Low Economic Growth Rates Research Articles

Digital economy, land resource mismatch, and urban housing costs: Evidence from China's digital governance policy perspective

Live in peace and work in contentment" encapsulates people's aspirations within a digital economy framework. Has the digital economy truly realized this ideal? To answer this query, this paper delves into the correlation between the digital economy, resource mismatch, and urban housing costs across 272 Chinese cities. It evaluates the impact of policies propelled by the digital economy, using the “Broadband China” strategy as a benchmark. The findings suggest several key conclusions: (i) The imbalance in land resources exacerbates the digital economy's impact on escalating urban housing expenses. This effect is particularly pronounced in cities within the Yangtze River Economic Zone, cities experiencing low economic growth rates, large cities with high employment levels, and cities with relatively low wages. (ii) The rise of the digital economy has contributed to increased urban housing costs. For every 0.1 unit increase in a city's digital economy level, there is an observed average rise of 9.87% in housing costs. (iii) Policies steered by the digital economy, such as the "Broadband China" strategy, have significantly increased urban housing costs. A higher degree of resource mismatch correlates with a more pronounced impact of the “Broadband China” strategy pilot in elevating urban housing expenses. It is imperative to emphasize the qualitative ramifications of the digital economy. This should coincide with efforts to enhance resource utilization efficiency, aiming to mitigate the adverse effects of the digital economy's advancement on housing costs.

Development of Russia’s industry: Some regularities and prospects

Industry is the substratum of material production and the economy as a whole. Numerous discussions about the need for new industrialisation make us turn again to the analysis of the state of industrial potential and results of industrial development in Russia. The study aims to explain the performance of the Russian industry in terms of the most relevant and aggregated indicators characterising its functioning, and to formulate its long-term development tasks. The methodological basis of the study is the theory of industrial development. Methods of planning and industrial analysis are used. The evidence is the data for 2012–2022 retrieved from the Federal State Statistics Service of the Russian Federation and the Unified Interdepartmental Statistical Information System. The research concludes about the ‘contracted’ development of the Russian industry. The growth rate of the gross value added is more significantly impacted by the dynamics of fixed capital rather than that of labour. Yet the labour contributed greatly to the creation of the new value, which indicates the predominance of labour-intensive technologies, or obsolete capital-intensive technologies. The study empirically confirms that some periods saw a ‘paradox of rapid industrialisation’, that is, a substantially lower rate of economic growth against a higher growth of industry and modernisation of its fixed assets. The general conclusion is that when conducting industrial policy, it is necessary to influence the state of the labour and capital factors in the manufacturing sectors. The industrialisation of the Russian economy needs to be oriented towards the technological substitution through the creation of new fixed assets; in addition, the losses of greatly reduced labour potential should be compensated. A promising avenue is the organisation of analytical planning for the state-owned industry and indicative planning for private industries along with the adoption of a law on the state sector.

Economic growth, current account dynamics, and growth regimes in the Baltic states

ABSTRACT This article considers the growth performance of the Baltic states from the mid-1990s to 2021. Economic growth was rapid before the global financial crisis but slowed markedly after the crisis. Panel data estimations using seemingly unrelated regressions suggest that the dynamics of the current account balance are important for short and medium-term growth in the Baltic states but that there is a break signifying a change of short-term growth regime around the time of the global financial crisis. Before the crisis, rapid growth was supported by domestic demand that was made possible by large current account deficits. After the crisis, economic growth was supported by external demand reflected in improvements in current account balances. The shift in the short-term economic growth regime after the global financial crisis has brought lower rates of economic growth but also reduced financial vulnerability.

