Template-Type: ReDIF-Article 1.0 Author-Name: Carlos Alfredo Rodríguez Author-X-Name-First: Carlos Alfredo Author-X-Name-Last: Rodríguez Title: A Journal from the Universidad Del Cema Journal: Journal of Applied Economics Pages: I-III Issue: 1 Volume: 1 Year: 1998 Month: 11 X-DOI: 10.1080/15140326.1998.12040514 File-URL: http://hdl.handle.net/10.1080/15140326.1998.12040514 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:recsxx:v:1:y:1998:i:1:p:I-III Template-Type: ReDIF-Article 1.0 Author-Name: Arnold C. Harberger Author-X-Name-First: Arnold C. Author-X-Name-Last: Harberger Title: Letter to a Younger Generation Journal: Journal of Applied Economics Pages: 1-33 Issue: 1 Volume: 1 Year: 1998 Month: 11 X-DOI: 10.1080/15140326.1998.12040515 File-URL: http://hdl.handle.net/10.1080/15140326.1998.12040515 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:recsxx:v:1:y:1998:i:1:p:1-33 Template-Type: ReDIF-Article 1.0 Author-Name: Guillermo A. Calvo Author-X-Name-First: Guillermo A. Author-X-Name-Last: Calvo Title: CAPITAL FLOWS AND CAPITAL-MARKET CRISES: The Simple Economics of Sudden Stops Abstract: The paper studies mechanisms through which a sudden stop in international credit flows may bring about financial and balance of payments crises. It is shown that these crises can occur even though the current account deficit is fully financed by foreign direct investment. However, equity and long-term bond financing may shield the economy from sudden stop crises. The paper also examines possible factors that could trigger sudden stops, and argues that the greater independence that countries have, as compared to regions of a given country, could help to explain why sudden stop crises are more prevalent and destructive at international than at national levels. Journal: Journal of Applied Economics Pages: 35-54 Issue: 1 Volume: 1 Year: 1998 Month: 11 X-DOI: 10.1080/15140326.1998.12040516 File-URL: http://hdl.handle.net/10.1080/15140326.1998.12040516 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:recsxx:v:1:y:1998:i:1:p:35-54 Template-Type: ReDIF-Article 1.0 Author-Name: Sebastian Edwards Author-X-Name-First: Sebastian Author-X-Name-Last: Edwards Title: Interest Rate Volatility, Contagion and Convergence: An Empirical Investigation of the Cases of Argentina, Chile and Mexico Journal: Journal of Applied Economics Pages: 55-86 Issue: 1 Volume: 1 Year: 1998 Month: 11 X-DOI: 10.1080/15140326.1998.12040517 File-URL: http://hdl.handle.net/10.1080/15140326.1998.12040517 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:recsxx:v:1:y:1998:i:1:p:55-86 Template-Type: ReDIF-Article 1.0 Author-Name: Edmund S. Phelps Author-X-Name-First: Edmund S. Author-X-Name-Last: Phelps Title: Designing a Capitalist Economy for Fast Growth and High Employment in Today's Globalized World Economy Journal: Journal of Applied Economics Pages: 87-103 Issue: 1 Volume: 1 Year: 1998 Month: 11 X-DOI: 10.1080/15140326.1998.12040518 File-URL: http://hdl.handle.net/10.1080/15140326.1998.12040518 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:recsxx:v:1:y:1998:i:1:p:87-103 Template-Type: ReDIF-Article 1.0 Author-Name: Mario I. Blejer Author-X-Name-First: Mario I. Author-X-Name-Last: Blejer Title: Central Banks and Price Stability: Is a Single Objective Enough? Journal: Journal of Applied Economics Pages: 105-122 Issue: 1 Volume: 1 Year: 1998 Month: 11 X-DOI: 10.1080/15140326.1998.12040519 File-URL: http://hdl.handle.net/10.1080/15140326.1998.12040519 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:recsxx:v:1:y:1998:i:1:p:105-122 Template-Type: ReDIF-Article 1.0 Author-Name: Vittorio Corbo Author-X-Name-First: Vittorio Author-X-Name-Last: Corbo Title: Reaching One-Digit Inflation: The Chilean Experience Abstract: The main purpose of this paper is to analyze the process by which Chile was able to reduce inflation during the 1990s. During this period, inflation was gradually reduced from close to 30% per annum in 1990, to only 6% in 1997. The paper concludes that three factors were important in helping to accomplish this reduction. First, the independent Central Bank and its tough action early on -to convey the message that it was ready to stand behind its core objective (to reduce inflation)- helped to shape inflationary expectations and, in the event, led to lower wage inflation and ultimately a lower path for core inflation. Second, the Bank's restrictive monetary policy, and the foreign exchange intervention policies associated with it, resulted in a nominal exchange rate trajectory much below what would have been observed under a PPP rule adjusted for differences in productivity. This result was reinforced by the low credibility of the band, reflected in the effect on the observed rate of the location of the exchange rate within the band. Third, the higher rate of growth of labor productivity, given the wage equation, resulted in a lower rate of growth of the unit cost of labor than would have obtained otherwise. Of these three effects, the first, that is, the enhanced credibility of the new policy operating through the formation of inflation expectations, was found to be the most important factor in the successful reduction of the inflation rate. Journal: Journal of Applied Economics Pages: 123-163 Issue: 1 Volume: 1 Year: 1998 Month: 11 X-DOI: 10.1080/15140326.1998.12040520 File-URL: http://hdl.handle.net/10.1080/15140326.1998.12040520 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:recsxx:v:1:y:1998:i:1:p:123-163 Template-Type: ReDIF-Article 1.0 Author-Name: Rudiger Dornbusch Author-X-Name-First: Rudiger Author-X-Name-Last: Dornbusch Title: Notes on Intertemporal Trade in Goods and Money Journal: Journal of Applied Economics Pages: 165-177 Issue: 1 Volume: 1 Year: 1998 Month: 11 X-DOI: 10.1080/15140326.1998.12040521 File-URL: http://hdl.handle.net/10.1080/15140326.1998.12040521 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:recsxx:v:1:y:1998:i:1:p:165-177 Template-Type: ReDIF-Article 1.0 Author-Name: Larry A. Sjaastad Author-X-Name-First: Larry A. Author-X-Name-Last: Sjaastad Title: Why PPP Real Exchange Rates Mislead Abstract: This paper investigates the properties of the purchasing-power-parity (PPP) real exchange rate as a proxy for the true real exchange rate, which is defined as the relative price of traded goods. It finds that the PPP real exchange rate is prone to measurement error and examines the nature of that error. Measurement error is defined as the fraction of the variance of the PPP real exchange rate that has no counterpart in the true real exchange rate. That measurement error is estimated for seven small countries and the results indicate that, in most cases, the error component of PPP real exchange rates is extremely high. Journal: Journal of Applied Economics Pages: 179-207 Issue: 1 Volume: 1 Year: 1998 Month: 11 X-DOI: 10.1080/15140326.1998.12040522 File-URL: http://hdl.handle.net/10.1080/15140326.1998.12040522 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:recsxx:v:1:y:1998:i:1:p:179-207 Template-Type: ReDIF-Article 1.0 Author-Name: Manuel Guitián Author-X-Name-First: Manuel Author-X-Name-Last: Guitián Title: Capital Account Convertibility and the Financial Sector Journal: Journal of Applied Economics Pages: 209-229 Issue: 1 Volume: 1 Year: 1998 Month: 11 X-DOI: 10.1080/15140326.1998.12040523 File-URL: http://hdl.handle.net/10.1080/15140326.1998.12040523 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:recsxx:v:1:y:1998:i:1:p:209-229 Template-Type: ReDIF-Article 1.0 Author-Name: Robert N. Stavins Author-X-Name-First: Robert N. Author-X-Name-Last: Stavins Title: A Methodological Investigation of the Costs of Carbon Sequestration Journal: Journal of Applied Economics Pages: 231-277 Issue: 2 Volume: 1 Year: 1998 Month: 11 X-DOI: 10.1080/15140326.1998.12040524 File-URL: http://hdl.handle.net/10.1080/15140326.1998.12040524 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:recsxx:v:1:y:1998:i:2:p:231-277 Template-Type: ReDIF-Article 1.0 Author-Name: Lawrence H. Goulder Author-X-Name-First: Lawrence H. Author-X-Name-Last: Goulder Title: Environmental Policy Making in a Second-Best Setting Abstract: This paper uses analytically tractable and numerically solved general equilibrium models to examine the significance of pre-existing distortions in factor markets for revenue- neutral environmental tax reforms and for various policies involving pollution quotas and permits. Results indicate that pre-existing factor taxes generally raise the costs of these environmental policies. This reflects a tax-interaction effect: the lowering of real factor returns resulting from the higher output prices occasioned by environmental taxes and other regulations. The revenue-recycling effect — stemming from the use of environmental tax revenues to finance cuts in pre-existing factor taxes — helps reduce policy costs, but under plausible assumptions does not eliminate the costs of such policies: the double dividend does not materialize. Even if it does not produce a double dividend, the revenue-recycling effect is important for reducing policy costs. Policies that fail to exploit the revenue-recycling effect suffer significant disadvantages in terms of efficiency. Like environmental taxes, freely allocated (or grandfathered) pollution quotas or permits, for example, produce a costly tax-interaction effect, yet such quotas or permits do not enjoy the offsetting revenue-recycling effect. Auctioning the permits or quotas makes possible the revenue-recycling effect and allows given pollution-abatement targets to be achieved at lower cost. The failure to exploit the revenue-recycling effect can alter the sign of overall efficiency impact. Indeed, if marginal environmental benefits from pollution reductions are below a certain threshold value, then any level of pollution abatement through freely allocated quotas or permits is efficiency-reducing. The tax-interaction effect is relevant to government regulation outside the environmental area. To the extent that regulations on international trade or agricultural production raise output prices and thereby reduce real factor returns, these regulations exacerbate the factor-market distortions from pre-existing taxes and thus involve higher social costs than would be indicated by partial equilibrium analyses. Journal: Journal of Applied Economics Pages: 279-328 Issue: 2 Volume: 1 Year: 1998 Month: 11 X-DOI: 10.1080/15140326.1998.12040525 File-URL: http://hdl.handle.net/10.1080/15140326.1998.12040525 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:recsxx:v:1:y:1998:i:2:p:279-328 Template-Type: ReDIF-Article 1.0 Author-Name: Adam Rose Author-X-Name-First: Adam Author-X-Name-Last: Rose Author-Name: Brandt Stevens Author-X-Name-First: Brandt Author-X-Name-Last: Stevens Title: A Dynamic Analysis of Fairness in Global Warming Policy: Kyoto, Buenos Aires, and Beyond Journal: Journal of Applied Economics Pages: 329-362 Issue: 2 Volume: 1 Year: 1998 Month: 11 X-DOI: 10.1080/15140326.1998.12040526 File-URL: http://hdl.handle.net/10.1080/15140326.1998.12040526 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:recsxx:v:1:y:1998:i:2:p:329-362 Template-Type: ReDIF-Article 1.0 Author-Name: Juan-Pablo Montero Author-X-Name-First: Juan-Pablo Author-X-Name-Last: Montero Title: Optimal Opt-in “Climate” Contracts Abstract: The paper studies the design of a tradeable permit system with voluntarily opt-in possibilities for LDCs in the context of climate change. In setting the optimal opt-in rule, the social planner faces a trade-off between production efficiency (minimization of control costs) and information rent extraction (reduction of excess permits). Results from a simulation exercise based on data from MIT's EPPA model are also provided. Journal: Journal of Applied Economics Pages: 363-384 Issue: 2 Volume: 1 Year: 1998 Month: 11 X-DOI: 10.1080/15140326.1998.12040527 File-URL: http://hdl.handle.net/10.1080/15140326.1998.12040527 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:recsxx:v:1:y:1998:i:2:p:363-384 Template-Type: ReDIF-Article 1.0 Author-Name: Gunnar S. Eskeland Author-X-Name-First: Gunnar S. Author-X-Name-Last: Eskeland Author-Name: Jian Xie Author-X-Name-First: Jian Author-X-Name-Last: Xie Title: Acting Globally While Thinking Locally: Is the Global Environment Protected by Transport Emission Control Programs? Abstract: Locally motivated air quality programs in Santiago and Mexico City have only minor collateral benefits for the global climate. If agencies with global and local agendas did business together, then individuals and firms and even cities would act globally when thinking locally, and one would see greater synergy. Eskeland and Xie find that locally motivated air quality programs for urban transport have limited collateral benefits in terms of protecting the global climate. This could puzzle some, since these two public goods one global, one local seem to be jointly produced. However, air quality in Mexico City, Santiago, and elsewhere is predominantly pursued by technical improvements (making cars and fuels cleaner), and not by reducing demand for polluting goods and services (though in Europe high fuel taxes help reduce demand). Control programs developed under joint stimulus to protect the global and local environment have not yet been seen, and they may surprise us when they come. However, they will likely rely more on reducing demand, using instruments such as corrective (Pigovian) taxes on fuels. The authors show how, if locally and globally charged agencies can do business together, consumers, producers, and cities will act globally when thinking locally. Only then will we know the extent to which local and global benefits are produced jointly. Journal: Journal of Applied Economics Pages: 385-411 Issue: 2 Volume: 1 Year: 1998 Month: 11 X-DOI: 10.1080/15140326.1998.12040528 File-URL: http://hdl.handle.net/10.1080/15140326.1998.12040528 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:recsxx:v:1:y:1998:i:2:p:385-411 Template-Type: ReDIF-Article 1.0 Author-Name: Seema Arora Author-X-Name-First: Seema Author-X-Name-Last: Arora Author-Name: Timothy N. Cason Author-X-Name-First: Timothy N. Author-X-Name-Last: Cason Title: Do Community Characteristics Influence Environmental Outcomes? Evidence from the Toxics Release Inventory Abstract: This research uses neighborhood characteristics (at the zipcode level) in 1990 to explain toxic releases in 1993. It combines the Toxics Release Inventory data with demographic data from the 1990 US Census. We first analyze the location of manufacturing facilities in a particular neighborhood using a sample selection model, and then estimate the relationship between releases in 1993 and the demographic characteristics of the neighborhood in 1990. We conduct the analysis for the entire US as well as for different geographic regions to study regional differences in determinants of environmental outcomes. Releases in non-urban areas of the southeastern US exhibit a pattern suggesting that race might be an important determinant of release patterns. Economic characteristics of neighborhoods (such as income levels and unemployment) also affect releases. Our variables that proxy the propensity for communities to engage in political action exert greater influence on environmental outcomes in non-urban areas. Journal: Journal of Applied Economics Pages: 413-453 Issue: 2 Volume: 1 Year: 1998 Month: 11 X-DOI: 10.1080/15140326.1998.12040529 File-URL: http://hdl.handle.net/10.1080/15140326.1998.12040529 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:recsxx:v:1:y:1998:i:2:p:413-453 Template-Type: ReDIF-Article 1.0 Author-Name: Joop Hartog Author-X-Name-First: Joop Author-X-Name-Last: Hartog Author-Name: Luis Diaz-Serrano Author-X-Name-First: Luis Author-X-Name-Last: Diaz-Serrano Title: Earnings Risk and Demand for Higher Education: A Cross-Section Test for Spain Abstract: We develop a simple human capital model for optimum schooling length when earnings are stochastic, and highlight the pivotal role of risk attitudes and the schooling gradient of earnings risk. We use Spanish data to document the gradient and to estimate individual response to earnings risk in deciding on attending university education, by measuring risk as the residual variance in regional earnings functions. We find that the basic response is negative but that in households with lower risk aversion, the response will be dampened substantially and may even be reversed to positive. Journal: Journal of Applied Economics Pages: 1-28 Issue: 1 Volume: 10 Year: 2007 Month: 5 X-DOI: 10.1080/15140326.2007.12040479 File-URL: http://hdl.handle.net/10.1080/15140326.2007.12040479 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:recsxx:v:10:y:2007:i:1:p:1-28 Template-Type: ReDIF-Article 1.0 Author-Name: Mario Coccia Author-X-Name-First: Mario Author-X-Name-Last: Coccia Title: A New Taxonomy of Country Performance and Risk Based on Economic and Technological Indicators Abstract: This paper proposes a new taxonomy for countries based on principal component analysis. The paper investigates 51 countries using a set of 13 indicators of economic and technological performance for the period 2000–2002. The methodology reduces the variables and groups the countries that show similar strategic behaviour in the global market. The taxonomy facilitates the identification of country performance and risk, and provides relevant information both to international investors and to policy-makers, who must decide about global investment strategies and economic policies. Journal: Journal of Applied Economics Pages: 29-42 Issue: 1 Volume: 10 Year: 2007 Month: 5 X-DOI: 10.1080/15140326.2007.12040480 File-URL: http://hdl.handle.net/10.1080/15140326.2007.12040480 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:recsxx:v:10:y:2007:i:1:p:29-42 Template-Type: ReDIF-Article 1.0 Author-Name: Katherina Fernández Author-X-Name-First: Katherina Author-X-Name-Last: Fernández Author-Name: Roque B. Fernández Author-X-Name-First: Roque B. Author-X-Name-Last: Fernández Title: Willingness to Pay and the Sovereign Debt Contract Abstract: This paper uses a contract theory model to argue that covenants ruling debt renegotiations are important to assure the sovereign willingness to pay. The model includes the following features: first, collective action clauses, exit consents, aggregation provisions and pari passu clauses play an important role in the post default “game” of negotiations and coalitions. These covenants are represented in reduced form by the endogenous probability of refinancing a defaulted sovereign debt. Second, the model has “endogenous bad luck” because the unfavorable state of nature where default occurs depends on the level of indebtedness, which is itself an endogenous variable. Third, “vultures”, contrary to conventional wisdom, tend to improve the access of emerging economies to capital markets because they might help to rule out strategic defaults. And fourth, under special assumptions the model is able to analyze the possibility of post default discrimination between domestic and foreign bondholders. Journal: Journal of Applied Economics Pages: 43-76 Issue: 1 Volume: 10 Year: 2007 Month: 5 X-DOI: 10.1080/15140326.2007.12040481 File-URL: http://hdl.handle.net/10.1080/15140326.2007.12040481 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:recsxx:v:10:y:2007:i:1:p:43-76 Template-Type: ReDIF-Article 1.0 Author-Name: Sebastian Fossati Author-X-Name-First: Sebastian Author-X-Name-Last: Fossati Author-Name: Fernando Lorenzo Author-X-Name-First: Fernando Author-X-Name-Last: Lorenzo Author-Name: Cesar M. Rodriguez Author-X-Name-First: Cesar M. Author-X-Name-Last: Rodriguez Title: Regional and International Market Integration of a Small Open Economy Abstract: This paper studies the relationship between a set of commodity prices in a small open economy like Uruguay and the corresponding international and regional prices. The empirical methodology used is the multivariate cointegration procedure based on maximum likelihood methods introduced by Johansen (1988) as well as estimations of half-life persistence indicators. In the case of cereals, the evidence suggests strong market integration between domestic and regional markets and, to some extent, also to international markets. Therefore, directly or indirectly, domestic prices are connected with the efficient price signal. Results for beef indicate strong market integration between the domestic market and the regional market, which is not so well connected with international markets. Thus, domestic price appears to be linked to a regional price that is not linked to the efficient price signal. Journal: Journal of Applied Economics Pages: 77-98 Issue: 1 Volume: 10 Year: 2007 Month: 5 X-DOI: 10.1080/15140326.2007.12040482 File-URL: http://hdl.handle.net/10.1080/15140326.2007.12040482 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:recsxx:v:10:y:2007:i:1:p:77-98 Template-Type: ReDIF-Article 1.0 Author-Name: Hany S. Guirguis Author-X-Name-First: Hany S. Author-X-Name-Last: Guirguis Author-Name: Christos I. Giannikos Author-X-Name-First: Christos I. Author-X-Name-Last: Giannikos Title: A Note on the Effect of Expected Changes in Monetary Policy on Long-Term Interest Rates Abstract: The ability of monetary policy to affect long-term interest rates is of central importance for economics and finance. Several recent studies have shown that long-term interest rates are virtually unaffected by monetary policy. This paper develops a statistical methodology to identify the expected and unexpected changes in monetary policy as measured by the federal funds rate. The empirical evidence shows that expected changes in the funds rate cause stronger and more significant movements in the long-term rates. Further, ignoring such asymmetry can erroneously generate the insignificant responses of long-term interest rates to the changes in the monetary policy. Journal: Journal of Applied Economics Pages: 99-114 Issue: 1 Volume: 10 Year: 2007 Month: 5 X-DOI: 10.1080/15140326.2007.12040483 File-URL: http://hdl.handle.net/10.1080/15140326.2007.12040483 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:recsxx:v:10:y:2007:i:1:p:99-114 Template-Type: ReDIF-Article 1.0 Author-Name: Liza Jabbour Author-X-Name-First: Liza Author-X-Name-Last: Jabbour Author-Name: Jean Louis Mucchielli Author-X-Name-First: Jean Louis Author-X-Name-Last: Mucchielli Title: Technology Transfer Through Vertical Linkages: The Case of the Spanish Manufacturing Industry Abstract: Whether or not foreign direct investment helps to upgrade the technological capacities of firms in host countries is an important question for policy makers. Even more important is the question of what are the most effective channels of technology transfer. The econometric analysis presented here is based on a firm level database from Spain for the period 1990–2000. We associate spillovers with the effect of horizontal and vertical FDI on total factor productivity of local firms. We find that technology spillovers are limited to the case of vertical linkages. However these spillovers are affected by the technology gap between domestic firms and foreign affiliates as well as by the characteristics of foreign affiliates. Linkages with exportoriented affiliates and fully owned ones seem to have a better influence on the productivity of domestic firms. Journal: Journal of Applied Economics Pages: 115-136 Issue: 1 Volume: 10 Year: 2007 Month: 5 X-DOI: 10.1080/15140326.2007.12040484 File-URL: http://hdl.handle.net/10.1080/15140326.2007.12040484 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:recsxx:v:10:y:2007:i:1:p:115-136 Template-Type: ReDIF-Article 1.0 Author-Name: Byung-Joo Lee Author-X-Name-First: Byung-Joo Author-X-Name-Last: Lee Title: Economic Fundamentals and Exchange Rates Under Different Exchange Rate Regimes: Korean Experience Abstract: Korea provides a unique opportunity to study the different behaviors or roles, if any, of limited flexibility and free floating exchange rate regimes. Korea shifted from a limited flexibility to a free floating exchange rate regime after the 1997 economic crisis. It is well documented that the exchange rate is very difficult to predict using any theoretical models for exchange rate determination. Based on a simple monetary model, we find that the impact of economic fundamentals on the exchange rate is very similar under both exchange rate regimes according to OLS estimates, but the difference is statistically significant with GARCH(1,1) results. We also find that the size of the exchange rate shock is much bigger under the free floating regime than under the limited flexibility regime. VAR results show that the exchange rate shock impact on inflation is not statistically different under the two regimes. These findings are generally in line with Baxter and Stockman (1989) for regime neutrality. Journal: Journal of Applied Economics Pages: 137-159 Issue: 1 Volume: 10 Year: 2007 Month: 5 X-DOI: 10.1080/15140326.2007.12040485 File-URL: http://hdl.handle.net/10.1080/15140326.2007.12040485 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:recsxx:v:10:y:2007:i:1:p:137-159 Template-Type: ReDIF-Article 1.0 Author-Name: Roberto Martínez-Espiñeira Author-X-Name-First: Roberto Author-X-Name-Last: Martínez-Espiñeira Title: An Estimation of Residential Water Demand Using Co-Integration and Error Correction Techniques Abstract: In this paper short- and long-run price elasticities of residential water demand are estimated using co-integration and error-correction methods. Unit root tests reveal that water use series and series of other variables affecting use are non-stationary. However, a long-run co-integrating relationship is found in the water demand model, which makes it possible to obtain a partial correction term and to estimate an error correction model. Using monthly time-series observations from Seville, Spain, we find that the price-elasticity of demand is estimated as around -0.1 in the short run and -0.5 in the long run. These results are robust to the use of different specifications. Journal: Journal of Applied Economics Pages: 161-184 Issue: 1 Volume: 10 Year: 2007 Month: 5 X-DOI: 10.1080/15140326.2007.12040486 File-URL: http://hdl.handle.net/10.1080/15140326.2007.12040486 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:recsxx:v:10:y:2007:i:1:p:161-184 Template-Type: ReDIF-Article 1.0 Author-Name: André Varella Mollick Author-X-Name-First: André Varella Author-X-Name-Last: Mollick Title: Random Walks and Half-Lives in Chilean and Mexican Peso Real Exchange Rates: 1980 – 2003 Abstract: Several papers have shown that high-inflation contributes to mean reversion in real exchange rates. This paper studies the Chilean peso (CLP) and Mexican peso (MXN) real exchange rates over 1980–2003. Three datasets are used: two with quarterly and monthly bilateral data (against the U.S. dollar) with consumer and producer price indices and another with monthly real effective rate exchange rates (REER). Unit root tests do not reject the root in levels for both currencies. Half-lives, however, contrast markedly: at 5 years or infinity for the Chilean peso and between 1 and 3 years for the Mexican peso. These findings suggest that the sharp depreciations in MXN and Mexico's relatively higher inflation record may have amplified monetary forces in the dynamics of the real exchange rates. Journal: Journal of Applied Economics Pages: 185-211 Issue: 1 Volume: 10 Year: 2007 Month: 5 X-DOI: 10.1080/15140326.2007.12040487 File-URL: http://hdl.handle.net/10.1080/15140326.2007.12040487 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:recsxx:v:10:y:2007:i:1:p:185-211 Template-Type: ReDIF-Article 1.0 Author-Name: Francisco Requena-Silvente Author-X-Name-First: Francisco Author-X-Name-Last: Requena-Silvente Author-Name: James Walker Author-X-Name-First: James Author-X-Name-Last: Walker Title: The Impact of Exchange Rate Fluctuations on Profit Margins: The UK Car Market, 1971–2002 Abstract: We investigate the impact on profit margins of exchange rate fluctuations in order to examine optimal pricing policy by source countries in the UK car market. We first estimate a nested logit demand model of new cars to calculate model-specific profit margins. Next we use these estimates to analyse the pricing-to-market (PTM) behaviour of car importers and local producers. The results show that: (1) profit margins fell over the period 1971–2002 as the UK car market moved from being a concentrated market to a looser oligopoly structure; (2) there is a positive association between exchange rate changes and mark-up adjustments of imported cars. Following a 10% pound depreciation, exporters' profit margins declined by up to 4% and local producers' profit margins increased by up to 2%; (3) PTM behaviour is asymmetric between appreciations and depreciations in bilateral exchange rates. Journal: Journal of Applied Economics Pages: 213-235 Issue: 1 Volume: 10 Year: 2007 Month: 5 X-DOI: 10.1080/15140326.2007.12040488 File-URL: http://hdl.handle.net/10.1080/15140326.2007.12040488 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:recsxx:v:10:y:2007:i:1:p:213-235 Template-Type: ReDIF-Article 1.0 Author-Name: Heinz Welsch Author-X-Name-First: Heinz Author-X-Name-Last: Welsch Title: Macroeconomics and Life Satisfaction: Revisiting the “Misery Index” Abstract: Using data from surveys of life satisfaction, evidence has been presented that European citizens' subjective well-being is inversely related to inflation and unemployment. Motivated by the “Barro Misery Index”, this paper reconsiders the relationship between macroeconomics and subjective well-being by including the growth rate and the long-term interest rate as additional variables in life satisfaction regressions. The paper finds that people care about growth and employment on the one hand and stability on the other, where stability may alternatively be captured by the inflation rate or the long-term interest rate. Stability, measured in whichever of these ways, does not seem to be less important to European citizens than growth and employment. Journal: Journal of Applied Economics Pages: 237-251 Issue: 2 Volume: 10 Year: 2007 Month: 11 X-DOI: 10.1080/15140326.2007.12040489 File-URL: http://hdl.handle.net/10.1080/15140326.2007.12040489 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:recsxx:v:10:y:2007:i:2:p:237-251 Template-Type: ReDIF-Article 1.0 Author-Name: Roberto Dell'Anno Author-X-Name-First: Roberto Author-X-Name-Last: Dell'Anno Title: The Shadow Economy in Portugal: An Analysis with the Mimic Approach Abstract: The paper estimates the Portuguese Shadow Economy (SE) from 1977 to 2004 and tests the statistical relationships between the SE and other economic variables. In order to carry out the econometric analysis, a multiple indicators multiple causes (MIMIC) model with means and intercepts is applied. The main causes of the Portuguese SE are analyzed and economic policies to reduce it are suggested. An appraisal on the reliability of estimates and an alternative benchmark strategy for the MIMIC approach are proposed. Journal: Journal of Applied Economics Pages: 253-277 Issue: 2 Volume: 10 Year: 2007 Month: 11 X-DOI: 10.1080/15140326.2007.12040490 File-URL: http://hdl.handle.net/10.1080/15140326.2007.12040490 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:recsxx:v:10:y:2007:i:2:p:253-277 Template-Type: ReDIF-Article 1.0 Author-Name: Pablo E. Guidotti Author-X-Name-First: Pablo E. Author-X-Name-Last: Guidotti Title: Global Finance, Macroeconomic Performance, and Policy Response in Latin America: Lessons from the 1990s Abstract: In the 1990s globalization brought to most countries in Latin America unprecedented challenges for policymakers. This paper examines the interaction between the changing economic environment and the response of policymakers to the volatility experienced by international capital markets. In doing so, a number of lessons regarding the design of economic policy, and in particular fiscal policy are presented. The analysis focuses on issues such as fiscal sustainability in the presence of liquidity constraints, debt management strategies in emerging markets, the design of policy in response to sudden stops in capital flows, and the role of the International Monetary Fund. Journal: Journal of Applied Economics Pages: 279-308 Issue: 2 Volume: 10 Year: 2007 Month: 11 X-DOI: 10.1080/15140326.2007.12040491 File-URL: http://hdl.handle.net/10.1080/15140326.2007.12040491 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:recsxx:v:10:y:2007:i:2:p:279-308 Template-Type: ReDIF-Article 1.0 Author-Name: Maria Pia Iannariello Author-X-Name-First: Maria Pia Author-X-Name-Last: Iannariello Author-Name: Hanan Morsy Author-X-Name-First: Hanan Author-X-Name-Last: Morsy Author-Name: Akiko Terada-Hagiwara Author-X-Name-First: Akiko Author-X-Name-Last: Terada-Hagiwara Title: Role of Debt Maturity on Firms' Fixed Assets During Sudden Stop Episodes: Evidence from Thailand Abstract: This paper studies the detrimental effect of sudden stops on the growth of Thai firms' fixed assets. We focus on the fixed assets adjustment that firms undertake at times of financial constraints. We derive our results from balance sheet data for 284 nonfinancial Thai listed firms. Our data demonstrate that Thai firms faced severe declines in the growth of their fixed assets starting in 1996. Regression results demonstrate, after controlling for firms' characteristics and lagged dependent variables, that a longer-term debt maturity structure is the factor that works in the firms' favor during sudden stop episodes, while it is their profitability that matters during tranquil periods. Journal: Journal of Applied Economics Pages: 309-335 Issue: 2 Volume: 10 Year: 2007 Month: 11 X-DOI: 10.1080/15140326.2007.12040492 File-URL: http://hdl.handle.net/10.1080/15140326.2007.12040492 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:recsxx:v:10:y:2007:i:2:p:309-335 Template-Type: ReDIF-Article 1.0 Author-Name: Yener Kandogan Author-X-Name-First: Yener Author-X-Name-Last: Kandogan Title: Sensitivity of International Blocs' Trade Effect to Alternative Specifications of the Gravity Equation Abstract: There are so many versions of the gravity model in the international trade literature that their results on trade effects inevitably vary even for the same international blocs. This paper evaluates these alternative specifications, and compares the resulting trade effects. The results show that there is considerable sensitivity to the specification of the gravity model used. Therefore, it is important to use the proper specification to accurately measure the trade effects. This paper suggests that removing restrictions on the parameters of the model with the introduction of year, exporter, importer, and bilateral effects is necessary to properly specify the model. In particular, factors included in the augmented model, especially monetary and spatial variables, are significant. An analysis of the resulting model also shows that international blocs effect on trade vary across blocs by the level of integration, the degree of their implementation, and their sectoral coverage. Journal: Journal of Applied Economics Pages: 337-360 Issue: 2 Volume: 10 Year: 2007 Month: 11 X-DOI: 10.1080/15140326.2007.12040493 File-URL: http://hdl.handle.net/10.1080/15140326.2007.12040493 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:recsxx:v:10:y:2007:i:2:p:337-360 Template-Type: ReDIF-Article 1.0 Author-Name: Dona Rai Author-X-Name-First: Dona Author-X-Name-Last: Rai Title: Credit Rationing, Government Credit Programs and Co-Financing Abstract: Costly monitoring may lead to credit rationing in equilibrium in an economy without any adverse selection or moral hazard problems. Given the widespread phenomenon of government intervention in credit markets in developing and developed countries, the natural question then is, How effective are these government programs? I incorporate government loan programs in a simple, closed, pure exchange economy with borrowing and lending. Intermediation of funds is facilitated in credit markets characterized by a costly state verification problem. I then show that government loan programs (financed with lump-sum taxes) with co-financing can increase credit rationing when the private lender is the prior claimant in the event of a default. Moreover such programs unambiguously decrease the expected utility of both borrowers and lenders. On the other hand, when the government is the prior claimant, such programs decrease credit rationing and increase the expected utility of borrowers. Finally, with proportional repayments there is no effect on credit rationing or expected utility of agents. Journal: Journal of Applied Economics Pages: 361-389 Issue: 2 Volume: 10 Year: 2007 Month: 11 X-DOI: 10.1080/15140326.2007.12040494 File-URL: http://hdl.handle.net/10.1080/15140326.2007.12040494 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:recsxx:v:10:y:2007:i:2:p:361-389 Template-Type: ReDIF-Article 1.0 Author-Name: Mary A. Silles Author-X-Name-First: Mary A. Author-X-Name-Last: Silles Title: The Returns to Education for the United Kingdom Abstract: This paper uses data from the General Household Survey to examine the economic returns to education between 1985 and 2003 for men and women in the UK. The evidence suggests that the returns to education have increased for men and declined for women. Quantile regression estimates illustrate that younger workers have come to experience more unequal returns to education across the conditional earnings distribution. The evidence suggests that both time spent in education and educational credentials are important in explaining earnings with higher qualifications always conveying higher earnings, holding years of schooling constant. Journal: Journal of Applied Economics Pages: 391-413 Issue: 2 Volume: 10 Year: 2007 Month: 11 X-DOI: 10.1080/15140326.2007.12040495 File-URL: http://hdl.handle.net/10.1080/15140326.2007.12040495 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:recsxx:v:10:y:2007:i:2:p:391-413 Template-Type: ReDIF-Article 1.0 Author-Name: Geoffrey L. Wallace Author-X-Name-First: Geoffrey L. Author-X-Name-Last: Wallace Title: Welfare Flows and Caseload Dynamics Abstract: Data from the 1990, 1991, 1992, 1993 and 1996 panels of the Survey of Income and Program Participations are used to estimate AFDC/TANF entry and exit rates. These estimates of AFDC/TANF entry and exit rates are used to conduct simulations aimed at determining the roles of economic conditions and welfare reform in explaining AFDC caseloads changes during the 1990s. The results of these simulations indicate that economic conditions were the engine driving the run-up in caseloads during the early 1990s and the decrease in caseloads following 1993. Journal: Journal of Applied Economics Pages: 415-442 Issue: 2 Volume: 10 Year: 2007 Month: 11 X-DOI: 10.1080/15140326.2007.12040496 File-URL: http://hdl.handle.net/10.1080/15140326.2007.12040496 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:recsxx:v:10:y:2007:i:2:p:415-442 Template-Type: ReDIF-Article 1.0 Author-Name: Ester Faia Author-X-Name-First: Ester Author-X-Name-Last: Faia Author-Name: Massimo Giuliodori Author-X-Name-First: Massimo Author-X-Name-Last: Giuliodori Author-Name: Michele Ruta Author-X-Name-First: Michele Author-X-Name-Last: Ruta Title: Political Pressures and Exchange Rate Stability in Emerging Market Economies Abstract: This paper presents a political economy model of exchange rate policy. The theory is based on a common agency approach with rational expectations. Financial and exporter lobbies exert political pressures to influence the government's choice of exchange rate policy, before shocks to the economy are realized. The model shows that political pressures affect exchange rate policy and create an over-commitment to exchange rate stability. This helps to rationalize the empirical evidence on fear of large currency swings that characterizes exchange rate policy of many emerging market economies. Moreover, the model suggests that the effects of political pressures on the exchange rate are lower if the quality of institutions is higher. Empirical evidence for a large sample of emerging market economies is consistent with these findings. Journal: Journal of Applied Economics Pages: 1-32 Issue: 1 Volume: 11 Year: 2008 Month: 5 X-DOI: 10.1080/15140326.2008.12040497 File-URL: http://hdl.handle.net/10.1080/15140326.2008.12040497 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:recsxx:v:11:y:2008:i:1:p:1-32 Template-Type: ReDIF-Article 1.0 Author-Name: Mohamed Ben Mimoun Author-X-Name-First: Mohamed Ben Author-X-Name-Last: Mimoun Title: Credit Constraints in Education: Evidence from International Data Abstract: This paper tests empirically the credit-constraints thesis by using cross-country data on secondary and higher-education enrolment rates. Contrary to some previous works in this direction, we find several pieces of evidence that support the importance of such a thesis. First, controlling for the effects of both economic development and educational inequality, we find that school enrolments are negatively correlated with income inequality and positively correlated with financial-market development. Second, these correlations are robust to the specific country-effects, the composition of the sample of countries, and the inclusion of public education expenditures. Finally, public education expenditures are significantly correlated with school enrolment ratios. Distinguishing developed countries from developing ones reveals that the effects of both social and material factors are larger in rich countries than in poor ones. Our estimation results also show that the way public expenditures are allocated across educational levels affects enrolment ratios in higher educational stages. Specifically, countries where expenditure allocations are biased in favour of the advanced stages of education at the expense of the basic levels also experience low enrolment ratios in the higher levels of education. Journal: Journal of Applied Economics Pages: 33-60 Issue: 1 Volume: 11 Year: 2008 Month: 5 X-DOI: 10.1080/15140326.2008.12040498 File-URL: http://hdl.handle.net/10.1080/15140326.2008.12040498 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:recsxx:v:11:y:2008:i:1:p:33-60 Template-Type: ReDIF-Article 1.0 Author-Name: Fabia A. de Carvalho Author-X-Name-First: Fabia A. de Author-X-Name-Last: Carvalho Author-Name: Cyntia F. Azevedo Author-X-Name-First: Cyntia F. Author-X-Name-Last: Azevedo Title: The Incidence of Reserve Requirements in Brazil: Do Bank Stockholders Share the Burden? Abstract: There is consensus in the economic literature that reserve requirements are a tax levied upon financial intermediation, yet the incidence of the tax remains controversial. In this paper, we test whether changes in reserve requirements in Brazil impact the stock returns of the Brazilian financial system distinctly from the rest of the economy. We show that Brazilian bank stock returns may have been affected by changes in reserve requirements on both time deposits and transaction accounts, which implies that the tax burden of required reserves has not been fully passed through to banks' borrowers or clients. Stock returns of non-financial firms may also have been affected by changes in reserve requirements, suggesting that in some cases reserve requirements on time deposits and transaction accounts served as a non-neutral instrument of monetary or fiscal policy in Brazil. Journal: Journal of Applied Economics Pages: 61-90 Issue: 1 Volume: 11 Year: 2008 Month: 5 X-DOI: 10.1080/15140326.2008.12040499 File-URL: http://hdl.handle.net/10.1080/15140326.2008.12040499 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:recsxx:v:11:y:2008:i:1:p:61-90 Template-Type: ReDIF-Article 1.0 Author-Name: Gisele Ferreira-Tiryaki Author-X-Name-First: Gisele Author-X-Name-Last: Ferreira-Tiryaki Title: The Informal Economy and Business Cycles Abstract: A vast literature has focused on what causes businesses to move into informality and what is the impact of an enlarging informal sector on growth. This paper shows that the size of the informal economy also affects business cycle volatility. Informal businesses are usually small in size, which not only prevents them from achieving economies of scale and from operating with the right capital/labor mix, but also restricts their access to credit markets. Because firms operating informally lack access to credit markets to neutralize the cash flow squeeze arising during recessions, they are more exposed to fluctuations in economic activity and more likely to fail. Using a Generalized Method of Moments methodology, this paper shows that countries with larger informal economies tend to undergo increased volatility in output, investment and consumption over the business cycle. Journal: Journal of Applied Economics Pages: 91-117 Issue: 1 Volume: 11 Year: 2008 Month: 5 X-DOI: 10.1080/15140326.2008.12040500 File-URL: http://hdl.handle.net/10.1080/15140326.2008.12040500 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:recsxx:v:11:y:2008:i:1:p:91-117 Template-Type: ReDIF-Article 1.0 Author-Name: David Kiefer Author-X-Name-First: David Author-X-Name-Last: Kiefer Title: Revealed Preferences for Macroeconomic Stabilization Abstract: In the new Keynesian model of endogenous stabilization governments have objectives with respect to macroeconomic performance, but are constrained by an augmented Phillips curve. Because they react more quickly to inflation shocks than private agents, governments can lean against the macroeconomic wind. We develop an econometric test of this characterization of the political-economic equilibrium. Applying this methodology to a variety of quadratic social welfare functions provides inferences about the functional form of stabilization preferences and about the formation of expectations. Journal: Journal of Applied Economics Pages: 119-143 Issue: 1 Volume: 11 Year: 2008 Month: 5 X-DOI: 10.1080/15140326.2008.12040501 File-URL: http://hdl.handle.net/10.1080/15140326.2008.12040501 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:recsxx:v:11:y:2008:i:1:p:119-143 Template-Type: ReDIF-Article 1.0 Author-Name: Gabriel Montes-Rojas Author-X-Name-First: Gabriel Author-X-Name-Last: Montes-Rojas Title: Non-Uniform Wealth Distribution in a Simple Spatial Banking Model Abstract: This paper uses a static spatial banking model with a non-uniform wealth distribution to provide theoretical assessments for differences in banks' prices and locations across regions. It assumes imperfect information, where banks know more about individuals if they are “near” the bank and individuals incur in a cost proportional to this distance to show the viability of their projects to the bank. A free entry model is constructed to account for banks' tendency to concentrate in rich regions and to charge lower prices. Comparative statics exercises show the effect of changes in the monitoring technology and wealth dispersion. Journal: Journal of Applied Economics Pages: 145-165 Issue: 1 Volume: 11 Year: 2008 Month: 5 X-DOI: 10.1080/15140326.2008.12040502 File-URL: http://hdl.handle.net/10.1080/15140326.2008.12040502 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:recsxx:v:11:y:2008:i:1:p:145-165 Template-Type: ReDIF-Article 1.0 Author-Name: Matthew C. Stockton Author-X-Name-First: Matthew C. Author-X-Name-Last: Stockton Author-Name: Oral Capps Author-X-Name-First: Oral Author-X-Name-Last: Capps Author-Name: David A. Bessler Author-X-Name-First: David A. Author-X-Name-Last: Bessler Title: Samuelson's Full Duality and the Use of Directed Acyclical Graphs Abstract: To date, mixed demand systems have been all but ignored in empirical work. A possible reason for the scarcity of such applications is that one needs to know a priori which prices and quantities are endogenous in the mixed demand system. By using a directed acyclical graph (DAG), causal relationships among price and quantity variables are identified giving rise to a causally identified mixed demand system. A statistical comparison is made of the traditional Rotterdam model, a synthetic demand system, which subsumes the traditional Rotterdam model, and a Rotterdam mixed demand system identified through the use of a DAG. In this analysis, the respective demand systems consist of five products: steak, ground beef, beef roasts, pork, and chicken. Journal: Journal of Applied Economics Pages: 167-191 Issue: 1 Volume: 11 Year: 2008 Month: 5 X-DOI: 10.1080/15140326.2008.12040503 File-URL: http://hdl.handle.net/10.1080/15140326.2008.12040503 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:recsxx:v:11:y:2008:i:1:p:167-191 Template-Type: ReDIF-Article 1.0 Author-Name: Ariel M. Viale Author-X-Name-First: Ariel M. Author-X-Name-Last: Viale Author-Name: James W. Kolari Author-X-Name-First: James W. Author-X-Name-Last: Kolari Author-Name: Nikolai V. Hovanov Author-X-Name-First: Nikolai V. Author-X-Name-Last: Hovanov Author-Name: Mikhail V. Sokolov Author-X-Name-First: Mikhail V. Author-X-Name-Last: Sokolov Title: Computing and Testing a Stable Common Currency for Mercosur Countries Abstract: This paper develops a stable common currency for mid-sized open monetary economies with incomplete markets in general and the Mercosur countries in particular. The proposed currency is constructed as a derivative of a dynamic portfolio of securities that proxies the nominal exchange risk factors for a set of monies and floats against the rest of the world's currencies. We find that the resulting optimal common currency is comprised of currencies with country weights that are statistically significant and fairly symmetrical with relatively equal weight (e.g., 22% Argentinean pesos, 27% Brazilian reals, 27% Chilean pesos, and 23% Uruguayan pesos). We also find that increasing the number of countries in a common currency tends to increase its stability. The willingness of Mercosur countries to participate in a monetary union is assessed from statistical moments of the density functions of the implied stable common currency and its components. Journal: Journal of Applied Economics Pages: 193-220 Issue: 1 Volume: 11 Year: 2008 Month: 5 X-DOI: 10.1080/15140326.2008.12040504 File-URL: http://hdl.handle.net/10.1080/15140326.2008.12040504 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:recsxx:v:11:y:2008:i:1:p:193-220 Template-Type: ReDIF-Article 1.0 Author-Name: Vasilis Zervos Author-X-Name-First: Vasilis Author-X-Name-Last: Zervos Title: Whatever Happened to Competition in Space Agency Procurement? The Case of NASA Abstract: Using the U.S. National Aeronautics and Space Administration (NASA) as a case study, this paper examines how conflicting objectives in procurement policies by public space agencies result in anti-competitive procurement. Globally, public sectors have actively encouraged mergers and acquisitions of major contractors at the national level, since the end of the “Cold War”, following largely from the perceived benefits of economies of size. The paper examines the impact the resulting industrial concentration has on the ability of space agencies to follow a pro-competitive procurement policy. Using time series econometric analysis, the paper shows that NASA's pro-competitive policy is unsuccessful due to a shift, since the mid-1990s, in the share of appropriations in favour of its top contractors. Journal: Journal of Applied Economics Pages: 221-236 Issue: 1 Volume: 11 Year: 2008 Month: 5 X-DOI: 10.1080/15140326.2008.12040505 File-URL: http://hdl.handle.net/10.1080/15140326.2008.12040505 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:recsxx:v:11:y:2008:i:1:p:221-236 Template-Type: ReDIF-Article 1.0 Author-Name: George T. McCandless Author-X-Name-First: George T. Author-X-Name-Last: McCandless Title: Inflation Taxes and Inflation Subsidies: Explaining the Twisted Relationship Between Inflation and Output Abstract: This paper studies the nature of monetary policy in a cash-in-advance model with indivisible labor and with financial intermediaries that provide loans for working capital. Monetary policy occurs through money injections either directly to families or to financial intermediaries. Injections to families produce an inflation tax while injections directly to financial intermediaries provide an inflation subsidy that improves output, consumption, and welfare. This model helps explain why monetary policy based on growth in monetary aggregates can have ambiguous output effects, why central bankers usually prefer interest rate rules to monetary aggregate rules, and why estimated money demand equations tend to be unstable. Journal: Journal of Applied Economics Pages: 237-258 Issue: 2 Volume: 11 Year: 2008 Month: 11 X-DOI: 10.1080/15140326.2008.12040506 File-URL: http://hdl.handle.net/10.1080/15140326.2008.12040506 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:recsxx:v:11:y:2008:i:2:p:237-258 Template-Type: ReDIF-Article 1.0 Author-Name: Giorgio Di Pietro Author-X-Name-First: Giorgio Di Author-X-Name-Last: Pietro Author-Name: Lucas Pedace Author-X-Name-First: Lucas Author-X-Name-Last: Pedace Title: Changes in the Returns to Education in Argentina Abstract: In this paper we examine the returns to education in Argentina from 1995 to 2003. We use several econometric techniques in an attempt to account for sample selection bias arising from endogenous labour force participation and to control for the endogeneity of education. The empirical results indicate that the returns to education have fluctuated over time. We provide some evidence suggesting that the relative demand for more educated people is likely to be a key factor in explaining changes in the returns to education. Journal: Journal of Applied Economics Pages: 259-279 Issue: 2 Volume: 11 Year: 2008 Month: 11 X-DOI: 10.1080/15140326.2008.12040507 File-URL: http://hdl.handle.net/10.1080/15140326.2008.12040507 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:recsxx:v:11:y:2008:i:2:p:259-279 Template-Type: ReDIF-Article 1.0 Author-Name: Hirofumi Fukuyama Author-X-Name-First: Hirofumi Author-X-Name-Last: Fukuyama Author-Name: William L. Weber Author-X-Name-First: William L. Author-X-Name-Last: Weber Title: Profit Inefficiency of Japanese Securities Firms Abstract: We develop a new indicator of profit inefficiency, which is based on decision-makers choosing the amount to spend on each input and the amount to earn on each output, rather than choosing physical quantities of inputs and outputs. The method is suitable for situations when prices and quantities are not directly observable, when markets are non-competitive, or when qualitative differences exist for inputs and outputs between firms. The indicator of profit inefficiency equals normalized lost profits arising from technical inefficiency and allocative inefficiency. We offer an empirical example of our method using firms in the Japanese securities industry during the period 1989–2005. We find profit inefficiency rises from 1989 to 1993, declines during the 1994–2001 period, and then increases during the years 2002–2005. Allocative inefficiency tends to be a greater source of profit inefficiency than technical inefficiency. Lost profits as a percent of assets range from 0% to 15% and are highest in 2002–2005. Journal: Journal of Applied Economics Pages: 281-303 Issue: 2 Volume: 11 Year: 2008 Month: 11 X-DOI: 10.1080/15140326.2008.12040508 File-URL: http://hdl.handle.net/10.1080/15140326.2008.12040508 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:recsxx:v:11:y:2008:i:2:p:281-303 Template-Type: ReDIF-Article 1.0 Author-Name: Luigi Landolfo Author-X-Name-First: Luigi Author-X-Name-Last: Landolfo Title: Assessing the Sustainability of Fiscal Policies: Empirical Evidence from the Euro Area and the United States Abstract: This paper provides a formal theoretical framework for analyzing the sustainability of fiscal policy based on the government intertemporal budget constraint, and derives conditions that determine whether a fiscal stance is sustainable in the medium and long term. In contrast to previous studies, it uses a log-linearization of the public debt identity and generalizes the results obtained in the literature by using a multivariate test. The analysis is applied to the fiscal position of the United States and the Euro Area. On the basis of infinite horizon-tests the broad conclusion is that both regions have a sustainable fiscal policy. Journal: Journal of Applied Economics Pages: 305-326 Issue: 2 Volume: 11 Year: 2008 Month: 11 X-DOI: 10.1080/15140326.2008.12040509 File-URL: http://hdl.handle.net/10.1080/15140326.2008.12040509 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:recsxx:v:11:y:2008:i:2:p:305-326 Template-Type: ReDIF-Article 1.0 Author-Name: Diego N. Moccero Author-X-Name-First: Diego N. Author-X-Name-Last: Moccero Title: The Intertemporal Approach to the Current Account: Evidence for Argentina Abstract: The Argentinean current account has exhibited large fluctuations over time. Sizable deficits over the last part of the 19th century and beginning of the 20th were followed by an almost equilibrated balance for most of the 20th century. Moderate deficits were again recorded between 1990 and 2002. Can factors highlighted by the intertemporal approach to the current account explain the dynamics of the Argentinean external sector for the 1885–2002 period? To answer this question we make use of a model featuring two main external shocks for small economies: real interest rates and exchange rates. In contrast to its application to other Latin American countries, the intertemporal model does not track well the actual current account from 1885 to 2002 in Argentina. This is due to the country's lack of access to the international financial system (a main assumption in the model), the occurrence of balance of payments crises, and the stop and go process. There is, however, some evidence in favor of the theory for the period 1885–1930, when capital mobility was relatively high and free of currency crises and stop and go cycles. Journal: Journal of Applied Economics Pages: 327-353 Issue: 2 Volume: 11 Year: 2008 Month: 11 X-DOI: 10.1080/15140326.2008.12040510 File-URL: http://hdl.handle.net/10.1080/15140326.2008.12040510 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:recsxx:v:11:y:2008:i:2:p:327-353 Template-Type: ReDIF-Article 1.0 Author-Name: Laura Onofri Author-X-Name-First: Laura Author-X-Name-Last: Onofri Title: Testing Williamson's Theory on Transaction-Specific Governance Structures: Evidence from Electricity Markets Abstract: Long term contracts increase the hazard of ex post maladaptation, creating demand for processes that enable adaptation over the course of long-term exchange. Enabling adaptation, however, may diminish the effectiveness of the long-term contracts, designed as prima facie hold-up remedies. Following Joskow (1987), we attempt to empirically capture the positive relationship between physical asset specificity and the duration of long-term contracts between California electricity generators. In addition, following Masten and Crocker (1985), we try to measure the effect of legal provisions on contract duration and interpret them as efficient instruments for providing flexibility in long-term relationships. The more important the investment in relationship-specific assets, the longer the contractual duration. However, parties mitigate long-term contract inflexibility, based on ex ante bargained terms and conditions, with provisions that allow for contingent adaptation. Our empirical results provide support for the hypothesised relationships under different model specifications and alternative estimation techniques. Journal: Journal of Applied Economics Pages: 355-372 Issue: 2 Volume: 11 Year: 2008 Month: 11 X-DOI: 10.1080/15140326.2008.12040511 File-URL: http://hdl.handle.net/10.1080/15140326.2008.12040511 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:recsxx:v:11:y:2008:i:2:p:355-372 Template-Type: ReDIF-Article 1.0 Author-Name: Kevin Sylwester Author-X-Name-First: Kevin Author-X-Name-Last: Sylwester Title: Historical Legacy and Institutions Across Countries Abstract: Several recent theories postulate why some countries were able to devise institutions conducive to long-run economic growth whereas others were not. Most of these consider various historical factors or geographic characteristics as important predeterminants. But which of these theories comes closest to the truth? This paper simultaneously considers several competing theories and empirically examines which ones provide the strongest explanations for contemporary institutions. I find that settler mortality rates are strongly associated with contemporary institutions even when controlling for other important historical factors, including ones from theories that do not emphasize geographic characteristics. However, Englebert's concept of state legitimacy does best at explaining institutional outcomes within sub-Saharan Africa. Journal: Journal of Applied Economics Pages: 373-398 Issue: 2 Volume: 11 Year: 2008 Month: 11 X-DOI: 10.1080/15140326.2008.12040512 File-URL: http://hdl.handle.net/10.1080/15140326.2008.12040512 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:recsxx:v:11:y:2008:i:2:p:373-398 Template-Type: ReDIF-Article 1.0 Author-Name: Samuel Koumkwa Author-X-Name-First: Samuel Author-X-Name-Last: Koumkwa Author-Name: Raul Susmel Author-X-Name-First: Raul Author-X-Name-Last: Susmel Title: Arbitrage and Convergence: Evidence from Mexican ADRs Abstract: This paper investigates the convergence between the prices of ADRs and Mexican traded shares using a sample of 21 dually listed shares. Since both markets have similar trading hours, standard arbitrage considerations should make persistent deviation from price parity rare. We use a STAR model, where the dynamics of convergence to price parity are influenced by the size of the deviation from price parity. Based on different tests, we select the ESTAR model. Deviations from price parity tend to die out quickly; for 14 out of 21 pairs it takes less than two days for the deviations from price parity to be reduced by half. The average half-life of a shock to price parity is 3.1 business days, while the median half-life is 1.1 business days. By allowing a non-linear adjustment process, the average half-life is reduced by more than 50% when compared to the standard linear arbitrage model. We find that several liquidity indicators are positively correlated to the speed of convergence to price parity. Journal: Journal of Applied Economics Pages: 399-425 Issue: 2 Volume: 11 Year: 2008 Month: 11 X-DOI: 10.1080/15140326.2008.12040513 File-URL: http://hdl.handle.net/10.1080/15140326.2008.12040513 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:recsxx:v:11:y:2008:i:2:p:399-425 Template-Type: ReDIF-Article 1.0 Author-Name: David W. Galenson Author-X-Name-First: David W. Author-X-Name-Last: Galenson Title: Old Masters and Young Geniuses: The Two Life Cycles of Human Creativity Abstract: There are two fundamentally different approaches to innovation, and each is associated with a distinct pattern of discovery over the life cycle. Experimental innovators work by trial and error, and arrive at their major contributions gradually, late in life. Conceptual innovators make sudden breakthroughs, usually at an early age. Both types of innovators have made important contributions to art and science. Journal: Journal of Applied Economics Pages: 1-9 Issue: 1 Volume: 12 Year: 2009 Month: 5 X-DOI: 10.1016/S1514-0326(09)60002-7 File-URL: http://hdl.handle.net/10.1016/S1514-0326(09)60002-7 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:recsxx:v:12:y:2009:i:1:p:1-9 Template-Type: ReDIF-Article 1.0 Author-Name: Christos Agiakloglou Author-X-Name-First: Christos Author-X-Name-Last: Agiakloglou Author-Name: Sotiris Karkalakos Author-X-Name-First: Sotiris Author-X-Name-Last: Karkalakos Title: A Spatial and Economic Analysis for Telecommunications: Evidence from the European Union Abstract: This paper evaluates the role of a number of determinants of telecommunication services in the European Union. We use a logistic model with spatial covariates to estimate the demand function for telecommunications in the Union. Our results show that different types of interconnections generate diverse estimates for country specific demand. The impact on telecommunications from countries with spatial, economic or social similarities differs based on those characteristics. Omitted variable bias from not modeling spatial interdependence is limited in models under spatial connectivity criteria. This satisfies the statistical inference drawn by previous empirical studies regarding determinants of telecommunications. Journal: Journal of Applied Economics Pages: 11-32 Issue: 1 Volume: 12 Year: 2009 Month: 5 X-DOI: 10.1016/S1514-0326(09)60003-9 File-URL: http://hdl.handle.net/10.1016/S1514-0326(09)60003-9 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:recsxx:v:12:y:2009:i:1:p:11-32 Template-Type: ReDIF-Article 1.0 Author-Name: Jose Angelo Divino Author-X-Name-First: Jose Angelo Author-X-Name-Last: Divino Author-Name: Vladimir Kuhl Teles Author-X-Name-First: Vladimir Kuhl Author-X-Name-Last: Teles Author-Name: Joaquim Pinto de Andrade Author-X-Name-First: Joaquim Pinto de Author-X-Name-Last: Andrade Title: On the Purchasing Power Parity for Latin-American Countries Abstract: This paper tests the hypothesis of long-run purchasing power parity (PPP) for all Latin American countries. Those countries share characteristics as high inflation, nominal shocks, and trade openness which might have led to quicker adjustment in relative prices and contributed for PPP to hold. New time series unit root tests give evidence of stationary real exchange rates for the vast majority of countries. In the panel data framework, tests for the null of unit root, null of stationarity, and unit root under multiple structural breaks indicate that the pooled real exchange rate is stationary. Thus, the results provide convincing evidence that PPP holds in Latin-America in the post-1980 period. Journal: Journal of Applied Economics Pages: 33-54 Issue: 1 Volume: 12 Year: 2009 Month: 5 X-DOI: 10.1016/S1514-0326(09)60004-0 File-URL: http://hdl.handle.net/10.1016/S1514-0326(09)60004-0 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:recsxx:v:12:y:2009:i:1:p:33-54 Template-Type: ReDIF-Article 1.0 Author-Name: Alvaro Forteza Author-X-Name-First: Alvaro Author-X-Name-Last: Forteza Author-Name: Ianina Rossi Author-X-Name-First: Ianina Author-X-Name-Last: Rossi Title: The Contribution of Government Transfer Programs to Inequality. A Net-Benefit Approach Abstract: The contribution of government transfer programs to inequality is often assessed by analyzing to what extent the benefits paid go to lower income families. Several analysts have found that some key government transfers actually go mostly to middle and high income families and thus contribute to greater inequality. We argue in this paper that the impact of these programs on inequality should be evaluated considering the benefits received net of the taxes paid by households to finance the programs, since higher income households receive higher benefits but they also pay higher taxes. We illustrate this approach by estimating the impact of three government programs on inequality in Uruguay and show that the conclusions are different depending on whether we use gross or net benefits in the estimation. Journal: Journal of Applied Economics Pages: 55-67 Issue: 1 Volume: 12 Year: 2009 Month: 5 X-DOI: 10.1016/S1514-0326(09)60005-2 File-URL: http://hdl.handle.net/10.1016/S1514-0326(09)60005-2 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:recsxx:v:12:y:2009:i:1:p:55-67 Template-Type: ReDIF-Article 1.0 Author-Name: Franz R. Hahn Author-X-Name-First: Franz R. Author-X-Name-Last: Hahn Title: A Note on Management Efficiency and International Banking. Some Empirical Panel Evidence Abstract: This analysis focuses