US electrification in the 1930s

Carl Kitchens, 29 January 2014

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In 1930, fewer than 10% of farms in the US had access to electricity. By the mid-1950s, almost every farm in the country had electricity. While the US was able to extend electricity to its rural locations rapidly over a 25-year period, much of the developing world still remains without electricity today. In 2012, 1.3 billion people lived without electricity worldwide.

Topics: Development, Economic history
Tags: Agriculture, electricity, electrification, growth, infrastructure, investment, subsidies, technology

Why Asian firms hold cash

Charles Yuji Horioka, Akiko Terada-Hagiwara, 25 January 2014

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In many, if not most, economies, sharp declines in household saving rates have been offset by sharp increases in corporate saving rates for the past two decades (see, for example, Karabarbounis and Neiman 2012). Even so, relatively little research has been done on the determinants of corporate saving.

Topics: Financial markets
Tags: Asia, borrowing constraints, corporate saving, financial frictions, investment, saving, savings

Dark side of housing-price appreciation

Indraneel Chakraborty, Itay Goldstein, Andrew MacKinlay, 25 November 2013

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Policymakers around the world often worry about decreases in real-estate prices and other asset prices, and take measures to prevent them. For example, in the aftermath of the financial crisis, the Federal Reserve has engaged in large-scale asset purchases – especially of mortgage-backed assets – to support the housing market and, in turn, the overall economy.

Topics: Financial markets, Monetary policy
Tags: asset prices, banks, Federal Reserve, housing, investment, lending, real estate

How to get around credit constraints? The role of renting and leasing during financial crises

Peter N. Gal, Gabor Pinter, 21 September 2013

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How does the ownership of capital affect the aggregate behaviour of the economy? Does it matter whether firms own or rent production capital such as machinery, equipment, offices, and structures?

Topics: Financial markets
Tags: business cycles, credit constraints, financial crises, investment, rental markets

Informal or formal financing: First evidence on co-funding of Chinese firms

Hans Degryse, Liping Lu, Steven Ongena, 21 August 2013

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The credit squeeze in June 2013 has triggered policymakers’ concern worldwide about a potential debt crisis in China, while at the same time the Chinese government has moved to crack down on undisciplined lending in order to alleviate the debt-bubble fears emanating from the shadow banking system.1 

Topics: Development, Financial markets
Tags: China, Finance, investment

Save more to improve infrastructure in Latin America and the Caribbean

Eduardo Cavallo, 3 April 2013

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Saving and investment, like the chicken and the egg, involve circular causality. But regardless of causality, there is no doubt that Latin America and the Caribbean need more of both.

That the region has an infrastructure problem hardly requires an explanation:

Topics: Development
Tags: Caribbean, investment, Latin America, savings

Fire-sale FDI: All smoke and no fire?

Ron Alquist, Linda Tesar, Rahul Mukherjee, 26 March 2013

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When times are bad, governments tend to welcome foreign direct investment, but they worry that they are selling the family silver for cheap. This ‘fire-sale FDI’ phenomenon, as Krugman called it in the 1990s, is a perennial concern of nations whose currencies have recently plummeted.

Topics: Development
Tags: FDI, fire-sale FDI, investment

Public investments for long-term economic growth: the case of health

Michael Stolpe, 22 March 2013

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Crisis or not, healthcare cries out for large-scale public investments that lock in what appears to be an historic trough in government borrowing costs in many of the world’s advanced countries.

Topics: Health economics
Tags: Ageing, Europe, investment, Japan, US

Avoiding middle-income growth traps

Pierre-Richard Agénor, Otaviano Canuto, Michael Jelenic, 21 December 2012

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In the postwar era, many countries have managed to quickly reach middle-income status, but few have gone on to become high-income economies1. Rather, after an initial period of rapid ascent, many countries have experienced a sharp slowdown in growth and productivity, falling into what has been called a ‘middle-income trap’:

Topics: Development, International trade, Labour markets, Productivity and Innovation
Tags: income, innovation, investment, labour market reform, middle income

Oil exporters’ dilemma: How much to save and how much to invest

Reda Cherif, Fuad Hasanov, 10 November 2012

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Policymakers in many commodity-exporting countries confront the question of how much to consume, save, and invest out of revenues from commodity exports (see van der Ploeg and Venables 2008). In the face of highly volatile commodity revenues (especially from oil), governments have to balance several objectives at the same time.

Topics: Energy, Macroeconomic policy
Tags: investment, oil exports, savings

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