Understanding Piketty: Merit and rent in a growing economy

Enrico Minelli 19 December 2014

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The publication of Capital in the 21st Century (Piketty 2014) has put the issue of growth and redistribution back at the centre of the economic debate, both in academic and in policy-oriented discussion.

Almost every commentator has praised Piketty and his coauthors for the painstaking work of data collection on the long-run evolution of income and wealth. Their interpretation of the data, and even more so their predictions of further trends have, understandably, given rise to interesting debates.

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Topics:  Poverty and income inequality Productivity and Innovation

Tags:  growth, Inequality, endogenous growth, capital share, innovation, saving, rent

What I learnt about growth policy at the World Bank

Brian Pinto 17 December 2014

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Growth concerns have gone global. Advanced economies are beset by fears of secular stagnation, the IMF recently cut estimates of potential growth in emerging markets by 1.5 percentage points relative to 2011, and G20 leaders approved 800 new measures at Brisbane 2014 for raising G20 GDP by an incremental 2.1% by 2018.1

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Topics:  Development Institutions and economics

Tags:  growth, secular stagnation, emerging markets, World Bank, structural reform, Transition economies, financial crisis, global crisis, debt overhang, exchange rates

Growth slowdowns: Middle-income trap vs. regression to the mean

Lant Pritchett, Lawrence H. Summers 11 December 2014

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No question is more important for the living standards of billions of people or for the evolution of the global system than the question of how rapidly differently economies will grow over the next generation. We believe that conventional wisdom makes two important errors in assessing future growth prospects.

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Topics:  Development

Tags:  middle-income trap, slowdown, growth, creative destruction, mean reversion

Is growth in East Africa for real?

Nikoloz Gigineishvili, Paolo Mauro, Ke Wang 07 October 2014

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Sustained rapid growth in many African economies has generated a debate on the sources and likely persistence of a so-called 'African growth miracle' (see McMillan, 2014). The East African Community (EAC) countries’ have been an especially vibrant part of the continent. Its economic growth performance during the past decade has been impressive. At 6.2%, the EAC’s average growth rate (unweighted, see Figure 1) in 2004-2013 is in the top one-fifth of the distribution of ten­-year growth-rate episodes experienced by all countries worldwide since 1960.

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Topics:  Development International trade

Tags:  Africa, diversification, growth

Rapid growth in emerging markets and developing economies: Now and forever?

Giang Ho, Paolo Mauro 12 September 2014

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Projecting a country’s economic growth into the medium term and beyond is notoriously difficult. At the same time, getting the growth projections wrong has major adverse consequences. For fiscal policymakers, overestimating future economic growth implies underestimating the government debt-to-GDP ratio that will be reached at the end of the projection period (in the absence of corrective policy measures).

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Topics:  Development Macroeconomic policy

Tags:  optimism bias, forecasting, growth, IMF, World Bank

The US economy performs better under Democratic presidents. Why?

Alan S. Blinder, Mark Watson 04 September 2014

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Economists and political scientists – not to mention the political commentariat – have devoted a huge amount of attention to the well-established fact that faster economic growth helps re-elect the incumbent party (see, for example, Fair 2011 for the US). But what about causation in the opposite direction – from election outcomes to economic performance? It turns out that the US economy grows faster – indeed, performs better by almost every metric – when a Democratic president occupies the White House.

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Topics:  Politics and economics

Tags:  US, politics, Democrats, Republicans, growth, macroeconomics, self-fulfilling prophecies

Growth escalators and growth convergence

Ejaz Ghani 17 August 2014

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The literature on global growth convergence and divergence is vast and deep. And it is still evolving. Some have argued that global growth is actually diverging across countries. Pritchett (1977) called this “divergence, big time”, whereby the living standards of a few countries pulled away from the rest in the aftermath of the industrial revolution. Others have found evidence in favour of growth convergence.

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Topics:  Development

Tags:  growth, Africa, convergence

African growth looking forward

Marco Annunziata 16 August 2014

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Views on Africa’s growth prospects have jumped from utter pessimism to extreme enthusiasm. The latter has been centre-stage with the US–Africa Summit hosted in Washington DC from 4–6 August 2014, with the participation of top political and business leaders. My coauthors Todd Johnson and Shlomi Kramer and I have tried to take a sober assessment of Africa’s progress and prospects, looking beyond the current hype and the inevitable frustration that doing business in the region still generates (Annunziata et al. 2014).

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Topics:  Development

Tags:  development, growth, Africa, human capital, trade, innovation, infrastructure, commodity boom

Protection of intellectual property to foster innovations in the service sector

Masayuki Morikawa 20 July 2014

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Given the declining labour force due to population ageing, accelerating the productivity growth of industries – especially the service industries – is an important element of the growth strategy in Japan and most advanced countries. While there are a variety of factors affecting productivity, innovation is one of the key determinants of productivity growth. However, innovation in the service sector has not been studied well. I present findings on innovation in the service sector by focusing on the effect of intellectual property rights on innovation.

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Topics:  Productivity and Innovation

Tags:  R&D, growth, productivity, patents, Japan, innovation, services, intellectual property, trade secrets

Connecting Brazil to the world

Patricia Ellen, Jaana Remes 12 July 2014

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Despite a decade of rapid growth and falling poverty rates, Brazil has failed to match the global average for income growth – let alone to achieve the kind of impressive gains posted by other rapidly transforming emerging economies. As of 2012, Brazil had become the world’s seventh-largest economy, but it ranked only 95th in the world for gross national income per capita (IHS Economics and Country Risk data). To raise household living standards, Brazil needs to find a new formula for accelerating productivity growth.

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Topics:  Development International trade Productivity and Innovation

Tags:  development, growth, productivity, globalisation, MERCOSUR, trade, openness, Brazil, global value chains

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