The Open economy : tools for policymakers in developing countries / edited by Rudiger Dornbusch and F. Leslie C.H. Helmers.

Format:

Book

Contributor:

Dornbusch, Rudiger.

Helmers, F. L. C. H. (Frederik Leslie Cornelis Hazlewood), 1929-

World Bank.

Series:

EDI series in economic development

EDI series in economic development.

Language:

English

Subjects (All):

Developing countries--Economic policy--Case studies.

Developing countries.

Economic policy.

Genre:

Case studies.

Physical Description:

x, 414 pages : illustrations ; 25 cm.

Place of Publication:

New York : Published for the World Bank, Oxford University Press, [1988]

Summary:

High tariffs, quantitative restrictions, and controls on foreign exchange -- these and other restrictive measures characterize a closed economy and tend to impede its growth. Opening up an economy allows domestic production to become competitive with the rest of the world and increases efficiency. But how does one open up an economy? To answer that question a team of distinguished economists analyzes policies related to an open economy and offers advice of value to government officials and policymakers in the developing world. Five country studies review the policies actually followed -- and their consequences -- in Argentina, Brazil, Indonesia, the Republic of Korea, and Mexico. Four appendixes deal with the data sources and basic economic concepts.

Contents:

1. Policy Issues and the Main Policy Tools 2

2. Country Studies 7

3. Not Policy Miracles 9

2. The Real Exchange Rate / F. Leslie C. H. Helmers 10

1. The Real Exchange Rate as the Price of Foreign Exchange 11

2. Analysis of the Real Exchange Rate 12

3. Expenditure Reducing and Expenditure Switching 16

4. Floating and Fixed Exchange Rates 19

5. Effects of Changes in the Real Exchange Rate 26

Part I. Policy Issues and the Main Policy Tools

3. Balance of Payments Issues / Rudiger Dornbusch 37

1. An Overview of Linkages 37

2. Basic Accounting Concepts 42

3. Policy Instruments 45

4. Determinants of Growth 49

5. Some Mistakes To Be Avoided 51

4. External Shocks and Domestic Policy Responses / Paul Krugman 54

1. Anatomy of External Shocks 54

2. Policy Response to External Shocks 64

5. Overvaluation and Trade Balance / Rudiger Dornbusch 80

1. Effects of Overvaluation 80

2. Definitions of the Real Exchange Rate 82

3. Effects of Disturbances 86

4. Goods, Factor, and Asset Markets 91

5. Country Experiences 96

6. Exchange Rate Rules 101

7. Undervaluation 104

6. Devaluation and Inflation / Stanley Fischer 108

1. Exchange Rate Arrangements 108

2. Exchange Rate Indicators 114

3. How Does Devaluation Work? 117

4. Assets Market Problems 121

5. Devaluation and High Inflation 122

7. Multiple Exchange Rates, Capital Controls, and Commercial Policy / Susan M. Collins 128

1. Overview of Policy Alternatives 129

2. Multiple Exchange Rates and Trade Taxes 132

3. Quantitative Restrictions 140

4. Capital Controls 144

5. Dual Exchange Rates 148

Appendix 1. Jamaica in the 1970s 155

Appendix 2. Capital Flight 157

Appendix 3. Black Markets for Foreign Exchange 158

8. Exchange Reserves as Shock Absorbers / John Williamson 165

1. Reserve Composition 167

2. Purpose of Holding Reserves 172

3. The Norm for the Reserve Stock 175

4. Speed of Adjustment 178

9. External Borrowing and Debt Management / Albert Fishlow 187

1. History of Capital Movements 188

2. The First Oil Price Shock 196

3. The Second Oil Price Shock 202

4. Coping with the Debt Crisis 205

5. Prospects for New Capital Flows 210

6. Policy Lessons 217

Appendix Debt Dynamics 220

10. Opening Up: Liberalization with Stabilization / Michael Bruno 223

1. Sequence of Liberalization Measures 224

2. Liberalization of Trade 230

3. Liberalization of Financial Markets 237

4. Stabilization from High Inflation 239

11. Policymaking and Economic Policy in Small Developing Countries / Arnold C. Harberger 249

1. Some Simple Demographic Facts 250

2. Demography's Hidden Curse 251

3. Professionalism 254

4. The Lessons of Experience 256

Part II. Country Studies

12. Argentina / Domingo F. Cavallo 267

1. Foreign Terms of Trade and Commercial Policies 271

2. Short-Term Cycles and the External Sector 275

3. The Real Exchange Rate for Exports 277

4. Speculation and Hyperinflation 282

13. Brazil / Mario Henrique Simonsen 285

1. From Coffee Valorization to External Debt 285

2. Indexation Issues 288

3. Balance of Payments Policies 295

14. Indonesia / Malcolm Gillis, David Dapice 307

1. Historical Overview 307

2. A Tale of Three Devaluations 317

3. Trade Policy 324

Appendix The Real Exchange Rate and the Index of International Competitiveness 329

15. Korea / Yung-Chul Park 336

1. Exports as an Engine of Growth 337

2. Disadvantages of the Strategy 341

16. Mexico / Eliana A. Cardoso, Santiago Levy 348

1. From 1935 to 1982 348

2. Industrialization and Trade Policy 355

3. Exchange Rates from the Mid-1920s to 1982 358

4. Budget Deficits and Inflation 362

5. Recent Policies 364

A. Sources of Current Data / Rudiger Dornbusch 373

B. National Accounting Identities / F. Leslie C. H. Helmers 375

1. Gross Domestic Product and Gross National Product 375

2. The Balance of Payments Equation 380

3. Examples of the Basic Balance of Payments Equation 384

C. Real-Exchange-Rate Indexes / F. Leslie C. H. Helmers 392

D. Effective Protection / F. Leslie C. H. Helmers 398.

Notes:

Includes bibliographies and index.

ISBN:

0195206568 :

0195207092

OCLC:

17548681