on the assumption that management efficiency is one of the most important company-specific factors affecting a bank's international activities. The theoretical results on whether good or bad management influences international activities in banking are mixed. We attempt to let the data speak for itself, applying advanced panel-econometric regression models to a dataset covering 747 universal banks based in Austria for the period running from 1995 to 2002. The dataset is unique in the sense that it provides almost full coverage of a banking sector at the company level that expanded foreign operations during the period covered on an unprecedented scale at the time. We find that management efficiency as measured by X-efficiency affects the degree of a bank's international orientation positively. In addition, risk-based capital and international orientation in banking is positively related. Journal: Journal of Applied Economics Pages: 69-81 Issue: 1 Volume: 12 Year: 2009 Month: 5 X-DOI: 10.1016/S1514-0326(09)60006-4 File-URL: http://hdl.handle.net/10.1016/S1514-0326(09)60006-4 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:recsxx:v:12:y:2009:i:1:p:69-81 Template-Type: ReDIF-Article 1.0 Author-Name: Wonjoon Kim Author-X-Name-First: Wonjoon Author-X-Name-Last: Kim Author-Name: Jeong-Dong Lee Author-X-Name-First: Jeong-Dong Author-X-Name-Last: Lee Title: Measuring the Role of Technology-Push and Demand-Pull in the Dynamic Development of the Semiconductor Industry: The Case of the Global DRAM Market Abstract: This paper reexamines and resolves the long dispute over the source of technological innovation by suggesting an integrated technology-push and demand-pull model. We derive an equilibrium model within the framework of differentiated product analysis and explain the dynamic interaction between these two sources of innovation. Based on the empirical analysis of the global DRAM market, we show that the relative importance of technology-push and demand- pull in technological innovation is described by an L-type curve which describes the phenomenon where technology-push is greater than demand-pull in the early stages and then decreases as demand-pull becomes greater. Our finding suggests that the role of supply and demand is different in inducing technological change and their relative importance changes with product development over the technological life cycle; the marginal prices of products are an important factor in determining the principal forces of technological innovation between these two sources. Journal: Journal of Applied Economics Pages: 83-108 Issue: 1 Volume: 12 Year: 2009 Month: 5 X-DOI: 10.1016/S1514-0326(09)60007-6 File-URL: http://hdl.handle.net/10.1016/S1514-0326(09)60007-6 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:recsxx:v:12:y:2009:i:1:p:83-108 Template-Type: ReDIF-Article 1.0 Author-Name: Amaranta Melchor Del Río Author-X-Name-First: Amaranta Melchor Del Author-X-Name-Last: Río Author-Name: Susanne Thorwarth Author-X-Name-First: Susanne Author-X-Name-Last: Thorwarth Title: Tomatoes or Tomato Pickers? Free Trade and Migration Between Mexico and the United States Abstract: This paper examines the relationship between trade liberalisation and migration in the case of Mexico. The increasing bilateral trade between Mexico and the United States after signing the North American Free Trade Agreement (NAFTA) was supposed to stem the illegal Mexican migration flow by contributing to economic growth and job creation in both countries. Twelve years after the treaty has come into effect, questions emerge about the extent to which NAFTA was able to reduce the migration pressure: are trade and migration substitutes like the policy-makers had assumed or are they complements? Using monthly data from 1968 until 2004, we estimate a distributed lag model with the number of apprehensions at the US-Mexican border as a proxy for illegal migration. The results indicate that increasing trade flows cause larger illegal migration from Mexico to the United States. Journal: Journal of Applied Economics Pages: 109-135 Issue: 1 Volume: 12 Year: 2009 Month: 5 X-DOI: 10.1016/S1514-0326(09)60008-8 File-URL: http://hdl.handle.net/10.1016/S1514-0326(09)60008-8 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:recsxx:v:12:y:2009:i:1:p:109-135 Template-Type: ReDIF-Article 1.0 Author-Name: Boopen Seetanah Author-X-Name-First: Boopen Author-X-Name-Last: Seetanah Title: The Economic Importance of Education: Evidence from Africa Using Dynamic Panel Data Analysis Abstract: The existing literature has dealt inadequately with the link between education and economic growth in developing countries, particularly for Africa which has experienced a massive growth of enrolment at all levels of education during the second half of the 20th century. Moreover, the issues of causality and dynamics have been largely ignored until lately. This paper investigates the empirical link between education and economic performance for the case of 40 African States for the time period 1980–2000 using both static and dynamic panel data analysis. Result from the analysis shows that education has been an instrumental element in the growth process, though to a lesser extent as compared to recent empirical works. The study also confirms the presence of dynamics in the education-growth debate and is in line with recent findings from other developing country cases. Journal: Journal of Applied Economics Pages: 137-157 Issue: 1 Volume: 12 Year: 2009 Month: 5 X-DOI: 10.1016/S1514-0326(09)60009-X File-URL: http://hdl.handle.net/10.1016/S1514-0326(09)60009-X File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:recsxx:v:12:y:2009:i:1:p:137-157 Template-Type: ReDIF-Article 1.0 Author-Name: Belem I. Vasquez Galan Author-X-Name-First: Belem I. Vasquez Author-X-Name-Last: Galan Author-Name: Olajide S. Oladipo Author-X-Name-First: Olajide S. Author-X-Name-Last: Oladipo Title: Have Liberalisation and NAFTA Had a Positive Impact on Mexico's Output Growth? Abstract: This paper analyses the role of real exports, and foreign direct investment in explaining real growth in an era of economic liberalisation. The econometric approach is based on time series analysis using VARs, Granger causality, impulse response functions and variance decomposition. The empirical results reveal that exports Granger cause output growth in Mexico, which is a possible confirmation of the Export-led growth paradigm. However, no effect from FDI on GDP is found. The inclusion of NAFTA's potential impact confirms the positive effect of exports and reveals that GDP and exports Granger cause FDI. The evidence suggests that export promotion and liberalisation in Mexico had the potential to attract greater flows of foreign capital and induce economic growth. Journal: Journal of Applied Economics Pages: 159-180 Issue: 1 Volume: 12 Year: 2009 Month: 5 X-DOI: 10.1016/S1514-0326(09)60010-6 File-URL: http://hdl.handle.net/10.1016/S1514-0326(09)60010-6 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:recsxx:v:12:y:2009:i:1:p:159-180 Template-Type: ReDIF-Article 1.0 Author-Name: Leonardo Gasparini Author-X-Name-First: Leonardo Author-X-Name-Last: Gasparini Author-Name: Francisco Haimovich Author-X-Name-First: Francisco Author-X-Name-Last: Haimovich Author-Name: Sergio Olivieri Author-X-Name-First: Sergio Author-X-Name-Last: Olivieri Title: Labor Informality Bias of a Poverty-Alleviation Program in Argentina Abstract: In 2002, in the midst of a serious macroeconomic crisis, Argentina implemented a large social program (the Programa Jefes de Hogar, PJH) that provides cash transfers to unemployed household heads meeting certain criteria. In practice, the difficulty in monitoring the unemployment requirement for informal (unregistered) workers would imply a disincentive for the program participants to search for a formal job. By applying matching techniques we evaluate the empirical relevance of this prediction during the period of strong economic growth that followed the crisis. We find some evidence on the informality bias of the PJH when the value of the cash transfer was relatively high compared to wages in the formal labor market. Journal: Journal of Applied Economics Pages: 181-205 Issue: 2 Volume: 12 Year: 2009 Month: 11 X-DOI: 10.1016/S1514-0326(09)60012-X File-URL: http://hdl.handle.net/10.1016/S1514-0326(09)60012-X File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:recsxx:v:12:y:2009:i:2:p:181-205 Template-Type: ReDIF-Article 1.0 Author-Name: Carlos A. Chávez Author-X-Name-First: Carlos A. Author-X-Name-Last: Chávez Author-Name: Mauricio G. Villena Author-X-Name-First: Mauricio G. Author-X-Name-Last: Villena Author-Name: John K. Stranlund Author-X-Name-First: John K. Author-X-Name-Last: Stranlund Title: The Choice of Policy Instruments to Control Pollution Under Costly Enforcement and Incomplete Information Abstract: We analyze the cost of enforcing a system of firm specific emissions standards vis a vis a transferable emissions permit system in the context of complete and incomplete information. We also examine the optimality of a transferable emissions permit system when abatement costs and enforcement costs are considered. We show that under incomplete information, regulation based on each firm-specific emissions standards cannot be less costly than a transferable emissions permit system. In addition, we find that the distribution of emissions that minimize aggregate program costs differ from the distribution of emissions generated by a competitive transferable emissions permit system. Journal: Journal of Applied Economics Pages: 207-227 Issue: 2 Volume: 12 Year: 2009 Month: 11 X-DOI: 10.1016/S1514-0326(09)60013-1 File-URL: http://hdl.handle.net/10.1016/S1514-0326(09)60013-1 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:recsxx:v:12:y:2009:i:2:p:207-227 Template-Type: ReDIF-Article 1.0 Author-Name: Juncal Cunado Author-X-Name-First: Juncal Author-X-Name-Last: Cunado Author-Name: Luis A. Gil-Alana Author-X-Name-First: Luis A. Author-X-Name-Last: Gil-Alana Author-Name: Fernando Perez de Gracia Author-X-Name-First: Fernando Perez de Author-X-Name-Last: Gracia Title: New Evidence on Long-Run Monetary Neutrality Abstract: This paper re-examines the issue of long-run monetary neutrality by using fractional integration and allowing for a possible structural break in six countries: the United States, the United Kingdom, Mexico, Brazil, Australia and Argentina. We use an extension of Fisher and Seater's (1993) reduced-form test recently proposed by Bae, Jensen and Murdock (2005). The results show that long-run monetary neutrality holds for five countries when no structural breaks are taken into account, and for all countries if one break is allowed. Journal: Journal of Applied Economics Pages: 229-248 Issue: 2 Volume: 12 Year: 2009 Month: 11 X-DOI: 10.1016/S1514-0326(09)60014-3 File-URL: http://hdl.handle.net/10.1016/S1514-0326(09)60014-3 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:recsxx:v:12:y:2009:i:2:p:229-248 Template-Type: ReDIF-Article 1.0 Author-Name: Chien-Chiang Lee Author-X-Name-First: Chien-Chiang Author-X-Name-Last: Lee Author-Name: Chun-Ping Chang Author-X-Name-First: Chun-Ping Author-X-Name-Last: Chang Title: FDI, Financial Development, and Economic Growth: International Evidence Abstract: Previous studies have recognized that the benefits from foreign direct investment (FDI) to recipient countries can only be realized when those countries have reached a certain level of financial development. However, the dynamic interrelationships among FDI, financial development, and real output, including the long-run equilibrium as well as causality, have not been analyzed. This paper overcomes this major shortcoming by applying recent advances in panel cointegration and panel error correction models for a set of 37 countries using annual data for the period 1970–2002. For the first time, we explore the directions of causality among FDI, financial development, and economic growth and obtain solid, convincing evidence of a fairly strong long-run relationship. Furthermore, the financial development indicators have a larger effect on economic growth than does FDI. From the panel causality tests, while the evidence of a short-run relationship is weak, that of a long-run relationship among the variables is unequivocal. Overall, the findings underscore the potential gains associated with FDI when coupled with financial development in an increasingly global economy. Journal: Journal of Applied Economics Pages: 249-271 Issue: 2 Volume: 12 Year: 2009 Month: 11 X-DOI: 10.1016/S1514-0326(09)60015-5 File-URL: http://hdl.handle.net/10.1016/S1514-0326(09)60015-5 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:recsxx:v:12:y:2009:i:2:p:249-271 Template-Type: ReDIF-Article 1.0 Author-Name: Samuel W. Malone Author-X-Name-First: Samuel W. Author-X-Name-Last: Malone Title: Balance Sheet Effects, External Volatility, and Emerging Market Spreads Abstract: This paper studies the determinants of emerging market spreads, and thus of the cost of borrowing for emerging market sovereigns, using recent data from JP Morgan's EMBI+ index for a panel of 19 countries. Controlling for traditional spread determinants, we focus on three additional factors whose importance is suggested by recent work: external shocks, the balance sheet effect of real devaluations, and the degree of current account leverage. We find clear and strong evidence that the variables in the foregoing categories have an economically and statistically significant relationship with spreads. In particular, we find a major role for the terms-of-trade volatility and the level of current account leverage in explaining spread variation. The result on current account leverage establishes an important link between a factor shown to make countries more vulnerable to sudden stops of capital flows, and the premium required by international investors on their foreign debt. Journal: Journal of Applied Economics Pages: 273-299 Issue: 2 Volume: 12 Year: 2009 Month: 11 X-DOI: 10.1016/S1514-0326(09)60016-7 File-URL: http://hdl.handle.net/10.1016/S1514-0326(09)60016-7 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:recsxx:v:12:y:2009:i:2:p:273-299 Template-Type: ReDIF-Article 1.0 Author-Name: Andreas Peichl Author-X-Name-First: Andreas Author-X-Name-Last: Peichl Title: The Benefits and Problems of Linking Micro and Macro Models — Evidence from a Flat Tax Analysis Abstract: Microsimulation (MS) and Computable General Equilibrium models (CGE) have both been widely used in policy analysis. Their combination allows the utilisation of the advantages of both types. The aim of this paper is to describe the state-of-the-art in simulation analysis and to illustrate the benefits and problems of linking micro and macro models by analysing flat tax reform proposals for Germany. Taking feedback effects into account has important implications for the evaluation of tax reforms. The analysis shows that a personal income flat tax can indeed overcome the fundamental equity efficiency trade-off while simultaneously increasing the tax revenue. However, this result does not hold for a flat tax combining a personal income flat tax with a corporate cash flow flat tax, even when allowing for an ex-post loss in revenue, as the top of the distribution still gains the most. Journal: Journal of Applied Economics Pages: 301-329 Issue: 2 Volume: 12 Year: 2009 Month: 11 X-DOI: 10.1016/S1514-0326(09)60017-9 File-URL: http://hdl.handle.net/10.1016/S1514-0326(09)60017-9 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:recsxx:v:12:y:2009:i:2:p:301-329 Template-Type: ReDIF-Article 1.0 Author-Name: Hefei Wang Author-X-Name-First: Hefei Author-X-Name-Last: Wang Title: Reputation Acquisition of Underwriter Analysts — Theory and Evidence Abstract: I examine the role of reputation in a multi-stage strategic information transmission game between an analyst and an investor. While reputation mitigates the conflict of interest in a repeated game, it may induce the biased analyst to elevate potential underperformers to the highest rating category, thus undermining the information quality of the highest message. Uncertainty about firm value helps the unbiased analyst to communicate better information in a single stage game. However, in a multi-stage game, uncertainty increases misrepresentation by the biased analyst. Empirical implications are tested. I document that 1) affiliated and unaffiliated analysts recommendations differ only in the “Strong Buy” category; 2) the underperformance of underwriter analysts' recommendations increases with the underlying uncertainty. Journal: Journal of Applied Economics Pages: 331-363 Issue: 2 Volume: 12 Year: 2009 Month: 11 X-DOI: 10.1016/S1514-0326(09)60018-0 File-URL: http://hdl.handle.net/10.1016/S1514-0326(09)60018-0 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:recsxx:v:12:y:2009:i:2:p:331-363 Template-Type: ReDIF-Article 1.0 Author-Name: Bruno S. Frey Author-X-Name-First: Bruno S. Author-X-Name-Last: Frey Author-Name: Katja Rost Author-X-Name-First: Katja Author-X-Name-Last: Rost Title: Do Rankings Reflect Research Quality? Abstract: Publication and citation rankings have become major indicators of the scientific worth of universities and determine to a large extent the career of individual scholars. Such rankings do not effectively measure research quality, which should be the essence of any evaluation. These quantity rankings are not objective; two citation rankings, based on different samples, produce entirely different results. For that reason, an alternative ranking is developed as a quality indicator, based on membership on academic editorial boards of professional journals. It turns out that the ranking of individual scholars based on that measure is far from objective. Furthermore, the results differ markedly, depending on whether research quantity or quality is considered. Thus, career decisions based on rankings are dominated by chance and do not reflect research quality. We suggest that evaluations should rely on multiple criteria. Public management should return to approved methods such as engaging independent experts who in turn provide measurements of research quality for their research communities. Journal: Journal of Applied Economics Pages: 1-38 Issue: 1 Volume: 13 Year: 2010 Month: 5 X-DOI: 10.1016/S1514-0326(10)60002-5 File-URL: http://hdl.handle.net/10.1016/S1514-0326(10)60002-5 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:recsxx:v:13:y:2010:i:1:p:1-38 Template-Type: ReDIF-Article 1.0 Author-Name: M. Hakan Berument Author-X-Name-First: M. Hakan Author-X-Name-Last: Berument Author-Name: Afsin Sahin Author-X-Name-First: Afsin Author-X-Name-Last: Sahin Title: Seasonality in Inflation Volatility: Evidence from Turkey Abstract: This paper assesses the presence of seasonal volatility in price indexes where a similar type of pattern has been reported in asset prices in financial markets. The empirical evidence from Turkey for the monthly period from 1987:01 to 2007:05 suggests the presence of seasonality in the conditional variance of inflation. Thus, inferences for the models that do not account for the seasonality in the conditional variance will be misleading. Journal: Journal of Applied Economics Pages: 39-65 Issue: 1 Volume: 13 Year: 2010 Month: 5 X-DOI: 10.1016/S1514-0326(10)60003-7 File-URL: http://hdl.handle.net/10.1016/S1514-0326(10)60003-7 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:recsxx:v:13:y:2010:i:1:p:39-65 Template-Type: ReDIF-Article 1.0 Author-Name: Adela de la Torre Author-X-Name-First: Adela Author-X-Name-Last: de la Torre Author-Name: Arthur Havenner Author-X-Name-First: Arthur Author-X-Name-Last: Havenner Author-Name: Katherine Adams Author-X-Name-First: Katherine Author-X-Name-Last: Adams Author-Name: Justin Ng Author-X-Name-First: Justin Author-X-Name-Last: Ng Title: Premium Sex: Factors Influencing the Negotiated Price of Unprotected Sex by Female Sex Workers in Mexico Abstract: This paper examines economic, sociocultural, and behavioral risk factors that influence the compensating price difference (premium paid) between sex with and without a condom for female sex workers (FSWs) in U.S.-Mexico border cities. Field data collected in Ciudad Juarez on the price of sex with and without a condom for the same FSW respondent allowed calculation of the price premium for unprotected sex based on these paired prices, holding unobservable characteristics constant. A Tobit model was used to identify the factors determining the price premium. Key predictors of a larger price premium for sex without a condom included: length of time as a FSW; number of male clients; and participation in HIV education. Key predictors of a decrease in the price premium for unprotected sex included: age; a bad financial situation; frequent alcohol consumption before or during sex; and frequent drug use before or during sex. Journal: Journal of Applied Economics Pages: 67-90 Issue: 1 Volume: 13 Year: 2010 Month: 5 X-DOI: 10.1016/S1514-0326(10)60004-9 File-URL: http://hdl.handle.net/10.1016/S1514-0326(10)60004-9 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:recsxx:v:13:y:2010:i:1:p:67-90 Template-Type: ReDIF-Article 1.0 Author-Name: Raymond Fisman Author-X-Name-First: Raymond Author-X-Name-Last: Fisman Author-Name: Virginia Sarria Allende Author-X-Name-First: Virginia Sarria Author-X-Name-Last: Allende Title: Regulation of Entry and the Distortion of Industrial Organization Abstract: We study the distortions of industrial organization caused by entry regulation. We take advantage of heterogeneity across industries in their natural barriers and growth opportunities to examine whether industries are differentially affected in countries according to entry regulation. First, we consider the effect of entry regulation on the (static) industry structure. We find that regulation has a greater impact in industries with lower natural barriers to entry, both on the number of firms and on the average size of firms. We find that the effect of entry regulation on industry share is not related to differences in natural barriers. Regarding industry dynamics, we find that in countries with high entry regulation, industries respond to growth opportunities through the expansion of existing firms, while in countries with low entry regulation, growth opportunities lead to the creation of new firms; finally, the total sectoral response is invariant to the level of regulation. Journal: Journal of Applied Economics Pages: 91-111 Issue: 1 Volume: 13 Year: 2010 Month: 5 X-DOI: 10.1016/S1514-0326(10)60005-0 File-URL: http://hdl.handle.net/10.1016/S1514-0326(10)60005-0 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:recsxx:v:13:y:2010:i:1:p:91-111 Template-Type: ReDIF-Article 1.0 Author-Name: Kazuyuki Inagaki Author-X-Name-First: Kazuyuki Author-X-Name-Last: Inagaki Title: Income Inequality and the Suicide Rate in Japan: Evidence from Cointegration and La-Var Abstract: Using time series techniques, this paper examines the relationship between the suicide rate and income inequality in Japan. Since both the suicide rate and income inequality (Gini coefficient) in Japan are integrated of order one for the sample period 1951–2007, the existence of cointegration is a prerequisite for the successful modeling of their relationship. The Durbin-Hausman test shows that the suicide rate is cointegrated with income inequality and the unemployment rate. The dynamic ordinary least squares (DOLS) and fully modified ordinary least squares (FMOLS) methods demonstrate that income inequality and the unemployment rate are positively and significantly related to the suicide rate in Japan, and there is evidence supporting the parameter stability of our suicide model. Furthermore, the lag-augmented vector autoregression (LA-VAR) approach shows that there exists unidirectional Granger-causality from income inequality to the suicide rate. Hence, the fluctuations in Japan's suicide rate are partially explained by income inequality. Journal: Journal of Applied Economics Pages: 113-133 Issue: 1 Volume: 13 Year: 2010 Month: 5 X-DOI: 10.1016/S1514-0326(10)60006-2 File-URL: http://hdl.handle.net/10.1016/S1514-0326(10)60006-2 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:recsxx:v:13:y:2010:i:1:p:113-133 Template-Type: ReDIF-Article 1.0 Author-Name: Magda Kandil Author-X-Name-First: Magda Author-X-Name-Last: Kandil Title: Demand Shocks and the Cyclical Behavior of the Real Wage: Some International Evidence Abstract: The focus of this investigation is on the cyclical response of the real wage to demand shocks. This response differentiates the empirical validity of major New Keynesian explanations of business cycles. The empirical evidence, across industrial countries, highlights a moderate positive correlation between nominal wage and price flexibility in response to various demand shocks. Nonetheless, higher price flexibility moderates the effect of demand shocks on real output, while higher nominal wage flexibility increases, or does not determine, the effects of demand shocks on real output across countries. An increase in the response of the real wage to demand shocks therefore exacerbates their real effect on output, as predicted by sticky-price models. Further, demand shocks do not determine the difference in wage variability. Nominal wage variability increases, in turn, output variability across countries. In contrast, demand shocks differentiate price variability. Price variability moderates, in turn, output variability across countries. Journal: Journal of Applied Economics Pages: 135-158 Issue: 1 Volume: 13 Year: 2010 Month: 5 X-DOI: 10.1016/S1514-0326(10)60007-4 File-URL: http://hdl.handle.net/10.1016/S1514-0326(10)60007-4 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:recsxx:v:13:y:2010:i:1:p:135-158 Template-Type: ReDIF-Article 1.0 Author-Name: Chengsi Zhang Author-X-Name-First: Chengsi Author-X-Name-Last: Zhang Author-Name: Joel Clovis Author-X-Name-First: Joel Author-X-Name-Last: Clovis Title: The New Keynesian Phillips Curve of Rational Expectations: A Serial Correlation Extension Abstract: This paper evaluates the empirical validity of the New Keynesian Phillips Curve (NKPC) model of rational expectations. We employ an instrumental variable (IV) projection method to approximate inflation expectations, and show that the inference based on this approach can differ significantly from the one based on rational expectations. More importantly, using an IV test for serial correlation in the GMM context, we find that the error term in the stylized NKPC model is significantly serially correlated. To compensate for the serial correlation problem, we propose an extended framework which can be easily rationalized in terms of sticky price setting of backward-looking firms. Empirical results show that further lags of inflation are needed in the hybrid specification of the NKPC in order to rule out serial correlation in the Euler equation. Journal: Journal of Applied Economics Pages: 159-179 Issue: 1 Volume: 13 Year: 2010 Month: 5 X-DOI: 10.1016/S1514-0326(10)60008-6 File-URL: http://hdl.handle.net/10.1016/S1514-0326(10)60008-6 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:recsxx:v:13:y:2010:i:1:p:159-179 Template-Type: ReDIF-Article 1.0 Author-Name: Lucio Esposito Author-X-Name-First: Lucio Author-X-Name-Last: Esposito Author-Name: Enrica Chiappero-Martinetti Author-X-Name-First: Enrica Author-X-Name-Last: Chiappero-Martinetti Title: Multidimensional Poverty: Restricted and Unrestricted Hierarchy Among Poverty Dimensions Abstract: The increasing interest in multidimensional poverty and well-being analysis has added complexity to the way these phenomena are conceptualized and measured. When multiple attributes are considered, a criterion determining the relative importance attached to the different dimensions has to be adopted. There has not been thus far in the literature a specific attempt to conceptualize the nature of the desired hierarchy among the selected poverty dimensions. The aim of this paper is to take the first step in this direction. We envisage two simple and highly intuitive ways in which such a hierarchical system can be understood, which we label restricted and unrestricted hierarchy. The analytical conditions allowing the incorporation of these into a poverty index are derived and their implications in terms of the understanding of poverty are discussed. An empirical application shows how the choice of the hierarchical scheme for poverty dimensions can lead to opposite conclusions on the poverty trend. Journal: Journal of Applied Economics Pages: 181-204 Issue: 2 Volume: 13 Year: 2010 Month: 11 X-DOI: 10.1016/S1514-0326(10)60009-8 File-URL: http://hdl.handle.net/10.1016/S1514-0326(10)60009-8 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:recsxx:v:13:y:2010:i:2:p:181-204 Template-Type: ReDIF-Article 1.0 Author-Name: Michał Brzozowski Author-X-Name-First: Michał Author-X-Name-Last: Brzozowski Author-Name: Joanna Siwińska-Gorzelak Author-X-Name-First: Joanna Author-X-Name-Last: Siwińska-Gorzelak Title: The Impact of Fiscal Rules on Fiscal Policy Volatility Abstract: In this paper, we study the impact of fiscal rules, in the form of explicit deficit or debt constraints, on fiscal policy volatility. The main motivation behind this research is, on the one hand, a negative and robust correlation of fiscal policy volatility and long run growth documented in several papers and, on the other, the relatively small number of works that discuss possible determinants of the former. We argue that fiscal rules have a significant impact on fiscal policy volatility, but depending on the target of the rule—public debt or fiscal balance—rules will increase or decrease policy volatility. This result is novel, and, to the best of our knowledge, has not been discussed in the literature. Journal: Journal of Applied Economics Pages: 205-231 Issue: 2 Volume: 13 Year: 2010 Month: 11 X-DOI: 10.1016/S1514-0326(10)60010-4 File-URL: http://hdl.handle.net/10.1016/S1514-0326(10)60010-4 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:recsxx:v:13:y:2010:i:2:p:205-231 Template-Type: ReDIF-Article 1.0 Author-Name: José Ignacio Antón Author-X-Name-First: José Ignacio Author-X-Name-Last: Antón Author-Name: Rafael Muñ de Bustillo Author-X-Name-First: Rafael Muñ Author-X-Name-Last: de Bustillo Author-Name: Miguel Carrera Author-X-Name-First: Miguel Author-X-Name-Last: Carrera Title: Labor Market Performance of Latin American and Caribbean Immigrants in Spain Abstract: This paper analyzes the wage differentials in Spain between local and foreign employees from Latin America and the Caribbean. It also explores the earnings gap between Latin American employees and other groups of foreign workers from both developing and developed countries. The study is based on the Wage Structure Survey 2006, which is the first nationally representative sample of both foreign and Spanish employees. Using the Machado-Mata econometric procedure, earnings differentials across the whole wage distribution are decomposed into a component related to observable characteristics and another associated to different returns to such endowments. First, we find that, in absolute terms, the earnings differential between Latin American and Caribbean immigrants and natives that is not explained by observable characteristics increases across the wage distribution. While the large gap at the top might be mainly explained by problems of transferability of skills among immigrants, the low differential at the bottom is likely to be related to the compressive effect exerted by labor market institutions such as the minimum wage and collective agreements. A quite similar pattern is observed when they are compared with developed countries' workers. Secondly, there does not seem to be a significant wage gap between Latin American and the rest of foreign employees from developing countries, possibly because immigrants are largely employed in low-skill jobs where Spanish proficiency is not an essential asset. Journal: Journal of Applied Economics Pages: 233-261 Issue: 2 Volume: 13 Year: 2010 Month: 11 X-DOI: 10.1016/S1514-0326(10)60011-6 File-URL: http://hdl.handle.net/10.1016/S1514-0326(10)60011-6 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:recsxx:v:13:y:2010:i:2:p:233-261 Template-Type: ReDIF-Article 1.0 Author-Name: Oscar Bajo-Rubio Author-X-Name-First: Oscar Author-X-Name-Last: Bajo-Rubio Author-Name: Carmen Díaz-Roldán Author-X-Name-First: Carmen Author-X-Name-Last: Díaz-Roldán Author-Name: Vicente Esteve Author-X-Name-First: Vicente Author-X-Name-Last: Esteve Title: On the Sustainability of Government Deficits: Some Long-Term Evidence for Spain, 1850–2000 Abstract: We provide a test of the sustainability of the Spanish government deficit over the period 1850–2000, from the estimation of a cointegration relationship between government expenditures and revenues derived from the intertemporal budget constraint. The longer than usual span of the data allows us to obtain more robust results on the fulfilment of the intertemporal budget constraint than most of the previous analyses. Two additional robustness checks are provided. First, we investigate the possibility of structural changes occurring along the period analyzed, using the new approach of Kejriwal and Perron (2008, 2010) to testing for multiple structural changes in cointegrated regression models. Second, we investigate whether the behaviour of fiscal authorities has been non-linear, by means of the procedure of Hansen and Seo (2002) based on a threshold cointegration model. Our results show that (i) the government deficit has been strongly sustainable in the long run, (ii) no evidence is found on any significant structural break throughout the whole period, and (iii) fiscal sustainability has been attained due to the non-linear behaviour of fiscal authorities, which have only acted on the budget deficit when it has exceeded around 4.5% of GDP. Journal: Journal of Applied Economics Pages: 263-281 Issue: 2 Volume: 13 Year: 2010 Month: 11 X-DOI: 10.1016/S1514-0326(10)60012-8 File-URL: http://hdl.handle.net/10.1016/S1514-0326(10)60012-8 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:recsxx:v:13:y:2010:i:2:p:263-281 Template-Type: ReDIF-Article 1.0 Author-Name: Derek Kellenberg Author-X-Name-First: Derek Author-X-Name-Last: Kellenberg Title: Consumer Waste, Backhauling, and Pollution Havens Abstract: Pollution havens have received a great deal of attention in the past 15 years. However, the literature has focused almost exclusively on production side externalities and whether dirty industry migrates to countries with lax environmental laws. More recently, concerns have been raised about the rapid explosion of consumption side pollution such as e-waste and its trade in international markets. Between 1996 and 2007, US exports of waste plastics and ferrous waste along the USA-Asia trade route increased by 917% and 482%, respectively. Over the same time period the average freight rate on commercial liners along the USA-Asia trade route fell by 46%, while average freight rates along the Asia-USA trade route increased by 2.9%. This paper develops a two country trade model with endogenous asymmetric transport costs as well as externalities associated with harmful waste generated from consumption. It shows that even when both governments set optimal Pigouvian taxes on the consumption of the dirty good, endogenous asymmetric transport costs can lower the ‘backhaul’ rate from North to South. This creates an environmental arbitrage condition by which it is cheaper for the North to export its waste to the South rather than dispose of it at home. The model yields a number of clear predictions regarding the relationship between country characteristics, the international terms of trade, the backhaul shipping rate, and the North's export supply function of waste. Journal: Journal of Applied Economics Pages: 283-304 Issue: 2 Volume: 13 Year: 2010 Month: 11 X-DOI: 10.1016/S1514-0326(10)60013-X File-URL: http://hdl.handle.net/10.1016/S1514-0326(10)60013-X File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:recsxx:v:13:y:2010:i:2:p:283-304 Template-Type: ReDIF-Article 1.0 Author-Name: Pedro E. Moncarz Author-X-Name-First: Pedro E. Author-X-Name-Last: Moncarz Author-Name: Marcel Vaillant Author-X-Name-First: Marcel Author-X-Name-Last: Vaillant Title: Who Wins in South-South Trade Agreements? New Evidence for Mercosur Abstract: Using a detailed database on intra-MERCOSUR tariffs, we estimate the effect of tariff preferences on the origin of imports of MERCOSUR members. The results show tariff preferences affected imports patterns in the cases of Argentina and Uruguay, and to a less extent also those of Brazil. For the first two countries the results support the hypothesis that MERCOSUR has produced a diversion of trade, no similar evidence is found for Brazil and Paraguay. Journal: Journal of Applied Economics Pages: 305-334 Issue: 2 Volume: 13 Year: 2010 Month: 11 X-DOI: 10.1016/S1514-0326(10)60014-1 File-URL: http://hdl.handle.net/10.1016/S1514-0326(10)60014-1 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:recsxx:v:13:y:2010:i:2:p:305-334 Template-Type: ReDIF-Article 1.0 Author-Name: Juan Prieto-Rodríguez Author-X-Name-First: Juan Author-X-Name-Last: Prieto-Rodríguez Author-Name: Juan Gabriel Rodríguez Author-X-Name-First: Juan Gabriel Author-X-Name-Last: Rodríguez Author-Name: Rafael Salas Author-X-Name-First: Rafael Author-X-Name-Last: Salas Title: Income Mobility and Economic Inequality from a Regional Perspective Abstract: A necessary condition for mobility to reduce the popular desire for redistribution is a significant positive correlation between inequality and mobility. In Prieto et al. (2008), a significant positive relationship was found at the national level. The objective of this study is to establish empirically whether such a relationship is maintained at the regional level. The indices are calculated for the set of EU regions using the European Community Household Panel survey. Total mobility is decomposed into three terms: growth, dispersion and exchange. We show that this positive relationship is robust by estimating a hierarchical linear model. Journal: Journal of Applied Economics Pages: 335-350 Issue: 2 Volume: 13 Year: 2010 Month: 11 X-DOI: 10.1016/S1514-0326(10)60015-3 File-URL: http://hdl.handle.net/10.1016/S1514-0326(10)60015-3 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:recsxx:v:13:y:2010:i:2:p:335-350 Template-Type: ReDIF-Article 1.0 Author-Name: David W. Galenson Author-X-Name-First: David W. Author-X-Name-Last: Galenson Title: Understanding Creativity Abstract: The discipline of economics has traditionally refused to study the behavior and achievements of specific individuals. Yet creativity — a primary source of the technological change that drives economic growth — is largely the domain of extraordinary individuals or small groups. For the first time in the history of the discipline, within the last decade economists have begun to study how these extraordinary individuals make their discoveries, and the results have been dramatic. Research done to date has demonstrated that artistic innovators can usefully be divided into two types. Experimental innovators seek to record their perceptions. They proceed tentatively, by trial and error, building their skills gradually, and making their greatest contributions late in their lives. In contrast, conceptual innovators use their art to express ideas and emotions. The precision of their goals allows them to plan their work, and execute it decisively. Their most radical new ideas, and consequently their greatest innovations, occur early in their careers. The research that has established these patterns has several central components. A key element is the systematic measurement of an artist's creativity over the course of the life cycle: this not only establishes when the artist made his greatest contribution, but also provides an objective identification of his greatest innovation. This facilitates another key element of the research, the categorization of the artist as experimental or conceptual. This effectively depends on whether the artist works inductively, building his contribution incrementally from observation, or deductively, creating his innovation as a consequence of a new idea. These patterns have been established empirically, by a large number of studies of important practitioners of a wide range of arts. It is now time to extend economic research on creativity, by applying this analysis to other intellectual domains. It is important to recognize that economists' failure to study individuals has prevented them from understanding the sources of the contributions of the most productive people in our society. Breaking this disciplinary taboo may now allow us not only to understand, but perhaps also to increase, the creativity of these remarkable individuals, and to help others to follow them. Journal: Journal of Applied Economics Pages: 351-362 Issue: 2 Volume: 13 Year: 2010 Month: 11 X-DOI: 10.1016/S1514-0326(10)60016-5 File-URL: http://hdl.handle.net/10.1016/S1514-0326(10)60016-5 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:recsxx:v:13:y:2010:i:2:p:351-362 Template-Type: ReDIF-Article 1.0 Author-Name: Guillermo Calvo Author-X-Name-First: Guillermo Author-X-Name-Last: Calvo Title: Leonardo “Pepe” Auernheimer Journal: Journal of Applied Economics Pages: I-III Issue: 1 Volume: 14 Year: 2011 Month: 5 X-DOI: 10.1016/S1514-0326(11)60001-9 File-URL: http://hdl.handle.net/10.1016/S1514-0326(11)60001-9 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:recsxx:v:14:y:2011:i:1:p:I-III Template-Type: ReDIF-Article 1.0 Author-Name: Robert E. Lucas Author-X-Name-First: Robert E. Author-X-Name-Last: Lucas Title: What Economists Do Abstract: This is the Commencement Address delivered at the University of Chicago on December 9, 1988. Journal: Journal of Applied Economics Pages: 1-4 Issue: 1 Volume: 14 Year: 2011 Month: 5 X-DOI: 10.1016/S1514-0326(11)60002-0 File-URL: http://hdl.handle.net/10.1016/S1514-0326(11)60002-0 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:recsxx:v:14:y:2011:i:1:p:1-4 Template-Type: ReDIF-Article 1.0 Author-Name: John Creedy Author-X-Name-First: John Author-X-Name-Last: Creedy Author-Name: Nicolas Hérault Author-X-Name-First: Nicolas Author-X-Name-Last: Hérault Author-Name: Guyonne Kalb Author-X-Name-First: Guyonne Author-X-Name-Last: Kalb Title: Measuring Welfare Changes in Behavioural Microsimulation Modelling: Accounting for the Random Utility Component Abstract: This paper presents a method of predicting individuals' welfare changes (compensating and equivalent variations) arising from a tax or social security policy change in the context of behavioural microsimulation modelling, where individuals can choose between a limited number of discrete hours of work. The method allows fully for the nonlinearity of the budget constraint facing each individual, the probabilistic nature of the labour supply model and the presence of unobserved heterogeneity in the estimation of preference functions. Yet it is relatively straightforward to implement. An advantage of welfare measures, compared with changes in net incomes, is that they take into account the value of leisure and home production. The method is applied to a hypothetical income tax policy change in Australia. Journal: Journal of Applied Economics Pages: 5-34 Issue: 1 Volume: 14 Year: 2011 Month: 5 X-DOI: 10.1016/S1514-0326(11)60003-2 File-URL: http://hdl.handle.net/10.1016/S1514-0326(11)60003-2 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:recsxx:v:14:y:2011:i:1:p:5-34 Template-Type: ReDIF-Article 1.0 Author-Name: Adalbert Mayer Author-X-Name-First: Adalbert Author-X-Name-Last: Mayer Title: Quantifying the Effects of Job Matching Through Social Networks Abstract: The recent literature explains the theoretical implications of the matching of workers to jobs through social networks. These insights are obtained for extremely simplified economies or rely on unrealistically simple social networks. Therefore, it is difficult to obtain a sense for the quantitative importance of effects generated by real life social networks. In this paper, I augment a labor market matching model to allow for information transmission through social networks. I illustrate the effects of social networks and I use simulations to quantify the predictions of the model for complex and realistic social networks. Information transmission through social contacts reduces the steady state unemployment rate from a hypothetical 6.5% to 5%. Social referrals can explain 1/5th of the observed duration dependence of unemployment. They cannot explain much of the variation in wages of otherwise homogeneous workers and do not substantially influence aggregate outcomes over the business cycle. Journal: Journal of Applied Economics Pages: 35-59 Issue: 1 Volume: 14 Year: 2011 Month: 5 X-DOI: 10.1016/S1514-0326(11)60004-4 File-URL: http://hdl.handle.net/10.1016/S1514-0326(11)60004-4 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:recsxx:v:14:y:2011:i:1:p:35-59 Template-Type: ReDIF-Article 1.0 Author-Name: Betty Agnani Author-X-Name-First: Betty Author-X-Name-Last: Agnani Author-Name: Amaia Iza Author-X-Name-First: Amaia Author-X-Name-Last: Iza Title: Growth in an Oil Abundant Economy: The Case of Venezuela Abstract: Venezuela's growth experience over the 56–year period from 1950 to 2006 was characterized by a high economic growth rate from 1950 to 1974 and a low economic growth rate from 1974 to 2006. We show that the country has been immersed in a ‘great depression’ since the mid-seventies. We also show that although Venezuela is an oil abundant economy, this growth experience is largely due to the evolution of its non-oil GDP. We perform a growth accounting exercise to quantify the extent to which the growth experience in the non-oil sector is a result of physical capital accumulation, finding that non-oil sector behavior can largely be explained by the evolution of total factor productivity (TFP). Finally, we calculate the correlations between oil rents and physical capital accumulation and TFP in the non-oil sector, finding a high positive correlation during the good performance period, but a negative correlation in the implosion period. Journal: Journal of Applied Economics Pages: 61-79 Issue: 1 Volume: 14 Year: 2011 Month: 5 X-DOI: 10.1016/S1514-0326(11)60005-6 File-URL: http://hdl.handle.net/10.1016/S1514-0326(11)60005-6 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:recsxx:v:14:y:2011:i:1:p:61-79 Template-Type: ReDIF-Article 1.0 Author-Name: Carlo Altavilla Author-X-Name-First: Carlo Author-X-Name-Last: Altavilla Author-Name: Concetto Paolo Vinci Author-X-Name-First: Concetto Paolo Author-X-Name-Last: Vinci Title: Non-Linear Dynamics of Real Wages Over the Business Cycle Abstract: This paper aims at analysing the dynamic properties of real wages over the business cycle. We apply a Bayesian vector autoregressive (BVAR) model and analyse the possible asymmetric behaviour of real wages in response to different macroeconomic shocks. Finally, we use the NBER business cycle periodisation to evaluate how real wages interact with the different shocks during contractions and booms. The results indicate that real wages cyclicality substantially depends on the driving forces of business cycle fluctuations. Different time periods are dominated by different types of shocks. When the business cycle is mainly driven by supply-side shocks real wages present a pro-cyclical behaviour. On the contrary, when the business cycle is driven by aggregate demand shocks real wages move counter-cyclically. Journal: Journal of Applied Economics Pages: 81-99 Issue: 1 Volume: 14 Year: 2011 Month: 5 X-DOI: 10.1016/S1514-0326(11)60006-8 File-URL: http://hdl.handle.net/10.1016/S1514-0326(11)60006-8 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:recsxx:v:14:y:2011:i:1:p:81-99 Template-Type: ReDIF-Article 1.0 Author-Name: Juncal Cunado Author-X-Name-First: Juncal Author-X-Name-Last: Cunado Title: Structural Breaks and Real Convergence in Opec Countries Abstract: This article examines the real convergence hypothesis in OPEC countries (Algeria, Angola, Ecuador, Gabon, Indonesia, Iran, Iraq, Kuwait, Libya, Nigeria, Qatar, Saudi Arabia, United Arab Emirates and Venezuela) using time series techniques and allowing for structural breaks. The main results show lack of support for income convergence in OPEC countries. We only find evidence of catch-up with the U.S. economy for the case of Indonesia, and for Angola in the last years of the sample. These findings are in line with the “resource curse” literature, which suggests that natural resource dependence inhibits economic growth. Furthermore, the results suggest that the country's oil export dependence is negatively related with its per capita GDP growth rate. Journal: Journal of Applied Economics Pages: 101-117 Issue: 1 Volume: 14 Year: 2011 Month: 5 X-DOI: 10.1016/S1514-0326(11)60007-X File-URL: http://hdl.handle.net/10.1016/S1514-0326(11)60007-X File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:recsxx:v:14:y:2011:i:1:p:101-117 Template-Type: ReDIF-Article 1.0 Author-Name: Ester Faia Author-X-Name-First: Ester Author-X-Name-Last: Faia Title: Macroeconomic and Welfare Implications of Financial Globalization Abstract: It is well documented that since the mid-1980s there has been a surge in capital flows due to an increased integration of world financial markets. Absent limited commitment, the increase in financial linkages should improve risk-sharing opportunities and foster consumption smoothing. However the data show that for several countries financial liberalization leads to enhanced consumption volatility. This fact can be rationalized using a small open economy model where foreign lending to households is constrained by a borrowing limit motivated by limited enforcement. Borrowing is secured by collateral in the form of durable investment whose accumulation is subject to adjustment costs. In this economy an increase in the degree of capital account liberalization increases consumption volatility (even relative to output volatility) as agents are unable to exploit risk-sharing opportunities. In presence of risk-averse agents an increase in financial integration reduces welfare. Journal: Journal of Applied Economics Pages: 119-144 Issue: 1 Volume: 14 Year: 2011 Month: 5 X-DOI: 10.1016/S1514-0326(11)60008-1 File-URL: http://hdl.handle.net/10.1016/S1514-0326(11)60008-1 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:recsxx:v:14:y:2011:i:1:p:119-144 Template-Type: ReDIF-Article 1.0 Author-Name: Sherif Khalifa Author-X-Name-First: Sherif Author-X-Name-Last: Khalifa Author-Name: Ihsan Kaler Hurcan Author-X-Name-First: Ihsan Kaler Author-X-Name-Last: Hurcan Title: Undiscounted Optimal Growth with Consumable Capital: Application to Water Resources Abstract: This paper utilizes the geometric techniques developed in Khan and Mitra (2005, 2007) to analyze the optimal intertemporal allocation of water resources in a dynamic setup without discounting. The framework features two sectors: the first uses labor to purify water, while the second uses labor and purified water for irrigation to produce an agricultural consumption good. Purified water can also be used as potable water for drinking purposes. The planner allocates the available factors of production between the two sectors every period, and determines the optimal amounts of purified water, potable water, and irrigation water. The geometry characterizes the optimal path depending on whether the irrigation sector is more labor intensive than the purification sector. When the irrigation sector is labor intensive, the optimal path is a non converging cycle around the golden rule stock of purified water, while if the purification sector is labor intensive, there is a damped cyclical convergence to the golden rule stock. Journal: Journal of Applied Economics Pages: 145-166 Issue: 1 Volume: 14 Year: 2011 Month: 5 X-DOI: 10.1016/S1514-0326(11)60009-3 File-URL: http://hdl.handle.net/10.1016/S1514-0326(11)60009-3 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:recsxx:v:14:y:2011:i:1:p:145-166 Template-Type: ReDIF-Article 1.0 Author-Name: Reginaldo P. Nogueira Author-X-Name-First: Reginaldo P. Author-X-Name-Last: Nogueira Author-Name: Miguel A. León-Ledesma Author-X-Name-First: Miguel A. Author-X-Name-Last: León-Ledesma Title: Does Exchange Rate Pass-Through Respond to Measures of Macroeconomic Instability? Abstract: We argue that, theoretically, exchange rate pass-through (ERPT) into consumer prices may be nonlinear in contrast to standard linear estimates found in the literature. ERPT can be higher in periods of financial or confidence crises, when firms have no incentive to absorb cost increases in their margins. We test this hypothesis applying a logistic smooth transition (LSTR) model to Mexican data. Using two different measures of macroeconomic instability as transition variables, we find that ERPT does seem to increase in periods of macroeconomic distress, which highlights the importance of a stable macroeconomic environment in reducing ERPT in emerging markets. Journal: Journal of Applied Economics Pages: 167-180 Issue: 1 Volume: 14 Year: 2011 Month: 5 X-DOI: 10.1016/S1514-0326(11)60010-X File-URL: http://hdl.handle.net/10.1016/S1514-0326(11)60010-X File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:recsxx:v:14:y:2011:i:1:p:167-180 Template-Type: ReDIF-Article 1.0 Author-Name: Ricardo F. Crespo Author-X-Name-First: Ricardo F. Author-X-Name-Last: Crespo Title: Two Conceptions of Economics Abstract: As Ronald Coase points out, there are two kinds of conceptions of economics: first, the conception that emphasizes the study of specific kinds of human activities; and, second, the conception that makes economics the study of a specific approach to all human choices. The paper first shortly reviews the two conceptions. Then, it links them to specific conceptions about rationality. An analysis of the terms involved in the discussion shows which conception of economics corresponds most to its ordinary language meaning. The paper then analyzes and develops Coase's argument for the first and against the second conception, explores the limits of an integration of the two views and assigns them specific roles. Journal: Journal of Applied Economics Pages: 181-197 Issue: 2 Volume: 14 Year: 2011 Month: 11 X-DOI: 10.1016/S1514-0326(11)60011-1 File-URL: http://hdl.handle.net/10.1016/S1514-0326(11)60011-1 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:recsxx:v:14:y:2011:i:2:p:181-197 Template-Type: ReDIF-Article 1.0 Author-Name: Antonio Estache Author-X-Name-First: Antonio Author-X-Name-Last: Estache Author-Name: Atsushi Iimi Author-X-Name-First: Atsushi Author-X-Name-Last: Iimi Title: Bidders' Entry and Auctioneer's Rejection: Applying a Double Selection Model to Road Procurement Auctions Abstract: Public procurement is a dynamic process involving vendors, contractors and procuring agencies. Even before submitting bids, competition among contractors may already have started. Given the nature of public work and expected strategies of rivals, some firms decide to enter the market, but others do not. Procurers can also enhance or limit the bidder participation through various ex ante qualification procedures for quality assurance purposes. Some applicants are qualified, but others are not. Thus, the selection process has two dimensions: bidders self-select, and an auctioneer may (dis)qualify some applicants. The paper explores this selection dynamics, using procurement data from road projects in developing countries. It shows that bidders are selecting themselves; low-cost firms are more prone to enter the market. But they are more likely to be rejected for technical reasons. Procurement design, such as contract size, and public governance are also found important determinants of the entry strategy of firms. Journal: Journal of Applied Economics Pages: 199-223 Issue: 2 Volume: 14 Year: 2011 Month: 11 X-DOI: 10.1016/S1514-0326(11)60012-3 File-URL: http://hdl.handle.net/10.1016/S1514-0326(11)60012-3 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:recsxx:v:14:y:2011:i:2:p:199-223 Template-Type: ReDIF-Article 1.0 Author-Name: Andrew K.G. Tan Author-X-Name-First: Andrew K.G. Author-X-Name-Last: Tan Author-Name: Steven T. Yen Author-X-Name-First: Steven T. Author-X-Name-Last: Yen Author-Name: Yiing Jia Loke Author-X-Name-First: Yiing Jia Author-X-Name-Last: Loke Title: Credit Card Holders, Convenience Users and Revolvers: A Tobit Model with Binary Selection and Ordinal Treatment Abstract: This paper studies the characteristics of credit card holders in Malaysia and distinguishes between convenience users and revolvers. A Tobit model with binary selection and ordinal treatment is developed to accommodate the data feature that debts are incurred only among card holders and the endogeneity of card holding in card debt. Results from a stratified sample in Malaysia indicate that age, household size, income, education, loan commitments, and current-account ownership play a role in card holding. Age, loan commitments, previous card holdings, current-account ownership, and bad debt history affect the probability and level of card debt. Multi-card holders are more likely to be credit revolvers than convenience users. Journal: Journal of Applied Economics Pages: 225-255 Issue: 2 Volume: 14 Year: 2011 Month: 11 X-DOI: 10.1016/S1514-0326(11)60013-5 File-URL: http://hdl.handle.net/10.1016/S1514-0326(11)60013-5 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:recsxx:v:14:y:2011:i:2:p:225-255 Template-Type: ReDIF-Article 1.0 Author-Name: Joaquim Pinto de Andrade Author-X-Name-First: Joaquim Pinto Author-X-Name-Last: de Andrade Author-Name: Manoel Carlos de Castro Pires Author-X-Name-First: Manoel Carlos Author-X-Name-Last: de Castro Pires Title: Implications of Public Debt Indexation for Monetary Policy Transmission Abstract: The goal of this paper is to provide a better understanding of monetary policy effectiveness in the case of indexed bonds. When public debt management deals with bonds indexed to the interest rate set by the monetary policy, there is no wealth effect and, as a consequence, monetary policy has a weak transmission channel reducing its effectiveness. This can help to explain why monetary policy in Brazil has been so tight and interest rates so high during the Real Plan. Journal: Journal of Applied Economics Pages: 257-268 Issue: 2 Volume: 14 Year: 2011 Month: 11 X-DOI: 10.1016/S1514-0326(11)60014-7 File-URL: http://hdl.handle.net/10.1016/S1514-0326(11)60014-7 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:recsxx:v:14:y:2011:i:2:p:257-268 Template-Type: ReDIF-Article 1.0 Author-Name: Mehmet Balcilar Author-X-Name-First: Mehmet Author-X-Name-Last: Balcilar Author-Name: Zeynel Abidin Ozdemir Author-X-Name-First: Zeynel Abidin Author-X-Name-Last: Ozdemir Author-Name: Esin Cakan Author-X-Name-First: Esin Author-X-Name-Last: Cakan Title: On the Nonlinear Causality Between Inflation and Inflation Uncertainty in the G3 Countries Abstract: This study examines the dynamic relationship between monthly inflation and inflation uncertainty in Japan, the US and the UK by employing linear and nonlinear Granger causality tests for the 1957: 01–2006: 10 period. Using a generalised autoregressive conditional heteroskedasticity (GARCH) model to generate a measure of inflation uncertainty, the empirical evidence from the linear and nonlinear Granger causality tests indicate a bidirectional causality between the series. The estimates from both the linear vector autoregressive (VAR) and nonparametric regression models show that higher inflation rates lead to greater inflation uncertainty for all countries as predicted by Friedman (1977). Although VAR estimates imply no significant impact, except for Japan, nonparametric estimates show that inflation uncertainty raises average inflation in all countries, as suggested by Cukierman and Meltzer (1986). Thus, inflation and inflation uncertainty have a positive predictive content for each other, supporting the Friedman and Cukierman-Meltzer hypotheses, respectively. Journal: Journal of Applied Economics Pages: 269-296 Issue: 2 Volume: 14 Year: 2011 Month: 11 X-DOI: 10.1016/S1514-0326(11)60015-9 File-URL: http://hdl.handle.net/10.1016/S1514-0326(11)60015-9 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:recsxx:v:14:y:2011:i:2:p:269-296 Template-Type: ReDIF-Article 1.0 Author-Name: Štefan Bojnec Author-X-Name-First: Štefan Author-X-Name-Last: Bojnec Author-Name: Laure Latruffe Author-X-Name-First: Laure Author-X-Name-Last: Latruffe Title: Financing Availability and Investment Decisions of Slovenian Farms During the Transition to a Market Economy Abstract: This paper investigates the financial determinants of investment decisions made by Slovenian family farms during the transition to a market economy in the period 1994–2003. Results from standard and augmented accelerator models indicate that farms' investment decisions were based on market opportunities during this period, ruling out the presence of soft budget constraints, but that these decisions were constrained by the availability of finance. Further analyses reveal a non-significant impact of investment subsidies received by farms, but a positive impact of operational subsidies for small farms only, on the alleviation of financial constraints. Journal: Journal of Applied Economics Pages: 297-317 Issue: 2 Volume: 14 Year: 2011 Month: 11 X-DOI: 10.1016/S1514-0326(11)60016-0 File-URL: http://hdl.handle.net/10.1016/S1514-0326(11)60016-0 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:recsxx:v:14:y:2011:i:2:p:297-317 Template-Type: ReDIF-Article 1.0 Author-Name: James L. Butkiewicz Author-X-Name-First: James L. Author-X-Name-Last: Butkiewicz Author-Name: Halit Yanikkaya Author-X-Name-First: Halit Author-X-Name-Last: Yanikkaya Title: Institutions and the Impact of Government Spending on Growth Abstract: This paper reports the results of a study of the impact of government expenditures on economic growth, emphasizing how government effectiveness influences the efficiency of government spending. The effects of sub-categories of government spending on growth are also examined. Total expenditures are estimated to have negative growth effects for some groupings of developed nations. Consumption expenditures are found to have a detrimental growth effect in developing nations with ineffective governments. Developing nations with ineffective governments benefit from capital expenditures. To stimulate growth, developing nations should limit their governments' consumption spending and invest in infrastructure. Journal: Journal of Applied Economics Pages: 319-341 Issue: 2 Volume: 14 Year: 2011 Month: 11 X-DOI: 10.1016/S1514-0326(11)60017-2 File-URL: http://hdl.handle.net/10.1016/S1514-0326(11)60017-2 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:recsxx:v:14:y:2011:i:2:p:319-341 Template-Type: ReDIF-Article 1.0 Author-Name: Patricio Pérez Author-X-Name-First: Patricio Author-X-Name-Last: Pérez Author-Name: Marta Bengoa Author-X-Name-First: Marta Author-X-Name-Last: Bengoa Author-Name: Adolfo C. Fernández Author-X-Name-First: Adolfo C. Author-X-Name-Last: Fernández Title: Technological Capital and Technical Progress in the G5 Countries Abstract: We conduct an empirical application based on Coe and Helpman's (1995) seminal work, in order to measure the elasticity of technical progress with respect to R&D capital for the G5 countries between 1971 and 2003. For this purpose, a series for technological capital is built for the 1990–2003 period, and linked with Coe and Helpman's series for the 1971–1990 period. The technical progress of leading countries depends critically on the domestic R&D capital stock, in line with Coe and Helpman's (1995) and Coe, Helpman and Hofmaister's (2009) work. Nevertheless, there are some important differences. The estimations for the elasticity values appear to be higher and show larger differences between countries than in previous studies. Furthermore, the results give evidence in favour of Schumpeterian models, as TFP growth is positively related to the distance to the technological frontier represented by the US. Journal: Journal of Applied Economics Pages: 343-361 Issue: 2 Volume: 14 Year: 2011 Month: 11 X-DOI: 10.1016/S1514-0326(11)60018-4 File-URL: http://hdl.handle.net/10.1016/S1514-0326(11)60018-4 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:recsxx:v:14:y:2011:i:2:p:343-361 Template-Type: ReDIF-Article 1.0 Author-Name: Byeong-Il Ahn Author-X-Name-First: Byeong-Il Author-X-Name-Last: Ahn Author-Name: Daniel A. Sumner Author-X-Name-First: Daniel A. Author-X-Name-Last: Sumner Title: Estimation of Relative Bargaining Power in Markets for Raw Milk in the United States Abstract: This study contributes to the empirical industrial organization literature by deriving and estimating the empirical equation containing the parameter for bargaining power and an indicator of competition between suppliers. We specify a reduced form of the price equation, which is composed of the minimum price specified in milk marketing orders and the reduced form of the upper bound for the price in regional raw milk markets in the United States. Estimation results indicate that the relative bargaining power of dairy cooperatives in setting regional raw milk prices is small compared to the power of milk bottlers. We find the price differential in milk marketing orders has contributed to raise the price bargained between dairy cooperatives and milk bottlers. Journal: Journal of Applied Economics Pages: 1-23 Issue: 1 Volume: 15 Year: 2012 Month: 5 X-DOI: 10.1016/S1514-0326(12)60001-4 File-URL: http://hdl.handle.net/10.1016/S1514-0326(12)60001-4 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:recsxx:v:15:y:2012:i:1:p:1-23 Template-Type: ReDIF-Article 1.0 Author-Name: Joe Amoako-Tuffour Author-X-Name-First: Joe Author-X-Name-Last: Amoako-Tuffour Author-Name: Roberto Martínez-Espiñeira Author-X-Name-First: Roberto Author-X-Name-Last: Martínez-Espiñeira Title: Leisure and the Net Opportunity Cost of Travel Time in Recreation Demand Analysis: An Application to Gros Morne National Park Abstract: Using count data models that account for zero-truncation, overdispersion, and endogenous stratification, we estimate the value of access to recreational parks. The focus is on the empirical estimation of the proportion of the wage rate that best approximates park visitors' opportunity cost of travel time within the cost of their trip and its effects on estimated consumer surplus. The fraction of hourly earnings that corresponds to the opportunity cost of travel time is endogenously estimated as a function of visitor characteristics, rather than fixed exogenously. In this case, which deals with a relatively remote recreational site, the relevant opportunity cost of time for most visitors appears to represent a smaller fraction of their wage rate than commonly assumed in previous similar studies. Journal: Journal of Applied Economics Pages: 25-49 Issue: 1 Volume: 15 Year: 2012 Month: 5 X-DOI: 10.1016/S1514-0326(12)60002-6 File-URL: http://hdl.handle.net/10.1016/S1514-0326(12)60002-6 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:recsxx:v:15:y:2012:i:1:p:25-49 Template-Type: ReDIF-Article 1.0 Author-Name: Antonio N. Bojanic Author-X-Name-First: Antonio N. Author-X-Name-Last: Bojanic Title: The Impact of Financial Development and Trade on the Economic Growth of Bolivia Abstract: The relationship of economic growth with financial development and trade openness is analyzed with annual time-series data for Bolivia during the 1940–2010 period. The analysis is an advance over previous work in several ways. First, the hypothesis of a long-run relationship between these variables is tested using bivariate cointegrated systems and employing the methodology of