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Note sur les conséquences globales de la reconstruction de l'Europe de l'Est et l'épargne mondiale

Author

Listed:
  • Jean-Paul Fitoussi

    (OFCE - Observatoire français des conjonctures économiques (Sciences Po) - Sciences Po - Sciences Po)

  • Edmund Phelps

    (Center on Capitalism and Society - Columbia University [New York])

Abstract

The investment needed to rebuild several of the economies of Eastern Europe will most probably be fairly important. This paper tries to answer the question of the adequacy of Western saving in the light of this new development. We argue that the world will suffer from a rise in the real rate of interest during a transitory period when an amount of capital will be reallocated to those parts of the East desiring and seen to be credit-worthy of possession of such capital. We then study the causes and consequences of the elevation of the real rate of interest, through the theoretical perspective of models of economic growth. Because Europe and the rest of the world will not be presumably equally affected, we reason in the framework of a two-countries, two- sectors model. We finally deal with the question of what the rest of the world should do, if anything, in response to the shocks coming from Eastern Europe.

Suggested Citation

  • Jean-Paul Fitoussi & Edmund Phelps, 1990. "Note sur les conséquences globales de la reconstruction de l'Europe de l'Est et l'épargne mondiale," Post-Print hal-03392994, HAL.
    • Handle: RePEc:hal:journl:hal-03392994
    DOI: 10.3406/ofce.1990.1228
    Note: View the original document on HAL open archive server: https://sciencespo.hal.science/hal-03392994
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    References listed on IDEAS

    as
    1. Jean-Paul Fitoussi & Jacques Le Cacheux, 1989. "Une théorie des années quatre-vingt," Revue de l'OFCE, Programme National Persée, vol. 29(1), pages 117-160.
    2. Edmund Phelps & Jean-Paul Fitoussi, 1988. "The slump in Europe : reconstructing open economy theory," Post-Print hal-03393283, HAL.
    3. Phelps, Edmund S, 1988. "A Working Model of Slump and Recovery from Disturbances to Capital-Goods Demand in an Open Nonmonetary Economy," American Economic Review, American Economic Association, vol. 78(2), pages 346-350, May.
    4. repec:hal:spmain:info:hdl:2441/5953 is not listed on IDEAS
    5. Phelps, Edmund, 2015. "Seven Schools of Macroeconomic Thought," OUP Catalogue, Oxford University Press, number 9780198743903.
    6. International Monetary Fund, 1988. "A Working Model of Slump and Recovery from Disturbances to Capital-Goods Demand in a Closed Non-Monetary Economy," IMF Working Papers 1988/082, International Monetary Fund.
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