3 results
1 - Introduction
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- By Hal Hill, Australian National University, Canberra, Sisira Jayasuriya, Monash University, Melbourne, Jayant Menon, Asian Development Bank, Manila
- Edited by Hal Hill, Jayant Menon
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- Book:
- Managing Globalization in the Asian Century
- Published by:
- ISEAS–Yusof Ishak Institute
- Published online:
- 22 July 2017
- Print publication:
- 16 November 2016, pp 1-24
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- Chapter
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Summary
This volume, in honour of a great development economist and esteemed friend and colleague, Prema-Chandra Athukorala (hereafter “Chandra”), examines two of the most important, interrelated phenomena of the twenty-first century: the rise of the Asian economies and the inexorable process of global economic integration. In this chapter, we first provide an introduction to the key issues examined in the chapters that follow. Next, we provide a sketch of the life and times of Chandra, and his intellectual contributions, including especially his contributions to the issues examined in this book. Finally, we summarize and integrate the diverse and illuminating contributions to the volume.
AN OVERVIEW OF THE ISSUES
Virtually every dimension of globalization is increasing — the flow of goods, services, and capital across borders; the movement of people; and the dissemination of technologies, ideas, and cultures. Increasingly, porous borders and rapid technological change have popularized the notion of the “death of distance” (Cairncross 1997). The rise of Asia, as the most dynamic region in the global economy over the past half century, is central to this process. Most of the exceptionally high-growth economies over this period have been located in Asia, principally East Asia (Commission on Growth and Development 2008). The outcomes have been transformative, for people's lives, for regional and global architecture, and for the intellectual foundations of development theories.
Both theory and empirics clearly demonstrate that, on balance, globalization is a force for good, especially for the countries that open up to the global economy, but also for consumers in export destinations enjoying the resultant increased welfare. The standard “triangles” analysis in static trade theory indicates that countries benefit from specializing in the production of goods and services in which they have a comparative advantage. The dynamic advantages of a more open economy are arguably more important still, through opening up to technology flows, the power of demonstration effects, the discipline of import competition, and much else. Empirically also there is a great deal of research concluding that, ceteris paribus, more outward-oriented economies do grow faster in the long run (Bhagwati 2007).
12 - The Japanese Macroeconomic Mystery
- from PART 2 - COUNTRY STUDIES
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- By W. Max Corden, University of Melbourne, Sisira Jayasuriya, Monash University, Melbourne
- Edited by Hal Hill, Jayant Menon
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- Book:
- Managing Globalization in the Asian Century
- Published by:
- ISEAS–Yusof Ishak Institute
- Published online:
- 22 July 2017
- Print publication:
- 16 November 2016, pp 297-332
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- Chapter
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Summary
This chapter, written in honour of our old friend Prema-Chandra Athukorala, is designed to unravel a set of complications and mysteries concerned with the Japanese macroeconomy for the last twenty years, or even longer. This is the period of Japan's two lost decades, beginning around 1995. We draw on a huge and highly sophisticated, even brilliant, literature on this, written principally by Japanese economists (and also some Americans). Fortunately for us, much of it is written, or translated into, English, and we have tried to understand it. Our aim is to make the complex issues and possible solutions simple enough for non-specialists to understand. We also wish to see whether there are some lessons for other countries.
What are these mysteries? Well, the single most interesting one is this. For about twenty years, the Japanese government has run significant and deliberate budget deficits that have been motivated by the Keynesian objective of stimulating the economy. Plenty of countries have run budget deficits for long periods, usually because of political difficulties in raising taxes or cutting spending. But this is different because the explicit Keynesian “fiscal stimulus” motive for maintaining aggregate employment or the growth rate is usually only short term, whereas the Japanese case is unique because it has gone on for more than two decades. But this does not mean that it is interesting only as a historical curiosity. Since the global financial crisis (GFC) of 2008, prolonged application of stimulus policies has become increasingly common as many major economies struggle to restore growth, and the Japanese experience is likely to hold lessons of wider contemporary relevance.
THE BUBBLE AND AFTER
The economic recovery of Japan after the war was impressive. It was indeed a boom, especially a boom in manufactured exports. The main problems came from two sharp world oil price rises. Details of this post-war period go beyond this chapter. The economic situation of Japan was dramatically transformed in a short period of five years — from 1985 to 1990 — by “The Bubble”. Indeed, this surprising episode was the bridge between the remarkably successful post-war years (lasting about thirty years) and the later long unfortunate period of stagnation or recession — described as the two lost decades — with which this chapter is mainly concerned.
Development strategy and trade liberalization: implications for poverty and environment in the Philippines
- IAN COXHEAD, SISIRA JAYASURIYA
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- Journal:
- Environment and Development Economics / Volume 9 / Issue 5 / October 2004
- Published online by Cambridge University Press:
- 07 October 2004, pp. 613-644
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- Article
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Poverty and environmental degradation or deforestation in developing countries have common determinants in underlying economic and institutional conditions that determine factor and product prices and incentives for migration and resource-depleting activities. These determinants include property rights failures (open access to forest lands) but also ‘government failures’ in the form of policies that indirectly promote resource use and retard poverty alleviation. A general equilibrium analysis identifies influences that such distortions have on poverty and environment. Using a numerical GE model, we consider likely effects of Philippine trade policy reforms of the 1990s on determinants of poverty, deforestation, and agricultural land expansion. These reforms marked a significant shift away from the import substitution industrialization strategy that characterized post-independence Philippine development. The results suggest that though reforms would increase poverty in the short term, in the longer run trade liberalization is poverty reducing. The environmental impact can also be positive, provided liberalized trade is combined with appropriate government action to address market failures.