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502. Economic Growth and Institutional Innovation: Outlines of a Reform Agenda
- Author:
- William A. Galston
- Publication Date:
- 06-2010
- Content Type:
- Policy Brief
- Institution:
- The Brookings Institution
- Abstract:
- When experts and pundits are asked what the president and Congress should do to promote economic growth, they typically respond with a list of policies, often mixed with stylistic and political suggestions. Few focus on institutional change, which is too easy to conflate with yawn-inducing “governmental reorganization.”
- Topic:
- Economics and Financial Crisis
- Political Geography:
- United States
503. Spurring Innovation Through Education: Four Ideas
- Author:
- Grover J. (Russ) Whitehurst
- Publication Date:
- 06-2010
- Content Type:
- Policy Brief
- Institution:
- The Brookings Institution
- Abstract:
- A nation's education system is a pillar of its economic strength and international competitiveness. The National Bureau of Economic Research analyzed data from 146 countries, collected between 1950 and 2010, and found that each year of additional average schooling attained by a population translates into at least a two percent increase in economic output. A 2007 World Bank policy research working paper reported similar results. Based on these findings, if the United States increased the average years of schooling completed by its adult population from the current 12 years to 13 years—that is, added one year of postsecondary education—our gross domestic product would rise by more than $280 billion.
- Topic:
- Economics and Education
- Political Geography:
- United States
504. The Future of Small Business Entrepreneurship: Jobs Generator for the U.S. Economy
- Author:
- Martin Neil Baily, Karen Dynan, and Douglas J. Elliott
- Publication Date:
- 06-2010
- Content Type:
- Policy Brief
- Institution:
- The Brookings Institution
- Abstract:
- As the nation strives to recover from the “Great Recession,” job creation remains one of the biggest challenges to renewed prosperity. Small businesses have been among the most powerful generators of new jobs historically, suggesting the value of a stronger focus on supporting small businesses— especially high-growth firms—and encouraging entrepreneurship. Choosing the right policies will require public and private decision-makers to establish clear goals, such as increasing employment, raising the overall return on investment, and generating innovations with broader benefits for society. Good mechanisms will also be needed for gauging their progress and ultimate success. This brief examines policy recommendations to strengthen the small business sector and provide a platform for effective programs. These recommendations draw heavily from ideas discussed at a conference held at the Brookings Institution with academic experts, successful private-sector entrepreneurs, and government policymakers, including leaders from the Small Business Administration. The gathering was intended to spur the development of creative solutions in the private and public sectors to foster lasting economic growth.
- Topic:
- Economics and Financial Crisis
- Political Geography:
- United States
505. The Roots of Global Wage Gaps: Evidence from Randomized Processing of U.S. Visas
- Author:
- Michael Clemens
- Publication Date:
- 06-2010
- Content Type:
- Working Paper
- Institution:
- Center for Global Development
- Abstract:
- This study uses a unique natural experiment to test a simple model of international differences in workers' wages and productivity. Large differences in wages across countries could arise from several sources. These include barriers to trade in outputs, differences in technology, differences in workers, or differences in the other factors of production accessible in different countries. To measure the relative importance of these sources in one setting, this study exploits the randomized processing of U.S. visas for a group of Indian workers who produce software within a single multinational firm. In this setting, international barriers to trade in outputs, barriers to technology transfer, and all observable or unobservable differences between workers are extremely low. The results indicate that location outside of India causes a sixfold increase in the wages of the same worker using the same technology to produce a highly tradable good. Under plausible assumptions about competition in the industry, this suggests that country-of-work by itself is responsible—in this industry—for roughly three-quarters of the gap in productivity between workers in India and workers in the richest countries. These findings have implications for open questions in labor, growth, international, and development economics.
- Topic:
- Economics and Labor Issues
- Political Geography:
- United States and India
506. Economic Challenges in Post-Conflict Iraq
- Author:
- Anthony H. Cordesman
- Publication Date:
- 03-2010
- Content Type:
- Working Paper
- Institution:
- Center for Strategic and International Studies
- Abstract:
- Economics are as important to Iraq's stability and political accommodation as security and governance, and they are equally critical to creating a successful strategic partnership between Iraq and the United States. It is far from easy, however, to analyze many of the key factors and trends involved. Iraqi data are weak and sometimes absent. U.S. and Coalition forces generally failed to look in detail at many of Iraq's most serious economic problems, or they issued heavily politicized reports designed to show that Iraqi “reconstruction” had been far more successful than it really was.
