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This paper analyzes the effect of the sectoral composition of government spending on the stability properties of a two-sector economy with a progressive tax structure. The results suggest that indeterminacy is more likely to occur if the fraction of government spending on consumption goods increases. This study also finds that, under progressive taxation, a sufficiently high public-consumption share is needed to generate indeterminacy. It is shown that, with the benchmark parameterization, a higher fraction of government spending on consumption goods needs to be implemented with a more progressive tax scheme to stabilize the economy. Moreover, it is emphasized that belief-driven economic fluctuations may indeed be a feature of the U.S. economy.

This paper examines the impact of per capita income, gross domestic product (GDP) growth, foreign direct investment (FDI), sectoral composition, and domestic credit on employment patterns in the Gulf Cooperation Council (GCC) countries from 2013 to 2023, based on 'Okun's law'. The dynamic data panel was analyzed using the generalized method of moments (GMM) and the ordinary least square (OLS) method. The research findings reveal that the agricultural sector's contributions have significantly influenced the employment patterns in GCC countries, emphasizing the traditional role of agriculture in creating job opportunities. However, the contribution of the services and industrial sectors has no significant impact on employment patterns. Domestic credit and FDI inflows have significantly influenced employment patterns in GCC countries, underscoring their vital role in sustaining long-term economic stability. Per capita income and GDP growth did not significantly impact the employment pattern in the GCC countries during the study period. This research provides valuable insights to policymakers, highlighting the need to focus on the services and industrial sectors to promote their contribution to employment in GCC countries. The research findings also augment the literature by identifying the key economic indicators contributing to GCC countries' employment creation.

PurposeThe purpose of this paper is to assess the impact of sectoral economic growth and other factors on poverty reduction in Vietnam in the period 2010–2016.Design/methodology/approachOriginating from the question of whether there is an endogenous problem between the structure of economic growth by sector and some other factors in the process of impact on poverty reduction, the paper has used the 2-Stage Least Squares method to deal with the endogenous issues.FindingsIncreasing the proportion of the industrial sector and the agricultural sector had great impacts on poverty reduction. In contrast, the increasing proportion of the service sector made the poverty rate higher. One noticeable thing is that economic growth was not significant for the goal of poverty reduction in 2010–2016. In addition, the process of urbanization, the increase in the labor rate and literacy rate contributed positively to poverty reduction achievements. Finally, population growth was also one of the reasons hindering Vietnam’s successful poverty reduction process.Practical implicationsAccelerating the process of economic restructuring in the direction of increasing the proportion of the industry is accompanied by more attention to agricultural development than the service sector. Employment creation policies should be promoted. Maintaining population control by educating poverty reduction awareness for the poor will have a positive effect on long-term poverty reduction.Originality/valueResearch on the growth structure by sector affecting poverty reduction in Vietnam is still relatively limited. The study of relationships in the context of endogenous existence is still quite limited in Vietnam. Therefore, this paper has focused on the question of sectoral economic growth affects poverty in the interrelation among sectors in the process of economic development.

The article develops the methodology of using investment multipliers to identify growth points for a regional economy. The paper discusses various options for the assessment of multiplicative effects caused by investments in certain sectors of the economy. All calculations are carried out on the example of economy of the Republic of Tatarstan for the period 2005–2015. The instrument of regression modeling using the method of least squares, permits to estimate sectoral and cross-sectoral investment multipliers in the economy of the Republic of Tatarstan. Moreover, this method allows to assess the elasticity of gross output of regional economy and its individual sectors depending on investment in various sectors of the economy. Calculations results allowed to identify three growth points of the economy of the Republic of Tatarstan. They are mining industry, manufacturing industry and construction. The success of a particular industry or sub-industry in a country or a region should be measured not only by its share in macro-system’s gross output or value added, but also by the multiplicative effect that investments in the industry have on the development of other industries, on employment and on general national or regional product. In recent years, the growth of the Russian was close to zero. Thus, it is crucial to understand the structural consequences of the increasing investments in various sectors of the Russian economy. In this regard, the problems solved in the article are relevant for a number of countries and regions with a similar economic situation. The obtained results can be applied for similar estimations of investment multipliers as well as multipliers of government spending, and other components of aggregate demand in various countries and regions to identify growth points. Investments in these growth points will induce the greatest and the most evident increment of the outcome from the macro-system’s economic activities.

