Medium-term Growth Research Articles

POSITIONING OF RUSSIAN REGIONS IN LONG-TERM AND MEDIUM-TERM ECONOMIC GROWTH RATINGS

In the article the author creates ratings of Russian regions according to criteria — ​long-term and medium-term real economic growth. An indicator of economic growth is the index of the physical volume of gross regional product. By the long-term period we mean the period from 1997 to 2021, by the medium-term period — ​the period from 2016 to 2021. The purpose of the study is to rank the regions according to these periods. Objectives of the study are following: to conduct a comparative analysis of the results of building two ratings; to show the spatial location of regions from the standpoint of long-term economic growth; to show the specialization of the leading regions. Specific research methods are the ranking method, comparative and correlation analyses, and the graphical illustration method. The leaders of both long-term and medium-term economic growth are three regions. These are St. Petersburg, the Moscow region and the Republic of Adygea. The absolute outsider according to both ratings is the Komi Republic. The industry specificity of the leading regions was obtained: all regions are characterized by specialization in manufacturing. Regions leading long-term and medium-term growth also specialize in non-production activities — ​wholesale and retail trade, real estate operations. The leading regions of medium-term growth specialize both in the extractive industry and in the fields of transport and communications.

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.

People’s Republic of China

Following an impressive recovery from the initial impact of the pandemic, China’s growth has slowed significantly in 2022. It remains under pressure as more transmissible variants have led to recurring outbreaks that have dampened mobility, the real estate crisis remains unresolved, and global demand has slowed. Macroeconomic policies have been eased appropriately, but their effectiveness has been diminished by a focus on enterprises and increasingly less effective traditional infrastructure investment rather than support to households. The pandemic and its impacts have also been a setback to economic rebalancing toward private consumption and to reducing greenhouse gas emissions. A slowdown in growth-enhancing reforms against the backdrop of increasing geoeconomic fragmentation pressures stand in the way of a much-needed lift to productivity growth, weighing on China’s medium-term growth potential.

Does Debt Have Threshold Effects on Medium-Term Growth? Evidence from European Union Countries

Abstract Debt has become an important factor in economic activity and its extent has incentivized many researchers to incorporate it into contemporary growth models. On the positive side, debt has the ability to smoothen private consumption, firms’ investment and government expenditure in relation to their corresponding income, subsequently leading to better capital allocation. However, the history of debt defaults and lessons from European sovereign debt crises, which were accompanied by strict austerity measures, have warned us about the danger of debt overhang and unsustainable debt burdens. This paper tackles the question of the existence of a turning point, at which the negative effects of debt start to prevail in the economic process. In the sample of European Union countries in the period from 1995 to 2019, the author of this paper investigated the presence of threshold effects of government, non-financial corporate and household debt on medium-term growth following the paper by Mika and Žumer (2017). The author first confirmed the concave-shaped relationship between public debt and growth with a threshold of 111.6% of GDP, based on Eurostat debt-to-GDP data. In contrast, private debt was found to have first lag effects with an accompanied convex-shaped relationship between private debt and growth and with a corresponding threshold of 149.8% of GDP. Next, the author divided private debt into non-financial corporate and household debt to investigate a more detailed relationship between debt and growth. Corresponding to the Global Debt Database, the concave-shaped relationship between public debt and growth was confirmed with a threshold of 104.8% of GDP. Both of the investigated types of private debt confirmed the previously explored lagged impact on medium-term growth and a convex-shaped relationship between non-financial corporate and household debt and growth. The threshold of non-financial corporate debt stands at 138.3% of GDP, while that for household debt is 145.1% of GDP. Considering the presence of thresholds may offer an important message to economic policymakers, as timely and suitable governance can lead to either higher economic growth or prevent adverse effects of excessive indebtedness.

The Bahamas: 2022 Article IV Consultation-Press Release; Staff Report; and Statement by the Executive Director for The Bahamas

The Bahamas is experiencing a tourism-led rebound. Real GDP growth in 2021 was close to 14 percent, as stayover tourist arrivals doubled relative to 2020. The economy is projected to expand by 8 percent in 2022. Nonetheless, it will likely take until 2024 to return to the 2019 level of GDP and the pandemic has given rise to significant human and social costs. The country’s medium-term growth challenges are likely worse than before, and public finances are in a more precarious state. Risks are skewed downwards given a difficult near-term financing situation, rising inflationary—and potentially BOP—pressures because of the war in Ukraine, an ongoing threat from the evolving pandemic, and the country’s high vulnerability to natural disasters.

