kaldor s growth analysis revisited kaldor s laws on manufacturing as the engine of growth have been tested using cross country data mainly from developing countries for the period 1960 1994 instrumental variable techniques were used to explore problems associated with simultaneity and spuriousness it has been found that manufacturing output growth rate is exogenous as kaldor envisaged and his laws are applicable to most of the developing world

characterising deindustrialisation an analysis of changes in manufacturing employment and output internationally deindustrialisation is typically conceptualised as a decline in manufacturing as a share of total employment from a kaldorian perspective deindustrialisation could have negative implications for long run growth given the special growth pulling properties of manufacturing however defining deindustrialisation purely in terms of employment share is conceptually limiting given that some of the kaldorian processes operate primarily through output rather than employment as well as blunting empirical analysis by not focussing enough on changes in manufacturing share of gross domestic product gdp this study develops a new method using decomposition techniques to analyse changes in manufacturing employment levels and shares in 48 countries over periods of deindustrialisation the analysis separates out changes in the levels and shares of employment manufacturing into components associated with changes in the share of manufacturing in gdp the growth of manufacturing value added the labour intensity of manufacturing production and economic growth the results indicate that in most cases the decline in manufacturing employment is associated primarily with falling labour intensity of manufacturing rather than an overall decline in the size or share of the manufacturing sector we suggest that deindustrialisation should appropriately be defined in terms of a sustained decline in both the share of manufacturing in total employment and the share of manufacturing in gdp copyright the author 2008 published by oxford university press on behalf of the cambridge political economy society all rights reserved oxford university press

kaldor s laws and spatial dependence evidence for the european regions pons novell j and viladecans marsal e 1999 kaldor s laws and spatial dependence evidence for the european regions reg studies 33 443 451 in this paper we provide an outline of kaldor s growth model and test its relevance to the economic experience of european regions during the period 1984 92 kaldor s first law asserts that manufacturing is the engine of economic growth his second proposition also known as verdoorn s law states that there is a strong positive relation between manufacturing productivity growth and manufacturing output growth kaldor s third law holds that overall productivity growth is positively related to manufacturing output growth and negatively related to employment in non manufacturing sectors the empirical results corrected for the presence of spatial autocorrelation indicate that kaldor s second and third laws are compatible with the economic growth of european regions during the period 1984 92 pons novell j et viladecans marsal e 1999 les lois de kaldor et la

do people understand monetary policy abstract we combine questions from the michigan survey about future inflation unemployment and interest rates to investigate whether households are aware of the basic features of u s monetary policy our findings provide evidence that some households form their expectations in a way that is consistent with a taylor 1993 type rule we also document a large degree of variation in the pattern of responses over the business cycle in particular the negative relationship between unemployment and interest rates that is apparent in the data only shows up in households answers during periods of labor market weakness

expectation formation in a new environment evidence from the german reunification abstract exploiting the german reunification we study how households adapt to a new environment in their macroeconomic forecasting east germans expect higher inflation than west germans decades after reunification these differences are likely driven by the persistent effect of the inflation shock after reunification which contrasted strongly with experiences of zero inflation in the gdr east germans higher inflation expectations are reflected in higher consumer debt and lower bond holdings our findings suggest that large changes in the environment can permanently impede people s ability to form expectations with an important role for the interaction of experiences before and after the event

how do firms form their expectations new survey evidence author s coibion o gorodnichenko y kumar s abstract 2018 american economic association all rights reserved we survey new zealand firms and document novel facts about their macroeconomic beliefs there is widespread dispersion in beliefs about past and future macroeconomic conditions especially inflation this dispersion in beliefs is consistent with firms incentives to collect and process information using experimental methods we find that firms update their beliefs in a bayesian manner when presented with new information about the economy and that changes in their beliefs affect their decisions inflation is not generally perceived as being important to business decisions so firms devote few resources to collecting and processing information about inflation

inflation expectations and firm decisions new causal evidence author s coibion o gorodnichenko y ropele t abstract 2019 the author s we use a unique design feature of a survey of italian firms to study the causal effect of inflation expectations on firms economic decisions in the survey a randomly chosen subset of firms is repeatedly treated with information about recent inflation whereas other firms are not this information treatment generates exogenous variation in inflation expectations we find that higher inflation expectations on the part of firms leads them to raise their prices increase demand for credit and reduce their employment and capital however when policy rates are constrained by the effective lower bound demand effects are stronger leading firms to raise their prices more and no longer reduce their employment

