominal Anchors in Disinflation   6.2.1 Controllability and Effectiveness   6.2.2 Adjustment Paths and Relative Costs   6.2.3 Credibility, Fiscal Commitment, and Flexibility   6.2.4 The Flexibilization Stage     6.3 Disinflation: The Role of Credibility   6.3.1 Sources of Credibility Problems   6.3.2 Enhancing Credibility   Big Bang and Gradualism   Central Bank Independence   Price Controls   Aid as a Commitment Mechanism     6.4 Two Stabilization Experiments   6.4.1 Egypt, 1992-97   6.4.2 Uganda, 1987-95     6.5 Summary    Appendix - Inflation Persistence and Policy Credibility      7. CAPITAL INFLOWS: CAUSES AND POLICY RESPONSES  7.1 Capital Flows: Recent Evidence     7.2 How Volatile Are Capital Flows?     7.3 Domestic and External Factors      7.4 Macroeconomic Effects of Capital Inflows      7.5 External Shocks and Capital Flows   7.5.1 Households   7.5.2 Firms and the Labor Market   7.5.3 Commercial Banks   7.5.4 Government and the Central Bank   7.5.5 Equilibrium Conditions   The Money Market   The Credit Market   The Market for Home Goods   7.5.6 Graphical Solution   7.5.7 Rise in the World Interest Rate     7.6 Policy Responses to Capital Inflows   7.6.1 Sterilization   7.6.2 Exchange Rate Flexibility   7.6.3 Fiscal Adjustment   7.6.4 Capital Controls   Forms of Capital Controls   Pros and Cons of Capital Controls   7.6.5 Changes in Statutory Reserve Requirements   7.6.6 Other Policy Responses     7.7 Summary   Appendix - Measuring the Degree of Capital Mobility      8. FINANCIAL CRISES AND FINANCIAL VOLITILITY  8.1 Sources of Exchange Rate Crises   8.1.1 Inconsistent Fundamentals   8.1.2 Rational Policymakers and Self-Fulfilling Crises   8.1.3 Third-Generation Models     8.2 Currency Crises: Three Case Studies   8.2.1 The 1994 Crisis of the Mexican Peso   8.2.2 The 1997 Thai Baht Crisis   8.2.3 The 1999 Brazilian Real Crisis     8.3 Banking and Currency Crises   8.3.1 Causes of Banking Crises   8.3.2 Self-Fulfilling Bank Runs   8.3.3 Links between Currency and Banking Crises   8.3.4 Liquidity Crises in an Open Economy     8.4 Predicting Financial Crises     8.5 Financial Volatility: Sources and Effects   8.5.1 Volatility of Capital Flows   8.5.2 Herding Behavior and Contagion   8.5.3 The Tequila Effect and the Asia Crisis     8.6 Coping with Financial Volatility   8.6.1 Macroeconomic Discipline   8.6.2 Information Disclosure   8.6.3 The Tobin Tax     8.7 Summary   Appendix - The Mechanics of Speculative Attacks and Interest Rate Defense      9. POLICY TOOLS FOR MACROECONOMIC ANALYSIS   9.1 Assessing Business Cycle Regularities     9.2 Financial Programming   9.2.1 The Polak Model   9.2.2 An Extended Framework     9.3 The World Bank RMSM Model     9.4 The Merged Model and RMSM-X   9.4.1 The Merged IMF-World Bank Model 380   9.4.2 The RMSM-X Framework     9.5 Three-Gap Models     9.6 The 1-2-3 Model   9.6.1 The Minimal Setup   9.6.2 An Adverse Terms-of-Trade Shock   9.6.3 Investment, Saving, and the Government     9.7 Lags and the Adjustment Process     9.8 Summary   Appendix - Money Demand and Cointegration      10. GROWTH, POVERTY, AND INEQUALITY: SOME BASIC FACTS  10.1 A Long-Run Perspective     10.2 The Power of Compounding   10.2.1 Growth and Standards of Living   10.2.2 How Fast Do Economies Catch Up?     10.3 Some Basic Facts   10.3.1 Output Growth, Population, and Fertility   10.3.2 Saving, Investment, and Growth   10.3.3 Growth and Poverty   10.3.4 Inequality, Growth, and Development   The Kuznets Curve   Education and Income Distribution   10.3.5 Trade, Inflation, and Financial Deepening     10.4 Summary   Appendix - Common Measures of Poverty and Inequality      11. GROWTH AND TECHNOLOGICAL PROCESS: THE SOLOW-SWAN MODEL   11.1 Basic Structure and Assumptions     11.2 The Dynamics of Capital and Output     11.3 A Digression on Low-Income Traps     11.4 Population, Savings, and Output     11.5 The Speed of Adjustment     11.6 Model Predictions and Empirical Facts     11.7 Summary   Appendix - Dynamics of k, the Output Effect of s, and the Speed of Adjustment       12. KNOWLEDGE, HUMANCAPITAL, AND ENDOGENOUS GROWTH  12.1 The Accumulation of Knowledge   12.1.1 Knowledge as a By-Product: Learning by Doing   12.1.2 The Production of Knowledge     12.2 Human Capital and Returns to Scale   12.2.1 The Mankiw-Romer-Weil Model   12.2.2 The AK Model     12.3 Human Capital and Public Policy     12.4 Other Determinants