Featuring articles from prominent economists, this compendium delves into essential themes in economics. Each entry provides insights from leading practitioners, making it a valuable reference tool for students and professionals alike. The selection from The New Palgrave Dictionary of Economics 2nd edition ensures a comprehensive overview of the discipline's foundational concepts.
This compendium features carefully selected articles from 'The New Palgrave Dictionary of Economics' 2nd edition, addressing key themes in economics. Each piece is authored by a prominent expert, making it an essential reference tool for those interested in the discipline.
One of the enduring questions in economics is how nations can accelerate their economic development, with a common answer being the promotion of exports. This approach is believed to influence development by encouraging the production of goods for export or by allowing the accumulation of foreign exchange, which facilitates the importation of high-quality goods and services necessary for expanding production capabilities. This concept is often referred to as export-led growth, with the "two-gap" hypothesis highlighting the importance of foreign exchange in this process. Early studies on this topic primarily involved static cross-country comparisons, which suggested a strong correlation between export growth and income growth. However, Kravis raised a pivotal question in 1970 regarding whether exports serve as a catalyst or merely accompany economic growth. To explore this dynamic relationship, researchers have utilized time series analyses to determine if exports drive income growth. Several studies have employed Granger causality tests to assess whether individual countries demonstrate statistically significant evidence of export-led growth, contributing to the ongoing debate about the true role of exports in economic development.