Technical Progress and Economic Growth: Business Cycles and Stabilization Policies

ISBN-13: 9783540415961 / Angielski / Miękka / 2001 / 194 str.

Franco Nardini

Opis

In this book we intend to discuss economic fluctuations and growth and possible stabilizing fiscal policies. Since these topics are major preoccupa tions of economic theorists and have been extensively discussed since the classics, one may wonder why another book on these subjects. A possible defense is that we are going to do so in the framework of a two-sector model where the main featureS of each sector depend on the characteristics of the goods produced by the sector itself. The conventional wisdom suggests that the problem of (dis )aggregation in growth and business cycle theory is basically a quantitative one: the model should consider as many sectors, goods, and agents as necessary to provide a sufficiently rich picture, the upper bound obviously resulting from the tractability of the problem. In this attitude the same equilibrium (or diseqUilibrium) assumptions generally hold true throughout all sectors. Here we want to prove the relevance of an alternative approach: we look at the qualitative differences across sectors and at the peculiarities of each market as at the determinants of the economic dynamics. This tradition goes back over one hundred years to Tugan-Baranowkj and has been de veloped by Aftalion, Fanno, Spiethof, and Lowe, but has never been sys tematically formalized."

Spis treści

A Two-Sector Disequilibrium Model: Two Three and Multisector Models in the Economic Literature.- Multisector models and dynamic analysis; General outline of the model; Assumptions of the Model.- Common features of the two sectors; The consumption goods sector; The capital goods sector; The Equations of the Model.- Common features of both sectors; The consumption goods sector; The capital goods sector; The Dynamical System.- Relative variables and profitability conditions; The dynamical system under normal conditions; Dynamical system when profits fall; The dynamical system during the slump; The dynamical system when profit rates are far from equilibrium; The dynamical system during the rationing of capital goods; Growth and Business Cycles: Evolution of the Economy under Normal Conditions.- Equilibrium points; Evolution of the system in a neighborhood of an equilibrium point; Expansion and depression; Depression and Expansion Regimes.- Evolution of the depression; Evolution of the expansion; Technical Progress and Economic Fluctuations.- Different cases of technical progress; An increase of labor productivity in the consumption goods sector; An incrase of capital productivity in the consumption goods sector; An increase of labor productivity in the capital goods sector; An increase of the capital productivity in the capital goods sector; Stabilization Policies: Unstable Growth Paths and Effectiveness of Fiscal Policies.- Instability in multisector models; The role of the government; Further Equations.- The government; The consumption goods sector; The capital goods sector; Dual income tax; Balancing the Budget: Equilibria and Stability.- Evolution of the main variables; Local dynamics; Expansion and depression; Anti-inflationary Policies.- Effects of a rise of the consumption tax rate; Effects of a rise in the profit tax; Expansionary Policies.- Effects of a tax cut; Effects of the introduction of unemployment benefits; The Open Economy: Importing from a Developing Country: Industrialization in an Open Economy.- Large country and small country; Dual structure of the small country; The modern sector in the small country; The Developed Country and the Developing one.- The new industrial sector in the small country; Early phase and further phase; Perturbation of Equilibria and Stabilization Policies; the Early Phase.- Large and small country during the early phase; The dynamical system; Equilibrium and fiscal policies; Perturbation of Equilibria and Stabilization Policies: the Further Phase.- Catching up and falling behind; Large and small country during the further phase; The dynamical system; Equilibrium and fiscal policy; Technical progress in the open economy; Remarks and Open Problems.- Fiscal policy of the developed country and expansion of the new industrial sector in the developing country; Fiscal policy of the developed country, budget and trade balance deficit; Conclusions.- Appendices.- List of Figures.- List of Symbols.- References.