rafmacalaba/datause-encoder-data huggingface dataset:
Inflation in Czechoslovakia, 1985-91
The authors assess inflation in
            Czechoslovakia between 1985 and 1991 and identify the main
            causes of inflation through a literature survey and
            empirical studies. The official prices in centrally planned
            economies were never perceived by central planners to be
            fully market clearing. Only by coincidence would the overall
            price level correspond to the level associated with general
            equilibrium. What is missing in official price indices in
            centrally planned economies - including the consumer price
            index - is suppressed inflation, manifast in queuing for
            products, forced substitution of demand, and forced savings.
            Also missing is hidden inflation, associated with practices
            that disguise price increases behind cosmetic or other
            change in product quality. The authors argue that
            inflationary pressures in Czechoslovakia in 1985-89
            originated mainly in the investment sector. Even though the
            investment sector was strictly controlled, making it
            difficult for open inflation to emerge, the scope for
            inflationary pressures was great in Czechoslovakia. Such
            pressures arose from a mixture of factors, including poor
            investment planning, accommodating government finance, and
            the high priority given to investments and social
            consumption. For Czechoslovakia, the official price indices
            show virtually no inflation between 1985 and 1989, when
            there were long waiting lists for such products as cars and
            state and cooperative flats. Trends in these price indices
            do not seem to depend on the method used for constructing
            them, according to the sensitivity tests conducted by
            Czechoslovakia's Federal Statistical Office. Obviously,
            the official price indices failed to capture the full extent
            of economic disequilibrium in that period. But the extent to
            which official price indices understated inflationary
            pressures was not serious in Czechoslovakia, compared with
            other centrally planned economies. Estimates of hidden
            inflation for 1985-89 range from 0.5 percent to 2 percent a
            year in consumer markets and about 3 percent in the
            industrial sector. Estimates for suppressed inflation were
            less than 5 percent. The relatively small inflationary gap
            is indirectly confirmed by the sharp inflation associated
            with the recent price liberalization that subsided in a
            relatively short period, and both suppressed and hidden
            inflations have virtually disappeared. Estimates of hidden
            inflation were based on benchmark price comparisons between
            Czechoslovakia and such market economies as Austria. Those
            for suppressed inflation were based on disequilibrium
            econometric models of asset holdings and on conjecture tests.
Foreign direct investment in a
            macroeconomic framework : finance, efficiency, incentives,
            and distortions
Does foreign direct investment (FDI)
            increase domestic investment, or does it provide additional
            foreign exchange for a pre-existing current account deficit,
            or some linear combination of the two? The author
            investigates this question for a group of five Pacific Basin
            countries and a control group of 11 other developing
            countries. For the sample of all 16 developing countries,
            the author finds that FDI does not provide additional
            balance of payments financing for a pre-existing current
            account deficit. In the control group of 11 developing
            countries, FDI is associated with reduced domestic
            investment - implying that FDI to those countries is simply
            a close substitute for other capital inflows. For the five
            Pacific Basin market economies, however, FDI raises domestic
            investment by the full extent of the FDI inflow. The author
            finds that FDI has a significantly negative impact on
            national saving in the sample of all 16 developing
            countries. For the control group, this negative effect is
            similar in magnitude to FDI's negative effect on
            domestic investment - implying a zero effect on the current
            account. But FDI's negative effect on national saving
            in the five Pacific Basin developing market economies
            implies that FDI could have more of a negative effect on the
            current account than through increased domestic investment
            alone. The author also investigates the impact of FDI on
            economic growth in these 16 countries, taking into account
            distortions in the economies. He estimates reduced-form
            current account equations, and presents an analytical
            framework for estimating FDI's effect on economic
            growth in the presence of incentive-disincentive packages
            and other economic distortions. He illustrates his framework
            using indicators of foreign trade and financial distortions.
