This study builds a North-South trade and uneven development model, and investigates the effects of changes in income distribution (the profit share) on economicgrowth rates of both countries. How a change in the profit share affects both countries’ growth rates differs for the short-run equilibirum and the long-run equilibrium. For example, in the short-run equilibirum, an increase in the profit share of the North deteriorates the terms of trade of the South, and then, decreases the growth rate of the South. On the other hand, in the long-run equilibrium, an increase in the profit share of the North either increases or decreases the growth rate of the South through Thirlwall’s law.
Besides, the novel empirical results obtained in this paper have relevant policy implications in so far as they provide guidance for the design of growth-enhancing structural policies. In fact, as catching-up countries must pursue supply-side policies to alter the structure of production, the estimated sectoral exports and imports demand functions can be used to guide the design of effective sectoral balance-of-payments-constraint-alleviating strategies such as import substitution and export promotion. After all, a major implication of the multisectoral balance- of-payments-constrained growth model estimated here is that changes in the composition of demand or in the structure of production which are not reflected in changes in income elasticities of exports and imports, but come through changes in the share of each sector in aggregate exports or imports, also matter for economicgrowth in the long run. Given the income elasticities of imports and exports, the original Thirlwall‟s Law implies that a country‟s growth rate will rise only in case the growth rate of income ou tside it rises, whereas the Multis ectoral Thirlwall‟s Law implies that a country can still raise its growth rate even in case such a rise in the growth of outside income does not occur, provided it can manage to change the sectoral composition of exports and/or imports conveniently. Clearly, how effective in this respect are trade, industrial and technological policies intended to stimulate and/or protect specific domestic sectors, for instance, is a public policy issue which must be addressed by means of a multisectoral approach.
Theoretical and empirical literature have focused on supply factors when studying economicgrowth determinants. The present work analyzes demand factors as determinants of the Bolivian economicgrowth between 1953-2002 using framework introduced by Thirlwall (1979). According to cointegration analysis exports were an important determinant in the Bolivian economicgrowth for the whole period. In addition, real exchange rate presents a negative relationship respect to the long run growth. Further results show that Bolivian imports are more elastics than exports respect to the GDP, determining a negative impact in trade balance. An hypothesis is that the implemented economic model after 1985 has increased the external constraint of the country causing a process of
The technological gap approach asserts that a country’s growth rate depends on its level of technological development. It also states that countries whose technological level is below the world innovation frontier can increase their rate of growth through a process of “catching up” or imitation. Lastly, the absorptive capacity of such countries depends on their “ability to mobilize resources for transforming social, institutional and economic structures” (Fagerberg and Verspagen, 2001, p. 11). The technological gap approach recognizes that all countries are not alike, that development levels are an important determinant of growth and welfare and that not all countries benefit to a similar extent from trade and the transmission of trade linkages.
Arising from the preceding concessions, it is noteworthy to emphatically stress that it has always been the goal of trading countries to obtain improved services and secure access to markets abroad, Nigeria being no exception to the rule. While the protagonists, led by the IMF group and Uruguay Round team view globalization as being an instrument of rapid economic and material expansion for all, characterized by foreign direct investment, economic openness and net capital flows that could translate into economicgrowth both in the developed and developing countries involved, the antagonists contend with doubts based on development policy implications that may arise from unequal distribution of the expected benefits and the fear expressed by most developing countries about the negative impact of globalization as is envisaged to engender fiscal deficit and balance of payments disability leading to the dependency syndrome. According to World Bank (2002), worldwide unemployment had been accompanying globalization since the 1980s in the European Union; about 45 million people were out of work in 2000 out of the total population of about 45 million, or about 10% of the entire population of the union or about 25% of its economically active population. About 10 million others are today working part-time in Western Europe and an increasing number of people are on dole or on one type of “begging” or the other, with women and youths being especially adversely affected. In Australia and New Zealand, about 70 percent of the women were unemployed, underemployed or retrenched in 2000; many who had left school, college or university among the young men are today without job or are working below their skill capacity.
