Starting as low-income economies in the 1960s, a few economies in East Asia managed,in a few decades, to bridge all or nearly all of the income gap that separated them from the high-income economies of the Organisation for Economic Co-operation and Development (OECD).Meanwhile many other developing economies stagnated .What made the difference?One way to grow is by developing hitherto unexploited land.Another is to accumulate physical capital:roads, factories, telephone networks.A third is to expand the labor force and increase its education and training.But Hong Kong (China) and Singapore had almost no land.They did invest heavily in physical capital and in educating their populations,but so did many other economies.During the 1960s through the 1980s the Soviet Union accumulated more capital as a share of its gross domestic product (GDP) than did Hong Kong (China), the Republic of Korea, Singapore, or Taiwan (China).And it increased the education of its population in no trivial measure. Yet the Soviets generated far smaller increases in living standards during that period than did these four East Asian economies.Perhaps the difference was that the East Asian economies did not build, work, and grow harder so much as they built, worked, and gr ew smarter.Could knowledge, then, have been behind East Asia’s surge ?If so, the implications are enormous,for that would mean that knowledge is the key to development—that knowledge is development.How important was knowledge for East Asia’s growt h spurt ?This turned out not to be an easy question to answer.The many varieties of knowledge combine with its limited marketability to present a formidable challenge to anyone seeking to evaluate the effect of knowledge on economic growth.How, after all, does one put a price tag on and add up the various types of knowledge?What common denominator lets us sum the knowledge that firms use in their production processes; the knowledge that policymaking institutions use to formulate, monitor, and evaluate policies; the knowledge that people use in their economic transactions and social interactions?What is the contribution of books and journals, of R&D spending, of the stock of information and communications equipment, of the learning and know-how of scientists, engineers, and students? Compound ing the difficulty is the fact that many types of knowledge are accumulated and exchanged almost exclusively within networks, traditional groups, and professional associations.That makes it virtually impossible to put a value on such knowledge.Reflecting these difficulties in quantify ing knowledge,efforts to evaluate the aggregate impact of knowledge on growth have often proceeded indirectly, by postulat ing that knowledge explains the part of growth that cannot be explained by the accumulation of tangible and identifiable factors, such as labor or capital.The growth not accounted for by these factors of production—the residual in the calculation—is attributed to growth in their productivity, that is, using the other factors smarter, through knowledge.This residual is sometimes called the Solow residual, after the economist Robert M. Solow,who spearheaded the approach in the 1950s,and what it purports to measure is conventionally called total factor productivity (TFP) growth.Some also call the Solow residual a measure of our ignorance ,because it represents what we cannot account for. Indeed, we must be careful not to attribute all of TFP growth to knowledge,or there may be other factors lurking in the Solow residual.Many other things do contribute to growth—institutions are an example—but are not reflected in the contributions of the more measurable factors.Their effect is (so far) inextricably woven into TFP growth.In early TFP analyses,physical capital was modeled as the only country-specific factor that could be accumulated to better people’s lives.Technical progress and other intangible factors were said to be universal, equally available to all people in all countries,and thus could not explain growth differencesbetween countries.Their contributions to growth were lumped with the TFP growth numbers.Although this assumption was convenient, it quickly became obvious that physical capital was not the only factor whose accumulation drove economic growth. A study that analyzed variations in growth rates across a large number of countries showed that the accumulation of physical capital explained less than 30 percent of those variations.The rest—70 percent or more—was attributed directly or indirectly to the intangible factors that make up TFP growth (Table 1.1).Later attempts introduced human capital to better explain the causes of economic growth.A higher level of education in the population means that more people can learn to use better technology. Education was surely a key ingredient in the success of four of the fastest-growing East Asian economies: Hong Kong (China), the Republic of Korea, Singapore, and Taiwan (China). Before their transformation from developing into industrializing economies, their school enrollment rates had been much higher than those of other developing countries (Table 1.2).They had also emphasized advanced scientific and technical studies—as measured by their higher ratios of students in technical fields than in even some industrial countries—thus enhancing their