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Business and Economics > Production and Operations Management

You are looking at 1 - 10 of 32 items for :

  • Type: Journal Issue x
  • Taiwan, Province of China x
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Cover IMF Working Papers
Government Debt and Growth: The Role of R&D
Can Sever
Economic growth in the advanced economies (AEs) has been slowing down since the early 2000s, while government debt ratios have been rising. The recent surge in debt at the onset of the Covid-19 pandemic has further intensified concerns about these phenomena. This paper aims to offer insight into the high-debt low-growth environment in AEs by exploring a causal link from government debt to future growth, specifically through the impact of debt on R&D activities. Using data from manufacturing industries since the 1980s, it shows that (i) government debt leads to a decline in growth, particularly in R&D-intensive industries; (ii) the differential effect of government debt on these industries is persistent; and (iii) more developed or open financial systems tend to mitigate this negative impact. These findings contribute to our understanding of the relationship between government debt and growth in AEs, given the role of technological progress and innovation in economic growth.
Keywords:
Government debt; fiscal policy; economic growth; R&D; innovation; financial development; economic growth in the advanced economies; R&D activity; impact of debt; debt level; affect tax dynamics; Financial sector development; Manufacturing; Productivity; Aging; Global
Cover IMF Working Papers
China’s Productivity Convergence and Growth Potential—A Stocktaking and Sectoral Approach
Min Zhu
,
Ms. Longmei Zhang
, and
Daoju Peng
China’s growth potential has become a hotly debated topic as the economy has reached an income level susceptible to the “middle-income trap” and financial vulnerabilities are mounting after years of rapid credit expansion. However, the existing literature has largely focused on macro level aggregates, which are ill suited to understanding China’s significant structural transformation and its impact on economic growth. To fill the gap, this paper takes a deep dive into China’s convergence progress in 38 industrial sectors and 11 services sectors, examines past sectoral transitions, and predicts future shifts. We find that China’s productivity convergence remains at an early stage, with the industrial sector more advanced than services. Large variations exist among subsectors, with high-tech industrial sectors, in particular the ICT sector, lagging low-tech sectors. Going forward, ample room remains for further convergence, but the shrinking distance to the frontier, the structural shift from industry to services, and demographic changes will put sustained downward pressure on growth, which could slow to 5 percent by 2025 and 4 percent by 2030. Digitalization, SOE reform, and services sector opening up could be three major forces boosting future growth, while the risks of a financial crisis and a reversal in global integration in trade and technology could slow the pace of convergence.
Keywords:
WP; market services; productivity convergence; high-productivity industrial sector; potential GDP; labor productivity; growth outlook; real value; industry structure; productivity slowdown; Productivity; Services sector; Labor productivity; Industrial sector; Industrial productivity; Global
Cover IMF Working Papers
The Return of the Policy That Shall Not Be Named: Principles of Industrial Policy
Reda Cherif
and
Fuad Hasanov
Industrial policy is tainted with bad reputation among policymakers and academics and is often viewed as the road to perdition for developing economies. Yet the success of the Asian Miracles with industrial policy stands as an uncomfortable story that many ignore or claim it cannot be replicated. Using a theory and empirical evidence, we argue that one can learn more from miracles than failures. We suggest three key principles behind their success: (i) the support of domestic producers in sophisticated industries, beyond the initial comparative advantage; (ii) export orientation; and (iii) the pursuit of fierce competition with strict accountability.
Keywords:
WP; private sector; government failure; learning by doing; Industrial policy; technology; innovation; growth; diversification; market share; physical capital; export intensity; document state intervention; government intervention; construction company; Exports; Manufacturing; Comparative advantage; Productivity; Income; East Asia; Africa
Cover China's Economy in Transition
China's Economy in Transition
From External to Internal Rebalancing
Mr. Anoop Singh
,
Mr. Malhar S Nabar
, and
Mr. Papa M N'Diaye

Abstract

China's current account surplus has declined to around one-quarter the peak reached before the global financial crisis. While this is a major reduction in China's external imbalance, it has not been accompanied by a decisive shift toward consumption-based growth. Instead, the compression in its external surplus has been accomplished through increasing fixed investment so that it is now an even higher share of China's national economy. This increasing reliance on fixed investment as the main driver of China's growth raises questions about the durability of the compression in the external surplus and the sustainability of the current growth model that has had unprecedented success in lifting about 500 million people out of poverty over the last three decades. This volume examines various aspects of the rebalancing process underway in China, highlighting policy lessons for achieving stable, sustainable, and inclusive growth.