            His main conclusion: the effect of FDI differs markedly from
            one group of countries to another. FDI has a negative effect
            on economic growth in the control group. It has the same
            positive effect on growth as domestically financed
            investment does in the Pacific Basin countries. The main
            cause for the different effect is the low level of
            distortion in the Pacific Basin countries.
How retail food markets responded to
            price liberalization in Russia after January 1992
Under administered prices through the
            fall of 1991, Russia's food distribution system broke
            down, and it was feared that the food supply would be
            inadequate in the winter of 1992 and thereafter.  In January
            and March 1992, price ceilings were removed on most items
            sold in state-owned Russian stores.  Price liberalization
            was intended to return food to shelves and to improve the
            flow of food among regions through responses to price
            differentials.  Privatization of the distribution system did
            not begin until October 1992.  At the time of price
            liberalization the environment was still dominated by
            unrestructured state enterprises.  Retail prices immediately
            rose sharply and fluctuated.  Because food prices did not
            stabilize after the initial jump, many people questioned
            whether price liberalization accomplished anything positive.
            The authors examine data on movements in food prices and
            volumes between December 1991 and August 1992 to examine how
            retail food markets responded to liberalization.  They
            address the following questions. Is there any evidence that
            after liberalization food returned to retail outlets that
            were essentially bare in December 1991?  Is there evidence
            that transactions took place in response to price
            differentials (did markets begin to emerge despite the lack
            of privatization and demonopolization)?  Did city-to-city
            price differentials evolve to reflect a price surface
            explainable by transportation costs and other economic
            variables?  If not, why not?  The authors conclude that
            progress was made toward market integration in the seven
            months after price liberalization.  The volume of food sold
            in monitored shops increased substantially.  The geographic
            dispersion of prices declined over time.  But large price
            differences between cities persisted that cannot be
            explained in terms of available economic variables.  Large
            economic gains could be achieved by futher market integration.
Prices and protocols in public
            health care
The author tries to derive price and
            rationing rules for public health facilities. He highlights
            the effect on these rules of different assumptions about the
            objectives of government (health versus welfare), the limits
            of available policy instruments, and the market environment
            in which the public system operates. One recurrent finding:
            policy reform must be assessed in relation to the changes it
            induces relative to the status quo before reform. This point
            may seem obvious, but it represents a distinct gap in the
            literature on resource allocation in health. To assess
            changes, the behavior of the private sector must be known in
            the type of care given in a system and on how this care will
            change in response to the policy. Substituting for a
            reasonably well-functioning private sector is not as
            valuable as providing services that the private sector
            cannot be expected to sustain. Research is needed to
            characterize market equilibrium for medical care and its
            response to policy measures. The author could not examine
            many issues - most important, those related to uncertainty
            and insurance. But if the research he calls for in this
            paper is pursued, those issues must figure prominently as
            major determinants in the demand for care. This need was
            originally identified by Arrow, and there is still a long
            way to go. The author's analysis is not done in terms
            of preventive or curative care, and he argues for assessing
            interventions on the basis of changes in the stated
            objectives of a public system. But there could well be a
            connection with the preventive-curative dichotomy if there
            were reason to believe that preventive care will
            systematically lose out to curative care in a market
            setting. On the basis of people's generally
            acknowledged undervaluation of preventive services, this may
            well be the case. Other prevention activities also have many
            public good features, with few private alternatives, and
            will look good when improvements over stauts quo are
            examined for all interventions. But all activities must be
            evaluated in their improvement over market provision. It is
            not necessary to prejudge the case for certain types of intervention.
The international ocean transport
            industry in crisis : assessing the reasons and outlook
Until 1980, the world merchant fleet
            expanded rapidly in response to thriving seatrade markets.
            Since then, it has not grown much.  The industry did not
            adjust effectively to periodic global recession, and the
            fleet's earnings deteriorated as the gap widened
            between the supply of tonnage and the demand for transport.
