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Towards more balanced growth strategies in developing countries : Issues related to market size, trade balances, and purchase power

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  • Towards more balanced growth strategies in developing countries
  • Mayer, Jörg
  • United Nations


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Title Towards more balanced growth strategies in developing countries
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Sub Title

Issues related to market size, trade balances, and purchase power

Material Type Articles
Author(English)

Mayer, Jörg

Publisher

[Geneva]:United Nations

Date 2013-12
Pages 42
Subject Country South Korea(Asia and Pacific)
Language English
File Type Link
Subject Economy < Economic Conditions
Economy < Economic Administration
Holding United Nations conference on Trade and Development

Abstract

The global crisis has disrupted the favourable external environment that made export-led development strategies viable. Developing countries can compensate for the resulting decline in aggregate demand growth through domestic demand if their domestic markets are sufficiently large and if they avoid an import boom, which would cause balance of payments problems. Concentrating on household consumption, the paper shows that the sales potential in some large emerging economies is approaching that in developed countries but also that imports might meet most new domestic consumption demand. Sustaining a shift towards a more balanced growth path requires changes in the production structure, fostered by product innovation, to make domestic production patterns better correspond to newly emerging demand patterns. The associated new employment and wage opportunities would allow realizing emerging sales potentials through rising incomes, rather than rising household debt.

User Note

An earlier draft of this paper was a background note for UNCTAD’s Trade and Development Report 2013. The author is grateful to Alfredo Calcagno, Detlef Kotte, William Milberg, Wim Naudé and Adrian Wood, as well as participants in the Chinese Economic Association’s 2013-conference at Leiden University in The Hague and in the “Europe and Global Economic Rebalancing” congress of Ekonomik Yaklisim in Ankara, for helpful comments and suggestions. The author also thanks Juan Pizarro for excellent research assistance. A synthesis of this paper was published as Mayer (2013).