The shadow economy in industrial countries

The shadow (underground) economy has a major impact on society and economy in many countries. People evade taxes and regulations by working in the shadow economy or by employing people illegally. On the one hand, this unregulated economic activity can result in reduced tax revenue and fewer public goods and services, lower tax morale and less tax compliance, higher control costs, and lower economic growth rates. But on the other hand, the shadow economy can be a powerful force fostering institutional change and boosting the overall production of goods and services in an economy. The shadow economy has implications on the political order and institutional change. illustration

Labour incomes and economic activity in Poland

ObjectivesThe purpose of the paper is to examine the impact of labour incomes on economic activity and growth in Poland.Material and methodsThe thesis of the paper is rooted in the hypothesis of underconsumption and it claims that a proportion of labour incomes to the domestic product exerts an influence on the structure and the value of the aggregate demand and thus it eventually has an effect on economic activity. Empirical analysis provided refers to macroeconomic data for the period 2010-2019.ResultsThe results support the thesis; relatively low growth of labour incomes is followed by low rates of economic growth and investment and higher rates of unemployment.ConclusionsThe analysis of changes in real production per employee, real wages, the rate of unemployment, the rate of GDP growth and changes in households’ consumption spending strongly support the claim that low wages at least periodically stand behind a demand constraint in the Polish economy and that they impair economic results.

Model for Determining Insurance Premiums Taking into Account the Rate of Economic Growth and Cross-Subsidies in Providing Natural Disaster Management Funds in Indonesia

Natural disasters are increasing due to climate change, which is causing economic losses for countries affected by them. Disaster management funds need to be provided, including through purchasing insurance. Determining natural disaster insurance premiums needs to involve consideration of the geographical conditions of the country. The aim of this research was to develop a model for determining natural disaster insurance premiums using the jumping processes method and a cross-subsidy system. The model takes into account the level of economic growth and the natural disaster potential index. The data analyzed relate to cases of natural disasters and losses that occurred in each province in Indonesia. From the results of the analysis, it was found that through a cross-subsidy system, the principle of mutual cooperation can be applied in managing natural disasters. Regions with a high level of economic growth and a low natural disaster potential index need to provide subsidies to regions with a low economic growth rate and a high natural disaster potential index. It was also found that the cost of insurance premiums was influenced by the size of losses and the frequency of natural disasters in the province. The greater the potential for disasters and economic losses experienced by a province due to disasters, the greater the premium burden that must be borne, and vice versa. Based on these conditions, insurance premiums vary in each province in Indonesia. It is hoped that the results of this research can provide a reference for the government in determining policies for providing funds for natural disaster management using a cross-subsidy system. In addition, this research can provide a reference for insurance companies in determining natural disaster insurance premiums in Indonesia.

Creative destruction, human capital accumulation, and growth in a digital economy

Abstract The rapid development of the digital economy has highlighted the crucial role of data in economic growth. This study investigates the impact of two types of innovation on long-term growth by incorporating data into a model of creative destruction and knowledge accumulation. Unlike traditional factors, data exhibit nonrivalry between the two research and development (R&D) sectors, thereby influencing the growth rate of economic outputs simultaneously without interference. Our findings reveal the existence of a balanced growth path (BGP) in both the decentralized economy and the social planner’s economy. In horizontal innovation, data can be transformed into digital knowledge to promote the economic growth [Cong et al. (2021)]. In addition to horizontal innovation, the utilization of data in vertical innovation also enhances the success rate of innovation, with a gradual decrease in per capita data usage on the BGP. Moreover, as agents accumulate human capital, the economy achieves higher output levels, effectively addressing consumer privacy concerns. However, along the transitional path, insufficient data provision by both R&D sectors leads to lower economic growth rates or more intense economic fluctuations, necessitating policy interventions.

