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This blog is maintained by the Growth and Crisis (GC ) Program of the World Bank Institute.

We bring you timely news, resources, tools, ideas and commentaries on issues related to the global economic crisis and growth.

Macroeconomics and Economic Growth

Survey Results: Brazil Stays Strong in the face of the Crisis

Submitted by Ihssane on Wed, 10/14/2009 - 12:38

(Thanks and Credits for this information go to the Brazilian Secretariat of Social Communication - SECOM)

Brazil is one of the world's fastest growing economies. An annual socioeconomic survey of over 150,000 households conducted by the Brazilian Government showed notable advances in housing, employment, education, access to services and a drop in income concentration among Brazilians for the year 2008 compared to the year 2007. The findings of this report, released on September 18, 2009, indicate that, thanks to major government investments in infrastructure, education, and local development, Brazil’s citizens have prospered alongside the booming economy.

According to the National Survey by Household Sampling (PNAD), conducted by the Brazilian Institute of Geography and Statistics (IBGE), Brazil saw an increase in the home ownership rate, formal jobs and income for workers, and home access to sewerage, telephone and Internet systems.

In 2008, the number of employed workers in Brazil was 2.8% higher than that of 2007, and totaled 92.4 million people.  This increase came largely from the construction sector, with growth of 14.1% that generated 900,000 new jobs across the country.  34.5% of employed Brazilians in 2008 were under formal contract employment, receiving all rights and benefits granted by law. This is an increase of 2.1 million people, from a 33.1% rate in 2007.  This increase resulted in a 5.9% increase in the number of Social Security taxpayers in 2008 as compared to 2007.

Grab Your (Online, Pre-Press) Version of the World Development Report 2010 Now

Submitted by Ihssane on Mon, 09/21/2009 - 16:31


An advance version of the World Development Report 2010: Development and Climate is now available online. With a focus on climate change and its negative impacts on vulnerable populations, this year's Report also covers innovation and technology diffusion, land and water management, and other important factors for accelerating development.

This version is not final and may be subject to further changes. The final WDR 2010 will be out in October.

Decoupling, Reverse Coupling and All That Jazz

Submitted by Otaviano on Tue, 09/01/2009 - 10:17

(By Otaviano Canuto)

In PREM Note 141 released last week, Milan Brahmbhatt and Luiz Pereira da Silva point to several structural differences between the global economy today and in the 1930s that tend to differentiate the current crisis from the Great Depression. The larger weight of faster-growing developing countries in the current world economy is among those differences, one that bodes well for recovery prospects.[1]

As can be seen in Chart 1, there has long been a close correlation between economic cycles in developed and developing economies. More recently, since the early 2000s, this has been combined with systematically higher growth rates in developing relative to developed economies. As the authors remark, “there has been no decoupling in the cyclical component of developing country growth”, while “there has arguably been a decoupling in underlying trend rates of growth” (p.2). A similar pattern remains even if China and India are taken out of the picture.

Chart 1

              Source: PREM Note 141(p.3)

Microfoundations of Economic Growth

Submitted by Raj on Mon, 08/24/2009 - 17:22

Most growth analysis has been primarily a macroeconomic subject with particular emphasis on contribution of capital, education adjusted labor, and total factor productivity to output growth (see Collins and Bosworth 1996, Hu and Khan, 1997, Sarel 1997, Sala-i-Martin 2000, Hall and Jones, 1999, Easterly and Levine 2001). Importance of macroeconomic policies as represented by budget deficits, exchange rate premia, inflation, trade openness and inflow of foreign Investment etc are tagged on in the growth analysis at a macroeconomic level. A few studies have invoked ethnic differences and other exogenous factors to understand cross country differences in total productivity growth and per capita incomes. 

In trying to understand the rapid output growth of East Asian ‘miracle’ countries, Krugman (1994), Young (1995), and others were engaged in an interesting debate on whether capital accumulation or total factor productivity growth best explained the high and sustained output growth of these countries. Their conclusion that capital accumulation was most important was based on macroeconomic data analysis in a factors of production approach to sources of growth. Others have found that the growth of output is strongly correlated with productivity growth in developed and developing economies as reported by Kehoe and Prescott (2002) and Solimano and Soto (2004), and this co-movement appears to be stronger the longer is the time period considered.