NDLI: Adjusting towards a sustainable growth path

Please wait, while we are loading the content...

Adjusting towards a sustainable growth path

Content Provider	OECD iLibrary
Organization	OECD
Abstract	The 2008-09 recession was moderated by unprecedented policy stimulus and by relatively strong growth in Australia and Asia, New Zealand’s largest trading partners, which also boosted the terms of trade. The subsequent recovery has been unexpectedly weak and patchy, however. A large debt overhang and increased risk aversion following the global crisis have led to a wish to deleverage by households, firms, banks and (soon) by government. This seems a necessary and desirable part of adjusting toward more sustainable long-run growth. The debt-fuelled property boom of the past decade drove down already structurally low household saving rates. Expansionary fiscal measures implemented prior to the recession, together with cyclical revenue shortfalls and major one-off earthquake costs, have now reduced government saving rates as well. With most of the growth in household, business and now government debt funded from abroad, for the private sector mainly through the banking system, net foreign liabilities have accumulated to levels that make the economy particularly vulnerable to sharp changes in investor sentiment. Persistently higher interest rates relative to other countries are symptomatic of low levels of national saving and have attracted significant capital inflows, placing upward pressure on the exchange rate and thereby shrinking the trade-exposed sector. Relatively high interest rates have also driven up the cost of capital, restraining domestic investment and hence longer-term growth prospects. The official objective of closing the productivity gap with Australia will require a re-balancing of the economy away from consumption towards more productive sources of growth. Fiscal consolidation, in particular through paring back public spending, will play an important role in reducing pressure on the exchange rate and improving the external position. This would allow price stability to be maintained at lower real and nominal interest rates. Public transfer cuts and capital divestments could, in a context of broader regulatory reforms to reduce policy distortions, serve to improve private incentives to work, save and invest, boosting potential growth.
Page Count	39
Starting Page	21
Ending Page	59
Language	English
Publisher	OECD Publishing
Publisher Date	2011-04-27
Access Restriction	Open
Subject Keyword	Economics
Content Type	Text
Resource Type	Chapter

Central Library (ISO-9001:2015 Certified)
Indian Institute of Technology Kharagpur
Kharagpur, West Bengal, India | PIN - 721302

See location in the Map
03222 282435
Mail: support@ndl.gov.in

Sl.	Authority	Responsibilities	Communication Details
1	Ministry of Education (GoI), Department of Higher Education	Sanctioning Authority	https://www.education.gov.in/ict-initiatives
2	Indian Institute of Technology Kharagpur	Host Institute of the Project: The host institute of the project is responsible for providing infrastructure support and hosting the project	https://www.iitkgp.ac.in
3	National Digital Library of India Office, Indian Institute of Technology Kharagpur	The administrative and infrastructural headquarters of the project	Dr. B. Sutradhar bsutra@ndl.gov.in
4	Project PI / Joint PI	Principal Investigator and Joint Principal Investigators of the project	Dr. B. Sutradhar bsutra@ndl.gov.in Prof. Saswat Chakrabarti will be added soon
5	Website/Portal (Helpdesk)	Queries regarding NDLI and its services	support@ndl.gov.in
6	Contents and Copyright Issues	Queries related to content curation and copyright issues	content@ndl.gov.in
7	National Digital Library of India Club (NDLI Club)	Queries related to NDLI Club formation, support, user awareness program, seminar/symposium, collaboration, social media, promotion, and outreach	clubsupport@ndl.gov.in
8	Digital Preservation Centre (DPC)	Assistance with digitizing and archiving copyright-free printed books	dpc@ndl.gov.in
9	IDR Setup or Support	Queries related to establishment and support of Institutional Digital Repository (IDR) and IDR workshops	idr@ndl.gov.in