            The unpredictability of seatrade markets and the changing
            structure of demand for ocean transport complicated
            shipowners' efforts to retrench and draw up defensive
            strategies.  Advances in ship design and ocean transport
            technologies allowed shipowners to adjust to the greater
            need for specialized vessels, but chose to retain their
            assets and their adoption was expensive.  Most shipowners
            added a few new vessels after 1980, often supported by
            government subsidies.  Government regulations created
            serious distortions in ocean transport and impeded free
            market adjustments. The most serious issues the industry
            faces are a critically overaged fleet and shortage of
            capital.  Because of reduced freight earnings, maintenance
            has been neglected, leading to frequent structural failure.
            Ship casualties - often with serious envionmental damage -
            have reached alarming levels.  The deteriorating safety
            record has caused insurance costs to escalate and has
            provoked calls for stricter liability rules, stringent
            technical standards, and rigorous inspection.  Enforcement
            would make ocean transport more expensive. To meet expected
            demand for ocean transport safely and efficiently, a great
            deal of overaged tonnage must be replaced, maintenance must
            be improved, and new tonnage has to be added.  The estimated
            cost:  almost US$400 billion in constant 1992 prices.  But
            traditional financing, through mortgage lending and
            government subsidy, is becoming scarce.  Leasing or
            cashflow-based lending are promising alternatives, but they
            required predictable revenue streams based on long-term
            freight contracts predicated on cargo-owners'
            cooperation, which remains doubtful.  No effective
            arrangements have been made to meet the industry's
            capital requirements, and doubts are more numerous than
            assurances in the industry.  The crisis that has developed
            is unprecedented.
Trends in retirement systems and
            lessons for reform
In multiple-pillar retirement systems,
            the government provision of old-age income support plays a
            very different role from vehicles for encouraging private
            retirement savings - and for the government regulation and
            insurance of private savings.  Despite the diversity of
            public and private retirement systems, and despite their
            wealth and their potential impact on labor and capital
            markets, they are often overlooked in structural analyses of
            country problems and prospects.  The author examines
            important institutional features of retirement systems in
            industrial and developing countries and outlines what is
            known about their economic effects.  She also identifies
            ways in which public and private retirement systems affect
            economic adjustment, paying special attention to the costs
            and benefits of encouraging early retirement.  She finds
            that a coherent plan for retirement reform must identify how
            much old-age income security is affordable, how the
            government and private sector can address failures in the
            private market to provide this security, and how these
            objectives can be attained given available financing
            mechanisms. The author finds evidence that many retirement
            systems will be forced to change a great deal in the next
            few decades.  In some cases:  retirement benefits will have
            to be reduced (perhaps by imposing a means test); the age
            for early retirement will have to be raised; multiple-pillar
            plans will have to be integrated and streamlined to
            rationalize work incentives; and incentives and
            opportunities for private saving will be increased.  In any
            case, using high-cost long-term retirement systems to
            mitigate short- and medium-term unemployment problems will
            probably prove costly and inefficient as a solution to
            problems faced by economies in transition.
What would happen if all developing
            countries expanded their manufactured exports
Despite the achievements of the
            export-oriented economies of East Asia, many policymakers
            doubt that a development path led by manufactured exports is
            feasible for all developing countries. The author examines
            what happens if all developing countries, rather than merely
            a few, expand manufactured exports. He considers two driving
            forces for export expansion: the liberalization of trade
            barriers, and productivity growth in the production of
            manufactured exports. With only trade liberalization, the
            static welfare gains are small (with the standard Armington
            specification used in the analysis). Even the export growth
            rates are far too small to replicate the essential East
            Asian experience. And when all developing countries
            participate in static trade liberalization, the small
            welfare gains diminish slightly. Under the more realistic
            assumption of dynamic export growth driven by productivity
            gains for manufactured exports, the welfare effects are much
            greater and the efforts of developing countries are mutually
            reinforcing. Because of strong South-South trade links, and
            developing countries' dependence on manufactured
            imports, developing countries buy more manufactured goods
            from each other. The author accepts the view of export
            pessimists that a country expanding its manufactured exports
            will receive depressed prices for those exports. But his
            results differ because he uses a general equilibrium
            framework with intra-industry trade rather than a partial
            equilibrium model of the export market. The general
            equilibrium model captures the fact that developing
            countries still import most manufactured goods, often from
            each other. They will suffer, but they will also benefit,
            from declining prices. So they are better off if they all
            expand those exports.
