Direct Investment, Rising Real Wages and the Absorption of Excess Labor in the Periphery
AbstractThis paper sets out the political economy behind Asian governments' participation in a revived Bretton Woods System. The overriding problem for these governments is to rapidly integrate a large pool of underemployed labor into the industrial sector. The principal constraints are inefficient domestic resource and capital markets, and resistance to import penetration by labor in industrial countries. The system has evolved to overcome these constraints through export led growth and growth of foreign direct investment. Periphery governments' objectives for the scale and composition of gross trade in goods and financial assets may dominate more conventional concerns about international capital flows.
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Bibliographic InfoPaper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 10626.
Date of creation: Jul 2004
Date of revision:
Publication status: published as Michael P. Dooley, David Folkerts-Landau, Peter Garber. "Direct Investment, Rising Real Wages and the Absorption of Excess Labor in the Periphery," in Richard H. Clarida, editor, "G7 Current Account Imbalances: Sustainability and Adjustment" University of Chicago Press (2007)
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Other versions of this item:
- Michael Dooley & David Folkerts-Landau & Peter Garber, 2005. "Direct investment, rising real wages and the absorption of excess labor in the periphery," Proceedings, Federal Reserve Bank of San Francisco, issue Feb.
- Michael P. Dooley & David Folkerts-Landau & Peter Garber, 2007. "Direct Investment, Rising Real Wages and the Absorption of Excess Labor in the Periphery," NBER Chapters, in: G7 Current Account Imbalances: Sustainability and Adjustment, pages 103-132 National Bureau of Economic Research, Inc.
- F02 - International Economics - - General - - - International Economic Order; Noneconomic International Organizations;; Economic Integration and Globalization: General
- F32 - International Economics - - International Finance - - - Current Account Adjustment; Short-term Capital Movements
This paper has been announced in the following NEP Reports:
- NEP-ALL-2004-07-18 (All new papers)
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- Eswar Prasad & Shang-Jin Wei, 2005.
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- Michael Dooley & David Folkerts-Landau & Peter Garber, 2005.
"An essay on the revived Bretton Woods system,"
Federal Reserve Bank of San Francisco, issue Feb.
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- Razin, Assaf & Sadka, Efraim, 2003.
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- Assaf Razin & Efraim Sadka, 2002. "Gains from FDI Inflows with Incomplete Information," NBER Working Papers 9008, National Bureau of Economic Research, Inc.
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