Contents

Preface

Notes on the Contributors

1. Investment and Growth

Keith Griffin

    Macroeconomic stabilization

The cumulative loss of income

Investment and savings

Conclusions

2. Investment and Structural Change

Keith Griffin

Stocks, flows and contraction

Structural change in Armenia

The composition of output and economic decline in Armenia

Summary and conclusions

3. Banking System Reform

Bagrat Asatryan

Banking system capital

Activities of non-bank financial institutions

Impact of the banking system on investment

Monetary policy and its impact

4. Poverty and the Character of Growth

Terry McKinley

The impact of agriculture on poverty

The impact of industry on poverty

The impact of services on poverty

Concluding remarks

5. Employment-Intensive Growth and Poverty Reduction
Terry McKinley

The illusion of productive employment

Trends in employment

Disequalizing growth

The role of the private sector

Concluding remarks

6. The Nature of Poverty

Thomas Kelly

The data and methodology used for measuring poverty

Overview of income poverty in Armenia

Human poverty

Conclusions

7. The Transition to Inequality Thomas Kelly and Armen Yeghiazarian

Income inequality

Transition to inequality

Inequality and growth

Conclusions

8. The Role of Public Finance in Poverty Reduction Levon Barkhudaryan and Keith Griffin

Main trends in public finance

Public expenditure, human development and poverty

Tax policy and resource mobilization

9. Foreign Capital and Foreign Aid

Keith Griffin

Investment and savings

Foreign direct investment

Taxation and external finance

Conclusions

10. Policy Conclusions: A Strategy for Pro-Poor Growth

Keith Griffin

Priority for investment

The centrality of employment

Poverty

Inequality

Monetary policy and the banking system

Public finance during the transition