capacity to import sophisticated technologies.Moreover, the importance of education for economic growth had long been recognized and established empirically .One study had found that growth in years of schooling explained about 25 percent of the increase in GDP per capita in the United States between 1929 and 1982.Adding education reduced the part of growth that could not be explained,thus shrinking the haystack in which TFP growth (and knowledge) remained hidden.Some analysts even concluded, perhaps too quickly,that physical and human capital, properly accounted for, explained all or virtually all of the East Asian economies’ rapid growth,leaving knowledge as a separate factor out of the picture.One re ason these analysts came up with low values for TFP growth is that they incorporated improvements in labor and equipment into their measurement of factor accumulation.So even their evidence of low TFP growth in East Asia does not refute the importance of closing knowledge gaps.Indeed, it shows that the fast-growing East Asian economies had a successful strategy to close knowledge gaps:by investing in the knowledge embodi ed in physical capital, and by investing in people and institutions to enhance the capability to absorb and use knowledge.Looking beyond East Asia,other growth accounting studies have examined larger samples of countries.Even when human capital is accounted for,the unexplained part of growth remains high.One such study, of 98 countries with an unweighted average growth rate of output per worker of 2.24 percent,found that 34 percent (0.76 percentage point) of that growth came from physical capital accumulation,20 percent (0.45 percentage point) from human capital accumulation,and as much as 46 percent (just over 1 percentage point) from TFP growth.Even more remains to be explained in variations in growth rates across countries. The same study found the combined role of human and physical capital to be as low as 9 percent, leaving the TFP residual at a staggering 91 percent.To take another example:Korea and Ghana had similarly low incomes per capita in the 1950s,but by 1991 Korea’s income per capita was more than seven times Ghana’s.Much of that gap remains unexplained even when human capital is taken into account .All these results are subject to measurement problems.For example, the measured stock of human capital may overstate the actual quantity used in producing goods and services.High rates of school enrollment or attainment (years completed) may not translate into higher rates of economic growthif the quality of education is poor, or if educated people are not employed at their potential because of distortion s in the labor market.Moreover, it is now evident that education without openness to innovation and knowledge will notlead to economic development.The people of the former Soviet Union, like the people of the OECD countries and East Asia, were highly educated, with nearly 100 percent literacy .And for an educated population it is possible,through foreign direct investment and other means,to acquire and use information about the latest production and management innovations in other countries.But the Soviet Union placed severe restrictions on foreign investment, foreign collaboration, and innovation.Its work force did not adapt and change as new information became available elsewhere in the world, and consequently its economy suffered a decline.(excerpted from World Development Report 1998/1999)一些东亚国家在20世纪60年代还是低收入国家，但是在短短的几十年之间，他们成功地弥补了其与经济合作与发展组织（OECD）中高收入国家之间的差距；与此同时，也有许多发展中国家的经济停滞不前。
How Bill Gates Invests His MoneyTending the Investment PoolsAs Gates converts billions of dollars of Microsoft stock into philanthropic tender, Michael Larson will be shepherding the funds every step of the way. He will manage the foundation portfolios until the dollars are expended on syringes, scholarships, and software. “People have no idea the kind of pressure that Michael Larson operates under,” says Roger McNamee. “For one thing, he’s running money for two of the largest foundations in the world. The better he does, the more good works can be done.”Here’s how Larson’s job works. He’s in charge of three large pots of money: the two foundations and the $5 billion or so in Gates’ personal portfolio, which is mostly invested through Cascade, though there are other smallish accounts also under Larson’s auspices. Each of these three pools is discretely managed, with its own objectives and investments. And there’s one thing both Gates and Larson want to make perfectly clear. “Michael and I talk regularly about general investment matters, but he has full discretion over the portfolio.” Gates says. Larson, his usual grin gone for a second, says, “I wish everyone understood that. When people find out that Cascade has made an inv estment in something, that’s not Bill Gates. I’ll call Bill about something I’m buying if he needs to know, but Bill might not have any idea what Cascade owns.” (There are exceptions to this rule. For instance, Gates makes his own investments in biotech—more on that later.)So what’s in the portfolios? The Learning Foundation is the simplest. Because Patty Stonesifer and her crew have a fairly constant need for cash, Larson keeps this portfolio mostly in short-maturity U.S. government and corporate fixed-income securities. The William H. Gates