cointegration analysis. Second, causality tests utilizing standard Granger regressions and ECM models are carried out to determine the direction of causality between indicators of economic growth and financial development, and economic growth and trade openness. Lastly, the study comprises a period of seventy years, a first for a study of this kind on Bolivia. The empirical results demonstrate that there is indeed a long-run equilibrium relationship, and that unidirectional Granger causality runs from the indicators of financial development and trade openness to economic growth. Journal: Journal of Applied Economics Pages: 51-70 Issue: 1 Volume: 15 Year: 2012 Month: 5 X-DOI: 10.1016/S1514-0326(12)60003-8 File-URL: http://hdl.handle.net/10.1016/S1514-0326(12)60003-8 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:recsxx:v:15:y:2012:i:1:p:51-70 Template-Type: ReDIF-Article 1.0 Author-Name: Paúl Castillo Author-X-Name-First: Paúl Author-X-Name-Last: Castillo Author-Name: Alberto Humala Author-X-Name-First: Alberto Author-X-Name-Last: Humala Author-Name: Vicente Tuesta Author-X-Name-First: Vicente Author-X-Name-Last: Tuesta Title: Regime Shifts and Inflation Uncertainty in Peru Abstract: The link between inflation and inflation uncertainty is evaluated using Peruvian data, in a context of changing monetary policies because of regime shifts. A Markov regime-switching heteroskedasticity model that includes unobserved components is used. The model shows how periods of high (low) inflation accompany periods of high (low) short- and long-run uncertainty in inflation. The results of the model also illustrate how, during the recent period of price stability in Peru, both permanent and transitory shocks in inflation show a decrease in volatility. Finally, a time-varying measure of inflation uncertainty is derived from the estimates, giving additional evidence on the positive link between the level of inflation and its uncertainty. Journal: Journal of Applied Economics Pages: 71-87 Issue: 1 Volume: 15 Year: 2012 Month: 5 X-DOI: 10.1016/S1514-0326(12)60004-X File-URL: http://hdl.handle.net/10.1016/S1514-0326(12)60004-X File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:recsxx:v:15:y:2012:i:1:p:71-87 Template-Type: ReDIF-Article 1.0 Author-Name: Antonio Di Paolo Author-X-Name-First: Antonio Di Author-X-Name-Last: Paolo Author-Name: Josep Lluís Raymond Author-X-Name-First: Josep Lluís Author-X-Name-Last: Raymond Title: Language Knowledge and Earnings in Catalonia Abstract: This paper represents the first contribution that investigates the economic value of Catalan knowledge in terms of earnings, focusing on national and foreign first- and second-generation immigrants in Catalonia. Specifically, drawing on data from the Survey on Living Conditions and Habits of the Catalan Population (2006), we quantify the expected earnings differential between individuals who are proficient in Catalan and those who are not, taking into account the potential endogeneity between knowledge of Catalan and earnings. The results indicate the existence of a positive return to knowledge of Catalan, with a 7.5% increase in earnings estimated by OLS. When we account for the presence of endogeneity, monthly earnings are around 18% higher for individuals who are able to speak and write Catalan. We also find that language and education are complementary inputs for generating earnings in Catalonia, given that knowledge of Catalan increases monthly earnings only for more educated individuals. Journal: Journal of Applied Economics Pages: 89-118 Issue: 1 Volume: 15 Year: 2012 Month: 5 X-DOI: 10.1016/S1514-0326(12)60005-1 File-URL: http://hdl.handle.net/10.1016/S1514-0326(12)60005-1 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:recsxx:v:15:y:2012:i:1:p:89-118 Template-Type: ReDIF-Article 1.0 Author-Name: Nasser Khiabani Author-X-Name-First: Nasser Author-X-Name-Last: Khiabani Author-Name: Mehdi Hamidisahneh Author-X-Name-First: Mehdi Author-X-Name-Last: Hamidisahneh Title: The Effects of Entry Regulation on Bank Competition: The Case of the Iranian Banking Industry Abstract: We focus on a modified version of the markup test to investigate the impact of entry regulation on competitive conditions in the Iranian banking industry for the period 1996–2006. The time interval under examination corresponds to an era characterized by substantial relaxation of entry barriers and private bank penetration. To estimate Lerner indexes as a measure of bank competition, we set up a simultaneous equation model for unbalanced panel data by utilizing the stepwise maximum likelihood method. We find that concomitantly with the new bank entries a pro-competitive change in the banking industry took place. Journal: Journal of Applied Economics Pages: 119-137 Issue: 1 Volume: 15 Year: 2012 Month: 5 X-DOI: 10.1016/S1514-0326(12)60006-3 File-URL: http://hdl.handle.net/10.1016/S1514-0326(12)60006-3 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:recsxx:v:15:y:2012:i:1:p:119-137 Template-Type: ReDIF-Article 1.0 Author-Name: Antonio Lecuna Author-X-Name-First: Antonio Author-X-Name-Last: Lecuna Title: Corruption and Size Decentralization Abstract: Statistical tests based on newly collected cross-sectional data suggest that countries which have more first-tier subnational governments relative to their population are more corrupt. I measure the strength of association between “corruption” and the variables “population per regional government” and “average area of first-tier unit,” both individually and combined as the interaction effect “size decentralization,” in 100 randomly selected countries. Two theoretical arguments may explain these associations: (i) the greater the quantity of first-tier subnational units with monopolistic powers, such as legal and regulatory sanctions, the greater the incentives for bribery and extortion; and (ii) elected authorities and public servants of smaller regional governments are more vulnerable to capture by a corrupt private elite, especially when control and accountability mechanisms are weaker than national ones. This paper also provides some support for existing corruption theories, namely that wealthy countries with Protestant societies use democratic systems more effectively to control corruption. Journal: Journal of Applied Economics Pages: 139-168 Issue: 1 Volume: 15 Year: 2012 Month: 5 X-DOI: 10.1016/S1514-0326(12)60007-5 File-URL: http://hdl.handle.net/10.1016/S1514-0326(12)60007-5 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:recsxx:v:15:y:2012:i:1:p:139-168 Template-Type: ReDIF-Article 1.0 Author-Name: Saleem Shaik Author-X-Name-First: Saleem Author-X-Name-Last: Shaik Author-Name: Ashok K. Mishra Author-X-Name-First: Ashok K. Author-X-Name-Last: Mishra Author-Name: Joseph Atwood Author-X-Name-First: Joseph Author-X-Name-Last: Atwood Title: Aggregation Issues in the Estimation of Linear Programming Productivity Measures Abstract: This paper demonstrates the sensitivity of the linear programming approach in the estimation of productivity measures in the primal framework. Specifically, the sensitivity to the number of constraints (level of dis-aggregation) and imposition of returns to scale constraints is evaluated. Further, the shadow or dual values are recovered from the linear program and compared to the market prices used in the ideal Fisher index approach. Empirical application to U.S. state-level time series data from 1960–2004 reveal productivity change decreases with increases in the number of constraints. Divergence in productivity measures is observed due to the choice of method imposed, various levels of commodity/input aggregation, and technology assumptions. Due to the piecewise linear approximation of the nonparametric programming approach, the shadow share-weights are skewed leading to the difference in the productivity measures due to aggregation. Journal: Journal of Applied Economics Pages: 169-187 Issue: 1 Volume: 15 Year: 2012 Month: 5 X-DOI: 10.1016/S1514-0326(12)60008-7 File-URL: http://hdl.handle.net/10.1016/S1514-0326(12)60008-7 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:recsxx:v:15:y:2012:i:1:p:169-187 Template-Type: ReDIF-Article 1.0 Author-Name: Marek Hanusch Author-X-Name-First: Marek Author-X-Name-Last: Hanusch Title: Mooted Signals: Economic Disturbances and Political Budget Cycles Abstract: Governments can finance fiscal expansions with debt to appear competent and boost their electoral prospects, resulting in a political budget cycle. This article shows that economic disturbances blur competence signals, dampening political budget cycles. Economic disturbances can be construed at the aggregate level as economic volatility which is a consequence of decisions taken by diverse economic actors. The more actors that are not elected at the national level have an impact on economic performance, the more difficult it will be for voters to disentangle government-specific competence shocks. Fiscal decentralisation increases policy leverage of governing bodies that are not elected at the national level; economic openness affects the number of foreign economic actors that cannot be held locally accountable. These two factors therefore limit voters' ability to disentangle individual shocks to government competence, dampening strategic borrowing. The predictions receive empirical support from a time series-cross section analysis between 1980 and 2008. Journal: Journal of Applied Economics Pages: 189-212 Issue: 2 Volume: 15 Year: 2012 Month: 11 X-DOI: 10.1016/S1514-0326(12)60009-9 File-URL: http://hdl.handle.net/10.1016/S1514-0326(12)60009-9 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:recsxx:v:15:y:2012:i:2:p:189-212 Template-Type: ReDIF-Article 1.0 Author-Name: Astrid Ayala Author-X-Name-First: Astrid Author-X-Name-Last: Ayala Author-Name: Juncal Cuñado Author-X-Name-First: Juncal Author-X-Name-Last: Cuñado Author-Name: Luis Albériko Gil-Alana Author-X-Name-First: Luis Albériko Author-X-Name-Last: Gil-Alana Title: Unemployment Hysteresis: Empirical Evidence for Latin America Abstract: This paper analyzes the unemployment dynamics of 18 Latin American countries for the last four decades. We use a time series approach to test the mean reversion of unemployment rates and its approximation to a Natural Rate of Unemployment (NRU). The tests include the possibility of one and two structural changes to account for the occurrence of significant macroeconomic changes experienced by the Latin American economies. In addition, we estimate the order of integration of the series, allowing for fractional degrees of differentiation, to assess the persistence of unemployment in the region. Our results indicate that when endogenous structural changes are included in the model, in general we find evidence of mean reversion of unemployment rates for the Latin American countries under study. Therefore, our findings support the structuralist hypothesis of unemployment. Journal: Journal of Applied Economics Pages: 213-233 Issue: 2 Volume: 15 Year: 2012 Month: 11 X-DOI: 10.1016/S1514-0326(12)60010-5 File-URL: http://hdl.handle.net/10.1016/S1514-0326(12)60010-5 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:recsxx:v:15:y:2012:i:2:p:213-233 Template-Type: ReDIF-Article 1.0 Author-Name: Andrea Báez-Montenegro Author-X-Name-First: Andrea Author-X-Name-Last: Báez-Montenegro Author-Name: Ana María Bedate Author-X-Name-First: Ana María Author-X-Name-Last: Bedate Author-Name: Luis César Herrero Author-X-Name-First: Luis César Author-X-Name-Last: Herrero Author-Name: Jose Ángel Sanz Author-X-Name-First: Jose Ángel Author-X-Name-Last: Sanz Title: Inhabitants' Willingness to Pay for Cultural Heritage: A Case Study in Valdivia, Chile, Using Contingent Valuation Abstract: We estimate the economic value of the urban cultural heritage of Valdivia, Chile, an emblematic historical city that comprises an ensemble of disperse cultural heritage elements. To derive its economic value we use the preferences stated by residents. The contingent valuation method with parametrical estimation (probit bivariate models) is applied, consisting of a survey employing double-bounded questions. The paper contributes to broadening the spectrum of case studies in this line of research in developing countries. It also seeks to determine which socioeconomic and demographical factors of interviewees prove significant when estimating willingness to pay (WTP). WTP is significant, although it reveals a slight drop as the degree of certainty of actually making a payment, in accordance with the hypothetical valuations that are stated, increases. WTP is positively related to educational qualifications and cultural habits, but there seem to be no major differences in terms of urban distribution. Journal: Journal of Applied Economics Pages: 235-258 Issue: 2 Volume: 15 Year: 2012 Month: 11 X-DOI: 10.1016/S1514-0326(12)60011-7 File-URL: http://hdl.handle.net/10.1016/S1514-0326(12)60011-7 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:recsxx:v:15:y:2012:i:2:p:235-258 Template-Type: ReDIF-Article 1.0 Author-Name: Rodolfo Cermeño Author-X-Name-First: Rodolfo Author-X-Name-Last: Cermeño Author-Name: F. Alejandro Villagómez Author-X-Name-First: F. Alejandro Author-X-Name-Last: Villagómez Author-Name: Javier Orellana Polo Author-X-Name-First: Javier Orellana Author-X-Name-Last: Polo Title: Monetary Policy Rules in a Small Open Economy: An Application to Mexico Abstract: We estimate a small-scale macro model for the Mexican economy under the New Keynesian (NK) framework and alternative interest rate rules for Mexico. With these results we evaluate the performance of the Bank of Mexico against a set of optimality principles derived in the NK literature. Our system estimation results show that the Bank of Mexico holds a preference for stabilizing not only inflation around target, but also acts to achieve an output gap close to zero. Furthermore, we find that the central bank responds non-linearly to real exchange rate depreciations. We also find that the central bank has actively attempted to neutralize demand and supply shocks through monetary policy that is consistent with the Taylor principle. Journal: Journal of Applied Economics Pages: 259-286 Issue: 2 Volume: 15 Year: 2012 Month: 11 X-DOI: 10.1016/S1514-0326(12)60012-9 File-URL: http://hdl.handle.net/10.1016/S1514-0326(12)60012-9 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:recsxx:v:15:y:2012:i:2:p:259-286 Template-Type: ReDIF-Article 1.0 Author-Name: Giovanni Cerulli Author-X-Name-First: Giovanni Author-X-Name-Last: Cerulli Author-Name: Bianca Potì Author-X-Name-First: Bianca Author-X-Name-Last: Potì Title: Evaluating the Robustness of the Effect of Public Subsidies on Firms' R&D: An Application to Italy Abstract: This paper applies different econometric methods to evaluate the effect of public subsidies on firms' R&D activity. For the sake of robustness, results from the Heckman selection model (Heckit), Control-function regression, Difference-in-differences, and various Matching methods are compared by using the third and fourth wave of the Italian Community Innovation Survey (CIS3, years 1998–2000 and CIS4, years 2002–2004). We predict the absence of a full crowding-out of private R&D performance, both for the whole sample and for some subsets of firms. Nevertheless, we conclude that while for variables expressed as ratio (R&D intensity and R&D per employee) the difference in results is negligible, R&D expenditure presents a strong variability among the approaches, even for those relying on similar identification assumptions. Given the utmost importance of this target-variable, future works should go beyond the use of single methods, especially when they are thought of to steer future policymaking. Journal: Journal of Applied Economics Pages: 287-320 Issue: 2 Volume: 15 Year: 2012 Month: 11 X-DOI: 10.1016/S1514-0326(12)60013-0 File-URL: http://hdl.handle.net/10.1016/S1514-0326(12)60013-0 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:recsxx:v:15:y:2012:i:2:p:287-320 Template-Type: ReDIF-Article 1.0 Author-Name: Jason M. Debacker Author-X-Name-First: Jason M. Author-X-Name-Last: Debacker Title: Political Parties as a Commitment Technology: Effects of Term Limits on Vote Share Abstract: Building on models of electoral competition with reputational mechanisms, I show that term limits decrease the vote share of candidates from parties less able to reward or punish candidates. Candidates suffer by not being able to credibly commit to policies far from their own preferences. Assuming that the major parties can provide better discipline of their members than third parties, the implication of the model is that third party candidates will be worse off, in terms of vote share garnered, in elections for offices with term limits. The hypothesis that third parties do worse under term limits is tested using state gubernatorial elections. Data from 1977–2008 show the vote share of third party candidates is approximately six percent lower in elections for a term-limited office when controlling for other election characteristics and regional and temporal trends in party popularity. Journal: Journal of Applied Economics Pages: 321-351 Issue: 2 Volume: 15 Year: 2012 Month: 11 X-DOI: 10.1016/S1514-0326(12)60014-2 File-URL: http://hdl.handle.net/10.1016/S1514-0326(12)60014-2 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:recsxx:v:15:y:2012:i:2:p:321-351 Template-Type: ReDIF-Article 1.0 Author-Name: Ashok K. Mishra Author-X-Name-First: Ashok K. Author-X-Name-Last: Mishra Author-Name: Hiroki Uematsu Author-X-Name-First: Hiroki Author-X-Name-Last: Uematsu Author-Name: Rebekah R. Powell Author-X-Name-First: Rebekah R. Author-X-Name-Last: Powell Title: Precautionary Wealth and Income Uncertainty: A Household-Level Analysis Abstract: This study investigates the presence of precautionary savings among self-employed farm households using an instrumental variable approach on farm-level data. Results indicate that precautionary saving is a powerful determinant of wealth accumulation among U.S. farm households. Precautionary savings account for 53% of total wealth accumulation in general. Our results indicate an age-wealth profile that is consistent with the life-cycle hypothesis. The share of precautionary saving in total wealth accumulation differs across farm households. Results show that for farm households receiving government payments (designed to benefit farmers by reducing income variability), precautionary saving account for a large share (51%) of wealth accumulation, compared to 41% for households that do not receive any government payments. Journal: Journal of Applied Economics Pages: 353-369 Issue: 2 Volume: 15 Year: 2012 Month: 11 X-DOI: 10.1016/S1514-0326(12)60015-4 File-URL: http://hdl.handle.net/10.1016/S1514-0326(12)60015-4 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:recsxx:v:15:y:2012:i:2:p:353-369 Template-Type: ReDIF-Article 1.0 Author-Name: Carlos Scartascini Author-X-Name-First: Carlos Author-X-Name-Last: Scartascini Author-Name: Ernesto Stein Author-X-Name-First: Ernesto Author-X-Name-Last: Stein Author-Name: Mariano Tommasi Author-X-Name-First: Mariano Author-X-Name-Last: Tommasi Title: Political Institutions, Intertemporal Cooperation, and the Quality of Public Policies Abstract: While economists have tended to focus on specific public policies when developing recommendations, the achievement of welfare objectives might depend more on the quality of policies than their content. This paper develops several measures of the qualities of policies across countries, arguing that the quality of public policies depends on each polity's ability to strike intertemporal transactions necessary to develop and sustain effective policies. The analytical framework developed here indicates that this ability depends on several characteristics of political institutions, such as congressional capabilities, judicial independence, and bureaucratic independence and professionalism. The empirical evidence presented supports this idea. Journal: Journal of Applied Economics Pages: 1-32 Issue: 1 Volume: 16 Year: 2013 Month: 5 X-DOI: 10.1016/S1514-0326(13)60001-X File-URL: http://hdl.handle.net/10.1016/S1514-0326(13)60001-X File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:recsxx:v:16:y:2013:i:1:p:1-32 Template-Type: ReDIF-Article 1.0 Author-Name: Mohsen Bahmani-Oskooee Author-X-Name-First: Mohsen Author-X-Name-Last: Bahmani-Oskooee Author-Name: Jia Xu Author-X-Name-First: Jia Author-X-Name-Last: Xu Title: The S-Curve Dynamics of U.S.-Mexico Commodity Trade Abstract: In testing the short-run effects of currency depreciation on the trade balance, rather than engaging in regression analysis, part of the literature basically looks at the correlation coefficients between past and future values of the trade balance and the current exchange rate. It is postulated that these coefficients are positive between future values of the trade balance and current exchange rate, but negative between past values of the trade balance and the current exchange rate, hence the S-Curve pattern. Previous research has shown that the curve is not supported for Mexico when aggregate trade data are used. In this paper we used bilateral trade data between Mexico and her main partner, the United States to test the curve. Still there was no support for the curve. However, when we disaggregated bilateral trade flows by industry and considered the trade balances of 223 industries that trade between the two countries, we were able to support the S-Curve in 90 industries. Journal: Journal of Applied Economics Pages: 33-48 Issue: 1 Volume: 16 Year: 2013 Month: 5 X-DOI: 10.1016/S1514-0326(13)60002-1 File-URL: http://hdl.handle.net/10.1016/S1514-0326(13)60002-1 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:recsxx:v:16:y:2013:i:1:p:33-48 Template-Type: ReDIF-Article 1.0 Author-Name: Ma Ángeles Caraballo Author-X-Name-First: Ma Ángeles Author-X-Name-Last: Caraballo Author-Name: Carlos Dabús Author-X-Name-First: Carlos Author-X-Name-Last: Dabús Title: Price Dispersion and Optimal Inflation: The Spanish Case Abstract: This paper studies the relation between inflation and relative price variability (RPV) in Spain during the 1987–2009 period. We find that this relation presents a U-shape profile, and that the optimal annual inflation rate (defined as the one that minimizes RPV) is around 4%, higher than the 2% inflation target proposed by the European Monetary Union. More importantly, this result does not depend on whether the monetary regime is before or after the euro. Hence, the main policy implication is that disinflation efforts to achieve the 2% inflation target result in welfare losses. The key link between inflation and RPV is unexpected inflation, whose optimal level is around zero. This suggests that monetary policy matters: the welfare costs associated with higher RPV can be minimized with a credible and predictable inflation targeting policy set at the appropriate level. Journal: Journal of Applied Economics Pages: 49-70 Issue: 1 Volume: 16 Year: 2013 Month: 5 X-DOI: 10.1016/S1514-0326(13)60003-3 File-URL: http://hdl.handle.net/10.1016/S1514-0326(13)60003-3 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:recsxx:v:16:y:2013:i:1:p:49-70 Template-Type: ReDIF-Article 1.0 Author-Name: Carlos Eduardo Castillo-Maldonado Author-X-Name-First: Carlos Eduardo Author-X-Name-Last: Castillo-Maldonado Author-Name: Fidel Pérez-Macal Author-X-Name-First: Fidel Author-X-Name-Last: Pérez-Macal Title: Assessment of Models to Forecast Exchange Rates: The Quetzal-U.S. Dollar Exchange Rate Abstract: Based on Cheung, Chinn and García-Pascual (2004) and Meese and Rogoff (1983), the forecasting performance of a wide variety of theoretical and empirical exchange rate models (PPP, UIP, flexible and sticky-price monetary models, portfolio balance, and a BEER model) is tested against the random walk specification to determine their assessment in predicting the quetzal-U.S. dollar nominal exchange rate. Such models are estimated by applying a recursive regression methodology to quarterly data for the period 1995–2009. Estimations are performed based on an innovative trend-gap data disaggregation methodology, and an error-correction specification to contrast short vs. long run prediction performance, which is evaluated up to eight periods ahead for all model specifications. Different from previous results, forecasts provided by most specifications in the very short run (up to 2 quarters ahead), particularly the BEER specification, consistently outperform those obtained from the random walk model. Journal: Journal of Applied Economics Pages: 71-99 Issue: 1 Volume: 16 Year: 2013 Month: 5 X-DOI: 10.1016/S1514-0326(13)60004-5 File-URL: http://hdl.handle.net/10.1016/S1514-0326(13)60004-5 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:recsxx:v:16:y:2013:i:1:p:71-99 Template-Type: ReDIF-Article 1.0 Author-Name: Jose Angelo Divino Author-X-Name-First: Jose Angelo Author-X-Name-Last: Divino Author-Name: Luis Felipe Vital Nunes Pereira Author-X-Name-First: Luis Felipe Vital Nunes Author-X-Name-Last: Pereira Title: Are Increases in Government Spending Neutral? Evidence from Latin-American Households Abstract: Using a dynamic optimization model, Ricardian Equivalence (RE) is empirically tested for Argentina, Brazil, Chile and Mexico. The system of equations obtained in the theoretical model is solved using Generalized Method of Moments and Full Information Maximum Likelihood. Results indicate that the null hypothesis concerning RE cannot be rejected for Argentina, Brazil, and Chile but is strongly rejected for Mexico. Therefore, when the fiscal authority seeks to stimulate economic activity by means of tax reductions and increases in government spending, the outstanding effect might be only a rise in private savings for the first three countries. Journal: Journal of Applied Economics Pages: 101-120 Issue: 1 Volume: 16 Year: 2013 Month: 5 X-DOI: 10.1016/S1514-0326(13)60005-7 File-URL: http://hdl.handle.net/10.1016/S1514-0326(13)60005-7 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:recsxx:v:16:y:2013:i:1:p:101-120 Template-Type: ReDIF-Article 1.0 Author-Name: Nada Mora Author-X-Name-First: Nada Author-X-Name-Last: Mora Title: The Bank Lending Channel in a Partially Dollarized Economy Abstract: This paper studies the transmission of monetary policy through the bank-lending channel in a partially dollarized banking system. Taking advantage of the cross-sectional and time- series variation in individual Mexican bank balance sheets, I find that the deposits and loans of banks that have a larger share of foreign currency deposits are less sensitive to domestic monetary shocks, particularly for small banks. The results also suggest that banks with a larger foreign deposit share are more sensitive to foreign (U.S.) monetary shocks and Mexican country risk. The results indicate a novel way in which monetary policy has real effects in a partially dollarized economy: Not only are banks unable to easily replace insured deposits with other sources of funds because of information frictions (the conventional bank lending channel), but they are also unable to fully offset a loss of domestic currency deposits with foreign currency deposits. Journal: Journal of Applied Economics Pages: 121-151 Issue: 1 Volume: 16 Year: 2013 Month: 5 X-DOI: 10.1016/S1514-0326(13)60006-9 File-URL: http://hdl.handle.net/10.1016/S1514-0326(13)60006-9 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:recsxx:v:16:y:2013:i:1:p:121-151 Template-Type: ReDIF-Article 1.0 Author-Name: Sergio Tezanos Author-X-Name-First: Sergio Author-X-Name-Last: Tezanos Author-Name: Ainoa Quiñones Author-X-Name-First: Ainoa Author-X-Name-Last: Quiñones Author-Name: Marta Guijarro Author-X-Name-First: Marta Author-X-Name-Last: Guijarro Title: Inequality, Aid and Growth: Macroeconomic Impact of Aid Grants and Loans in Latin America and the Caribbean Abstract: Aid effectiveness in Latin America and the Caribbean (LAC) has been little studied, despite the fact that it is the developing region receiving foreign aid with the highest per capita income and inequality levels. This paper uses a growth regression model to analyze the impact of Official Development Assistance (ODA) in LAC. We evaluate ODA effectiveness in relation to the growth rate of an ‘inequality-adjusted GDP per capita’ in order to precisely define the desired impact of aid in a region with high levels of inequality. The estimation produces three main results: aid is effective, in aggregated terms, once we deal with the effect of income inequalities; the impact of concessional loans seems to be greater than the impact of grants; and, aid may be more effective in less corrupt countries. Journal: Journal of Applied Economics Pages: 153-177 Issue: 1 Volume: 16 Year: 2013 Month: 5 X-DOI: 10.1016/S1514-0326(13)60007-0 File-URL: http://hdl.handle.net/10.1016/S1514-0326(13)60007-0 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:recsxx:v:16:y:2013:i:1:p:153-177 Template-Type: ReDIF-Article 1.0 Author-Name: Jin Zhang Author-X-Name-First: Jin Author-X-Name-Last: Zhang Author-Name: David A. Bessler Author-X-Name-First: David A. Author-X-Name-Last: Bessler Author-Name: David J. Leatham Author-X-Name-First: David J. Author-X-Name-Last: Leatham Title: Aggregate Business Failures and Macroeconomic Conditions: A Var Look at the U.S. Between 1980 and 2004 Abstract: In this paper, we study the U.S. aggregate business failures during 1980–2004 in relation to four macroeconomic variables: aggregate corporate profits, the producer price index, the interest rate, and stock market performance. We argue that aggregate business failures should not be treated as a passive variable, as usually done in previous studies, and we allow its possible causal effect on other macroeconomic variables through a Structural Vector Autoregression model that builds on Directed Acyclic Graphs. Granger type causality and innovation accounting results both show that while subject to the influence of interest rates, aggregate business failures are quite exogenous in comparison to the other three variables. The implications of these findings are discussed as well. Journal: Journal of Applied Economics Pages: 179-202 Issue: 1 Volume: 16 Year: 2013 Month: 5 X-DOI: 10.1016/S1514-0326(13)60008-2 File-URL: http://hdl.handle.net/10.1016/S1514-0326(13)60008-2 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:recsxx:v:16:y:2013:i:1:p:179-202 Template-Type: ReDIF-Article 1.0 Author-Name: J. Daniel Aromi Author-X-Name-First: J. Daniel Author-X-Name-Last: Aromi Title: The (Formal) Return to Openness: A Quantitative Contribution to the History of Economic Thought Abstract: We develop a comprehensive quantitative account of changing practices in economics in the last 122 years. The analysis uses word detection algorithms to partially characterize prevailing practices. We document a shift toward isolation from other disciplines during most of the twentieth century. In sharp contrast, the most recent decades show a strong move towards a more connected discipline. Periods of more connectedness are associated with openness to a broader set of features of economic agents and the economic environment. In parallel, the 1960s and 1970s show a notable acceleration in the move towards a more mathematical approach. This development did not reverse. As a result, the current state of the discipline is characterized by an embrace of mathematical tools together with openness to a wider set of aspects and findings developed in other disciplines. Most of the reported variables show surprisingly high correlations across disciplines and across journals. Journal: Journal of Applied Economics Pages: 203-222 Issue: 2 Volume: 16 Year: 2013 Month: 11 X-DOI: 10.1016/S1514-0326(13)60009-4 File-URL: http://hdl.handle.net/10.1016/S1514-0326(13)60009-4 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:recsxx:v:16:y:2013:i:2:p:203-222 Template-Type: ReDIF-Article 1.0 Author-Name: Paul Brewer Author-X-Name-First: Paul Author-X-Name-Last: Brewer Author-Name: Jaksa Cvitanic Author-X-Name-First: Jaksa Author-X-Name-Last: Cvitanic Author-Name: Charles R. Plott Author-X-Name-First: Charles R. Author-X-Name-Last: Plott Title: Market Microstructure Design and Flash Crashes: A Simulation Approach Abstract: We study consequences of regulatory interventions in limit order markets that aim at stabilizing the market after an occurrence of a “flash crash”. We use a simulation platform that creates random arrivals of trade orders, that allows us to analyze subtle theoretical features of liquidity and price variability under various market structures. The simulations are performed under continuous double-auction microstructure, and under alternatives, including imposing minimum resting times, shutting off trading for a period of time, and switching to call auction mechanisms. We find that the latter is the most effective in restoring the liquidity of the book and recovery of the price level. However, one has to be cautious about possible consequences of the intervention on the traders' strategies, including an undesirable slowdown of a convergence to a new equilibrium after a change in fundamentals. Journal: Journal of Applied Economics Pages: 223-250 Issue: 2 Volume: 16 Year: 2013 Month: 11 X-DOI: 10.1016/S1514-0326(13)60010-0 File-URL: http://hdl.handle.net/10.1016/S1514-0326(13)60010-0 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:recsxx:v:16:y:2013:i:2:p:223-250 Template-Type: ReDIF-Article 1.0 Author-Name: Francisco de Castro Author-X-Name-First: Francisco Author-X-Name-Last: de Castro Author-Name: José Luis Fernández Author-X-Name-First: José Luis Author-X-Name-Last: Fernández Title: Does Ricardian Equivalence Hold? the Relationship Between Public and Private Saving in Spain Abstract: This paper aims to test the validity of the Ricardian proposition for the Spanish economy in two different frameworks: a) in traditional structural consumption equations and, b)in consumption functions stemming from Euler equations derived from a consumer's maximization problem. Our results lean toward rejection of the Ricardian proposition, although some degree of substitution between public and private saving is detected. Moreover, we provide some evidence of consumers becoming increasingly Ricardian with the level of government indebtedness as it may trigger sustainability concerns. In terms of policy implications, these results would suggest that until 2007 fiscal policy in Spain enjoyed some room of manoeuvre to exert its countercyclical role. The sovereign debt crisis has exhausted such margin. Journal: Journal of Applied Economics Pages: 251-274 Issue: 2 Volume: 16 Year: 2013 Month: 11 X-DOI: 10.1016/S1514-0326(13)60011-2 File-URL: http://hdl.handle.net/10.1016/S1514-0326(13)60011-2 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:recsxx:v:16:y:2013:i:2:p:251-274 Template-Type: ReDIF-Article 1.0 Author-Name: Qichun He Author-X-Name-First: Qichun Author-X-Name-Last: He Author-Name: Meng Sun Author-X-Name-First: Meng Author-X-Name-Last: Sun Author-Name: Heng-Fu Zou Author-X-Name-First: Heng-Fu Author-X-Name-Last: Zou Title: Financial Deregulation, Absorptive Capability, Technology Diffusion and Growth: Evidence from Chinese Panel Data Abstract: Technological diffusion via FDI is essential for the economic growth of backward economies. However, institutional and policy barriers may slow down technology diffusion. Using a simple theory based on Acemoglu (2009), we predict that inward FDI (pool of available world frontier technologies) and financial deregulation (enhancing absorptive capability via lowering institutional and policy barriers) have a complementary effect on economic growth. We test the predictions using panel data on Chinese provinces during the reform and opening-up period. The Chinese experience is appealing because of the symbiotic financial deregulation and inflow of FDI. We find robust evidence that there is a significant interaction effect between FDI and the level of financial deregulation that promotes economic growth. This furthers our understanding of the reform and opening-up strategy of China. Journal: Journal of Applied Economics Pages: 275-301 Issue: 2 Volume: 16 Year: 2013 Month: 11 X-DOI: 10.1016/S1514-0326(13)60012-4 File-URL: http://hdl.handle.net/10.1016/S1514-0326(13)60012-4 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:recsxx:v:16:y:2013:i:2:p:275-301 Template-Type: ReDIF-Article 1.0 Author-Name: Lina Lourenço-Gomes Author-X-Name-First: Lina Author-X-Name-Last: Lourenço-Gomes Author-Name: Lígia M. Costa Pinto Author-X-Name-First: Lígia M. Costa Author-X-Name-Last: Pinto Author-Name: João Rebelo Author-X-Name-First: João Author-X-Name-Last: Rebelo Title: Using Choice Experiments to Value a World Cultural Heritage Site: Reflections on the Experimental Design Abstract: In the context of public amenities, whose benefits of preservation are not totally reflected by the market, the valuation of cultural heritage has given primacy to the contingent valuation method, with very few attempts being made to valuation via the discrete choice experiments technique (DCE). In the present paper, from among the various phases of the DCE conception, particular emphasis is given to the way in which the attributes levels are combined into alternatives and how they are allocated into choice sets (experimental design step). In order to configure hypothetical scenarios relating to the conservation of a World Heritage cultural landscape, this paper applies both the experimental design strategies identified in the literature review as commonly applied in DCE to value cultural items, as well as D-optimal processes, which proved to be advantageous both in terms of statistical efficiency and in the information required (number of choice sets). Journal: Journal of Applied Economics Pages: 303-331 Issue: 2 Volume: 16 Year: 2013 Month: 11 X-DOI: 10.1016/S1514-0326(13)60013-6 File-URL: http://hdl.handle.net/10.1016/S1514-0326(13)60013-6 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:recsxx:v:16:y:2013:i:2:p:303-331 Template-Type: ReDIF-Article 1.0 Author-Name: Alberto Porto Author-X-Name-First: Alberto Author-X-Name-Last: Porto Author-Name: Agustín Lodola Author-X-Name-First: Agustín Author-X-Name-Last: Lodola Title: Economic Policy and Electoral Outcomes Abstract: This paper studies the connection between economic policy and electoral outcomes. In particular, it analyzes the impact of the conflict between the agro-manufacturing sector and the national government on the congressional elections for national deputies in the 134 municipalities of the province of Buenos Aires — a conflict which stemmed from the increase in taxation and the imposition of quantitative restrictions on the sector's production and exports. The municipalities differ greatly in their productive structures; therefore, a policy that is detrimental (beneficial) to a certain sector of activity may be expected to have a greater negative (positive) impact on the election results for the governing party in those municipalities where that sector is quantitatively important. The estimations show that the relative importance of the agro-manufacturing sector, controlling for economic, social and political variables, had a positive impact on the party in office in 2007 and a negative one in 2009. Journal: Journal of Applied Economics Pages: 333-356 Issue: 2 Volume: 16 Year: 2013 Month: 11 X-DOI: 10.1016/S1514-0326(13)60014-8 File-URL: http://hdl.handle.net/10.1016/S1514-0326(13)60014-8 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:recsxx:v:16:y:2013:i:2:p:333-356 Template-Type: ReDIF-Article 1.0 Author-Name: Armando Sanchez-Vargas Author-X-Name-First: Armando Author-X-Name-Last: Sanchez-Vargas Author-Name: Ricardo Mansilla-Sanchez Author-X-Name-First: Ricardo Author-X-Name-Last: Mansilla-Sanchez Author-Name: Alonso Aguilar-Ibarra Author-X-Name-First: Alonso Author-X-Name-Last: Aguilar-Ibarra Title: An Empirical Analysis of the Nonlinear Relationship Between Environmental Regulation and Manufacturing Productivity Abstract: The relationship between environmental regulation and productivity has been broadly analyzed. Here, we propose the use of one member of the family of exponential Gumbel distributions in order to study a potential nonlinear relationship between environmental regulation and manufacturing productivity in Mexico using a data set at the plant level. We show that the link between environmental regulation and productivity is in fact nonlinear and that there is a decreasing trade-off between those variables in the manufacturing industry. We find that such trade-off is high for small firms, but almost negligible for large companies. Thus, we argue that much of the debate on different effects is due to the heterogeneity of the industry. This result might be useful for the design of policies devoted to enhancing environmental performance. Journal: Journal of Applied Economics Pages: 357-371 Issue: 2 Volume: 16 Year: 2013 Month: 11 X-DOI: 10.1016/S1514-0326(13)60015-X File-URL: http://hdl.handle.net/10.1016/S1514-0326(13)60015-X File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:recsxx:v:16:y:2013:i:2:p:357-371 Template-Type: ReDIF-Article 1.0 Author-Name: Selahattin Togay Author-X-Name-First: Selahattin Author-X-Name-Last: Togay Author-Name: Nezir Kose Author-X-Name-First: Nezir Author-X-Name-Last: Kose Title: Money-Price Relationships Under a Currency Board System: The Case of Argentina Abstract: The relationship between money and prices, and the endogenous money hypothesis, is examined within the framework of a currency board-like system by using monthly data for the Argentinean economy in the period 1991–2001. Employing exogeneity tests, the empirical findings support the endogenous money hypothesis for the relationship between monetary variables (M1, M2, monetary base) and the producer price index, but reject it when the consumer price index is used instead as price variable. Journal: Journal of Applied Economics Pages: 373-389 Issue: 2 Volume: 16 Year: 2013 Month: 11 X-DOI: 10.1016/S1514-0326(13)60016-1 File-URL: http://hdl.handle.net/10.1016/S1514-0326(13)60016-1 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:recsxx:v:16:y:2013:i:2:p:373-389 Template-Type: ReDIF-Article 1.0 Author-Name: Sara Barcenilla-Visús Author-X-Name-First: Sara Author-X-Name-Last: Barcenilla-Visús Author-Name: Carmen López-Pueyo Author-X-Name-First: Carmen Author-X-Name-Last: López-Pueyo Author-Name: Jaime Sanaú-Villarroya Author-X-Name-First: Jaime Author-X-Name-Last: Sanaú-Villarroya Title: Semi-Endogenous Versus Fully Endogenous Growth Theory: A Sectoral Approach Abstract: This paper analyses the validity of second generation endogenous growth theories for six developed countries and ten manufacturing sectors over the period 1979–2001, applying modern tests and estimation procedures for the treatment of panel data. The basic autonomous innovation-driven model is extended to include international technology transfer and different measures of absorptive capacity. The estimates give great support to semi-endogenous growth theory. Furthermore, Schumpeterian or fully-endogenous growth theory has some support in the high impact of distance to the frontier variable which represents autonomous technology transfer. Journal: Journal of Applied Economics Pages: 1-30 Issue: 1 Volume: 17 Year: 2014 Month: 5 X-DOI: 10.1016/S1514-0326(14)60001-5 File-URL: http://hdl.handle.net/10.1016/S1514-0326(14)60001-5 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:recsxx:v:17:y:2014:i:1:p:1-30 Template-Type: ReDIF-Article 1.0 Author-Name: Senay Acikgoz Author-X-Name-First: Senay Author-X-Name-Last: Acikgoz Author-Name: Merter Mert Author-X-Name-First: Merter Author-X-Name-Last: Mert Title: Sources of Growth Revisited: The Importance of the Nature of Technological Progress Abstract: Traditional sources of growth studies generally assume that the nature of technological progress is Hicks-neutral. However, the nature of technological progress compatible with steady state conditions is Harrod-neutral rather than Hicks-neutral. This study thus investigates sources of growth for Hong-Kong, the Republic of Korea, Singapore and Taiwan using the bounds testing procedure of Pesaran, Shin and Smith (2001) and the autoregressive distributed lag (ARDL) approach of Pesaran and Shin (1999). The robustness of the test results and parameter estimates are also justified by the fully modified ordinary least squares approach of Phillips and Hansen (1990). The results emphasize that the fundamental source of economic growth is technological progress in the short-run. Journal: Journal of Applied Economics Pages: 31-62 Issue: 1 Volume: 17 Year: 2014 Month: 5 X-DOI: 10.1016/S1514-0326(14)60002-7 File-URL: http://hdl.handle.net/10.1016/S1514-0326(14)60002-7 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:recsxx:v:17:y:2014:i:1:p:31-62 Template-Type: ReDIF-Article 1.0 Author-Name: William Gabriel Brafu-Insaidoo Author-X-Name-First: William Gabriel Author-X-Name-Last: Brafu-Insaidoo Author-Name: Nicholas Biekpe Author-X-Name-First: Nicholas Author-X-Name-Last: Biekpe Title: Determinants of Foreign Capital Flows: The Experience of Selected Sub-Saharan African Countries Abstract: This study investigates the major determinants of international capital flows in selected countries in Sub-Saharan Africa. Both theory and the empirical literature suggest that financial liberalization and regionalism lead to higher levels of capital inflows. By using a dynamic panel data analysis, this research tests these hypotheses. The impact of financial liberalization depends on the type of liberalization implemented. Liberalization of the domestic financial system and the domestic equity market has a positive and significant impact on international capital flows. Aggregate capital account liberalization is not significant, but the elimination of multiple exchange rates significantly affects international capital flows, while other components have a more limited impact: the liberalization of inward FDI directly increases foreign direct investments, whilst the deregulation of offshore borrowing directly causes an increase in foreign debt inflows. Regionalism causes an increase in foreign direct investment inflows but does not affect other forms of capital inflows. Journal: Journal of Applied Economics Pages: 63-88 Issue: 1 Volume: 17 Year: 2014 Month: 5 X-DOI: 10.1016/S1514-0326(14)60003-9 File-URL: http://hdl.handle.net/10.1016/S1514-0326(14)60003-9 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:recsxx:v:17:y:2014:i:1:p:63-88 Template-Type: ReDIF-Article 1.0 Author-Name: Julian Cristia Author-X-Name-First: Julian Author-X-Name-Last: Cristia Author-Name: Alejo Czerwonko Author-X-Name-First: Alejo Author-X-Name-Last: Czerwonko Author-Name: Pablo Garofalo Author-X-Name-First: Pablo Author-X-Name-Last: Garofalo Title: Does Technology in Schools Affect Repetition, Dropout and Enrollment? Evidence from Peru Abstract: Many developing countries are allocating significant resources to expand technology access in schools. Whether these investments will translate into measurable educational improvements remains an open question because of the limited existing evidence. This paper contributes to fill this gap exploiting a large-scale public program that increased computer and internet access in secondary public schools in Peru. Rich longitudinal school-level data from 2001 to 2006 is used to implement a differences-in-differences framework. Results indicate no statistically significant effects of increasing technology access in schools on repetition, dropout and initial enrollment. Large sample sizes allow ruling out even modest effects. Journal: Journal of Applied Economics Pages: 89-111 Issue: 1 Volume: 17 Year: 2014 Month: 5 X-DOI: 10.1016/S1514-0326(14)60004-0 File-URL: http://hdl.handle.net/10.1016/S1514-0326(14)60004-0 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:recsxx:v:17:y:2014:i:1:p:89-111 Template-Type: ReDIF-Article 1.0 Author-Name: Kazunobu Hayakawa Author-X-Name-First: Kazunobu Author-X-Name-Last: Hayakawa Author-Name: Fukunari Kimura Author-X-Name-First: Fukunari Author-X-Name-Last: Kimura Author-Name: Kaoru Nabeshima Author-X-Name-First: Kaoru Author-X-Name-Last: Nabeshima Title: Nonconventional Provisions in Regional Trade Agreements: Do They Enhance International Trade? Abstract: The scope of recent regional trade agreements (RTAs) has become much broader than before by the inclusion of nonconventional provisions such as those on competition policy and intellectual property rights protection. This paper empirically examines the extent to which those nonconventional provisions in RTAs enhance international trade between RTA member countries by estimating a gravity equation with detailed information on the contents of RTAs. We find that the provision for competition policy has the largest effect on international trade, followed by the government procurement provision. These two provisions have significant and positive impacts on intensive margin intensive margin (trade values per variety) and extensive margin (number of varieties traded) Journal: Journal of Applied Economics Pages: 113-137 Issue: 1 Volume: 17 Year: 2014 Month: 5 X-DOI: 10.1016/S1514-0326(14)60005-2 File-URL: http://hdl.handle.net/10.1016/S1514-0326(14)60005-2 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:recsxx:v:17:y:2014:i:1:p:113-137 Template-Type: ReDIF-Article 1.0 Author-Name: Peter J. Phillips Author-X-Name-First: Peter J. Author-X-Name-Last: Phillips Author-Name: Gabriela Pohl Author-X-Name-First: Gabriela Author-X-Name-Last: Pohl Title: Prospect Theory and Terrorist Choice Abstract: We study terrorist choice from the perspective of economics and psychology. Using RAND-MIPT data about the injuries and fatalities inflicted by different terrorist attack methods, we compute sets of preference orderings over the attack methods using prospect theory. This incorporates reference point dependence, risk seeking in the domain of losses, risk aversion in the domain of gains, non-linear preferences and loss aversion into an analysis of terrorist behaviour. We pay particular attention to the importance of a reference point in the context of ‘copycat’ acts of violence and the influence of loss aversion on the choice of attack method. Our results provide an indication of the types of attack methods that would be chosen by a terrorist whose decision-making process is described by prospect theory and who might, for example, seek to emulate or surpass the actions of a predecessor. Journal: Journal of Applied Economics Pages: 139-160 Issue: 1 Volume: 17 Year: 2014 Month: 5 X-DOI: 10.1016/S1514-0326(14)60006-4 File-URL: http://hdl.handle.net/10.1016/S1514-0326(14)60006-4 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:recsxx:v:17:y:2014:i:1:p:139-160 Template-Type: ReDIF-Article 1.0 Author-Name: Cecilia Rumi Author-X-Name-First: Cecilia Author-X-Name-Last: Rumi Title: National Electoral Cycles in Transfers to Subnational Jurisdictions. Evidence from Argentina Abstract: The political budget cycle literature studies the periodic fluctuations in governments' fiscal policies induced by the cyclicality of electoral processes, but the effects of elections on the distribution of federal resources among subnational governments has not been thoroughly investigated. This paper inquires into the presence of electoral cycles in federal government transfers, presenting evidence on how the Argentine national government has allocated, since the reestablishment of democracy in 1983, two different types of discretional transfers — cash and in-kind — among the subnational governments. There is an electoral manipulation of total transfers that favors subnational governments that are politically affiliated to the national government; cash transfers show that same pattern. However, in-kind transfers, which are more traceable to the national government than cash transfers, increase in non-affiliated subnational jurisdictions during election years. Journal: Journal of Applied Economics Pages: 161-178 Issue: 1 Volume: 17 Year: 2014 Month: 5 X-DOI: 10.1016/S1514-0326(14)60007-6 File-URL: http://hdl.handle.net/10.1016/S1514-0326(14)60007-6 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:recsxx:v:17:y:2014:i:1:p:161-178 Template-Type: ReDIF-Article 1.0 Author-Name: Bedri Kamil Onur Taş Author-X-Name-First: Bedri Kamil Onur Author-X-Name-Last: Taş Author-Name: Hüseyin Ekrem Cunedioğlu Author-X-Name-First: Hüseyin Ekrem Author-X-Name-Last: Cunedioğlu Title: How Can Recessions Be Brought to an End? Effects of Macroeconomic Policy Actions on Durations of Recessions Abstract: This paper analyzes how effective macroeconomic policy actions are in ending recessions. We also investigate which structural factors help the country to experience shorter recessions. We implement survival regression analysis and conclude that expansionary monetary policy significantly decreases durations of recessions whereas fixing the exchange rate does not have an effect on the durations of recessions. Expansionary fiscal policy has undesired effects and decreases the probability that recession will end, thus increasing the durations of recessions. The analysis of country specific factors indicates that emerging countries experience shorter recessions. Recessions in countries with higher trade openness last significantly longer. Financial openness and institutional quality do not have significant effects of recession durations. The empirical analysis takes into account alternative probability distributions and endogeneity of policy actions. Journal: Journal of Applied Economics Pages: 179-198 Issue: 1 Volume: 17 Year: 2014 Month: 5 X-DOI: 10.1016/S1514-0326(14)60008-8 File-URL: http://hdl.handle.net/10.1016/S1514-0326(14)60008-8 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:recsxx:v:17:y:2014:i:1:p:179-198 Template-Type: ReDIF-Article 1.0 Author-Name: Maurizio Conti Author-X-Name-First: Maurizio Author-X-Name-Last: Conti Title: The Introduction of the Euro and Economic Growth: Some Panel Data Evidence Abstract: We use a difference in difference estimation framework to analyse the effects of the adoption of the euro on the level of per capita GDP for a sample of seventeen European countries (the EU15 plus Norway and Iceland) over the period 1990–2010. We find that the adoption of the euro may have raised the level of per capita GDP (and labour productivity) by about 4 percent. There is also some evidence that the impact of the euro has been smaller in the case of countries with a high debt-to-GDP ratio in 1999 when the euro was introduced. Results are robust to controlling for country fixed effects, time trends and to estimation strategies that control for cross-country parameter heterogeneity. Journal: Journal of Applied Economics Pages: 199-211 Issue: 2 Volume: 17 Year: 2014 Month: 11 X-DOI: 10.1016/S1514-0326(14)60009-X File-URL: http://hdl.handle.net/10.1016/S1514-0326(14)60009-X File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:recsxx:v:17:y:2014:i:2:p:199-211 Template-Type: ReDIF-Article 1.0 Author-Name: Mohammad Amin Author-X-Name-First: Mohammad Author-X-Name-Last: Amin Author-Name: Asif Islam Author-X-Name-First: Asif Author-X-Name-Last: Islam Title: Are There More Female Managers in the Retail Sector? Evidence from Survey Data in Developing Countries Abstract: Using firm-level data for 87 developing countries, the paper analyzes how the likelihood of a firm having female vs. male top manager varies across sectors. The service sector is often considered to be more favorable towards women compared with men vis-à-vis the manufacturing sector. While our exploration of the data confirm a significantly higher presence of female managers in services vs. manufacturing, the finding is entirely driven by the retail firms with little contribution from other service sectors such as wholesale, construction and other services. We also find that the greater presence of female managers in the retail sector vs. manufacturing is much higher among the relatively small firms and firms located in the relatively small cities. These findings could serve as useful inputs for the design of optimal policy measures aimed at promoting gender equality in a country. Journal: Journal of Applied Economics Pages: 213-228 Issue: 2 Volume: 17 Year: 2014 Month: 11 X-DOI: 10.1016/S1514-0326(14)60010-6 File-URL: http://hdl.handle.net/10.1016/S1514-0326(14)60010-6 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:recsxx:v:17:y:2014:i:2:p:213-228 Template-Type: ReDIF-Article 1.0 Author-Name: Mario Catalán Author-X-Name-First: Mario Author-X-Name-Last: Catalán Author-Name: Eduardo Ganapolsky Author-X-Name-First: Eduardo Author-X-Name-Last: Ganapolsky Title: On the Optimality of Bank Capital Requirement Policy in a Macroeconomic Framework Abstract: An increasingly widespread “macro-prudential” view holds that bank capital requirements should be loosened during recessions and tightened during expansions to avoid excessive credit and output swings. We present a dynamic general equilibrium framework that accounts for the effects of capital requirement policies on the saving decisions of households, and, through this channel, on bank loans and output. We evaluate optimal capital requirement policy in the presence of loan write-offs (loan supply) and productivity (loan demand) shocks. We show that capital requirements should be reduced in response to unanticipated loan write-offs. We also show that capital requirements should be tightened in anticipation of future declines in productivity, and loosened at the onset of recessions. We conclude that macro-prudential capital requirement policies can be optimal from a welfare standpoint, but they can also generate output and credit booms through general equilibrium effects. Journal: Journal of Applied Economics Pages: 229-255 Issue: 2 Volume: 17 Year: 2014 Month: 11 X-DOI: 10.1016/S1514-0326(14)60011-8 File-URL: http://hdl.handle.net/10.1016/S1514-0326(14)60011-8 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:recsxx:v:17:y:2014:i:2:p:229-255 Template-Type: ReDIF-Article 1.0 Author-Name: Marc Hansen Author-X-Name-First: Marc Author-X-Name-Last: Hansen Author-Name: Helmut Herwartz Author-X-Name-First: Helmut Author-X-Name-Last: Herwartz Author-Name: Malte Rengel Author-X-Name-First: Malte Author-X-Name-Last: Rengel Title: State Dependence of Aggregated Risk Aversion: Evidence for the German Stock Market Abstract: We propose a dynamic generalization of the Capital Asset Pricing Model (CAPM) that allows for a time-varying market price of risk (MPR) reflecting both cross market dependence and future investment opportunities. The realized volatility approach is employed to determine market risk. The advocated state space model takes autoregressive dynamics of the MPR and predetermined state variables into account. For the case of the DAX, the major German stock index, the empirical analysis strongly underpins time variation of risk compensation. The MPR is conditioned upon the EURIBOR, a national and an international term spread, returns of the Dow-Jones-Industrial-Average-Index (DOW), and a dummy variable hinting at excess activity of noise traders. Moreover, we document forecasting results based on a short horizon trading strategy. The proposed model is characterized by strong market timing ability. Journal: Journal of Applied Economics Pages: 257-281 Issue: 2 Volume: 17 Year: 2014 Month: 11 X-DOI: 10.1016/S1514-0326(14)60012-X File-URL: http://hdl.handle.net/10.1016/S1514-0326(14)60012-X File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:recsxx:v:17:y:2014:i:2:p:257-281 Template-Type: ReDIF-Article 1.0 Author-Name: Rebeca Jiménez-Rodríguez Author-X-Name-First: Rebeca Author-X-Name-Last: Jiménez-Rodríguez Author-Name: Amalia Morales-Zumaquero Author-X-Name-First: Amalia Author-X-Name-Last: Morales-Zumaquero Title: Nominal and Real Exchange Rate Co-Movements Abstract: This paper investigates the existence of common movements between nominal and real exchange rates across different countries in three regions - North America, Western Europe, and Central and Eastern Europe - by using the multi-factor model. It also examines the role of macroeconomic fundamentals (i.e., prices, money and output) in order to explain the variance of the exchange rate global factor. The findings suggest the existence of co-movements among exchange rates. The exchange rate global factor seems to play a central role in explaining exchange rate variability in Western Europe, whereas regional and country-specific factors are the most important ones in North America and Central and Eastern Europe, respectively. Finally, the paper shows empirical evidence in favour of the connection between exchange rate global factor variability and macroeconomic fundamentals. Moreover, the importance of fundamentals has increased in the recent global crisis. Journal: Journal of Applied Economics Pages: 283-300 Issue: 2 Volume: 17 Year: 2014 Month: 11 X-DOI: 10.1016/S1514-0326(14)60013-1 File-URL: http://hdl.handle.net/10.1016/S1514-0326(14)60013-1 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:recsxx:v:17:y:2014:i:2:p:283-300 Template-Type: ReDIF-Article 1.0 Author-Name: Adnan Kasman Author-X-Name-First: Adnan Author-X-Name-Last: Kasman Author-Name: Oscar Carvallo Author-X-Name-First: Oscar Author-X-Name-Last: Carvallo Title: Financial Stability, Competition and Efficiency in Latin American and Caribbean Banking Abstract: Using a sample of 272 commercial banks from fifteen Latin American countries for the period 2001–2008, we estimate cost and revenue efficiency scores, financial stability scores (Z-scores) and competition scores (Lerner indexes and Boone indicators) at the bank level. The Granger causality technique in dynamic panels is used to establish dynamic relationships among these variables. We find evidence that strongly supports the “quite life” hypothesis, while we also find partial support for causality running in the opposite direction. Moreover, the results suggest that more competition is conducive to greater financial stability (when the revenue efficiency score is used). Banks seem to achieve market power through better efficiency, leverage and earning ability. As size and complexity increase, however, agency problems and increasing risk-taking might start gaining momentum, generating inefficiency and fragility. Journal: Journal of Applied Economics Pages: 301-324 Issue: 2 Volume: 17 Year: 2014 Month: 11 X-DOI: 10.1016/S1514-0326(14)60014-3 File-URL: http://hdl.handle.net/10.1016/S1514-0326(14)60014-3 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:recsxx:v:17:y:2014:i:2:p:301-324 Template-Type: ReDIF-Article 1.0 Author-Name: Erling Røed Larsen Author-X-Name-First: Erling Røed Author-X-Name-Last: Larsen Title: The Engel Curve of Owner-Occupied Housing Consumption Abstract: Housing is a major component of aggregate demand, and understanding how the demand for housing co-varies with income is useful for analysis and policy. While estimating housing consumption for tenants amounts to observing rents, estimating housing consumption for owner-occupiers is challenging because it is not directly observable and interest payments vary with re-paid principals. In order to examine the housing consumption for owner- occupiers, this article combines micro data sets on income and imputed rents for owner- occupiers based on home attributes from a consumer expenditure survey and monthly rents in a rental survey. This allows estimation of an Engel curve of owner-occupied consumption, both parametrically and non-parametrically. Regression results demonstrate that the income share of owner-occupied housing consumption decreases with income, while the Engel elasticity computed at the mean is 0.32 and increasing in income. Journal: Journal of Applied Economics Pages: 325-352 Issue: 2 Volume: 17 Year: 2014 Month: 11 X-DOI: 10.1016/S1514-0326(14)60015-5 File-URL: http://hdl.handle.net/10.1016/S1514-0326(14)60015-5 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:recsxx:v:17:y:2014:i:2:p:325-352 Template-Type: ReDIF-Article 1.0 Author-Name: Peter A. Prazmowski Author-X-Name-First: Peter A. Author-X-Name-Last: Prazmowski Author-Name: José R. Sánchez-Fung Author-X-Name-First: José R. Author-X-Name-Last: Sánchez-Fung Title: Assessing the Impact of Different Nominal Anchors on the Credibility of Stabilisation Programmes Abstract: The paper compares the impact of announcing exchange rate-based versus money-based stabilisation programmes in a time series cross-section of countries. The analysis finds that, on average, the effect of announcing exchange rate-based programmes is more credible, in terms of reducing inflation inertia, than the outcome associated with money-based programmes. The econometric analysis is robust to augmenting the benchmark inflation model with measures of the size of IMF-programme loans and the timing of government elections. The paper also finds that the gap between the magnitudes of the impacts from pursuing the different strategies has been falling since the 1970s. The trend seems compatible with the much debated Great Moderation in advanced economies and similar developments in economies around the world. Journal: Journal of Applied Economics Pages: 353-372 Issue: 2 Volume: 17 Year: 2014 Month: 11 X-DOI: 10.1016/S1514-0326(14)60016-7 File-URL: http://hdl.handle.net/10.1016/S1514-0326(14)60016-7 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:recsxx:v:17:y:2014:i:2:p:353-372 Template-Type: ReDIF-Article 1.0 Author-Name: Ariel M. Viale Author-X-Name-First: Ariel M. Author-X-Name-Last: Viale Author-Name: David A. Bessler Author-X-Name-First: David A. Author-X-Name-Last: Bessler Author-Name: James W. Kolari Author-X-Name-First: James W. Author-X-Name-Last: Kolari Title: On the Structure of Financial Contagion: Econometric Tests and Mercosur Evidence Abstract: We introduce a flexible copula-based semi-parametric test of financial contagion that is capable of capturing structural shifts in the transmission channel of shocks across a network of financial markets beyond the increase in the intensity of time-varying dependence. We illustrate the capabilities of the proposed test using returns of stock, money, sovereign debt, and foreign exchange markets of seven Latin-American countries, and test for the presence of pure contagion effects for each major financial crisis that affected the Mercosur region between 1994 and 2001. Besides strong evidence in favor of time-varying market interdependence, we cannot rule out the presence of pure contagion effects in the stock market transmission channel associated with the Mexican, Asian, and Russian financial crises. Journal: Journal of Applied Economics Pages: 373-400 Issue: 2 Volume: 17 Year: 2014 Month: 11 X-DOI: 10.1016/S1514-0326(14)60017-9 File-URL: http://hdl.handle.net/10.1016/S1514-0326(14)60017-9 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:recsxx:v:17:y:2014:i:2:p:373-400 Template-Type: ReDIF-Article 1.0 Author-Name: Mauricio Bugarin Author-X-Name-First: Mauricio Author-X-Name-Last: Bugarin Author-Name: Adriana Portugal Author-X-Name-First: Adriana Author-X-Name-Last: Portugal Title: Should Voting Be Mandatory? the Effect of Compulsory Voting Rules on Candidates' Political Platforms Abstract: This article analyzes the effect of political participation in the electoral process on parties' announced platforms in a model of electoral competition. The model highlights the existence of a class bias that favors groups of voters with higher turnout. There exists empirical evidence that wealthier economic classes present higher levels of political participation. In that situation, the model suggests that compulsory voting may be a useful mechanism to reduce the bias in favor of the higher-turnout class. Journal: Journal of Applied Economics Pages: 1-29 Issue: 1 Volume: 18 Year: 2015 Month: 5 X-DOI: 10.1016/S1514-0326(15)30001-5 File-URL: http://hdl.handle.net/10.1016/S1514-0326(15)30001-5 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:recsxx:v:18:y:2015:i:1:p:1-29 Template-Type: ReDIF-Article 1.0 Author-Name: María Laura Alzúa Author-X-Name-First: María Laura Author-X-Name-Last: Alzúa Author-Name: Leonardo Gasparini Author-X-Name-First: Leonardo Author-X-Name-Last: Gasparini Author-Name: Francisco Haimovich Author-X-Name-First: Francisco Author-X-Name-Last: Haimovich Title: Education Reform and Labor Market Outcomes: The Case of Argentina's Ley Federal De Educación Abstract: In the nineties Argentina implemented a large education reform (Ley Federal de Educación - LFE) that mainly implied the extension of compulsory education in two additional years. The timing in the implementation substantially varied across provinces, providing a source of identification for unraveling the causal effect of the reform. The estimations from difference-in-difference models suggest that the LFE had a positive impact on years of education and the probability of high school graduation. The impact on labor market outcomes—employment, hours of work and wages—was positive for the non-poor youths, but almost null for the poor. Journal: Journal of Applied Economics Pages: 21-43 Issue: 1 Volume: 18 Year: 2015 Month: 5 X-DOI: 10.1016/S1514-0326(15)30002-7 File-URL: http://hdl.handle.net/10.1016/S1514-0326(15)30002-7 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:recsxx:v:18:y:2015:i:1:p:21-43 Template-Type: ReDIF-Article 1.0 Author-Name: Oscar Bajo-Rubio Author-X-Name-First: Oscar Author-X-Name-Last: Bajo-Rubio Author-Name: Antonio G. Gómez-Plana Author-X-Name-First: Antonio G. Author-X-Name-Last: Gómez-Plana Title: Alternative Strategies to Reduce Public Deficits: Taxes vs. Spending Abstract: We examine the effects of several alternative measures intended to reduce government deficits for the case of Spain, distinguishing between those acting through taxes and through spending. The Spanish case is relevant as an example of front-loaded fiscal adjustment that has led to a large GDP fall, where (unlike the cases of Greece, Ireland and Portugal) the authorities were able to choose the composition of the adjustment measures. The empirical methodology is based on a computable general equilibrium model. All the simulated policies lead to a decrease in the levels of output and employment, and to a higher unemployment rate. The greatest contractionary effects appear in the case of an increase in the income tax, followed by spending cuts, especially in public education; in contrast, the contractionary effect is weaker for indirect tax increases. While income distribution for labour worsens with spending cuts, it slightly improves with tax increases. Journal: Journal of Applied Economics Pages: 45-70 Issue: 1 Volume: 18 Year: 2015 Month: 5 X-DOI: 10.1016/S1514-0326(15)30003-9 File-URL: http://hdl.handle.net/10.1016/S1514-0326(15)30003-9 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:recsxx:v:18:y:2015:i:1:p:45-70 Template-Type: ReDIF-Article 1.0 Author-Name: Emanuele Baldacci Author-X-Name-First: Emanuele Author-X-Name-Last: Baldacci Author-Name: Sanjeev Gupta Author-X-Name-First: Sanjeev Author-X-Name-Last: Gupta Author-Name: Carlos Mulas-Granados Author-X-Name-First: Carlos Author-X-Name-Last: Mulas-Granados Title: Debt Reduction, Fiscal Adjustment, and Growth in Credit-Constrained Economies Abstract: This paper assesses the effects of fiscal consolidations associated with public debt reduction on medium-term output growth during periods of private debt deleveraging. The analysis covers 107 countries and 79 episodes of public debt reduction driven by discretionary fiscal adjustments during the 1980–2012 period. It shows that expenditure-based, front-loaded fiscal adjustments can dampen growth when there are credit supply restrictions. Instead, fiscal adjustments that are gradual and rely on a mix of revenue and expenditure measures can support output expansion, while reducing public debt. In this context, protecting public investment is critical for medium-term growth, as is the implementation of supply-side, productivity-enhancing reforms. Journal: Journal of Applied Economics Pages: 71-97 Issue: 1 Volume: 18 Year: 2015 Month: 5 X-DOI: 10.1016/S1514-0326(15)30004-0 File-URL: http://hdl.handle.net/10.1016/S1514-0326(15)30004-0 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:recsxx:v:18:y:2015:i:1:p:71-97 Template-Type: ReDIF-Article 1.0 Author-Name: Magda Kandil Author-X-Name-First: Magda Author-X-Name-Last: Kandil Title: The Adverse Effects of Real Exchange Rate Variability in Latin America and the Caribbean Abstract: The paper examines the pros and cons of anticipated appreciation and the asymmetric effects of short-term exchange rate fluctuations in a sample of countries in Latin America and the Caribbean. On the demand side, exchange rate depreciation increases competitiveness and export growth, expanding output growth. On the supply side, depreciation increases the cost of imported inputs, increasing output capacity constraints and accelerating price inflation. The time-series evidence indicates that output expansion (contraction) and price deflation (inflation) predominate with anticipated currency appreciation (depreciation). The cross-country results show that exchange rate variability exacerbates the variability of economic activity across countries. Short-term fluctuations of the exchange rate may reflect the adverse effects of unanticipated currency fluctuations. Therefore, more flexibility towards aligning the real effective exchange rate with the underlying fundamentals could help mitigate the adverse effects of higher cost of imports and loss of competitiveness on real growth, and ease inflationary pressures. Journal: Journal of Applied Economics Pages: 99-120 Issue: 1 Volume: 18 Year: 2015 Month: 5 X-DOI: 10.1016/S1514-0326(15)30005-2 File-URL: http://hdl.handle.net/10.1016/S1514-0326(15)30005-2 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:recsxx:v:18:y:2015:i:1:p:99-120 Template-Type: ReDIF-Article 1.0 Author-Name: Taisuke Nakata Author-X-Name-First: Taisuke Author-X-Name-Last: Nakata Author-Name: Christopher Tonetti Author-X-Name-First: Christopher Author-X-Name-Last: Tonetti Title: Small Sample Properties of Bayesian Estimators of Labor Income Processes Abstract: There exists an extensive literature estimating idiosyncratic labor income processes. While a wide variety of models are estimated, GMM estimators are almost always used. We examine the validity of using likelihood based estimation in this context by comparing the small sample properties of a Bayesian estimator to those of GMM. Our baseline studies estimators of a commonly used simple earnings process. We extend our analysis to more complex environments, allowing for real world phenomena such as time varying and heterogeneous parameters, missing data, unbalanced panels, and non-normal errors. The Bayesian estimators are demonstrated to have favorable bias and efficiency properties. Journal: Journal of Applied Economics Pages: 121-148 Issue: 1 Volume: 18 Year: 2015 Month: 5 X-DOI: 10.1016/S1514-0326(15)30006-4 File-URL: http://hdl.handle.net/10.1016/S1514-0326(15)30006-4 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:recsxx:v:18:y:2015:i:1:p:121-148 Template-Type: ReDIF-Article 1.0 Author-Name: Esteban Sanromá Author-X-Name-First: Esteban Author-X-Name-Last: Sanromá Author-Name: Raúl Ramos Author-X-Name-First: Raúl Author-X-Name-Last: Ramos Author-Name: Hipólito Simón Author-X-Name-First: Hipólito Author-X-Name-Last: Simón Title: How Relevant Is the Origin of Human Capital for Immigrant Wages? Evidence from Spain Abstract: The objective of this article is to analyse the role played by the different components of human capital in the wage determination of immigrants in the Spanish labour market. Using microdata from the Encuesta Nacional de Inmigrantes, we find that human capital of immigrants acquired in Spain presents higher returns than human capital obtained in home countries, reflecting the limited international transferability of the latter. This result is reinforced by the strong heterogeneity observed in wage returns to different kinds of human capital across immigrants from different origins and, in particular, by the fact that immigrants with the higher returns to human capital acquired in their home countries are those coming from other developed countries and Latin America, the two regions more similar to Spain in terms of development and/or culture. Journal: Journal of Applied Economics Pages: 149-172 Issue: 1 Volume: 18 Year: 2015 Month: 5 X-DOI: 10.1016/S1514-0326(15)30007-6 File-URL: http://hdl.handle.net/10.1016/S1514-0326(15)30007-6 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:recsxx:v:18:y:2015:i:1:p:149-172 Template-Type: ReDIF-Article 1.0 Author-Name: Pei-Chun Lai Author-X-Name-First: Pei-Chun Author-X-Name-Last: Lai Author-Name: David A. Bessler Author-X-Name-First: David A. Author-X-Name-Last: Bessler Title: Price Discovery Between Carbonated Soft Drink Manufacturers and Retailers: A Disaggregate Analysis with Pc and Lingam Algorithms Abstract: This paper considers the use of two machine learning algorithms to identify the causal relationships among retail prices, manufacturer prices, and number of packages sold. The two algorithms are PC and Linear Non-Gaussian Acyclic Models (LiNGAM). The dataset studied comprises scanner data collected from the retail sales of carbonated soft drinks in the Chicago area. The PC algorithm is not able to assign direction among retail price, manufacturer price and quantity sold, whereas the LiNGAM algorithm is able to decide in every case, i.e., retail price leads manufacturer price and quantity sold. Journal: Journal of Applied Economics Pages: 173-197 Issue: 1 Volume: 18 Year: 2015 Month: 5 X-DOI: 10.1016/S1514-0326(15)30008-8 File-URL: http://hdl.handle.net/10.1016/S1514-0326(15)30008-8 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:recsxx:v:18:y:2015:i:1:p:173-197 Template-Type: ReDIF-Article 1.0 Author-Name: Diego Winkelried Author-X-Name-First: Diego Author-X-Name-Last: Winkelried Author-Name: José Enrique Gutierrez Author-X-Name-First: José Enrique Author-X-Name-Last: Gutierrez Title: Regional Inflation Dynamics and Inflation Targeting. The Case of Peru Abstract: The Central Reserve Bank of Peru (BCRP) has been targeting inflation for more than a decade, using Lima's inflation as the operational measure. An alternative indicator is countrywide inflation, whose quality and real-time availability have improved substantially. Given these competing measures, two policy questions arise: What have been the implications for national inflation of targeting Lima's inflation? Would shifting to a national aggregate significantly affect the workings of monetary policy in Peru? To answer these questions, we estimate a large, but parsimonious, error correction model and investigate how regional shocks propagate across the country. The results indicate that a shock to Lima's inflation is transmitted fast and strongly elsewhere in the country, whereas the effects of shocks in other regions are limited and short-lived. This constitutes supporting evidence to the view that by targeting Lima's inflation, the BCRP has effectively, albeit indirectly, targeted national inflation. Journal: Journal of Applied Economics Pages: 199-224 Issue: 2 Volume: 18 Year: 2015 Month: 11 X-DOI: 10.1016/S1514-0326(15)30009-X File-URL: http://hdl.handle.net/10.1016/S1514-0326(15)30009-X File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:recsxx:v:18:y:2015:i:2:p:199-224 Template-Type: ReDIF-Article 1.0 Author-Name: Ahdi Noomen Ajmi Author-X-Name-First: Ahdi Noomen Author-X-Name-Last: Ajmi Author-Name: Goodness C. Aye Author-X-Name-First: Goodness C. Author-X-Name-Last: Aye Author-Name: Mehmet Balcilar Author-X-Name-First: Mehmet Author-X-Name-Last: Balcilar Author-Name: Ghassen El Montasser Author-X-Name-First: Ghassen Author-X-Name-Last: El Montasser Author-Name: Rangan Gupta Author-X-Name-First: Rangan Author-X-Name-Last: Gupta Title: Causality Between Us Economic Policy and Equity Market Uncertainties: Evidence from Linear and Nonlinear Tests Abstract: This paper examines the causal relationship between economic policy uncertainty (EPU) and equity market uncertainty (EMU) in the US. We use daily data on the newly developed indexes by Baker et al. (2013a) covering 1985:01:01 to 2013:06:14. Results from the linear causality tests indicate strong bidirectional causality. However, the parameters stability tests show strong evidence of short-run parameter instability, thus invalidating any conclusion from the full sample linear estimations. Therefore we turn to nonlinear tests and observe a stronger predictive power from EMU to EPU than from EPU to EMU. Using sub-sample bootstrap rolling window causality tests to fully account for the existence of structural breaks, we find evidence that EPU can help predict the movements in EMU only around 1993, 2004 and, 2006. However, we find strong evidence that EMU can help predict the movements in EPU throughout the sample period barring around 1998, 2003 and 2005. Journal: Journal of Applied Economics Pages: 225-246 Issue: 2 Volume: 18 Year: 2015 Month: 11 X-DOI: 10.1016/S1514-0326(15)30010-6 File-URL: http://hdl.handle.net/10.1016/S1514-0326(15)30010-6 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:recsxx:v:18:y:2015:i:2:p:225-246 Template-Type: ReDIF-Article 1.0 Author-Name: Luca De Angelis Author-X-Name-First: Luca Author-X-Name-Last: De Angelis Author-Name: Attilio Gardini Author-X-Name-First: Attilio Author-X-Name-Last: Gardini Title: Disequilibria and Contagion in Financial Markets: Evidence from a New Test Abstract: This paper provides an analysis of contagion by measuring disequilibria in risk premium dynamics. We propose to test financial contagion using an econometric procedure where we first estimate the preference parameters of the consumption-based asset pricing model (C-CAPM) to measure the equilibrium risk premia in different countries and then we consider the difference between empirical and equilibrium risk premia to test cross-country disequilibrium episodes due to contagion. Disequilibrium in financial markets is modeled by the multivariate DCC-GARCH model including a deterministic crisis variable. Our approach allows to identify the disequilibria generated by increases in volatility that is not explained by fundamentals but is endogenous to financial markets and to evaluate the existence of contagion effects defined by exogenous shifts in cross-country return correlations during crisis periods. Our results show evidence of contagion from the U.S. to U.K., Japan, France, and Italy during the crisis started in 2007–08. Journal: Journal of Applied Economics Pages: 247-265 Issue: 2 Volume: 18 Year: 2015 Month: 11 X-DOI: 10.1016/S1514-0326(15)30011-8 File-URL: http://hdl.handle.net/10.1016/S1514-0326(15)30011-8 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:recsxx:v:18:y:2015:i:2:p:247-265 Template-Type: ReDIF-Article 1.0 Author-Name: Mercedes Haga Author-X-Name-First: Mercedes Author-X-Name-Last: Haga Title: On Central Bank Independence and Political Cycles Abstract: Using a large panel data set, I find that political budget cycles are significantly smaller in countries with de facto central bank independence (CBI). To explain this result and its consequences in the economy, I develop an extended New Keynesian model that incorporates a political economy model of career concerns. I find that CBI mitigates the incumbent's fiscal decisions. Intuitively, since increases in the interest rate have a negative effect on the reelection probability due to consumption postponement, this discourages expansionary fiscal policies. Journal: Journal of Applied Economics Pages: 267-295 Issue: 2 Volume: 18 Year: 2015 Month: 11 X-DOI: 10.1016/S1514-0326(15)30012-X File-URL: http://hdl.handle.net/10.1016/S1514-0326(15)30012-X File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:recsxx:v:18:y:2015:i:2:p:267-295 Template-Type: ReDIF-Article 1.0 Author-Name: Nils Hesse Author-X-Name-First: Nils Author-X-Name-Last: Hesse Author-Name: María Fernanda Rivas Author-X-Name-First: María Fernanda Author-X-Name-Last: Rivas Title: Does Managerial Compensation Affect Workers' Effort? Abstract: We explore in a two-level gift-exchange experiment whether the managerial compensation influences workers' effort decisions. Firstly, we find that there exists a strong positive relation between own wage and effort levels for the workers, while the managers' effort reaches a maximum for intermediate wages and decreases for very high wages. Secondly, our data suggests that the managerial compensations are significantly negatively correlated with the workers' effort choices: the higher the manager's wage, the lower the effort level chosen by the workers. Journal: Journal of Applied Economics Pages: 297-323 Issue: 2 Volume: 18 Year: 2015 Month: 11 X-DOI: 10.1016/S1514-0326(15)30013-1 File-URL: http://hdl.handle.net/10.1016/S1514-0326(15)30013-1 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:recsxx:v:18:y:2015:i:2:p:297-323 Template-Type: ReDIF-Article 1.0 Author-Name: Anna Huysse-Gaytandjieva Author-X-Name-First: Anna Author-X-Name-Last: Huysse-Gaytandjieva Author-Name: Wim Groot Author-X-Name-First: Wim Author-X-Name-Last: Groot Author-Name: Milena Pavlova Author-X-Name-First: Milena Author-X-Name-Last: Pavlova Author-Name: Catelijne Joling Author-X-Name-First: Catelijne Author-X-Name-Last: Joling Title: Low Self-Esteem Predicts Future Unemployment Abstract: The paper analyses whether people with low self-esteem are more likely to become unemployed than those with high self-esteem, and whether gender plays a moderating role in the relationship between self-esteem and becoming unemployed. The outcomes of a piecewise constant exponential model confirms our assumptions. Low self-esteem is highly significant in predicting the probability of becoming unemployed for women but not for men. However, low self-esteem has an effect on the chance of becoming unemployed regardless of gender for people in higher skills occupations. Journal: Journal of Applied Economics Pages: 325-346 Issue: 2 Volume: 18 Year: 2015 Month: 11 X-DOI: 10.1016/S1514-0326(15)30014-3 File-URL: http://hdl.handle.net/10.1016/S1514-0326(15)30014-3 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:recsxx:v:18:y:2015:i:2:p:325-346 Template-Type: ReDIF-Article 1.0 Author-Name: Mostafa Tahmasebi Author-X-Name-First: Mostafa Author-X-Name-Last: Tahmasebi Author-Name: Michel Rocca Author-X-Name-First: Michel Author-X-Name-Last: Rocca Title: A Fuzzy Model to Estimate the Size of the Underground Economy Applying Structural Equation Modeling Abstract: The underground economy is an ambiguous concept: the literature presents a wide variety of definitions about it; the activities it encompasses are mobile and dynamic; and its structure has displayed several variations as time goes by. The present work aims to estimate a fuzzy number (a possible interval) for the size of the underground economy by applying structural equation modelling with fuzzy data. The proposed fuzzy model applied here involves two main steps, changing the structural equation model to a reduced form, then making a nonlinear model from reduced-form equations applying fuzzy linear regression concepts and solutions. Finally, the time series of the underground economy are obtained using the GAMS mathematical optimization software and compared with the findings of two MIMIC models and a microeconomic method. Journal: Journal of Applied Economics Pages: 347-368 Issue: 2 Volume: 18 Year: 2015 Month: 11 X-DOI: 10.1016/S1514-0326(15)30015-5 File-URL: http://hdl.handle.net/10.1016/S1514-0326(15)30015-5 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:recsxx:v:18:y:2015:i:2:p:347-368 Template-Type: ReDIF-Article 1.0 Author-Name: Rodrigo Zarazaga Author-X-Name-First: Rodrigo Author-X-Name-Last: Zarazaga Title: Plugged in Brokers: A Model of Vote-Buying and Access to Resources Abstract: Available formal models portray brokers as exploitative agents who buy their clients at the minimum possible price; that is, at voters' reservation values. If this were the case then we should expect that poor voters be indifferent as to which broker they deal with, since they could expect the same minimum price from any broker. On the contrary, evidence of long-term broker-client relationships suggests that clients do care about who their broker is. The formal model in this paper, in correspondence with evidence drawn from 120 interviews with brokers, illuminates the reason why clients care about who their brokers are. Brokers are uncertain about voters' reservation values. Due to this uncertainty, the more resources brokers obtain, the more they transfer to clients to assure their votes. Given this uncertainty over reservation values, voters benefit from brokers' abilities to access more resources. These dynamics account for party machines' frequent electoral hegemony. Journal: Journal of Applied Economics Pages: 369-390 Issue: 2 Volume: 18 Year: 2015 Month: 11 X-DOI: 10.1016/S1514-0326(15)30016-7 File-URL: http://hdl.handle.net/10.1016/S1514-0326(15)30016-7 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:recsxx:v:18:y:2015:i:2:p:369-390 Template-Type: ReDIF-Article 1.0 Author-Name: Eugenio Rojas Author-X-Name-First: Eugenio Author-X-Name-Last: Rojas Author-Name: Rafael Sánchez Author-X-Name-First: Rafael Author-X-Name-Last: Sánchez Author-Name: Mauricio G. Villena Author-X-Name-First: Mauricio G. Author-X-Name-Last: Villena Title: The Unintended Consequences of Childcare Regulation: Evidence from a Regression Discontinuity Design Abstract: In several countries governments fund childcare provision but in many others it is privately funded as labor regulation mandates that firms have to provide childcare services. For this later case, there is no empirical evidence on the effects generated by the financial burden of childcare provision. In particular, there is no evidence on who effectively pays (firms or employees) and how (e.g., via wages and/or employment). Our hypothesis is that in imperfect labor markets, firms will transfer childcare cost on to their workers. To analyze this, we exploit a discontinuity in childcare provision mandated by Chilean labor regulation. Journal: Journal of Applied Economics Pages: 1-39 Issue: 1 Volume: 19 Year: 2016 Month: 5 X-DOI: 10.1016/S1514-0326(16)30001-0 File-URL: http://hdl.handle.net/10.1016/S1514-0326(16)30001-0 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:recsxx:v:19:y:2016:i:1:p:1-39 Template-Type: ReDIF-Article 1.0 Author-Name: Eiji Yamamura Author-X-Name-First: Eiji Author-X-Name-Last: Yamamura Title: Social Conflict and Redistributive Preferences Among Rich and Poor: Testing the Hypothesis of Acemoglu and Robinson Abstract: Acemoglu and Robinson (2000) provide their hypothesis that the political elite extend the franchise to avoid revolution or social unrest. For the purpose of empirically testing this hypothesis, the present paper explores how the degree of conflict between rich and poor people is associated with individual preferences for income redistribution and perceptions regarding income differences. This paper used cross-country individual-level data covering 26 countries. The key findings are as follows: (1) an individual is more likely to prefer income redistribution policy in countries where people perceive conflict between rich and poor to be high; (2) an individual is more likely to consider the income difference to be too large in countries where people perceive conflict between rich and poor to be high; and (3) after dividing the sample into high- and low-income earners, the above two findings are only obtained for high-income earners and not for low-income earners. Journal: Journal of Applied Economics Pages: 41-63 Issue: 1 Volume: 19 Year: 2016 Month: 5 X-DOI: 10.1016/S1514-0326(16)30002-2 File-URL: http://hdl.handle.net/10.1016/S1514-0326(16)30002-2 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:recsxx:v:19:y:2016:i:1:p:41-63 Template-Type: ReDIF-Article 1.0 Author-Name: Ana Inés Balsa Author-X-Name-First: Ana Inés Author-X-Name-Last: Balsa Author-Name: Alejandro Cid Author-X-Name-First: Alejandro Author-X-Name-Last: Cid Title: A Randomized Impact Evaluation of a Tuition-Free Private School Targeting Low Income Students in Uruguay Abstract: Using a randomized trial, we evaluate the impact of Liceo Jubilar, a tuition-free private school providing middle school education to poor students in Montevideo, Uruguay. The research compares adolescents randomly selected to enter the school with those not drawn in the school lottery. Several features of this school — the capacity to select personnel, a culture of high expectations, a safe and disciplined environment, differential teaching, extended instructional time, strong parental involvement, and a rich offer of extracurricular activities — contrast with the country's highly centralized public education system. We find large positive impacts of Liceo Jubilar on students' promotion rates and academic expectations. Our results shed light on new approaches to education that may contribute to improve opportunities for disadvantaged adolescents in developing countries. Journal: Journal of Applied Economics Pages: 65-94 Issue: 1 Volume: 19 Year: 2016 Month: 5 X-DOI: 10.1016/S1514-0326(16)30003-4 File-URL: http://hdl.handle.net/10.1016/S1514-0326(16)30003-4 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:recsxx:v:19:y:2016:i:1:p:65-94 Template-Type: ReDIF-Article 1.0 Author-Name: Guglielmo Maria Caporale Author-X-Name-First: Guglielmo Maria Author-X-Name-Last: Caporale Author-Name: Luis A. Gil-Alana Author-X-Name-First: Luis A. Author-X-Name-Last: Gil-Alana Author-Name: Yuliya Lovcha Author-X-Name-First: Yuliya Author-X-Name-Last: Lovcha Title: Testing Unemployment Theories: A Multivariate Long Memory Approach Abstract: This paper investigates the empirical relevance of both the hysteresis and the natural rate hypothesis on unemployment in three major economies, namely the UK, the US and Japan, by estimating the degree of dependence in the unemployment series. Both univariate and multivariate long memory methods are used. The results vary depending on whether the former or the latter approach is followed. Specifically, when taking a univariate approach, the unit root null cannot be rejected in case of the UK and Japanese unemployment series, and some degree of mean reversion (d < 1) is found in the case of the US unemployment rate. When applying multivariate methods instead, higher orders of integration are still found for the UK and Japanese series, but the natural rate hypothesis cannot be rejected in the case of the US. Journal: Journal of Applied Economics Pages: 95-112 Issue: 1 Volume: 19 Year: 2016 Month: 5 X-DOI: 10.1016/S1514-0326(16)30004-6 File-URL: http://hdl.handle.net/10.1016/S1514-0326(16)30004-6 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:recsxx:v:19:y:2016:i:1:p:95-112 Template-Type: ReDIF-Article 1.0 Author-Name: Richard Gearhart Author-X-Name-First: Richard Author-X-Name-Last: Gearhart Title: The Robustness of Cross-Country Healthcare Rankings Among Homogeneous Oecd Countries Abstract: This paper re-examines analyses of cross-country healthcare efficiency using modern, non-parametric estimators and Malmquist indices to determine productivity changes over the panel. This paper finds that cross-country heterogeneity leads to different efficiency rankings than previously thought, and that the hyperbolic order-α estimator leads to more robust efficiency scores when looking across different output measures, only looking at the more homogeneous OECD countries. It finds that the United States, if excluding the percent of healthcare expenditures that are publicly financed, is one of the more inefficient healthcare delivery systems in the world. What are commonly thought of as well-run healthcare systems (Austria and France) are either inefficient themselves or have variation in their efficiency rankings, showcasing difficulties in using other countries' healthcare systems as models for reform. It also finds that there has been productivity regression in all countries except the United States. These highlight the difficulties in cross-country efficiency comparisons. Journal: Journal of Applied Economics Pages: 113-143 Issue: 1 Volume: 19 Year: 2016 Month: 5 X-DOI: 10.1016/S1514-0326(16)30005-8 File-URL: http://hdl.handle.net/10.1016/S1514-0326(16)30005-8 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:recsxx:v:19:y:2016:i:1:p:113-143 Template-Type: ReDIF-Article 1.0 Author-Name: Osvaldo Meloni Author-X-Name-First: Osvaldo Author-X-Name-Last: Meloni Title: Electoral Opportunism and Vertical Fiscal Imbalance Abstract: Evidence of political budget cycles from cross-country studies has been rationalized as coming from the voters' cost to process the available information and asymmetric information. This explanation has also been adopted in most cross-province studies, leaving aside variables related to the incentive structure of fiscal federalism. This paper investigates electorally induced fiscal fluctuations in Argentina for the period 1985–2007. Province-level dynamic panel data reveal that vertical fiscal imbalances in subnational districts fuel fiscal expansion and changes in expenditure composition, favoring current expenditure to the detriment of investment, in election years. Vertical fiscal imbalances make electoral opportunism cheaper and more profitable. Journal: Journal of Applied Economics Pages: 145-167 Issue: 1 Volume: 19 Year: 2016 Month: 5 X-DOI: 10.1016/S1514-0326(16)30006-X File-URL: http://hdl.handle.net/10.1016/S1514-0326(16)30006-X File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:recsxx:v:19:y:2016:i:1:p:145-167 Template-Type: ReDIF-Article 1.0 Author-Name: Daniel H. Vedia-Jerez Author-X-Name-First: Daniel H. Author-X-Name-Last: Vedia-Jerez Author-Name: Coro Chasco Author-X-Name-First: Coro Author-X-Name-Last: Chasco Title: Long-Run Determinants of Economic Growth in South America Abstract: Based on an annual historical database for South American countries from 1960 to 2008, we develop an empirical study to gain insight into the long-run determinants of economic growth using a two-equation framework. A system of two panel data models is estimated to identify the growth determinants and their connection with foreign direct investment. We find that economic growth is driven most strongly by physical and human capital accumulation, as well as by sectorial exports, and that institutions and policy have a substantial impact on economic growth and investment. Macroeconomic disturbances have a significant detrimental effect on long-run growth. Trade openness correlates positively with foreign investment, indicating that relatively closed countries stand to benefit most from opening up their economies. Our division of the sample into two sub-periods, 1960–1980 and 1981–2008, indicates a structural change. Journal: Journal of Applied Economics Pages: 169-192 Issue: 1 Volume: 19 Year: 2016 Month: 5 X-DOI: 10.1016/S1514-0326(16)30007-1 File-URL: http://hdl.handle.net/10.1016/S1514-0326(16)30007-1 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:recsxx:v:19:y:2016:i:1:p:169-192 Template-Type: ReDIF-Article 1.0 Author-Name: Heinz Welsch Author-X-Name-First: Heinz Author-X-Name-Last: Welsch Author-Name: Jan Kühling Author-X-Name-First: Jan Author-X-Name-Last: Kühling Title: Macroeconomic Performance and Institutional Change: Evidence from Subjective Well-Being Data Abstract: The relationship between macroeconomic performance and institutional change is explored in member countries of the Organization for Economic Cooperation and Development (OECD). We first assess the effects of national income growth, unemployment and inflation on subjective well-being (SWB) in thirty OECD countries, and employ the relationships found to construct an index of macroeconomic performance in terms of SWB. Applying the index to the period 1990–2009, we find that macroeconomic performance has improved in OECD overall and in the majority of countries, and that there has been a convergence of performance within the OECD. We then present evidence that OECD countries' performance, as measured, is positively related to institutional change towards more trade openness and better institutional quality. We argue that both increased openness and improved institutional quality are correlates of economic and political integration and conclude that international integration has enhanced SWB by improving OECD countries' national macroeconomic performance. Journal: Journal of Applied Economics Pages: 193-217 Issue: 2 Volume: 19 Year: 2016 Month: 11 X-DOI: 10.1016/S1514-0326(16)30008-3 File-URL: http://hdl.handle.net/10.1016/S1514-0326(16)30008-3 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:recsxx:v:19:y:2016:i:2:p:193-217 Template-Type: ReDIF-Article 1.0 Author-Name: David W. Galenson Author-X-Name-First: David W. Author-X-Name-Last: Galenson Author-Name: Simone Lenzu Author-X-Name-First: Simone Author-X-Name-Last: Lenzu Title: Pricing Genius: The Market Evaluation of Innovation Abstract: Economists have neglected a key issue for understanding and increasing technological change, in failing to study how talented individuals produce innovations. This paper takes a quantitative approach to this problem. Regression analysis of auction data from 1965–2015 reveals that the age-price profiles of Jackson Pollock and Andy Warhol—the two greatest painters born in the 20th century—closely resemble the profiles of the two artists' careers derived both from textbooks of art history and from retrospective exhibitions. The agreement of these sources confirms that the auction market assigns the highest prices to the art that scholars judge to be the most important, and examination of the artists' careers reveals that this art is the most important because it is the most innovative. These results lend strong support to our understanding of creativity at the individual level, with a sharp contrast between the extended experimental innovation of Pollock and the sudden conceptual innovation of Warhol. Journal: Journal of Applied Economics Pages: 219-248 Issue: 2 Volume: 19 Year: 2016 Month: 11 X-DOI: 10.1016/S1514-0326(16)30009-5 File-URL: http://hdl.handle.net/10.1016/S1514-0326(16)30009-5 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:recsxx:v:19:y:2016:i:2:p:219-248 Template-Type: ReDIF-Article 1.0 Author-Name: Luisa F. Acuña-Roa Author-X-Name-First: Luisa F. Author-X-Name-Last: Acuña-Roa Author-Name: Julián A. Parra-Polania Author-X-Name-First: Julián A. Author-X-Name-Last: Parra-Polania Title: Price-Level Targeting Versus Inflation Targeting in a New Keynesian Model with Inflation Persistence Abstract: We compare Price-Level Targeting (PLT) versus Inflation Targeting (IT) using a New Keynesian model, which exhibits inflation persistence (as a result of partial indexation to lagged inflation). We find that, for standard values of the underlying parameters, (i) the loss associated to macroeconomic volatility may decrease about 29% by switching to PLT, (ii) a wide range of values for the weight given by the PLT central bank to output stabilisation allows to attain higher levels of social welfare, (iii) the higher the price rigidity the wider the range over which PLT outperforms IT, but the lower the welfare gain, and (iv) only when the level of indexation is higher than 65% it becomes better not to switch to PLT. Journal: Journal of Applied Economics Pages: 249-269 Issue: 2 Volume: 19 Year: 2016 Month: 11 X-DOI: 10.1016/S1514-0326(16)30010-1 File-URL: http://hdl.handle.net/10.1016/S1514-0326(16)30010-1 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:recsxx:v:19:y:2016:i:2:p:249-269 Template-Type: ReDIF-Article 1.0 Author-Name: Ceyhun Elgin Author-X-Name-First: Ceyhun Author-X-Name-Last: Elgin Author-Name: Serdar Birinci Author-X-Name-First: Serdar Author-X-Name-Last: Birinci Title: Growth and Informality: A Comprehensive Panel Data Analysis Abstract: In this paper we empirically explore the impact of the presence of informal economies on long-run economic growth. Using a novel panel dataset of 161 countries over the period from 1950 to 2010 we obtain an inverted-U relationship between informal sector size and growth of GDP per capita. That is, small and large sizes of the informal economy are associated with little growth and medium levels of the size of the informal economy are associated with higher levels of growth. We also observe that in high (low) income economies, informal economy size is positively (negatively) correlated with growth. Moreover, when we decompose growth into several components using a simple growth accounting framework, we find that informality is mainly associated with growth in TFP and that this association is different in high and low-income economies. Journal: Journal of Applied Economics Pages: 271-292 Issue: 2 Volume: 19 Year: 2016 Month: 11 X-DOI: 10.1016/S1514-0326(16)30011-3 File-URL: http://hdl.handle.net/10.1016/S1514-0326(16)30011-3 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:recsxx:v:19:y:2016:i:2:p:271-292 Template-Type: ReDIF-Article 1.0 Author-Name: Makram El-Shagi Author-X-Name-First: Makram Author-X-Name-Last: El-Shagi Author-Name: Gregor Von Schweinitz Author-X-Name-First: Gregor Author-X-Name-Last: Von Schweinitz Title: Qual Var Revisited: Good Forecast, Bad Story Abstract: Due to the recent financial crisis, the interest in econometric models that allow to incorporate binary variables (such as the occurrence of a crisis) experienced a huge surge. This paper evaluates the performance of the Qual VAR, originally proposed by Dueker (2005). The Qual VAR is a VAR model including a latent variable that governs the behavior of an observable binary variable. While we find that the Qual VAR performs reasonable well in forecasting (outperforming a probit benchmark), there are substantial identification problems even in a simple VAR specification. Typically, identification in economic applications is far more difficult than in our simple benchmark. Therefore, when the economic interpretation of the dynamic behavior of the latent variable and the chain of causality matter, use of the Qual VAR is inadvisable. Journal: Journal of Applied Economics Pages: 293-321 Issue: 2 Volume: 19 Year: 2016 Month: 11 X-DOI: 10.1016/S1514-0326(16)30012-5 File-URL: http://hdl.handle.net/10.1016/S1514-0326(16)30012-5 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:recsxx:v:19:y:2016:i:2:p:293-321 Template-Type: ReDIF-Article 1.0 Author-Name: Harold Ngalawa Author-X-Name-First: Harold Author-X-Name-Last: Ngalawa Author-Name: Fulbert Tchana Tchana Author-X-Name-First: Fulbert Tchana Author-X-Name-Last: Tchana Author-Name: Nicola Viegi Author-X-Name-First: Nicola Author-X-Name-Last: Viegi Title: Banking Instability and Deposit Insurance: The Role of Moral Hazard Abstract: The primary objective of this paper is to investigate the impact of moral hazard on the effectiveness of deposit insurance in achieving banking stability. If moral hazard explains banking instability arising from the adoption of deposit insurance, then deposit insurance will be associated with bank insolvency more than with bank runs. To test the hypothesis, we develop a new empirical framework distinguishing between banking instability initiated by panic withdrawals of deposits, and banking instability initiated by the insolvency problem of banks. Using a dataset covering 118 countries over the period 1980–2004, we find that deposit insurance per se has no significant effect either on bank insolvency or on bank runs. However, interacting deposit insurance with credit to the private sector, we observe a positive and significant effect on bank insolvency and bank runs, suggesting that moral hazard outweighs the positive effect of deposit insurance on banking stability. Journal: Journal of Applied Economics Pages: 323-350 Issue: 2 Volume: 19 Year: 2016 Month: 11 X-DOI: 10.1016/S1514-0326(16)30013-7 File-URL: http://hdl.handle.net/10.1016/S1514-0326(16)30013-7 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:recsxx:v:19:y:2016:i:2:p:323-350 Template-Type: ReDIF-Article 1.0 Author-Name: Markus Hertrich Author-X-Name-First: Markus Author-X-Name-Last: Hertrich Title: The Distribution of Exchange Rates Under a Minimum Exchange Rate Regime Abstract: This paper adjusts the Chen and Giovannini (1992) methodology to estimate the unconditional distribution of exchange rates under a one-sided target zone regime, where a central bank commits itself to intervene on foreign exchange markets to prevent its currency to move beyond a previously announced target level vis-à-vis a specific foreign currency. An application of this methodology to the 2011–2015 EUR/CHF minimum exchange rate regime shows that the Swiss National Bank presumably intervened only at (or very close to) the floor level of EUR/CHF 1.20 and not at a level significantly above that boundary. Hence, contrary to previous studies, the reported results accord with the predictions of the Krugman (1991) target zone model about the behavior of exchange rates, allowing investors to gain insights about the central bank's policy function in extraordinary monetary situations and with important consequences for the descriptive validity of theoretical one-sided target zone models. Journal: Journal of Applied Economics Pages: 351-361 Issue: 2 Volume: 19 Year: 2016 Month: 11 X-DOI: 10.1016/S1514-0326(16)30014-9 File-URL: http://hdl.handle.net/10.1016/S1514-0326(16)30014-9 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:recsxx:v:19:y:2016:i:2:p:351-361 Template-Type: ReDIF-Article 1.0 Author-Name: Georg Man Author-X-Name-First: Georg Author-X-Name-Last: Man Title: Political Competition and Growth in Global Perspective: Evidence from Panel Data Abstract: The present paper investigates the relationship between political competition, its components (executive versus legislature), and economic growth in international panel data. The results suggest the presence of a statistically significant nonlinearity between political competition (overall and in the executive) and growth in the form of a U-shape. In contrast, political competition variables do not exert statistically significant effects on growth in linear specifications. These results withstand an array of extensions and robustness checks, and provide international panel data evidence complementing work conducted for national and cross-sectional contexts. Journal: Journal of Applied Economics Pages: 363-382 Issue: 2 Volume: 19 Year: 2016 Month: 11 X-DOI: 10.1016/S1514-0326(16)30015-0 File-URL: http://hdl.handle.net/10.1016/S1514-0326(16)30015-0 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:recsxx:v:19:y:2016:i:2:p:363-382 Template-Type: ReDIF-Article 1.0 Author-Name: Jiun-Nan Ou Author-X-Name-First: Jiun-Nan Author-X-Name-Last: Ou Title: Swimming Pool Versus Art Museum: Efficiency in the Provision of Local Public Facilities with Heterogeneity Abstract: This paper follows an approach adopted by Cremer, Marchand and Pestieau (1997) to analyze efficiency in the provision of heterogeneous local public facilities. Even when spillovers exist, under certain conditions the local government could still reach the optimum provision of the local public good, otherwise there is under-provision. Secondly, relaxing the non-excludability assumption, provision efficiency could be achieved if the local governments collect the service fees based on the neighboring community user's net marginal willingness to pay. If not, the service fee mechanism would not always be able to eliminate the preexisting allocation inefficiency and could sometimes lead to increased inefficiency due to overprovision of the public good. Journal: Journal of Applied Economics Pages: 383-399 Issue: 2 Volume: 19 Year: 2016 Month: 11 X-DOI: 10.1016/S1514-0326(16)30016-2 File-URL: http://hdl.handle.net/10.1016/S1514-0326(16)30016-2 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:recsxx:v:19:y:2016:i:2:p:383-399 Template-Type: ReDIF-Article 1.0 Author-Name: Joel Owen Author-X-Name-First: Joel Author-X-Name-Last: Owen Author-Name: Ramon Rabinovitch Author-X-Name-First: Ramon Author-X-Name-Last: Rabinovitch Title: Ranking Portfolio Performance by a Joint Means and Variances Equality Test Abstract: Vlc propose a new procedure to rank portfolio performance. Given a set of N portfolios. we use statistical tests of dominance which produce direct mean-variance comparisons between any two portfolios in the set. These tests yield an NxN matrix of pairwise comparisons. A ranking function maps the elements of the comparison matrix into a numerical ranking. To illustrate the procedure we use a set of 133 mutual funds, including the S&PSOO index and the CRSP equal and value weighted indexes. We explore the empirical and theoretical relationships between our ranking procedure and the Treynor, Sharpe and Jensen performance measures. In general, the new procedure's ranking is relatively robust, does not allow for gaming and can be performed with small samples. Journal: Journal of Applied Economics Pages: 97-130 Issue: 1 Volume: 2 Year: 1999 Month: 5 X-DOI: 10.1080/15140326.1999.12040530 File-URL: http://hdl.handle.net/10.1080/15140326.1999.12040530 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:recsxx:v:2:y:1999:i:1:p:97-130 Template-Type: ReDIF-Article 1.0 Author-Name: Germán Coloma Author-X-Name-First: Germán Author-X-Name-Last: Coloma Title: Product Differentiation and Market Power in the California Gasoline Market Abstract: This paper applies a model of market power measurement under product differentiation to the case of the gasoline market in California, using data for the period 1983–1989. Our results show that there is a considerable degree of product differentiation among major brands. This allows firms to exercise local market power over their own specific products, but there are also signals of an important degree of global market power. However, none of the four pure market structures analyzed (price taking, monopolistic competition, Cournot oligopoly and collusion) seems able to explain by itself the behavior of the whole market. Journal: Journal of Applied Economics Pages: 1-27 Issue: 1 Volume: 2 Year: 1999 Month: 5 X-DOI: 10.1080/15140326.1999.12040531 File-URL: http://hdl.handle.net/10.1080/15140326.1999.12040531 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:recsxx:v:2:y:1999:i:1:p:1-27 Template-Type: ReDIF-Article 1.0 Author-Name: Valeriano F. Garcia Author-X-Name-First: Valeriano F. Author-X-Name-Last: Garcia Author-Name: Lin Liu Author-X-Name-First: Lin Author-X-Name-Last: Liu Title: Macroeconomic Determinants of Stock Market Development Abstract: Using pooled data from fifteen industrial and developing countries from 1980 to 1995, this paper examines the macroeconomic determinants of stock market development, particularly market capitalization. The paper finds that: (1) real income, saving rate, financial intermediary development, and stock market liquidity are important determinants of stock market capitalization; (2) macroeconomic volatility does not prove significant; and (3) stock market development and financial intermediary development are complements instead of substitutes. Journal: Journal of Applied Economics Pages: 29-59 Issue: 1 Volume: 2 Year: 1999 Month: 5 X-DOI: 10.1080/15140326.1999.12040532 File-URL: http://hdl.handle.net/10.1080/15140326.1999.12040532 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:recsxx:v:2:y:1999:i:1:p:29-59 Template-Type: ReDIF-Article 1.0 Author-Name: Claudio Loser Author-X-Name-First: Claudio Author-X-Name-Last: Loser Author-Name: Martine Guerguil Author-X-Name-First: Martine Author-X-Name-Last: Guerguil Title: Trade and Trade Reform in Latin America and the Caribbean in the 1990S Abstract: For many decades, trade policy in Latin America and the Caribbean (LAC) had involved very high levels of protection and of government intervention. The active pursuit of import substitution policies reduced the openness and efficiency of the region's economies. It also increased their external vulnerability, as they became dependent on a narrow range of export products, with little ability to absorb external shocks. This state of affairs changed markedly in the 1980s and 1990s, when most countries of the region moved to liberalize their trade regime. Trade policy reform in LAC in the 1990s has been both widespread and extensive, and the region now shows a fairly open trade regime. Such a sharp policy reversal clearly had an impact on trade flows, and those effectively underwent significant changes in the past decade. They also coincided with a number of other important changes in the LAC economies, including major structural reforms (with the privatization of many public enterprises and the deregulation of most domestic markets), a surge in investment (itself partly linked to the lower relative prices for capital goods resulting from higher openness), higher capital flows, and a more careful pursuit of macroeconomic policy aimed at preserving financial stability to foster sustainable growth. This paper seeks to assess the magnitude of the changes in trade flows in the past decade in the context of changes in the underlying policy framework. Section I summarizes the main trends observed in LAC trade over the 1990–97 period. Section II summarizes trade liberalization in the region since the mid-1980s. Section III attempts to assess how trade liberalization has affected the volume and structure of trade flows. Section IV concludes with some policy recommendations in the area of trade, particularly in the context of the present global financial crisis. Journal: Journal of Applied Economics Pages: 61-96 Issue: 1 Volume: 2 Year: 1999 Month: 5 X-DOI: 10.1080/15140326.1999.12040533 File-URL: http://hdl.handle.net/10.1080/15140326.1999.12040533 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:recsxx:v:2:y:1999:i:1:p:61-96 Template-Type: ReDIF-Article 1.0 Author-Name: Assaf Razin Author-X-Name-First: Assaf Author-X-Name-Last: Razin Author-Name: Chi-Wa Yuen Author-X-Name-First: Chi-Wa Author-X-Name-Last: Yuen Title: Understanding the “Problem of Economic Development”: The Role of Factor Mobility and International Taxation Abstract: The “problem of economic development”, as Lucas (1988) states it, is the problem of accounting for the observed diversity in levels and rates of growth of per capita income across countries and across time. We study conditions under which capital mobility and labor mobility (two seemingly income-equalizing forces) may interact with cross-country differences in income tax rates and income tax principles (two seemingly income-diverging forces) to generate such diversity. As a corollary, we also examine when countries with different initial endowments may finally converge in their income levels. Journal: Journal of Applied Economics Pages: 131-167 Issue: 1 Volume: 2 Year: 1999 Month: 5 X-DOI: 10.1080/15140326.1999.12040534 File-URL: http://hdl.handle.net/10.1080/15140326.1999.12040534 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:recsxx:v:2:y:1999:i:1:p:131-167 Template-Type: ReDIF-Article 1.0 Author-Name: Sebastián M. Saiegh Author-X-Name-First: Sebastián M. Author-X-Name-Last: Saiegh Author-Name: Mariano Tommasi Author-X-Name-First: Mariano Author-X-Name-Last: Tommasi Title: Why is Argentina's Fiscal Federalism so Inefficient? Entering the Labyrinth Abstract: A long-standing concern in political economy is whether outcomes are efficient in political equilibrium. Recent contributions have examined the efficiency/inefficiency of policy choices from a theoretical point of view. The aim of this paper is to examine such issue empirically. Building on existing “economic” diagnoses that highlight the deficient incentives present in Argentina's Federal Tax-Sharing Agreement the paper will attempt to understand the politics behind its adoption and persistence. We suggest an explanation based on the transaction costs of Argentina's political market. Although potentially Pareto-improving policies could could have been adopted, they were not introduced because of the uncertainty over the future status of today's bargains, and given the lack of institutions to enforce bargains among the political actors. The paper concludes offering some preliminary ideas for institutional engineering: what governance structures could help reduce these transaction costs? The purpose is to create an institutional framework in which political actors could negotiate among themselves, ensuring the enforceability of agreements, in order to achieve more efficient outcomes. Journal: Journal of Applied Economics Pages: 169-209 Issue: 1 Volume: 2 Year: 1999 Month: 5 X-DOI: 10.1080/15140326.1999.12040535 File-URL: http://hdl.handle.net/10.1080/15140326.1999.12040535 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:recsxx:v:2:y:1999:i:1:p:169-209 Template-Type: ReDIF-Article 1.0 Author-Name: Laura Alfaro Author-X-Name-First: Laura Author-X-Name-Last: Alfaro Title: Why Governments Implement Temporary Stabilization Programs Abstract: This paper provides a political economy explanation for temporary exchange-rate-based stabilization programs (where the exchange rate is used as a nominal anchor) and their optimal duration by focusing on the distributive effects of real exchange rate appreciation. In a small-open-economy model, a temporary reduction in the devaluation rate leads to a reduction in the nominal interest rate and to a temporary appreciation of the real exchange rate. Owners of tradable-goods are hurt, while for reasonable parameter values, the owners of non-traded goods' welfare improves. Journal: Journal of Applied Economics Pages: 211-245 Issue: 2 Volume: 2 Year: 1999 Month: 11 X-DOI: 10.1080/15140326.1999.12040536 File-URL: http://hdl.handle.net/10.1080/15140326.1999.12040536 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:recsxx:v:2:y:1999:i:2:p:211-245 Template-Type: ReDIF-Article 1.0 Author-Name: Rodolfo Apreda Author-X-Name-First: Rodolfo Author-X-Name-Last: Apreda Title: The Cash Flow Model with Float: A New Approach to Deal with Valuation and Agency Problems Abstract: In this paper we introduce a cash flow model with float to manage core issues in Corporate Finance. The float actually removes current hindrances pervading the standard cash flow model. To start with, we derive the float model and uncover its underlying financial engineering. After that, any investment decision is regarded as a synthetic portfolio made out of a revenue bond financing the investment, and a performance swap acting as a value driver. It is within the performance swap where the float lies and enhances value. Furthermore, extension to valuation is provided taking advantage of the former portfolio approach. Next, the float complex structure is displayed to proceed towards its sources and uses of cash flows. Last of all, we expand upon a normative model which makes the most of the float and spells out how an accountability precept should be functional in redressing agency problems. Journal: Journal of Applied Economics Pages: 247-279 Issue: 2 Volume: 2 Year: 1999 Month: 11 X-DOI: 10.1080/15140326.1999.12040537 File-URL: http://hdl.handle.net/10.1080/15140326.1999.12040537 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:recsxx:v:2:y:1999:i:2:p:247-279 Template-Type: ReDIF-Article 1.0 Author-Name: Robert J. Barro Author-X-Name-First: Robert J. Author-X-Name-Last: Barro Title: Notes on Optimal Debt Management Journal: Journal of Applied Economics Pages: 281-289 Issue: 2 Volume: 2 Year: 1999 Month: 11 X-DOI: 10.1080/15140326.1999.12040538 File-URL: http://hdl.handle.net/10.1080/15140326.1999.12040538 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:recsxx:v:2:y:1999:i:2:p:281-289 Template-Type: ReDIF-Article 1.0 Author-Name: Miguel A. Kiguel Author-X-Name-First: Miguel A. Author-X-Name-Last: Kiguel Title: A Note on Argentina's Debt Management Strategy Journal: Journal of Applied Economics Pages: 291-298 Issue: 2 Volume: 2 Year: 1999 Month: 11 X-DOI: 10.1080/15140326.1999.12040539 File-URL: http://hdl.handle.net/10.1080/15140326.1999.12040539 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:recsxx:v:2:y:1999:i:2:p:291-298 Template-Type: ReDIF-Article 1.0 Author-Name: Steven Cook Author-X-Name-First: Steven Author-X-Name-Last: Cook Title: Cyclicality and Durability: Evidence from U.S. Consumers' Expenditure Abstract: In this paper three hypotheses concerning the cyclicality of U.S. consumers' expenditure are proposed. These hypotheses are based upon the distinction between expenditure on durable and non-durable goods. It is argued that durability will lead to increased cyclical sensitivity and that this increased cyclicality will be of an asymmetric nature. The asymmetric adjustment will be of the form of decreases in expenditure on durable goods being more extensive and more rapid during recessionary phases of the business cycle than corresponding increases during expansionary periods. These hypotheses are evaluated using U.S. data on consumer durables and non-durables over the period 1959–1998. Via the use of the Hodrick-Prescott (1997) filter the cyclical elements of these series are derived and subjected to Sichel's (1993) univariate tests of business cycle asymmetry. Overwhelming support is found for all of the hypotheses proposed. Journal: Journal of Applied Economics Pages: 299-310 Issue: 2 Volume: 2 Year: 1999 Month: 11 X-DOI: 10.1080/15140326.1999.12040540 File-URL: http://hdl.handle.net/10.1080/15140326.1999.12040540 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:recsxx:v:2:y:1999:i:2:p:299-310 Template-Type: ReDIF-Article 1.0 Author-Name: Alvaro Forteza Author-X-Name-First: Alvaro Author-X-Name-Last: Forteza Title: Transaction Costs and Overinsurance in Government Transfer Policy Abstract: Benevolent governments lacking commitment ability provide too much insurance, if opportunistic private agents free ride on the government's concern and exert too little effort expecting government assistance. Yet, the costs of implementing the transfer policy work as a commitment device, alleviating the credibility problem. Indeed, despite of the lack of commitment capacity, the government might provide incomplete insurance because of these transaction costs. Therefore, transaction costs can increase welfare by resolving the dynamic inconsistency faced by a welfare maximizing policymaker. Journal: Journal of Applied Economics Pages: 311-335 Issue: 2 Volume: 2 Year: 1999 Month: 11 X-DOI: 10.1080/15140326.1999.12040541 File-URL: http://hdl.handle.net/10.1080/15140326.1999.12040541 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:recsxx:v:2:y:1999:i:2:p:311-335 Template-Type: ReDIF-Article 1.0 Author-Name: K Hadri Author-X-Name-First: K Author-X-Name-Last: Hadri Author-Name: J. Whittaker Author-X-Name-First: J. Author-X-Name-Last: Whittaker Title: Efficiency, Environmental Contaminants and Farm Size: Testing for Links Using Stochastic Production Frontiers Abstract: This paper investigates whether there is any relationship between farm size, technical efficiency and the use of agrochemicals which are potentially environmentally contaminating. These questions are pertinent in the context of current EU policy decisions. Using two models of stochastic frontier production and a set of panel data on 35 farms from the South West of England for the years 1987–1991, we obtain an indication, that there is a positive relationship between technical efficiency and use of contaminants, and between technical efficiency and farm size. However, there is a weak negative relationship between farm size and use of contaminants. Journal: Journal of Applied Economics Pages: 337-356 Issue: 2 Volume: 2 Year: 1999 Month: 11 X-DOI: 10.1080/15140326.1999.12040542 File-URL: http://hdl.handle.net/10.1080/15140326.1999.12040542 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:recsxx:v:2:y:1999:i:2:p:337-356 Template-Type: ReDIF-Article 1.0 Author-Name: Ernesto Stein Author-X-Name-First: Ernesto Author-X-Name-Last: Stein Title: Fiscal Decentralization and Government Size in Latin America Abstract: This paper explores the link between fiscal decentralization and government size in Latin America. While most related work attempts to test Brennan and Buchannan's “Liviathan” hypothesis, here the emphasis is placed on a different channel: the potential for decentralization to aggravate the common pool problem. In addition to the degree of expenditure decentralization, we consider the importance of vertical fiscal imbalance, as well as some institutional variables related to the nature of intergovernmental relations which can affect the ability of some jurisdictions to shift the cost of their local programs onto others: the degree to which intergovernmental transfers are discretional, and the degree to which subnational governments have borrowing autonomy. We find that decentralization tends to produce larger governments, but this effect is particularly important in cases where vertical imbalance is high, transfers are discretional and the degree of borrowing autonomy of subnational governments is large. Journal: Journal of Applied Economics Pages: 357-391 Issue: 2 Volume: 2 Year: 1999 Month: 11 X-DOI: 10.1080/15140326.1999.12040543 File-URL: http://hdl.handle.net/10.1080/15140326.1999.12040543 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:recsxx:v:2:y:1999:i:2:p:357-391 Template-Type: ReDIF-Article 1.0 Author-Name: Sarah Marx Quintanar Author-X-Name-First: Sarah Marx Author-X-Name-Last: Quintanar Title: Man Vs. Machine: An Investigation of Speeding Ticket Disparities Based on Gender and Race Abstract: This paper analyzes the extent to which police behavior in giving speeding tickets differs from the ticketing pattern of automated cameras, which provide an estimate of the population of speeders. The novel data are obtained from Lafayette, Louisiana court records, and provide specific details about the ticketed driver as well as a wide range of violation characteristics. In contrast to the automated cameras, the probability of a ticketed driver being female is consistently and significantly higher when the ticket was given by a police officer. For African-American drivers this effect is less robust, though in general still positive and significant. This implies that police use gender and race as a determining factor in issuing a speeding ticket. Potential behavioral reasons for this outcome are discussed. The validity of using automated cameras as a population measure for police-issued tickets is thoroughly investigated and supportive evidence is provided. Journal: Journal of Applied Economics Pages: 1-28 Issue: 1 Volume: 20 Year: 2017 Month: 5 X-DOI: 10.1016/S1514-0326(17)30001-6 File-URL: http://hdl.handle.net/10.1016/S1514-0326(17)30001-6 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:recsxx:v:20:y:2017:i:1:p:1-28 Template-Type: ReDIF-Article 1.0 Author-Name: Francisco B. Galarza Author-X-Name-First: Francisco B. Author-X-Name-Last: Galarza Author-Name: Gustavo Yamada Author-X-Name-First: Gustavo Author-X-Name-Last: Yamada Title: Triple Penalty in Employment Access: The Role of Beauty, Race, and Sex Abstract: This article reports the results from a first experiment specifically designed to disentangle the effect of beauty from that of race in the observed labor market discrimination, for both females and males in Peru. We randomly assigned Quechua and white surnames and (subjectively perceived) attractive or homely-looking photographs (or no photos) to 4,899 fictitious résumés sent in response to 1,247 job openings. We find that candidates who are physically attractive, have a white-sounding surname, and are males, receive 82%, 54%, and 34% more callbacks for job interviews than their similarly-qualified counterparts, thus imposing a triple penalty on homely-looking, indigenous, and female job candidates. We further find that the intensity of discrimination by race and physical appearance differs for males and females; the intensity of discrimination by physical appearance and sex differs for Quechua and white applicants; and the intensity of racial and sexual discrimination differs for beautiful and homely-looking persons. Journal: Journal of Applied Economics Pages: 29-47 Issue: 1 Volume: 20 Year: 2017 Month: 5 X-DOI: 10.1016/S1514-0326(17)30002-8 File-URL: http://hdl.handle.net/10.1016/S1514-0326(17)30002-8 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:recsxx:v:20:y:2017:i:1:p:29-47 Template-Type: ReDIF-Article 1.0 Author-Name: J. Daniel AromÍ Author-X-Name-First: J. Daniel Author-X-Name-Last: AromÍ Title: Conventional Views and Asset Prices: What to Expect After Times of Extreme Opinions? Abstract: This study evaluates the performance of stock market indices after times of extreme opinions. The underlying conjecture is that extreme opinions are associated to overreactions in the perception of wealth. The analysis covers 34 countries from 1988 through 2013. In a novel approach, views regarding economic performance are approximated using content in the global economic press. Consistent with the overreaction conjecture, stock market indices are shown to under-perform following extreme optimistic views and over-perform after pessimistic views. A long-short contrarian portfolio earns 11% annually over the next five years. This persistent and predictable difference in returns cannot be explained by risk considerations and cannot be replicated using alternative strategies based on past returns or past economic growth. Journal: Journal of Applied Economics Pages: 49-73 Issue: 1 Volume: 20 Year: 2017 Month: 5 X-DOI: 10.1016/S1514-0326(17)30003-X File-URL: http://hdl.handle.net/10.1016/S1514-0326(17)30003-X File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:recsxx:v:20:y:2017:i:1:p:49-73 Template-Type: ReDIF-Article 1.0 Author-Name: Sérgio Lagoa Author-X-Name-First: Sérgio Author-X-Name-Last: Lagoa Title: Determinants of Inflation Differentials in the Euro Area: Is the New Keynesian Phillips Curve Enough? Abstract: In the euro area, inflation rates diverged after the creation of the single currency, and started to converge again from mid-2002. It is against this background that the paper studies the determinants of inflation differentials in the euro area. We start by using the New Keynesian Phillips Curve (NKPC) to explain inflation differences for a panel of countries. Exchange rate movements and expected inflation in particular play an important part in bringing about diverging inflation dynamics, while lagged inflation does not. The Incomplete Competition Model (ICM) adds explanatory power to the NKPC in describing inflation dynamics across countries. The latter model does not encompass ICM, and the variables proposed by the ICM are statistically significant: the growth in nominal Unit Labour Cost and the long-run disequilibrium between prices and costs explain inflation differentials. Journal: Journal of Applied Economics Pages: 75-103 Issue: 1 Volume: 20 Year: 2017 Month: 5 X-DOI: 10.1016/S1514-0326(17)30004-1 File-URL: http://hdl.handle.net/10.1016/S1514-0326(17)30004-1 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:recsxx:v:20:y:2017:i:1:p:75-103 Template-Type: ReDIF-Article 1.0 Author-Name: Mehmet Balcilar Author-X-Name-First: Mehmet Author-X-Name-Last: Balcilar Author-Name: Rangan Gupta Author-X-Name-First: Rangan Author-X-Name-Last: Gupta Author-Name: Charl Jooste Author-X-Name-First: Charl Author-X-Name-Last: Jooste Title: The Growth-Inflation Nexus for the U.S. from 1801 to 2013: A Semiparametric Approach Abstract: We study the existence of a threshold level of inflation for the U.S. economy over 1801–2013, beyond which it has a negative effect on economic growth. A combination of nonparametric (NP) and instrumental variable semiparametric (SNP-IV) methods obtain inflation thresholds for the