ЕКОНОМІКА НАДЛИШКУ ГРОШЕЙ

The article is devoted to the formation of an economy in which there is a relative surplus of money. Excess money is seen as a consequence of the policy of quantitative easing, which was carried out by the central banks of developed countries. Peculiarities of growth in the ratio of money supply and gross domestic product for individual countries have been studied. It is shown that financing the reconstruction of Ukraine corresponds to the own economic interests of the donor countries, as it will help to correct certain systemic imbalances of monetary circulation in their economies. This imbalance is embodied in a relative surplus of money. This surplus is of a different nature than that implied by the quantity theory of money. From the point of view of behavioral economics, money is a tool for motivating the subject to action (or, when necessary, inaction). Stimulation of activity, in particular, entrepreneurial activity, due to the opportunity to get more money is a characteristic feature of the capitalist economy. Considering that the value of money is important not in itself, but in relation to what it is used for, we can imagine that the creeping inflation of even the most seemingly basic and solid world currencies (the US dollar, the British pound, the euro) is evidence of a certain loss of vision of what money is needed for and, accordingly, how much money is needed in the economy. The dynamics of the ratio of the money supply to the manufactured product can serve as an indicator of the existence of a problem in the monetary supply of the functioning of the world economy. A gradual increase in the ratio of money supply to GDP is observed in all countries. The rate of growth of this indicator in developed countries is generally close to the world average. In poor countries characterized by low rates of economic growth, the ratio of money supply to GDP remains quite low. Moreover, in our opinion, the leading role here is played not so much by low per capita income as by low rates of economic growth. According to the group of countries with an average level of per capita income (and especially, with “above average” incomes), the ratio is significantly higher than the world average level. The growth of the ratio of money supply to GDP is especially noticeable in the countries of the Far East, which took as an example the strategy that led to the Japanese “ economic miracle.” This strategy involves the acceleration of economic growth at the expense of the preemptive development of export-oriented industries. Periods of accelerated economic development precisely reveal the motivational role of money. Entrepreneursinnovators should receive more money. the state, or rather, its monetary regulator, the central bank, facilitates the conditions providing loans to help innovators dare and take a decisive step into something new. Entrepreneurs have separated the desire to earn money from the desire to spend to meet real needs. Due to the saturation of the economy with money, the state has already reached a high level of monetization, which indicates accumulated monetary wealth. The owners of this monetary wealth need new directions of investment, because after the ideological and motivational potential of Internetization was exhausted, the banking and financial infrastructure began to fail. A series of crises (2001, 2008-2009, 2020) was the result of a mismatch between the large accumulated monetary wealth and the lack of ideas for its profitable investment. Reconstruction of Ukraine can become such a profitable investment idea.

ANALISIS PENGARUH INDEKS PEMBANGUNAN MANUSIA, JUMLAH TENAGA KERJA, RASIO KETERGANTUNGAN DAN RASIO JENIS KELAMIN TERHADAP PERTUMBUHAN EKONOMI DI JAWA TENGAH TAHUN 2015-2021

Economic growth is a long-term problem that is always faced by a country. Central Java Province is a province that has a low economic growth rate among other provinces on the island of Java. The purpose of this study is to see the effect of human development index, total labor, dependency ratio and sex ratio on economic growth in Central Java in 2015-2021. The analytical tool used is the Fixed Effect Model (FEM) panel data regression. The data used is secondary data from 35 districts / cities in Central Java. The results showed that the human development index, the number of workers and the sex ratio had a positive effect on economic growth in Central Java, while the dependency ratio had a negative effect on economic growth in Central Java.

Effect of External Shocks on the Predictability of Remittance Flows From Developed Countries

The present analysis has explored the effect of external shocks on the predictability of remittance outflows, by relying on an unbalanced panel of 24 developed countries over the period from 1996 to 2020. The indicator of predictability of remittance outflows for a given country in a given year is the deviation of the remittance outflows (as a share of gross domestic product) from its trend. Results are obtained by means of the within-fixed effects estimator, and indicate that external shocks reduce the predictability of remittance outflows, with a larger negative effect on the positive predictability of these capital outflows than on the negative predictability of these capital outflows. The negative effect of external shocks on the predictability of remittance outflows operates through the economic growth channel, with the magnitude of this negative effect being higher in countries with low economic growth rates. Finally, external shocks reduce the predictability of remittance outflows in countries that experience a decline in migrant inflows. This finding has implications for the economic and development prospects of migrants’ countries of origin. JEL Classification: F24, F43, O11

The impact of fiscal technology expenditures on innovation drive and carbon emissions in China

China's central government has identified the reduction of carbon emissions as an important strategic goal for achieving economic and social progress. Innovation is the main driver behind these goals, and fiscal technology expenditures are a crucial policy instrument that can influence such innovation. We use a panel of 277 Chinese prefecture-level cities from 2010 to 2019 and a fixed effects econometric model to assess the impact of fiscal technology expenditures on CO2 and study the transmission mechanism underlying this relationship. Our results suggest that public support of research and development initiatives can effectively curb regional carbon emission intensity. Moreover, this effect is particularly strong in areas characterized by relatively low economic growth rates and fiscal pressure. In addition, the analysis of the underlying transmission mechanism suggests that public spending on science and technology can promote emission reduction via investment in digital and green innovation. Hence, it is imperative to increase fiscal technology expenditures in order to help curb carbon emissions at the local level.

