Following the urging of the Leader’s statements, the goal of this Report is to focus more explicitly on what, in the Leader’s own words, constitutes the “right policy environment” to yield the “higher productivity” of the “new style of economy” where policies “transcend the traditional boundaries”. Accordingly, this Report ‘The New Economy and APEC’ goes forward from the KBE report of 2000 to examine what structural policies underpin a “knowledge-based economy”.
But, importantly, it goes one step beyond the individual members of APEC by considering what might be the implications for the forum as a whole of the potential divergence of productivity and economic growth that comes with differential paces of structural reform among the APEC membership. In making this analysis, it uses the lens of economists as advisors to policy- makers, recognizing that policymakers face many, and sometimes competing, views and factors for their consideration.
Summary Objectives of the Report and Basic Outline of Method At the February 2001 meeting, the Economic Committee agreed to put into the work program for 2001 the preparation of a Report led by the US government on the New Economy and APEC. The initial outline of the Report was discussed with members of the sub-committee in April in Beijing, and initial findings were presented to Senior Officials in Shenzhen. The Report reviews existing research, develops new empirical analysis, and distills case studies written explicitly for this project by official and private sector representatives of the members of APEC. The Report addresses four questions:
What are the fundamental underpinnings of the “New Economy”? What evidence is there, at the macro level on benefits to growth and at the micro level of the challenges of transformation, which can assist in the domestic political discussion about policy reform and structural adjustment? What are the implications, particularly in terms of trade competitiveness and digital divides, of the different paces of policy reform in pursuit of the New Economy? What conclusions, both for economies and for the institution of APEC, can be drawn from the foregoing discussion? With respect to empirical research, the Report both reviews existing empirical research as well as develops new analysis.
It reviews existing empirical analyses of the macroeconomic benefits of putting in place the prerequisites for achieving the productivity enhancing outcomes of the New Economy; these analyses focus on the gains to GDP of trade and investment liberalization. In addition, the Report undertakes new microeconomic and sector- level analysis of the implications of the New Economy for international trade competitiveness. Specifically the Report considers the relationships between the pace of - 2-