of Growth   12.4.1 Fiscal Policy   Government Spending   The Dual Effects of Taxation   Budget Deficits and Growth   12.4.2 Inflation and Macroeconomic Stability   12.4.3 Trade and International Financial Openness   12.4.4 Financial Development   12.4.5 Political Factors and Income Inequality   12.4.6 Institutions and the Allocation of Talent     12.5 Summary   Appendix - Determinants and Costs of Corruption      13. THE DETERMINANTS OF ECONOMIC GROWTH: AN EMPIRICAL OVERVIEW   13.1 Growth Accounting    13.2 The East Asian \"Miracle\"     13.3 Growth Regressions and Convergence  13.3.1 Diminishing Returns and Convergence   13.3.2 Convergence and Cross-Section Regressions   13.3.3 Testing the Mankiw-Romer-Weil Model     13.4 The Empirics of Growth     13.5 The Econometric Evidence: Overview   13.5.1 Saving and Physical and Human Capital   13.5.2 Fiscal Variables   13.5.3 Inflation and Macroeconomic Stability   13.5.4 Financial Factors   13.5.5 External Trade and Financial Openness   13.5.6 Political Variables and Income Inequality       14. TRADE AND LABOR MARKET REFORMS  14.1 Trade Liberalization  14.1.1 The Gains from Trade   14.1.2 Recent Evidence on Trade Reforms   14.1.3 Trade Reform, Employment, and Wage Inequality   14.1.4 Obstacles to Trade Reform     14.2 Trade and Regional Integration     14.3 Reforming Labor Markets   14.3.1 Labor Markets in Developing Countries   Basic Structure   Employment Distribution and Unemployment   Wage Formation and Labor Market Segmentation   Minimum Wages   Trade Unions and the Bargaining Process   14.3.2 Labor Market Reforms and Flexibility     14.4 Summary   Appendix - Reforming Price Incentives in Agriculture      15. FISCAL ADJUSTMENT AND FINANCIAL SECTOR REFORMS   15.1 Fiscal Adjustment   15.1.1 Reforming Tax Systems   The Excess Burden of Taxation   Fighting Tax Evasion   Guidelines for Reform   15.1.2 Expenditure Control and Management   15.1.3 Civil Service Reform   15.1.4 Fiscal Decentralization    15.2 Pension Reform   15.2.1 Basic Features of Pension Systems   15.2.2 Pension Regimes and Saving: A Framework   15.2.3 Recent Evidence on Pension Reform    15.3 Interest Rate Liberalization  15.3.1 A Simple Framework   15.3.2 Potential Pitfalls    15.4 Sources of Financial Fragility   15.4.1 The Nature of Banks' Balance Sheets   15.4.2 Microeconomic and Institutional Failings   15.4.3 Moral Hazard and Perverse Incentives   15.4.4 Macroeconomic Instability   15.4.5 Premature Financial Liberalization     15.5 Strengthening Financial Systems     15.6 Summary   Appendix - Structural Policy Indices      16. AID, EXTERNAL DEBT, AND GROWTH   16.1 The Effects of Foreign Aid   16.1.1 Aid Effectiveness and the Fungibility Problem   16.1.2 Aid, Investment, and Growth   The Situation without Aid   The Effects of Aid on Investment   16.1.3 Aid and Growth: Cross-Country Evidence    16.2 Growth, Debt, and Fiscal Adjustment     16.3 The Debt Overhang and the Debt Laffer Curve     16.4 Measuring the Debt Burden  16.4.1 Conventional and Present Value Indicators   16.4.2 Sustainability and External Solvency     16.5 Debt Rescheduling and Debt Relief     16.6 Summary  Appendix - The Theory of Stages in the Balance of Payments     17. SEQUENCING, GRADUALISM, AND THE POLITICAL ECONOMY OF ADJUSTMENT  17.1 Stabilization and Structural Adjustment     17.2 The Order of Liberalization   17.2.1 Liberalization of External Accounts   17.2.2 Financial Reform and the Capital Account   17.2.3 A Formal Framework   Analysis of Liberalization Policies   Financial Deregulation   Relaxation of Capital Controls   Trade Liberalization     17.3 Sequencing and Labor Market Reforms     17.4 Political Constraints and Reforms   17.4.1 Modeling Political Conflict   17.4.2 The Benefits of Crises   17.4.3 Political Acceptability and Sustainability     17.5 Shock Treatment or Gradual Approach?    17.6 Summary   Appendix - Calculating the Welfare Effects of Reform      References    Figure Credits    Index","brand":"Harvard University Press","offers":[{"title":"Default Title","offer_id":49403521401175,"sku":"9780674015784","price":91.16,"currency_code":"GBP","in_stock":true}],"thumbnail_url":"\/\/cdn.shopify.com\/s\/files\/1\/0817\/1739\/5799\/files\/9780674015784.jpg?v=1730483716","url":"https:\/\/bookcurl.com\/products\/the-economics-of-adjustment-and-growth-9780674015784","provider":"Book Curl","version":"1.0","type":"link"}