Growth with Equity: Economic Policymaking for the Next Century

by Martin Neil Baily, Gary Burtless, Robert E. Litan

Overview

For nearly two decades the U.S. economy has been plagued by two disturbing economic trends: the slowdown in the growth rates of productivity and average real wages and the increase in wage and income inequality. The federal budget is in chronic deficit. Imports have far exceeded exports for more than a decade. American competitiveness has been a source of concern for even longer. Many Americans worry that foreigners are buying up U.S. companies, that the economy is losing its manufacturing base, and that the gap between rich and poor is widening. In this book three of the nation's most noted economists look at the primary reasons for these trends and assess which of the many suggestions for change in policy—whether for increased tax incentives for investment, education reform, or accelerated research and development—are likely to work and which may not work and could even hinder economic development. The author's discuss a variety of issues connected with deindustrialization and diminished competitiveness, distinguishing between problems that would be of real concern and those that should not. They evaluate explanations for slow growth in aggregate productivity in the United States and its relation to slower growth in other industrialized countries. They discuss the performance of the various sectors of the U.S. economy and systematically examine the evidence for and against the major proposals for correcting the adverse trends in productivity and inequity. Growth With Equity clearly explains how the country can accomplish the challenge of accelerating growth and narrowing the gap that separates the rich from the poor. While recognizing that some of their recommendations may be politically painful, the authors stress the importance of adopting a purposeful, long-range policy to encourage growth, ensure equity, and reduce the government's equity.

Product Details

ISBN-13:	9780815707653
Publisher:	Rowman & Littlefield Publishers, Inc.
Publication date:	02/01/1993
Pages:	254
Product dimensions:	6.00(w) x 9.00(h) x 0.58(d)
Lexile:	1440L (what's this?)

Table of Contents

1.	Introduction and Summary	1
	Growth and Equity: Compatible Objectives	4
	A Framework for Enhancing Growth and Equity	7
	A Preview of Our Recommendations	10
2.	Slow Growth and Other Economic Ills	15
	The Slowdown of Productivity Growth	15
	Why Is Productivity Growth Important?	20
	Sources of Productivity Growth	31
	Subsidiary Problems	39
	Conclusion	46
3.	Inequality	48
	Earnings Inequality	50
	Family Income Inequality	64
	Implications	71
4.	Increasing the Pace of Innovation	74
	Sustaining American Strength in Basic Research	74
	Lengthening Time Horizons	91
	Liability Reform	103
	Encouraging Joint Ventures	106
	Should America Adopt an Industrial Policy?	107
	Conclusion	108
5.	Improving the Labor Market	110
	Work Force Preparation	112
	Remedies	121
	Improvements in Labor Market Institutions	133
6.	Promoting Investment	142
	Encouraging Investment	142
	Encouraging Investment with High Social Returns	156
	Summary	172
7.	Foreign Trade and Investment	174
	Promoting Productivity through Freer Trade	175
	Promoting Productivity through Foreign Direct Investment	182
	New Strategies for Gaining Access to Foreign Markets	190
	Helping Displaced Workers	194
8.	An Agenda for Growth and Equity	198
Appendix	Research from the Center for Economic Progress and Employment	208
	Notes	211
	Index	233
	Tables
	Indicators of Quality of Life in the United States, Selected Years, 1960-89
	Contributions to Average Labor Productivity Growth, by Type of Contribution, 1929-82
	Average Annual Growth in GDP per Hour, by Major Economic Sector, 1948-73, 1973-89
	Sources of Family Income Change, by Quintile, 1979, 1989
	Government Lists of Important Technologies
	Average Annual Hours Worked in Manufacturing, Seven OECD Countries, 1989
	Productivity Growth and Trade Data, Selected Periods, 1973-88
	Summary of Proposals
	Figures
	Measures of U.S. Productivity Growth, Selected Periods, 1948-90
	Output per Hour and Real Compensation, 1947-90
	GDP per Capita for Canada, Germany, and Japan Relative to the United States, Purchasing-Power-Parity Exchange Rates, 1950-90
	National Saving and Investment Rates, by Country, 1980-90
	Relative Manufacturing Productivity, Four Countries, 1973-89
	Share of Global High-Technology Markets, by Country, 1980, 1984, 1990
	Import Penetration of U.S. High-Technology Markets, by Type of Import, 1980, 1987, 1990
	Share of Manufacturing in the U.S. Economy, 1929-89
	Inequality of U.S. Family Income, 1947-91
	Rate of Growth in Annual Earnings, Male Workers, 1967-79, 1979-89
	Differential in Annual Income between Male High School and College Graduates, by Age, 1978, 1987
	Family Income Growth, Selected Parts of Income Distribution, 1973-91
	Academic R&D Expenditures, by Type, and Funding, by Source, 1989
	Academic R&D, United States and Selected Other Countries, by Field, 1987
	Federal R&D Funding, by Function, 1981, 1989
	Total and Nondefense R&D Expenditures as Percent of GNP, by Country, 1971-87
	Ratio of R&D Spending to Industrial Production, 1960-89
	International Performance on Tests in Science and Mathematics, 1980s
	Enrollment Rates in Postsecondary Education, Selected Industrialized Countries, Late 1980s
	Average Public Spending per Person Age 16-24 for Education and Training
	Probability of Receiving Training after Completion of Formal Schooling and Entry into Employment, Young American Men
	Net Private Investment and Private and Public Saving as Percent of GDP, 1970-91
	Nominal and Real Interest Rates for Moody's AAA Corporate Bonds, 1971-91
	Government and Full-Employment Deficits, Actual and Projected, as Percent of GDP, 1970-97
	Federal Interest Payments and Budget Deficits as Percent of GDP, 1962-91
	Main Components of Federal Expenditures as Percent of GDP, 1962-91
	Net Public Capital Stock and Gross Investment as Percent of GNP, 1950-91
	State and Local Government Investment in Core Infrastructure Projects, by Type, 1950-91
	Federal and State and Local Government Expenditures for Core Infrastructure, 1960-90
	Relationship of Trade and Productivity Performance, Selected Periods, 1973-88
	Alternative Rates of Return for the United States, 1983-90

Editorial Reviews

Recommends measures that three Brookings fellows say will improve the US economy (despite anything the Democrats can do), such as requiring employers to improve the training of their workforce, re-orienting secondary education to job training for the non- college-bound, shifting federal support from military and big science to smaller projects and private companies, and reforming international trade policies. Paper edition (unseen), $12.95. Annotation c. Book News, Inc., Portland, OR (booknews.com)

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