Controlled Open Economies A Neoclassical Approach to Structuralism

by Bevan, David; Collier, Paul; Gunning, Jan Willem; Bigstein, Arne; Horsnell, Paul

• ISBN13: 9780198286202
• ISBN10: 0198286201
• Format: Hardcover
• Copyright: 1991-01-17
• Publisher: Oxford University Press

Summary

This book develops macroeconomic theory for small open economies characterized by the sort of controls which make much of existing neoclassical economics inapplicable to developing countries. It distinguishes between sustainable combinations of policies and incompatible control regimes. The authors analyze the changes needed to maintain compatibility and the consequences of failing to do so. They also consider optimal investments in response to a temporary shock. The second half of the book contains an analysis of two temporary trade shocks in Africa, in both compatible and incompatible control regimes, demonstrating the applicability of the theory. It shows that in a compatible regime, the regime and the fiscal response to changes in revenue may make the reaction to a shock grossly inefficient. Under incompatibility, an economy exposed to a negative shock may go into steep decline, while responses to conventional policies may be reversed.

Table of Contents

Acknowledgements	p. v
Introduction	p. 1
The Theory of Controlled Open Economies	p. 5
Compatible Control Regimes	p. 7
Appendix Compatible: Trade and Fiscal Policies: the Model	p. 44
Incompatible Control Regimes	p. 88
The Theory of a Temporary Windfall in a Controlled Economy	p. 97
Two African Applications	p. 141
An Application to the Kenyan Coffee Boom of 1975-1983	p. 143
the Computable General Equilibrium Model	p. 258
An Application to the Tanzanian Economic Decline of 1975-1984	p. 311
Macroeconomic Experience Compared	p. 337
Conclusion: And a Manifesto	p. 349
References	p. 354
Index	p. 359
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