Prices, Incentives, and Economic Growth

  • Bela Balassa
Part of the International Economic Association Series book series (IEA)

Abstract

Relative prices were at the center of economics during the one-and-a-half centuries following the publication of the Wealth of Nations. Classical economists never doubted that economic activities respond to price incentives, generating economic growth in the process. The choice between work and leisure was seen to be affected by the relative prices of goods and labor; the choice between present and future consumption by the rate of interest; and the choice among goods by their relative prices. The interactions of these choices, in turn, were seen to determine the allocation of resources among industries and the pace of economic growth, with full employment being maintained over time.

Keywords

Europe Transportation Income Turkey Expense 

Preview

Unable to display preview. Download preview PDF.

Unable to display preview. Download preview PDF.

References

  1. Balassa, Bela,The Theory of Economic Integration. Homewood, Ill., 1961.Google Scholar
  2. —, “The Newly-Industrializing Developing Countries after the Oil Crisis”. Weltwirtschaftliches Archiv, Vol. 117, 1981, pp. 142–194.CrossRefGoogle Scholar
  3. Balassa, Bela, “Disequilibrium Analysis in Developing Economies: An Overview”. World Development, Vol. 10, 1982, pp. 1027–1038.CrossRefGoogle Scholar
  4. — [1984a], “Adjustment Policies in Sub-Saharan Africa, 1973–78”. In: Moshe Syrquin, Lance Taylor, Larry E. Westphal (Eds.); Economic Structure and Performance — Essays in Honor of Hollis B. Chenery, New York 1984.Google Scholar
  5. — [1984b], The Economic Consequences of Social Policies in the Industrial Countries. Institut für Weltwirtschaft, Bernhard-Harms-Vorlesungen 11, Kiel 1984.Google Scholar
  6. — [1984c], “The Policy Experience of Twelve Less Developed Countries, 1973–1978”. In: Gustav Ranis, Robert L. West, Mark Leiserson, Cynthia Morris (Eds.), Comparative Development Perspectives — Essays in Honor of Lloyd G. Reynolds. Boulder, Col., 1984, pp. 96–123.Google Scholar
  7. — [1985a], Exports, Policy Choices and Economic Growth in Developing Countries after the 1973 Oil Shock”. Journal of Development Economics, Vol. 15, 1985, forthcoming.Google Scholar
  8. — [1985b], Public Finance and Social Policy — Explanations of Their Trends and Developments: The Case of Developing Countries. Paper presented at the 39th Congress of the International Institute of Public Finance held in Budapest in August 1983: forthcoming.Google Scholar
  9. et al., The Structure of Protection in Developing Countries, Baltimore 1971.Google Scholar
  10. Bhagwati, Jagdish N., “The Generalized Theory of Distortions and Welfare”. In: Jagdish N. Bhagwati, Ronald W. Jones, Robert A. Mundell, Jaroslav Vanek (Eds.), Trade, Balance of Payments and Growth — Papers in International Economics in Honor of Charles P. Kindleberger. Amsterdam 1971, pp. 69–90.Google Scholar
  11. Boskin, Michael J., “Taxation, Saving, and the Rate of Interest”. Journal of Political Economy, Vol. 86, 1978, No. 2, Pt.2, pp. 3–27.CrossRefGoogle Scholar
  12. Boss, Alfred, Günter Flemig, Peter Trapp, Norbert Walter, “Bundesrepublik Deutschland: Trotz Krise noch kein Umdenken”. Die Weltwirtschaft, 1982, No. 2, pp. 22–47.Google Scholar
  13. Brittain, John A.,The Payroll Tax for Social Security. The Brookings Institution, Studies of Government Finance, Washington 1972.Google Scholar
  14. Brown, Charles, Curtis Gilroy, Andrew Kohen, “The Effect of the Minimum Wage on Employment and Unemployment”. Journal of Economic Literature, Vol. 20, 1982, pp. 487–528.Google Scholar
  15. Clark, Colin,Taxmanship: Principles and Proposals for the Reform of Taxation. London 1970.Google Scholar
  16. Drabicki, John Z., Akira Takiyama, “Minimum Wage Regulation and Economic Growth”. Journal of Economics and Business, Vol. 34, 1982, pp. 231–240.CrossRefGoogle Scholar
  17. Eltis, Walter, “How Rapid Public Sector Growth Can Undermine the Growth of the National Product”. In: Wilfred Beckerman (Ed.), Slow Growth in Britian: Causes and Consequences. Oxford 1979, pp. 118–139.Google Scholar
  18. Evans, Owen J. [1983a], “Social Security and Household Saving in the United States: A Re-Examination”. IMF Staff Papers, Vol. 30, 1983, pp. 601–618.CrossRefGoogle Scholar
