Gap Disequilibria

Lance Taylor

No 295609, WIDER Working Papers from United Nations University, World Institute for Development Economic Research (UNU-WIDER)

Abstract: Four "gaps" or restrictions on capacity growth -- from available saving and foreign exchange, investment demand (with crowding-in of private by public capital formation), and ex ante discrepancies between inflation rates needed on the one hand to achieve macroeconomic balance via the inflation tax and forced saving and on the other hand to meet increases in costs -- are analyzed in a simple, unified framework. Several policy issues are addressed, in particular how a developing economy can sustain growth when faced with reduced net foreign resource transfers and capital flight, and macroeconomic difficulties implicit in "heterodox shock" anti-inflation programs.

Keywords: International; Development (search for similar items in EconPapers)
Pages: 32
Date: 1989-10
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Persistent link: https://EconPapers.repec.org/RePEc:ags:widerw:295609

DOI: 10.22004/ag.econ.295609

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