- Topic:
- Economics
- Political Geography:
- United States, Iraq, and Middle East
507. Russia-Europe Energy Relations: Implications for U.S. Policy
- Author:
- Keith C. Smith
- Publication Date:
- 02-2010
- Content Type:
- Working Paper
- Institution:
- Center for Strategic and International Studies
- Abstract:
- It is my thesis that the national security risk posed by Russian energy policies are only tangentially related to Europe's dependency on Russian energy imports. The primary energy risk to Europe, and especially to the newer EU members, stems from the corrosive effect this dependency has on governance and on transatlantic cooperation. Moscow's divide-and-conquer tactics have successfully prevented greater inter-European cooperation on both economic and security issues. As we shall see, these factors have added to already existing strains in the U.S.-Europe relationship. Further NATO enlargement has been stopped, in part, due to Moscow's energy ties with the wealthier Western European states. It is in the U.S. interest to assist those Eastern and Central European (ECE) states that are highly dependent on Russian energy imports and are most susceptible to imported corruption. Kremlin officials, supported by 60 percent of Russian public opinion, favor reestablishing Soviet-era control or influence over ECE countries. The threat to the sovereignty of these new democracies cannot be dismissed.
- Topic:
- Economics
- Political Geography:
- Russia, United States, Europe, and Moscow
508. Wholesalers and Retailers in US Trade
- Author:
- J. Bradford Jensen, Andrew B. Bernard, Peter K. Schott, and Stephen J. Redding
- Publication Date:
- 06-2010
- Content Type:
- Working Paper
- Institution:
- Peterson Institute for International Economics
- Abstract:
- International trade models typically assume that producers in one country trade directly with final consumers in another. In reality, of course, trade can involve long chains of potentially independent actors who move goods through wholesale and retail distribution networks. These networks likely affect the magnitude and nature of trade frictions and hence both the pattern of trade and its welfare gains. To promote further understanding of the means by which goods move across borders, this paper examines the extent to which US exports and imports flow through wholesalers and retailers versus producing and consuming firms.
- Topic:
- Economics, International Trade and Finance, and Markets
- Political Geography:
- United States
509. US Trade and Wages: The Misleading Implications of Conventional Trade Theory
- Author:
- Robert Z. Lawrence and Lawrence Edwards
- Publication Date:
- 06-2010
- Content Type:
- Working Paper
- Institution:
- Peterson Institute for International Economics
- Abstract:
- Conventional trade theory, which combines the Heckscher-Ohlin theory and the Stolper-Samuelson theorem, implies that expanded trade between developed and developing countries will increase wage equality in the former. This theory is widely applied. It serves as the basis for estimating the impact of trade on wages using two-sector simulation models and the net factor content of trade. It leads naturally to the presumption that the rapid growth and declining relative prices of US manufactured imports from developing countries since the 1990s have been a powerful source of increased US wage inequality.
- Topic:
- Economics, Political Theory, and Labor Issues
- Political Geography:
- United States
510. The Realities and Relevance of Japan's Great Recession: Neither Ran nor Rashomon
- Author:
- Adam S. Posen
- Publication Date:
- 06-2010
- Content Type:
- Working Paper
- Institution:
- Peterson Institute for International Economics
- Abstract:
- Japan's Great Recession was the result of a series of macroeconomic and financial policy mistakes. Thus, it was largely avoidable once the initial shock from the bubble bursting had passed. The aberration in Japan's recession was not the behaviour of growth, which is best seen as a series of recoveries aborted by policy errors. Rather, the surprise was the persistent steadiness of limited deflation, even after recovery took place. This is a more fundamental challenge to our basic macroeconomic understanding than is commonly recognized. The UK and US economies are at low risk of having recurrent recessions through macroeconomic policy mistakes—but deflation itself cannot be ruled out. The United Kingdom worryingly combines a couple of financial parallels to Japan with far less room for fiscal action to compensate for them than Japan had. Also, Japan did not face poor prospects for external demand and the need to reallocate productive resources across export sectors during its Great Recession. Many economies do now face this challenge simultaneously, which may limit the pace of, and their share in, the global recovery.
- Topic:
- Economics, Markets, Monetary Policy, and Financial Crisis
- Political Geography:
- United States, Japan, and United Kingdom