Bhutan: 2022 Article IV Consultation-Press Release; Staff Report; and Statement by the Executive Director for Bhutan

The pandemic has had a substantial impact on the economy, straining pre-pandemic gains in income and poverty reduction. The wide-ranging policy measures, including containment protocols, rapid vaccination and booster campaigns, direct income support, and policy support for borrowers and businesses, mitigated the adverse impact on lives and well-being. As the pandemic recedes and in light of the uncertainties from the war in Ukraine, the focus needs to be on securing livelihoods and ensuring strong and job-rich medium-term growth, while minimizing any persistent adverse effects from the pandemic and mitigating risks.

Transformation of capitalism to enforce ecologically sustainable GDP growth: lessons from Keynes and Schumpeter

An economy with a low stable medium-term growth rate given by ecological needs is only possible after a radical reform of the type of capitalism we have today. In an ecologically sustainable economic system, aggregate demand has to be controlled on a macroeconomic level. Of focal importance is the steering of investment. Here a national credit plan that fixes the national credit volume and to a certain extent the allocation of credit is in the centre. For consumption demand in a low-growth economy it is important that saving is low or in a zero-growth economy even zero, whereas at the same time accumulation of deficits of economic sectors or sub-sectors such as poorer households are not sustainable. Here policies to achieve a more equal distribution of income and wealth are suitable. Although comprehensive government interventions and rules are needed in an ecologically low-growth economy, the recommended system is not comparable with a planned system of the former Soviet type. Whether such an alternative system is understood as a version of highly regulated capitalism or as a new system is a question of taste.

ROLE OF FISCAL POLICY IN STIMULATING THE ECONOMIC RECOVERY OF THE WESTERN BALKAN COUNTRIES

The crisis caused by the coronavirus pandemic has raised the question of the role and possibilities of fiscal policy in mitigating its current effects and accelerating postpandemic recovery. This issue is relevant for all economies without exception, bearing in mind that aid packages to the population and the economy are predominantly based on fiscal stimulus. For this reason, the issue of the efficiency of expansionary fiscal policy has been raised again, taking into account the specific macroeconomic circumstances in which most economies find themselves. Therefore, the subject of this paper is the analysis of the optimal structure of the expansionary fiscal policy, with particular emphasis on the Western Balkans region, in the context of resolving the current macroeconomic consequences of the crisis and the possibility of providing both short and medium-term growth. Based on the analysis of specific macroeconomic circumstances in the countries of the Western Balkans, conclusions were reached as to which fiscal policy instrument can be used to achieve the previously described goals.

The End of Growth? Fading Prospects for Latter-day Saint Expansion

The Church of Jesus Christ of Latter-day Saints faces diminished prospects for growth in the twenty-first century due to both institutional and societal factors. Growth rates in congregations and active membership averaged below one percent annually from 2009–2019. Fertility, retention of member children, and new conversions have experienced ongoing declines. Institutional decisions that were once adaptive have become liabilities hindering growth and internationalization. The dichotomy between the Mormon “homeland” and the “mission field” has fueled asymmetric information, misaligned incentives, principal-agent problems, and a culture of nonparticipation in personal evangelism by leaders and members. Reforms have sent mixed messages without resolving underlying pathologies. Societal conditions are decidedly less favorable for LDS growth than in the late twentieth century. The human rights situation has deteriorated worldwide, Christianity is experiencing proportional decline in most world regions, and prospects for mission outreach in unreached nations are dim. Medium-term growth in active LDS membership and congregations is likely to average below one percent annually. Over longer periods, losses may occur. The faith experiences its brightest prospects in Africa, where it is likely to achieve active growth. The LDS Church has lost its competitive advantages and is likely to continue to underperform its major competitors.

The Impact of B Corp Certification on Growth

We empirically test whether B Corp certification affects the short- and medium-term growth rates of sustainable enterprises. These businesses are growing in popularity and prevalence but, due to their hybrid nature, often suffer from external credibility issues and competing internal logics. Because of the rigorous and time-involving audit procedure, B Corp certification potentially sends a credible signal about the sustainable nature of the enterprise to its stakeholders. In addition, the B Corp label could help to straighten out internal tensions and align the company towards its dual purpose. Hence, B Corp certification could contribute to company success. We observe 129 firms that were certified between 2013 and 2018 over a period between six years prior and five years post-certification. Using propensity score matching, we identify 129 non-certified matching companies. On this sample, we conduct a difference-in-differences panel regression analysis to investigate the effect of certification. Our dataset allows us to study how the effects of B Corp certification evolve over time, which was previously untested. Our study documents a positive effect of B Corp certification on turnover growth and also that this effect increases with the time since certification, implying that certification requires some time for its full effect to become apparent.