United States. The results suggest that the relationship between growth and inflation is hump shaped —that higher levels of inflation reduce growth more compared to low inflation or deflation. The strongest result to emerge from the study consistently shows that inflation above two per cent negatively affects growth. Two additional parametric methods confirm this finding. Another important result is that high or very low levels of inflation are undesirable and are associated with lower growth - hinting that a growth maximizing value of inflation exists. Journal: Journal of Applied Economics Pages: 105-120 Issue: 1 Volume: 20 Year: 2017 Month: 5 X-DOI: 10.1016/S1514-0326(17)30005-3 File-URL: http://hdl.handle.net/10.1016/S1514-0326(17)30005-3 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:recsxx:v:20:y:2017:i:1:p:105-120 Template-Type: ReDIF-Article 1.0 Author-Name: Faqin Lin Author-X-Name-First: Faqin Author-X-Name-Last: Lin Author-Name: Dongzhou Mei Author-X-Name-First: Dongzhou Author-X-Name-Last: Mei Author-Name: Huanhuan Wang Author-X-Name-First: Huanhuan Author-X-Name-Last: Wang Author-Name: Xi Yao Author-X-Name-First: Xi Author-X-Name-Last: Yao Title: Romer Was Right on Openness and Inflation: Evidence from Sub-Saharan Africa Abstract: Romer (1993) documents a negative relation between trade openness and inflation and offers an explanation based on time-inconsistency of monetary policy, but subsequent research casts doubt on the negative relationship and the explanation. This paper contributes to this debate by estimating the effect of openness to international trade on inflation with panel data from Sub-Saharan Africa. Employing instrumental variable techniques that correct for endogeneity bias of trade openness, the empirical evidence suggests that within-country variations in trade openness restrict inflation: a 1 percentage point increase in the ratio of trade over gross domestic product is associated with a decrease in inflation of approximately 0.08 percentage points per year. These results are robust to additional controls, different measurements of trade openness and alternative instruments. Finally, we inspect the time-inconsistency mechanism of the negative-relationship between trade openness and inflation. Journal: Journal of Applied Economics Pages: 121-140 Issue: 1 Volume: 20 Year: 2017 Month: 5 X-DOI: 10.1016/S1514-0326(17)30006-5 File-URL: http://hdl.handle.net/10.1016/S1514-0326(17)30006-5 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:recsxx:v:20:y:2017:i:1:p:121-140 Template-Type: ReDIF-Article 1.0 Author-Name: Vincenzo Atella Author-X-Name-First: Vincenzo Author-X-Name-Last: Atella Author-Name: Lorenzo Carbonari Author-X-Name-First: Lorenzo Author-X-Name-Last: Carbonari Title: Is Gerontocracy Harmful for Growth? a Comparative Study of Seven European Countries Abstract: We study the relationship between gerontocracy and aggregate economic performance in a simple model where growth is driven by human capital accumulation and productive government spending. We show that less patient élites display the tendency to underinvest in public education and productive government services, and thus are harmful for growth. The damage caused by gerontocracy is mainly due to the lack of long-term delayed return on investments, originated by the lower subjective discount factor. An empirical analysis using public investment in Information and Communication Technologies (ICT) is carried out to test theoretical predictions across different countries and different economic sectors. The econometric results confirm our main hypotheses. Journal: Journal of Applied Economics Pages: 141-168 Issue: 1 Volume: 20 Year: 2017 Month: 5 X-DOI: 10.1016/S1514-0326(17)30007-7 File-URL: http://hdl.handle.net/10.1016/S1514-0326(17)30007-7 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:recsxx:v:20:y:2017:i:1:p:141-168 Template-Type: ReDIF-Article 1.0 Author-Name: Luisa Martí Author-X-Name-First: Luisa Author-X-Name-Last: Martí Author-Name: Juan Carlos Martín Author-X-Name-First: Juan Carlos Author-X-Name-Last: Martín Author-Name: Rosa Puertas Author-X-Name-First: Rosa Author-X-Name-Last: Puertas Title: A Dea-Logistics Performance Index Abstract: Logistics and transport increasingly play a pivotal role in international trade relations. The Logistics Performance Index (LPI) measures the on-the-ground efficiency of trade supply chains or logistics performance. The aim of this paper is to propose a data envelopment analysis (DEA) approach to compute a synthetic index of overall logistics performance (DEA-LPI) and benchmark the logistics performance of the countries with LPI. Dealing with the six dimensions of LPI, the proposed approach uses DEA as a tool for multiple criteria decision making (MCDM). Furthermore, the paper also analyses the potential differences observed when using different variables, namely income and geographical area. Our findings suggest that the logistics performance depends largely on income and geographical area. High income countries are in the group of best performers, which is highly dominated by the EU. Journal: Journal of Applied Economics Pages: 169-192 Issue: 1 Volume: 20 Year: 2017 Month: 5 X-DOI: 10.1016/S1514-0326(17)30008-9 File-URL: http://hdl.handle.net/10.1016/S1514-0326(17)30008-9 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:recsxx:v:20:y:2017:i:1:p:169-192 Template-Type: ReDIF-Article 1.0 Author-Name: Alexandre Repkine Author-X-Name-First: Alexandre Author-X-Name-Last: Repkine Title: Imposing Concavity and the Null-Jointness Property on the Production Possibilities Frontier in Case of Polluting Technologies Abstract: Economic theory requires the directional distance functions used to study the properties of production possibility sets of polluting technologies to be concave in both outputs, while the implied production possibilities frontier (PPF) is required to be concave with respect to the bad output. However, existing estimation frameworks do not preclude the estimation of convex PPFs. We analyze geometrical properties of the quadratic approximation to the directional output distance functions to derive a constraint that guarantees PPF concavity and consider the issue of imposing the property of null-jointness on the production possibilities set, which is also required by theory. We simulate a dataset corresponding to a concave PPF and show that in case concavity and null-jointness constraints are not imposed, it is possible that the conventional estimation framework may lead to erroneous conclusions with respect to the type of curvature of both the directional output distance function, and the PPF. Journal: Journal of Applied Economics Pages: 193-210 Issue: 1 Volume: 20 Year: 2017 Month: 5 X-DOI: 10.1016/S1514-0326(17)30009-0 File-URL: http://hdl.handle.net/10.1016/S1514-0326(17)30009-0 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:recsxx:v:20:y:2017:i:1:p:193-210 Template-Type: ReDIF-Article 1.0 Author-Name: Mauricio Bugarin Author-X-Name-First: Mauricio Author-X-Name-Last: Bugarin Author-Name: Fernanda Marciniuk Author-X-Name-First: Fernanda Author-X-Name-Last: Marciniuk Title: Strategic Partisan Transfers in a Fiscal Federation: Evidence from a New Brazilian Database Abstract: This article makes use of a unique database that allows, for the first time, calculating in a precise way the amounts of discretionary transfers from the Brazilian Federal government to municipalities in the period from 1997 to 2012. The new database is used to test the “strategic partisan transfers hypothesis”, which states that mayors from the same party as the president receive higher federal transfers than those from different parties, if the corresponding municipality is situated in a state where the governor is not aligned with the president. In general, the econometric analysis strongly supports the strategic partisan transfers hypothesis. Furthermore, it supports the hypothesis that there is a biannual political transfers cycle in Brazil due to the country's staggered electoral system with elections every other year. Journal: Journal of Applied Economics Pages: 211-239 Issue: 2 Volume: 20 Year: 2017 Month: 11 X-DOI: 10.1016/S1514-0326(17)30010-7 File-URL: http://hdl.handle.net/10.1016/S1514-0326(17)30010-7 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:recsxx:v:20:y:2017:i:2:p:211-239 Template-Type: ReDIF-Article 1.0 Author-Name: Walter Cont Author-X-Name-First: Walter Author-X-Name-Last: Cont Author-Name: Alberto Porto Author-X-Name-First: Alberto Author-X-Name-Last: Porto Author-Name: Pedro Juarros Author-X-Name-First: Pedro Author-X-Name-Last: Juarros Title: Regional Income Redistribution and Risk-Sharing: Lessons from Argentina Abstract: This paper estimates redistribution and risk-sharing across provinces in Argentina during the 1995–2010 period as a result of the national budget. We find that the aggregate national budget (expenditure, transfers and their corresponding revenues) reduces differences in the per capita provincial Gross Geographic Product by 5% in the long term, and stabilizes such differences by 10%. The redistributive tool is national expenditure, while automatic intergovernmental transfers are almost neutral and tax revenues amplify regional disparities. The quantitative effects are somewhat modest in comparison with those achieved in developed countries. Regressive taxation is the key difference with developed countries. Journal: Journal of Applied Economics Pages: 241-269 Issue: 2 Volume: 20 Year: 2017 Month: 11 X-DOI: 10.1016/S1514-0326(17)30011-9 File-URL: http://hdl.handle.net/10.1016/S1514-0326(17)30011-9 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:recsxx:v:20:y:2017:i:2:p:241-269 Template-Type: ReDIF-Article 1.0 Author-Name: Mark J. Gibson Author-X-Name-First: Mark J. Author-X-Name-Last: Gibson Author-Name: Jeff Luckstead Author-X-Name-First: Jeff Author-X-Name-Last: Luckstead Title: Coupled Vs. Decoupled Subsidies with Heterogeneous Firms in General Equilibrium Abstract: We develop a competitive general equilibrium model with heterogeneous firms and endogenous entry and exit to contrast the effects of coupled and decoupled subsidies. Unlike coupled subsidies, decoupled subsidies are not tied to a producer's level of output, so they are thought to be less distortive. We challenge this view by proving that, in a model with endogenous TFP, coupled subsidies have no effect on TFP while decoupled subsidies have a negative effect. Moreover, our numerical experiments show that, for a given level of government expenditure, decoupled subsidies can lower welfare more than coupled subsidies. Journal: Journal of Applied Economics Pages: 271-282 Issue: 2 Volume: 20 Year: 2017 Month: 11 X-DOI: 10.1016/S1514-0326(17)30012-0 File-URL: http://hdl.handle.net/10.1016/S1514-0326(17)30012-0 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:recsxx:v:20:y:2017:i:2:p:271-282 Template-Type: ReDIF-Article 1.0 Author-Name: Robert Pater Author-X-Name-First: Robert Author-X-Name-Last: Pater Title: Is There a Beveridge Curve in the Short and the Long Run? Abstract: The theoretical Beveridge curve has a negative slope and is convex to the origin, a relationship most often associated to the short run. However, search and matching theory indicates that certain shocks may affect unemployment and vacancies in the same way. I trace the effects of both types of shocks affecting the vacancy rate and the unemployment rate using U.S. data. I impose common factor restrictions in an unobserved component model and sign restrictions in a vector autoregressive model. I derive negatively and positively-correlated components of vacancies and unemployment. The negatively-sloped Beveridge curve is the result of an aggregate labour demand shock. This shock also causes some more long-lasting effects for vacancies and unemployment, the ‘loops’ around the Beveridge curve. The shock that creates a positive co-movement between vacancies and unemployment is due to matching efficiency and job destruction. This positive co-movement occurs after recessions and in the long run. Journal: Journal of Applied Economics Pages: 283-303 Issue: 2 Volume: 20 Year: 2017 Month: 11 X-DOI: 10.1016/S1514-0326(17)30013-2 File-URL: http://hdl.handle.net/10.1016/S1514-0326(17)30013-2 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:recsxx:v:20:y:2017:i:2:p:283-303 Template-Type: ReDIF-Article 1.0 Author-Name: Pablo Schiaffino Author-X-Name-First: Pablo Author-X-Name-Last: Schiaffino Author-Name: Ricardo F. Crespo Author-X-Name-First: Ricardo F. Author-X-Name-Last: Crespo Author-Name: Daniel Heymann Author-X-Name-First: Daniel Author-X-Name-Last: Heymann Title: Processing Uncertainty: Evolving Beliefs, Fallible Theories, Rationalizations and the Origins of Macroeconomic Crises Abstract: The macroeconomic crisis of the last decade reopened questions about how economic agents define plans and expectations. The crisis triggered widespread, yet ongoing revisions of the beliefs entertained by agents and economists. The decision errors that result in crises do not necessarily derive from behavioral biases: often, those choices were rationalized with reference to established conventional wisdom, backed by economic theories influential at the respective times. Thus, understanding such socially relevant events requires addressing concretely how people build decision scenarios in changing environments, and how those interact with the evolution of prevalent economic analysis. A revision of Keynes' work on uncertainty, especially his notion of “weight of evidence”, can help in this respect. In this paper we analyze some central informational elements of macro crises, discuss weaknesses of the standard analyses which try to accommodate critical phenomena into the rational expectations framework, and comment on ways to move ahead. Journal: Journal of Applied Economics Pages: 305-328 Issue: 2 Volume: 20 Year: 2017 Month: 11 X-DOI: 10.1016/S1514-0326(17)30014-4 File-URL: http://hdl.handle.net/10.1016/S1514-0326(17)30014-4 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:recsxx:v:20:y:2017:i:2:p:305-328 Template-Type: ReDIF-Article 1.0 Author-Name: Oscar Claveria Author-X-Name-First: Oscar Author-X-Name-Last: Claveria Author-Name: Enric Monte Author-X-Name-First: Enric Author-X-Name-Last: Monte Author-Name: Salvador Torra Author-X-Name-First: Salvador Author-X-Name-Last: Torra Title: Using Survey Data to Forecast Real Activity with Evolutionary Algorithms. a Cross-Country Analysis Abstract: In this study we use survey expectations about a wide range of economic variables to forecast real activity. We propose an empirical approach to derive mathematical functional forms that link survey expectations to economic growth. Combining symbolic regression with genetic programming we generate two survey-based indicators: a perceptions index, using agents' assessments about the present, and an expectations index with their expectations about the future. In order to find the optimal combination of both indexes that best replicates the evolution of economic activity in each country we use a portfolio management procedure known as index tracking. By means of a generalized reduced gradient algorithm we derive the relative weights of both indexes. In most economies, the survey-based predictions generated with the composite indicator outperform the benchmark model for one-quarter ahead forecasts, although these improvements are only significant in Austria, Belgium and Portugal. Journal: Journal of Applied Economics Pages: 329-349 Issue: 2 Volume: 20 Year: 2017 Month: 11 X-DOI: 10.1016/S1514-0326(17)30015-6 File-URL: http://hdl.handle.net/10.1016/S1514-0326(17)30015-6 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:recsxx:v:20:y:2017:i:2:p:329-349 Template-Type: ReDIF-Article 1.0 Author-Name: Néstor Gandelman Author-X-Name-First: Néstor Author-X-Name-Last: Gandelman Author-Name: Alejandro Rasteletti Author-X-Name-First: Alejandro Author-X-Name-Last: Rasteletti Title: Credit Constraints, Sector Informality and Firm Investments: Evidence from a Panel of Uruguayan Firms Abstract: Using data on Uruguayan firms (1997–2008) this paper explores whether the extent of informality in a sector affects a firm's investment decision either directly or indirectly through a credit availability channel. The results suggest that financial restrictions affect investment decisions: a one percentage point increase in overall credit growth translates into a one half percentage point increase in investment rates. It is also found that, although there is no direct effect of informality on the firm investment decision, there is an indirect effect through the borrowing channel. Journal: Journal of Applied Economics Pages: 351-372 Issue: 2 Volume: 20 Year: 2017 Month: 11 X-DOI: 10.1016/S1514-0326(17)30016-8 File-URL: http://hdl.handle.net/10.1016/S1514-0326(17)30016-8 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:recsxx:v:20:y:2017:i:2:p:351-372 Template-Type: ReDIF-Article 1.0 Author-Name: Amin Karimu Author-X-Name-First: Amin Author-X-Name-Last: Karimu Author-Name: George Marbuah Author-X-Name-First: George Author-X-Name-Last: Marbuah Title: Re-Examining the Financial Development-Openness Nexus: Nonparametric Evidence for Developing Countries Abstract: This paper re-examines the nexus between financial development and openness in developing countries. Specifically, we test whether both financial and trade openness explain financial development and its variations across 44 developing economies. Questioning the functional specifications in previous studies, we propose a fully nonparametric modelling approach to validate the simultaneous openness hypothesis. Our findings from the parametric approach suggest that both openness dimensions positively impact financial development, providing a loose support for the simultaneous openness hypothesis. The results based on the nonparametric approach suggest a negative effect of closed economies (economies with relatively closed trade and capital accounts) on financial development, supporting the strong version of the simultaneous openness hypothesis. Correct model specification test results support the nonparametric model relative to the parametric model as appropriate for the sampled data. Our conclusion is therefore based on the nonparametric finding, which supports the simultaneous openness hypothesis for the selected developing countries. Journal: Journal of Applied Economics Pages: 373-394 Issue: 2 Volume: 20 Year: 2017 Month: 11 X-DOI: 10.1016/S1514-0326(17)30017-X File-URL: http://hdl.handle.net/10.1016/S1514-0326(17)30017-X File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:recsxx:v:20:y:2017:i:2:p:373-394 Template-Type: ReDIF-Article 1.0 Author-Name: Ummad Mazhar Author-X-Name-First: Ummad Author-X-Name-Last: Mazhar Author-Name: Juvaria Jafri Author-X-Name-First: Juvaria Author-X-Name-Last: Jafri Title: Can the Shadow Economy Undermine the Effect of Political Stability on Inflation? Empirical Evidence Abstract: This paper revisits the empirical relationship between political stability and inflation while explicitly accounting for the presence of the shadow economy. Using a large data set of 122 countries over the 1999 to 2007 period, we find that the well established negative correlation between political stability and inflation holds only if the size of the shadow economy remains modest; and it ceases to exist at higher levels of the size of the informal sector. This finding contributes to the existing literature on public finance that assigns special importance to political determinants of inflation. The results are robust against alternative specifications and satisfy the usual assumptions of a valid statistical inference. Journal: Journal of Applied Economics Pages: 395-420 Issue: 2 Volume: 20 Year: 2017 Month: 11 X-DOI: 10.1016/S1514-0326(17)30018-1 File-URL: http://hdl.handle.net/10.1016/S1514-0326(17)30018-1 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:recsxx:v:20:y:2017:i:2:p:395-420 Template-Type: ReDIF-Article 1.0 Author-Name: Víctor Mauricio Castañeda Rodríguez Author-X-Name-First: Víctor Mauricio Author-X-Name-Last: Castañeda Rodríguez Title: Tax determinants revisited. An unbalanced data panel analysis Abstract: Quantitative research on taxation is important to test which variables affect it and hence to identify strategies in order to boost tax revenue or change its composition. Albeit research on this topic is not recent, many authors have focused on developed countries, whereas others have avoided including variables that are available recently, for example many governance indicators. This paper contributes to the matter by expanding the dataset with a relevant sample of countries, variables, and time observations. Using a dataset that covers over 138 countries and a 40-year period (1976–2015) we estimate static and dynamic models, although the results generally keep unchanged. In addition, and according to the coefficients significance, some variables as the following influence taxation and/or its composition: Agriculture’s share in gross domestic product, financial intermediation, natural rents, education, population share above 65 years, quality of government, and democracy. Journal: Journal of Applied Economics Pages: 1-24 Issue: 1 Volume: 21 Year: 2018 Month: 1 X-DOI: 10.1080/15140326.2018.1526867 File-URL: http://hdl.handle.net/10.1080/15140326.2018.1526867 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:recsxx:v:21:y:2018:i:1:p:1-24 Template-Type: ReDIF-Article 1.0 Author-Name: Elżbieta Antczak Author-X-Name-First: Elżbieta Author-X-Name-Last: Antczak Author-Name: Ewa Gałecka-Burdziak Author-X-Name-First: Ewa Author-X-Name-Last: Gałecka-Burdziak Author-Name: Robert Pater Author-X-Name-First: Robert Author-X-Name-Last: Pater Title: Unemployment and vacancy flows in spatial labour market matching at the regional level. The case of a transition country Abstract: We examine the extent to which spatial interactions affect the labour market matching process at the regional level using three frameworks: random, stock-flow, and job-queuing. We study the underexplored, regionally diversified former transition country of Poland at the LAU-1 level over the 2003–2014 time period using registered monthly data. We employ a Durbin panel model with spatial error. Results prove that spatial interactions affect matching and that the stock-flow model is in some respects superior to others in explaining the job creation process. Unemployment affects matching more than vacancies. The newly unemployed may seek jobs in adjacent regions and can cause congestion there, but vacancies tend to attract workers from adjacent markets and exert positive externalities. Policy actions should be aimed at exploiting spatial interdependencies to improve matching at the regional level by increasing the number of available job offers, improving information, and increasing labour force mobility. Journal: Journal of Applied Economics Pages: 25-43 Issue: 1 Volume: 21 Year: 2018 Month: 1 X-DOI: 10.1080/15140326.2018.1526874 File-URL: http://hdl.handle.net/10.1080/15140326.2018.1526874 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:recsxx:v:21:y:2018:i:1:p:25-43 Template-Type: ReDIF-Article 1.0 Author-Name: Eva Medina-Moral Author-X-Name-First: Eva Author-X-Name-Last: Medina-Moral Author-Name: Vicente J. Montes-Gan Author-X-Name-First: Vicente J. Author-X-Name-Last: Montes-Gan Title: Economic freedom, good governance and the dynamics of development Abstract: The purpose of this research is to provide empirical evidence about what institutions are most likely to favor development in its different stages. Firstly, we identify the three development stages that prevailed in the world between 1996 and 2011 according to the income classification of the World Bank corroborated with data from the UNDP Human Development Index. Secondly, we consider that a country had a “successful” behavior if it improved its development stage in that period. Grouping countries based on “success”, instead of according to the income level, allows us to introduce the dynamics of development in the analysis. Thirdly, we formulate a panel data and a probit model to determine the institutions that are behind the success cases. The results identified economic freedom as the most important institution in all development stages; governance was also found essential, but only in the countries in the intermediate stage of development. Journal: Journal of Applied Economics Pages: 44-66 Issue: 1 Volume: 21 Year: 2018 Month: 1 X-DOI: 10.1080/15140326.2018.1526873 File-URL: http://hdl.handle.net/10.1080/15140326.2018.1526873 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:recsxx:v:21:y:2018:i:1:p:44-66 Template-Type: ReDIF-Article 1.0 Author-Name: Ricardo Ramalhete Moreira Author-X-Name-First: Ricardo Ramalhete Author-X-Name-Last: Moreira Author-Name: Edson Zambon Monte Author-X-Name-First: Edson Zambon Author-X-Name-Last: Monte Author-Name: André Abdala Author-X-Name-First: André Author-X-Name-Last: Abdala Title: Inflation targeting and inflation deviation inertia: a study for Brazil based on the fractional integration approach Abstract: We applied the fractional integration approach to measure inflation deviation inertia in an emerging economy under an inflation targeting regime, as well as to control for potential determinants of such a deviation. We did not base our analysis on typical unit root tests, as we identified a long-memory behavior in inflation deviation. Such a non-conventional procedure can be regarded as a contribution to the inflation targeting literature. From ARFIMA and ARFIMAX estimates, we identified that inflation deviation was mainly determined by a strong inertia degree (AR(1)), commodity prices, nominal exchange rate and economic activity over the entire sample. Moreover, we found an increase of the inflation deviation inertia over the last years of our time sample, thereby indicating a deterioration of the inflation targeting regime in such a specific period. Journal: Journal of Applied Economics Pages: 67-83 Issue: 1 Volume: 21 Year: 2018 Month: 1 X-DOI: 10.1080/15140326.2018.1526877 File-URL: http://hdl.handle.net/10.1080/15140326.2018.1526877 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:recsxx:v:21:y:2018:i:1:p:67-83 Template-Type: ReDIF-Article 1.0 Author-Name: Jong Woo Kang Author-X-Name-First: Jong Woo Author-X-Name-Last: Kang Author-Name: Suzette Dagli Author-X-Name-First: Suzette Author-X-Name-Last: Dagli Title: International trade and exchange rates Abstract: This paper analyzes the link between international trade and exchange rate levels in the context of the global financial crisis (GFC) and the rise of global and regional value chains (GVCs). Using bilateral data for 72 economies over the 2001–2015 period, we find a positive relationship between the real exchange rate and export volume pre-GFC; but this relationship mostly disappears post-GFC. We also examine the impact of deepening GVCs on trade and on the exchange rate-trade link channel. The analysis confirms that increased participation in GVCs lowers the impact of the exchange rate on exports, and could be a contributing factor to weakening links between exchange rates and trade. Lastly, other structural factors, such as import composition and stock of short-term external debt of exporters and importers, seem to have a significant impact on trade performance but less impact on the exchange rate-trade link channel post-GFC. Journal: Journal of Applied Economics Pages: 84-105 Issue: 1 Volume: 21 Year: 2018 Month: 1 X-DOI: 10.1080/15140326.2018.1526878 File-URL: http://hdl.handle.net/10.1080/15140326.2018.1526878 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:recsxx:v:21:y:2018:i:1:p:84-105 Template-Type: ReDIF-Article 1.0 Author-Name: Soumyananda Dinda Author-X-Name-First: Soumyananda Author-X-Name-Last: Dinda Title: Production technology and carbon emission: long-run relation with short-run dynamics Abstract: Using a vector error correction model, this paper investigates the long-run relation with short-run dynamics among CO2 emission, technological progress and economic growth. It observes a specific kind of causality running from technological progress to reduction of CO2 emission in the United States during 1963–2010, while past income generation is the cause of rising carbon emission. Policy makers should emphasise R&D for updated production technology, while raising income helps to reduce CO2 emission. Technological progress is the central force that causes income growth as well as emissions’ reduction. Continuous change and adaption of new and updated technology is the main driving force towards sustainable development. Journal: Journal of Applied Economics Pages: 106-121 Issue: 1 Volume: 21 Year: 2018 Month: 1 X-DOI: 10.1080/15140326.2018.1526871 File-URL: http://hdl.handle.net/10.1080/15140326.2018.1526871 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:recsxx:v:21:y:2018:i:1:p:106-121 Template-Type: ReDIF-Article 1.0 Author-Name: Dong Diansheng Author-X-Name-First: Dong Author-X-Name-Last: Diansheng Author-Name: Stewart Hayden Author-X-Name-First: Stewart Author-X-Name-Last: Hayden Author-Name: McLaughlin Patrick Author-X-Name-First: McLaughlin Author-X-Name-Last: Patrick Title: A new approach to estimate household food demand with panel data Abstract: This article develops a model of food demand in which the quality and quantity of food purchased and the inter-purchase time are determined simultaneously. We use this model to explore the relationship between a household’s cereal purchases and its demographic variables. Households eligible to participate in the U.S. Government Special Supplemental Nutrition Program for Women, Infants, and Children are found to purchase a larger quantity of cereals when making a purchase and also buy more often. The model is estimated using data from Information Resources Inc.’s National Consumer Panel. These data are heavily censored at zero. The traditional approach for working with such data in demand estimation usually involves accounting for the missing unit value for non-purchase occasions and the evaluation of multivariate probabilities. However, our methodology overcomes these problems by modeling the inter-purchase time rather than modeling whether or not a purchase is made in a given time period. Journal: Journal of Applied Economics Pages: 122-136 Issue: 1 Volume: 21 Year: 2018 Month: 1 X-DOI: 10.1080/15140326.2018.1526869 File-URL: http://hdl.handle.net/10.1080/15140326.2018.1526869 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:recsxx:v:21:y:2018:i:1:p:122-136 Template-Type: ReDIF-Article 1.0 Author-Name: Julio Escolano Author-X-Name-First: Julio Author-X-Name-Last: Escolano Author-Name: Laura Jaramillo Author-X-Name-First: Laura Author-X-Name-Last: Jaramillo Author-Name: Carlos Mulas-Granados Author-X-Name-First: Carlos Author-X-Name-Last: Mulas-Granados Title: How much is a lot? The maximum size of fiscal adjustments Abstract: The sizeable fiscal consolidation required to stabilize the debt-to-GDP ratios in several countries in the aftermath of the global crisis raises a crucial question on its feasibility. To answer this question, we propose a methodology to identify historical fiscal adjustment episodes for countries that both needed and wanted to adjust in order to stabilize debt to GDP. We identify 91 adjustment episodes in 49 countries during 1945–2014. We find that countries typically improved their cyclically adjusted primary balances by close to 5 percent of GDP. We also observe that countries make substantial efforts to stabilize debt, but ease their primary balances once this objective is achieved, without getting back to their initial lower debt-to-GDP ratio. Consolidations were larger when sustained over time and the initial deficit was high. Fiscal adjustments were also larger when accompanied by monetary easing and, to a lesser extent, by an improvement in credit conditions. Journal: Journal of Applied Economics Pages: 137-159 Issue: 1 Volume: 21 Year: 2018 Month: 1 X-DOI: 10.1080/15140326.2018.1526870 File-URL: http://hdl.handle.net/10.1080/15140326.2018.1526870 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:recsxx:v:21:y:2018:i:1:p:137-159 Template-Type: ReDIF-Article 1.0 Author-Name: Eirini Ozouni Author-X-Name-First: Eirini Author-X-Name-Last: Ozouni Author-Name: Constantinos Katrakylidis Author-X-Name-First: Constantinos Author-X-Name-Last: Katrakylidis Author-Name: Grigoris Zarotiadis Author-X-Name-First: Grigoris Author-X-Name-Last: Zarotiadis Title: Technology evolution and long waves: investigating their relation with spectral and cross-spectral analysis Abstract: The present paper is an empirical exercise that contributes to the debate on whether long-lasting cyclical economic development can be viewed as a deterministic phenomenon or a stochastic process. First, we search for longer lasting, periodically reappearing cycles of GDP per capita in four countries: USA, UK, Germany and France. Second, based on theoretical arguments that stress applied knowledge as a significant driving force, we test its dynamic interrelationship with these countries’ economic performance by applying spectral and cross-spectral methodologies. We confirm the existence of periodical long waves both in terms of GDP per capita as well as of applied knowledge. Moreover, we find strong interrelations between them and modest evidence for which is the leading force in the long term. Journal: Journal of Applied Economics Pages: 160-174 Issue: 1 Volume: 21 Year: 2018 Month: 1 X-DOI: 10.1080/15140326.2018.1526872 File-URL: http://hdl.handle.net/10.1080/15140326.2018.1526872 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:recsxx:v:21:y:2018:i:1:p:160-174 Template-Type: ReDIF-Article 1.0 Author-Name: Puneet Arora Author-X-Name-First: Puneet Author-X-Name-Last: Arora Author-Name: Alberto Chong Author-X-Name-First: Alberto Author-X-Name-Last: Chong Title: Government effectiveness in the provision of public goods: the role of institutional quality Abstract: While poorer countries have a much smaller public sector and correspondingly a smaller tax burden than richer countries, their economic performance has not been necessarily better. This paper discusses the role that institutional quality plays in determining government’s effectiveness in delivering public goods and in, therefore, mediating the effects of higher taxation in an economy. A simple theoretical model shows that provision of public goods and optimal tax levels increase with improved institutional quality. Using firm-level perceptions data on the quality of public services and the tax burden, consistent with the predictions of our model, we find that a higher level of institutional quality bolsters positive perception of the quality of public services while at the same time moderating the view of the taxes as an obstacle to growth. Journal: Journal of Applied Economics Pages: 175-196 Issue: 1 Volume: 21 Year: 2018 Month: 1 X-DOI: 10.1080/15140326.2018.1550593 File-URL: http://hdl.handle.net/10.1080/15140326.2018.1550593 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:recsxx:v:21:y:2018:i:1:p:175-196 Template-Type: ReDIF-Article 1.0 Author-Name: Dennis Wesselbaum Author-X-Name-First: Dennis Author-X-Name-Last: Wesselbaum Title: Time-varying volatility in the U.S. labor market Abstract: In state-of-the-art macroeconomic and labor market models shocks are assumed to be homoscedastic. However, we show that this assumption is much too restrictive. We estimate the conditional variance-covariance matrix using a VAR-DCC model and discuss the time-varying risk contained in a large set of labor market variables. We find significant evidence for strong time-varying volatility in all considered labor market time series. We observe that recessions tend to lead peaks of volatility for most variables. Further, the effect of the Great Moderation does not hold for all variables. We also find different effects of supply-side and demand-side recessions. The implications are relevant for modelling purposes, forecasting, welfare analysis, and the understanding of sources of fluctuations. Journal: Journal of Applied Economics Pages: 197-213 Issue: 1 Volume: 21 Year: 2018 Month: 1 X-DOI: 10.1080/15140326.2018.1526875 File-URL: http://hdl.handle.net/10.1080/15140326.2018.1526875 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:recsxx:v:21:y:2018:i:1:p:197-213 Template-Type: ReDIF-Article 1.0 Author-Name: Leonardo Salazar Author-X-Name-First: Leonardo Author-X-Name-Last: Salazar Title: The Phillips curve and the role of monetary policy in Chile Abstract: In this paper, the empirical analysis finds that the dynamics of inflation and unemployment can be described by a Phillips curve when allowing for a positive co-movement between trend-adjusted productivity and unemployment. This suggests that improvements in productivity have been achieved by laying off the least productive part of the labor force. Furthermore, the natural rate of unemployment is a function of the long-term interest rate, indicating that monetary policy is not completely neutral in the long run. This result rejects the natural rate hypothesis and, at the same time, provides empirical support for the structural slump theory in a world of imperfect knowledge. The recent theory of imperfect knowledge economics (IKE) seems to address the problem that many economic models lack: persistence in the observed data. By combining IKE and the structural slumps theory it is possible to obtain predictions that are theoretically and empirically consistent. Journal: Journal of Applied Economics Pages: 1-22 Issue: 1 Volume: 22 Year: 2019 Month: 1 X-DOI: 10.1080/15140326.2018.1526865 File-URL: http://hdl.handle.net/10.1080/15140326.2018.1526865 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:recsxx:v:22:y:2019:i:1:p:1-22 Template-Type: ReDIF-Article 1.0 Author-Name: Juan A. Correa Author-X-Name-First: Juan A. Author-X-Name-Last: Correa Author-Name: Miguel Lorca Author-X-Name-First: Miguel Author-X-Name-Last: Lorca Author-Name: Francisco Parro Author-X-Name-First: Francisco Author-X-Name-Last: Parro Title: Measuring the impact of financial taxation on capital: evidence from Chilean manufacturing plants Abstract: Using panel data from Chilean manufacturing plants, we estimate the impact of a stamp tax, levied on loans by financial institutions, on capital stock. Our results show that the tax has a statistically significant negative effect on the stock of capital. Specifically, we find that a rise of one percentage point in the financial tax rate decreases the stock of capital by about $$4\% $$4%. We also find that the impact on firms is heterogeneous, depending on the intensity of the different types of capital they hold. In particular, the demand for capital from firms with a higher percentage of structural assets, such as land and buildings, is relatively less affected by the tax. Journal: Journal of Applied Economics Pages: 23-39 Issue: 1 Volume: 22 Year: 2019 Month: 1 X-DOI: 10.1080/15140326.2018.1526866 File-URL: http://hdl.handle.net/10.1080/15140326.2018.1526866 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:recsxx:v:22:y:2019:i:1:p:23-39 Template-Type: ReDIF-Article 1.0 Author-Name: João Rebelo Author-X-Name-First: João Author-X-Name-Last: Rebelo Author-Name: Lina Lourenço-Gomes Author-X-Name-First: Lina Author-X-Name-Last: Lourenço-Gomes Author-Name: Tânia Gonçalves Author-X-Name-First: Tânia Author-X-Name-Last: Gonçalves Author-Name: José Caldas Author-X-Name-First: José Author-X-Name-Last: Caldas Title: A hedonic price analysis for the Portuguese wine market: Does the distribution channel matter? Abstract: Price is a core component of both wine firms’ and consumers’ decision-making and so there has been a lot of analysis of the determinants of wine price. Most of the research has used the hedonic price function and assumed that the wine market is homogeneous with respect to both distribution channel and price segments. In this paper, a hedonic price function is estimated using data from a specialist retailer and a large supermarket, i.e., retailers in two different consumer market segments, niche and mass market, respectively. We conclude that the wine market is heterogeneous, and the importance of the various price determinants differs between distribution channels and, in the case of the specialist retailer, throughout the conditional statistical distribution of the price. This result may help the wine companies to place themselves in the market value chain. Journal: Journal of Applied Economics Pages: 40-59 Issue: 1 Volume: 22 Year: 2019 Month: 1 X-DOI: 10.1080/15140326.2018.1550596 File-URL: http://hdl.handle.net/10.1080/15140326.2018.1550596 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:recsxx:v:22:y:2019:i:1:p:40-59 Template-Type: ReDIF-Article 1.0 Author-Name: Bryon J. Parman Author-X-Name-First: Bryon J. Author-X-Name-Last: Parman Author-Name: Allen M. Featherstone Author-X-Name-First: Allen M. Author-X-Name-Last: Featherstone Title: A comparison of parametric and nonparametric estimation methods for cost frontiers and economic measures Abstract: This article examines the empirical performance of alternative frontier estimators’ ability to replicate a known underlying technology and economic measures such as multi-product and product-specific economies of scale, and economies of scope. A cross sectional Monte Carlo procedure to simulate data is used to evaluate a two-sided error system, an OLS system restricting errors to be above the cost frontier, the stochastic frontier method, and data envelopment analysis (DEA). The data are generated assuming a half-normal distribution, and a uniform distribution. Data were also simulated with single and two output firms. The DEA estimator was most robust in estimating the “true” cost frontier and associated economic measures including data sets without single output firms and less effected by distributional assumptions. Journal: Journal of Applied Economics Pages: 60-85 Issue: 1 Volume: 22 Year: 2019 Month: 1 X-DOI: 10.1080/15140326.2018.1526868 File-URL: http://hdl.handle.net/10.1080/15140326.2018.1526868 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:recsxx:v:22:y:2019:i:1:p:60-85 Template-Type: ReDIF-Article 1.0 Author-Name: Kevin Sylwester Author-X-Name-First: Kevin Author-X-Name-Last: Sylwester Title: Extortion or cost-reduction: why do firms pay bribes? Abstract: Do firms bribe government officials to reduce their costs or do bribe payments arise because of extortion from government officials? Using three of the Business Environment and Enterprise Performance surveys of firms across several countries and employing various estimation methodologies, this paper considers how bribery is associated with the potential for the firm to find honest government officials. If firms that report greater opportunities to find honest officials pay lower bribes, then this is a sign that bribes come from extortion because the presence of such officials should not matter for firms wanting to pay bribes to reduce costs. I generally find evidence that bribes arise due to extortion although results somewhat weaken in the latest survey. Journal: Journal of Applied Economics Pages: 86-102 Issue: 1 Volume: 22 Year: 2019 Month: 1 X-DOI: 10.1080/15140326.2018.1526876 File-URL: http://hdl.handle.net/10.1080/15140326.2018.1526876 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:recsxx:v:22:y:2019:i:1:p:86-102 Template-Type: ReDIF-Article 1.0 Author-Name: John B. Taylor Author-X-Name-First: John B. Author-X-Name-Last: Taylor Title: Inflation targeting in high inflation emerging economies: lessons about rules and instruments Abstract: This talk emphasizes the connection between inflation targeting and monetary policy rules. Inflation targeting is not enough. You need to have a policy procedure – a policy rule – to achieve the target. And one cannot design or evaluate a monetary policy rule without a target inflation rate. Hence, there is a symbiotic relationship between inflation targeting and monetary policy rules. Initially, the instrument in the policy rule was a monetary aggregate – a quantity, usually the money supply. It was only later that research on monetary policy rules focused on another instrument of monetary policy – the interest rate, as velocity became more volatile so the interest rate was more reliable as instrument, at least for low levels of inflation. Interest rate rules work best within a band between very high inflation and deflation. Outside that band, the central bank should rely more on money growth rules. Journal: Journal of Applied Economics Pages: 103-116 Issue: 1 Volume: 22 Year: 2019 Month: 1 X-DOI: 10.1080/15140326.2019.1565396 File-URL: http://hdl.handle.net/10.1080/15140326.2019.1565396 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:recsxx:v:22:y:2019:i:1:p:103-116 Template-Type: ReDIF-Article 1.0 Author-Name: Nikolaos Antonakakis Author-X-Name-First: Nikolaos Author-X-Name-Last: Antonakakis Author-Name: Juncal Cunado Author-X-Name-First: Juncal Author-X-Name-Last: Cunado Author-Name: Rangan Gupta Author-X-Name-First: Rangan Author-X-Name-Last: Gupta Author-Name: Mawuli Segnon Author-X-Name-First: Mawuli Author-X-Name-Last: Segnon Title: Revisiting the twin deficits hypothesis: a quantile cointegration analysis over the period 1791-2013 Abstract: We revisit the twin deficits hypothesis by examining the long-run cointegrating relationship between the US budget and trade deficits across various quantiles using a unique dataset for the period 1791–2013. The main results suggest the existence of nonlinearities and structural breaks in the relationship between the trade and budget deficits, indicating that the long-run relationship between the two variables has not been constant overtime. Furthermore, we find evidence in favour of the twin deficits hypothesis. Finally, the results suggest that the cointegrating coefficient in the long-run relationship between the two variables is not constant across different quantiles. In fact, we find that an increase in the budget deficit will have a greater effect on the trade deficit at quantiles below the median than at higher quantiles, suggesting that the effectiveness of restrictive fiscal policies directed to reduce trade deficits will depend on the actual size of the budget deficit. Journal: Journal of Applied Economics Pages: 117-131 Issue: 1 Volume: 22 Year: 2019 Month: 1 X-DOI: 10.1080/15140326.2018.1550594 File-URL: http://hdl.handle.net/10.1080/15140326.2018.1550594 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:recsxx:v:22:y:2019:i:1:p:117-131 Template-Type: ReDIF-Article 1.0 Author-Name: António Afonso Author-X-Name-First: António Author-X-Name-Last: Afonso Author-Name: José Alves Author-X-Name-First: José Author-X-Name-Last: Alves Author-Name: Raquel Balhote Author-X-Name-First: Raquel Author-X-Name-Last: Balhote Title: Interactions between monetary and fiscal policies Abstract: Using a panel data set of the 28 EU countries from 1970 to 2015, we study the nature of monetary and fiscal policies of both respective authorities and assess how economic and institutional events influence each authority’s reaction functions. Our results show that, for the all period under analysis and controlling for institutional variables, inflation has a significant impact on monetary policy, and that governments raise their primary balances when facing increases in government debt. We also find a substitution relationship between both policies, whereby the central bank assumes an active role, especially in cases of higher levels of debt. Furthermore, the introduction of a common currency shared by 19 out of 28 EU countries had a structural impact on the response and the interaction between the two policies. Journal: Journal of Applied Economics Pages: 132-151 Issue: 1 Volume: 22 Year: 2019 Month: 1 X-DOI: 10.1080/15140326.2019.1583309 File-URL: http://hdl.handle.net/10.1080/15140326.2019.1583309 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:recsxx:v:22:y:2019:i:1:p:132-151 Template-Type: ReDIF-Article 1.0 Author-Name: Atsushi Iimi Author-X-Name-First: Atsushi Author-X-Name-Last: Iimi Author-Name: Haileysus Adamtei Author-X-Name-First: Haileysus Author-X-Name-Last: Adamtei Author-Name: James Markland Author-X-Name-First: James Author-X-Name-Last: Markland Author-Name: Eyasu Tsehaye Author-X-Name-First: Eyasu Author-X-Name-Last: Tsehaye Title: Port rail connectivity and agricultural production: evidence from a large sample of farmers in Ethiopia Abstract: Agriculture important in Africa, employing a large share of the labor force and earning foreign exchange. Transport connectivity has long been a crucial constraint in the region. In theory, railways have the advantage of shipping bulky freight, such as fertilizer, at low costs. However, in many African countries, railways were in virtual bankruptcy in the 1990s. Using a large sample of data comprised of more than 190,000 households over eight years in Ethiopia, the paper estimates the impacts of rail transport on agricultural production. The paper takes advantage of the historical event that a major rail line connecting the country to Port Djibouti was abandoned during the 2000s. With the fixed effects and instrumental variable techniques combined, an agricultural production function is estimated. It is found that deteriorated transport accessibility to the port had a significantly negative impact. The use of fertilizer particularly decreased with increased transport costs. Journal: Journal of Applied Economics Pages: 152-173 Issue: 1 Volume: 22 Year: 2019 Month: 1 X-DOI: 10.1080/15140326.2019.1591814 File-URL: http://hdl.handle.net/10.1080/15140326.2019.1591814 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:recsxx:v:22:y:2019:i:1:p:152-173 Template-Type: ReDIF-Article 1.0 Author-Name: Vasco F. Alves Author-X-Name-First: Vasco F. Author-X-Name-Last: Alves Title: Pricing and waiting time decisions in a health care market with private and public provision Abstract: This paper describes a duopoly market for healthcare where one of the two providers is publicly owned and charges a price of zero, while the other sets a price so as to maximize its profit. Both providers are subject to congestion in the form of an M/M/1 queue, and they serve patient-consumers who have randomly distributed unit costs of time. Consumer demand (as market share) for both providers is obtained and described. The private provider’s pricing decision is explored, equilibrium existence is proven, and conditions for uniqueness presented. Comparative statics for demand are presented. Social welfare functions are described and the welfare maximizing condition obtained. More detailed results are then obtained for cases when costs follow uniform and Kumaraswamy distributions. Numerical simulations are then performed for these distributions, employing several parameter values, demonstrating the private provider’s pricing decision and its relationship with social welfare. Journal: Journal of Applied Economics Pages: 174-195 Issue: 1 Volume: 22 Year: 2019 Month: 1 X-DOI: 10.1080/15140326.2019.1594010 File-URL: http://hdl.handle.net/10.1080/15140326.2019.1594010 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:recsxx:v:22:y:2019:i:1:p:174-195 Template-Type: ReDIF-Article 1.0 Author-Name: Jón Helgi Egilsson Author-X-Name-First: Jón Helgi Author-X-Name-Last: Egilsson Title: Old shocks cast long shadows over the exchange rate Abstract: We propose a new exchange rate model using IRD time series as the input, and we fit the new model with empirical data for calibration. We assume that exchange rate modeling cannot be based on the response to a single shock but must instead be based on the response to a series of shocks, as previous shocks could still be playing out and affecting the overall response. We extend the Dornbusch overshooting model and make adjustments to account for empirical findings. The new model is substantiated by empirical data from several currency areas and can explain the so-called exchange rate “puzzles”. Based on the model, we derive a relationship that explains when no interest rate differential (IRD) will suffice to support a stable exchange rate, which also suggests when policy-makers could be tempted to widen the IRD continually. Journal: Journal of Applied Economics Pages: 196-218 Issue: 1 Volume: 22 Year: 2019 Month: 1 X-DOI: 10.1080/15140326.2019.1597328 File-URL: http://hdl.handle.net/10.1080/15140326.2019.1597328 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:recsxx:v:22:y:2019:i:1:p:196-218 Template-Type: ReDIF-Article 1.0 Author-Name: Diego Aycinena Author-X-Name-First: Diego Author-X-Name-Last: Aycinena Author-Name: Szabolcs Blazsek Author-X-Name-First: Szabolcs Author-X-Name-Last: Blazsek Author-Name: Lucas Rentschler Author-X-Name-First: Lucas Author-X-Name-Last: Rentschler Author-Name: Betzy Sandoval Author-X-Name-First: Betzy Author-X-Name-Last: Sandoval Title: Smoothing, discounting, and demand for intra-household control for recipients of conditional cash transfers Abstract: Inter-temporal preferences are important determinants of investment decisions, including investments in human capital. Yet, little is known about these preferences for recipients of conditional cash transfers (CCTs). We simultaneously estimate utility curvature (preference for consumption smoothing), discounting, and present biasedness for such recipients. We also introduce a financially motivated method of measuring willingness to forgo funds to control household finances. We find that female participants in a CCT program in Guatemala have very high degrees of utility curvature and low discount factors, which may lead to low levels of investment by participants in the human capital of the household. We also find that intra-household conflict is not significantly related to consumption smoothing, discounting, or present bias. Journal: Journal of Applied Economics Pages: 219-242 Issue: 1 Volume: 22 Year: 2019 Month: 1 X-DOI: 10.1080/15140326.2019.1596641 File-URL: http://hdl.handle.net/10.1080/15140326.2019.1596641 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:recsxx:v:22:y:2019:i:1:p:219-242 Template-Type: ReDIF-Article 1.0 Author-Name: Pablo J. Garofalo Author-X-Name-First: Pablo J. Author-X-Name-Last: Garofalo Title: Strategic spending in federal governments: theory and evidence from the US Abstract: Past research on the allocation of federal resources to localities has failed to account for the interaction between federal and state governments. Here a sequential-move game of such interaction is developed, where state governments behave like political surrogates for the federal government when they are politically aligned, while they engage in political competition when not. The model predicts that aligned states increase the funding of aligned localities, while the federal government increases the funding of aligned localities only within nonaligned states. Using data from the Census of Governments 1982–2002 and a difference-in-difference strategy reveals that such predictions are upheld by the data. My findings find a limit to the benefits of decentralization. Although the standard view is that it removes political power from the center, I find that decentralization could concentrate such power more at local level, which may give the President political advantages within unaligned states through aligned localities. Journal: Journal of Applied Economics Pages: 243-272 Issue: 1 Volume: 22 Year: 2019 Month: 1 X-DOI: 10.1080/15140326.2019.1611203 File-URL: http://hdl.handle.net/10.1080/15140326.2019.1611203 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:recsxx:v:22:y:2019:i:1:p:243-272 Template-Type: ReDIF-Article 1.0 Author-Name: Carlos Acuña Author-X-Name-First: Carlos Author-X-Name-Last: Acuña Author-Name: Héctor Acuña Author-X-Name-First: Héctor Author-X-Name-Last: Acuña Author-Name: Diego Carrasco Author-X-Name-First: Diego Author-X-Name-Last: Carrasco Title: Health shocks and the added worker effect: a life cycle approach Abstract: This study analyzes the existence of the added worker effect (AWE) when a male partner suffers a health shock (negative health event), by using the information from the Chilean Social Protection Survey. The health shocks considered in this study are new cases of arthritis, asthma and hypertension. We find that neither asthma nor hypertension diagnosis generates an AWE. In the case of arthritis, the study shows differentiated effects by age cohorts. More specifically, we find that women’s probability of labor force entry over three years increases by 50 percentage points when the husband between the ages of 18–44 is diagnosed with arthritis. This effect disappears in older age groups, which suggests that when studying the effect of health shocks, the differences between life cycle stages should be considered (chronic disabling conditions are an important source of financial risk for young households). Journal: Journal of Applied Economics Pages: 273-286 Issue: 1 Volume: 22 Year: 2019 Month: 1 X-DOI: 10.1080/15140326.2019.1613089 File-URL: http://hdl.handle.net/10.1080/15140326.2019.1613089 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:recsxx:v:22:y:2019:i:1:p:273-286 Template-Type: ReDIF-Article 1.0 Author-Name: Luis Alfredo Avila-Lopez Author-X-Name-First: Luis Alfredo Author-X-Name-Last: Avila-Lopez Author-Name: Chaofeng Lyu Author-X-Name-First: Chaofeng Author-X-Name-Last: Lyu Author-Name: Santos Lopez-Leyva Author-X-Name-First: Santos Author-X-Name-Last: Lopez-Leyva Title: Innovation and growth: evidence from Latin American countries Abstract: This paper aims to analyze the relationship between innovation and per capita economic growth over the long-run for 12 Latin American countries for the period 1996–2015. This study uses six different indicators of innovation. Using Granger causality test, the study finds the presence of unidirectional and bidirectional causalities between innovation and per capita economic growth. These results vary. Latin America is a diverse region, depending upon the types of innovation indicators that we use in the empirical investigation process. It is important to note that all these innovation indicators are considerably linked with per capita economic growth. Journal: Journal of Applied Economics Pages: 287-303 Issue: 1 Volume: 22 Year: 2019 Month: 1 X-DOI: 10.1080/02102412.2019.1610624 File-URL: http://hdl.handle.net/10.1080/02102412.2019.1610624 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:recsxx:v:22:y:2019:i:1:p:287-303 Template-Type: ReDIF-Article 1.0 Author-Name: Máximo Camacho Author-X-Name-First: Máximo Author-X-Name-Last: Camacho Author-Name: Gonzalo Palmieri Author-X-Name-First: Gonzalo Author-X-Name-Last: Palmieri Title: Do economic recessions cause inequality to rise? Abstract: We use a local projection approach to analyze the effect of economic recessions on income inequality in a comprehensive sample of 43 countries from 1960 to 2016. Although we consider both business-cycle and growth-cycle recessions, we fail to find evidence of significant positive impacts of economic downturns on income distribution, once controls are added to the model. However, we do find important differences across countries, which mainly depend on the degree of economic development. Journal: Journal of Applied Economics Pages: 304-320 Issue: 1 Volume: 22 Year: 2019 Month: 1 X-DOI: 10.1080/15140326.2019.1620982 File-URL: http://hdl.handle.net/10.1080/15140326.2019.1620982 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:recsxx:v:22:y:2019:i:1:p:304-320 Template-Type: ReDIF-Article 1.0 Author-Name: Daniel Kaufmann Author-X-Name-First: Daniel Author-X-Name-Last: Kaufmann Author-Name: Gil Mehrez Author-X-Name-First: Gil Author-X-Name-Last: Mehrez Author-Name: Tugrul Gurgur Author-X-Name-First: Tugrul Author-X-Name-Last: Gurgur Title: Voice or public sector management? An empirical investigation of determinants of public sector performance based on a survey of public officials Abstract: Drawing on an in-depth governance micro-survey of public officials in Bolivia, we address empirically the question of the relative importance of the various determinants of governance. We find that commonly made inferences about policy based on simple correlation can be highly misleading due to the high correlation between the various governance determinants, as well as the endogeneity in these variables. We find that undue emphasis may have been given in the previous work to a number of conventional public-sector management variables (such as civil servant wages, internal enforcement of rules, autonomy of agency by fiat, etc.), while undermining the priority of “external” (to public sector management) variables, such as citizen voice and transparency. The latter set of “voice”-related variables has a larger effect on the service delivery performance and corruption than the more traditional public-sector management type of variables. Journal: Journal of Applied Economics Pages: 321-348 Issue: 1 Volume: 22 Year: 2019 Month: 1 X-DOI: 10.1080/15140326.2019.1627718 File-URL: http://hdl.handle.net/10.1080/15140326.2019.1627718 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:recsxx:v:22:y:2019:i:1:p:321-348 Template-Type: ReDIF-Article 1.0 Author-Name: Rémi Stellian Author-X-Name-First: Rémi Author-X-Name-Last: Stellian Author-Name: Jenny Danna-Buitrago Author-X-Name-First: Jenny Author-X-Name-Last: Danna-Buitrago Title: Revealed comparative advantages and regional specialization: Evidence from Colombia in the Pacific Alliance Abstract: This paper is a methodological contribution to the calculation and use of Revealed Comparative Advantage (RCA) indexes. We first explain why the RCA index of Contribution to the Trade Balance (CTB) is theoretically relevant. However, as other RCA indexes might also be reliable measures of comparative advantages, we present standardized tools to compare RCA indexes computed for a given set of countries, products and periods. We illustrate with Colombia in the Pacific Alliance. In that case, the CTB index should be preferred to eight other representative RCA indexes. Therefore, the CTB index might be useful for empirical analysis, besides its theoretical relevance. Last, we suggest highlighting products that constitute strengths (weaknesses) for a country in international trade according to its ability to maintain through time the highest (lowest) CTB index compared with other countries. Again, we illustrate with Colombia in the Pacific Alliance and discuss implications for Colombian economic policy. Journal: Journal of Applied Economics Pages: 349-379 Issue: 1 Volume: 22 Year: 2019 Month: 1 X-DOI: 10.1080/15140326.2019.1627722 File-URL: http://hdl.handle.net/10.1080/15140326.2019.1627722 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:recsxx:v:22:y:2019:i:1:p:349-379 Template-Type: ReDIF-Article 1.0 Author-Name: Jan Simon Hallonsten Author-X-Name-First: Jan Simon Author-X-Name-Last: Hallonsten Author-Name: Thomas H.W. Ziesemer Author-X-Name-First: Thomas H.W. Author-X-Name-Last: Ziesemer Title: A semi-endogenous growth model with public factors, imported capital goods, and limited export demand for developing countries Abstract: We build a semi-endogenous growth model for developing countries with non-rivalrous public factors, imported capital goods, and an export demand function. The model exhibits the three-way interaction between public and private investment and trade shown recently in the empirical literature. A parameter for government-investment inefficiency has transitional growth effects distorting between public investment and private capital, consumption, and exports, the latter biasing the terms of trade. Our analysis of a vector error-correction model (VECM) for Trinidad &Tobago shows that additional expenditure for public investment increases output less than taxes decrease per capita consumption and therefore is sub-optimal there. Both temporary and permanent shocks on public investment have level effects supporting semi-endogenous growth modeling and demonstrate that the VECM effects are in line with the logic of the theoretical model; terms of trade are endogenous. Journal: Journal of Applied Economics Pages: 380-402 Issue: 1 Volume: 22 Year: 2019 Month: 1 X-DOI: 10.1080/15140326.2019.1627726 File-URL: http://hdl.handle.net/10.1080/15140326.2019.1627726 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:recsxx:v:22:y:2019:i:1:p:380-402 Template-Type: ReDIF-Article 1.0 Author-Name: Evan C. Tanner Author-X-Name-First: Evan C. Author-X-Name-Last: Tanner Title: Disinflation, external vulnerability, and fiscal intransigence: some unpleasant Mundellian arithmetic Abstract: This paper examines the policy challenges that a country faces when it wants to both reduce inflation and maintain a sustainable external position. Robert Mundell’s policy assignment framework suggests that these two goals may be mutually incompatible unless monetary and fiscal policies are properly coordinated. Unfortunately, if the fiscal authority is unwilling to cooperate – a case of fiscal intransigence – and central banks pursue a disinflation on a “go it alone” basis, their country’s external position may further deteriorate. A dynamic analysis shows that if the central bank itself lacks credibility, it must rely even more on cooperation from the fiscal authority. The paper thus extends Sargent and Wallace’s “unpleasant monetarist arithmetic” to an open economy: a central bank’s efforts to stabilize prices and output using a “go it alone” strategy (no help from the fiscal) may be thwarted by external factors: more external debt, higher risk premia and exchange rate passthrough. Journal: Journal of Applied Economics Pages: 403-436 Issue: 1 Volume: 22 Year: 2019 Month: 1 X-DOI: 10.1080/15140326.2019.1644718 File-URL: http://hdl.handle.net/10.1080/15140326.2019.1644718 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:recsxx:v:22:y:2019:i:1:p:403-436 Template-Type: ReDIF-Article 1.0 Author-Name: Francisco Roch Author-X-Name-First: Francisco Author-X-Name-Last: Roch Title: The adjustment to commodity price shocks Abstract: This paper analyzes the macroeconomic adjustment in commodity-exporting countries to commodity price shocks. First, I estimate a heterogenous panel SVAR using data from 22 commodity-exporting economies spanning the period 1980–2017. I find that commodity terms of trade shocks are an important driver of business-cycle fluctuations: they explain around 30 percent of movements in output, contrary to the 10 percent found in recent studies. However, there is wide variation in the responses to a commodity terms of trade innovation across countries. Second, I use panel SVARs to study the role of various key country characteristics and economic policies in the macroeconomic response to these shocks. I find evidence that exchange rate flexibility, inflation targeting regimes and fiscal rules help insulate the economy from commodity price movements. Journal: Journal of Applied Economics Pages: 437-467 Issue: 1 Volume: 22 Year: 2019 Month: 1 X-DOI: 10.1080/15140326.2019.1665316 File-URL: http://hdl.handle.net/10.1080/15140326.2019.1665316 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:recsxx:v:22:y:2019:i:1:p:437-467 Template-Type: ReDIF-Article 1.0 Author-Name: Hongbing Ouyang Author-X-Name-First: Hongbing Author-X-Name-Last: Ouyang Author-Name: Xiaolu Wei Author-X-Name-First: Xiaolu Author-X-Name-Last: Wei Author-Name: Qiufeng Wu Author-X-Name-First: Qiufeng Author-X-Name-Last: Wu Title: Agricultural commodity futures prices prediction via long- and short-term time series network Abstract: In this study, we attempt to predict global agricultural commodity futures prices through analysis of multivariate time series. Our motivation is based on the notion that datasets of agricultural commodity futures prices involves a mixture of long- and short-term information, linear and non-linear structure, for which traditional