Economic Stagnation

What economists have identified as stagnation over the last few decades can also be interpreted as the cost of continuing successful engagement with a complex world that is not set up to serve human interests. Two arguments: 1) The core argument holds that elasticity (ß) in the production function for economic growth is best interpreted as a function of the interaction between the economic entity (firm, industry, the economy as a whole) and particular aspects the larger world: physical scale in the case of semi-conductor development, biological organization in the case of drug discovery. 2) A larger argument interprets current stagnation as the shoulder of a growth curve in the evolution of culture through a succession of fundamental stages in underlying cognitive architecture. New stages develop over old through a process of reflective abstraction (Piaget) in which the mechanisms of earlier stages become objects for manipulation and deployment for the emerging stage.

The paper reviews the trends in poverty, economic policies and growth in a sample of African countries during the 1990s, drawing on the better household data now available. Overall, experiences have varied: some countries have seen sharp falls in income poverty, while others have witnessed marked increases. In some countries economic growth has in the aggregate been ‘pro-poor’, and in others not. But the aggregate numbers hide systematic distributional effects. Taking both macro and micro perspectives of growth and poverty in Africa, the paper draws four key conclusions. First, economic policy reforms (improving macroeconomic balances and liberalizing markets) appear conducive to reductions in poverty. Second, market connectedness is crucial to enable participation in the gains from economic growth. Some regions and households by virtue of their sheer remoteness have been left behind when growth picks up. Third, education and access to land emerge as key private endowments to help h...

Aux États-Unis, la Grande récession de 2008-2009 est reconnue comme étant principalement le résultat d'une régulation déficiente du secteur financier américain, combinée à de faibles taux d'intérêt. Ces phénomènes parviennent toutefois difficilement à expliquer pourquoi la reprise économique flirte avec la stagnation, six ans après la récession, ce qui sous-entend des causes plus profondes. Si l'importance de ces facteurs ne doit pas être sous-estimée, la trame de fond devant laquelle ils ont pris place ne doit pas être négligée non plus. La croissance importante des inégalités en faveur du 1 % le plus riche couplée à une stagnation du revenu moyen depuis le début des années 1980 seraient en cause. L'article démontre que ces phénomènes ont créé deux dynamiques. Premièrement, l'amplification des écarts de revenus encouragea une insoutenable course à la consommation sociale. Ensuite, la croissance importante des hauts revenus alimenta l'instabilité des marchés financiers par une hausse de la propension à spéculer. Le retour à une croissance économique soutenable dépendra inévitablement d'une réduction des inégalités de revenus, principalement par la revalorisation des salaires de l'ensemble des travailleurs.

This article provides a new approach to the study of global values, based on a statistical analysis of the freely available World Values Survey, whose 6th wave of global opinion surveys has been made public recently. This unique instrument includes data from around the world and also from twenty majority Muslim countries. We provide our readers with results of the first large-scale multivariate analysis of these new data in the global social scientific literature.

R. Inglehart, whose research is especially prominent nowadays in the West in this field, predicted a global increase in human security in parallel with the gradual waning of the religious phenomenon. Inglehart spells out the tendencies which are brought about by this: higher levels of tolerance for abortion, divorce, homosexuality; the erosion of parental authority, the decrease of the importance of family life et cetera.

Our statistical re-analysis of all these questions is based on SPSS II Promax Factor Analysis with the original World Values Survey data. In accordance with economic approaches in the tradition of Barro and Schumpeter, we think that family values (Schumpeter) and religious values (Barro) can be an important asset for modern economic growth. In this essay we show that too many negative phenomena, which cannot be overlooked anymore by contemporary social science, are clearly to be associated with the loss of religion (irrespective of denomination): the distrust in the state of law; the shadow economy; the distance from altruistic values; the growing fatigue of democracy; the lack of entrepreneurial spirit; et cetera.


Social scientific literature for a number of years now studies cross-national survey data to gain insights about global value patterns with statistical methods. The global spread of this methodology is really breathtaking, and today includes – as we shall demonstrate below – not only much of the Americas, Europe and the former USSR, East and South-East Asia and several countries in Sub-Saharan Africa, but also twenty majority Muslim countries of our globe, now participating in the last wave of the World Values Survey project.