When a payment is received from a foreign country, it is a credit transaction while payment to a foreign country is a debit transaction. The principal items shown on the credit side are exports of goods and services, transfer receipts in the form of gifts, grants, etc. from foreigners, borrowings from abroad, investments by foreigners in the country, and official sale of reserve assets including gold to foreign countries and international agencies. The principal items on the Debit side include imports of goods and services, transfer payments to foreigners as gifts, grants, etc., lending to foreign countries, investments by residents to foreign countries, and official purchase of reserve assets or gold from foreign countries and international agencies.
What is common to Croatia, Bulgaria and Romania is that they had governments that did not from the very beginning of the nineties act pro-Europeanly, with the proviso of course that Croatia was also specific because of the war. Because of the delay in starting the association process and the postponement of the beginnings of negotiations, Croatia was in an thankless situation because even the exogenous factor of the EU began to lose its influence. Problems can arise precisely when the inhabitants of a given country think that the institutions of the EU do not suit them, and they will thus not persist (Rodrik, 2003). Although negotiations have begun, it is not known how long they will go on and they can even be suspended. It is positive that the EU, to do with Croatia, is particularly insisting on the reform of the courts and the public administration, and this should speed up the exit from the bad institutional imbalance in which Croatia finds itself and contrib- ute to economicgrowth.
The major actions that were taken by the government include reductions in public sector employees’ allowance and benefits, suspension of annual salary increase, raising energy prices, raising water prices, and rising electricity tariffs. The increase in energy, water, and electricity tariffs was placed on households and corporate users. The intended outcomes of fiscal balance program are to grow non-oil revenues, reduce governmental capital and operational expenditures, reduce governmental subsidies by giving them to low-income citizens, maintain economicgrowth in the private sectors, and increase taxes and fees on foreign residents. The government did not consider the consequences of increasing fees and taxes on foreign workers. If fees are to be raised on foreign residents, the services cost rendered by them will increase.
The government of India takes digitalization forward rigorously and tirelessly. The government pushed digitalization through “Digital India” and Demonetization. These initiatives faced a lot of appreciations and criticisms in India. However, the digitalization effort has gained the confidence of people and started to pick up. The digitalization has reached the field of payments and settlement as well. The payments and settlements in India are dominated by cash and this dominance has gradually been minimized by digital payments like Real Time Gross Settlement (RTGS), National Electronic Fund Transfer (NEFT), Immediate Payment Services (IMPS), Cheque Truncation System (CTS), Unified Payment Interface (UPI), Bharat Interface for Money (BHIM) and Aadhar Enabled Payment System (AEPS) since 2014. Even after having robust growth in the digital payments market, there are still many questions unanswered in India. These questions include; Can a country like India where there is a large number of low-income people having low financial literacy and computer literacy transit to the cashless economy? Does the cashless economy impact economicgrowth in India as there is proved the relationship between these variables in other countries? Therefore, this study investigates quantitative evidence of the relationship between digital payments and economic
E-payment system is a way of making transactions or paying for goods and services through an electronic medium without the use of check or cash. It’s also called an electronic payment system or online payment system. Read on to learn more. The electronic payment system has grown increasingly over the last decades due to the widely spread of internet- based banking and shopping. As the world advance more on technology development, a lot of electronic payment systems and payment processing devices have been developed to increase, improve and provide secure e-payment transactions while decreasing the percentage of check and cash transaction. The electronic payment system has grown increasingly over the last decades due to the widely spread of internet-based banking and shopping. As the world advance more on technology development, a lot of electronic payment systems and payment processing devices have been developed to increase, improve and provide secure e- payment transactions while decreasing the percentage of check and cash transaction. E-payment economy does not mean an outright elimination of cash transactions in the economic setting but one in which the amount of cash-based transactions are kept to the barest minimum. According to , cashless economy is defined as one in which there are assumed to be no transactions frictions that can be reduced through the use of money balances, and that accordingly provide a reason for holding such balances even when they earn rate of return. The following among others enhance the functioning of cashless economy; e-finance, e-banking, e- money, e-brokering, e-exchanges etc. In a modern economy, the use of noncash payment methods such as cards (credit and debit) dominates the use of cash in payments .