Abstract—The article presents an approach to analyzing the role of interindustry competition in the formation of the sectoral composition of the national economy. The approach is original in its emphasis on competitive mechanisms of interindustry interactions, taking into account redistribution of national economic resources between sectors of the national economy. Three key channels of such interactions are considered: foreign trade, the labor market, and the financial market. Testing the proposed approach on the example of Russia reveals that interindustry competition plays a major role in changes in the sectoral composition of its economy. Considering the channels of interindustry interaction leads to a deeper understanding of processes that cause such changes.

This paper focuses on the response of Italian inner areas to the Great Recession. Inner areas represent the majority of the Italian territory and are very heterogeneous in terms of (unstable) growth trajectories and industrial composition. One key issue that has partially hindered a thorough empirical analysis of the development paths of these areas so far, is defining these inner areas. To this aim, we adopt the recent classification proposed by the National Strategy for Inner Areas (2014), which identified six categories based on the travel distance from service provision centers. Our purpose is to analyze the potential structural change of inner vs non-inner areas in the face of the 2007–2008 economic crisis, assessing their adaptive capacity to the recessionary disturbance and the factors underlying their industrial composition change. We found that urban poles and inner areas had different abilities to re-adapt their local industrial compositions in response to the economic crisis with obvious effects on their future resilience.

The study aims to establish a pro-poor growth index called the 'Poverty Equivalent Growth Rate', which considers both the extent of sectoral growth and the benefits reaching the poor in Pakistan, using 21 household surveys between 1964 and 2011. The result reveals that despite the positive signs in agriculture growth, the growth process may not be classifiable as pro-poor. The result points out that compared with the non-poor, the poor overall benefited less from the revitalisation of agricultural processes; however, the trend was reversed during 2002 to 2011 when the poverty equivalent growth rates are higher than the growth rate of industry, manufacturing, commodity producing and services value added, which shows sectoral growth favours the poor more than non-poor in Pakistan.

The 1960s and 70s were decades of solid growth rates for Latin America and the Caribbean region as a whole. This changed in the 1980s, when the growth rate of output per capita fell to negative values and its volatility increased notably. However, Latin America’s economic growth became positive again in the 1990s, with truly remarkable turnarounds in Argentina, Costa Rica, El Salvador, Nicaragua, and Peru. This recovery was driven in most cases by large increases in the growth of total factor productivity, reflecting the initial benefits from the process of economic reforms initiated in the 1990s. Economic Growth in Latin America and the Caribbean analyzes whether economic reforms have been beneficial to growth in the region. In doing so, it recognizes that growth is driven by a variety of factors – in some cases poor growth is due to insufficient structural reforms (e.g., low trade openness), in others to inappropriate stabilization policies (e.g., exchange rate overvaluation), and still in others to negative international conditions (e.g., growth slowdown in industrial countries). It is obvious but still correct to say that identifying the problem is the first step towards the solution. This book contributes to this effort by examining the growth performance of countries in Latin America and the Caribbean, explaining the underlying sources of their economic growth, and designing a strategy for further growth.

China is now the world's fourth largest economy and growing very fast. India's economic salience is also on the rise. Together these two countries will profoundly influence the pace and nature of global economic change. This volume analyzes this rapid future development and examines how their growth will impact upon other countries.

Understanding Changes in Poverty brings together different methods to decompose the contributions to poverty reduction. A simple approach quantifies the contribution of changes in demographics, employment, earnings, public transfers, and remittances to poverty reduction. A more complex approach quantifies the contributions to poverty reduction from changes in individual and household characteristics, including changes in the sectoral, occupational, and educational structure of the workforce, as well as changes in the returns to individual and household characteristics. Understanding Changes in Poverty implements these approaches and finds that labor income growththat is, growth in income per worker rather than an increase in the number of employed workerswas the largest contributor to moderate poverty reduction in 21 countries experiencing substantial reductions in poverty over the past decade. Changes in demographics, public transfers, and remittances helped, but made relatively smaller contributions to poverty reduction. Further decompositions in three countries find that labor income grew mainly because of higher returns to human capital endowments, signaling increases in productivity, higher relative price of labor, or both. Understanding Changes in Poverty will be of particular relevance to development practitioners interested in better understanding distributional changes over time. The methods and tools presented in this book can also be applied to better understand changes in inequality or any other distributional change.