9_3_Notes - Econ 4730 F2008 (9/3/2008) Last time, we...

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Econ 4730 F2008 (9/3/2008) Last time, we discussed the benchmark model, in which a change in the policy parameter may convert a stagnant economy into export-led development. Japan was the first, and the largest economy (even today) which presumably took this path, after World War II, under the slogan of ‘export or starve’. But there has been some voice of doubt in the literature (starting from papers like Boltho,1996): can the development of a large, industrial economy such as Japan ever be led by export? For this issue, the course document, Appendix 1, Lecture 2, Wan (2008) supplies some background facts, relevant for answering this question: a) Supporting the Japanese economy was a Cold War strategy of America suggested by George Kennan to Secretary of State George Marshall, in PSS 223 (due to the controversy about accurate quotation, a selection of which has been attached). b) The off-shore production of ammunition for America in Japan during the Korean War brought the Japanese economy respite. But when the end of Korean War
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9_3_Notes - Econ 4730 F2008 (9/3/2008) Last time, we...

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