approaches such as Auto-Regressive Integrated Moving Average (ARIMA) and Vector Auto-Regression (VAR) may fail. To tackle this issue, Long- and Short-Term Time-series Network (LSTNet) is applied for prediction. Empirical results show that LSTNet achieves better performance over that of several state-of-the-art baseline methods on average and in most periods based on three performance evaluation measures and two tests of performance difference. Journal: Journal of Applied Economics Pages: 468-483 Issue: 1 Volume: 22 Year: 2019 Month: 1 X-DOI: 10.1080/15140326.2019.1668664 File-URL: http://hdl.handle.net/10.1080/15140326.2019.1668664 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:recsxx:v:22:y:2019:i:1:p:468-483 Template-Type: ReDIF-Article 1.0 Author-Name: Asena Temizsoy Author-X-Name-First: Asena Author-X-Name-Last: Temizsoy Author-Name: Gabriel Montes-Rojas Author-X-Name-First: Gabriel Author-X-Name-Last: Montes-Rojas Title: Measuring the effect of monetary shocks on European sovereign country risk: an application of GVAR models Abstract: This paper investigates the effect of European monetary policies on Eurozone countries’ sovereign risks. We control for interdependencies across individual variables within and across countries using a global VAR specification weighting transmission by their fiscal position. We find evidence of positive correlation between sovereign bond CDS and risk aversion for almost all countries in the Eurozone. The effects are larger after the 2012 Greek debt crisis. When the ECB increases its refinancing rate or there is a decline in money aggregates (i.e., M3), we observe an increase in sovereign bonds’ risk of all countries (except Greece). In contrast, monetary policy tightening shocks have the opposite impact on Greece due to a differentiation effect. Journal: Journal of Applied Economics Pages: 484-503 Issue: 1 Volume: 22 Year: 2019 Month: 1 X-DOI: 10.1080/15140326.2019.1665312 File-URL: http://hdl.handle.net/10.1080/15140326.2019.1665312 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:recsxx:v:22:y:2019:i:1:p:484-503 Template-Type: ReDIF-Article 1.0 Author-Name: Kan Yao Author-X-Name-First: Kan Author-X-Name-Last: Yao Title: Heterogeneous skill distribution and college major: evidence from PIAAC Abstract: A large literature documents the uneven distribution of labor market outcomes across majors. Students in STEM (science, technology, engineering, and mathematics) can earn more than their peers. This earnings gap can be attributed not only to the differential educational resources investment but also to heterogeneous distribution of initial cognitive skills across majors. I benefit from the rich data from the Programme for the International Assessment of Adult Competencies to examine this earnings gap in the United Stated and the United Kingdom. Based on my findings, this paper establishes new facts that add to the understanding of how college field premiums are generated. I show that a sizable portion of the return to majors is due to self-selection and up to two-fifths of the field premiums can be explained by basic cognitive skills. Despite the qualitatively similar impacts of numeracy and literacy skills on choosing college field of study, the pricing of numeracy is much higher than literacy in the labor market. Journal: Journal of Applied Economics Pages: 504-526 Issue: 1 Volume: 22 Year: 2019 Month: 1 X-DOI: 10.1080/15140326.2019.1665310 File-URL: http://hdl.handle.net/10.1080/15140326.2019.1665310 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:recsxx:v:22:y:2019:i:1:p:504-526 Template-Type: ReDIF-Article 1.0 Author-Name: Hans Martínez-Torres Author-X-Name-First: Hans Author-X-Name-Last: Martínez-Torres Author-Name: Cesáreo Gámez Author-X-Name-First: Cesáreo Author-X-Name-Last: Gámez Title: Is internet access bad news for media-capturing incumbents? Abstract: This paper’s objective is to investigate the effects of internet access on voter behavior in governor elections at the state level in aconsolidating democracy. Using a fractional probit model for panel data, we analyze the electoral outcomes in 31 Mexican states and Mexico City during state/city governor elections between 1999 and 2015. The evidence suggests that, in environments where traditional media might be captured by government (1) an increase in government expenditure growth in the year before elections increases the incumbent party’s vote share, and (2) in contrast, an increase in the portion of the population that has access to the internet reduces it. Not surprisingly, these effects seem to diminish as more broadcast companies enter the market. Unlike previous studies, this paper considers how changes in the market conditions (industry concentration and technology) of news supply, and their resulting effects on media freedom, influence voters. Journal: Journal of Applied Economics Pages: 527-553 Issue: 1 Volume: 22 Year: 2019 Month: 1 X-DOI: 10.1080/15140326.2019.1673082 File-URL: http://hdl.handle.net/10.1080/15140326.2019.1673082 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:recsxx:v:22:y:2019:i:1:p:527-553 Template-Type: ReDIF-Article 1.0 Author-Name: Lucía Morales Author-X-Name-First: Lucía Author-X-Name-Last: Morales Author-Name: Amparo Soler-Domínguez Author-X-Name-First: Amparo Author-X-Name-Last: Soler-Domínguez Author-Name: James Hanly Author-X-Name-First: James Author-X-Name-Last: Hanly Title: The power of ethical investment in the context of political uncertainty Abstract: In this paper we analyse a set of socially responsible investment (SRI) indices against their conventional counterparts in the US context. Using a data set that spans the Obama and Trump administrations, we aim to identify whether performance and volatility patterns differ when markets are exposed to political uncertainty and the Global Financial Crisis (GFC). The findings suggest that SRI indices underperform conventional indices, and that the S&P 500 has a significant impact on their behaviour. The CBOE’s Volatility Index (VIX), the US Equity Related Economic Uncertainty Index (EEUi) and the impact of the economic policy uncertainty index (EPUi) are used to consider market volatility and political uncertainty, with VIX emerging as the best indicator to capture market uncertainty. The study signals a positive and significant impact on SRI indices during the first hundred days of the Obama administration with a lack of significant findings for the Trump administration for the period of study. The results for implied volatility reveal similar patterns across all indices. Journal: Journal of Applied Economics Pages: 554-580 Issue: 1 Volume: 22 Year: 2019 Month: 1 X-DOI: 10.1080/15140326.2019.1683264 File-URL: http://hdl.handle.net/10.1080/15140326.2019.1683264 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:recsxx:v:22:y:2019:i:1:p:554-580 Template-Type: ReDIF-Article 1.0 Author-Name: Celso J. Costa Author-X-Name-First: Celso J. Author-X-Name-Last: Costa Title: Preferred habitat and the term structure of interest rates in DSGE models Abstract: The aim of the present study is to use an alternative approach to derive the term structure of interest rates in DSGE models, which is based on the theory of preferred habitat. We show that this approach yields a substantial term premium which is time-variant. In particular, by introducing bonds of longer maturity, we avoid the underestimation of the volatility of the output. In addition, by allowing longer-term bonds, we show that output is more responsive to technology shocks than it would otherwise. Therefore, the goal of stabilizing output around the nonstochastic level is more difficult to achieve. Journal: Journal of Applied Economics Pages: 581-601 Issue: 1 Volume: 22 Year: 2019 Month: 1 X-DOI: 10.1080/15140326.2019.1680124 File-URL: http://hdl.handle.net/10.1080/15140326.2019.1680124 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:recsxx:v:22:y:2019:i:1:p:581-601 Template-Type: ReDIF-Article 1.0 Author-Name: Guglielmo Maria Caporale Author-X-Name-First: Guglielmo Maria Author-X-Name-Last: Caporale Author-Name: Alex Plastun Author-X-Name-First: Alex Author-X-Name-Last: Plastun Title: On stock price overreactions: frequency, seasonality and information content Abstract: This paper explores the frequency of price overreactions in the US stock market by focusing on the Dow Jones Industrial Index over the period 1990–2017. It uses two different methods (static and dynamic) to detect overreactions and then carries out various statistical tests (both parametric and non-parametric) including correlation analysis, augmented Dickey–Fuller tests (ADF), Phillips-Perron (PP) tests, Granger causality tests, and regression analysis with dummy variables. The following hypotheses are tested: whether or not the frequency of overreactions varies over time (H1), is informative about crises (H2) and/or price movements (H3), and exhibits seasonality (H4). The null cannot be rejected except for H4, i.e., no seasonality is found. On the whole, it appears that the frequency of overreactions can provide useful information about market developments. A sharp increase in the number of overreactions occurs in crisis periods. The frequency of overreactions is linked to the VIX index and therefore could be used as an alternative measure of market sentiment and market fear, and it also affects stock returns. Further, our findings provide evidence supporting market inefficiency since price predictability can allow investors to design profitable trading strategies; in addition, the fact that the frequency of overreactions varies over time is consistent with the Adaptive Expectations Hypothesis. Journal: Journal of Applied Economics Pages: 602-621 Issue: 1 Volume: 22 Year: 2019 Month: 1 X-DOI: 10.1080/15140326.2019.1692509 File-URL: http://hdl.handle.net/10.1080/15140326.2019.1692509 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:recsxx:v:22:y:2019:i:1:p:602-621 Template-Type: ReDIF-Article 1.0 Author-Name: Gerardo Licandro Author-X-Name-First: Gerardo Author-X-Name-Last: Licandro Author-Name: Miguel Mello Author-X-Name-First: Miguel Author-X-Name-Last: Mello Title: Foreign currency invoicing of domestic transactions as a hedging strategy: evidence for Uruguay Abstract: This study is an empirical analysis of the factors associated with the use of the US dollar for the invoicing of domestic transactions, which is a common practice of Uruguayan firms. Using a novel dataset we find that both the input and debt structure of firms are relevant for determining their currency of invoicing. Intuitively, firms will generate cash flows in US dollar if they have to make expenditures in foreign currency, either because they use imported inputs or if they cover debt services with currency risk. This practice can be seen as a hedging strategy to mitigate exchange risk in a highly dollarized economy. We empirically show that firms use their flows position to hedge currency mismatches in their stocks; domestic invoicing in US dollar is correlated with large negative financial positions, and the share of imported inputs and of exports. Journal: Journal of Applied Economics Pages: 622-634 Issue: 1 Volume: 22 Year: 2019 Month: 1 X-DOI: 10.1080/15140326.2019.1692581 File-URL: http://hdl.handle.net/10.1080/15140326.2019.1692581 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:recsxx:v:22:y:2019:i:1:p:622-634 Template-Type: ReDIF-Article 1.0 Author-Name: Huilian Huang Author-X-Name-First: Huilian Author-X-Name-Last: Huang Author-Name: Tao Xiong Author-X-Name-First: Tao Author-X-Name-Last: Xiong Title: Price bubbles and market integration in global sugar futures markets Abstract: We use a Supremum Augmented Dickey–Fuller test to detect price bubbles in the world’s most important sugar futures markets (ZCE, NYBOT, and LIFFE) from 2006 to 2017. Results show 19 bubbles with characteristics similar in quantity, duration, and price variation. We explore whether sugar futures prices in ZCE, NYBOT, and LIFFE are integrative in a full sample with an improved hybrid method of directed acyclic graphs and structural vector autoregression. Based on the bubble test, we examine market integration in the sugar futures markets during explosive and unexplosive episodes. We find the impact of price bubbles on market integration and explore the cause of price bubbles in a macro-economic environment. Empirical results show futures markets are more integrative when price bubbles occur. We find sugar futures price bubbles reflect supply and demand imbalance, market participants are extremely sensitive, and market information exchanges frequently during the bubble period. Journal: Journal of Applied Economics Pages: 1-20 Issue: 1 Volume: 23 Year: 2020 Month: 01 X-DOI: 10.1080/15140326.2019.1693202 File-URL: http://hdl.handle.net/10.1080/15140326.2019.1693202 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:recsxx:v:23:y:2020:i:1:p:1-20 Template-Type: ReDIF-Article 1.0 Author-Name: Mostafa E. AboElsoud Author-X-Name-First: Mostafa E. Author-X-Name-Last: AboElsoud Author-Name: Anas AlQudah Author-X-Name-First: Anas Author-X-Name-Last: AlQudah Author-Name: Eman Elish Author-X-Name-First: Eman Author-X-Name-Last: Elish Title: Does a change in immigration affect the unemployment rate in host countries? Evidence from Australia Abstract: This study examines and evaluates the dynamic causality relationship between immigration, unemployment, wages and GDP per capita in host countries with a focus on Australia. Previous research has indicated that the economic impact of immigration is significant; nonetheless, its effect on the labour market being positive or negative is inconclusive. This study uses a Vector Error Correction Model (VECM) to examine the dynamic short- and long-run nexus between these variables in Australia over the period 1980–2016. The paper provides clear evidence to policy makers on the positive spillover effect of immigration policies developed by the Australian government. Journal: Journal of Applied Economics Pages: 21-43 Issue: 1 Volume: 23 Year: 2020 Month: 01 X-DOI: 10.1080/15140326.2019.1684740 File-URL: http://hdl.handle.net/10.1080/15140326.2019.1684740 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:recsxx:v:23:y:2020:i:1:p:21-43 Template-Type: ReDIF-Article 1.0 Author-Name: Manzoor Ahmad Author-X-Name-First: Manzoor Author-X-Name-Last: Ahmad Author-Name: Shoukat Iqbal Khattak Author-X-Name-First: Shoukat Iqbal Author-X-Name-Last: Khattak Author-Name: Shehzad Khan Author-X-Name-First: Shehzad Author-X-Name-Last: Khan Author-Name: Zia Ur Rahman Author-X-Name-First: Zia Ur Author-X-Name-Last: Rahman Title: Do aggregate domestic consumption spending & technological innovation affect industrialization in South Africa?  An application of linear & non-linear ARDL models Abstract: The current paper has attempted to measure the effect of the positive and negative shocks of aggregate domestic consumption spending (ADCS) and technological innovation (TINN) on industrialisation in South Africa using the time-series data from 1980 to 2014. The ARDL estimations indicated that the ADCS and TINN determine industrialisation in both the short term and long term, while the NARDL estimations suggested that the positive shocks in ADCS and TINN have a positive effect on industrialisation in both the short run and long run. Our results validated an asymmetrical association between TINN and industrialisation, and between ADCS and industrialisation. Journal: Journal of Applied Economics Pages: 44-65 Issue: 1 Volume: 23 Year: 2020 Month: 01 X-DOI: 10.1080/15140326.2019.1683368 File-URL: http://hdl.handle.net/10.1080/15140326.2019.1683368 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:recsxx:v:23:y:2020:i:1:p:44-65 Template-Type: ReDIF-Article 1.0 Author-Name: Huthaifa Alqaralleh Author-X-Name-First: Huthaifa Author-X-Name-Last: Alqaralleh Title: Stock return-inflation nexus; revisited evidence based on nonlinear ARDL Abstract: Understanding the Stock Return-Inflation Nexus is a continuing concern among scholars. The main goal of the current study was to critically examine the view that the relation between stock return and inflation is potentially asymmetric. To capture the possibility of dynamic nonlinearity and, in turn, asymmetry, the nonlinear Autoregressive Distributed lag model (NARDL) was deployed. This study has identified that the responses of stock return are generally asymmetric. In other words, the results suggest that contractionary time appears to reduce the stock returns more than expansionary time does. Journal: Journal of Applied Economics Pages: 66-74 Issue: 1 Volume: 23 Year: 2020 Month: 01 X-DOI: 10.1080/15140326.2019.1706828 File-URL: http://hdl.handle.net/10.1080/15140326.2019.1706828 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:recsxx:v:23:y:2020:i:1:p:66-74 Template-Type: ReDIF-Article 1.0 Author-Name: Shahriyar Mukhtarov Author-X-Name-First: Shahriyar Author-X-Name-Last: Mukhtarov Author-Name: Sugra Humbatova Author-X-Name-First: Sugra Author-X-Name-Last: Humbatova Author-Name: Ilgar Seyfullayev Author-X-Name-First: Ilgar Author-X-Name-Last: Seyfullayev Author-Name: Yashar Kalbiyev Author-X-Name-First: Yashar Author-X-Name-Last: Kalbiyev Title: The effect of financial development on energy consumption in the case of Kazakhstan Abstract: This study investigates the relationship between energy consumption, financial development, economic growth, and energy prices in Kazakhstan, utilizing VECM technique to the data spanning from 1993 to 2014. Estimation results reveal that there is a positive and statistically significant impact of financial development and economic growth on the energy consumption while, energy prices proxied by CPI has a negative effect on energy consumption in the long run for the Kazakhstani case which are in line with the expectations and with the theoretical findings. This finding also shows that a 1% increase in financial development and economic growth increases energy consumption by 0.11 and 0.39%, respectively. Journal: Journal of Applied Economics Pages: 75-88 Issue: 1 Volume: 23 Year: 2020 Month: 01 X-DOI: 10.1080/15140326.2019.1709690 File-URL: http://hdl.handle.net/10.1080/15140326.2019.1709690 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:recsxx:v:23:y:2020:i:1:p:75-88 Template-Type: ReDIF-Article 1.0 Author-Name: Achille Dargaud Fofack Author-X-Name-First: Achille Dargaud Author-X-Name-Last: Fofack Author-Name: Ahmet Aker Author-X-Name-First: Ahmet Author-X-Name-Last: Aker Author-Name: Husam Rjoub Author-X-Name-First: Husam Author-X-Name-Last: Rjoub Title: Assessing the post-quantitative easing surge in financial flows to developing and emerging market economies Abstract: The aim of this paper is to assess the surge in financial flows to developing and emerging market economies induced by the Federal Reserve’s experience of quantitative easing. Using both panel causality tests and dynamic panel regression models on a data set covering as much as 78 developing and EMEs between 2007Q1 and 2014Q4, it is found on the one hand that QE caused cross-border capital flows in the form of foreign direct investment, an equity portfolios, and bank loans. On the other hand, the study reveals that QE significantly fueled financial flows to developing and EMEs through the portfolio rebalancing, liquidity and confidence channels. In addition, the paper highlights the significant contribution of the fiscal channel and shows that when it comes to post-QE cross-border financial flows, the BRICS exhibit a pattern similar to that of other developing and EMEs. Journal: Journal of Applied Economics Pages: 89-105 Issue: 1 Volume: 23 Year: 2020 Month: 01 X-DOI: 10.1080/15140326.2019.1710421 File-URL: http://hdl.handle.net/10.1080/15140326.2019.1710421 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:recsxx:v:23:y:2020:i:1:p:89-105 Template-Type: ReDIF-Article 1.0 Author-Name: Tenkir Seifu Legesse Author-X-Name-First: Tenkir Seifu Author-X-Name-Last: Legesse Author-Name: Haifeng Guo Author-X-Name-First: Haifeng Author-X-Name-Last: Guo Title: Does firm efficiency matter for debt financing decisions? Evidence from the biggest manufacturing countries Abstract: The paper examines the relationship between debt financing and firm efficiency and the moderating role of liquidity holding. We focus on countries that have strong manufacturing industries, specifically China, Germany, India and Japan. The study shows that the firms’ efficiency relates positively to short-term and negatively to long-term debt financing. We document that companies with high productivity are likely to generate high cash flows and have more short-term financing capacity. On the contrary, high efficiency reduces the long-term borrowing since the short-term and internal financing are substitute for the external long-term capital. Besides, the results indicate that high short-term solvency weakens the relationship between the firms’ efficiency and their long-term debt financing. Our paper suggests that a firm’s capital structure is affected by different factors including the firm’s efficiency. Therefore, in their debt financing decisions, managers should consider the firm’s productivity level among other factors. Journal: Journal of Applied Economics Pages: 106-128 Issue: 1 Volume: 23 Year: 2020 Month: 01 X-DOI: 10.1080/15140326.2020.1711591 File-URL: http://hdl.handle.net/10.1080/15140326.2020.1711591 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:recsxx:v:23:y:2020:i:1:p:106-128 Template-Type: ReDIF-Article 1.0 Author-Name: Şule Akkoyunlu Author-X-Name-First: Şule Author-X-Name-Last: Akkoyunlu Title: Revisiting the Feldstein-Horioka puzzle for Turkey Abstract: The domestic saving and investment correlation as posited by Feldstein and Horioka is revisited for Turkey and tested over the whole period (1950–2017) and the two subperiods (1950–1989 and 1990–2017). The time-series properties of the data and the presence of structural breaks are properly addressed by the bounds testing procedure. Although, the investment and savings are positively correlated during the period of restricted capital mobility (1950–1989) and negatively correlated during the period of perfect capital mobility (1990–2017) according to the joint F-test on the significance of the coefficients, the long-run elasticity of investment with respect to savings ratio is significant for the whole period and for the first sub-period. The results confirm the Feldstein and Horioka hypothesis in a closed economy. However, the high, negative and insignificant long-run elasticity and non-constant coefficients in the second sub-period necessitate a full-investment model. Journal: Journal of Applied Economics Pages: 129-148 Issue: 1 Volume: 23 Year: 2020 Month: 01 X-DOI: 10.1080/15140326.2020.1711592 File-URL: http://hdl.handle.net/10.1080/15140326.2020.1711592 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:recsxx:v:23:y:2020:i:1:p:129-148 Template-Type: ReDIF-Article 1.0 Author-Name: Wesley A. Austin Author-X-Name-First: Wesley A. Author-X-Name-Last: Austin Author-Name: Sarah J. Skinner Author-X-Name-First: Sarah J. Author-X-Name-Last: Skinner Author-Name: John Keith Watson Author-X-Name-First: John Keith Author-X-Name-Last: Watson Title: An examination of non-addictive drug (mis)use and work absenteeism Abstract: This article mainly examines the effect(s) of legal drug misuse on work absenteeism, which has a connecting influence to work productivity. Also, the analysis compares the effects of legal drug use (e.g., tranquilizers) on work absences to that of a commonly used, but illegal drug, marijuana. Utilizing a large dataset from the NSDUH (National Survey on Drug Use and Health), and controlling for several demographic and labor market-related variables, our results indicate that legal drug use (for nonmedical reasons) leads to an increase in work absenteeism, as does marijuana. In some instances, legal drug use has a greater effect on work absenteeism that does marijuana. Journal: Journal of Applied Economics Pages: 149-162 Issue: 1 Volume: 23 Year: 2020 Month: 01 X-DOI: 10.1080/15140326.2019.1709013 File-URL: http://hdl.handle.net/10.1080/15140326.2019.1709013 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:recsxx:v:23:y:2020:i:1:p:149-162 Template-Type: ReDIF-Article 1.0 Author-Name: Athanasia S. Kalaitzi Author-X-Name-First: Athanasia S. Author-X-Name-Last: Kalaitzi Author-Name: Trevor W. Chamberlain Author-X-Name-First: Trevor W. Author-X-Name-Last: Chamberlain Title: Merchandise exports and economic growth: multivariate time series analysis for the United Arab Emirates Abstract: This paper examines the validity of the export-led growth (ELG) hypothesis in the United Arab Emirates (UAE) over the period 1975–2012, using a neoclassical production function augmented with merchandise exports and imports of goods and services. The study applies the Johansen cointegration technique and dynamic ordinary least squares (DOLS) regression to confirm the existence of a long-run relationship between exports and economic growth, while the multivariate Granger causality test is applied to examine the direction of the short-run causality. In addition, the existence of long-run causality is investigated by applying a modified version of the Wald test in an augmented vector autoregressive model. The Johansen test and DOLS results confirm the existence of a long-run relationship between exports and economic growth. In addition, the study provides evidence to support the validity of the ELG hypothesis in the short-run, while no long-run causality is found to exist. Journal: Journal of Applied Economics Pages: 163-182 Issue: 1 Volume: 23 Year: 2020 Month: 01 X-DOI: 10.1080/15140326.2020.1722384 File-URL: http://hdl.handle.net/10.1080/15140326.2020.1722384 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:recsxx:v:23:y:2020:i:1:p:163-182 Template-Type: ReDIF-Article 1.0 Author-Name: Liping Fu Author-X-Name-First: Liping Author-X-Name-Last: Fu Author-Name: Yuhui Wang Author-X-Name-First: Yuhui Author-X-Name-Last: Wang Author-Name: Lanping He Author-X-Name-First: Lanping Author-X-Name-Last: He Title: Age composition change and inter-provincial labor productivity: a study from the perspective of population dividend and population urbanization Abstract: Under the background of the aging social-transformation, studying the relationship between the change of age structure (CAS) and labor productivity (LP) was of great practical significance for sustainable development of China's economy. Therefore this paper first examined the overall impact of age structure changes on LP by the provincial panel data from year 2006 to 2015. Then regional difference was also carried out through the two dimensions of demographic dividend and population urbanization. Results showed that CAS with the increase of total dependency ratio and child dependency ratio had a significant negative impact on provincial LP. Increasing the labor input and accelerating the upgrading of human capital were the main lines to deal with the challenges of aging. From the perspective of demographic dividend and population urbanization, the impact of CAS on LP showed obvious inter-provincial and regional development differences. Journal: Journal of Applied Economics Pages: 183-198 Issue: 1 Volume: 23 Year: 2020 Month: 01 X-DOI: 10.1080/15140326.2020.1723885 File-URL: http://hdl.handle.net/10.1080/15140326.2020.1723885 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:recsxx:v:23:y:2020:i:1:p:183-198 Template-Type: ReDIF-Article 1.0 Author-Name: Francesca Castellani Author-X-Name-First: Francesca Author-X-Name-Last: Castellani Author-Name: Giulia Lotti Author-X-Name-First: Giulia Author-X-Name-Last: Lotti Author-Name: Nataly Obando Author-X-Name-First: Nataly Author-X-Name-Last: Obando Title: Fixed or open-ended? Labor contract and productivity in the Colombian manufacturing sector Abstract: Using the Colombian Annual Manufacturing Survey (AMS) between 2000 and 2014, this paper investigates the effect of labor contract modalities on firm productivity within the industrial sector through a structural model. We find that the elasticity of revenue with respect to temporary workers is often lower than that with respect to permanent workers, but not in small firms, where some forms of flexibility might lead to productivity gains. Journal: Journal of Applied Economics Pages: 199-223 Issue: 1 Volume: 23 Year: 2020 Month: 01 X-DOI: 10.1080/15140326.2020.1729582 File-URL: http://hdl.handle.net/10.1080/15140326.2020.1729582 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:recsxx:v:23:y:2020:i:1:p:199-223 Template-Type: ReDIF-Article 1.0 Author-Name: Abdullah Alqahtani Author-X-Name-First: Abdullah Author-X-Name-Last: Alqahtani Author-Name: Michael J. Wither Author-X-Name-First: Michael J. Author-X-Name-Last: Wither Author-Name: Zhankui Dong Author-X-Name-First: Zhankui Author-X-Name-Last: Dong Author-Name: Kimberly R. Goodwin Author-X-Name-First: Kimberly R. Author-X-Name-Last: Goodwin Title: Impact of news-based equity market volatility on international stock markets Abstract: This study examines the long run impacts of equity market volatility on index returns of nine major international stock exchanges in the Western and Asian regions. This study employs the text-based Economic Market Volatility (EMV) index to measure the degree of uncertainty in the U.S. stock market. Using monthly data from December 2001 to August 2018, the estimation results derived using the standard and nonlinear ARDL models deliver several key messages. First, rising U.S. stock market volatility exhibits significant and negative impacts on stock market returns, except for the stock markets of China, Hong Kong, and India whose impacts are negative but insignificant. Second, the use of the nonlinear ARDL model does not show any signs of asymmetry in the relationship between stock market returns and changes in the EMV index, suggesting that the change in the EMV index has symmetric effects on the changes in major stock indices. Journal: Journal of Applied Economics Pages: 224-234 Issue: 1 Volume: 23 Year: 2020 Month: 01 X-DOI: 10.1080/15140326.2020.1729571 File-URL: http://hdl.handle.net/10.1080/15140326.2020.1729571 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:recsxx:v:23:y:2020:i:1:p:224-234 Template-Type: ReDIF-Article 1.0 Author-Name: Sen Wang Author-X-Name-First: Sen Author-X-Name-Last: Wang Author-Name: Yanni Zeng Author-X-Name-First: Yanni Author-X-Name-Last: Zeng Author-Name: Jiaying Yao Author-X-Name-First: Jiaying Author-X-Name-Last: Yao Author-Name: Hao Zhang Author-X-Name-First: Hao Author-X-Name-Last: Zhang Title: Economic policy uncertainty, monetary policy, and housing price in China Abstract: This paper analyzes the impact of macroeconomic variables on house price volatility under different regimes of policy uncertainty, incorporating the Economic Policy Uncertainty Index and several Chinese macroeconomic data sets for the period from 1999 to 2014. We adopt a logistic smooth transition vector autoregressive model and a generalized impulse response function. The results show that macroeconomic progress leads to house price growth, which is augmented by policy uncertainty. In addition, the effect of macroeconomic shocks on house price volatility varies under different regimes of policy uncertainty. We find that shocks are asymmetric under regimes of high and low policy uncertainty. Under a high policy uncertainty regime, expansionary quantitative monetary policy can facilitate house price growth, whereas a contractionary monetary policy gives rise to an enduring “Home Price Puzzle,” which makes it difficult to regulate house prices. Journal: Journal of Applied Economics Pages: 235-252 Issue: 1 Volume: 23 Year: 2020 Month: 01 X-DOI: 10.1080/15140326.2020.1740874 File-URL: http://hdl.handle.net/10.1080/15140326.2020.1740874 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:recsxx:v:23:y:2020:i:1:p:235-252 Template-Type: ReDIF-Article 1.0 Author-Name: Martin Hodula Author-X-Name-First: Martin Author-X-Name-Last: Hodula Author-Name: Aleš Melecký Author-X-Name-First: Aleš Author-X-Name-Last: Melecký Title: Debt management when monetary and fiscal policies clash: some empirical evidence Abstract: We explore the effects of fiscal and monetary policy shocks on key debt management variables and provide empirical evidence supporting the notion of a strict separation of economic policy from the debt management agenda. We find that a tighter monetary policy coupled with fiscal expansion increases the risk that government debt will have to be rolled over at unusually high cost. This is especially the case in a downturn, where low or even negative interest rates often provide incentives for debt managers to invest predominantly in short-term bonds. Our findings echo the post-crisis environment of low or even negative interest rates, where many debt managers altered their portfolios’ structure in favor of short-term bonds. In this respect, we argue that debt managers should use a longer optimization horizon and base their strategy on the medium- and long-term economic outlook. Journal: Journal of Applied Economics Pages: 253-280 Issue: 1 Volume: 23 Year: 2020 Month: 01 X-DOI: 10.1080/15140326.2020.1750120 File-URL: http://hdl.handle.net/10.1080/15140326.2020.1750120 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:recsxx:v:23:y:2020:i:1:p:253-280 Template-Type: ReDIF-Article 1.0 Author-Name: Hany Fahmy Author-X-Name-First: Hany Author-X-Name-Last: Fahmy Title: Is the sharing economy causing a regime switch in consumption? Abstract: The recent rise of digital technology has enabled the development of various online platforms that gave rise to the so-called sharing economy. Academics suggest that this economy is causing a switch in consumer behaviour. This paper attempts to test this hypothesis by fitting a smooth transition autoregressive model to the cycle of the proportion of e-commerce to personal consumption in the U.S. between 1999 and 2019. The analysis reveals that the sharing economy, driven by the diffusion of digital technology, is causing consumption to transition smoothly, but frequently, between two regimes between 1999 and 2013. In the later period, however, it displays a stable regime due to the slow diffusion of digital technologies over this period. We conclude that, indeed, the sharing economy is causing a regime switch in consumption, and the dynamic behaviour of this regime switching is consistent with the behaviour of the diffusion process of digital technologies. Journal: Journal of Applied Economics Pages: 281-298 Issue: 1 Volume: 23 Year: 2020 Month: 01 X-DOI: 10.1080/15140326.2020.1750121 File-URL: http://hdl.handle.net/10.1080/15140326.2020.1750121 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:recsxx:v:23:y:2020:i:1:p:281-298 Template-Type: ReDIF-Article 1.0 Author-Name: Rodrigo Schneider Author-X-Name-First: Rodrigo Author-X-Name-Last: Schneider Author-Name: Diloá Athias Author-X-Name-First: Diloá Author-X-Name-Last: Athias Author-Name: Mauricio Bugarin Author-X-Name-First: Mauricio Author-X-Name-Last: Bugarin Title: Electronic voting and public spending: the impact of de facto enfranchisement on federal budget amendments in Brazil Abstract: This article examines whether an increase in political participation biased toward low-income voters – and concentrated in legislative elections – impacts federal representatives’ allocation of resources from the federal budget to Brazilian municipalities. We use a regression discontinuity design that exploits the assignment of electronic voting to municipalities based on population size to identify the causal effect of enfranchisement on the allocation of federal public spending. We find that an increase of 1 percentage point in the valid-vote-to-turnout ratio for federal representatives in a municipality increases the allocation of funds from the federal budget by 3.3%, and that experienced politicians are more responsive to the enfranchisement of low-income voters. Journal: Journal of Applied Economics Pages: 299-315 Issue: 1 Volume: 23 Year: 2020 Month: 01 X-DOI: 10.1080/15140326.2020.1748358 File-URL: http://hdl.handle.net/10.1080/15140326.2020.1748358 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:recsxx:v:23:y:2020:i:1:p:299-315 Template-Type: ReDIF-Article 1.0 Author-Name: Shiue-Hung Lin Author-X-Name-First: Shiue-Hung Author-X-Name-Last: Lin Author-Name: Yungho Weng Author-X-Name-First: Yungho Author-X-Name-Last: Weng Title: Can strengthening the local content requirements meet a government’s need to raise industrial productivity and production? Abstract: By taking firm heterogeneity in productivity into account in a monopolistic competition market in a general-equilibrium model setting, this paper investigates whether a stricter local content requirements (LCRs) can increase both productivity and production in the domestic intermediate-goods industry. The result shows that stricter LCRs policy cannot simultaneously increase both. The initial level of LCRs plays an important role in policy effectiveness. If it is below a critical level, a stricter LCRs can increase production but decrease productivity; however, production decreases but productivity increases if the initial LCRs are higher than the critical level. Journal: Journal of Applied Economics Pages: 316-328 Issue: 1 Volume: 23 Year: 2020 Month: 01 X-DOI: 10.1080/15140326.2020.1753468 File-URL: http://hdl.handle.net/10.1080/15140326.2020.1753468 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:recsxx:v:23:y:2020:i:1:p:316-328 Template-Type: ReDIF-Article 1.0 Author-Name: Tolga Omay Author-X-Name-First: Tolga Author-X-Name-Last: Omay Author-Name: Burcu Ozcan Author-X-Name-First: Burcu Author-X-Name-Last: Ozcan Author-Name: Muhammed Shahbaz Author-X-Name-First: Muhammed Author-X-Name-Last: Shahbaz Title: Testing the hysteresis effect in the US state-level unemployment series Abstract: This paper re-examines the stochastic time series behaviour of the monthly unemployment rate in 50 states of the United States (US) for the period 1976–2017 using a number of state-of-the-art unit root tests. The new developments incorporate structural break, nonlinearity, asymmetry, and cross-sectional correlation within panel-data estimation including the use of a sequential panel selection method. While not previously considered, sequential panel selection enabled us to determine and separate the stationary and nonstationary series in the sample. The empirical findings are in support of the stationarity of unemployment rate in 47 states. The findings confirm a natural rate hypothesis for the labour markets in the most US states, indicating that labour market shocks have solely temporary effects on state-level unemployment. This empirical study provides significant state-specific policy implications. Journal: Journal of Applied Economics Pages: 329-348 Issue: 1 Volume: 23 Year: 2020 Month: 01 X-DOI: 10.1080/15140326.2020.1759865 File-URL: http://hdl.handle.net/10.1080/15140326.2020.1759865 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:recsxx:v:23:y:2020:i:1:p:329-348 Template-Type: ReDIF-Article 1.0 Author-Name: Naqeeb Ur Rehman Author-X-Name-First: Naqeeb Ur Author-X-Name-Last: Rehman Author-Name: Eglantina Hysa Author-X-Name-First: Eglantina Author-X-Name-Last: Hysa Author-Name: Xuxin Mao Author-X-Name-First: Xuxin Author-X-Name-Last: Mao Title: Does public R&D complement or crowd-out private R&D in pre and post economic crisis of 2008? Abstract: Research and development expenditure (R&D) generate innovation and contribute significantly to the economic development. Previous studies emphasized the role of public R&D to encourage the technological innovation in the private sector. However, the effect of global economic crisis with respect to the public and private R&D link has been somewhat neglected in the empirical literature. Based on system GMM estimation, we found that public R&D complements private R&D in pre and post economic crisis. However, the strength of their complementary association is found strong in pre-economic crisis. In sum, the results indicate that continuous support to public R&D in pre and post economic crisis accelerate the technological innovation in the private sector. This study implies that public support to R&D is a good strategy for an economy to confront economic crisis effectively by increasing the technological innovation in the private sector. For policy makers, it is suggested that care must be taken while investing in the R&D, the investment is to be based on the ratio between R&D expenditure to number of R&D workers. Journal: Journal of Applied Economics Pages: 349-371 Issue: 1 Volume: 23 Year: 2020 Month: 01 X-DOI: 10.1080/15140326.2020.1762341 File-URL: http://hdl.handle.net/10.1080/15140326.2020.1762341 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:recsxx:v:23:y:2020:i:1:p:349-371 Template-Type: ReDIF-Article 1.0 Author-Name: Jiawu Dai Author-X-Name-First: Jiawu Author-X-Name-Last: Dai Author-Name: Xun Li Author-X-Name-First: Xun Author-X-Name-Last: Li Title: How does subsidy change a firm’s market power? The case of China’s rice processing industry Abstract: The effect of subsidy on firms’ market power is controversial and unclear. In this article, we investigate such effect through an unbalanced panel data at firm level. Empirical results indicate that subsidy weakens the market power of firms subsidized. We then verify our hypothesis for this result that striving for subsidy through building or keeping relationship with governments will lead to higher administration and selling expense, and therefore lower market power, given that the rice processing industry is relatively competitive due to its low entry barrier and high homogenous product. Compared with non-state-owned enterprises, state-owned enterprises are found to be weaker in market power, to be higher in administration expense and to be lower in selling expense, which are well consistent with China’s reality. Finally, robustness test consolidates our conclusions. Journal: Journal of Applied Economics Pages: 372-384 Issue: 1 Volume: 23 Year: 2020 Month: 01 X-DOI: 10.1080/15140326.2020.1776976 File-URL: http://hdl.handle.net/10.1080/15140326.2020.1776976 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:recsxx:v:23:y:2020:i:1:p:372-384 Template-Type: ReDIF-Article 1.0 Author-Name: R. Ippoliti Author-X-Name-First: R. Author-X-Name-Last: Ippoliti Author-Name: G. Tria Author-X-Name-First: G. Author-X-Name-Last: Tria Title: Efficiency of judicial systems: model definition and output estimation Abstract: Focusing on the Italian judicial system as our case study, we use Data Envelopment Analysis to estimate technical efficiency scores and reference values for policy makers. In detail, this work presents a comparative analysis of different model definitions to identify the most appropriate one, emphasizing the key role of case matters in this production process. According to our results, the North of Italy emerges as more efficient than the other Italian macro areas, although the gap significantly decreases when case matters are considered in the output estimation. Concerning the collected reference values, which might be adopted by policy makers to reform the judicial system, we can observe significant differences able to affect the reorganization of courts. Taking the proposed case study into account, it seems that improvements in court performance could be achieved by reforming civil procedures, which are the technologies applied by judges in their production process. Journal: Journal of Applied Economics Pages: 385-408 Issue: 1 Volume: 23 Year: 2020 Month: 01 X-DOI: 10.1080/15140326.2020.1776977 File-URL: http://hdl.handle.net/10.1080/15140326.2020.1776977 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:recsxx:v:23:y:2020:i:1:p:385-408 Template-Type: ReDIF-Article 1.0 Author-Name: C.P. Adekunle Author-X-Name-First: C.P. Author-X-Name-Last: Adekunle Author-Name: S.O. Akinbode Author-X-Name-First: S.O. Author-X-Name-Last: Akinbode Author-Name: A.M. Shittu Author-X-Name-First: A.M. Author-X-Name-Last: Shittu Author-Name: S. Momoh Author-X-Name-First: S. Author-X-Name-Last: Momoh Title: Food price changes and farm households’ welfare in Nigeria: direct and indirect approach Abstract: This paper analyzed the welfare effects of price changes over categories of farm households in Nigeria taking into consideration the dual role of farm households as both consumer and producer of food between 2010–2016. This study attempts to shed some light on the differences between the direct approach and indirect. Estimated Compensating Variation reveals that 79.0% of farm households were net food buyers and suffered welfare loss (mean = 2.98) with the mean expenditure of N529, 397.5 per annum while 21.0% were net food sellers and enjoyed welfare gain (mean = −1.66) with the mean expenditure of N513, 755.7 per annum. Cereal was identified as food for which the households were most vulnerable to price shocks. When adjustments are allowed, households can adapt their consumption and production patterns resulting in lower deteriorations in welfare with significant differences across quintiles. Therefore, efforts to mitigate extreme price spikes are relevant for improved overall household welfare. Journal: Journal of Applied Economics Pages: 409-425 Issue: 1 Volume: 23 Year: 2020 Month: 01 X-DOI: 10.1080/15140326.2020.1743103 File-URL: http://hdl.handle.net/10.1080/15140326.2020.1743103 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:recsxx:v:23:y:2020:i:1:p:409-425 Template-Type: ReDIF-Article 1.0 Author-Name: Haytem Troug Author-X-Name-First: Haytem Author-X-Name-Last: Troug Title: Monetary policy with non-separable government spending Abstract: The significant role of government consumption in affecting economic conditions raises the necessity for monetary policy to take into account the behaviour of fiscal policy and to also take into account how the presence of the fiscal sector might affect the transmission mechanism of monetary policy in the economy. To test for this, we build an otherwise standard New Keynesian model that incorporates non-separable government consumption. The simulations of the model show that when government consumption has a crowding-in effect on private consumption, it will dampen the transmission mechanism of monetary policy, and vice versa. The empirical estimations of the paper also support the theoretical findings of the model, as the panel regressions show that, in OECD countries, government consumption dampens the effect of the policy rate on private consumption. These results are robust to the zero lower bound era. Journal: Journal of Applied Economics Pages: 426-449 Issue: 1 Volume: 23 Year: 2020 Month: 01 X-DOI: 10.1080/15140326.2020.1793281 File-URL: http://hdl.handle.net/10.1080/15140326.2020.1793281 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:recsxx:v:23:y:2020:i:1:p:426-449 Template-Type: ReDIF-Article 1.0 Author-Name: Jón Helgi Egilsson Author-X-Name-First: Jón Helgi Author-X-Name-Last: Egilsson Title: How raising interest rates can cause inflation and currency depreciation Abstract: In this paper we derive a new model on exchange rate response to a lasting higher interest rate level. Contemporary models do not provide a convincing explanation for this relationship, but recent research suggests that models based on demand-pull effects to be somewhat confined to small funding cost increases. This would make cost-push effects more relevant when the interest rate differential (IRD) is larger and longer-lasting. The new model accounts for cost-push effects and suggests that a persistent higher IRD can evoke multiple responses, including currency depreciation, specialization, inflation, and wage drift. The model suggests that excessive long-lasting IRD can spark a chronic interaction between inflation and currency depreciation. Empirical data substantiate the prediction capability of the new model. We also demonstrate how the uncovered interest rate parity (UIP) principle is a special case, which can explain its empirical research anomalies, and when carry trade is a profitable investment strategy. Journal: Journal of Applied Economics Pages: 450-468 Issue: 1 Volume: 23 Year: 2020 Month: 01 X-DOI: 10.1080/15140326.2020.1795526 File-URL: http://hdl.handle.net/10.1080/15140326.2020.1795526 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:recsxx:v:23:y:2020:i:1:p:450-468 Template-Type: ReDIF-Article 1.0 Author-Name: Paula C. A. M. de Albuquerque Author-X-Name-First: Paula C. A. M. Author-X-Name-Last: de Albuquerque Author-Name: Jorge Caiado Author-X-Name-First: Jorge Author-X-Name-Last: Caiado Author-Name: Andreia Pereira Author-X-Name-First: Andreia Author-X-Name-Last: Pereira Title: Population aging and inflation: evidence from panel cointegration Abstract: This study investigates the relationship between demography and inflation using panel cointegration for 24 countries during 1961–2014. It shows that the age structure of the population affects inflation. The answer to the question “is population aging inflationary or disinflationary?” depends on the stage of the demographic process and, particularly, on the consideration that the share of mature workers is increasing or decreasing. The empirical results support the existence of a long-run equilibrium function between inflation and the changes in the shares of the population under 20 years of age, young adults (20–34), middle-age people (35–64), and older-old people (75+). The panel least squares equations for inflation with population age shares growth, GDP growth, M2 growth, exchange rate growth, labour costs and recession dummy variables as exogenous regressors allow the identification of the population shares that have positive significant impact on inflation, and those that have negative significant effects on inflation. Journal: Journal of Applied Economics Pages: 469-484 Issue: 1 Volume: 23 Year: 2020 Month: 01 X-DOI: 10.1080/15140326.2020.1795518 File-URL: http://hdl.handle.net/10.1080/15140326.2020.1795518 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:recsxx:v:23:y:2020:i:1:p:469-484 Template-Type: ReDIF-Article 1.0 Author-Name: Xun Li Author-X-Name-First: Xun Author-X-Name-Last: Li Author-Name: Yuxin Deng Author-X-Name-First: Yuxin Author-X-Name-Last: Deng Author-Name: Shanlin Li Author-X-Name-First: Shanlin Author-X-Name-Last: Li Title: Gender differences in self-risk evaluation: evidence from the Renrendai online lending platform Abstract: Risk-related gender differences such as risk perception and risk aversion are widely discussed, whereas gender differences in self-risk evaluations are unknown. Using a sample of more than 310,000 individual loan applications from the Renrendai online lending platform, this study uses a hedonic model to examine gender differences in self-risk evaluations. We find that males are more likely than females to offer lower interest rate premiums when they have favorable attributes, such as larger loans, higher credit ratings, married status, and income level, and females tend to offer lower interest rate premiums when they have unfavorable attributes, such as longer-term loans. We conclude that males seek benefits and females avoid disadvantages when evaluating their own risk, which is supported by economic, biological and psychological research. Our findings fill this gap on gender differences in risk-related behaviors. Journal: Journal of Applied Economics Pages: 485-496 Issue: 1 Volume: 23 Year: 2020 Month: 01 X-DOI: 10.1080/15140326.2020.1797338 File-URL: http://hdl.handle.net/10.1080/15140326.2020.1797338 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:recsxx:v:23:y:2020:i:1:p:485-496 Template-Type: ReDIF-Article 1.0 Author-Name: Teshome Hailemeskel Abebe Author-X-Name-First: Teshome Hailemeskel Author-X-Name-Last: Abebe Title: Modeling time-varying coffee price volatility in Ethiopia Abstract: Recently, modeling and forecasting of high-frequency data (such as daily price) volatility using GARCH-MIDAS attract the attention of many researchers. Thus, the objective of this study is to model the average daily coffee price volatility from 1 January 2010 to 30 June 2019. The GARCH-MIDAS component model decomposes the conditional variance into short run component which follows a mean-reverting unit GARCH process and long-run component which consider different frequency macroeconomic indicators via mixed interval data sampling (MIDAS) specification. Unit root test results show the return series are stationary at level, while macroeconomic variables are stationary at first difference except interest rate, which is stationary at level. From the result of estimated model, all selected indicators are crucial in explaining price volatility. . Moreover, the estimated GARCH-MIDAS model with money supply as a main driver is used for out-sample forecast. Based on, DM test statistic multiplicative GARCH-MIDAS model provides an explanation for stylized facts that cannot be captured by standard GARCH model. Journal: Journal of Applied Economics Pages: 497-518 Issue: 1 Volume: 23 Year: 2020 Month: 01 X-DOI: 10.1080/15140326.2020.1804304 File-URL: http://hdl.handle.net/10.1080/15140326.2020.1804304 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:recsxx:v:23:y:2020:i:1:p:497-518 Template-Type: ReDIF-Article 1.0 Author-Name: Peisen Liu Author-X-Name-First: Peisen Author-X-Name-Last: Liu Author-Name: Houjian Li Author-X-Name-First: Houjian Author-X-Name-Last: Li Title: Does bank competition spur firm innovation? Abstract: For transition economies, the virtues of financial development for economic growth are obvious; however, bank competition has dubious effects due to various firm characteristics. This study uses Chinese banking and firm data from 1998 to 2011 to examine how bank competition affects firm innovation and how firm size and ownership influence the effects of bank competition. The results show that bank competition promotes firm-level innovation and that this positive effect is stronger for small firms and non-state-owned enterprises (non-SOEs). In addition, bank competition has a more beneficial influence on innovation for transparent firms and domestic firms. These conclusions thus shed light on the real effects of bank competition and the determinants of firm innovation in developing countries. Journal: Journal of Applied Economics Pages: 519-538 Issue: 1 Volume: 23 Year: 2020 Month: 01 X-DOI: 10.1080/15140326.2020.1806001 File-URL: http://hdl.handle.net/10.1080/15140326.2020.1806001 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:recsxx:v:23:y:2020:i:1:p:519-538 Template-Type: ReDIF-Article 1.0 Author-Name: Stefanie R. Ramirez Author-X-Name-First: Stefanie R. Author-X-Name-Last: Ramirez Author-Name: Kaitlyn Harger Author-X-Name-First: Kaitlyn Author-X-Name-Last: Harger Title: Identifying border effects of payday-lending regulations Abstract: Using branch-level licensing data for 13 states, we examine cross-border effects of state-level payday-lending policies on new and operating branches within border counties from January 2005 to December 2010. We hypothesize branch counts are higher in border counties adjacent to states that restrict payday lending through prohibitive fee limits due to decreased competition and higher excess profits from cross-border markets. Predicted results for effects of enabling or non-existent payday lending policy are ambiguous; cross-border markets may or may not have increased competition given established market practices. Results show border counties adjacent to prohibitive states have 14 percent more operating branches and 83 percent more new branches than interior counties, suggesting clustering and expansion in regions with access to cross-border consumers that lack in-state access to payday loans. Border counties adjacent to states with enabling regulations have 30 percent more operating branches relative to interior counties, suggesting clustering in cross-border markets. Journal: Journal of Applied Economics Pages: 539-559 Issue: 1 Volume: 23 Year: 2020 Month: 01 X-DOI: 10.1080/15140326.2020.1793280 File-URL: http://hdl.handle.net/10.1080/15140326.2020.1793280 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:recsxx:v:23:y:2020:i:1:p:539-559 Template-Type: ReDIF-Article 1.0 Author-Name: Fernando Borraz Author-X-Name-First: Fernando Author-X-Name-Last: Borraz Author-Name: Gerardo Licandro Author-X-Name-First: Gerardo Author-X-Name-Last: Licandro Author-Name: Daniela Sola Author-X-Name-First: Daniela Author-X-Name-Last: Sola Title: Wage and price setting: new evidence from Uruguayan firms Abstract: This paper presents new evidence on wage and price setting based on a survey of more than 300 Uruguayan firms in 2013. Most of the firms set prices considering costs and adding a profit margin; therefore, they have some degree of market power. The evidence indicates that price increases appear quite flexible in Uruguay (prices are downward rigid). Most of the firms adjust their prices on an irregular basis, which suggests that price changes in Uruguay are state-dependent, although wage changes are concentrated in January and July. Interestingly, the cost of credit is seen as an irrelevant factor in explaining price increases. We also find that cost reduction is the principal strategy to a negative demand shock, and finally, that the adjustment of prices to changes in wages is relatively quick. Journal: Journal of Applied Economics Pages: 560-582 Issue: 1 Volume: 23 Year: 2020 Month: 01 X-DOI: 10.1080/15140326.2020.1805713 File-URL: http://hdl.handle.net/10.1080/15140326.2020.1805713 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:recsxx:v:23:y:2020:i:1:p:560-582 Template-Type: ReDIF-Article 1.0 Author-Name: Élisé Wendlassida Miningou Author-X-Name-First: Élisé Wendlassida Author-X-Name-Last: Miningou Author-Name: Sampawende Jules Tapsoba Author-X-Name-First: Sampawende Jules Author-X-Name-Last: Tapsoba Title: Education systems and foreign direct investment: does external efficiency matter? Abstract: This paper examines the effect of the efficiency of the education system on Foreign Direct Investment (FDI). First, it applies a frontier-based measure as a proxy of the ability of countries to optimally convert the average years of schooling into income for individuals. Second, it shows the relationship between the external efficiency of the education system and FDI inflows. The results show that the efficiency level varies across regions and countries and appears to be driven by higher education and secondary vocational education. Similarly to other studies in the literature, there is no significant relationship between the average years of schooling and FDI inflows. However, the external efficiency of the education system is important for FDI inflows. Improving the external efficiency of the education system can play a role in attracting FDI especially in non-resource rich countries, non-landlocked countries and countries in the low and medium human development groups. Journal: Journal of Applied Economics Pages: 583-599 Issue: 1 Volume: 23 Year: 2020 Month: 01 X-DOI: 10.1080/15140326.2020.1797337 File-URL: http://hdl.handle.net/10.1080/15140326.2020.1797337 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:recsxx:v:23:y:2020:i:1:p:583-599 Template-Type: ReDIF-Article 1.0 Author-Name: Nick Deschacht Author-X-Name-First: Nick Author-X-Name-Last: Deschacht Author-Name: Karolien De Bruyne Author-X-Name-First: Karolien Author-X-Name-Last: De Bruyne Title: Excess commuting and frictions in the labor market Abstract: We propose a model of excess commuting based on search costs in the labor market and show how the equilibrium rate of excess commuting is determined by the degree of geographical job concentration – without neglecting the importance of the size of the labor market and commuting costs. We test – and largely confirm – the main predictions of our model using Belgian population data on commuting flows between all its 589 municipalities. Our approach is to aggregate the data into 640 sectors and skill-specific groups in order to generate heterogeneity in the excess commuting rate. We find that workers in sectors with a high degree of job concentration have lower rates of excess commuting and that workers that operate in larger labor markets, such as higher educated workers and men compared to women, have higher rates of excess commuting. Journal: Journal of Applied Economics Pages: 600-617 Issue: 1 Volume: 23 Year: 2020 Month: 01 X-DOI: 10.1080/15140326.2020.1812476 File-URL: http://hdl.handle.net/10.1080/15140326.2020.1812476 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:recsxx:v:23:y:2020:i:1:p:600-617 Template-Type: ReDIF-Article 1.0 Author-Name: Yang Yue Author-X-Name-First: Yang Author-X-Name-Last: Yue Title: The effects of movie piracy on box-office revenue: an empirical analysis of the Chinese movie market Abstract: I evaluate the substitution effects of pirated movies – the unlicensed online movies available on file-sharing websites – on their genuine counterparts, and explore the institutional and economic causes of China’s high level of movie piracy. To do this, I build a dataset including information on online piracy, theater showings, and revenues. I use the level of availability of pirated products and the download intensity of pirated movies as proxies for the piracy level. By utilizing these proxies, I estimate that the average revenue loss caused by piracy is 64%. Protectionism and censorship systems, as well as a low theater coverage rate, contribute to China’s high level of piracy. Counterfactual results show that minimizing release delays, which are mainly caused by protectionism and censorship, increases the box office returns of foreign movies by 43%. Journal: Journal of Applied Economics Pages: 618-655 Issue: 1 Volume: 23 Year: 2020 Month: 01 X-DOI: 10.1080/15140326.2020.1812477 File-URL: http://hdl.handle.net/10.1080/15140326.2020.1812477 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:recsxx:v:23:y:2020:i:1:p:618-655 Template-Type: ReDIF-Article 1.0 Author-Name: Adriana Peluffo Author-X-Name-First: Adriana Author-X-Name-Last: Peluffo Author-Name: Inmaculada Martinez-Zarzoso Author-X-Name-First: Inmaculada Author-X-Name-Last: Martinez-Zarzoso Author-Name: Ernesto Silva Author-X-Name-First: Ernesto Author-X-Name-Last: Silva Title: New stuff or better ways: what matters to access international markets? Abstract: The connection of innovation and exporting is of major interest to developing countries aiming to achieve higher growth and wellbeing. This study analyzes whether different types of innovation affect export behavior at the firm level for an unbalanced panel of Uruguayan manufacturing firms. Logistic regression and matching with difference-in-differences (MDID) techniques are applied to data from 2003 to 2012. Unlike other studies, productivity-enhancing (or cost-reducing) innovation shows a stronger correlation with exporting than product innovation, indicating that price competition is more important than quality competition for Uruguayan products in foreign markets. Furthermore, using MDID we establish a direct causal link from innovation to exporting. Finally, the causal effect of innovation on exporting is mainly found for exports to countries belonging to the regional trade agreement Mercosur. Overall, the findings indicate that active innovation policies along with other export promotion policies would help promote firms’ participation in foreign markets. Journal: Journal of Applied Economics Pages: 656-678 Issue: 1 Volume: 23 Year: 2020 Month: 01 X-DOI: 10.1080/15140326.2020.1816120 File-URL: http://hdl.handle.net/10.1080/15140326.2020.1816120 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:recsxx:v:23:y:2020:i:1:p:656-678 Template-Type: ReDIF-Article 1.0 Author-Name: Zhe Song Author-X-Name-First: Zhe Author-X-Name-Last: Song Author-Name: Taihua Yan Author-X-Name-First: Taihua Author-X-Name-Last: Yan Author-Name: Tangyang Jiang Author-X-Name-First: Tangyang Author-X-Name-Last: Jiang Title: Poverty aversion or inequality aversion? The influencing factors of crime in China Abstract: This paper aims to understand whether and how poverty aversion and inequality aversion affect the criminal behaviors. We analyze the relationship between the three variables through a theoretical model and an empirical model. The panel data of 27 provincial-level regions in China were collected for testing the hypothesis. The investigation revealed: 1. Inequality significantly increases crime, while the poverty reduction does not reduce crime. 2. The widening consumption gap between urban and rural residents may be the cause of crime, the effect is more significant for visible consumer goods. 3. The excessive consumption difference between the rich and ordinary people may lead to crime. 