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Traditional Sector (traditional + sector)

Distribution by Scientific Domains

Business, Economics, Finance and Accounting	50%

Selected Abstracts

Can Growth Ease Class Conflict?

ECONOMICS & POLITICS, Issue 1 2002
E. Somanathan
This paper proposes a theory that links labor supply to wage growth and economic growth, and the conflict of interest between capital and labor. During the early stages of industrialization of a country, "surplus" labor drawn from the traditional sector of the economy is available to the modern capitalist sector at a constant or only slowly rising wage. As industrialization proceeds, this labor surplus vanishes, leading to wages rising in tandem with the growth of output. As long as there is surplus labor, workers in the modern capitalist sector, who are organized, have little interest in growth as it does not raise wages. The effect of growth is external to them, simply drawing more workers into the capitalist sector and enabling the entrants to receive rents. So capitalist-sector workers would like to redistribute income regardless of the adverse effect on growth. Once the economy grows enough for the subsistence sector to vanish, further growth raises wages. Hence, this change in the structure of the economy leads to a reduction in the intensity of the labor,capital conflict. The dual economy model implies that growth rates rise over time and fall after the exhaustion of the labor surplus which is consistent with the stylized fact of economic growth. [source]

Tradition and interaction: research trends in modern Japanese industrial history

AUSTRALIAN ECONOMIC HISTORY REVIEW, Issue 3 2004
Tomoko Hashino
This paper surveys research findings since the early 1970s, focusing on the growth processes of both traditional and modern industries and their relations with government activity in the period between the 1870s and 1940. Most of the surveyed research can be seen as a response to two theses: first, that pre-1940 Japan was essentially a market-led economy; and second, that the traditional sector did not decline in the industrialisation process, but in fact prospered. The survey argues that there were a good deal of interactions between the modern and traditional sectors at regional levels and that the regional economy occupied a significant place in the ways in which government business relations were structured. [source]

The Macroeconomic Implications of Regulatory Capital Adequacy Requirements for Korean Banks

ECONOMIC NOTES, Issue 1 2000
G. Choi
The capital adequacy requirement, combined with the flight to quality, contributed to a drastic credit slowdown and a sharp recession in Korea in the aftermath of the financial crisis. Since most banks were placed under the strengthened capital adequacy constraints, they reduced loans to firms with high credit risks. As a result, bank-dependent small and medium-sized enterprises (SMEs) were badly hit, and eventually demand for bank loans fell. The reduction in loans was most visible among banks with poor capital adequacy, yet the overall change in bank portfolios had a disproportionately large negative influence on financial conditions for SMEs. In conclusion, the banks' response to capital adequacy requirements resulted in changes in the loan/bond ratio which, in turn, reduced loans to SMEs and caused a sharp cut in production. The resulting contraction in SME production created a polarized industrial structure and a chronic depression in the traditional sectors of the economy. The introduction of capital adequacy requirements (CARs) in the wake of financial crisis worsened conditions for SMEs and weakened the validity of the CARs that were mainly necessitated by successive failures among larger firms. [source]