EconPapers    
Economics at your fingertips  
 

How could the South respond to secular stagnation in the North?

Joerg Mayer

MPRA Paper from University Library of Munich, Germany

Abstract: Developed countries face the risk of a sustained lack of aggregate demand, i.e. secular stagnation. Demand-oriented growth models emphasizing the balance-of-payments constraint raise concerns about attendant adverse growth impacts on developing countries from reduced export growth. These concerns are well-founded, albeit less serious than the simplest version of these models would imply. Relaxing their assumptions and emphasizing cumulative causation forces from domestic-demand growth and relative price effects indicates how changed policies can maintain rapid growth while reducing the import content of demand. Crucial is investment that reduces gaps between the composition of domestic production and domestic demand and emphasizes sectors with cumulative-causation effects, combined with incomes policy and capital-account management. Drawing down excessive foreign-exchange reserves and obtaining concessionary loans from development banks can finance required capital-goods imports. Enhanced South-South integration may be an important complement for small countries.

Keywords: Secular stagnation; economic development; balance-of-payments constrained growth (search for similar items in EconPapers)
JEL-codes: F43 O11 O20 (search for similar items in EconPapers)
Date: 2015-03-03
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (4)

Downloads: (external link)
https://mpra.ub.uni-muenchen.de/62113/1/MPRA_paper_62113.pdf original version (application/pdf)

Related works:
Journal Article: How Could the South Respond to Secular Stagnation in the North? (2017) Downloads
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:pra:mprapa:62113

Access Statistics for this paper

More papers in MPRA Paper from University Library of Munich, Germany Ludwigstraße 33, D-80539 Munich, Germany. Contact information at EDIRC.
Bibliographic data for series maintained by Joachim Winter ().

 
Page updated 2025-03-19
Handle: RePEc:pra:mprapa:62113