Characteristics and spatial–temporal patterns of supply and demand of ecosystem services in the Taihang Mountains

Research on the spatial–temporal pattern of the supply and demand associated with ecosystem services(ESs) is of great significance for regional sustainable development. Due to their high spatial heterogeneity, the relationship between supply and demand of ESs in mountainous areas in particular needs to be further studied. This paper examines the supply and demand of ESs in the Taihang Mountains from 2000 to 2018 at both the whole-region and county scale to evaluate supply–demand patterns, the nature and resilience of the supply–demand relationship, and to analyze spatiotemporal variation and characteristics, which can provide a basis for the coordination and sustainable management of the supply and demand relationship of the ecosystem. Our results showed that during the study period: （1)the ecosystem services supply(ESS) increased by 2.36% and the ecosystem services demand(ESD) increased by 50.93%,the increase in the rate of ESS was far less than that of ESD and on the county scale, the ESS of 20% of the counties decreased whereas and the ESD of all counties increased.（2)the supply and demand pattern of the Taihang Mountains remained basically unchanged，the types of supply and demand in the Taihang Mountains are mainly low supply-high demand, low supply-low demand, and high supply-low demand, accounting for>90% of the total county number.（3)the average supply and demand index of high altitude counties is more than five times that of low altitude counties.The average supply and demand index of counties with low economic growth rate is twice that of the high economic growth rate.（4)67% of counties reduced the resilience level of total ecosystem services（TES), the resilience level of the provisioning services(PS) decreased most significantly, reaching 76%.

НАЛОГОВЫЕ АСПЕКТЫ ПРОСТРАНСТВЕННОГО РАЗВИТИЯ: МОДЕЛИ, МЕХАНИЗМЫ И ПОДХОДЫ

This article examines spatial development from the point of view of tax incentives, approaches, methods of study and its aspects. This study examines issues in terms of the distinctive features of such definitions as «territorial development», «regional development» and «cluster development», their focus and strategic objectives that are interconnected with spatial development. The essence of spatial development is revealed through the evolution of tax instruments used for economic growth in terms of investment and innovation of specific entities and territories. Comparative analysis of spatial development links allows us to note the complexity of emerging relationships between various aspects of the economy, which indicates the need for an integrated approach to solving issues of innovation and investment policy of the state. This article presents an analysis of foreign practice in terms of using spatial development as a tool for tax incentives for various territories with low and high economic growth rates to minimize differentiation between regions and solve strategically important tasks.

Impact of Bank Size on Its Financial Indicators in Bulgaria

Introduction. One of the frequently used criteria for classifying banks is according to their size. The question of the existence of a dependence between the size of credit institutions, on the one hand, and their financial condition and results of activity, on the other hand, was logically raised. In recent years, this issue has increased its significance in Bulgaria against the background of the following circumstances: first, a process of consolidation of the banking sector in the country has begun; second, the new dimensions of the macroprudential policy impose higher regulatory requirements on banks, according to Basel III regulations; third, there is a significant number of relatively small credit institutions whose activity has a relatively limited scope; fourth, weak economic activity and low rate of economic growth of the country; fifth, the search for ways to increase the efficiency of banking activity.
 Aim and tasks. The aim of the research is to establish the extent to which the size of the credit institutions in the country has an impact on various aspects of banking activity, as well as the strength of this impact. The subject of the study is focused on delineating the comparative advantages and disadvantages of big and small banks in terms of the scale of their operations.
 Results. The analysis is based on information on the status and results of the activities of 18 banks in Bulgaria. The study covers observations on the development of the banking sector in 2020 and 2021. When specifying the size of banks, the traditional criterion is used, which is most often used to determine their size, namely the amount of their assets. It examines the impact of the size of credit institutions on 7 financial indicators reflecting different aspects of banking activity: Return on Assets, Efficiency of Administrative Costs, Staff Productivity, Asset Quality, Asset risk rating, Liquidity Coverage Ratio, Total Capital Ratio. On this basis, a correlation analysis is made, in which the correlation coefficient is used as the statistical measure of the dependence between the size of credit institutions (the assets), on the one hand, and their financial indicators, on the other hand. In parallel, the average values of the analyzed indicators for the respective years are calculated separately for each group of banks.
 Conclusions. There is reason to claim that one of the possible instruments for increasing the efficiency of the banking sector in the country is its further consolidation. Of course, the conclusions drawn are not universal. This reflects the specifics of the banking industry in Bulgaria and the specifics of the period to which the analyzed data refer. With almost all analyzed indicators, a strong or moderate dependence between the size of the banks and the values of the considered financial indicators is outlined. This dependence is most pronounced in relation to the Return on Assets– as the size of credit institutions increases, the return on their assets increases significantly. The values with credit institutions with a wider scale of activity are better, which gives them visible advantages over other smaller banks.

