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Inflation and Monetary Institutions in Developing Countries

  • Michael Kuczynski
Part of the International Economic Association Series book series (IEA)

Abstract

The ‘developing’ countries with which this note is concerned might have been identified otherwise fifty years ago. Nowadays they comprise the clientèle, actual or potential, of the international lending agencies. To stress the importance of the international economy in their inflationary and financial experience, they will be labelled here ‘peripheral’ countries. Diverse as they are, they share a distinctive feature which derives from populousness and late-coming to modern industry: across most of their economic activity, in the same product lines, strikingly different levels of labour productivity co-exist. This is true in primary, secondary, and tertiary production; in metal-working as in construction, in textiles as in agriculture, in household services as in mining, etc. Both the absolute gap between high and low productivity, and the persistently high proportion of total output which is low-productivity in origin, are remarkable. Clearly in any economy as it grows the competitive process will keep recreating a spread of different levels of labour productivity. What is distinctive about peripheral countries is the marked bipolarity of their distribution of productivity levels. Indeed, in the analysis of their relationship to the international economy and to inflation, this is their central feature.

Keywords

Monetary Policy Capital Inflow Export Price Real Demand Peripheral Country 
These keywords were added by machine and not by the authors. This process is experimental and the keywords may be updated as the learning algorithm improves.

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Copyright information

© International Economic Association 1987

Authors and Affiliations

  • Michael Kuczynski
    • 1
  1. 1.University of CambridgeUK

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