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The Three Regularities in Development pp 271–303Cite as

Palgrave Macmillan

Macro Policy for Drivers of Growth and Jobs

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Abstract

Building on the earlier premise that accumulation of physical capital explains per capita incomes as much as human capital, Mahmood examines macro policies that should enable countries to increase both types of investment. He finds that looser monetary policy must work in tandem with—and be sequenced to follow—more stringent macroprudential regimes to enable higher levels of investment. On investment in human capital, the key enabling policy variable is government expenditure on both basic and tertiary education. That said, there is a broader policy argument to be made for balancing a country’s reliance among the drivers of investment, exports, and consumption to enable a better balance between incentives to raise productivity and incomes and incentives to raise aggregate demand.

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Notes

  1. 1.

    Bank-specific factors include bank size, loan ratios, return on average assets, and operating costs. See, for example, Were and Wambua (2014).

  2. 2.

    Women’s education not being well utilised, except through a well-observed drop in fertility rates.

  3. 3.

    See, for example, the survey article in Schütt (2003).

  4. 4.

    Well illustrated by the Feldman–Mahalanobis model for the former Soviet Union and the Raj–Sen and Bhaduri models for China.

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Authors and Affiliations

  1. Lahore School of Economics, Lahore, Punjab, Pakistan

    Moazam Mahmood

  2. Capital University of Economics and Business, Beijing, China

    Moazam Mahmood

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  1. Moazam Mahmood
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Mahmood, M. (2018). Macro Policy for Drivers of Growth and Jobs. In: The Three Regularities in Development. Palgrave Macmillan, Cham. https://doi.org/10.1007/978-3-319-76959-2_7

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  • DOI: https://doi.org/10.1007/978-3-319-76959-2_7

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