Appropriate Economic Policies at Different Stages of Development

Victor Polterovich and Vladimir Popov
Authors registered in the RePEc Author Service: Виктор Меерович Полтерович

MPRA Paper from University Library of Munich, Germany

Abstract: This paper summarizes theoretical arguments and provides empirical evidence to support the statement that rational economic policies depend qualitatively on two factors – technological and institutional level of development of a country. We concentrate on the impact of three policies to promote the catch up development – import tariffs, increase of government revenues/spending, and the speed of foreign exchange reserves accumulation ("exchange rate protectionism"). It is shown that the impact of these policies may be positive or negative dependening on a stage of development; in each case we find threshold levels or critical combinations of GDP per capita and/or an institutional quality indicator. A theoretical model demonstrates how tariff protection and accumulation of reserves can boost long term growth in the presence of externalities.

Keywords: development stages; economic growth (search for similar items in EconPapers)
JEL-codes: P16 (search for similar items in EconPapers)
Date: 2005
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (20)

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Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:20066

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