Economic policy and the financial and economic crisis

The aim of this paper is to present and evaluate the theory and principles of economic policy applied before the 2008-2009 crisis1. Against this backdrop we will attempt to describe the evolution of targets and tools of economic policy in view of the experiences of recent years and the conditions of the globalization in this time. The first Section contains an outline of the world economic situation after 1945. Section two includes presentation and evaluation of the evolution of economic policy theory which co-created the conditions for world economic growth and stabilization in recent decades. The third Section describes macroeconomic mechanisms and conditions of economic policy directly preceding the 2007-2011 situation, and provides an analysis of the 2008-2009 crisis implications for the theory and future practice of economic policy. The paper is summed up in a conclusion.quantitative policy, qualitative policy, monetary policy, exchange-rate policy, financial and economic crisis, globalization

Economic Freedom and New Economic Paradigm

Are economic freedoms going to clear our way to prosperity? Is the growth of economic freedoms our path to prosperity? Is it in the base of the new understanding of development? If yes, what will necessarily have to be changed in the economic practice of every country and whole world in general? What will be changed in economic theory? What are potential consequences of an attempt to offer resistance to the new concept of development? These are just some of the questions discussed in this paper,whereas the starting point is the economy and economic development of Montenegro.Economic Freedom, Economic Paradigm, Global economy, National state

Growth Economics and Reality

This paper questions current empirical practice in the study of growth. We argue that much of the modern empirical growth literature is based on assumptions concerning regressors, residuals, and parameters which are implausible both from the perspective of economic theory as well as from the perspective of the historical experiences of the countries under study. A number of these problems are argued to be forms of violations of an exchangeability assumption which underlies standard growth exercises. We show that relaxation of these implausible assumptions can be done by allowing for uncertainty in model specification. Model uncertainty consists of two types: theory uncertainty, which relates to which growth determinants should be included in a model, and heterogeneity uncertainty, which relates to which observations in a data set comprise draws from the same statistical model. We propose ways to account for both theory and heterogeneity uncertainty. Finally, using an explicit decision-theoretic framework, we describe how one can engage in policy-relevant empirical analysis.

COMPETITION-ZERO-GROWTH

After the second world-war there have been theoretically realized the synthesis between the macro-economic and dynamic approaches, in the first place at the neo-Keynesian economists. In this context, a growth-theory have been separated from the development theory, like a part of the contemporary economic science, in contact with other connected sciences, and also with the practice of elaborating measures and their planned and institutionalized implementation, in the sense of economic growth and development. Growth means the global increase of the net domestic product, including structural modifications too. The economic growth expresses those modifications occurring during a certain horizon of time, within a certain area, involving the augmentation of the macro-economic results, closely connected to their determinant factors. Zero-growth is the situation of equal augmentation rhythms of macroeconomic absolutely results and total population, having as effect a constant evolution of macroeconomic results per capita

Measuring real exchange rate instability in developing countries : empirical evidence and implications

Exchange rate policy has received renewed attention because of its prominent role in adjustment programs. Several analysts have examined the impact of real exchange rate uncertainty on the performance of such economic variables as GDP growth, exports, and investment. The author uses data on the real exchange rate for 56 developing countries with managed exchange rates to make three points. First, the distribution of annual changes in real exchange rates is highly non-normal - both skewness and excess kurtosis. Secondly, this asymmetric non-normality implies that the common practice of using the standard deviation (or coefficient of variation) to compare real exchange rate uncertainty across countries is not justified. Finally, empirically, the higher order moments (skewness and kurtosis) are at least as important as the standard deviation in explaining cross-country performance.Macroeconomic Management,Achieving Shared Growth,Economic Stabilization,Statistical&Mathematical Sciences,Economic Theory&Research

Population growth, factor accumulation, and productivity

In research on how population growth affects economic performance, some researchers stress that population growth reduces the natural resources and capital (physical and human) per worker while other researchers stress how greater population size and density affect productivity. Despite these differing theoretical predictions, the empirical literature hs focused mainly on the relationship between population growth and output per person (or crude proxies for factor accumulation). It has not decomposed the effect of population through factor accumulation and the effect through productivity. The author uses newly created cross-country, time-series data on physical capital stocks and the educational stock of the labor force to establish six findings: There is no correlation between the growth of capital per worker and population growth. The common practice of using investment rates as a proxy for capital stock growth rates is completely unjustified, as the two are uncorrelated across countries. There is either no correlation, or a weak positive correlation, between the growth of years of schooling per worker and the population growth rate. Enrollment rates are even worse as a crude proxy for the expansion of the educational capital stock, as the two are negatively correlated. There is no correlation, or a weak negative correlation, between measures of total factory productivity growth and population growth. Nearly all of the weak correlation between the growth of output per person and population growth is the result of shifts in participation in the labor force, not of changes in output per worker.Health Monitoring&Evaluation,Public Health Promotion,Economic Theory&Research,Environmental Economics&Policies,Economic Conditions and Volatility,Agricultural Research,Health Monitoring&Evaluation,Economic Growth,Achieving Shared Growth,Environmental Economics&Policies

Recent Developments In The Theory Of Very Long Run Growth : A Historical Appraisal

This paper offers a historical appraisal of recent developments in the theory of very long run growth, focusing on three main areas: (1) linkages between wages, population and human capital (2) interactions between institutions, markets and technology and (3) sustaining the process of economic growth once it has started. Historians as well as economists have recently begun to break away from the traditional practice of using different methods to analyse the world before and after the industrial revolution. However, tensions remain between the theoretical and historical literatures, particularly over the unit of analysis (the world or particular countries) and the role of historical contingency

THE FOREIGN TRADE IMPACT ON THE ROMANIAN EMPLOYMENT

The economic theory and practice proves that economic growth and employment rate in each country depend on both the domestic factor and participation in foreign economic exchanges. In this study we propose ourselves to emphasize the impact of foreign trade (import and export) on labor employment in Romania, in 1991-2006. As a result of our research, in Romania a significant direct relation cannot be set statistically between dynamics of exports and dynamics of employed population, and as a result, we can state that economic theory is not proven, as regards the direct relation between export and employment. On the other hand, the theory wherein increase of imports may lead to the reduction of employment rate in Romania is provenforeign trade, export, import, employment, economic growth.

Rapid rural population growth and its determinant factors in Wolaita zone, Ethiopia

Rapid population growth is one of critical problems for most of Sub-Sahara African economic development. As a result of this, imbalances between population number and existing resource were intensified in developing countries including Ethiopia. Most of empirical studies show that rapid population growth was determined by different biological, social, economic and institutional factors. This study aimed to assess rapid rural population growth and its determinant factors in Wolaita zone. Relevant data were collected both from primary and secondary sources. Diverse types of data including demographic, socio-economic and policy-related data were obtained from 300 randomly selected rural households. Data were analysed using both descriptive and inferential statistics. Wolaita is characterized by a high population density and a fast population growth rate above 3 %. Population growth was indeed higher than annual national growth rate. The average household size in the study area was about 6.7 members per household. Age at first marriage, educational level, daily income and livelihood security of household heads, and contraceptive practice are consistently significant and principal factors of large household size. The population theory aspect of Malthusian, Utility Cost Theory and Mediating Theory principles mostly aligned with the study area realities. Therefore, this study points out that managing rapid population growth by implementing a strict population policy/ strategy in the study area is important