  19. — [1983b], “Tax Policy, the Interest Elasticity of Saving, and Capital Accumulation: Numerical Analysis of Theoretical Models”. The American Economic Review, Vol. 73, 1983, pp. 398–410.Google Scholar
  20. Feldstein, Martin, “The Welfare Cost of Capital Income Taxation”. Journal of Political Economy, Vol. 86, 1978, pp. 529–551.CrossRefGoogle Scholar
  21. Feldstein, Martin, “The Effect of Social Security on Saving”. In: D. Currie, R. Nobay, D. Peel (Eds.), Macroeconomic Analysis: Essays in Macroeconomics and Econometrics. London 1981, pp. 1–23.Google Scholar
  22. Harberger, Arnold C., “Efficiency Effects of Taxes on Income from Capital”. In: Marian Krzyzaniak (Ed.), Effects of Corporation Income Tax. Papers presented at the Symposium on Business Taxation, Wayne State University, Detroit 1966, pp. 107–117.Google Scholar
  23. Harris, Richard G., David Cox,Trade, Industrial Policy, and Canadian Manufacturing. Toronto 1983.Google Scholar
  24. International Monetary Fund (IMF),Interest Rate Policies in Developing Countries. Occasional Paper No. 22, Washington, October 1983.CrossRefGoogle Scholar
  25. Johnson, Harry G., “The Possibility of Income Losses from Increased Efficiency or Factor Accumulation in the Presence of Tariffs”. The Economic Journal, Vol. 77, 1967, pp. 151–154.CrossRefGoogle Scholar
  26. Johnson, William R., Edgar K. Browning, “The Distributional and Efficiency Effects of Increasing the Minimum Wage: A Simulation”. The American Economic Review, Vol. 73, 1983, pp. 204–211.Google Scholar
  27. Kay, John, Jadu Sen, “The Comparative Burden of Business Taxation”. Fiscal Studies, Vol. 4, 1983, No. 3, pp. 23–28.CrossRefGoogle Scholar
  28. King, Mervyn A., Don Fullerton,The Taxation of Income from Capital: A Comparative Study of the US., the U.K., Sweden, and West Germany. Chicago 1984.CrossRefGoogle Scholar
  29. Knoester, Anthonie, “Stagnation and the Inverted Haavelmo Effect: Some International Evidence”. De Economist, Vol. 131, 1983, pp. 548–584.CrossRefGoogle Scholar
  30. Krueger, Anne O.,Trade and Employment in Developing Countries, Vol. 3: Synthesis and Conclusions. Chicago 1983.Google Scholar
  31. Lindbeck, Assar, “Work Disincentives in the Welfare State”. In: Austrian Economic Association, NÖG, Lectures 79–80: Douglass C. North, Assar Lindbeck. Vienna 1982.Google Scholar
  32. —, “Interpreting Income Distributions in a Welfare State: the Case of Sweden”. European Economic Review, Vol 22, 1983, pp. 227–256.CrossRefGoogle Scholar
  33. Linneman, Peter, “The Economic Impacts of Minimum Wage Laws: A New Look at an Old Question”. Journal of Political Economy, Vol. 90, 1982, pp. 443–469.CrossRefGoogle Scholar
  34. Marsden, Keith,Links between Taxes and Economic Growth: Some Empirical Evidence. World Bank Staff Working Papers, No. 605, Washington 1983.Google Scholar
  35. Melo, Jaime A.P. de, “Estimating the Costs of Protection: A General Equilibrium Approach”. The Quarterly Journal of Economics, Vol. 92, 1978, pp. 209–226.CrossRefGoogle Scholar
  36. Petersen, Hans-Georg, “Taxes, Tax Systems and Economic Growth”. In: Herbert Giersch (Ed.), Towards an Explanation of Economic Growth. Symposium 1980, Tübingen 1981, pp. 313–347.Google Scholar
  37. Schaafsma, Joseph, William D. Walsh, “Employment and Labour Supply Effects of the Minimum Wage: Some Pooled Time-Series Estimates from Canadian Provincial Data”. The Canadian Journal of Economics, Vol. 16, 1983, pp. 86–97.CrossRefGoogle Scholar
  38. Summers, Lawrence H., “Capital Taxation and Accumulation in a Life Cycle Growth Model”. The American Economic Review, Vol. 71, 1981, pp. 533–542.Google Scholar
  39. —, “The After Tax Rate of Return Affects Private Savings”. The American Economic Review, Vol. 74, 1984, pp. 249–253.Google Scholar
  40. United States Department of Health and Human Services, Social Security Administration,Social Security Programs Throughout the World 1981. Research Report No. 58, Washington 1982.Google Scholar
  41. Woodbury, Stephen A., “Substitution between Wage and Nonwage Benefits”. The American Economic Review, Vol. 73, 1983, pp. 166–178.Google Scholar

Copyright information

© International Economic Association 1986

Authors and Affiliations

  • Bela Balassa

There are no affiliations available

Personalised recommendations