Banks, Capital Markets, R&D and Economic Growth in Europe

  • Paul J. J. Welfens
Conference paper

Abstract

Economic growth and prosperity go together, although high growth and a deteriorating environment can pose a transitory conflict of interest. The need to maintain natural wealth and human capital has become a major concern of economic policy in western Europe after 1945. While maintaining the stock of real capital via depreciations and reinvestments was considered a natural requirement of capitalism, the concern about the stock of the environment and labor market problems reflects more recent problems. Human capital of many workers in western Europe has been eroded as a consequence of high unemployment which is mainly the result of the two oil price shocks in the 1970s and strong wage pressure with a bias in favor of unskilled workers in EU countries. At the same time technological progress and the shift towards the service industry raised the marginal value product of skilled labor overproportionately — which is one reason why income differentials among workers are growing again in OECD countries (another being the global increase in the unskilled labor supply as a consequence of China’s opening up).

Keywords

Depression Europe Transportation Income Shrinkage 

Preview

Unable to display preview. Download preview PDF.

Unable to display preview. Download preview PDF.

References

  1. Allen, F. (1993), “Stock Markets and Resource Allocation,” in Mayer, C. P. And Vives, X. (eds.), Capital Markets and Financial Intermediation, Cambridge University Press, Cambridge.Google Scholar
  2. Bank Of England (1995), Quarterly Bulletin, Vol. 35, London.Google Scholar
  3. Bis-Bank Of International Settlements (1995), 65. Jahresbericht, Basle.Google Scholar
  4. Bis-Bank Of International Settlements (1996), 66th Annual Report, Basle.Google Scholar
  5. Black, S. W. and Moersch, M. (1995), “Investment and its Financing During the Transition in Central and Eastern Europe,” Paper presented at AICGS conference ‘Europe’s Economy Looks East’, Washington D.C., May 15–16, 1995.Google Scholar
  6. Boot, A. W. A. and Van Wijnbergen, S. (1995), “Financial Sector Design, Regulation and Deposit Insurance in Eastern Europe,” in Rostowski, J. (ed.), Banking Reform in Central Europe and the Former Soviet Union, Central European University Press, Budapest, 42–57.Google Scholar
  7. Bundesverband Deutscher Banken (1995), “Auswirkungen der Europäischen Wirtschafts-und Währungsunion auf die Finanzmärkte,” Mimeo, Bonn.Google Scholar
  8. Corbett, J. And Mayer, C. (1992), “Financial Reform in Eastern Europe: Progress with the Wrong Model,” Oxford Review of Economic Policy, Vol. 8.Google Scholar
  9. Crockett, A. (1995), “Financial Innovation: Macro-Economic and Macro-Prudential Consequences,” Kredit und Kapital, Vol. 28, 46–61.Google Scholar
  10. Deutsche Bundesbank (1996), “Finanzmarktvolatilität und ihre Auswirkungen auf die Geldpolitik,” Monatsberichte der Deutschen Bundesbank, April, 53–70.Google Scholar
  11. Dimsdale, N. (1994), “Banks, Capital Markets, and the Monetary Transmission Mechanism,” Oxford Review of Economic Policy, Vol. 10, No. 4, 34–48.CrossRefGoogle Scholar
  12. Ec Commission (1993), Growth, Competitiveness, Employment, White Paper, Brussels.Google Scholar
  13. Edwards, F. R. and Mishkin, F. S. (1995), “The Decline of Traditional Banking: Implications for Financial Stability and Regulatory Policy,” Federal Reserve Bank of New York Economic Policy Review, July 1995, 27–45.Google Scholar
  14. Eib-European Investment Bank (1995), Annual Report, Luxembourg.Google Scholar
