Lost Decades in Growth Performance: Causes and Case Studies

267 Pages·2015·1.24 MB·English

by  Yun-Peng Chu (eds.)

Lost Decades in Growth Performance
Palgrave Macmillan Studies in Economics and Banking
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A FLOW OF FUNDS PERSPECTIVE ON THE FINANCIAL CRISIS VOLUME I:
Money, Credit and Sectoral Balance Sheets
Bernhard Winkler, Ad van Riet and Peter Bull
A FLOW OF FUNDS PERSPECTIVE ON THE FINANCIAL CRISIS VOLUME II:
Macroeconomic Imbalances and Risks to Financial Stability
Bernhard Winkler, Ad van Riet and Peter Bull
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Lost Decades in Growth
Performance
Causes and Case Studies
Edited by
Yun-Peng Chu
National Central University, Taiwan
Editorial matter and selection © Yun-Peng Chu 2015
Individual chapters © Respective authors 2015
Softcover reprint of the hardcover 1st edition 2015 978-1-137-47874-0
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ISBN 978-1-349-50233-2 ISBN 978-1-137-47875-7 (eBook)
DOI 10.1057/9781137478757
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To the memory of
Chi-Fang Chu
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Contents
List of Figures x
List of Tables x iii
Preface x v
Notes on Contributors xvii
1 E xcessive Credits and the “Lost Decades” in Growth
Performance 1
Y un-Peng Chu
1.1 Introduction 1
1.2 T he growth equation: expanded to include
economic crises and credit growth 2
1.3 T he result: balanced growth of domestic credit and
nominal GDP matters 5
1.4 The “lost decades” as residuals in the growth equation 8
1.5 Concluding remarks and structure of the book 1 3
A ppendix: list of right-hand side variables with their
instruments and sources 1 6
2 A Third Decade of Low Growth? Lessons from
Japan on Financial Management and Economic Growth 20
R ichard A. Werner
2.1 Introduction 2 0
2.2 D emand management policies: the puzzle of their failure 21
2.3 The failure of supply-side policies 26
2.4 The link between money and the economy 3 7
2.5 The Quantity Theory of Credit and its policy implications 44
2.6 Conclusion 4 9
3 I t’s not Structural Change, but Domestic Demand:
Japan’s Productivity Growth 5 3
A kira Kohsaka and Jun-ichi Shinkai
3.1 Introduction 5 3
3.2 Background 5 5
3.3 Methodology and dataset 5 7
vii
viii Contents
3.4 I ntra-industry productivity growth vs. inter-industry
reallocation of labor 5 9
3.5 Inter-industry reallocation of labor 6 0
3.6 Intra-industry productivity growth 6 3
3.7 C oncluding remarks: it’s not structural change,
but domestic demand 6 9
4 L ong Waves of Prosperity and Decline: What Makes
Financial-Led Capitalism Different? 75
Ó scar Dejuán
4.1 Introduction 7 5
4.2 T he real side of the economy and the problem of effective
demand driving sectors and stabilizing fiscal policies 76
4.3 T he balance of payments constraint and
deflationary forces in the international economy 7 9
4.4 T he financial side: from credit explosion to credit
crunch, debt traps, and speculative bubbles 8 2
4.5 T he dual role of banks and the need to differentiate
credit regulation according to the borrower and
the use of loans 8 6
4.6 Conclusions 9 1
5 T he Korean Economy: Structural Changes and Challenges 97
C heonsik Woo and Jinhee Park
5.1 Introduction 9 7
5.2 The Korean economy today: two contrasting views 98
5.3 Industrial and business landscape 102
5.4 Core tasks to resume the virtuous circle 1 08
A ppendix: recent policy initiatives to promote the
service sector 1 10
6 T aiwan’s Lost Decades: Populism and
Internal Contradiction 1 13
Y un-Peng Chu
6.1 Taiwan’s lost decade 1 13
6.2 The mutinous mutation of the developmental state 114
6.3 Failures in collective action caused by populism 117
6.4 O ther revealed failures in collective action caused
by populism 1 19
6.5 The anomalous growth equations 1 21
6.6 Clash between nationalisms 1 26
6.7 Clash between the economy and politics 1 30
Contents ix
6.8 Possible remedies? 1 40
6.9 Concluding remarks 1 42
A ppendix 6.1: results of an Experiment of
Delegated Deliberation 146
7 P aradigmatic Shifts in Policies, Evolution of the Political
Economy, and the Lost Decade in Growth Performance 164
Y un-Peng Chu
7.1 Introduction 1 64
7.2 Paradigmatic shifts in economic policies 1 64
7.3 T he lost decade in Brazil, India, Indonesia, Mexico,
Thailand, and Turkey 1 86
7.4 T he dynamic evolution of the political economy and
the lost decades: Taiwan and South Korea 1 97
7.5 Concluding remarks 2 33
Index 241