Keywords:
BOOK; China; investment; export
Cover IMF Working Papers
Quantifying the Spillovers from China Rebalancing Using a Multi-Sector Ricardian Trade Model
Rui Mano
This paper assesses the spillovers from different facets of China rebalancing using a calibrated Ricardian trade model that includes 41 economies, each consisting of 34 sectors. We find that China’s move up the value chain in particular has the potential for significant spillovers – on the one hand, adversely affecting industrialized economies heavily involved in the Asia value chain, while at the same time generating positive spillovers to lower and middle income countries. The model’s strength lies in endogenously capturing production value chains and international trade of goods across sectors.
Keywords:
WP; value chain; Spillovers; China rebalancing; trade channel; sectoral trade; export growth pattern; exports contract; trade model; goods trade channel; production value chains; export share; Income; Exports; Productivity; Consumption; Asia and Pacific
Cover IMF Staff Country Reports
Republic of Estonia: Selected Issues
International Monetary Fund. European Dept.
This Selected Issues paper analyzes income convergence and medium-term growth potential for Estonia. Estonia’s potential growth is projected to average some 3 percent over the next five years and 2.75 percent over the next two decades, implying continued income convergence with European Union levels, albeit at only half its historical pace. A number of policy enhancements could lift growth above this central projection. These include a greater operational policy focus on raising productivity growth, scaling up a number of envisaged pro-growth programs, supporting the upgrading of traditional industries as a second leg of innovation policy, and fully restoring Estonia’s high investment.
Keywords:
ISCR; CR; TFP growth; labor force; potential GDP; structural unemployment; capital stock; unemployment rate; Total factor productivity; Aging; Productivity; Western Europe; Europe; Central and Eastern Europe; Global; growth record; FDI inflow; R&D expenditure; staff team of the International Monetary Fund; qualification mismatch; Labor force participation
Cover IMF Working Papers
The Leap of the Tiger: How Malaysia Can Escape the Middle-Income Trap
Reda Cherif
and
Fuad Hasanov
Only a few European economies and Korea and Taiwan Province of China reached high-income status during 1970-2010. Malaysia’s real income per capita increased to 26 percent of the U.S. level in 2010 from 20 percent in 1970. Despite relatively strong growth and a substantial improvement in export sophistication, Malaysia’s total factor productivity lagged behind that of Korea and Taiwan Province of China. We argue that what characterizes their experience in contrast to Malaysia’s is the creation of technologies by domestic firms and a push to leapfrog to the technological frontier at an early stage of development.
Keywords:
WP; invested company share; electronics firm; firm Hyundai; spin-off firm; firm development; growth; middle-income trap; innovation; productivity; technology; global brand; firms in the electronics sector; local firm; auto parts firm; government intervention; Exports; Income; Manufacturing; Global; Asia and Pacific
Cover IMF Working Papers
China’s Growth: Can Goldilocks Outgrow Bears?
Wojciech Maliszewski
and
Ms. Longmei Zhang
The paper analyzes the recent growth dynamics in China, evaluating both cyclical positions and long-term growth prospects. The analysis shows that financial cycles play a more important role than traditional inflation-based cycles in shaping the dynamics of growth. Currently, the ‘finance-neutral’ gap—our measure of the financial cycle—is large and positive, reflecting imbalances accumulated in the economy since the Global Financial Crisis. A period of slower growth is therefore both likely and needed in the near term to restore the economy to equilibrium. In the medium term, growth will slow as China moves closer to the technology frontier, but a steadfast implementation of reforms can ensure that China follows the path of the “Asia Tigers” and achieves successful convergence to high-income status.
Keywords:
WP; TFP growth; economic miracle; growth story; potential output gap; output gap measure; China; potential growth; total factor productivity; output gap; output gap estimate; output gap in China; production function approach; inflation dynamics; Potential output; Productivity; Capacity utilization; Global; Asia and Pacific
Cover China's Economy in Transition
China's Economy in Transition
From External to Internal Rebalancing
Mr. Anoop Singh
,
Mr. Malhar S Nabar
, and
Mr. Papa M N'Diaye

Abstract

China's current account surplus has declined to around one-quarter the peak reached before the global financial crisis. While this is a major reduction in China's external imbalance, it has not been accompanied by a decisive shift toward consumption-based growth. Instead, the compression in its external surplus has been accomplished through increasing fixed investment so that it is now an even higher share of China's national economy. This increasing reliance on fixed investment as the main driver of China's growth raises questions about the durability of the compression in the external surplus and the sustainability of the current growth model that has had unprecedented success in lifting about 500 million people out of poverty over the last three decades. This volume examines various aspects of the rebalancing process underway in China, highlighting policy lessons for achieving stable, sustainable, and inclusive growth.

Keywords:
BOOK; China; investment; export; growth model; capital-to-output ratio; interest rate liberalization; saving rate; China's growth; current account; Real interest rates; Income; Personal income; Total factor productivity; Global; Asia and Pacific; South Asia; Middle East; North Africa; East Africa; China's economy; Labor supply; Exports; Caribbean
Cover IMF Working Papers
Price Dynamics in China
International Monetary Fund
Chinese inflation, particularly non-food inflation, has been surprisingly modest in recent years. We find that supply factors, including those captured through upstream foreign commodity and producer prices, have been important drivers of non-food inflation, as has foreign demand for Chinese goods. Domestic demand and monetary conditions seem less important, possibly reflecting a large domestic output gap generated by many years of high investment. Inflation varies systemically within China, with richer (and urban) provinces having lower, more stable, inflation, but this urban inflation also influence that in lower-income provinces. Higher Mainland food inflation also raises inflation in non-Mainland China.
Keywords:
WP; food inflation; price; China; inflation; inflation spillovers; provincial inflation; inflation pattern; commodity price inflation rise; Mainland inflation; producer price inflation; inflation expectation; inflation dynamics; Output gap; Commodity prices; Personal income; Producer prices; Global