SOCIAL POLICY: A NEW PARADIGM

The article considers the possibility of solving the urgent problems of insufficient solvent demand and low rates of economic growth of the Russian economy in the process of implementing social policy of an active participant in the process of increasing aggregate supply in the economy as a generator of production growth and employment growth. Within the framework of the proposed new paradigm of social policy, the author of the article focuses on the need to strengthen the financial position of an individual by providing an additional and stable source of income through state financing of job search, training or opening their own business. The specifics of the research is the author's proposal to focus special attention on the possibility of receiving financial support from the state in the Russian Federation on a gratuitous and irrevocable basis for the above-mentioned purposes in the form of: – subsidies for the unemployed to start a business; – grants for small businesses; – social contracts. Thus, an urgent requirement for the modern system of state financing of entrepreneurial activity in the Russian Federation in the conditions of the financial and economic crisis is the need for improvement and universality of use. A prerequisite for the effective implementation of the new model of social policy is the provision of adequate opportunities for various segments of the population to open their own businesses in order to increase Russia's GDP (Gross Domestic Product), increase the number of taxpayers and expand the tax base, improve the country's macroeconomic indicators. The positive dynamics of the national income of Russia, the personal income of the citizens of the country, and, consequently, the increase in the level and quality of their life, a decrease in the level of income differentiation is the final result of effective financial support for socially vulnerable segments of the population. According to the author, the positive consequences of the successful implementation of the proposed approach in the implementation of social policy are as follows: – macroeconomic ones (stable rates of economic growth, expansion of effective demand, falling unemployment, growth in employment, GDP, tax revenues to the budget, the level and quality of life of the population); – microeconomic ones (growth of income of the population, decrease in the number of people in need of social support, decrease in the degree of differentiation of incomes of citizens).

SOCIAL POLICY: A NEW PARADIGM

The article considers the possibility of solving the urgent problems of insufficient solvent demand and low rates of economic growth of the Russian economy in the process of implementing social policy of an active participant in the process of increasing aggregate supply in the economy as a generator of production growth and employment growth. Within the framework of the proposed new paradigm of social policy, the author of the article focuses on the need to strengthen the financial position of an individual by providing an additional and stable source of income through state financing of job search, training or opening their own business. The specifics of the research is the author's proposal to focus special attention on the possibility of receiving financial support from the state in the Russian Federation on a gratuitous and irrevocable basis for the above-mentioned purposes in the form of: – subsidies for the unemployed to start a business; – grants for small businesses; – social contracts. Thus, an urgent requirement for the modern system of state financing of entrepreneurial activity in the Russian Federation in the conditions of the financial and economic crisis is the need for improvement and universality of use. A prerequisite for the effective implementation of the new model of social policy is the provision of adequate opportunities for various segments of the population to open their own businesses in order to increase Russia's GDP (Gross Domestic Product), increase the number of taxpayers and expand the tax base, improve the country's macroeconomic indicators. The positive dynamics of the national income of Russia, the personal income of the citizens of the country, and, consequently, the increase in the level and quality of their life, a decrease in the level of income differentiation is the final result of effective financial support for socially vulnerable segments of the population. According to the author, the positive consequences of the successful implementation of the proposed approach in the implementation of social policy are as follows: – macroeconomic ones (stable rates of economic growth, expansion of effective demand, falling unemployment, growth in employment, GDP, tax revenues to the budget, the level and quality of life of the population); – microeconomic ones (growth of income of the population, decrease in the number of people in need of social support, decrease in the degree of differentiation of incomes of citizens).