Ghana – Medium Term Growth Plan

Africa Research Bulletin: Economic, Financial and Technical SeriesVolume 58, Issue 4 p. 23407A-23407B Policy and Practice Ghana – Medium Term Growth Plan First published: 12 June 2021 https://doi.org/10.1111/j.1467-6346.2021.10022.xRead the full textAboutPDF ToolsRequest permissionExport citationAdd to favoritesTrack citation ShareShare Give accessShare full text accessShare full-text accessPlease review our Terms and Conditions of Use and check box below to share full-text version of article.I have read and accept the Wiley Online Library Terms and Conditions of UseShareable LinkUse the link below to share a full-text version of this article with your friends and colleagues. Learn more.Copy URL Share a linkShare onFacebookTwitterLinked InRedditWechat No abstract is available for this article. Volume58, Issue4June 2021Pages 23407A-23407B RelatedInformation

Understanding Dollarisation: A Keynesian/Kaleckian Perspective

ABSTRACT What does ‘dollarisation’ mean in a world of endogenous money, i.e., in a world where money is not (only) created by printing pieces of paper, but (mainly) by making loans? Is it true that dollarisation only constitutes a limitation of sovereignty in the short run (making it harder to run standard stabilisation macro policies) or can it also slow a country’s growth process? To answer these questions, the paper builds a theoretical Keynesian-Kaleckian growth model for a dollarised economy within a framework of endogenous money. We will show that, ceteris paribus, the steady-state medium-term growth rate of a dollarised economy is lower than that of a country with its own currency. We will also show that a dollarised economy is more likely to be unstable than an economy with its own currency, in the specific sense that, everything else being equal, it is more likely for a dollarised economy to fall into a debt trap.

Bosnia and Herzegovina

Pre-pandemic, Bosnia and Herzegovina’s (BiH) economy was growing, but at a pace below the more successful countries in Eastern Europe. The pandemic generated a substantial output contraction in 2020. Early in the pandemic, the authorities successfully implemented restrictions to prevent the spread of the virus and took measures to support firms and households. However, the ongoing second wave poses additional challenges. A gradual recovery is expected for the second half of 2021. Political disagreements about policy coordination at the BiH State level have hampered program implementation under the 2016 EFF arrangement and the deepening of the single economic space. The challenge is to deal with the pandemic and put the economy on a higher medium-term growth trajectory.

Knowledge Utilisation in AgriFood SMEs: Effects of Organisational and Informational Factors

Given the critical role of information and marketing in SME management it is surprising that little attention has been paid to the salient factors that motivate or inhibits consumer information used by agrifood SMEs. A model of organisational and informational factors affecting knowledge utilisation in Agri-food SMEs is presented and empirically tested through partial least squares analysis via SmartPLS. The results of the empirical testing of the conceptual model provide evidence to indicate that functional and technical qualities, provider-user interaction and usefulness in the market environment are determinants of knowledge utilisation. The findings of this study have implications for agri-food SME management in the UK regarding their growth and competitiveness in the medium and long term.

ACTUAL ISSUES OF MONETARY POLICY TO ENSURE RECOVERY AND SUSTAINABLE GROWTH OF THE UKRAINIAN ECONOMY

The article covers the issues of the monetary policy modernization in Ukraine. Particular attention is paid to the issue of ensuring the optimal interrelations between the inflation target and benchmark for real GDP growth. Authors argue that strict parameters of inflation targeting through 2017-2019 were counterproductive, since they were implemented under the critically low level of household savings (in 2019 - negative savings) and, together with other factors, led to a critical reduction in aggregate demand, a slowdown in economic activity and a decrease in the GDP’s monetization ratio. Based on the empirical data, authors suggest that a reasonable benchmark for medium-term growth of real GDP in Ukraine is 6% per year. The authors elaborate a new range of tasks for the central bank, compatible with the harmonious attainment of the low inflation target, financial stability goal and economic growth goal. The authors' proposals can be incorporated into the preparation of the Basic Principles of Monetary Policy of Ukraine for 2021 and for the medium run. Keywords: monetary policy, inflation targeting, national saving, economic growth.

