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Global dynamics, capabilities and the crisis

Author

Listed:
  • Jan Fagerberg

    (University of Oslo
    Aalborg University
    Lund University)

  • Martin Srholec

    (Lund University
    CERGE-EI, Economics Institute, Czech Academy of Sciences)

Abstract

The financial crisis started in 2007–8, initially in the US, but its consequences have been felt throughout the global economy. However, its effects were far from uniform. While parts of Asia and Africa continued to grow fast, Europe experienced a large set back. This paper emphasizes three important factors: differences across countries in technological development; differences in capacities to exploit the opportunities offered by technology; and differences in the ability to compete in international market. A formal model, based on this approach, is developed and applied to data for 100 countries in the period 1997–2012. Empirical indicators reflecting the various factors are developed, a dataset constructed and econometric estimates of the model performed. The results are used to explore the factors behind the slowdown in economic growth, with a particular emphasis on the continuing stagnation in Europe. A major factor turns out to be the increased financialization of the economy. The negative effect of the growth of finance prior to the crisis is especially pronounced for the countries that suffered most during the crisis.

Suggested Citation

  • Jan Fagerberg & Martin Srholec, 2016. "Global dynamics, capabilities and the crisis," Journal of Evolutionary Economics, Springer, vol. 26(4), pages 765-784, October.
  • Handle: RePEc:spr:joevec:v:26:y:2016:i:4:d:10.1007_s00191-016-0453-9
    DOI: 10.1007/s00191-016-0453-9
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    Cited by:

    1. Katharina Friz & Jutta Günther, 2021. "Innovation and economic crisis in transition economies," Eurasian Business Review, Springer;Eurasia Business and Economics Society, vol. 11(4), pages 537-563, December.
    2. Radosevic, Slavo & Meissner, Dirk & Lacasa, Iciar Dominguez & Günther, Jutta, 2019. "Exploring technology upgrading of emerging economies: From ‘shifting wealth I’ to ‘shifting wealth II’?," Technological Forecasting and Social Change, Elsevier, vol. 145(C), pages 254-257.
    3. Michalô °€ Brzozowski, 2020. "Impact of Credit Market Development and Stability on Productivity: New Evidence from the Industry Level," Annals of Economics and Finance, Society for AEF, vol. 21(1), pages 111-129, May.
    4. Katharina Friz & Jutta Günther, 2020. "Innovation and Economic Crisis in Transition Economies," Bremen Papers on Economics & Innovation 2014, University of Bremen, Faculty of Business Studies and Economics.
    5. Jan Fagerberg & Martin Srholec, 2017. "Capabilities, economic development, sustainability," Cambridge Journal of Economics, Oxford University Press, vol. 41(3), pages 905-926.
    6. Jutta Günther & Maria Kristalova & Udo Ludwig, 2019. "Structural stability of the research & development sector in European economies despite the economic crisis," Journal of Evolutionary Economics, Springer, vol. 29(5), pages 1415-1432, November.
    7. Michal Brzozowski, 2019. "Access to Credit and Growth of Firms," Czech Journal of Economics and Finance (Finance a uver), Charles University Prague, Faculty of Social Sciences, vol. 69(3), pages 253-274, June.
    8. Maciej Grodzicki, 2018. "Prices of Value Added and Competitiveness in Global Value Chains," SPRU Working Paper Series 2018-14, SPRU - Science Policy Research Unit, University of Sussex Business School.
    9. Areti Gkypali & Kostas Kounetas & Kostas Tsekouras, 2019. "European countries’ competitiveness and productive performance evolution: unraveling the complexity in a heterogeneity context," Journal of Evolutionary Economics, Springer, vol. 29(2), pages 665-695, April.

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    More about this item

    Keywords

    Technological capabilities; social capabilities; competitiveness; economic growth; crisis;
    All these keywords.

    JEL classification:

    • E11 - Macroeconomics and Monetary Economics - - General Aggregative Models - - - Marxian; Sraffian; Kaleckian
    • F43 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Economic Growth of Open Economies
    • O30 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - General

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