Risk management and stable financial structures
Conventional development economics has
            focused mainly on generating economic growth by mobilizing
            savings and allocating them wisely among investment
            opportunities.  Savings (external and domestic) were to be
            mobilized through tax incentives, income, and interest rate
            policies.  Their allocation often involved direct government
            intervention in the investment process.  After the
            disastrous results of the 1980s, the new wisdom is to let
            the private sector generate growth, while the government
            provides the regulatory and supervisory framework for
            competitive markets, ensures the existence of level playing
            fields, and removes obvious cases of moral hazard. But the
            private sector working under an inappropriate financial
            structure may do no better than the government in making
            right investment choices for long-term growth.  So
            governments (which in a financial crisis are responsible for
            all national debts) should have an effective national risk
            management strategy, with an understanding of the national
            balance sheet, and the necessity of a stable financial
            structure for steady long-term economic growth.  The authors
            argue that it is not only how much investment is mobilized
            and allocated but also how investments are financed that
            matters for an economy's long-term growth. Finance and
            development are inextricably linked with risk management
            (both at the sectoral and national levels).  Development is
            a function not just of promoting the right industries and
            allocating capital for the high-return investments (asset
            management) but also of choosing the right financial
            structure (liability management) - and of the related risks
            arising from the liability mix chosen.  The authors argue
            that one of the ingredients of the East Asian success is
            prudent risk management by these governments. They present
            five rules for national risk management, concluding, among
            other things, to:  (a) establish fiscal discipline and price
            stability as the anchor of overall financial stability; (b)
            encourage asset diversification through industrialization
            and export orientation, financed by foreign direct
            investment; (c) avoid sectoral imbalances, such as excessive
            domestic or external borrowing, including the development of
            instruments and institutions to absorb shocks; (d) establish
            strong institutional capacity to assess and contain systemic
            risks; and (e) when the above conditions are not adequately
            met, retain some policy measures to handle the risk.
Looking at the facts : what we know
            about policy and growth from cross-country analysis
What has the profession learned from
            cross-country regressions about the links between long-run
            growth and indicators of fiscal, monetary, trade, financial,
            and exchange-rate policies?  The authors find that:
            indicators of financial development are strongly associated
            with long-run growth; other individual policy indicators are
            only weakly linked to growth; and it is particularly
            difficult to find a consistent relationship between
            inflation and long-run growth.  For example, the inclusion
            or exclusion of one or two countries (Nicaragua and Uganda)
            out of more than 100 countries in the sample can lead to
            reaching three quite different conclusions:  (1) that only
            very high inflation is bad for growth; (2) that very high
            inflation in itself is not bad for growth, but small
            increases in inflation in moderate-inflation countries slow
            growth; or (3) that inflation is unrelated to growth.  The
            connections between policy indicators and growth are quite
            sensitive to slight alterations in the right-hand-side
            variables and to small changes in the sample of countries.
            And the daunting array of methodological problems limiting
            the ability to interpret cross-country regressions implies
            that, at best, they suggest interesting empirical
            regularities.  Cross-country regressions should not be used
            to predict by how much long-run growth will change when
            policies change. But beliefs about policy and growth that
            are not supported by cross-country evidence will tend to be
            viewed skeptically.  So, future work on the policy-growth
            nexus should integrate broad cross-country analyses with
            country case studies and investigations of specific firms.