The relationship between city size, decentralisation and economic growth

PurposeThis article examines the links between average city size, fiscal decentralisation, and national economic growth in 33 Organisation for Economic Co-operation and Development (OECD) countries.Design/methodology/approachThe data in this paper comprise an unbalanced panel dataset which contains economic growth indicators, average city size, fiscal decentralisation indicators and control variables in 33 OECD member countries from 1975 to 2015 in five-year intervals. Fixed-effects (FE) estimators are used for the analysis.FindingsThis research finds i) countries with larger weighted average city sizes have higher economic growth, ii) countries with greater fiscal decentralisation have higher economic growth, but iii) countries with larger weighted average city sizes with greater decentralisation have lower rates of economic growth.Originality/valueThe research highlights the importance of agglomerations and decentralised governance and management for economic growth. While the findings are consistent with previous evidence that larger city sizes and fiscal decentralisation are separately associated with higher rates of economic growth, the authors find countries which have larger cities and greater fiscal decentralisation experience lower rates of economic growth highlighting a need for caution on decentralisation agendas in such cases. The implications of this suggest policymakers should proceed with caution on decentralisation agendas in countries with large cities.

Determinants of Carbon Dioxide Emissions and Their Peaking Prospect: Evidence From China

In order to examine the key determinants of carbon dioxide emissions and judge whether China’s carbon dioxide emissions can reach their peak value before 2030, this study first uses the extended STIRPAT model to analyze the determinants of China’s carbon dioxide emissions from 1995 to 2019 and then uses the model regression result to forecast the carbon dioxide emissions from 2020 to 2040 under six scenarios to investigate their prospect. It is found that population size, GDP per capita, energy intensity, the share of coal consumption, urbanization level, the share of secondary industry, and investment have significant positive effects on carbon dioxide emissions. Among them, the influence of population size is the biggest and energy intensity is the weakest. China’s carbon dioxide emissions can reach their peak in 2029 under the baseline scenario. Increasing the rate of population growth, energy intensity, and share of coal consumption will push back the peak year. A lower rate of economic growth and share of the secondary industry will bring the peak year forward. Therefore, it is necessary to optimize the industrial structure and energy consumption structure, reduce the energy intensity, and control the population size in order to achieve the goal of peaking carbon dioxide emissions as soon as possible.

The Aging Population in Vietnam: Trend and Policy

This paper analyzes the aging population in Vietnam and the international experience, thereby assessing the potential challenges to provide new viewpoints and corresponding policies in the coming years. The aging population in Vietnam evolves with a rapid growth rate, even with a higher speed than other economies in the same income group, but is not associated with improved health care services for this particular group of the population. This can result in a lower economic growth rate, an unbalanced social development, and an aged but not rich society. In the future, the aging population needs to be considered as a phenomenon that is harmonious with nature and that goes along with economic development. Thus, some policies are proposed to deal with the aging population including an inclusive income insurance system for aged people, a sound economic policy architecture, and a social consensus on the aging population.

The Aging Population in Vietnam: Trend and Policy

This paper analyzes the aging population in Vietnam and the international experience, thereby assessing the potential challenges to provide new viewpoints and corresponding policies in the coming years. The aging population in Vietnam evolves with a rapid growth rate, even with a higher speed than other economies in the same income group, but is not associated with improved health care services for this particular group of the population. This can result in a lower economic growth rate, an unbalanced social development, and an aged but not rich society. In the future, the aging population needs to be considered as a phenomenon that is harmonious with nature and that goes along with economic development. Thus, some policies are proposed to deal with the aging population including an inclusive income insurance system for aged people, a sound economic policy architecture, and a social consensus on the aging population.