Growth, Macroeconomics, and Development

Stanley Fischer

No 3702, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: The 1980s were both the lost decade of growth for much of Latin America and Africa, and the period in which -- through the new growth theory -- macroeconomists returned to the study of growth and development. The new growth theory is production function driven and concerned primarily with steady states, and has paid little attention to the role of macroeconomic policy -- as reflected for instance in the rate of inflation and the budget deficit -- in determining growth. This paper presents a variety of evidence that macroeconomic policies matter for long-run growth. First, macroeconomic variables enter the typical new growth theory cross-country regressions with statistical significance and the expected signs. Second, evidence from large multi?country case studies, and from case-studies of Chile and Cote d'Ivoire presented in the paper, shows that macroeconomic policy choices have had a significant impact on growth over periods of more than a decade. The conclusion is that macroeconomic policy choices, including the budget deficit, the exchange rate system, and those choices that determine the inflation rate, matter for long-term economic growth.

Date: 1991-05
Note: EFG ITI IFM
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (143)

Published as NBER Macroeconomics Annual 1991, Vol.6, eds, O.J. Blanchard and S. Fischer, Cambridge: MIT Press, January 1992.
Published as Growth, Macroeconomics, and Development , Stanley Fischer. in NBER Macroeconomics Annual 1991, Volume 6 , Blanchard and Fischer. 1991

Downloads: (external link)
http://www.nber.org/papers/w3702.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:nbr:nberwo:3702

Ordering information: This working paper can be ordered from
http://www.nber.org/papers/w3702

Access Statistics for this paper

More papers in NBER Working Papers from National Bureau of Economic Research, Inc National Bureau of Economic Research, 1050 Massachusetts Avenue Cambridge, MA 02138, U.S.A.. Contact information at EDIRC.
Bibliographic data for series maintained by ().