ISSN 1813-2715 2010 SUBSCRIPTION Economic Policy Reforms Going for Growth 2010 The world is currently facing the aftermath of the worst financial crisis since the Great Depression. Going for Growth 2010 examines the structural policy measures that have been taken in response to the crisis, evaluates their possible impact on long-term economic growth, and identifies the most imperative reforms needed to strengthen recovery. In addition, it provides a global assessment of policy reforms implemented in OECD member countries over the past five years to boost employment and labour productivity. Reform areas include education systems, product market regulation, agricultural policies, tax and benefit systems, health care and labour market policies. The internationally comparable indicators provided here enable countries to assess their economic performance and structural policies in a wide range of areas. In addition, this issue contains three analytical chapters covering: • intergenerational social mobility; • prudential regulation and competition in banking; • key policy challenges in Brazil, China, India, Indonesia and South Africa. www.oecd.org/economics/goingforgrowth ISBN 978-92-64-07996-0 12 2010 03 1 P -:HSTCQE=U\^^[U: www.oecd.org/publishing 2010 Economic Policy Reforms Going for Growth OECD’s books, periodicals and statistical databases are now available via www.SourceOECD.org, our online library. This book is available to subscribers to the following SourceOECD theme: General Economics and Future Studies Ask your librarian for more details of how to access OECD books online, or write to us at SourceOECD@oecd.org Economic Policy Reforms Going for Growth 2010 Structural Policy Indicators, Priorities and Analysis [...]... OECD Countries ECONOMIC POLICY REFORMS: GOING FOR GROWTH © OECD 2010 Economic Policy Reforms Going for Growth © OECD 2010 PART I Chapter 1 Responding to the Crisis while Protecting Long-term Growth OECD countries have taken a wide range of measures in response to the crisis, notably in the areas of infrastructure investment, taxes, the labour market, regulatory reforms and trade policy This chapter assesses... USA United States USD ECONOMIC POLICY REFORMS: GOING FOR GROWTH © OECD 2010 9 Economic Policy Reforms Going for Growth © OECD 2010 Executive Summary T he OECD countries experienced a major financial crisis that led to the deepest recession since the Great Depression Governments and central banks swiftly took unprecedented steps to save the financial system, and a wide range of policy measures were undertaken... should therefore be preferred to 32 ECONOMIC POLICY REFORMS: GOING FOR GROWTH © OECD 2010 I.1 RESPONDING TO THE CRISIS WHILE PROTECTING LONG-TERM GROWTH Box 1.2 How do structural policies affect the reaction of economies to macroeconomic shocks? Many policy priorities identified in Going for Growth influence not only long-term material living standards but also how economies react to various macroeconomic... limited role for financial intermediation Policies directed at financial deepening, including improved regulation, could boost firm size, capital accumulation and productivity The application of the Going for Growth framework to the BIICS is more difficult than for OECD countries since the full range of policy and performance indicators are currently not ECONOMIC POLICY REFORMS: GOING FOR GROWTH © OECD... into Going for Growth increases the heterogeneity of country coverage Nevertheless, the exercise illustrates the flexibility and robustness of the Going for Growth framework, that will be refined as part of the full integration of new countries into the exercise in subsequent years 14 ECONOMIC POLICY REFORMS: GOING FOR GROWTH © OECD 2010 PART I Taking Stock of Structural Policies in OECD Countries ECONOMIC. .. re-structuring, and thereby reduce longer-term growth Therefore, the elaboration of exit strategies and the clarification of the longer-term regulatory framework are ECONOMIC POLICY REFORMS: GOING FOR GROWTH © OECD 2010 21 I.1 RESPONDING TO THE CRISIS WHILE PROTECTING LONG-TERM GROWTH Table 1.1 Financial market measures taken Country Government financial support for the financial sector Increase deposit... marginal rates Reductions in nonwage labour costs for Fiscal measures for new or continuing low earners workers Austria Income tax measures Australia Country Table 1.5 Tax and R&D measures I.1 RESPONDING TO THE CRISIS WHILE PROTECTING LONG-TERM GROWTH ECONOMIC POLICY REFORMS: GOING FOR GROWTH © OECD 2010 I.1 RESPONDING TO THE CRISIS WHILE PROTECTING LONG-TERM GROWTH increases in exemption levels, and decreases... levels, and examines structural policy challenges to deliver strong and sustainable growth going forward The main conclusions are that OECD countries have so far avoided major mistakes – in particular concerning trade and labour market policies – but some risks remain The crisis has in general reinforced the need for structural reforms These reforms could help to speed up the ongoing recovery, strengthen... wage adjustment and thereby may allow quicker return to potential ECONOMIC POLICY REFORMS: GOING FOR GROWTH © OECD 2010 33 I.1 RESPONDING TO THE CRISIS WHILE PROTECTING LONG-TERM GROWTH Box 1.2 How do structural policies affect the reaction of economies to macroeconomic shocks? (cont.) Structural policy influences on resilience to macroeconomic shocks Flexible labour and product market regulation (1st... can to a large extent be explained by structural policy factors that are the basis on which structural policy priorities are identified in Going for Growth The main reform 11 EXECUTIVE SUMMARY patterns that emerge from the stocktaking exercise carried out over the period 20052009 are the following: ● OECD countries have followed up on Going for Growth policy priorities since 2005 Twothirds of them took . of its member countries. ECONOMIC POLICY REFORMS: GOING FOR GROWTH © OECD 2010 3 www.oecd.org/economics/goingforgrowth Going for Growth was launched in 2005 as a new form of structural surveillance complementing. ECONOMIC POLICY REFORMS: GOING FOR GROWTH © OECD 2010 PART I Taking Stock of Structural Policies in OECD Countries