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2014 | OriginalPaper | Buchkapitel

2. Two Wealthy Economies and Their Development

verfasst von : Henrik Christoffersen, Michelle Beyeler, Reiner Eichenberger, Peter Nannestad, Martin Paldam

Erschienen in: The Good Society

Verlag: Springer Berlin Heidelberg

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Abstract

As mentioned in the introduction both Denmark and Switzerland have managed to stay wealthier than most countries in Western Europe, but the process of convergence in the West has reduced the gap. The West has experienced a strong economic integration in the twentieth century – notably in the second half. This process has led to convergence within the West – and as more countries have joined the process, it has become a true globalization.

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Fußnoten
1
During the last two decades the only European countries that are consistently richer than the two countries are Luxembourg and some micro-countries such as Liechtenstein, the Channel Islands and Monaco. However, Norway became richer in the last decade.
 
2
The 50 states of the USA have converged rather much, but there are still differences between the states, and with the σ-measure used below it appears that the smallest value that can be reached is above 0.1, and the countries of the West are surely more different than the US states.
 
3
The OECD and IMF have had committees to study offshore banking centers. In Europe 11 countries are classified by both committees as financial safe havens. The other 10 countries are all micro-states see Paldam (2013).
 
4
The exchange rate terminology is confusing: The nominal exchange rate is the price in domestic currency of one unit of foreign currency. A revaluation thus means that the exchange rate goes down, so that the price of foreign goods falls in the country, while the price of domestic goods rises abroad. The real exchange rate is reached from the nominal rate by multiplying with a foreign price index and dividing with the corresponding domestic price index. Below the consumer price index is used to calculate the real rate.
 
5
Madsen and Paldam (1983) analyze the 12 devaluations and 3 revaluations that took place in the OECD area during the Bretton Woods period. All of these were due to previous differences in the rate of inflation. They typically helped substantially to restore the equilibrium.
 
6
Switzerland has stayed neutral since 1815, so Switzerland was also neutral under World War I, but so was Denmark.
 
7
However, the most intact production sector in Denmark was agriculture, and the agric sector was subjected to a great deal of import regulation on the traditional Danish markets.
 
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Metadaten
Titel
Two Wealthy Economies and Their Development
verfasst von
Henrik Christoffersen
Michelle Beyeler
Reiner Eichenberger
Peter Nannestad
Martin Paldam
Copyright-Jahr
2014
Verlag
Springer Berlin Heidelberg
DOI
https://doi.org/10.1007/978-3-642-37238-4_2