  15. Field, A.J. (1984), “A New Interpretation of the Onset of the Great Depression,” Journal of Economic History, 44, 489–498.CrossRefGoogle Scholar
  16. Fratianni, M. and Huang, H. (1995), “New Growth Theory: A Survey from a Policy Perspective,” Kredit und Kapital, Vol. 28, 62–86.Google Scholar
  17. Froot, K. A. and Stein, J. C. (1991), “Exchange Rates and Foreign Direct Investment. An Imperfect Capital Markets Approach,” Quarterly Journal of Economics, November, 1191–1217.Google Scholar
  18. Gerschenkron, A. (1962), Economic Backwardness in Historical Perspective, Cambridge, Mass.Google Scholar
  19. Gerschenkron, A. (1968), Continuity in History and Other Essays, Harvard University Press, Cambridge.Google Scholar
  20. Greenwald, B. and Stiglitz, J. E. (1993), “Financial Market Imperfections and Business Cycles,” Quarterly Journal of Economics, Vol. 108, 77–114.CrossRefGoogle Scholar
  21. Hellwig, M. (1994), “Banking and Finance at the End of the Twentieth Century,” Wirtschaftswissenschaftliches Zentrum der Universität Basel, Mimeo.Google Scholar
  22. Honohan, P. (1995), “The Public Policy Role of the European Investment Bank within the EU,” Journal of Common Market Studies, Vol. 33, 315–330.CrossRefGoogle Scholar
  23. Imf-International Monetary Fund (1994), World Economic Outlook, October 1984, Washington DC.Google Scholar
  24. Institut Der Deutschen Wirtschaft (IDW), IWD-Mitteilungen, Nr. 39, Cologne.Google Scholar
  25. Jasinski, P. and Welfens, P. J. J. (1994), Privatization and Foreign Direct Investment in Transforming Economies, Dartmouth, Aldershot.Google Scholar
  26. Kaufmann, H. (1994), “Structural Changes in the Financial Markets: Economic and Policy Significance,” Economic Review of the Federal Reserve Bank of Kansas City, 2nd quarter.Google Scholar
  27. Klein, M.W. and Welfens, P.J.J. (1992), Multinationals in the New Europe and Global Trade, Springer, Heidelberg.CrossRefGoogle Scholar
  28. Klodt, H. Et Al. (1994), Standort Deutschland: Strukturelle Herausforderungen im neuen Europa, Mohr, Tübingen.Google Scholar
  29. Litan, R. E. (1994), “Financial Regulation,” in Feldstein, M. (ed.), American Economic Policy in the 1980s, University of Chicago Press, Chicago.Google Scholar
  30. Maddison, A. (1991), “Postwar Growth and Slowdown: A Global View,” in Gahlen, B., Hesse, H. and Ramser, H. J. (eds.), Wachstumstheorie und Wachstumspolitik. Ein Neuer Anlauf, Mohr, Tübingen, 23–41.Google Scholar
  31. McKINSEY (1996), Capital Productivity, Washington D.C.Google Scholar
  32. Metzler, L. A. (1951), “Wealth, saving and the rate of interest,” Journal of Political Economy, Vol. 59, 93–116.CrossRefGoogle Scholar
  33. Ochel, W. Und Penzkofer, H. (1995), “Internationale Wettbewerbsfähigkeit und ihre Implikationen für die Europäische FuE-Politik,” Mimeo, Ifo-Institut, München.Google Scholar
  34. Oecd (1993), Transformation of the Banking System, Paris.Google Scholar
  35. Oecd (1996), Financial Market Trends, No. 61, Paris.Google Scholar
  36. Plosser, C. I. (1992), “The Search for Growth,” in Policies in Long-Run Economic Growth, Federal Reserve Bank of Kansas.Google Scholar
  37. Rostowski, J. (1995), “The Banking System, Credit and the Real Sector in Transition Economies,” in Rostowski, J. (ed.), Banking Reform in Central Europe and the Former Soviet Union, Central European University Press, Budapest, 16–41.Google Scholar
  38. Schinasi, G. and Hargraves, M. (1995), “‘Boom and Bust’ in Asset Markets in the 1980s: Causes and Consequences,” IMF Staff Studies for the World Economic Outlook, Washington DC, 1–27.Google Scholar
  39. Schröder, K. (1995), “Banking Reforms in East Central Europe,” Intereconomics, Vol. 30, 133–195.CrossRefGoogle Scholar
