This study extends Baumol’s (1967) two-sector (manufacturing and services) unbalanced growth model to analyze a situation in which, first, services are used for both final consumption and intermediate inputs into manufacturing production, and second, the productivities of the manufacturing and services sectors endogenously evolve. By using this model, we examine the conditions under which the e...

Institutional aspects of economic growth are critically reviewed with emphasis on the fiscal crisis facing the European Union (EU). In particular the importance of public debt, economic governance, and industrial competition are assessed, as well as the effectiveness of econometric models in forecasting economic growth. Likewise, the debate on whether political institutions cause economic growt...

HE Federal Reserve’s monetary policy actions during 1986 were influenced by indications of weak economic growth and moderate inflation. The income velocity of money, defined as the ratio of nominal GNP to the narrowly defined money supply Ml, declined even more rapidly in 1986 than it had in the previous year.’ lnterest rates declined on balance over 1986, and the Federal Open Market Committee ...

This Working Paper should not be reported as representing the views of the IMF. The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate. Using panel data from 120 developing countries from 1975 to 2...

We analyze the differential growth effects of basic research, applied research, and embodied human capital accumulation in an R&D-based growth model with endogenous fertility and endogenous education. In line with the empirical evidence, our model allows for i) a negative association between long-run economic growth and population growth, ii) a positive association between long-run economic gro...

Recent aggregate tests of the impact of taxes on long-run growth rates in OECD countries remain vulnerable to two criticisms. First, they typically use ‘an aggregate average rate, or constructed marginal rate, that probably does not affect the rate that any particular economic decision maker is facing’ (Myles, 2007, p.89). Second, despite increased testing of corporate tax effects, the models e...

This paper clarifies the role of ICT capital in economic growth. Albeit ICT remarkably contributes to economic growth, there are few studies on ICT capital in ICT sector from theoretical point of view. In this paper, production function of ICT which is used as input of intermediate good in final good and ICT sectors is incorporated into our model. In this setting, we analyze the role of ICT on ...

Although transnational corporations play the crucial role as transplanters of technology, skills and access to the world market, how they facilitate structural upgrading and economic growth in developing countries has not been adequately conceptualized in terms of a theory of economic development. This article develops a dynamic paradigm o TNC-assisted development by recognizing five key struct...

The paper investigates socially optimal patterns of economic growth and environmental quality in a neoclassical growth model with endogenous technological progress. In the model, the environmental quality affects positively not only to utility but also to production. However, cleaner technologies can be used in the economy whether a part of the output is used in environmentally oriented R&D. In...

Education for sustainable development (ESD) is a concept that goes far beyond environmental education. It is the educational process of achieving human development (which envisages three pillars of human development: “economic growth”, “social development”, and “environmental protection”) in an inclusive, equitable and secure manner. It, thus, includes education for: poverty alleviation, human ...