half a century of development economics a review based on the handbook of development economics the handbook of development economics provides an unmatched perspective on the past half century of research in the field this article reviews some of the significant findings of the handbook and identifies areas of development economics not covered there it describes the evolution of the field beginning with the postwar indian congress consensus which emphasized state planning that paradigm was complemented in the 1970s by the dual economy paradigm and the work of the latin american structuralisms as the costs of protectionism came to be recognized many economies adopted an outward orientation with respect to both trade and foreign investment this outward orientation later formed part of a new consensus on macroeconomic management sometimes referred to as the washington consensus this consensus more accurately dubbed the one world consensus is now widely accepted throughout the world as developing and industrial countries alike have embraced its emphasis on fiscal discipline tax reform outward orientation and privatization of state enterprises deregulation and the safeguarding of property rights despite so years of research large gaps in the understanding of development remain adopting sen s framework of beings and doings and focusing on collective action and the roles played by individuals may help to fill some of these gaps

explaining disagreement on interest rates in a taylor rule setting most studies on disagreement focus on one specific variable thereby neglecting the fact that disagreement can be co moving with disagreement on other variables in this paper we explore to what extent disagreement regarding the interest rate is driven by disagreement on inflation and unemployment this relationship can be motivated by the theoretical concept of the taylor rule using survey microdata for both professional forecasters and consumers we provide evidence that disagreement on the interest rate is mainly driven by disagreement on inflation we further show that disagreement is significantly influenced by central bank transparency as well as news on money and credit conditions

on the perils of stabilizing prices when agents are learning abstract the main advantage of price level stabilization compared with inflation stabilization rests on the central bank s ability to shape expectations we show that stabilizing prices is no longer optimal when the central bank can shape expectations of agents with incomplete knowledge who have to learn about the policy implemented disinflating in the short run more than agents expect generates short term gains without triggering an abrupt loss of confidence because agents update expectations sluggishly following this policy in the long run the central bank loses the ability to shape agents beliefs and the economy converges to a rational expectations equilibrium in which policy does not stabilize prices economic volatility is high and agents suffer the corresponding welfare losses however these losses are outweighed by short term gains from the learning phase

manufacturing and economic growth in the united states kaldor s growth laws are applied to the post world war ii united states each variable employed in the time series analysis is smoothed with a moving average this procedure successfully mitigates the effects of short term cyclical changes and emphasizes long term economic growth indicate that kaldor s laws are compatible with the economic growth of united states

inattentive professional forecasters abstract using the ecb survey of professional forecasters to characterize expectations at the micro level we emphasize two new facts forecasters i fail to systematically update their forecasts and ii disagree even when updating it is moreover found that forecasters have predictable forecast errors these facts are qualitatively supportive of recent models of inattention and suggest a setup where agents imperfectly process information due to both sticky information a la mankiw reis and noisy information a la sims however building and estimating such an expectation model we find that it cannot quantitatively replicate the error and disagreement observed in the data

economic growth and kaldor s law the case of turkey 1925 78 in this paper kaldor s enine of growth hypothesis is examined and its validity is tested forr the turkish economy the results obtained regardless of the specification and estimation techniques used consistently support the hypothesis

monetary policy shocks from the consumer perspective abstract applying a latent factor model to survey expectations data on economic conditions unemployment family finances and readiness to spend reveals that following a monetary policy shock consumer expectations adjust in the direction predicted by standard models further expectations respond asymmetrically to policy tightenings or easings are sluggish and are consistent with an income channel of monetary policy inflation expectations are at first anchored but significantly adjust in the long run in a way that is consistent with a delphic effect of monetary policy expectations are heterogeneous according to gender income and housing status in systematic ways