4. The increasing inequality of distribution between the state and the people has a positive impact on crime too. The research shows that the Chinese residents are not affected by poverty but by inequality in the choice of crime. Journal: Journal of Applied Economics Pages: 679-708 Issue: 1 Volume: 23 Year: 2020 Month: 01 X-DOI: 10.1080/15140326.2020.1816130 File-URL: http://hdl.handle.net/10.1080/15140326.2020.1816130 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:recsxx:v:23:y:2020:i:1:p:679-708 Template-Type: ReDIF-Article 1.0 Author-Name: Nhan Dang Tran Author-X-Name-First: Nhan Dang Author-X-Name-Last: Tran Author-Name: Chuong Nguyen Ong Author-X-Name-First: Chuong Nguyen Author-X-Name-Last: Ong Author-Name: Quy Dinh Le Nguyen Author-X-Name-First: Quy Dinh Le Author-X-Name-Last: Nguyen Title: The relationship between income inequality and savings: evidence from household‐level panel data in Vietnam Abstract: The purpose of this paper is to address whether province-level income inequality is associated with household savings, as well as investigate how this relationship varies across different subgroups. The paper uses a unique balanced panel survey on access to resources of 2181 rural households between 2008 and 2014 in twelve provinces of Vietnam. An instrumental variablegeneralized method of moments approach aimed to tackle the issue of the endogeneity is applied to estimate relationships between relevant variables. Consistent with the prediction of the social status hypothesis, we find that income inequality positively impacts on households savings. Further analysis also shows that the effect of inequality on savings is somewhat stronger in those including poorer, richer, younger, and married-headed households than in the others. Our results are robust to alternative inequality measures and subsamples. Journal: Journal of Applied Economics Pages: 709-728 Issue: 1 Volume: 23 Year: 2020 Month: 01 X-DOI: 10.1080/15140326.2020.1816131 File-URL: http://hdl.handle.net/10.1080/15140326.2020.1816131 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:recsxx:v:23:y:2020:i:1:p:709-728 Template-Type: ReDIF-Article 1.0 Author-Name: Efrat Shadmi Author-X-Name-First: Efrat Author-X-Name-Last: Shadmi Author-Name: Dan Zeltzer Author-X-Name-First: Dan Author-X-Name-Last: Zeltzer Author-Name: Tzvi Shir Author-X-Name-First: Tzvi Author-X-Name-Last: Shir Author-Name: Natalie Flaks-Manov Author-X-Name-First: Natalie Author-X-Name-Last: Flaks-Manov Author-Name: Liran Einav Author-X-Name-First: Liran Author-X-Name-Last: Einav Author-Name: Ran D. Balicer Author-X-Name-First: Ran D. Author-X-Name-Last: Balicer Title: Can targeting high-risk patients reduce readmission rates? Evidence from Israel Abstract: We study a large intervention intended to reduce hospital readmission rates in Israel. Since 2012, readmission risk was calculated for patients aged 65 and older, and high-risk patients were flagged to providers upon admission and after discharge. Analyzing 171,541 admissions during 2009–2016, we find that the intervention reduced 30-day readmission rates by 5.9% among patients aged 65–70 relative to patients aged 60–64, who were not targeted by the intervention and for whom no risk-scores were calculated. The largest reduction, 12.3%, was among high-risk patients, though some of it may reflect substitution of attention away from patients with unknown high-risk at the point of care. Post-discharge follow-up encounters were significantly expedited. Estimated effects declined after incentives to reduce readmission rates were discontinued. The evidence demonstrates that informing providers about patient risk in real-time coupled with incentives to reduce readmissions can improve care continuity and reduce hospital readmissions. Journal: Journal of Applied Economics Pages: 729-745 Issue: 1 Volume: 23 Year: 2020 Month: 01 X-DOI: 10.1080/15140326.2020.1798194 File-URL: http://hdl.handle.net/10.1080/15140326.2020.1798194 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:recsxx:v:23:y:2020:i:1:p:729-745 Template-Type: ReDIF-Article 1.0 Author-Name: Elżbieta Antczak Author-X-Name-First: Elżbieta Author-X-Name-Last: Antczak Author-Name: Katarzyna M. Miszczyńska Author-X-Name-First: Katarzyna M. Author-X-Name-Last: Miszczyńska Title: The self-perceived high level of health quality of Europeans – spatial analysis of determinants Abstract: The aim of this article is to provide a quantification of the territorially varied relation between socioeconomic factors and share of people perceived their own health as good or very good in European countries in years 2005–2018. The preliminary data analysis shows that, to model health status at the country level, it is necessary to consider the age structure of inhabitants, country specifics and spatial interactions. For the purpose of the research, several causes were identified depending on age category, e.g., crime rate, self-reported unmet needs for medical examination by main reason declared, households with access to the Internet at home, pure alcohol consumption, hospital beds and population by educational attainment level. To increase the explained variability of phenomena and emphasize country-specific differences in the phenomena, geographically weighted regression was applied. Journal: Journal of Applied Economics Pages: 746-764 Issue: 1 Volume: 23 Year: 2020 Month: 01 X-DOI: 10.1080/15140326.2020.1848308 File-URL: http://hdl.handle.net/10.1080/15140326.2020.1848308 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:recsxx:v:23:y:2020:i:1:p:746-764 Template-Type: ReDIF-Article 1.0 Author-Name: Arieh Avishur Author-X-Name-First: Arieh Author-X-Name-Last: Avishur Title: A Positive Theory of Privatization Abstract: This paper presents a theory that explains the prevalence of different models of privatization across countries and across industries. First, it establishes the analytical framework for determining the impact of privatization on the value of a privatized firm, on aggregate social welfare, and on the relevant interest groups: taxpayers, consumers, employees, and private investors. Merging both the income distribution and the production efficiency aspects of the process, it identifies the government's principal decision variables, and presents the political tradeoffs faced by the government when carrying out privatization. Based on this framework, the paper offers an outline for testing the hypothesis that privatization introduces a Pareto-dominating mode of operation. Two fundamental laws of privatization define necessary and sufficient conditions for Pareto-dominance. Based on four economically sensible principal assumptions, the paper analyzes the government's behavior under alternative objective functions: maximization of taxpayer welfare, maximization of aggregate social welfare, and maximization of political support. The main result reveals that a vote-maximizing government sets the optimal value of its decision variables, depending on the characteristics of the political market. This result is illustrated through a cross-country and a cross-industry comparison. Journal: Journal of Applied Economics Pages: 1-55 Issue: 1 Volume: 3 Year: 2000 Month: 5 X-DOI: 10.1080/15140326.2000.12040544 File-URL: http://hdl.handle.net/10.1080/15140326.2000.12040544 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:recsxx:v:3:y:2000:i:1:p:1-55 Template-Type: ReDIF-Article 1.0 Author-Name: Ivo de Loo Author-X-Name-First: Ivo Author-X-Name-Last: de Loo Title: The Applicability of the Sectoral Shift Hypothesis in the Netherlands Abstract: The sectoral shift hypothesis in the Netherlands cannot be easily tested for the presence of rigorous structural breaks in the data. Therefore, a Kalman Filter approach is adopted. What we find, is that the variables capturing the sectoral shift hypothesis are the most important in explaining Dutch unemployment behavior during the postwar period. This means that cyclical unemployment in the Netherlands can be viewed as a fluctuation of the natural rate of unemployment. Journal: Journal of Applied Economics Pages: 57-69 Issue: 1 Volume: 3 Year: 2000 Month: 5 X-DOI: 10.1080/15140326.2000.12040545 File-URL: http://hdl.handle.net/10.1080/15140326.2000.12040545 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:recsxx:v:3:y:2000:i:1:p:57-69 Template-Type: ReDIF-Article 1.0 Author-Name: Jac C. Heckelman Author-X-Name-First: Jac C. Author-X-Name-Last: Heckelman Title: Economic Freedom and Economic Growth: A Short-Run Causal Investigation Abstract: The freedom and growth literature has consistently shown that nations which have fewer restrictions on private agents and transactions tend to higher levels of economic growth. It is less clear, however, whether freedom causes growth, growth causes freedom, or the two are jointly determined. To assess these possibilities, Granger-causality tests are performed on annual freedom indicators developed by the Heritage Foundation and national growth rates. The underlying component indexes, which include Trade Policy, Taxation, Government Intervention, Monetary Policy, Capital Flows and Foreign Investment, Banking, Wage and Price Controls, Property Rights, Regulation, and Black Markets, are also tested in addition to the summary freedom rating. The tests suggest the average level of freedom in a nation, as well as many of the specific underlying components of freedom, precedes growth. However, growth may precede one of the component indexes (Government Intervention), and no relationship is found to exist between growth and two of the indexes (Trade Policy and Taxation). Journal: Journal of Applied Economics Pages: 71-91 Issue: 1 Volume: 3 Year: 2000 Month: 5 X-DOI: 10.1080/15140326.2000.12040546 File-URL: http://hdl.handle.net/10.1080/15140326.2000.12040546 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:recsxx:v:3:y:2000:i:1:p:71-91 Template-Type: ReDIF-Article 1.0 Author-Name: Juan Luis Londoño Author-X-Name-First: Juan Luis Author-X-Name-Last: Londoño Author-Name: Miguel Székely Author-X-Name-First: Miguel Author-X-Name-Last: Székely Title: Persistent Poverty and Excess Inequality: Latin America, 1970–1995 Abstract: This work assesses the changes in aggregate poverty and inequality that have taken place in Latin America during the past 26 years. With this objective, we put together the largest number of observations on income distribution for the region for the period 1970–1995. We find that poverty and inequality have not declined during the 1990s in spite of improvements at the macroeconomic level. The characteristics of our data allow us to perform various comparisons between countries. Our results show that even though there are differences in levels across countries, inequality and poverty in most of them follow similar trends during the period under study. Journal: Journal of Applied Economics Pages: 93-134 Issue: 1 Volume: 3 Year: 2000 Month: 5 X-DOI: 10.1080/15140326.2000.12040547 File-URL: http://hdl.handle.net/10.1080/15140326.2000.12040547 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:recsxx:v:3:y:2000:i:1:p:93-134 Template-Type: ReDIF-Article 1.0 Author-Name: Alberto Porto Author-X-Name-First: Alberto Author-X-Name-Last: Porto Author-Name: Natalia Porto Author-X-Name-First: Natalia Author-X-Name-Last: Porto Title: Fiscal Decentralization and Voters' Choices as Control Abstract: This paper investigates, empirically, the voters' choices as a mechanism of control of the municipal governments in Argentina. In particular, the paper explores the question of whether voters choose to support the political party in office based on its fiscal performance while in office. After a learning period, citizens vote considering the fiscal performance. The smaller the jurisdiction, the more sensitive the citizens. Voters, in evaluating fiscal performance to take voting decisions, consider the performance in the recent past. Municipal elections are not a mere rehearsal of national or provincial elections. We conclude that we can trust in fiscal decentralization and voting. Perhaps, it is a better option than fiscal centralization. Journal: Journal of Applied Economics Pages: 135-167 Issue: 1 Volume: 3 Year: 2000 Month: 5 X-DOI: 10.1080/15140326.2000.12040548 File-URL: http://hdl.handle.net/10.1080/15140326.2000.12040548 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:recsxx:v:3:y:2000:i:1:p:135-167 Template-Type: ReDIF-Article 1.0 Author-Name: Carlos Alfredo Rodríguez Author-X-Name-First: Carlos Alfredo Author-X-Name-Last: Rodríguez Title: Macroeconomic Policy Lessons from LDC'S Abstract: This paper focuses on several topics related to macroeconomic policies in LDC's. The selection is biased towards those cases I have dealt with during my last 20 years of professional experience, home based in Argentina. Inflation, dollarization, quasi-fiscal deficits, capital controls and stabilization policies are old friends of Latin-Americans. Currency Boards, Common Markets, Lender of Last Resort and Country Risk are newer concepts that have taken special relevance in the 90's, the decade of globalization. Journal: Journal of Applied Economics Pages: 169-216 Issue: 1 Volume: 3 Year: 2000 Month: 5 X-DOI: 10.1080/15140326.2000.12040549 File-URL: http://hdl.handle.net/10.1080/15140326.2000.12040549 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:recsxx:v:3:y:2000:i:1:p:169-216 Template-Type: ReDIF-Article 1.0 Author-Name: Robert Mundell Author-X-Name-First: Robert Author-X-Name-Last: Mundell Title: Currency Areas, Exchange Rate Systems and International Monetary Reform Journal: Journal of Applied Economics Pages: 217-256 Issue: 2 Volume: 3 Year: 2000 Month: 11 X-DOI: 10.1080/15140326.2000.12040550 File-URL: http://hdl.handle.net/10.1080/15140326.2000.12040550 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:recsxx:v:3:y:2000:i:2:p:217-256 Template-Type: ReDIF-Article 1.0 Author-Name: Hildegart Ahumada Author-X-Name-First: Hildegart Author-X-Name-Last: Ahumada Author-Name: María Lorena Garegnani Author-X-Name-First: María Lorena Author-X-Name-Last: Garegnani Title: Assesing Hp Filter Performance for Argentina and U.S. Macro Aggregates Abstract: Hodrick-Prescott filter has been the favourite empirical technique among researchers studying “cycles”. Software facilities and the optimality criterion, from which the filter can be derived, can explain its wide use. However, different shortcomings and drawbacks have been pointed out in the literature, as alteration of variability and persistence and detecting spurious cycles and correlations. This paper discusses these criticisms from an empirical point of view trying to clarify what the filter can and cannot do. In particular, a less mechanical use for descriptive analysis is proposed: testing how the estimated cyclical component behaves and using autocorrelation adjusted standard errors to evaluate cross correlations to differentiate the “genuine” from “spurious” case. Simulation results to test these bivariate correlations when there is a “genuine” relationship are presented. Some examples of descriptive analysis for macro aggregates (real activity, trade flows and money) of Argentina and USA are reported to show that not always the filter is appropriate. Simple tools are used to appreciate how the filtered series result and to evaluate cross correlations. Journal: Journal of Applied Economics Pages: 257-284 Issue: 2 Volume: 3 Year: 2000 Month: 11 X-DOI: 10.1080/15140326.2000.12040551 File-URL: http://hdl.handle.net/10.1080/15140326.2000.12040551 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:recsxx:v:3:y:2000:i:2:p:257-284 Template-Type: ReDIF-Article 1.0 Author-Name: Andrew Berg Author-X-Name-First: Andrew Author-X-Name-Last: Berg Author-Name: Eduardo Borensztein Author-X-Name-First: Eduardo Author-X-Name-Last: Borensztein Title: The Choice of Exchange Rate Regime and Monetary Target in Highly Dollarized Economies Abstract: We examine the implications of high degrees of dollarization for the choice of exchange rate regime and the information content of various monetary aggregates in developing countries. We conclude that a high degree of currency substitution argues for a more fixed exchange rate regime, while asset substitution may imply that either more rigid or more flexible regimes may be appropriate. We also ask whether the most informative monetary aggregates include dollar assets. Based on an analysis of five countries, we conclude inter alia that broader aggregates that include dollar assets perform better than those that do not. Journal: Journal of Applied Economics Pages: 285-324 Issue: 2 Volume: 3 Year: 2000 Month: 11 X-DOI: 10.1080/15140326.2000.12040552 File-URL: http://hdl.handle.net/10.1080/15140326.2000.12040552 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:recsxx:v:3:y:2000:i:2:p:285-324 Template-Type: ReDIF-Article 1.0 Author-Name: Ephraim Clark Author-X-Name-First: Ephraim Author-X-Name-Last: Clark Author-Name: Gérard Mondello Author-X-Name-First: Gérard Author-X-Name-Last: Mondello Title: Water Management in France: Delegation and Irreversibility Abstract: The problem that we address in this paper stems from the trend to delegation in the water management field. It refers to the municipality's negotiating disadvantage in the face of cartelized water management firms that makes delegation, once undertaken, virtually irreversible. We show why the characteristics of the delegation auction render is useless as a tool for collective welfare maximization. We also show that the remaining tool for achieving collective welfare maximization, i.e. the municipality's right to revoke delegation and return to direct management, is also ineffective due to a lack of credibility that is essentially financial in nature. Thus, if the credibility of revocation could be restored, the municipality's bargaining power could also be restored. Using standard methods of stochastic calculus, we model the municipality's right of revocation as a call option held by the municipality. We show that the key variable for the value of this option, and thus for the municipality's position, is the exercise price, which is partly determined by objective economic criteria and partly by legal and institutional conventions. We show that community welfare maximisation occurs at the point where the exercise price is determined exclusively by objective economic criteria. Since the delegated firm as a simple agent has the right to abrogate the contract if delegation becomes unprofitable, we then model this right as a put option held by the firm. Its value also depends to a large extent on the exercise price, which is partly determined by objective economic criteria and partly by legal and institutional conventions. Combining the exercise points of the two options enables us to determine the price-profit interval over which delegation will be acceptable to both parties. We conclude that the optimal interval will be the one where the exercise prices are determined entirely by objective economic criteria. Journal: Journal of Applied Economics Pages: 325-352 Issue: 2 Volume: 3 Year: 2000 Month: 11 X-DOI: 10.1080/15140326.2000.12040553 File-URL: http://hdl.handle.net/10.1080/15140326.2000.12040553 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:recsxx:v:3:y:2000:i:2:p:325-352 Template-Type: ReDIF-Article 1.0 Author-Name: Luis Rubalcava Author-X-Name-First: Luis Author-X-Name-Last: Rubalcava Author-Name: Dante Contreras Author-X-Name-First: Dante Author-X-Name-Last: Contreras Title: Does Gender and Birth Order Matter When Parents Specialize in Child's Nutrition? Evidence from Chile Abstract: Using household survey data from Chile the current paper presents evidence of how the nutritional status of the child reflects differences in parental preferences and child rearing technology within an intra-household allocation approach that includes a health production function. From the household optimization problem we estimate the nutritional status of the child conditional on a set of child, family and community covariates that reflect parental preferences and parental child rearing technology. We test directly whether birth-order in the family and whether being a son or being a daughter reflect how parents allocate the resources, given that the Chilean family is often linked to a machismo sentiment in the division of household chores. Logit estimates of the nutritional status of the child show gender specialization on child rearing: mothers give more resources to their daughters and fathers to their sons. This gender polarity is significant for non-oldest daughters and non- oldest sons, reflecting perhaps infant-order experience in child-care specialization. We also find that father's education is less important than mother's education. Nevertheless, mothers with higher education levels than their spouse seem to assign less family resources to their children than those who are relatively less educated. Journal: Journal of Applied Economics Pages: 353-386 Issue: 2 Volume: 3 Year: 2000 Month: 11 X-DOI: 10.1080/15140326.2000.12040554 File-URL: http://hdl.handle.net/10.1080/15140326.2000.12040554 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:recsxx:v:3:y:2000:i:2:p:353-386 Template-Type: ReDIF-Article 1.0 Author-Name: Dongwei Su Author-X-Name-First: Dongwei Author-X-Name-Last: Su Title: Asset Pricing in a Segmented Emerging Market Abstract: This paper investigates the effect of market segmentation on stock prices and returns in emerging Chinese markets. Under the assumption of infinite investment horizon and representative consumer, I formulate an Intertemporal Capital Asset Pricing Model (ICAPM) with restrictions on share ownership. The model posits that cross-section variations in the average excess returns between domestic A -and foreign B- shares depend on systematic risks as measured by shares' own market betas and betas with respect to the international equity markets. After correcting for errors-in-variable problem, I obtain econometric results consistent with the empirical predictions of ICAPM. Journal: Journal of Applied Economics Pages: 387-412 Issue: 2 Volume: 3 Year: 2000 Month: 11 X-DOI: 10.1080/15140326.2000.12040555 File-URL: http://hdl.handle.net/10.1080/15140326.2000.12040555 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:recsxx:v:3:y:2000:i:2:p:387-412 Template-Type: ReDIF-Article 1.0 Author-Name: Guillermo A. Calvo Author-X-Name-First: Guillermo A. Author-X-Name-Last: Calvo Title: Economic Policy in Stormy Waters: Financial Vulnerability in Emerging Economies Journal: Journal of Applied Economics Pages: 1-25 Issue: 1 Volume: 4 Year: 2001 Month: 5 X-DOI: 10.1080/15140326.2001.12040556 File-URL: http://hdl.handle.net/10.1080/15140326.2001.12040556 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:recsxx:v:4:y:2001:i:1:p:1-25 Template-Type: ReDIF-Article 1.0 Author-Name: Christopher Bajada Author-X-Name-First: Christopher Author-X-Name-Last: Bajada Title: An Examination of the Statistical Discrepancy and Private Investment Expenditure Abstract: The statistical discrepancy is often used to gauge the reliability of national accounts data. Particularly since the mid-1980's the statistical discrepancy in Australia has grown significantly in size and variance. In this paper we demonstrate that the overwhelming contribution to the size of the statistical discrepancy is mismeasurement of private investment expenditure. We demonstrate that this mismeasurement not only adds to the volatility of investment but may have a significant impact on the volatility of the business cycle in general. Journal: Journal of Applied Economics Pages: 27-61 Issue: 1 Volume: 4 Year: 2001 Month: 5 X-DOI: 10.1080/15140326.2001.12040557 File-URL: http://hdl.handle.net/10.1080/15140326.2001.12040557 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:recsxx:v:4:y:2001:i:1:p:27-61 Template-Type: ReDIF-Article 1.0 Author-Name: Dimitris Christopoulos Author-X-Name-First: Dimitris Author-X-Name-Last: Christopoulos Author-Name: John Loizides Author-X-Name-First: John Author-X-Name-Last: Loizides Author-Name: Efthymios G. Tsionas Author-X-Name-First: Efthymios G. Author-X-Name-Last: Tsionas Title: Efficiency in European Railways: Not as Inefficient as One Might Think Abstract: The paper studies technical inefficiency in the railway systems of ten countries of the European Union. A new approach is used which permits the disaggregation of inefficiency by factor of production to result in estimates of input-specific technical inefficiency. The cost structure is represented using a generalized McFadden flexible functional form. Policy implications and guidelines for rational decision making in the railway sector, are discussed in detail. Journal: Journal of Applied Economics Pages: 63-88 Issue: 1 Volume: 4 Year: 2001 Month: 5 X-DOI: 10.1080/15140326.2001.12040558 File-URL: http://hdl.handle.net/10.1080/15140326.2001.12040558 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:recsxx:v:4:y:2001:i:1:p:63-88 Template-Type: ReDIF-Article 1.0 Author-Name: João Ricardo Faria Author-X-Name-First: João Ricardo Author-X-Name-Last: Faria Author-Name: Francisco Galrão Carneiro Author-X-Name-First: Francisco Galrão Author-X-Name-Last: Carneiro Title: Does High Inflation Affect Growth in the Long and Short Run? Abstract: This paper investigates the relationship between inflation and output in the context of an economy facing persistent high inflation. By analyzing the case of Brazil, we find that inflation does not impact real output in the long run, but that in the short run there exists a negative effect from inflation on output. These results support Sidrauski's (1967) superneutrality of money in the long run, but cast doubt on the short run implications of the model for separable utility functions in consumption and real money balances, as exposed by Fischer (1979). The results are more likely to support a class of utility functions in which real money balances and consumption are perfect complements. Journal: Journal of Applied Economics Pages: 89-105 Issue: 1 Volume: 4 Year: 2001 Month: 5 X-DOI: 10.1080/15140326.2001.12040559 File-URL: http://hdl.handle.net/10.1080/15140326.2001.12040559 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:recsxx:v:4:y:2001:i:1:p:89-105 Template-Type: ReDIF-Article 1.0 Author-Name: Jonathan E. Leightner Author-X-Name-First: Jonathan E. Author-X-Name-Last: Leightner Title: Maintenance Abstract: Maintenance and production interact. The ideal way of accounting for this interaction, when estimating production functions, is by picking the temporal length of observations so that they embed integer multiples of the production—maintenance cycles for all inputs. In contrast to labor and land, the production—maintenance cycles of capital sometimes vary tremendously in temporal length, which can make it impossible to implement the ideal method of accounting for the interaction between maintenance and production. This paper empirically tests four second best methods of accounting for maintenance, when the ideal method is impossible. The output elasticities of all inputs (not just the input undergoing maintenance), which emerge from these tests, vary tremendously. This implies that the way that maintenance is incorporated into the analysis (including the standard approach of ignoring maintenance) drastically affects the profit maximizing combinations of inputs derived from production function estimations. Journal: Journal of Applied Economics Pages: 107-124 Issue: 1 Volume: 4 Year: 2001 Month: 5 X-DOI: 10.1080/15140326.2001.12040560 File-URL: http://hdl.handle.net/10.1080/15140326.2001.12040560 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:recsxx:v:4:y:2001:i:1:p:107-124 Template-Type: ReDIF-Article 1.0 Author-Name: Julio Nogués Author-X-Name-First: Julio Author-X-Name-Last: Nogués Author-Name: Martín Grandes Author-X-Name-First: Martín Author-X-Name-Last: Grandes Title: Country Risk: Economic Policy, Contagion Effect or Political Noise? Abstract: The opening of the capital account was one of the important structural reforms implemented by Argentina. This liberalization increased the linkage of the real economy with the changing conditions of the international financial markets. In particular, recent data show a clear relation between interest rates and the business cycle on the one hand, and sovereign spreads on the other. In order to understand better these linkages, it is necessary to analyze the determinants of these spreads also known as country risk. Using monthly data for the period 1994 to 1998, we find that this spread is explained by: 1) growth expectations, 2) fiscal deficits, 3) the debt service to export ratio and its growth rate, 4) contagion effects, 5) external shocks including movements of international interest rates, and 6) political noise. Based on these findings, we offer a discussion of some of the policies that should be implemented in order for the spreads to start declining and for the country to eventually reach an “investment grade” rating for its sovereign bonds. Journal: Journal of Applied Economics Pages: 125-162 Issue: 1 Volume: 4 Year: 2001 Month: 5 X-DOI: 10.1080/15140326.2001.12040561 File-URL: http://hdl.handle.net/10.1080/15140326.2001.12040561 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:recsxx:v:4:y:2001:i:1:p:125-162 Template-Type: ReDIF-Article 1.0 Author-Name: Noel D. Uri Author-X-Name-First: Noel D. Author-X-Name-Last: Uri Title: Technical Efficiency, Allocative Efficiency, and the Implementation of a Price Cap Plan in Telecommunications in the United States Abstract: Incentive regulation is designed to improve productive efficiency, enhance service quality and consumer welfare, and reduce the costs of regulation. The issue that is considered here is whether incentive regulation in the form of a price cap applicable to interstate access service to local loops in the telecommunications industry in the United States has resulted in an increase in the technical efficiency and allocative efficiency of local exchange carriers. The results suggest that for changes in technical efficiency, there is a definite randomness between 1985 and 1993 with technical efficiency increasing in some years and decreasing in others. Subsequent to 1993, however, there is a consistent improvement in technical efficiency. Given that incentive regulation in the form of price caps was implemented in 1991, it is likely that some portion of the improvement in technical efficiency subsequent to 1993 is attributable to incentive regulation. Journal: Journal of Applied Economics Pages: 163-186 Issue: 1 Volume: 4 Year: 2001 Month: 5 X-DOI: 10.1080/15140326.2001.12040562 File-URL: http://hdl.handle.net/10.1080/15140326.2001.12040562 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:recsxx:v:4:y:2001:i:1:p:163-186 Template-Type: ReDIF-Article 1.0 Author-Name: S. Brock Blomberg Author-X-Name-First: S. Brock Author-X-Name-Last: Blomberg Title: “Dumb and Dumber” Explanations for Exchange Rate Dynamics Abstract: The failure of the structural monetary model to beat a random walk in out-of-sample forecasting is one of the most celebrated empirical (non) findings in international finance. In this paper we show that this result is an artifact of the way monetary policy is measured. We construct a simple measure of monetary policy based on the narrative approach of Romer & Romer (1989). Using a linear Gaussian autoregressive specification with exogenous variables (ARX), we demonstrate that a structural monetary model with properly measured money does indeed outperform the random walk in out-of-sample forecasts over a wide range of horizons. We conclude that contrary to the conventional wisdom, money (appropriately defined) is a robust fundamental determinant of short-run exchange rate dynamics. Journal: Journal of Applied Economics Pages: 187-216 Issue: 2 Volume: 4 Year: 2001 Month: 11 X-DOI: 10.1080/15140326.2001.12040563 File-URL: http://hdl.handle.net/10.1080/15140326.2001.12040563 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:recsxx:v:4:y:2001:i:2:p:187-216 Template-Type: ReDIF-Article 1.0 Author-Name: Manuel A. Abdala Author-X-Name-First: Manuel A. Author-X-Name-Last: Abdala Title: Institutions, Contracts and Regulation of Infrastructure in Argentina Abstract: Massive privatization in the Argentine infrastructure and public service sectors gave an opportunity to explore why we observe notorious differences in regulatory design choices and performance outcomes across sectors, under the umbrella of similar nation-specific institutional characteristics -same federal government producing reform during a short period of time (: 1990–95)-. Following the Levy and Spiller (1996) conceptual framework, we propose that some institutional characteristics (namely the nature of conflicts among groups affected by reform and administrative capabilities) determined a wide variety of government choices for regulatory incentives, producing different outcomes across sectors. Despite the will of the executive power to respect stable “rules of the game”, episodes of government opportunism appeared in most sectors. Poor regulatory incentive design and weak agencies, on the other hand, prompted ex-post opportunistic behavior from regulated firms, which renegotiated contractual conditions to their favor. Journal: Journal of Applied Economics Pages: 217-254 Issue: 2 Volume: 4 Year: 2001 Month: 11 X-DOI: 10.1080/15140326.2001.12040564 File-URL: http://hdl.handle.net/10.1080/15140326.2001.12040564 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:recsxx:v:4:y:2001:i:2:p:217-254 Template-Type: ReDIF-Article 1.0 Author-Name: Lars Behrenz Author-X-Name-First: Lars Author-X-Name-Last: Behrenz Title: Who Gets the Job and Why? an Explorative Study of Employers'recruitment Behavior Abstract: In the literature of labor economics we find many examples of studies analyzing job seekers search behavior, but few examples of the corresponding analysis of the recruitment behavior of employers. This paper gives a picture of the recruitment behavior of Swedish employers. The analysis is based on about 800 telephone interviews with employers regarding the last person they had hired. This paper relates the lemon's problem in Akerlof with the Spence signaling model, and then it proceeds to relate indices and signals to the hiring behavior of employers. Employers mainly recruit personnel in order to expand a certain activity of their firm. On an average the total recruitment process takes about a month. In first round employers mainly look for job seekers with good education and experience. During the job interview the employer search for persons with professional knowledge, personal engagement and social competence. Journal: Journal of Applied Economics Pages: 255-278 Issue: 2 Volume: 4 Year: 2001 Month: 11 X-DOI: 10.1080/15140326.2001.12040565 File-URL: http://hdl.handle.net/10.1080/15140326.2001.12040565 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:recsxx:v:4:y:2001:i:2:p:255-278 Template-Type: ReDIF-Article 1.0 Author-Name: César Calderón Author-X-Name-First: César Author-X-Name-Last: Calderón Author-Name: Alberto Chong Author-X-Name-First: Alberto Author-X-Name-Last: Chong Author-Name: Luisa Zanforlin Author-X-Name-First: Luisa Author-X-Name-Last: Zanforlin Title: On Non-Linearities Between Exports of Manufactures and Economic Growth Abstract: Building up human capital and other complementarities may be important in the link between exports of manufactures and economic growth. On the other hand, managerial strategies that push for export promotion may be important, too. Though both may yield non-linearities in the link between exports and growth, the associated patterns differ. In this paper we take an aseptic, empirical view in the link between these two variables and the possible nonlinear links. Since direct testing for non-linearities in panel data may yield non-significant results although they may actually be present, we propose a very simple method that may serve as a first approximation to uncover such non-linearities. We also take into consideration endogeneity and reverse causality problems (Arellano and Bover, 1995), and definitional problems in our variable of interest. In fact, we use a panel of 96 countries for the period 1960–1995 and find evidence consistent with the presence of non-linearities. We apply formal sensitivity analysis and confirm the results. Journal: Journal of Applied Economics Pages: 279-311 Issue: 2 Volume: 4 Year: 2001 Month: 11 X-DOI: 10.1080/15140326.2001.12040566 File-URL: http://hdl.handle.net/10.1080/15140326.2001.12040566 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:recsxx:v:4:y:2001:i:2:p:279-311 Template-Type: ReDIF-Article 1.0 Author-Name: Craig A. Depken Author-X-Name-First: Craig A. Author-X-Name-Last: Depken Title: Good News, Bad News and Garch Effects in Stock Return Data Abstract: It is shown that the volume of trade can be decomposed into proportional proxies for stochastic flows of good news and bad news into the market. Positive (good) information flows are assumed to increase the price of a financial vehicle while negative (bad) information flows decrease the price. For the majority of a sample of ten split-stocks it is shown that the proposed decomposition explains more GARCH than volume itself. Using the proposed decomposition, the variance of returns for younger split stocks reacts asymmetrically to good news flowing into the market, while the variance for older split-stocks reacts symmetrically to good news and bad news. Journal: Journal of Applied Economics Pages: 313-327 Issue: 2 Volume: 4 Year: 2001 Month: 11 X-DOI: 10.1080/15140326.2001.12040567 File-URL: http://hdl.handle.net/10.1080/15140326.2001.12040567 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:recsxx:v:4:y:2001:i:2:p:313-327 Template-Type: ReDIF-Article 1.0 Author-Name: Michael D. Stroup Author-X-Name-First: Michael D. Author-X-Name-Last: Stroup Author-Name: Jac C. Heckelman Author-X-Name-First: Jac C. Author-X-Name-Last: Heckelman Title: Size of the Military Sector and Economic Growth: A Panel Data Analysis of Africa and Latin America Abstract: We estimate the influence of defense spending and military labor use on economic growth in African and Latin American countries. Our model integrates disparate implications from the defense economics literature into a Barro-style model of economic growth that controls for political and economic institutional variation across countries. Our panel data analysis of 44 countries in Africa and Latin America from 1975 to 1989 also controls for cross-country variation in lost human capital and public sector production inefficiencies. We find empirical evidence that the defense burden on economic growth is non-linear, with low levels of military spending increasing economic growth but higher levels of military spending decreasing growth. We also find evidence that the influence of military labor use on growth is non-linear, and exhibits a greater drag on economic growth in those countries with relatively higher levels of adult male education attainment. Journal: Journal of Applied Economics Pages: 329-360 Issue: 2 Volume: 4 Year: 2001 Month: 11 X-DOI: 10.1080/15140326.2001.12040568 File-URL: http://hdl.handle.net/10.1080/15140326.2001.12040568 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:recsxx:v:4:y:2001:i:2:p:329-360 Template-Type: ReDIF-Article 1.0 Author-Name: Allan Drazen Author-X-Name-First: Allan Author-X-Name-Last: Drazen Title: Central Bank Independence, Democracy, and Dollarization Abstract: Is there a fundamental conflict between insulating monetary policy from popular pressures, seen as essential to sound monetary policy, and making policy responsive to the popular will, seen as fundamental to democracy? We argue that strongly independent monetary policy is not inconsistent with democratic control of policymaking, once one realizes that a key feature of democratic policymaking is the decision to remove some decisions from “day-to-day” political pressures. This is the essence of “constitutionalism,” central to the functioning of democracy, by which certain decisions are made difficult to reverse. It is further argued that a conflict between popular sovereignty and policymaker independence is not unique to monetary policy, but actually characterizes most policymaking in a democracy, with institutions designed to insulate policymaking from popular pressures. A constitutional perspective implies that extreme forms of commitment, such as a dollarization, are similarly consistent with democracy. One argument for such constraints on monetary policy (as opposed to fiscal policy, for example) is agreement on what good monetary policy means. Journal: Journal of Applied Economics Pages: 1-17 Issue: 1 Volume: 5 Year: 2002 Month: 5 X-DOI: 10.1080/15140326.2002.12040569 File-URL: http://hdl.handle.net/10.1080/15140326.2002.12040569 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:recsxx:v:5:y:2002:i:1:p:1-17 Template-Type: ReDIF-Article 1.0 Author-Name: Luis Catão Author-X-Name-First: Luis Author-X-Name-Last: Catão Author-Name: Elisabetta Falcetti Author-X-Name-First: Elisabetta Author-X-Name-Last: Falcetti Title: Determinants of Argentina's External Trade Abstract: Following the liberalization reforms of the late 80s and early 90s, several emerging market economies have experienced large and persistent trade deficits. This paper focuses on the Argentine experience, examining the extent to which trade imbalances in the 1990s resulted from income and relative price movements, as well as from shifts in foreign trade elasticities associated with structural changes. New estimates of export and import equations are presented using a broader set of variables than previous studies and distinguishing between intra and extra MERCOSUR trade. We find that considerable export sensitivity to world commodity prices, domestic absorption, and economic activity in Brazil, combined with a high income elasticity of imports, are key determinants of Argentina's trade balance. Journal: Journal of Applied Economics Pages: 19-57 Issue: 1 Volume: 5 Year: 2002 Month: 5 X-DOI: 10.1080/15140326.2002.12040570 File-URL: http://hdl.handle.net/10.1080/15140326.2002.12040570 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:recsxx:v:5:y:2002:i:1:p:19-57 Template-Type: ReDIF-Article 1.0 Author-Name: Taufiq Choudhry Author-X-Name-First: Taufiq Author-X-Name-Last: Choudhry Title: Money-Income Relationships Between Three Erm Countries Abstract: This paper investigates the monetary interdependence and the money-income relationship between countries under a pegged and a floating exchange rate system during the same time period (: 1979–1997). The relationship is tested between three ERM countries, France, Germany and Holland, and also between these countries and the United States. The ERM countries have a pegged exchange rate between themselves, and the rate between these countries and the United States is freely floating. The empirical tests are conducted by means of the Johansen multivariate cointegration method and the error correction model. Among the ERM countries, international transmission of monetary policy is found in almost all directions. This may provide evidence against the theory of German domination of the EMU. In the second set of tests, the United States money is found to affect all three European incomes but not vice versa. Journal: Journal of Applied Economics Pages: 59-94 Issue: 1 Volume: 5 Year: 2002 Month: 5 X-DOI: 10.1080/15140326.2002.12040571 File-URL: http://hdl.handle.net/10.1080/15140326.2002.12040571 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:recsxx:v:5:y:2002:i:1:p:59-94 Template-Type: ReDIF-Article 1.0 Author-Name: Martin Ravallion Author-X-Name-First: Martin Author-X-Name-Last: Ravallion Title: Are the Poor Protected from Budget Cuts? Evidence for Argentina Abstract: Macroeconomic adjustment programs often emphasize the need to protect social spending from cuts, and to protect pro-poor spending in particular. But does this happen in practice during fiscal contractions? The paper presents evidence for Argentina. Using aggregate time series data the paper first finds that social spending was not protected historically, although more “pro-poor” social spending was no more vulnerable. Turning next to new data for an externally-financed workfare scheme introduced in response to a macro crisis, the paper finds that this program was far better targeted than other social spending. However, it appears that the program still had to assure that a small but relatively well-protected share of its benefits went to the non-poor. This appears to be a political economy constraint. Journal: Journal of Applied Economics Pages: 95-121 Issue: 1 Volume: 5 Year: 2002 Month: 5 X-DOI: 10.1080/15140326.2002.12040572 File-URL: http://hdl.handle.net/10.1080/15140326.2002.12040572 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:recsxx:v:5:y:2002:i:1:p:95-121 Template-Type: ReDIF-Article 1.0 Author-Name: Petri Rouvinen Author-X-Name-First: Petri Author-X-Name-Last: Rouvinen Title: R&D—Productivity Dynamics: Causality, Lags, and ‘Dry Holes’ Abstract: We study four issues in R&D-productivity dynamics: does R&D Granger cause productivity, is there a lag between R&D and its productivity effects, does the potency of R&D vary in timing and magnitude, and what is the role of R&D spillovers and aggregate shocks. The results suggest that R&D causes productivity but not vice versa, productivity responds to changes in R&D with a considerable lag, the potency of R&D varies in timing and magnitude, and that the elasticity of productivity with respect to aggregate shocks is high, but negligible with respect to R&D spillovers. Journal: Journal of Applied Economics Pages: 123-156 Issue: 1 Volume: 5 Year: 2002 Month: 5 X-DOI: 10.1080/15140326.2002.12040573 File-URL: http://hdl.handle.net/10.1080/15140326.2002.12040573 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:recsxx:v:5:y:2002:i:1:p:123-156 Template-Type: ReDIF-Article 1.0 Author-Name: Ricardo Sanhueza Author-X-Name-First: Ricardo Author-X-Name-Last: Sanhueza Author-Name: Jaime Ruiz-Tagle Author-X-Name-First: Jaime Author-X-Name-Last: Ruiz-Tagle Title: Choosing Health Insurance in a Dual Health Care System: The Chilean Case Abstract: In Chile there is a public insurance system where people contribute a fixed percentage of their income, and also a private system where people pay a premium based on their personal characteristics. Using a large survey for 1996, we study the determinants of the decision to buy a private health plan. We find that the probability of buying a private health plan is positively correlated with income and living in areas with private health services providers. This probability decreases as families become older, and with a larger proportion of fertile age females. We also find that people who are more likely to demand health services prefer to buy a private health plan, and that people enrolled in a private health plan increase their use of health services. The segmentation observed in the health sector relates with the way private insurers and the public insurance system set their premiums. Journal: Journal of Applied Economics Pages: 157-184 Issue: 1 Volume: 5 Year: 2002 Month: 5 X-DOI: 10.1080/15140326.2002.12040574 File-URL: http://hdl.handle.net/10.1080/15140326.2002.12040574 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:recsxx:v:5:y:2002:i:1:p:157-184 Template-Type: ReDIF-Article 1.0 Author-Name: Carlos A. Rodríguez Author-X-Name-First: Carlos A. Author-X-Name-Last: Rodríguez Title: Rudi in Chicago Journal: Journal of Applied Economics Pages: I-III Issue: 2 Volume: 5 Year: 2002 Month: 11 X-DOI: 10.1080/15140326.2002.12040575 File-URL: http://hdl.handle.net/10.1080/15140326.2002.12040575 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:recsxx:v:5:y:2002:i:2:p:I-III Template-Type: ReDIF-Article 1.0 Author-Name: Oscar Bajo-Rubio Author-X-Name-First: Oscar Author-X-Name-Last: Bajo-Rubio Author-Name: M. Dolores Montávez-Garcés Author-X-Name-First: M. Dolores Author-X-Name-Last: Montávez-Garcés Title: Was There Monetary Autonomy in Europe on the Eve of Emu? the German Dominance Hypothesis Re-Examined Abstract: In this paper we re-examine the German dominance hypothesis, as a way to assess whether the loss of monetary autonomy in Europe associated with EMU had been significant. We use Granger-causality tests between the interest rates of Germany and all the countries participating in the European Monetary System, with the sample period running until December 1998. Our results would support a weak version of the hypothesis, with Germany playing a certain “leadership” or special role in the EMS, although she would not had been strictly the “dominant” player. Journal: Journal of Applied Economics Pages: 185-207 Issue: 2 Volume: 5 Year: 2002 Month: 11 X-DOI: 10.1080/15140326.2002.12040576 File-URL: http://hdl.handle.net/10.1080/15140326.2002.12040576 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:recsxx:v:5:y:2002:i:2:p:185-207 Template-Type: ReDIF-Article 1.0 Author-Name: William S. Comanor Author-X-Name-First: William S. Author-X-Name-Last: Comanor Author-Name: Llad Phillips Author-X-Name-First: Llad Author-X-Name-Last: Phillips Title: The Impact of Income and Family Structure on Delinquency Abstract: There is no more important issue in the economics of the family than the impact of parents on the behavior of their children. By providing rewards and imposing constraints, parents seek to affect their children's behavior. The explanation of these actions is that the child's conduct directly enters into the parent's utility function. In this paper, we use that framework to explore the role of parental control over his or her child's delinquent behavior. Using data from the National Longitudinal Survey of Youth, we estimate the impact of family income and various dimensions of family structure on a youth's contact with the criminal justice system between the ages of 14 and 22. From this analysis, we conclude that the single most important factor affecting these measures of delinquency is the presence of his father in the home. All other factors, including family income, are much less important. Journal: Journal of Applied Economics Pages: 209-232 Issue: 2 Volume: 5 Year: 2002 Month: 11 X-DOI: 10.1080/15140326.2002.12040577 File-URL: http://hdl.handle.net/10.1080/15140326.2002.12040577 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:recsxx:v:5:y:2002:i:2:p:209-232 Template-Type: ReDIF-Article 1.0 Author-Name: Alessandra Guariglia Author-X-Name-First: Alessandra Author-X-Name-Last: Guariglia Title: Superstores and Labour Demand: Evidence from Great Britain Abstract: The objective of this paper is to quantify the net effect that the massive opening of edge or out-of-town superstores, which took place in Great Britain in the mid-eighties and early nineties, had on local employment. Our data set consists of the location and the opening dates of Tesco and Sainsbury's stores, in combination with Census of Employment data from 1984 to 1991. Using both a fixed-effects specification and a system-GMM specification which allows to control for endogeneity, we find that in spite of the adverse effects they had on competing smaller stores, superstores had an overall positive net effect on employment. Journal: Journal of Applied Economics Pages: 233-252 Issue: 2 Volume: 5 Year: 2002 Month: 11 X-DOI: 10.1080/15140326.2002.12040578 File-URL: http://hdl.handle.net/10.1080/15140326.2002.12040578 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:recsxx:v:5:y:2002:i:2:p:233-252 Template-Type: ReDIF-Article 1.0 Author-Name: Robert Hoffmann Author-X-Name-First: Robert Author-X-Name-Last: Hoffmann Author-Name: Lee Chew Ging Author-X-Name-First: Lee Chew Author-X-Name-Last: Ging Author-Name: Bala Ramasamy Author-X-Name-First: Bala Author-X-Name-Last: Ramasamy Title: The Socio-Economic Determinants of International Soccer Performance Abstract: This paper reports regression results identifying the variables influencing a country's performance in international soccer games. The results reveal that economic, demographic, cultural and climatic factors are important. In particular, inverted U-shape relationships are identified with respect to temperature and per-capita wealth. We also find a significant interaction between Latin cultural origin and population size, while both variables are individually insignificant. Explanations for our results are offered. Journal: Journal of Applied Economics Pages: 253-272 Issue: 2 Volume: 5 Year: 2002 Month: 11 X-DOI: 10.1080/15140326.2002.12040579 File-URL: http://hdl.handle.net/10.1080/15140326.2002.12040579 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:recsxx:v:5:y:2002:i:2:p:253-272 Template-Type: ReDIF-Article 1.0 Author-Name: Pablo Marshall Author-X-Name-First: Pablo Author-X-Name-Last: Marshall Author-Name: Eduardo Walker Author-X-Name-First: Eduardo Author-X-Name-Last: Walker Title: Asymmetric Reaction to Information and Serial Dependence of Short-Run Returns Abstract: This paper studies the daily stock price reaction to new information of portfolios grouped by size quintiles. To that end, cross-correlations, autocorrelations and Dimson beta regressions are analyzed. Based on a sample of shares traded in the Santiago de Chile Stock Exchange for the 1991–1998 period, results show that larger company stock prices—as measured by market capitalization—react to both good and bad news sooner than the smaller ones do. Thus a crossed effect appears, although not as a cascade: only the prices of large firms react earlier than the rest. These effects do not seem to be caused by non-trading. There also are significant asymmetric lagged and cross-effects. Good news has a more pronounced lagged effect than bad news does. Journal: Journal of Applied Economics Pages: 273-292 Issue: 2 Volume: 5 Year: 2002 Month: 11 X-DOI: 10.1080/15140326.2002.12040580 File-URL: http://hdl.handle.net/10.1080/15140326.2002.12040580 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:recsxx:v:5:y:2002:i:2:p:273-292 Template-Type: ReDIF-Article 1.0 Author-Name: Juan-Pablo Montero Author-X-Name-First: Juan-Pablo Author-X-Name-Last: Montero Title: Market Structure and Environmental Innovation Abstract: This paper studies firms' incentives to invest in environmental R&D under different market structures (Cournot and Bertrand) and environmental policy instruments (emission standards, taxes, tradable permits and auctioned permits). Because of market strategic effects, R&D incentives vary widely across market structures and instruments. For example, when firms' products are strategic substitutes (i.e., Cournot), either emission standards, taxes or auctioned permits can provide the most incentives. But when firms' products are strategic complements, either taxes or auctioned permits provide the most incentives. If markets are perfectly competitive, however, permits and emission standards offer similar incentives that are lower than those offered by taxes. Journal: Journal of Applied Economics Pages: 293-325 Issue: 2 Volume: 5 Year: 2002 Month: 11 X-DOI: 10.1080/15140326.2002.12040581 File-URL: http://hdl.handle.net/10.1080/15140326.2002.12040581 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:recsxx:v:5:y:2002:i:2:p:293-325 Template-Type: ReDIF-Article 1.0 Author-Name: Javier Ortiz Author-X-Name-First: Javier Author-X-Name-Last: Ortiz Author-Name: Carlos Rodríguez Author-X-Name-First: Carlos Author-X-Name-Last: Rodríguez Title: Country Risk and the Mundell-Fleming Model Applied to the 1999–2000 Argentine Experience Abstract: In this paper we propose a modification of the traditional Mundell-Fleming model. The extended model introduces the implications of including the fiscal deficit and international reserves as determinants of the level of country risk. This slight modification of the traditional paradigm leads to radical changes in the effects that fiscal and monetary policies have in economies with high capital mobility under an extreme version of a fixed exchange rate regime (Currency Board). We use the proposed model to evaluate some of the economic policies implemented between December 1999 and March 2001 by the first economic team under the Presidency of Fernando De la Rúa in Argentina. Additionally, we suggest that some of the main results obtained from the model are applicable to other emerging economies. Journal: Journal of Applied Economics Pages: 327-348 Issue: 2 Volume: 5 Year: 2002 Month: 11 X-DOI: 10.1080/15140326.2002.12040582 File-URL: http://hdl.handle.net/10.1080/15140326.2002.12040582 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:recsxx:v:5:y:2002:i:2:p:327-348 Template-Type: ReDIF-Article 1.0 Author-Name: Titus O. Awokuse Author-X-Name-First: Titus O. Author-X-Name-Last: Awokuse Author-Name: David A. Bessler Author-X-Name-First: David A. Author-X-Name-Last: Bessler Title: Vector Autoregressions, Policy Analysis, and Directed Acyclic Graphs: An Application to the U.S. Economy Abstract: The paper considers the use of directed acyclic graphs (DAGs), and their construction from observational data with PC-algorithm TETRAD II, in providing over-identifying restrictions on the innovations from a vector autoregression. Results from Sims' 1986 model of the US economy are replicated and compared using these data-driven techniques. The directed graph results show Sims' six-variable VAR is not rich enough to provide an unambiguous ordering at usual levels of statistical significance. A significance level in the neighborhood of 30% is required to find a clear structural ordering. Although the DAG results are in agreement with Sims' theory-based model for unemployment, differences are noted for the other five variables: income, money supply, price level, interest rates, and investment. Overall the DAG results are broadly consistent with a monetarist view with adaptive expectations and no hyperinflation. Journal: Journal of Applied Economics Pages: 1-24 Issue: 1 Volume: 6 Year: 2003 Month: 5 X-DOI: 10.1080/15140326.2003.12040583 File-URL: http://hdl.handle.net/10.1080/15140326.2003.12040583 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:recsxx:v:6:y:2003:i:1:p:1-24 Template-Type: ReDIF-Article 1.0 Author-Name: Hsiao-Chuan Chang Author-X-Name-First: Hsiao-Chuan Author-X-Name-Last: Chang Title: International Trade, Productivity Growth, Education and the Wage Differential: A Case Study of Taiwan Abstract: The cause of changes in the wage differential between skilled and unskilled labor has been an important subject of debate for several decades. International trade and productivity growth are two main causes that have been suggested from large country studies. Recent research proposes that education is another influence. All three causes have been significantly associated with Taiwan's economic development. This paper attempts to contribute to the literature by investigating the wage differential in Taiwan, a small open economy. A Dynamic Intertemporal General Equilibrium (DIGE) model is used to perform theoretical simulation. An Error Correction Model (ECM) incorporating both short- and long-run effects is employed to accomplish the empirical examination. That education and international trade are important causes of changes in the wage differential is substantiated by Taiwanese data. Productivity growth has a significant influence on the wage differential in the short run but not in the long run. Journal: Journal of Applied Economics Pages: 25-48 Issue: 1 Volume: 6 Year: 2003 Month: 5 X-DOI: 10.1080/15140326.2003.12040584 File-URL: http://hdl.handle.net/10.1080/15140326.2003.12040584 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:recsxx:v:6:y:2003:i:1:p:25-48 Template-Type: ReDIF-Article 1.0 Author-Name: José Pablo Dapena Author-X-Name-First: José Pablo Author-X-Name-Last: Dapena Title: On the Valuation of Companies with Growth Opportunities Abstract: Each company faces day to day investment opportunities. Just by staying in business the company is taking a decision of reinvesting capital. These opportunities have to be fairly valued to overcome misallocation of resources. A project with high growth opportunities requires high reinvestments to take full advantage of them until it reaches its mature stage. These investments can be seen as a succession of call options on future growth. When a company with such prospects is valued using the discounted cash flow technique and growth is taken implicitly in the growing cash flows and the residual value, the value thus obtained will be higher than the true one (under certain circumstances). Technology advances and the effects of globalization create enormous growth opportunities, and so misvaluation risks are higher. Journal: Journal of Applied Economics Pages: 49-72 Issue: 1 Volume: 6 Year: 2003 Month: 5 X-DOI: 10.1080/15140326.2003.12040585 File-URL: http://hdl.handle.net/10.1080/15140326.2003.12040585 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:recsxx:v:6:y:2003:i:1:p:49-72 Template-Type: ReDIF-Article 1.0 Author-Name: Thorsten Fischer Author-X-Name-First: Thorsten Author-X-Name-Last: Fischer Author-Name: David R. Kamerschen Author-X-Name-First: David R. Author-X-Name-Last: Kamerschen Title: Measuring Competition in the U.S. Airline Industry Using the Rosse-Panzar Test and Cross-Sectional Regression Analyses Abstract: We employ the Rosse-Panzar test to assess market performance in selected airport-pairs originating from Atlanta. The Rosse-Panzar test stands in the tradition of the New Empirical Industrial Organization. It is based on the comparative statics of a reduced form revenue equation. Therefore, it is less powerful than structural models, but it offers the advantage of less stringent data requirements and reduces the risk of model misspecifications. The test statistic allows us in most airport-pairs to reject both conducts consistent with the Bertrand outcome, which is equivalent to perfect competition, and the collusive outcome, which is equivalent to joint profit-maximization. Rather, the test statistic suggests that behavior is consistent with a range of intermediate outcomes between the two extremes, including, but not limited to the Cournot oligopoly. In the second part of the paper, a cross-section pricing regression complements the Rosse-Panzar test. It shows that the presence of low-cost competition in an airport-pair reduces the average fare significantly. Journal: Journal of Applied Economics Pages: 73-93 Issue: 1 Volume: 6 Year: 2003 Month: 5 X-DOI: 10.1080/15140326.2003.12040586 File-URL: http://hdl.handle.net/10.1080/15140326.2003.12040586 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:recsxx:v:6:y:2003:i:1:p:73-93 Template-Type: ReDIF-Article 1.0 Author-Name: Alvaro Forteza Author-X-Name-First: Alvaro Author-X-Name-Last: Forteza Author-Name: Rossana Patrón Author-X-Name-First: Rossana Author-X-Name-Last: Patrón Title: Trade Liberalisation with Costly Adjustment Abstract: The paper analyses the efficiency and the distributional effects of eliminating a tariff in a protected sector, in a Heckscher-Ohlin model of trade with costs of adjustment. The tariff can be eliminated at the onset or after a while. In case of postponing it the government may pre-announce the policy change or may not do it and surprise the private sector. It is shown that while large adjustment costs reduce the efficiency gains from trade liberalisation, small to moderate adjustment costs may raise the efficiency gains from a pre-announced liberalisation. The adjustment costs reduce the effects on factor returns from a sudden unanticipated liberalisation. The distributional effects of trade liberalisations are more complex when the policy is pre-announced. For small and moderate levels, the adjustment costs may increase the effects of the policy on factor returns. Also, the “value of the announcement” rises with the adjustment costs. Journal: Journal of Applied Economics Pages: 95-125 Issue: 1 Volume: 6 Year: 2003 Month: 5 X-DOI: 10.1080/15140326.2003.12040587 File-URL: http://hdl.handle.net/10.1080/15140326.2003.12040587 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:recsxx:v:6:y:2003:i:1:p:95-125 Template-Type: ReDIF-Article 1.0 Author-Name: Yannick L'horty Author-X-Name-First: Yannick Author-X-Name-Last: L'horty Author-Name: Christophe Rault Author-X-Name-First: Christophe Author-X-Name-Last: Rault Title: Why Is French Equilibrium Unemployment So High? an Estimation of the Ws-Ps Model Abstract: Unemployment in France rose steadily from the early-seventies to the mid-eighties. Since the mid-eighties it has continued to experience fluctuations around a very high average level. Equilibrium unemployment theories are a useful framework within which to account for these developments. A multivariate estimation of the WS-PS model on macroeconomic quarterly data, which includes a larger number of potential unemployment determinants than earlier work, allows an enriched reading of the rise in French unemployment and of its persistence at a high level. We estimated it using a conditional VAR-ECM model, which is based upon the weak exogeneity properties of variables over the 1970–1/1996–4 period. The rise in equilibrium unemployment by 10 points in 25 years can essentially be explained by the rise in tax and social wedge, the slowdown in labour productivity and the deterioration of job security. Terms of exchange and skill mismatch account for only a slim part of the rise in equilibrium unemployment. Journal: Journal of Applied Economics Pages: 127-156 Issue: 1 Volume: 6 Year: 2003 Month: 5 X-DOI: 10.1080/15140326.2003.12040588 File-URL: http://hdl.handle.net/10.1080/15140326.2003.12040588 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:recsxx:v:6:y:2003:i:1:p:127-156 Template-Type: ReDIF-Article 1.0 Author-Name: Jonas Månsson Author-X-Name-First: Jonas Author-X-Name-Last: Månsson Title: How Can We Use the Result from a Dea Analysis? Identification of Firm-Relevant Reference Units Abstract: Two types of guidelines can be obtained from a DEA (data envelopment analysis) analysis. Firstly, the firm can reduce input or increase production according to the DEA results. Secondly, an inefficient firm might be able to identify reference units. This makes it possible for the inefficient firm to, on site, study production that is more efficient, and thereby get information on e.g. efficient organisational solutions. In this study, we focus on how to detect these firm-relevant reference units. While applying the existing methods for identification of reference units, i.e. the intensity variable method and the dominance method, on a data set concerning booking centres in the Swedish taxi market, shortcomings in these methods were identified. This motivates the development of a new method. This new method, the sphere measure, enables an inefficient unit to identify existing and efficient units that have the largest similarity with itself. The identified units will thus be firmrelevant reference units. Journal: Journal of Applied Economics Pages: 157-175 Issue: 1 Volume: 6 Year: 2003 Month: 5 X-DOI: 10.1080/15140326.2003.12040589 File-URL: http://hdl.handle.net/10.1080/15140326.2003.12040589 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:recsxx:v:6:y:2003:i:1:p:157-175 Template-Type: ReDIF-Article 1.0 Author-Name: Larry A. Sjaastad Author-X-Name-First: Larry A. Author-X-Name-Last: Sjaastad Author-Name: Meher Manzur Author-X-Name-First: Meher Author-X-Name-Last: Manzur Title: Import Protection, Capital Flows, and Real Exchange Rate Dynamics Abstract: This paper focuses on the effect of import protection on the response of the real exchange rate to capital flows. The central hypothesis is that barriers to imports blunt the expenditure and production shifting effects of changes in relative prices, and hence the ability of the real exchange rate to equilibrate the economy in response to international capital flows. Employing a cross-section approach, the study focuses on three broadly similar countries but with very different levels of protection: Argentina, Australia, and Canada. The empirical results are consistent with the central hypothesis. Journal: Journal of Applied Economics Pages: 177-203 Issue: 1 Volume: 6 Year: 2003 Month: 5 X-DOI: 10.1080/15140326.2003.12040590 File-URL: http://hdl.handle.net/10.1080/15140326.2003.12040590 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:recsxx:v:6:y:2003:i:1:p:177-203 Template-Type: ReDIF-Article 1.0 Author-Name: Paula C. Albuquerque Author-X-Name-First: Paula C. Author-X-Name-Last: Albuquerque Title: The Traditional Brokers: What are their Chances in the Forex? Abstract: The electronic brokers compete with the traditional brokers. The electronic brokers offer lower costs, increased speed and a better guarantee of transparency and of anonymity. The only real advantage of the traditional brokers is the gathering of information. We investigate whether the traders in the foreign exchange market consider that to be crucial, which is equivalent to asking “Do traditional brokers have any chance in the forex?” We build a simple model and use the results of a questionnaire that we elaborated and that was sent to the users of the brokers' services in the Portuguese foreign exchange market. We also use transaction data from the most important dealer in the Portuguese market. Considering this dealer to be representative, we conclude that the main advantage of the traditional broker is not much valued by the dealers. This does not leave a promising future for the traditional broker. Journal: Journal of Applied Economics Pages: 205-220 Issue: 2 Volume: 6 Year: 2003 Month: 11 X-DOI: 10.1080/15140326.2003.12040591 File-URL: http://hdl.handle.net/10.1080/15140326.2003.12040591 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:recsxx:v:6:y:2003:i:2:p:205-220 Template-Type: ReDIF-Article 1.0 Author-Name: Jorge Eduardo Carrera Author-X-Name-First: Jorge Eduardo Author-X-Name-Last: Carrera Author-Name: Mariano Féliz Author-X-Name-First: Mariano Author-X-Name-Last: Féliz Author-Name: Demian Panigo Author-X-Name-First: Demian Author-X-Name-Last: Panigo Title: Testing the Order of Integration with Low Power Tests. an Application to Argentine Macro-Variables Abstract: The low power of available econometric tests is an important problem in applied research on unit roots and related issues. Based on the principle of methodological triangulation, the problem should be analyzed from different points of view in order to increase the validity of the results. Following this approach a strategy to test the order of integration in time series is presented using a sequence of eleven consolidated tests. In this way it is possible to determine the persistence of shocks, to specify the best strategy for trend-cycle decomposition and to obtain additional information useful for public policies. As an application of the methodology, the integration properties in the main 14 Argentine macroeconomic variables are studied. A classification of them in four homogenous groups according to their order of integration is obtained. Journal: Journal of Applied Economics Pages: 221-246 Issue: 2 Volume: 6 