Foundation is a little more complicated. Though it may have a smattering of stocks at any given time, it too is almost entirely in bonds—about 75% short-term U.S. governments and corporates. “The portfolio is pretty c onservatively positioned right now for a couple of reasons,” says Larson. “First, it reflects my view of the markets. And second, we just had an inflow of a couple of billion dollars.” Another reason bonds are attractive to Larson is that as new money streams in, scaling up in the fixed-income markets is much easier than in stocks.As for the other 25% of this foundation’s assets, Larson has made investments running the whole gamut of the bond market. He holds some inflation-protected Treasury bonds called TIPs, and plain-vanilla corporate bonds like Ford, Du Pont, and Time Warner (parent of Time Inc., FORTUNE’s publisher). He also has a position in junk bonds and foreign government bonds—Danish, German, Canadian—as well as foreign corporates, gobs of mortgage-backed securities, and all sorts of hedging investments. Larson farms out some 15% of the overall portfolio to bond managers at Morgan Grenfell, PIMCO, Miller Anderson & Sherrerd, and Western Asset Management. “These guys have discretion over the money we give them, but if Idon’t agree with their take on interest rates or the yen, I’ll override them by hedging,” Larson says.Gates’ $5 billion personal portfolio is another matter. First, there is the question of how much Microsoft stock Gates should ow n. “The money I have outside Microsoft is less than 10% of the total,” says Gates.“ Since we are obviously heavily weighted with Microsoft, we will sell stock periodically in order to get more diversity. It’s basically the same strategy most individual investors engage in.” (As if!) Because Microsoft stock has soared over the past few years, Gates and Larson have had to sell huge amounts of stock to maintain even the semblance of a diversified portfolio. Since the company went public, Gates has sold an average of five million Microsoft shares a quarter, adjusted for splits. That works out to around 80000 shares every single trading day, though Larson sells through a “blind program” during legal windows to avoid insider-trading charges. Larson tries to sell as quietly as he can through his favorite brokers, including DLJ, Goldman Sachs, and Allen & Co. Gates has sold some 256 million (split-adjusted) shares of Microsoft stock over the past 13 years, for about $5.16 billion. He has given away another 76 million shares.If Gates continues to sell and give away Microsoft stock, will he still hold sway over the company? “Losing control of Microsoft isn’t an issue as I give the money away,” says Gates. “No one person controls Microsoft. The board and the shareholde rs decide whether they want to have me as CEO.” (Sure, Bill.) Actually, Gates’ ownership of the company has declined steadily over the years. At the time of the IPO, he owned 44.8% of Microsoft’s stock. He now owns just about 18.5%. About half of that decline is due to dilution, brought about by the issuance of millions of shares to Microsoft employees exercising options, while the other half is due to stock sales and gifts.As for the actual content of Gates’ $5 billion portfolio (drum roll, please), it t urns out to be not that e xciting. And for good reason. “If you think about it, 90%-plus of Bill’s wealth is in a single technology stock. He really doesn’t need much, if any, equity exposure at all,” says Larson. “Right now his portfolio actually looks som ewhat like a big old bond fund.” In fact, a recent snapshot of Gates’ personal portfolio looks like this: Larson has 70%, or $3.5 billion, invested in short-term governments and corporates, with a small weighting in foreign bonds. He also owns some emerging-market debt and high-yield issues. “Basically we are short on the yield curve right now,” Larson says, again reflecting his wary view of the markets.What about the other 30%, or $1.5 billion? About half of it—$750 million—is in what Larson calls privat e equity; that’s buyout funds and direct investments, such as Gates’ stake in Teledesic, McCaw’s satellite company (Larson is on its board). That figure also includes funds run by outsiders. About 5% of Gates’ portfolio is farmed out to managers like McNam ee’s Integral Capital Partners and Blue Ridge Capital, a New York hedge fund run by John Griffin, former right-hand man of Julian Robertson at Tiger Management. Larson also has a significant amount of money in shortpositions—actually more than usual right now—which reflects his view that many stocks are fully, if not overly, valued. He also has a small amount of money with Bill Fleckenstein, who runs a short-selling fund.Of the nonbond portion of Gates’ portfolio, another $250 million is in what Larson c alls “real stuff.” He means real assets, like commodities (he’s been in and out of crude oil futures) and real estate, such as investments in the Reserve, a real estate and golf course development near Palm Springs, and in the Cliveden hotels in England.T he remaining $500 million is in stocks. Given Gates’ huge position in Microsoft, why does Larson own equities at all? “Because I think some stocks have behavior patterns that run counter to Microsoft,” says Larson. “For instance, if and when the air comes out of tech stocks, food and oil