As the works of Hofstede, who pioneered this research in business studies, all too clearly show (Hofstede, 2001; Hofstede and Minkov, 2010; Hofstede, Hofstede and Minkov, 2010; Minkov and Hofstede, 2011, 2013), the discipline grew out of the fundamental insight among the personnel managers of transnational corporations that transferring global production and doing international business also needs a thorough study of the differences in international values in order to be able to prevail on international markets and to optimize production and sales. The discipline made enormous methodological developments over the last decade (Davidov, Schmidt and Billiet, 2011; Davidov, Schmidt and Schwarz, 2008). While comparative value research in the beginning undoubtedly was also influenced to a great degree by the empirical sociology of Western mainstream Christian denominations, especially the Roman Catholic Chruch (see Morel, 1972, 1977, 1986, 1997, 1998, 2003), recent years saw an enormous upsurge in empirical studies about value systems of global publics in a growing number of non-Western countries. Representative surveys by the World Values Survey and its different waves of surveys are now available from 100 countries which contain almost 90 percent of the world’s population, using a common and stable questionnaire with almost 400,000 representative respondents. An especially welcome development is the growing inclusion of statistically representative Muslim publics in these surveys (Tausch and Moaddel, 2009; Tausch, Heshmati and Karoui, 2014; Yesilada and Noordijk, 2010). Never before in human history have we known as much about values and cultures across the globe, and never before have we known as much about the changes of values and cultures over time.

Our variables include a wider array of values than in any previous encompassing analysis on the subject and they also include background data such as age, education, gender, and income, which were rather absent from the previous major published studies. The values and activities now measured include

 Active/Inactive membership in seven types of voluntary organizations
 Attitudes on gender issues
 Basic attitudes on the market economy, on inequality and on wealth
 Confidence in key national and international institutions (nine indicators)
 Eleven indicators of the values which are important in the education of a child
 Feeling of happiness
 Indentification with democracy (several indicators)
 Indicators of positions on environmental protection
 Indicators of trust
 Indicators of work ethics
 Nine indicators of what is justifiable and what is not in a society, including the shadow economy
 Seven indicators measuring the scales proposed by the researcher Shalom Schwartz
 Several indicators of religiosity
 Three indicators of xenophobia and racism
 What democracy should be all about (seven indicators)

Our final data set comprises 41178 global representative citizens, for whom data for all 78 variables were available. Our analysis is based on the freely available SPSS version of the World Values Survey (hitherto also abbreviated, if need be, as WVS), 6th wave for the years 2010 to 2014 (http://www.worldvaluessurvey.org/WVSOnline.jsp).

The black economy is once again a headline in the news and discussions following the announcement of demonetization of the large-denomination currency notes in India in November 2016. The notion that demonetization can tackle the black economy is a result of the incorrect understanding that the black economy is all cash. The black economy is the single biggest problem confronting India since 1970s. In India, it was estimated to be 62 percent of GDP for 2012-13. If it is assumed to be the same in 2017-18, the black economy amounts to Rs.103.99 lakh crore. Hence it cannot be ignored. In 1955-56, it was estimated by Prof. Kaldor to be 4-5 percent of GDP. Its growth has been rapid and it is intertwined with the white economy and results in growing inefficiencies. The black economy is one of the biggest reasons for the failure of state policies-the result of which is that society is unable to achieve its goals. It impacts all the micro-and-macro variables-inflation is higher and the trade deficit larger, the savings rate rises while the investment rate falls; employment is lower than potentially possible, and the rate of growth below the potential and ultimately sets back development. There is a paucity of white economy data, because of the existence of a substantial black economy in India. Its non-inclusion in analysis results in a partial understanding of the economy and often incorrect policy pronouncements. The need to incorporate the black economy is not simply an empirical matter, but a theoretical necessity. This paper in general tries to give some conceptual and theoretical understanding of the concept of the black economy in India. The empirical section of the paper explains the significance of the black economy as a variable to be included in the analysis to get a better understanding of the economy.