  40. Stiglitz, J. and Weiss, A. (1981), Credit Rationing in Markets with Imperfect Information, American Economic Review, Vol. 71, 393–410.Google Scholar
  41. Tavlas, G. S. and Ozeki, Y. (1992), “The Internationalization of Currencies: An Appraisal of the Japanese Yen,” IMF Occasional Paper No. 90.Google Scholar
  42. Thomas, I. P. (1995), “Konvergenz und Divergenz in der Europäischen Union — Theoretischer Überblick, empirische Evidenz und wirtschaftspolitische Implikationen,” April.Google Scholar
  43. Tilly, R. and Welfens, P. J. J. (1995) (eds.), European Economic Integration as a Challenge to Industry and Government, Springer, New York.Google Scholar
  44. Tobin, J. (1965), Money and Economic Growth, Econometrica, Vol. 33, 671–684.CrossRefGoogle Scholar
  45. Unctad (1995), World Investment Report 1995, Geneva.Google Scholar
  46. Unece (1995), Economic Survey of Europe in 1994–1995, Geneva.Google Scholar
  47. Waheed, A. and Mathur, I. (1995), “Wealth Effects of Foreign Expansion by U.S. Banks,” Journal of Banking & Finance, Vol. 19, 823–842.CrossRefGoogle Scholar
  48. Welfens, P. J. J. (1992), Market-oriented Systemic Transformations in Eastern Europe, Springer, New York.CrossRefGoogle Scholar
  49. Welfens, P. J. J. (1995), European Monetary Integration, 3rd revised and enlarged edition, Springer, New York.Google Scholar
  50. Welfens, P. J. J. (Ed.) (1996a), Economic Aspects of German Unification, 2nd, revised and enlarged edition, Springer, Heidelberg and New York.Google Scholar
  51. Welfens, P. J. J. (1996b), “Wettbewerbs-und Strukturpolitik im Transformationsprozeß: Analyse, Politikoptionen und Implikationen in Rußland,” in GöTz, R. And Grinberg, R. (eds.), Strukturpolitik in Rußland: Materialien einer Konferenz, Bundesinstitut für ostwissenschaftliche und internationale Studien, Sonderveröffentlichung, August.Google Scholar
  52. Welfens, P. J. J. and Jungmittag, A. (1996), “The Political Economy of EMU and Stabilization Policy,” paper presented at the international conference ‘European Monetary Union: Transition, International Impacts and Policy Options’, EIIW, Potsdam, 25.–26. April 1996.Google Scholar
  53. Welfens, P. J. J. and Yarrow, G. (Eds.) (1996), Telecommunications and Energy in Systemic Transformation, Springer, Heidelberg and New York.Google Scholar
  54. World Bank (1989), World Development Report 1989, Oxford University Press for the World Bank, Washington, D.C.CrossRefGoogle Scholar
  55. Young, A. (1991), “Learning By Doing and the Dynamic Effect of Trade,” Quarterly Journal of Economics, Vol. 106, 369–405.CrossRefGoogle Scholar
  56. Dowd, K. (1992), “Is Banking a Natural Monopoly?” Kyklos, Vol. 45, 379–392.CrossRefGoogle Scholar
  57. Fukao, M. and Hanazaki, M (1987), “Internationalisation of Financial Markets and the Allocation of Capital,” OECD Economic Studies, Vol. 8, 35–92.Google Scholar
  58. Heller, D. (1995), “Inflation und Wachstum,” Quartalsheft der Schweizerischen Nationalbank: Geld, Währung und Konjunktur, Vol. 13, 278–288.Google Scholar
  59. Schuler, K. (1992), “The World History of Free Banking: An Overview,” in Dowd, K. (ed.), The Experience of Free Banking, Routledge, London, New York, 7–47.Google Scholar
  60. White, L. H. (1991), “Banking Without a Central Bank: Scotland Before 1844 as a ‘Free Banking System’,” in Capie, F. And Wood, G. E. (eds.), Unregulated Banking: Chaos or Order?, Macmillan, London, 37-62Google Scholar

Copyright information

© Springer-Verlag Berlin Heidelberg 1997

Authors and Affiliations

  • Paul J. J. Welfens

There are no affiliations available

Personalised recommendations