The most striking feature of the revised Dietary Guidelines for Americans, released this past January, is the publication’s increased emphasis on obesity prevention: “To reverse the trend toward obesity, most Americans need to eat fewer calories, be more active, and make wiser food choices” (U.S. Department of Health and Human Services and U.S. Department of Agriculture, 2005). The Dietary Guidelines, which are released every 5 years and are now in their sixth edition, are intended as the Federal Government’s most authoritative summary of the state of nutrition science and the basis for all Federal communication with consumers on nutrition topics.
The pronounced focus on obesity prevention is not surprising, because rates of overweight and obesity have increased sharply in recent decades. One could quote any number of reports on these trends, but this chapter focuses on federal government statements, to give a sense of the prevailing view among federal policy-makers. In 2001, The Surgeon General’s Call To Action To Prevent and Decrease Overweight and Obesity warned that these health conditions have become an epidemic (U.S. Department of Health and Human Services, 2001). The Surgeon General estimated that, as of 1999, 61 percent of U.S. adults were overweight or obese. Thirteen percent of children and adolescents were overweight. The number of overweight children had doubled, and the number of overweight adolescents had almost tripled, since 1980. “We already are seeing tragic results from these trends,” the Surgeon General said.
Borrowing from the insights of Michal Kalecki and John Maynard Keynes, this essay presents a h igh1y-aggregative mode 1 of the world economy that highlights the crucial role of international credit flows in the short to medium term. The Center nations (or the developed industrial nations) produce and export a capital good that is used in all sectors of the world economy while the Periphery (or the developing nations) produces an export good that is used only in productive sectors at the Center. The model also includes an international banking zone that allocates credit to the Center and the Per iphery—with a preference for lending to the Center. The model displays certain crucial features of international economic interdependence, while simultaneously revealing the decisive role of investment and income distribution at the Center in determining flows of world trade and finance. In addition, the model facilitates exploration of the consequences of the current massive levels of state indebtedness held by Third World countries as well as the contradictions of the current international "liquidity crisis."
This paper employs a highly aggregative, two-region model of the world economy to facilitate examination of certain fundamental issues involving prospects for economic advance by the non-industrial or industrializing nations (the Periphery).
In order to explain the aggregate behavior of investment and production, it is necessary to understand the factors that affect investment at the firm level. Financing imperfections may prevent firms from accessing external finance, rendering firms unable to invest unless internal finance is available. It is therefore important to study the extent to which financing constraints matter for firms’ investment decisions. This line of inquiry is also relevant for other areas of research, such as the literature on the role of internal capital markets and banks, as well as the macro literature on the financial accelerator.
Starting with Fazzari, Hubbard, and Petersen (1988), several studies investigate the presence of financing constraints by estimating the Q model of investment with cash flow included as an explanatory variable. They argue informally that under certain conditions, and in the absence of financing frictions, Tobin’s average Q is equal to marginal q, and is a sufficient statistic for firm investment (Hayashi, 1982). It follows that conditional on Q, cash flow should affect only the investment of financially constrained firms.