Globalisation is an ideological term. It encompasses the frenetic international expansion of capital - an expansion which has had devastating consequences for the  majority of humanity. The debate around it, however, has tended to obscure rather than clarify our understanding of the forces at work. In his second article on this subject David Yaffe looks at the politics and economics of globalisation .

The black economy is once again a headline in the news and discussions following the announcement of demonetization of the large-denomination currency notes in India in November 2016. The notion that demonetization can tackle the black economy is a result of the incorrect understanding that the black economy is all cash. The black economy is the single biggest problem confronting India since 1970s. In India, it was estimated to be 62 percent of GDP for 2012-13. If it is assumed to be the same in 2017-18, the black economy amounts to Rs.103.99 lakh crore. Hence it cannot be ignored. In 1955-56, it was estimated by Prof. Kaldor to be 4-5 percent of GDP. Its growth has been rapid and it is intertwined with the white economy and results in growing inefficiencies. The black economy is one of the biggest reasons for the failure of state policies-the result of which is that society is unable to achieve its goals. It impacts all the micro-and-macro variables-inflation is higher and the trade deficit larger, the savings rate rises while the investment rate falls; employment is lower than potentially possible, and the rate of growth below the potential and ultimately sets back development. There is a paucity of white economy data, because of the existence of a substantial black economy in India. Its non-inclusion in analysis results in a partial understanding of the economy and often incorrect policy pronouncements. The need to incorporate the black economy is not simply an empirical matter, but a theoretical necessity. This paper in general tries to give some conceptual and theoretical understanding of the concept of the black economy in India. The empirical section of the paper explains the significance of the black economy as a variable to be included in the analysis to get a better understanding of the economy.

In this paper, we argue that the condition of education and the economy of the low performing sub-Saharan African countries can be characterized as a stagnant steady state -- a "trap". We present a simple heterogeneous-agent model in which high costs of education relative to income and the skill premium can cause the economy to be trapped in such a steady state with minimal educational attainment. We calibrate the model to available data from the sub-Saharan African countries to study policies that could potentially free these trapped economies and set them on a path to a higher steady state. We find that a tax and subsidy scheme that redistributes resources at the trap from poor households with lower ability children to those with higher ability children can pry the economy out of the trap, thus freeing it from dependence on foreign aid in order to achieve the same goal. In addition to the direct cost, a portion of the indirect cost also needs to be subsidized. Moreover, ...

A Zona da Mata de Minas Gerais ocupa área correspondente a 6,09% da superfície do estado, com população de 2.029.168 habitantes, distribuída por 142 municípios, dos quais 70,23% com menos de 10.000 habitantes e baixo índice de urbanização. Atualmente, com uma economia equivalente a 8,37% do PIB total estadual e aproximadamente 11% da população do estado, a Zona da Mata apresenta baixa renda per capita e desempenho econômico muito aquém de suas potencialidades regionais. Some-se a isso o franco processo de estagnação econômica e rebaixamento do índice de qualidade de vida, exacerbando ainda mais os desequilíbrios espaciais intra-regionais. O presente trabalho debruça-se sobre a geohistória da Zona da Mata Mineira, buscando os determinantes históricos de sua condição socioeconômica desfavorável.

Formal inflation targeting, which was introduced internationally in the early 1990s, has been evaluated by orthodox economists as "a success". But successful at what? Its rationale, which is supported neither by a general dynamic theory nor by historical/empirical studies of the relationship between growth and prices, is the presumption that the containment of inflation to low levels will ensure both shortrun economic stability and longrun prosperity. Initially these targets were set at 0-2% pa (New Zealand), but later relaxed slightly to 2-3% pa. By employing a general dynamic theory and estimating the growth-inflation curve for the UK and USA over several timeframes, this paper shows that, contrary to conventional wisdom, inflation targeting since the early 1990s has constrained not only prices but also economic growth--to rates half of those achieved in the previous period 1961 to 2019. Also, this study has uncovered a new economic concept, the Inflation-Targeting Trap--a low level trap from which growth rates have been unable to break free. As inflation targeting is contributing to the stagnation of Western civilization, it should be abandoned.