From Boom to Bust: The nature and sources of economic growth

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What is economic growth
it is the growth in total, or per capita, output of an econom
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Define boom
a period (of several years, or three monthly quarters) of sustained and unbroken expansion in economic output, usually accompanied by rising employment and living standards
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Define bust
an economic bust is usually defined by a sudden and sustained contraction in economic output, usually accompanied by rising unemployment and falling living standards for a majority of the working population
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Economic Growth does not measure Human Well-Being
GDP is the most widely used measure of economic activity, there are international standards for its calculation. It measures markey output, but is often treated as a measure of economic well being
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The growth of the wrodl economy: the work of angus Maddison
Over the past millennium, pop ^22fold, per capita income ^13fold, in the preceeding millennium, pop up by 1/6 no advance in per capita income. Since 1820 world development has been much more dynamic
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20th Century world economy - A century of Boom and Bust 1914-1973
1914-8 WWI 1920-25 Recession and unemployment 1925-29 recovery for some economies 1929 Great crash 1929-33 great depression 1933-39 New deal and rearmament 1939-45WWII 1945-50 Reconstruction and recovery 1950-73 the long boom
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The 20th century world economy - A century of Boom and Bust 1973-2014
73-80 Stagflation and recession 81-87 New right consumer and stock market boom 87 Black Monday stock market crash 88-92 onset of recession 90 collapse of japanese bubble economy 92 Black wednesday 93-07 The great stability, the 'nice' economy 97 asia
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Fostering growth Market led
Individual entrepeneurship, private corporation, liberlization and deregulation, choice and competition, private investment, privatisation of risk taking and management of risk, self regulation
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Fostering growth State led
state dirigisme, public corporations and national champions, nationalization and regulation, public investment, nationalisation of risk taking and management of risk
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Fostering growth, monetary policy
interest rate - QE to boost recovery? Exchange rate - Membership of single European currency? To shadow the dollar? The pound, the euro or a new scottish currency
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Fostering growth, fiscal policy
Govt spending - what share of national income should government consume? Where? - education, health, water, energy supply, telecommunications, welfare and warfare affordable? Taxation - low, competitive? strike what balance?
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Fostering growthm Industrial/competitiviness/enterprise policy
Support for key firms - tax holidays? subsidies for new plant employment? Support for entrepeneurship- finance for new enterprises, deregualtion of labour markets, restriction to entitlements. Supply side policies? competition? R&D? innovation? skill
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National growth models - Anglo American model
propensity for lower government spending and debt, limited militarism/welfare state, property owning, share owning democracy, propensity for high levels of personal debt, shareholder capitalism, lower trust societies, highly unequal
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National growth models - The Rhine/European model
Propensity for higher govt spending, social insurance, social market economy, lower levels of personal debt, stakeholder capitalism, more equitable wealth distribution, bank based capitalism,
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National growth models - East Asian Developmental state model
low govt spending, especially on welfare, selective state support for large corporations and industries, sustained high levels of private saving, propensity for lower levels of personal debt, high trust societies, bank based capitalism
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East Asian growth Miracle?
HPAEs differ from other developing economies in 3 factors; high rates of investment, including unusually high rates of private investments, high and rising endowment of human capital -education, improved productivity.
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East Asian growth miracle 6 characteristics that set them apart
More rapid output and productivity growth in agriculture, higher rates of growth of manufactured exports, earlier & steeper declines in fertility, higher growth rate of physical capital, high inital levels of human capital, high rates of productivity
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The world banks' growth lesson from the 1990s
policy focus in the 90s enabled better use of existing capacity, but didnt extend it, there is no unique combination of policies and insitutions for fulfilling key fucntions. avoidance of busts, usually requires avoidance of booms
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Spence commission on growth and development 2008
fast, sustained growth does not happen spoantaneously, requires long term committed from leaders. an increasingly capable, credible and committed govt needed, govt dont cause growth, but manage it in long run. investment key, equality of opportunity.
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OECD going for growth agenda
provides reform recommendations to boost growth. 5 policy priorities identified for each country. areas are product and labour market regs, education and training,tax and benefits, trade, investments rules and innovation
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Define boom

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a period (of several years, or three monthly quarters) of sustained and unbroken expansion in economic output, usually accompanied by rising employment and living standards

Card 3

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Define bust

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Card 4

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Economic Growth does not measure Human Well-Being

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Card 5

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The growth of the wrodl economy: the work of angus Maddison

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