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How do national policies affect long-run growth? : a research agenda

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  • Easterly, William*King, Robert*Levine, Ross*Rebe

Abstract

The authors suggest that there are important opportunities to empirically evaluate the theoretically predicted channels from policy to growth. They propose a research agenda based on the endogenous growth literature, designed to address the questions: How do national policies affect long-run growth? Which policies strongly affect long-run growth? Do policies explain why some poor countries have stagnated and others have advanced? Do policies explain successive periods of rapid growth and stagnation in the same country? And to what extent do national policies rather than external influences explain the stagnation of many countries in Africa, Latin America, and Asia in the 1980s? The authors discuss five national policies: fiscal policy; monetary policy; trade intervention; financial policies; and openness to foreign capital. Their analytical framework is based on the simple idea that all factors of production can be increased by investing in human or physical capital. Economic growth will be related to policies that affect the incentive to invest and the efficient use of capital and intermediate inputs. Such a framework can be used to consider which policies affect the long-run growth rate rather than affecting simply the level of income once and for all.

Suggested Citation

  • Easterly, William*King, Robert*Levine, Ross*Rebe, 1991. "How do national policies affect long-run growth? : a research agenda," Policy Research Working Paper Series 794, The World Bank.
  • Handle: RePEc:wbk:wbrwps:794
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    Cited by:

    1. Carolina Castaldi & Giovanni Dosi, 2008. "Technical Change and Economic Growth: Some Lessons from Secular Patterns and Some Conjectures on the Current Impact of ICT Technology," LEM Papers Series 2008/01, Laboratory of Economics and Management (LEM), Sant'Anna School of Advanced Studies, Pisa, Italy.
    2. Clarke, George R. G., 1995. "More evidence on income distribution and growth," Journal of Development Economics, Elsevier, vol. 47(2), pages 403-427, August.
    3. World Bank, 2007. "Uganda - Moving Beyond Recovery, Investment and Behavior Change, For Growth, Volume 2, Overview," World Bank Other Operational Studies 7574, The World Bank.
    4. Easterly, William*de Melo, Martha*Ofer, Gur*DEC, 1994. "Service as a major source of growth in Russia and other former Soviet states," Policy Research Working Paper Series 1292, The World Bank.
    5. Zuzana Machová & Igor Kotlán, 2015. "Právní jistota - možný problém daňové politiky vyspělých zemí?
      [Legal Certainty - Possible Problem of Tax Policy in Developed Countries?]
      ," Politická ekonomie, University of Economics, Prague, vol. 2015(7), pages 833-846.
    6. Steger, Thomas M., 2000. "Economic growth with subsistence consumption," Journal of Development Economics, Elsevier, vol. 62(2), pages 343-361, August.
    7. Aikaterini Kokkinou, 2005. "Entrepreneurship, Innovation Activities and Regional Growth," ERSA conference papers ersa05p419, European Regional Science Association.
    8. Carolina Castaldi & Giovanni Dosi, 2010. "Technical Change and Economic Growth: Some Lessons from Secular Patterns and Some Conjectures on the Current Impact of ICT," Chapters,in: Innovation and Economic Development, chapter 2 Edward Elgar Publishing.
    9. Sebastian Edwards, 1995. "Why are Saving Rates so Different Across Countries?: An International Comparative Analysis," NBER Working Papers 5097, National Bureau of Economic Research, Inc.
    10. Patricio Mujica & Jorge Quiroz, 1992. "Los Determinantes del Crecimiento Económico: la Evidencia Empírica y el Problema de Equivalencia Observacional," Latin American Journal of Economics-formerly Cuadernos de Economía, Instituto de Economía. Pontificia Universidad Católica de Chile., vol. 29(87), pages 307-328.

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