Influence of a shop floor management system on labour productivity in an automotive parts manufacturing organisation in South Africa

Background: South Africa’s labour productivity at the shop floor remains an issue of central concern for business. It plays a role in the life of every person and the performance of every business, thus requiring the business to solve problems at the shop floor level. This sentiment underpins the concept of a shop floor management (SFM) system. An SFM system refers to the extent of control exercised at the shop floor level for commitment and involvement of shop floor employees aimed at improving productivity. It is a process that facilitates employee engagement. Aim: This study examines the influence of an SFM system for productivity improvement in automotive parts manufacturing companies in South Africa. Productivity in the South African’s manufacturing sector is low compared to its counterpart industries in the Asian and Western countries. This sector experiences the lack in short to medium term growth in productivity. Setting: The automotive parts manufacturing company that has adopted an SFM strategy for productivity improvement participated in the study. Methods: The study objectives were achieved by examining the production and related experiences in the company. The collection of data was carried out in two phases. This includes the collection of results pre and post-SFM implementation from company records for spoilage, absenteeism and housekeeping rates. The pre-SFM results were quarterly data reflecting the company’s performance over the three-year period prior to the implementation of the SFM. This company operates in the eThekwini District Municipality in KwaZulu-Natal. Results: The study established that housekeeping and SFM have no relation to labour productivity. However, it revealed the relationship of both absenteeism and spoilage rates with labour productivity. Conclusion: SFM is an employee engagement process that creates a working environment that encourage worker participation and commitment. Contribution: The original value of this paper is its approach in uncovering strengths and weaknesses of SFM for productivity in South Africa.

Growth Accelerations and Reversals in Emerging Market and Developing Economies: External Conditions and Domestic Amplifiers

We investigate how country-specific external demand, external financial conditions, and terms of trade affect medium-term growth in emerging market and developing economies and the occurrence of growth accelerations and reversals. We find that the importance of country-specific external conditions for medium-term growth has increased over time, with external financial conditions accounting for one-third of the increase in average income per capita growth between 1995 and 2004 and 2005–14. Stronger external demand and financial conditions significantly increase the probability of growth accelerations, while a strengthening of any of the three conditions significantly decreases the probability of reversals. Certain domestic policies and structural attributes, including exchange rate flexibility, trade integration, and strong institutional frameworks, can significantly amplify or mitigate the effect that shifts in those external conditions have on growth patterns in emerging market and developing economies.

Labor Market Dynamics, Informality and Regulations in Latin America

Labor markets in Latin America and the Caribbean (LAC) are characterized by high levels of informality and relatively rigid regulation. This paper shows that these two features are related and together make the speed of adjustment of employment to shocks slower, especially when regulations are tightly enforced. Evidence suggests that strict labor market regulations also have an adverse effect on medium-term growth. While both regulations on prices (minimum wages) and quantities (employment protection) decrease the speed of adjustment to shocks, they appear to be binding in different phases of the cycle—the former affects mostly the (net) job creation margin and the latter the (net) job destruction margin. The results also highlight possible interactions between labor market regulations and the effectiveness of macro-stabilization tools—including exchange rate depreciation.

Labor Market Dynamics, Informality and Regulations in Latin America

Labor markets in Latin America and the Caribbean (LAC) are characterized by high levels of informality and relatively rigid regulation. This paper shows that these two features are related and together make the speed of adjustment of employment to shocks slower, especially when regulations are tightly enforced. Evidence suggests that strict labor market regulations also have an adverse effect on medium-term growth. While both regulations on prices (minimum wages) and quantities (employment protection) decrease the speed of adjustment to shocks, they appear to be binding in different phases of the cycle - the former affects mostly the (net) job creation margin and the latter the (net) job destruction margin. The results also highlight possible interactions between labor market regulations and the effectiveness of macro-stabilization tools - including exchange rate depreciation.

The impact of Training and Assessment Register (TAR) on productivity in the automotive parts manufacturing organisation in South Africa

Orientation: Organisations are confronted with the challenge of competency among its employees for productivity improvement. They implement strategies that improve employee skills proficiencies for higher productivity. These can also be achieved by implementing a training model that develops employee’s skills and knowledge so that they become the specialists in their work areas. This sentiment underpins the concept of employee Training and Assessment Register (TAR).Purpose: This study evaluates the influence of TAR on productivity in automotive parts manufacturing organisation in South Africa.Motivation for the study: The South African manufacturing sector has a low level of productivity compared to its counterpart industries in the Asian and Western countries. The sector experiences the lack in short to medium term growth in productivity.Research design, approach and methods: The automotive parts manufacturing company that has used a TAR strategy for productivity improvement participated in the study. The study objectives were achieved by examining the production and related experiences in the company. The collection of data was carried out in two phases. This includes the collection of pre- and post-quarterly data for spoilage, overtime and customer complaints. The pre-TAR results were quarterly data reflecting the company’s performance over the three-year period prior to the implementation of TAR. This company operates in the eThekwini District Municipality in KwaZulu-Natal.Main findings: The results established that spoilage rate has a relationship with company productivity. Any decrease in spoilage rate would result to an increase in company productivity. However, the overtime and customer complaints do not statistically have a relationship with company productivity.Contribution: This article uncovers the strengths and weaknesses of TAR on productivity in the automotive parts manufacturing organisation in South Africa.