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Deindustrialization Weak Political power = a clear intention of destroying a country => Fostering a negative
synergy among ALL European countries
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05/03/2014 Claude Rochet The road to recovery: Learning from the past crises
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05/03/2014 Claude Rochet The road to recovery: Learning from the past crises
Town and industries are at the heart of economic synergies as engines of wealth creation
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05/03/2014 Claude Rochet The road to recovery: Learning from the past crises
Only a massive transfer of monetary ressource to finance imports from the US Just a political operation to contain communism The catalyst of European recovery Monetary orthodoxy Free market orthodoxy
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05/03/2014 Claude Rochet The road to recovery: Learning from the past crises
What it was:
Strong public intervention: Govt failures are always preferable to market failures Alleviation of war controls on prices and quotas, exchange rate stability, BUT under mixed economies redistributional systems Priority to productive investments Considering the economy as a whole and not specific firms as market mechanisms would do + Knowledge transfer => Strong multiplier effect Political consensus on welfare state Bretton-woods system: no currency straitjacket
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05/03/2014 Claude Rochet The road to recovery: Learning from the past crises
Knowledge transfer accounted for 1,5% of the total cost of the plan (20bnUS$) 4-6 weeks study tours were organized in the US to learn management methods Productivity solutions suited to local conditions Workers Unions supported the plan under the condition that productivity benefits will be shared between owners, workers and consumers This resulted in dramatic productivity increase of 25-50% with no increase in fixed assets, and an historic increase of TFP
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05/03/2014 Claude Rochet The road to recovery: Learning from the past crises
Searching for synergies between economic activities Increase the technological content of products and labour
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05/03/2014 Claude Rochet The road to recovery: Learning from the past crises
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05/03/2014 Claude Rochet The road to recovery: Learning from the past crises
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05/03/2014 Claude Rochet The road to recovery: Learning from the past crises
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05/03/2014 Claude Rochet The road to recovery: Learning from the past crises
Troka policies are akin to Morgenthau Morgenthau plans (2) plan in action
Investment (% GDP)
Unemployment (% GDP)
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05/03/2014 Claude Rochet The road to recovery: Learning from the past crises
Development is an uneven process Activities are not alike Wealth is not valued by hours of work but with knowledge Infant activities protection is needed to preserve the first mover advantage High quality activities spill over all the society => civic humanism
The issue of Good and strong Govt is still topical as a condition for growth
Clisthenes principles: isotopia, isonomia, isocratia
Allegory of the Good Governement, Sienne Town Hall, by A. Lorenzetti
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05/03/2014 Claude Rochet The road to recovery: Learning from the past crises
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A strategic vision borne by sovereign state Power and plenty are linked Understanding the role of high quality activities Modernization of public administration and political strategy are closely intertwined Promoting the entrepreneurs and fighting the rentiers Keeping a tight rein on finance Since 1720, financial follies are alike
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Thank you!
Claude.Rochet@univ-amu.fr http://claude-rochet.fr
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