central bank announcements big news for little people little is known on how and whether central bank announcements affect consumers beliefs about policy relevant economic figures this paper focuses on consumers perceptions and expectations of inflation and interest rates and confidence therein based on a sound identification running surveys shortly before and after communication events and relying on above 15 000 observations spanning over 12 fomc press conferences between december 2015 and june 2018 we document the impact of the central bank communication on the general public while announcement events have no measurable direct effect on average beliefs they make people more likely to receive news about the central bank s policy in general informed consumers tend to have lower perceptions and expectations higher confidence and at least for perceived inflation smaller errors

disagreement a la taylor evidence from survey microdata there is a growing interest in studying the disagreement of economic agents most studies however focus on the disagreement regarding one specific variable hereby neglecting that disagreement may be comoving with disagreement on other variables in this paper we explore to which extent disagreement regarding the interest rate is driven by disagreement on inflation and on unemployment this relationship can be motivated by the existence of the taylor rule using micro survey data for both professional forecasters and consumers we provide evidence that disagreement on the future interest rate is mainly driven by disagreement on inflation exploring further determinants we confirm that central bank transparency as well as news on money and credit conditions significantly influence disagreement

kaldorian approach to greek economic growth in the last 30 years greece has experienced a rapid rate of economic growth which has transformed the economy and enabled it to become a member of the eec specifically greece transformed itself from an agricultural economy with virtually no industrial base to an economy with a significant industrial sector and consequently a relatively high income per capita one can explain this on the lines of a kaldorian framework in this paper we provide an outline of kaldor s growth model and test its relevance to the economic experience of greece during the 1967 1988 period the empirical results suggest that the model can adequately explain the developments in the economy to a considerable degree

who supports the ecb evidence from eurobarometer survey data this paper contributes empirically to the long debated issue of the legitimacy of the european central bank ecb with regard to european polities using micro level data from the eurobarometer survey we shed light on the socio demographic determinants of public opinion support for the ecb we find that people with higher level of education and income and centre to right wing political orientation tend to support the ecb as well as people with optimistic expectations on the economic situation by contrast the unemployed tend to distrust the ecb the policy relevance of such results is important for ecb s communication strategy with the general public

inflation expectations and monetary policy surprises we use monthly data across fifteen euro area economies for the period 1985 1 2015 3 to obtain monetary policy changes that can be regarded as surprises for different types of consumers a novel feature of our empirical approach is the estimation of monetary policy surprises based on changes in monetary policy that were unanticipated according to the consumers stated beliefs about the economy we go on to investigate how these monetary policy surprises affect consumers inflation expectations we find that such monetary policy surprises can have the opposite impact on inflation expectations to those obtained under the assumption that consumers are well informed about a set of macroeconomic variables describing the state of the economy more specifically when we relax the assumption of well informed consumers by focusing instead on their stated beliefs about the economy unanticipated increases in the interest rate raise inflation expectations this is consistent with imperfect information theoretical settings where unanticipated increases in interest rates are interpreted as positive news about the state of the economy by consumers that know policymakers have relatively more information this impact changes sign since the crisis

household informedness and long run inflation expectations experimental evidence this article uses an experiment embedded in a survey to analyze the response of consumers long run inflation expectations to information about the federal reserve s inflation target and past inflation on average respondents revise forecasts toward the 2 target with either information treatment forecast uncertainty and heterogeneity decline with the treatments but remain substantial since the information in the treatments is publicly available these findings are consistent with models of imperfect information in which agents do not fully and continually update their information sets or incorporate all available information into their expectations response to treatments varies with prior informedness and with demographic characteristics

a kaldorian approach to regional economic growth in china kaldor s engine of growth hypothesis is examined in the case of the chinese economy china has in the last decade experienced a rapid industrialization and very strong economic growth using regional data of this growth process the three kaldorian laws of economic growth are tested the empirical results support the hypothesis there seems to be an especially strong relation between productivity and industrial growth

personal experiences and expectations about aggregate outcomes using novel survey data we document that individuals extrapolate from recent personal experiences when forming expectations about aggregate economic outcomes recent locally experienced house price movements affect expectations about future u s house price changes and higher experienced house price volatility causes respondents to report a wider distribution over expected u s house price movements when we exploit within individual variation in employment status we find that individuals who personally experience unemployment become more pessimistic about future nationwide unemployment the extent of extrapolation is unrelated to how informative personal experiences are is inconsistent with risk adjustment and is more pronounced for less sophisticated individuals