stocks could hold up real well. The other reason we do equities is because we have some expertise in certain areas, and we make money at it.” It so happens that one of Larson’s interests is media stocks. He favors cable stocks such as TCI and Liberty Media, as well as Cox Communications and Barry Diller’s USA Networks. Larson also holds Berkshire Hathaway—he owned 300 shares last year and recently bought a bunch more—which he thinks became particularly attractive after its Gen Re acquisition. “Gen Re was in the S&P 500. Berkshire isn’t. So after the deal, index managers had to sell Berkshire, depressing the price.”Gates does make his own investment decisions in biotech. Says he: “I’ve always been interested in science—one o f my favorite books is James Watson’s Molecular Biology of the Gene. I’m an investor in a number of biotech companies, partly because of my incredible enthusiasm for the great innovations they will bring. I serve on the board of ICOS [which develops drugs to fight inflammatory diseases]. I continue to make a number of investments in this area.” At various points Gates has owned stock in other biotechs—including PathoGenesis, Targeted Genetics, and Chiroscience—but he is out of all those stocks now. He recently bought a stake in a company called Advanced Medicine, a private biotech firm.As for tech stocks, “We pretty much don’t own ’em,” Larson says, “not with Bill’s other asset.” It could be awkward, of course, if Cascade owned, say, 3% of a small tech co mpany that Microsoft’s strategic planners later decided they wanted to gobble up. Or if that small company felt inclined to sue Microsoft at some point. Gates does, however, own some tech stocks through his investments in McNamee’s partnerships. And Larson concedes that he might be short some tech names. “I do think the market is high right now, and there is an awful lot of excitement about tech stocks,” says Larson. Whoa! Does that mean he thinks Microsoft is overvalued? “I wouldn’t bet against [Microsoft],” he says.Larson continues: “I just think at some point the cycle is going to turn. We’ll have some rotation. There will be some trigger event that will change the equity market’s point of emphasis. Agriculture, for instance, will come back. Stocks like Deere & Co. [which he owns a bit of] will make out. Oil looks interesting. There aresome opportunities in that sector, and I don’t think oil has to go back to $20 a barrel [for oil stocks to work out].”What about interest rates? “I think they will trend higher. It’s true we don’t see much inflation now, but wage inflation is evident, and everything is in such high gear right now. I think long rates could climb 100 basis points, which could be a shock to the market. It could also make for a real nice buyi ng opportunity.” But Larson knows he has to go easy. “Sure, I could torque up the portfolio,” he says, perhaps a little wistfully, “but that’s not what I’m paid to do. The point wasn’t for Bill to become richer than the Sultan of Brunei.” No, but that hap pened anyway, not because of anything Larson did but because of Microsoft’s explosive growth (and a little imploding on the Sultan’s part.)The point is that the real growth engine is Microsoft. Just how big will the company, and therefore Gates’ fortune, become? How much will Gates end up giving away? No one knows, of course, not even Gates. But consider this: If Microsoft’s stock compounds over the next 20 years by merely 10%, Gates’ fortune, even assuming some selling, could be worth $400 billion. Impossible, you say? Well, what would you have said 13 years ago—the day of Microsoft’s IPO, when Gates’ holdings were worth $234 million—if someone had told you he would be worth $80 billion before the end of the millennium? Impossible.Andrew Carnegie was regarded in his day not just as a robber baron but—after the Homestead Strike of 1892, in which hired guards killed seven striking steel-workers—as a plutocrat with blood on his hands. He reshaped his image by giving away most of his fortune during his lifetime, and today he is remembered less for the strike than for his phrase “the man who dies...rich dies disgraced.”Today, Bill Gates is known variously as the creator of Microsoft, as the richest man in the world, and as a monopolist hell-bent on world infotech domination. Hard as it may be for some people to swallow, future generations may remember Bill Gates instead as the greatest philanthropist the world has ever known.(excerpted from Fortune, March 15, 1999)。
Unit 4 United We Stand?1991年12月，欧洲12个国家签署了具有历史意义的马斯特里赫特条约，并在这样做时，创造了现在被称为欧洲货币联盟（EMU）的单一货币贸易区。
马斯特里赫特条约概述了欧洲货币联盟的国家将用单一的货币---欧元取代它们各自货币的过程，欧元将由一个单一的欧洲央行控制。
1999年1月，各国货币与欧元之间的汇率都应当绝对固定，到2002年1月，国家货币都应该被完全淘汰。
然而，德国，法国和其他一些欧元区国家能够满足该时间期限，达到合约要求，但许多其他国家因为困难重重已经推迟了关于马斯特里赫特条约规定，可能无法按照合约时间固定汇率。
尽管多数欧洲政府官员目前都持乐观态度，但已经历过的困难并不预示着当前形式下的欧洲货币联盟有好的未来。
虽然目前的问题集中在控制政府赤字，以符合《马斯特里赫特条约》中的条件，但是近期发生的汇率危机对这项计划是否真正值得推行提出了质疑。
如果这些问题得不到解决，国家的经济不应该被强迫以适应马斯特里赫特的条件和武断的时间期限，因为这样的行动只会造成不必要的经济混乱。
货币统一目前的延迟是必要的；更谨慎将符合欧洲人民的最佳利益。
为什么要货币联盟为了正确评估欧洲货币联盟所面临的困境，必须仔细分析尤其要注意当前系统的经济成本和效益。
目前每个国家都有不同的货币，相对货币价值趋于波动，除非受限于人工的国际协议。
货币波动的发生有多种原因，最重要的即国家经常扩大或减少流通的货币量。
货币供应量的增加会迫使货币贬值，较低的汇率增加出口，以提高经济的总产出。
货币紧缩会导致相反的效果，也趋于降低通货膨胀。
因此，欧洲央行目前使用的货币供应量的控制，以保持国家的通货膨胀率很低，扩大了陷入衰退的国家经济的范围。
欧洲货币联盟的好处在于能消除存在多种货币带来的经济成本。
存在不同货币中最明显的成本是必须花费从一种货币转换为另一种货币的资源。
例如，如果一家德国公司的盈利法国法郎，它必须把法国法郎换成德国马克以支付其雇员。