Year: 2003 Month: 11 X-DOI: 10.1080/15140326.2003.12040592 File-URL: http://hdl.handle.net/10.1080/15140326.2003.12040592 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:recsxx:v:6:y:2003:i:2:p:221-246 Template-Type: ReDIF-Article 1.0 Author-Name: Steven Cook Author-X-Name-First: Steven Author-X-Name-Last: Cook Title: A Note on Business Cycle Non-Linearity in U.S. Consumption Abstract: The recently examined durability-asymmetry hypothesis of Cook (1999) is re-evaluated using the diagnostic tests of time deformation proposed by Stock (1987, 1988). An application of these tests to disaggregated data on U.S. consumers' expenditure provides further support for this hypothesis, with the findings given an economic interpretation in terms of variables evolving at differing speeds over different phases of the business cycle. Additionally, building upon the studies of Cover (1992), Karras (1996) and Rhee and Rich (1995), recent research by Arden et al. (2000) has shown the relaxation of the assumptions of linearity and symmetry typically employed in macroeconometric models to result in monetary policy having clear asymmetric effects on the economy. In particular it was shown that expansionary monetary policy as given by a reduction in the interest rate, has greater effects than contractionary policy (an increase in the interest rate), and that this becomes more apparent when the economy is in recovery rather than recession. The finding of non- linearity in U.S. consumption therefore has major implications for econometric modelling and policy analysis. Journal: Journal of Applied Economics Pages: 247-253 Issue: 2 Volume: 6 Year: 2003 Month: 11 X-DOI: 10.1080/15140326.2003.12040593 File-URL: http://hdl.handle.net/10.1080/15140326.2003.12040593 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:recsxx:v:6:y:2003:i:2:p:247-253 Template-Type: ReDIF-Article 1.0 Author-Name: K. Hadri Author-X-Name-First: K. Author-X-Name-Last: Hadri Author-Name: C. Guermat Author-X-Name-First: C. Author-X-Name-Last: Guermat Author-Name: J. Whittaker Author-X-Name-First: J. Author-X-Name-Last: Whittaker Title: Estimating Farm Efficiency in the Presence of Double Heteroscedasticity Using Panel Data Abstract: The accuracy of technical efficiency measures is important given the interest in such measures in policy discussions. In recent years the use of stochastic frontiers has become popular for estimating technical inefficiency, but estimated inefficiencies are sensitive to specification errors. One source of such errors is heteroscedasticity. This paper addresses this issue by extending the Hadri (1999) correction for heteroscedasticity to stochastic production frontiers and to panel data. It is argued that heteroscedasticity within an estimation can have a significant effect on results, and that correcting for heteroscedasticity yields more accurate measures of technical inefficiency. Using panel data on cereal farms, it is found that the usual technical efficiency measures used in stochastic production frontiers are significantly sensitive to the extended correction for heteroscedasticity. Journal: Journal of Applied Economics Pages: 255-268 Issue: 2 Volume: 6 Year: 2003 Month: 11 X-DOI: 10.1080/15140326.2003.12040594 File-URL: http://hdl.handle.net/10.1080/15140326.2003.12040594 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:recsxx:v:6:y:2003:i:2:p:255-268 Template-Type: ReDIF-Article 1.0 Author-Name: Sylvanus Ikhide Author-X-Name-First: Sylvanus Author-X-Name-Last: Ikhide Title: Was There a Credit Crunch in Namibia Between 1996–2000? Abstract: Commercial bank credit is a useful tool for promoting economic growth especially at the early stages of development. It has been observed that between 1996 and the early part of 2000, the growth rate of real credit to the private sector declined significantly in Namibia. This period coincided with observed strong demand for commercial bank loans. There has therefore been public discourse on the possibility of a restriction in the supply of credit by commercial banks and hence the occurrence of a credit crunch in the economy since commercial bank lending capacity did not fall. This paper attempts to provide some evidence in this regard by examining the main determinants of commercial bank credit in the economy and ascertaining if credit has been demand or supply constrained. This has been done through a survey of disaggregated data in the banking industry and an estimation of a switching regression model to identify regimes of excess supply and demand. Although it is difficult to determine in the face of obvious demand factors the extent to which the credit slowdown can be attributed to credit supply factors, our results show that supply factors did play a major role. Journal: Journal of Applied Economics Pages: 269-290 Issue: 2 Volume: 6 Year: 2003 Month: 11 X-DOI: 10.1080/15140326.2003.12040595 File-URL: http://hdl.handle.net/10.1080/15140326.2003.12040595 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:recsxx:v:6:y:2003:i:2:p:269-290 Template-Type: ReDIF-Article 1.0 Author-Name: Inmaculada Martinez-Zarzoso Author-X-Name-First: Inmaculada Author-X-Name-Last: Martinez-Zarzoso Author-Name: Felicitas Nowak-Lehmann Author-X-Name-First: Felicitas Author-X-Name-Last: Nowak-Lehmann Title: Augmented Gravity Model: An Empirical Application to Mercosur-European Union Trade Flows Abstract: This paper applies the gravity trade model to assess Mercosur-European Union trade, and trade potential following the agreements reached recently between both trade blocs. The model is tested for a sample of 20 countries, the four formal members of Mercosur plus Chile and the fifteen members of the European Union. A panel data analysis is used to disentangle the time invariant country-specific effects and to capture the relationships between the relevant variables over time. We find that the fixed effect model is to be preferred to the random effects gravity model. Furthermore, a number of variables, namely, infrastructure, income differences and exchange rates added to the standard gravity equation, are found to be important determinants of bilateral trade flows. Journal: Journal of Applied Economics Pages: 291-316 Issue: 2 Volume: 6 Year: 2003 Month: 11 X-DOI: 10.1080/15140326.2003.12040596 File-URL: http://hdl.handle.net/10.1080/15140326.2003.12040596 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:recsxx:v:6:y:2003:i:2:p:291-316 Template-Type: ReDIF-Article 1.0 Author-Name: Miguel Székely Author-X-Name-First: Miguel Author-X-Name-Last: Székely Title: The 1990S in Latin America: Another Decade of Persistent Inequality, but with Somewhat Lower Poverty Abstract: This paper processes 76 household surveys from 17 Latin American countries to document changes in poverty and inequality during the 1990s, and performs an analysis of the effect of economic reforms on inequality and poverty by using an expanded data base of 94 surveys spanning the 1977–2000 period. We show that there is no country in Latin America where inequality declined during the 1990s. Poverty declined in 10 or 11 out of the 17 countries for which household surveys are available to us, depending on the poverty measured used. Persistently high inequality inhibited further poverty reduction. One important factor contributing to the persistently high inequality level is financial liberalization. Trade liberalization and a more stable macroeconomic environment had a slight inequality-reducing effect. Journal: Journal of Applied Economics Pages: 317-339 Issue: 2 Volume: 6 Year: 2003 Month: 11 X-DOI: 10.1080/15140326.2003.12040597 File-URL: http://hdl.handle.net/10.1080/15140326.2003.12040597 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:recsxx:v:6:y:2003:i:2:p:317-339 Template-Type: ReDIF-Article 1.0 Author-Name: E. Sibel Yelten Author-X-Name-First: E. Sibel Author-X-Name-Last: Yelten Title: Real Effects of Movements in Nominal Exchange Rates: Application to the Asian Crisis Abstract: This paper analyzes the ad hoc decision of three Asian countries to peg their currency to the U.S. dollar prior to the Asian crisis. It uses the Sjaastad model to estimate the optimal basket weights for Thailand, Korea, and Singapore. The analysis in this paper differs from the optimal basket research since we are not searching for an ad hoc optimal basket; rather, the basket is the solution to the problem. For Thailand and Korea, the correct weights of the dollar in the basket are estimated to be 44 and 65 percent, respectively, which differ significantly from the actual weight of 100 percent for the U.S. dollar in their currency basket prior to the 1997 Asian crisis. Singapore, with a weight of 85 percent for the U.S. currency, is closer to a dollar peg, and therefore was less affected by the large depreciation of the European currencies and the yen toward the dollar that occurred prior to the Asian exchange rate crisis. Besides the fact that Singapore had better economic fundamentals prior to the crisis, the fact that the optimal basket for that country is closer to a dollar peg is an additional reason why its economy was less severely hit by the crisis. Journal: Journal of Applied Economics Pages: 341-359 Issue: 2 Volume: 6 Year: 2003 Month: 11 X-DOI: 10.1080/15140326.2003.12040598 File-URL: http://hdl.handle.net/10.1080/15140326.2003.12040598 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:recsxx:v:6:y:2003:i:2:p:341-359 Template-Type: ReDIF-Article 1.0 Author-Name: Julide Yildirim Author-X-Name-First: Julide Author-X-Name-Last: Yildirim Title: Currency Substitution and the Demand for Money in Five European Union Countries Abstract: The high degree of economic integration has led to an increased degree of currency substitution in the EU countries, which could bring instability in national money demand functions while an EU-wide money demand function could be more stable. Currency substitution usually takes the form of cross border deposits (CBD), which are not included in the traditional monetary aggregates. Thus, extended monetary aggregates that include the relevant CBDs are defined in this study. In order to investigate the implications of currency substitution for the stability of the demand functions, the traditional and extended monetary aggregates for five EU countries are defined in addition to EU-wide monetary aggregates. The estimated EU-wide demand for extended money appears to be stable suggesting that there is scope for monetary policy at the European level. However, the stability of the area-wide aggregate has been impaired when the relevant CBDs are not included. Journal: Journal of Applied Economics Pages: 361-383 Issue: 2 Volume: 6 Year: 2003 Month: 11 X-DOI: 10.1080/15140326.2003.12040599 File-URL: http://hdl.handle.net/10.1080/15140326.2003.12040599 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:recsxx:v:6:y:2003:i:2:p:361-383 Template-Type: ReDIF-Article 1.0 Author-Name: Joe Akira Yoshino Author-X-Name-First: Joe Akira Author-X-Name-Last: Yoshino Title: Market Risk and Volatility in the Brazilian Stock Market Abstract: We estimate in this paper the market risk implied by the prices of different options traded in the Brazilian stock market. The fundamental theory to handle this problem is the one implied by the Arrow-Debreu contingent claim concept. Using that theory, we are able to construct the term structure of market risk, and to obtain a surface that provides slices for a particular “volatility smile.” The methodology that we use follows the one proposed by Shimko (1993), which is able to calculate a non-lognormal probability density function (PDF) consistent with the volatility observed in a relatively small sample of option prices. This methodology goes beyond the one proposed originally by Black and Scholes (1973), since it does not require log-normality of the PDF nor that volatility remains constant. Journal: Journal of Applied Economics Pages: 385-403 Issue: 2 Volume: 6 Year: 2003 Month: 11 X-DOI: 10.1080/15140326.2003.12040600 File-URL: http://hdl.handle.net/10.1080/15140326.2003.12040600 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:recsxx:v:6:y:2003:i:2:p:385-403 Template-Type: ReDIF-Article 1.0 Author-Name: Kevin B. Grier Author-X-Name-First: Kevin B. Author-X-Name-Last: Grier Author-Name: Fausto Hernández-Trillo Author-X-Name-First: Fausto Author-X-Name-Last: Hernández-Trillo Title: The Real Exchange Rate Process and Its Real Effects: The Cases of Mexico and the USA Abstract: Exchange rate management is a salient macroeconomic issue, especially in developing countries. In this paper, we study political economy factors that may affect the real exchange rate (RER) process and the real economic effects of the RER. We review recent literature on the effects of elections on the exchange rate, and adapt Ball's (1992) model to show that uncertainty about the future course of policy may make more appreciated RER's less predictable. We also review the literature on the real effect of RER appreciations and of RER uncertainty. We then construct a simultaneous GARCH-M model of the joint determination of the RER and output capable of testing our hypotheses simultaneously in a single model. We estimate the model using data first from Mexico, a developing country, and the US. In Mexico we find that elections significantly affect the evolution of the RER, that more appreciated RERs are less predictable, that RER depreciations lower output growth and that RER uncertainty lowers output growth, even when controlling for its well-studied effect on trade. By contrast, none of these effects are found in the US data. Journal: Journal of Applied Economics Pages: 1-25 Issue: 1 Volume: 7 Year: 2004 Month: 5 X-DOI: 10.1080/15140326.2004.12040601 File-URL: http://hdl.handle.net/10.1080/15140326.2004.12040601 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:recsxx:v:7:y:2004:i:1:p:1-25 Template-Type: ReDIF-Article 1.0 Author-Name: Dimitrios Asteriou Author-X-Name-First: Dimitrios Author-X-Name-Last: Asteriou Author-Name: Vassilis Monastiriotis Author-X-Name-First: Vassilis Author-X-Name-Last: Monastiriotis Title: What Do Unions Do at the Large Scale? Macro-Economic Evidence from a Panel of OECD Countries Abstract: This paper investigates the long-run relationship between trade unionism and productivity using a panel data set comprising of 18 OECD economies. Much of the existing evidence on this issue derives from micro-economic studies, with limited attention paid to long-run dynamics and economy-wide effects. Using the mean group and pooled mean group estimation techniques on cross-country panel data, the paper offers support to the “productivity-increasing face of unionism” hypothesis, revealing a positive relationship between trade union density and per worker output. Journal: Journal of Applied Economics Pages: 27-46 Issue: 1 Volume: 7 Year: 2004 Month: 5 X-DOI: 10.1080/15140326.2004.12040602 File-URL: http://hdl.handle.net/10.1080/15140326.2004.12040602 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:recsxx:v:7:y:2004:i:1:p:27-46 Template-Type: ReDIF-Article 1.0 Author-Name: Begoña Eguía Author-X-Name-First: Begoña Author-X-Name-Last: Eguía Author-Name: Cruz A. Echevarría Author-X-Name-First: Cruz A. Author-X-Name-Last: Echevarría Title: Unemployment Rates and Population Changes in Spain Abstract: This paper discusses the long run effect of changes in the age distribution of Spanish population on the unemployment rate, disaggregated by sex and age segments in the light of cointegration theory given the non stationarity of the series. Four main results are obtained. First, empirical analysis does not provide a clear scheme concerning the long run relationships between population variables and the specific unemployment rates for different groups. Second, as a first approximation one can detect the existence of, at least, one long run equilibrium relationship in all sex-age groups, except for the ones including the middle aged unemployed female workers and oldest unemployed female workers. Third, a more thorough analysis enables us to justify the existence of such long run relationships for the youngest male workers and middle aged male workers. One cannot argue, however, a joint evolution of population variables and the unemployment rates associated with female workers and to the oldest male workers. Fourth, the short run dynamics of unemployment rates for the youngest (male and female workers) and the middle age male workers is affected by the transitory deviations from these long run relationships. Hence, from an applied economics point of view, the result stresses the likely failure of employment policies which do not take into account the heterogeneous composition of unemployed workers. It stresses the need to design particular policies for specific groups of workers depending on their age and sex characteristics. Journal: Journal of Applied Economics Pages: 47-76 Issue: 1 Volume: 7 Year: 2004 Month: 5 X-DOI: 10.1080/15140326.2004.12040603 File-URL: http://hdl.handle.net/10.1080/15140326.2004.12040603 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:recsxx:v:7:y:2004:i:1:p:47-76 Template-Type: ReDIF-Article 1.0 Author-Name: Giovanni Ferri Author-X-Name-First: Giovanni Author-X-Name-Last: Ferri Title: More Analysts, Better Ratings: Do Rating Agencies Invest Enough in Less Developed Countries? Abstract: Rating agencies' track record is good in developed countries but poor in emerging economies. Why? Given the almost-monopolistic structure of the industry, we conjecture that agencies might underinvest in information gathering. We propose an indicator quantifying the agencies' effort to gather information and assess whether greater effort affects rating levels. We detect: (i) absolute underinvestment for non-OECD sovereigns (less effort in spite of greater opaqueness); (ii) relative underinvestment for non-OECD firms compared with OECD ones (though the former receive a larger effort, more intense effort boosts firm ratings in non-OECD countries while depressing them in OECD countries). Journal: Journal of Applied Economics Pages: 77-98 Issue: 1 Volume: 7 Year: 2004 Month: 5 X-DOI: 10.1080/15140326.2004.12040604 File-URL: http://hdl.handle.net/10.1080/15140326.2004.12040604 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:recsxx:v:7:y:2004:i:1:p:77-98 Template-Type: ReDIF-Article 1.0 Author-Name: Eduardo Lora Author-X-Name-First: Eduardo Author-X-Name-Last: Lora Author-Name: Mauricio Olivera Author-X-Name-First: Mauricio Author-X-Name-Last: Olivera Title: What Makes Reforms Likely: Political Economy Determinants of Reforms in Latin America Abstract: The purpose of this paper is to test the main hypotheses of the recent theoretical literature on the political economy of reform for the case of the Latin American countries between 1985 and 1995. The paper first reviews the literature and extracts the main testable hypotheses. Then, a system of indices that measure the extent of reform in five policy areas is presented. These indices are used as the dependent variables in panel regressions where the main explanatory variables are indicators of crisis, political variables and indicators of channels of contagion. We find very strong support for the well-known hypothesis that crises make reform viable and also for the (less theoretically sound) hypotheses that reforms are more likely at the beginning of government periods. None of the hypotheses on the role of political and distributional variables, the importance of compensation schemes or contagion, finds support in our results. Rather disappointingly, however, most of the reforms seem to have responded to a process of convergence. Journal: Journal of Applied Economics Pages: 99-135 Issue: 1 Volume: 7 Year: 2004 Month: 5 X-DOI: 10.1080/15140326.2004.12040605 File-URL: http://hdl.handle.net/10.1080/15140326.2004.12040605 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:recsxx:v:7:y:2004:i:1:p:99-135 Template-Type: ReDIF-Article 1.0 Author-Name: John A. Tauras Author-X-Name-First: John A. Author-X-Name-Last: Tauras Title: Public Policy and Some-Day Smoking Among Adults Abstract: While much is known about the impact of public policy on current cigarette smoking among adults, very little is known about the determinants of some-day smoking. This paper investigates the impact of cigarette prices, clean indoor air laws, and other socioeconomic factors on adult cigarette demand. Special emphasis is placed on examining the determinants of some-day smoking among adults. The estimates from this study clearly indicate that increasing the price of cigarettes, will decrease the number of people who currently smoke, will decrease the number of every-day smokers, and will decrease the number of cigarettes smoked on average among some-day smokers. Finally, clean indoor air laws are found to have a limited impact on current and some-day smoking. Journal: Journal of Applied Economics Pages: 137-162 Issue: 1 Volume: 7 Year: 2004 Month: 5 X-DOI: 10.1080/15140326.2004.12040606 File-URL: http://hdl.handle.net/10.1080/15140326.2004.12040606 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:recsxx:v:7:y:2004:i:1:p:137-162 Template-Type: ReDIF-Article 1.0 Author-Name: Paul R. Zimmerman Author-X-Name-First: Paul R. Author-X-Name-Last: Zimmerman Title: State Executions, Deterrence, and the Incidence of Murder Abstract: This study employs a panel of U.S. state-level data over the years 1978–1997 to estimate the deterrent effect of capital punishment. Particular attention is paid to problems of endogeneity bias arising from the non-random assignment of death penalty laws across states and a simultaneous relationship between murders and the deterrence probabilities. The primary innovation of the analysis lies in the estimation of a simultaneous equations system whose identification is based upon the employment of instrumental variables motivated by the theory of public choice. The estimation results suggest that structural estimates of the deterrent effect of capital punishment are likely to be downward biased due to the influence of simultaneity. Correcting for simultaneity, the estimates imply that a state execution deters approximately fourteen murders per year on average. Finally, the results also suggest that the announcement effect of capital punishment, as opposed to the existence of a death penalty provision, is the mechanism actually driving the deterrent effect associated with state executions. Journal: Journal of Applied Economics Pages: 163-193 Issue: 1 Volume: 7 Year: 2004 Month: 5 X-DOI: 10.1080/15140326.2004.12040607 File-URL: http://hdl.handle.net/10.1080/15140326.2004.12040607 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:recsxx:v:7:y:2004:i:1:p:163-193 Template-Type: ReDIF-Article 1.0 Author-Name: Douglas J. Hodgson Author-X-Name-First: Douglas J. Author-X-Name-Last: Hodgson Author-Name: Oliver Linton Author-X-Name-First: Oliver Author-X-Name-Last: Linton Author-Name: Keith Vorkink Author-X-Name-First: Keith Author-X-Name-Last: Vorkink Title: Testing Forward Exchange Rate Unbiasedness Efficiently: A Semiparametric Approach Abstract: We apply semiparametric efficient estimation procedures for a seemingly unrelated regression model where the multivariate error density is elliptically symmetric to study the efficiency of the foreign exchange market. We consider both cointegrating regressions and standard stationary regressions. The elliptical symmetry assumption allows us to avoid the curse of dimensionality problem that typically arises in multivariate semiparametric estimation procedures, because the multivariate elliptically symmetric density function can be written as a function of a scalar transformation of the observed multivariate data. We test the unbiasedness hypothesis on both weekly and daily exchange rate data and strongly reject unbiasedness at the weekly horizon, but fail to reject the unbiasedness hypothesis on the daily data. Estimates of the semiparametric procedure in some cases differ substantially from traditional OLS estimates. Journal: Journal of Applied Economics Pages: 325-353 Issue: 1 Volume: 7 Year: 2004 Month: 5 X-DOI: 10.1080/15140326.2004.12040608 File-URL: http://hdl.handle.net/10.1080/15140326.2004.12040608 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:recsxx:v:7:y:2004:i:1:p:325-353 Template-Type: ReDIF-Article 1.0 Author-Name: W. Allard Bruinshoofd Author-X-Name-First: W. Allard Author-X-Name-Last: Bruinshoofd Author-Name: Clemens J. M. Kool Author-X-Name-First: Clemens J. M. Author-X-Name-Last: Kool Title: Dutch Corporate Liquidity Management: New Evidence on Aggregation Abstract: In this paper we investigate Dutch corporate liquidity management in general, and target adjustment behaviour in particular. To this purpose, we use a simple error correction model of corporate liquidity holdings applied to firm-level data for the period 1977–1997. We confirm the existence of long-run liquidity targets at the firm level. We also find that changes in liquidity holdings are driven by short-run shocks as well as the urge to converge towards targeted liquidity levels. The rate of target convergence is higher when we include more firm-specific information in the target. This result supports the idea that increased precision in defining liquidity targets associates with a faster observed rate of target convergence. It also suggests that the slow speeds of adjustment obtained in many macro studies on money demand are artefacts of aggregation bias. Journal: Journal of Applied Economics Pages: 195-230 Issue: 2 Volume: 7 Year: 2004 Month: 11 X-DOI: 10.1080/15140326.2004.12040609 File-URL: http://hdl.handle.net/10.1080/15140326.2004.12040609 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:recsxx:v:7:y:2004:i:2:p:195-230 Template-Type: ReDIF-Article 1.0 Author-Name: Karl Aiginger Author-X-Name-First: Karl Author-X-Name-Last: Aiginger Author-Name: Stephen W. Davies Author-X-Name-First: Stephen W. Author-X-Name-Last: Davies Title: Industrial Specialisation and Geographic Concentration: Two Sides of the Same Coin? Not for the European Union Abstract: Some recent studies have shown that specialisation of countries has tended to increase, while regional concentration of countries has tended to decrease. This seems to be counterintuitive at first glance. In this paper, we use the entropy index-as the indicator of structural change with the neatest aggregation properties to show how this divergence can happen. The main purpose of the paper is methodological, but we also apply the methodology to a specific case study: Manufacturing in the European Union since 1985. We confirm for this interesting period that increasing industrial specialisation has been offset by faster growth in the smaller Member States, with the net effect that industries have become somewhat less geographically concentrated. In terms of economic geography the evidence is in line with the second part of the inverted U-curve (where decreasing transport costs eventually foster de-concentration). This is no contradiction to increasing specialisation of countries in specific industries as predicted by many models in the old as well as the new trade theory. Journal: Journal of Applied Economics Pages: 231-248 Issue: 2 Volume: 7 Year: 2004 Month: 11 X-DOI: 10.1080/15140326.2004.12040610 File-URL: http://hdl.handle.net/10.1080/15140326.2004.12040610 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:recsxx:v:7:y:2004:i:2:p:231-248 Template-Type: ReDIF-Article 1.0 Author-Name: Mohammed I. Ansari Author-X-Name-First: Mohammed I. Author-X-Name-Last: Ansari Title: Sustainability of the US Current Account Deficit: An Econometric Analysis of the Impact of Capital Inflow on Domestic Economy Abstract: The purpose of this paper is to estimate, by using the recent econometric techniques of unit root testing and Johansen-Juselius cointegration technique (1990), the impact of foreign capital inflow on the volume and efficiency of domestic investment in the United States during the period, 1973–1999. A battery of diagnostic tests is employed to check the validity and robustness of the estimated results. Evidence suggests that capital inflows have had a significant positive effect on the volume of US investment, but the effect on the efficiency of investment has been minimal. These findings imply that, while achieving current account balance is important, it is equally important to sustain and augment the beneficial impact of capital inflow by creating a more conducive investment climate. Given our limited ability to influence current account balance, this seems to be a more pragmatic policy option for dealing with the US current account imbalance. Journal: Journal of Applied Economics Pages: 249-269 Issue: 2 Volume: 7 Year: 2004 Month: 11 X-DOI: 10.1080/15140326.2004.12040611 File-URL: http://hdl.handle.net/10.1080/15140326.2004.12040611 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:recsxx:v:7:y:2004:i:2:p:249-269 Template-Type: ReDIF-Article 1.0 Author-Name: Salvador Gil-Pareja Author-X-Name-First: Salvador Author-X-Name-Last: Gil-Pareja Author-Name: Simón Sosvilla-Rivero Author-X-Name-First: Simón Author-X-Name-Last: Sosvilla-Rivero Title: Export Market Integration in the European Union Abstract: This paper examines the degree and recent evolution (1988–2001) of export-price dispersion among European Union countries. It also explores the effect of exchange rates on export- price dispersion by reviewing the experience of some European countries that participated in the exchange rate stability zone. The results indicate that export-price dispersion across European Union countries was usually lower than across OECD countries. Moreover, although there is little evidence of convergence, this is stronger across European Union countries. Finally, even though price dispersion was often lower across European Union countries where exchange rates have been relatively stable than across countries with relatively volatile exchange rates, exchange-rate stability has not significantly contributed to export-price convergence across participating countries over the sample period. Journal: Journal of Applied Economics Pages: 271-301 Issue: 2 Volume: 7 Year: 2004 Month: 11 X-DOI: 10.1080/15140326.2004.12040612 File-URL: http://hdl.handle.net/10.1080/15140326.2004.12040612 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:recsxx:v:7:y:2004:i:2:p:271-301 Template-Type: ReDIF-Article 1.0 Author-Name: Jorge Herrera Hernández Author-X-Name-First: Jorge Herrera Author-X-Name-Last: Hernández Title: Business Cycles in Mexico and the United States: Do They Share Common Movements? Abstract: In this document I apply a recently developed econometric technique to prove the existence of common movements between time series. Said methodology is used to test and measure the existence of common cycles between the economies of Mexico and the United States for the 1993–2001 period. It is found that both economies share a common trend and a common cycle. Also, given the existence of one common cycle between these economies, it is found that transitory shocks affecting Mexico's GDP are more important than when a conventional trend-cycle decomposition methodology is applied. Finally, it is shown that there are efficiency gains in forecasting by considering the common cycle restriction in a bivariate vector error correction model that includes the Mexican and the U.S. GDPs. Journal: Journal of Applied Economics Pages: 303-323 Issue: 2 Volume: 7 Year: 2004 Month: 11 X-DOI: 10.1080/15140326.2004.12040613 File-URL: http://hdl.handle.net/10.1080/15140326.2004.12040613 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:recsxx:v:7:y:2004:i:2:p:303-323 Template-Type: ReDIF-Article 1.0 Author-Name: Hiroshi Ono Author-X-Name-First: Hiroshi Author-X-Name-Last: Ono Author-Name: Takuya Nakazato Author-X-Name-First: Takuya Author-X-Name-Last: Nakazato Author-Name: Colin Davis Author-X-Name-First: Colin Author-X-Name-Last: Davis Author-Name: Wilson Alley Author-X-Name-First: Wilson Author-X-Name-Last: Alley Title: Partial Ownership Arrangements in the Japanese Automobile Industry; 1990 - 2000 Abstract: The end of the 1990's saw a number of foreign automobile manufacturers become the largest shareholders in several Japanese automobile manufacturers. It seems logical to conclude that a firm only enters into a partial ownership arrangement (POA) if it is profit maximizing. However, research to date has treated POAs as if exogenous to the model. This paper develops a model that assumes POAs are determined endogenously. Data for the Japanese automobile industry are then used to investigate the factors that determine whether a firm enters into a POA, and the effects a POA has on the price-cost margin. The findings of this paper suggest that while both foreign and domestic firms take an interest in product mix when exploring POAs in the Japanese market, they have differing profit incentives. Furthermore, the level of ownership has a positive effect on POAs. Journal: Journal of Applied Economics Pages: 355-367 Issue: 2 Volume: 7 Year: 2004 Month: 11 X-DOI: 10.1080/15140326.2004.12040614 File-URL: http://hdl.handle.net/10.1080/15140326.2004.12040614 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:recsxx:v:7:y:2004:i:2:p:355-367 Template-Type: ReDIF-Article 1.0 Author-Name: Chikara Yamaguchi Author-X-Name-First: Chikara Author-X-Name-Last: Yamaguchi Title: Leviathan and Pure Public Goods in a Federation with Mobile Populations Abstract: This paper investigates properties of the second best allocation in a federation where regional governments provide a pure public good non-cooperatively and policy makers are neither entirely benevolent nor wholly self-serving. A high degree of household mobility across regions forces the governments to raise the efficiency of the public good, however, it also helps to waste resources. It is shown that regional Leviathans not only under-provide the public good but also decrease the amount of wasteful expenditures as households become less mobile. Central government's intervention can enhance efficiency if households are attached to particular regions. Journal: Journal of Applied Economics Pages: 369-389 Issue: 2 Volume: 7 Year: 2004 Month: 11 X-DOI: 10.1080/15140326.2004.12040615 File-URL: http://hdl.handle.net/10.1080/15140326.2004.12040615 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:recsxx:v:7:y:2004:i:2:p:369-389 Template-Type: ReDIF-Article 1.0 Author-Name: Ugo Panizza Author-X-Name-First: Ugo Author-X-Name-Last: Panizza Author-Name: Monica Yañez Author-X-Name-First: Monica Author-X-Name-Last: Yañez Title: Why Are Latin Americans So Unhappy About Reforms? Abstract: This paper uses opinion surveys to document discontent with the pro-market reforms implemented by most Latin American countries during the 1990s. The paper also explores four possible sets of explanations for this discontent: (i) a general drift of the populace's political views to the left; (ii) an increase in political activism by those who oppose reforms; (iii) a decline in the people's trust of political actors; and (iv) the economic crisis. The paper's principal finding is that the macroeconomic situation plays an important role in explaining the dissatisfaction with the reform process. Journal: Journal of Applied Economics Pages: 1-29 Issue: 1 Volume: 8 Year: 2005 Month: 5 X-DOI: 10.1080/15140326.2005.12040616 File-URL: http://hdl.handle.net/10.1080/15140326.2005.12040616 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:recsxx:v:8:y:2005:i:1:p:1-29 Template-Type: ReDIF-Article 1.0 Author-Name: Milton Barossi-Filho Author-X-Name-First: Milton Author-X-Name-Last: Barossi-Filho Author-Name: Ricardo Gonçalves Silva Author-X-Name-First: Ricardo Gonçalves Author-X-Name-Last: Silva Author-Name: Eliezer Martins Diniz Author-X-Name-First: Eliezer Martins Author-X-Name-Last: Diniz Title: The Empirics of the Solow Growth Model: Long-Term Evidence Abstract: In this paper we reassess the standard Solow growth model, using a dynamic panel data approach. A new methodology is chosen to deal with this problem. First, unit root tests for individual country time series were run. Second, panel data unit root and cointegration tests were performed. Finally, the panel cointegration dynamics is estimated by (DOLS) method. The resulting evidence supports roughly one-third capital share in income, α. Journal: Journal of Applied Economics Pages: 31-51 Issue: 1 Volume: 8 Year: 2005 Month: 5 X-DOI: 10.1080/15140326.2005.12040617 File-URL: http://hdl.handle.net/10.1080/15140326.2005.12040617 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:recsxx:v:8:y:2005:i:1:p:31-51 Template-Type: ReDIF-Article 1.0 Author-Name: Gonzalo Castañeda Author-X-Name-First: Gonzalo Author-X-Name-Last: Castañeda Title: Consequences of Firms' Relational Financing in the Aftermath of the 1995 Mexican Banking Crisis Abstract: This paper shows that, in the aftermath of the 1995 banking crisis, relational financing was a two-edged sword for firms listed on the Mexican Securities Market. On the negative side, only bank-linked firms observed on average a dependence on cash stock to finance their investment projects. On the positive side, the banking connection was important to boost their profit rates during the 1997–2000 period, at least for financially healthy firms. These econometric results are derived from dynamic panel data models of investment and profit rates, which are estimated by the Generalized Method of Moments, where level and difference equations are combined into a system. Journal: Journal of Applied Economics Pages: 53-79 Issue: 1 Volume: 8 Year: 2005 Month: 5 X-DOI: 10.1080/15140326.2005.12040618 File-URL: http://hdl.handle.net/10.1080/15140326.2005.12040618 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:recsxx:v:8:y:2005:i:1:p:53-79 Template-Type: ReDIF-Article 1.0 Author-Name: Dimitris Hatzinikolaou Author-X-Name-First: Dimitris Author-X-Name-Last: Hatzinikolaou Author-Name: Metodey Polasek Author-X-Name-First: Metodey Author-X-Name-Last: Polasek Title: The Commodity-Currency View of the Australian Dollar: A Multivariate Cointegration Approach Abstract: Using Australian quarterly data from the post-float period 1984:1-2003:1 and a partial system, we identify and estimate two cointegrating relations, one for the interest-rate differential and the other for the nominal exchange rate. Our estimate of the long-run elasticity of the exchange rate with respect to commodity prices is 0.939, which strongly supports the widely held view that the floating Australian dollar is a ‘commodity currency’. We also find that the PPP and UIP cannot be rejected so long as commodity prices are included in the cointegrating relations. Our model outperforms the random walk model in forecasting the exchange rate in the medium run. Journal: Journal of Applied Economics Pages: 81-99 Issue: 1 Volume: 8 Year: 2005 Month: 5 X-DOI: 10.1080/15140326.2005.12040619 File-URL: http://hdl.handle.net/10.1080/15140326.2005.12040619 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:recsxx:v:8:y:2005:i:1:p:81-99 Template-Type: ReDIF-Article 1.0 Author-Name: Angelos Kanas Author-X-Name-First: Angelos Author-X-Name-Last: Kanas Title: Pure Contagion Effects in International Banking: The Case of BCCI's Failure Abstract: We test for pure contagion effects in international banking arising from the failure of the Bank of Credit and Commerce International (BCCI), one of the largest bank failures in the world. We focused on large individual banks in three developed countries where BCCI had established operations, namely the UK, the US, and Canada. Using event study methodology, we tested for contagion effects using time windows surrounding several known BCCI-related announcements. Our analysis provides strong evidence of pure contagion effects in the UK, which have arisen prior to the official closure date. In contrast, there is no evidence of pure contagion effects in the US and Canada. Journal: Journal of Applied Economics Pages: 101-123 Issue: 1 Volume: 8 Year: 2005 Month: 5 X-DOI: 10.1080/15140326.2005.12040620 File-URL: http://hdl.handle.net/10.1080/15140326.2005.12040620 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:recsxx:v:8:y:2005:i:1:p:101-123 Template-Type: ReDIF-Article 1.0 Author-Name: John Loizides Author-X-Name-First: John Author-X-Name-Last: Loizides Author-Name: George Vamvoukas Author-X-Name-First: George Author-X-Name-Last: Vamvoukas Title: Government Expenditure and Economic Growth: Evidence from Trivariate Causality Testing Abstract: This paper seeks to examine if the relative size of government (measured as the share of total expenditure in GNP can be determined to Granger cause the rate of economic growth, or if the rate of economic growth can be determined to Granger cause the relative size of government. For this purpose, we first use a bivariate error correction model within a Granger causality framework, as well as adding unemployment and inflation (separately) as explanatory variables, creating a simple ‘trivariate’ analysis for each of these two variables. The combined analysis of bivariate and trivariate tests offers a rich menu of possible causal patterns. Using data on Greece, UK and Ireland, the analysis shows: i) government size Granger causes economic growth in all countries of the sample in the short run and in the long run for Ireland and the UK; ii) economic growth Granger causes increases in the relative size of government in Greece, and, when inflation is included, in the UK. Journal: Journal of Applied Economics Pages: 125-152 Issue: 1 Volume: 8 Year: 2005 Month: 5 X-DOI: 10.1080/15140326.2005.12040621 File-URL: http://hdl.handle.net/10.1080/15140326.2005.12040621 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:recsxx:v:8:y:2005:i:1:p:125-152 Template-Type: ReDIF-Article 1.0 Author-Name: Tay-Cheng Ma Author-X-Name-First: Tay-Cheng Author-X-Name-Last: Ma Title: Strategic Investment and Excess Capacity: A Study of the Taiwanese Flour Industry Abstract: The Taiwanese flour industry's capacity utilization rate has maintained an extremely low level of 40% for more than 20 years. This article sets up a two-stage game model and uses the strategic effect of the firm's capital investment on its rivals' outputs to explain the nature of this excess capacity. The model is tested with panel data from the Taiwanese flour industry by using non-linear three-stage least squares. The evidences indicate that a large capacity built in the past could have been used strategically to reduce other firms' outputs, in the context of a concerted action among the incumbent firms. Journal: Journal of Applied Economics Pages: 153-170 Issue: 1 Volume: 8 Year: 2005 Month: 5 X-DOI: 10.1080/15140326.2005.12040622 File-URL: http://hdl.handle.net/10.1080/15140326.2005.12040622 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:recsxx:v:8:y:2005:i:1:p:153-170 Template-Type: ReDIF-Article 1.0 Author-Name: James Odeck Author-X-Name-First: James Author-X-Name-Last: Odeck Title: Evaluating Target Achievements in the Public Sector: An Application of a Rare Non-Parametric DEA and Malmquist Indices Abstract: This paper provides an assessment of the extent to which targets set by a public authority are achieved by its operational units. A rare DEA framework and its subsequent Malmquist indices are applied on data comprising 19 units over a four year period of 1996 to 1999. The mean efficiency scores by which targets are achieved across the sample years are moderate, in the range 0.81 to 0.93. Average productivity progress across the sample years has been 26 percent. The results illustrate the usefulness of DEA even when there are no inputs and the decomposable Malmquist index for productivity is an asset in exploring causes of productivity growth. Journal: Journal of Applied Economics Pages: 171-190 Issue: 1 Volume: 8 Year: 2005 Month: 5 X-DOI: 10.1080/15140326.2005.12040623 File-URL: http://hdl.handle.net/10.1080/15140326.2005.12040623 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:recsxx:v:8:y:2005:i:1:p:171-190 Template-Type: ReDIF-Article 1.0 Author-Name: Philip A. Trostel Author-X-Name-First: Philip A. Author-X-Name-Last: Trostel Title: Nonlinearity in the Return to Education Abstract: This study estimates marginal rates of return to investment in schooling in 12 countries. Significant systematic nonlinearity in the marginal rate of return is found. In particular, the marginal rate of return is increasing significantly at low levels of education, and decreasing significantly at high levels of education. This may help explain why estimates of the return to schooling are often considerably higher when instrumenting for education. Journal: Journal of Applied Economics Pages: 191-202 Issue: 1 Volume: 8 Year: 2005 Month: 5 X-DOI: 10.1080/15140326.2005.12040624 File-URL: http://hdl.handle.net/10.1080/15140326.2005.12040624 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:recsxx:v:8:y:2005:i:1:p:191-202 Template-Type: ReDIF-Article 1.0 Author-Name: S. Brock Blomberg Author-X-Name-First: S. Brock Author-X-Name-Last: Blomberg Author-Name: Jeffry Frieden Author-X-Name-First: Jeffry Author-X-Name-Last: Frieden Author-Name: Ernesto Stein Author-X-Name-First: Ernesto Author-X-Name-Last: Stein Title: Sustaining Fixed Rates: The Political Economy of Currency Pegs in Latin America Abstract: Government exchange rate regime choice is constrained by both political and economic factors. One political factor is the role of special interests: the larger the tradable sectors exposed to international competition, the less likely is the maintenance of a fixed exchange rate regime. Another political factor is electoral: as an election approaches, the probability of the maintenance of a fixed exchange rate increases. We test these arguments with hazard models to analyze the duration dependence of Latin American exchange rate arrangements from 1960 to 1999. We find substantial empirical evidence for these propositions. Results are robust to the inclusion of a variety of other economic and political variables, to different time and country samples, and to different definitions of regime arrangement. Controlling for economic factors, a one percentage point increase in the size of the manufacturing sector is associated with a reduction of six months in the longevity of a country's currency peg. An impending election increases the conditional likelihood of staying on a peg by about 8 percent, while the aftershock of an election conversely increases the conditional probability of going off a peg by 4 percent. Journal: Journal of Applied Economics Pages: 203-225 Issue: 2 Volume: 8 Year: 2005 Month: 11 X-DOI: 10.1080/15140326.2005.12040625 File-URL: http://hdl.handle.net/10.1080/15140326.2005.12040625 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:recsxx:v:8:y:2005:i:2:p:203-225 Template-Type: ReDIF-Article 1.0 Author-Name: António Afonso Author-X-Name-First: António Author-X-Name-Last: Afonso Author-Name: Miguel St. Aubyn Author-X-Name-First: Miguel St. Author-X-Name-Last: Aubyn Title: Non-Parametric Approaches to Education and Health Efficiency in OECD Countries Abstract: We address the efficiency in education and health sectors for a sample of OECD countries by applying two alternative non-parametric methodologies: FDH and DEA. Those are two areas where public expenditure is of great importance so that findings have strong implications in what concerns public sector efficiency. When estimating the efficiency frontier we focus on measures of quantity inputs. We believe this approach to be advantageous since a country may well be efficient from a technical point of view but appear as inefficient if the inputs it uses are expensive. Efficient outcomes across sectors and analytical methods seem to cluster around a small number of core countries, even if for different reasons: Japan, Korea and Sweden. Journal: Journal of Applied Economics Pages: 227-246 Issue: 2 Volume: 8 Year: 2005 Month: 11 X-DOI: 10.1080/15140326.2005.12040626 File-URL: http://hdl.handle.net/10.1080/15140326.2005.12040626 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:recsxx:v:8:y:2005:i:2:p:227-246 Template-Type: ReDIF-Article 1.0 Author-Name: Moawia Alghalith Author-X-Name-First: Moawia Author-X-Name-Last: Alghalith Title: Estimation with Price and Output Uncertainty Abstract: This paper extends the existing estimation methods to allow estimation under simultaneous price and output uncertainty. In contrast with the previous literature, our approach is applicable to the direct and indirect utility functions and does not require specification and estimation of the production function. We derive estimating equations for the two most common forms of output risk (additive and multiplicative risks) and empirically determine which form is appropriate. Moreover, our estimation method can be utilized by future empirical studies in several ways. First, our method can be extended to include multiple sources of uncertainty. Second, it is applicable to other specifications of output uncertainty. Third, it can be used to conduct hypothesis tests regarding the functional forms and distributions. Furthermore, it enables the future empirical researcher to empirically verify/refute the theoretical comparative statics results. Journal: Journal of Applied Economics Pages: 247-257 Issue: 2 Volume: 8 Year: 2005 Month: 11 X-DOI: 10.1080/15140326.2005.12040627 File-URL: http://hdl.handle.net/10.1080/15140326.2005.12040627 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:recsxx:v:8:y:2005:i:2:p:247-257 Template-Type: ReDIF-Article 1.0 Author-Name: Klaus Conrad Author-X-Name-First: Klaus Author-X-Name-Last: Conrad Author-Name: Andreas Löschel Author-X-Name-First: Andreas Author-X-Name-Last: Löschel Title: Recycling of Eco-Taxes, Labor Market Effects and the True Cost of Labor- a CGE Analysis Abstract: Computable general equilibrium (CGE) modeling has provided a number of important insights about the interplay between environmental tax policy and the pre-existing tax system. In this paper, we emphasize that a labor market policy of recycling tax revenues from an environmental tax to lower employers' non-wage labor cost depends on how the costs of labor are modeled. We propose an approach, which combines neoclassical substitutability and fixed factor proportions. Our concept implies a user cost of labor which consists of the market price of labor plus the costs of inputs associated with the employment of a worker. We present simulation results based on a CO2 tax and the recycling of its revenues to reduce the non-wage labor cost. One simulation is based on the market price of labor and the other on the user cost of labor. We found a double dividend under the first approach but not under the second one. Journal: Journal of Applied Economics Pages: 259-278 Issue: 2 Volume: 8 Year: 2005 Month: 11 X-DOI: 10.1080/15140326.2005.12040628 File-URL: http://hdl.handle.net/10.1080/15140326.2005.12040628 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:recsxx:v:8:y:2005:i:2:p:259-278 Template-Type: ReDIF-Article 1.0 Author-Name: Néstor Gandelman Author-X-Name-First: Néstor Author-X-Name-Last: Gandelman Title: Community Tax Evasion Models: A Stochastic Dominance Test Abstract: In a multi community environment local authorities compete for tax base. When monitoring is imperfect, agents may decide not to pay in their community (evasion), and save the tax difference. The agent decision on where to pay taxes is based on the probability of getting caught, the fine he eventually will have to pay and the time cost of paying in a neighbor community. First, we prove that if the focus of the agents' decision is the probability of getting caught and the fine, only the richest people evade. If instead, the key ingredient is the time cost of evading, only the poorest cheat. Second, we test the evasion pattern on the Automobile Registration System in Uruguay using two stochastic dominance tests. The evidence favors in this case the hypothesis that richer people are the evaders. Journal: Journal of Applied Economics Pages: 279-297 Issue: 2 Volume: 8 Year: 2005 Month: 11 X-DOI: 10.1080/15140326.2005.12040629 File-URL: http://hdl.handle.net/10.1080/15140326.2005.12040629 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:recsxx:v:8:y:2005:i:2:p:279-297 Template-Type: ReDIF-Article 1.0 Author-Name: Mark J. Holmes Author-X-Name-First: Mark J. Author-X-Name-Last: Holmes Title: New Evidence on Long-Run Output Convergence Among Latin American Countries Abstract: This study assesses long-run real per capita output convergence among selected Latin American countries. The empirical investigation, however, is based on an alternative approach. Strong convergence is determined on the basis of the first largest principal component, based on income differences with respect to a chosen base country, being stationary. The qualitative outcome of the test is invariant to the choice of base country and, compared to alternative multivariate tests for long-run convergence, this methodology places less demands on limited data sets. Using annual data for the period 1960–2000, strong convergence is confirmed for the Central American Common Market. However, an amended version of the test confirms weaker long-run convergence in the case of the Latin American Integration Association countries. Journal: Journal of Applied Economics Pages: 299-319 Issue: 2 Volume: 8 Year: 2005 Month: 11 X-DOI: 10.1080/15140326.2005.12040630 File-URL: http://hdl.handle.net/10.1080/15140326.2005.12040630 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:recsxx:v:8:y:2005:i:2:p:299-319 Template-Type: ReDIF-Article 1.0 Author-Name: Carsten Ochsen Author-X-Name-First: Carsten Author-X-Name-Last: Ochsen Author-Name: Heinz Welsch Author-X-Name-First: Heinz Author-X-Name-Last: Welsch Title: Technology, Trade, and Income Distribution in West Germany: A Factor-Share Analysis, 1976–1994 Abstract: This paper examines the determinants of functional income distribution in West Germany. The approach is to estimate a complete system of factor share equations for low-skilled labor, high-skilled labor, capital, energy, and materials, taking account of biased technological progress and increasing trade-orientation. Technological progress is found to reduce the share of low-skilled labor and to raise the share of high-skilled labor. The effect of technology bias on the two labor shares is enhanced by substitution of intermediate inputs for low-skilled labor, which is almost absent in the case of high-skilled labor. Trade-induced changes in the composition of aggregate output tend to mitigate these effects, due to the relatively favorable export performance of low-skill intensive industries. The year-to-year variation in the low-skilled share can be attributed to input prices, biased technological progress, and trade-induced structural change in the proportion 19:77:4. For high-skilled labor and capital, the output composition effect of trade contributes about one percent. The results are robust across several specifications examined. Journal: Journal of Applied Economics Pages: 321-345 Issue: 2 Volume: 8 Year: 2005 Month: 11 X-DOI: 10.1080/15140326.2005.12040631 File-URL: http://hdl.handle.net/10.1080/15140326.2005.12040631 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:recsxx:v:8:y:2005:i:2:p:321-345 Template-Type: ReDIF-Article 1.0 Author-Name: Francisco Requena Silvente Author-X-Name-First: Francisco Requena Author-X-Name-Last: Silvente Title: Price Discrimination and Market Power in Export Markets: The Case of the Ceramic Tile Industry Abstract: This paper combines the pricing-to-market equation and the residual demand elasticity equation to measure the extent of competition in the export markets of ceramic tiles, which has been dominated by Italian and Spanish producers since the late eighties. The findings show that the tile exporters enjoyed substantial market power over the period 1988–1998, and limited evidence that the export market has become more competitive over time. Journal: Journal of Applied Economics Pages: 347-370 Issue: 2 Volume: 8 Year: 2005 Month: 11 X-DOI: 10.1080/15140326.2005.12040632 File-URL: http://hdl.handle.net/10.1080/15140326.2005.12040632 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:recsxx:v:8:y:2005:i:2:p:347-370 Template-Type: ReDIF-Article 1.0 Author-Name: Siv Taing Author-X-Name-First: Siv Author-X-Name-Last: Taing Author-Name: Andrew Worthington Author-X-Name-First: Andrew Author-X-Name-Last: Worthington Title: Return Relationships Among European Equity Sectors: A Comparative Analysis Across Selected Sectors in Small and Large Economies Abstract: This paper examines return interrelationships between numbers of equity sectors across several European markets. The markets comprise six Member States of the European Union (EU): namely, Belgium, Finland, France, Germany, Ireland and Italy. The five sectors include the consumer discretionary, consumer staples, financial, industrials and materials sectors. Generalised Autoregressive Conditional Heteroskedasticity in Mean (GARCH- M) models are used to consider the impact of returns in other European markets on the returns in each market across each sector. The results indicate that there are relatively few significant interrelationships between sectors in different markets, with most of these accounted for by the larger markets in France, Germany and Italy. The evidence also suggests the consumer discretionary, financial and materials sectors are relatively more interrelated than the consumer staples and industrials sectors. This has clear implications for portfolio diversification and asset pricing in the EU. Journal: Journal of Applied Economics Pages: 371-388 Issue: 2 Volume: 8 Year: 2005 Month: 11 X-DOI: 10.1080/15140326.2005.12040633 File-URL: http://hdl.handle.net/10.1080/15140326.2005.12040633 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:recsxx:v:8:y:2005:i:2:p:371-388 Template-Type: ReDIF-Article 1.0 Author-Name: Pablo Acosta Author-X-Name-First: Pablo Author-X-Name-Last: Acosta Author-Name: Andrés Loza Author-X-Name-First: Andrés Author-X-Name-Last: Loza Title: Short and Long Run Determinants of Private Investment in Argentina Abstract: This study provides an empirical analysis of the macroeconomic factors that can potentially affect investment decisions in Argentina in a short, medium and long run perspective. Both the theory and the empirical literature are reviewed in order to identify a private investment function for the last three decades (1970–2000). The results suggest that investment decisions seem to be determined, in the short run, by shocks in returns (exchange rate, trade liberalization) and in aggregate demand. Besides, there is evidence of a “crowding-out” effect of public investment. In the long run, the capital accumulation path seems to be closely dependent on both well-developed financial and credit markets and on perspectives of fiscal sustainability. Journal: Journal of Applied Economics Pages: 389-406 Issue: 2 Volume: 8 Year: 2005 Month: 11 X-DOI: 10.1080/15140326.2005.12040634 File-URL: http://hdl.handle.net/10.1080/15140326.2005.12040634 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:recsxx:v:8:y:2005:i:2:p:389-406 Template-Type: ReDIF-Article 1.0 Author-Name: Glenn P. Jenkins Author-X-Name-First: Glenn P. Author-X-Name-Last: Jenkins Author-Name: Chun-Yan Kuo Author-X-Name-First: Chun-Yan Author-X-Name-Last: Kuo Title: Evaluation of the Benefits of Transnational Transportation Projects Abstract: In this paper an analytical framework has been developed to evaluate the primary beneficiaries of cargo traffic generated by transnational transport projects. In the transportation economics literature, the economic impact of infrastructure projects on cargo traffic has not been developed as fully as for passenger traffic. In much of the previous literature it is often assumed that consumers of the traded goods would receive the full benefits from the reduction in logistics and transportation costs. This paper has shown that whether the goods are traded internationally or regionally is a key factor in the allocation of the economic benefits arising from the reduction in the cost of cargo transportation. The analytical framework developed in the paper is applied to the evaluation of the impacts of the proposed Buenos Aires-Colonia binational bridge project. Journal: Journal of Applied Economics Pages: 1-17 Issue: 1 Volume: 9 Year: 2006 Month: 5 X-DOI: 10.1080/15140326.2006.12040635 File-URL: http://hdl.handle.net/10.1080/15140326.2006.12040635 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:recsxx:v:9:y:2006:i:1:p:1-17 Template-Type: ReDIF-Article 1.0 Author-Name: Juan-Carlos Altamirano-Cabrera Author-X-Name-First: Juan-Carlos Author-X-Name-Last: Altamirano-Cabrera Author-Name: Michael Finus Author-X-Name-First: Michael Author-X-Name-Last: Finus Title: Permit Trading and Stability of International Climate Agreements Abstract: We analyze the implication of different allocation schemes of CO2-emission permits for stability and the success of international climate agreements. Our model combines a game theoretical with an empirical module that comprises 12 world regions and captures important dynamic aspects of the climate change problem. We consider seven different permit allocation schemes. Two “pragmatic schemes” allocate permits according to a uniform emission reduction quota, five “equitable schemes” allocate permits based on some normative criteria frequently discussed in the literature permit trading can raise participation and the success of climate agreements, but pragmatic schemes are superior to equitable ones. Journal: Journal of Applied Economics Pages: 19-47 Issue: 1 Volume: 9 Year: 2006 Month: 5 X-DOI: 10.1080/15140326.2006.12040636 File-URL: http://hdl.handle.net/10.1080/15140326.2006.12040636 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:recsxx:v:9:y:2006:i:1:p:19-47 Template-Type: ReDIF-Article 1.0 Author-Name: Carlos Gradín Author-X-Name-First: Carlos Author-X-Name-Last: Gradín Author-Name: Máximo Rossi Author-X-Name-First: Máximo Author-X-Name-Last: Rossi Title: Income Distribution and Income Sources in Uruguay Abstract: This paper is concerned with changes in the distribution of income sources in Uruguay after the late eighties. An apparent stability in the distribution of total incomes is hiding deep transformations affecting the generation of that income. The distribution across all income earners at the end of the eighties exhibited two well-distinguished poles, each associated with one of the main income sources: pension benefits and wages. This bimodality diminished during the nineties due to the reduction in polarization by income sources. In the same period we find that in the case of labor earnings there was a net transfer of population mass from the middle of the distribution to both extremes, which results in an increasing polarization within this income source. This phenomenon resembles the Anglo-Saxon experience of the shrinking middle class. Journal: Journal of Applied Economics Pages: 49-69 Issue: 1 Volume: 9 Year: 2006 Month: 5 X-DOI: 10.1080/15140326.2006.12040637 File-URL: http://hdl.handle.net/10.1080/15140326.2006.12040637 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:recsxx:v:9:y:2006:i:1:p:49-69 Template-Type: ReDIF-Article 1.0 Author-Name: Mansor H. Ibrahim Author-X-Name-First: Mansor H. Author-X-Name-Last: Ibrahim Title: Stock Prices and Bank Loan Dynamics in a Developing Country: The Case of Malaysia Abstract: This paper estimates a six-variable VAR model and simulates generalized impulse response functions to assess dynamic interactions between bank loans and stock prices and evaluate whether bank loans play a role in transmitting financial shocks to the real sector. We find evidence that bank loans react positively to the increase in stock prices but there seems to be no influence from bank loans to stock prices. Similarly, bank loans seem to accommodate expansion in real output with, again, no influence of bank loans on real economic activity. Interestingly, despite the noted currency mismatch of bank assets and liabilities as a factor that aggravates the currency crisis, we find no evidence that the exchange rate fluctuations have impact on bank lending. If anything, the exchange rate seems to affect bank lending activities through its effects on real output and stock prices. From the dynamic responses, we tend to conclude that bank loans play no significant role in transmitting stock market shocks to the real sector. An important implication from our analysis is that the health of the banking sector depends crucially on stock market stability and real output stability. Additionally, policy attempts to stimulate bank loans as a way to boost stock market activities as well as to expand real activities may be futile. Journal: Journal of Applied Economics Pages: 71-89 Issue: 1 Volume: 9 Year: 2006 Month: 5 X-DOI: 10.1080/15140326.2006.12040638 File-URL: http://hdl.handle.net/10.1080/15140326.2006.12040638 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:recsxx:v:9:y:2006:i:1:p:71-89 Template-Type: ReDIF-Article 1.0 Author-Name: Vahe Lskavyan Author-X-Name-First: Vahe Author-X-Name-Last: Lskavyan Author-Name: Mariana Spatareanu Author-X-Name-First: Mariana Author-X-Name-Last: Spatareanu Title: Ownership Concentration, Market Monitoring and Performance: Evidence from the UK, The Czech Republic and Poland Abstract: Using data for publicly traded companies from the UK and two transition countries, the Czech Republic and Poland, we analyze the relationship between ownership concentration and performance while also accounting for the effect of hostile takeover threats on this relationship. Some argue that ownership concentration will improve performance by making the owners more willing or able to monitor managers. Others argue that in the presence of efficient markets, market monitoring (via the threat of hostile takeovers) will discipline the managers. Our results show that concentration is insignificant in explaining performance both in the transition countries, where market monitoring is supposedly weak, and in the UK, where market monitoring is supposedly strong. Journal: Journal of Applied Economics Pages: 91-104 Issue: 1 Volume: 9 Year: 2006 Month: 5 X-DOI: 10.1080/15140326.2006.12040639 File-URL: http://hdl.handle.net/10.1080/15140326.2006.12040639 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:recsxx:v:9:y:2006:i:1:p:91-104 Template-Type: ReDIF-Article 1.0 Author-Name: Kristen Monaco Author-X-Name-First: Kristen Author-X-Name-Last: Monaco Author-Name: Taggert J. Brooks Author-X-Name-First: Taggert J. Author-X-Name-Last: Brooks Author-Name: John Bitzan Author-X-Name-First: John Author-X-Name-Last: Bitzan Title: A Time Series Analysis of Wages in Deregulated Industries: A Study of Motor Carriage and Rail Abstract: Using time series techniques, we contrast the impact of deregulation in trucking and rail labor markets. During regulation both labor markets were characterized by wages considerably higher than manufacturing wages. In fact, trucking and rail wages had a stable, deterministic relationship prior to deregulation. After deregulation, however, the mean trucking wages fell considerably, approaching manufacturing wages, while rail wages remained relatively constant. We also find that deregulation's negative impact on trucking wages was non-discrete and occurred primarily between 1980 and 1984. Journal: Journal of Applied Economics Pages: 105-118 Issue: 1 Volume: 9 Year: 2006 Month: 5 X-DOI: 10.1080/15140326.2006.12040640 File-URL: http://hdl.handle.net/10.1080/15140326.2006.12040640 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:recsxx:v:9:y:2006:i:1:p:105-118 Template-Type: ReDIF-Article 1.0 Author-Name: Anthony N. Rezitis Author-X-Name-First: Anthony N. Author-X-Name-Last: Rezitis Title: Productivity Growth in the Greek Banking Industry: A Non-Parametric Approach Abstract: This paper investigates productivity growth and technical efficiency in the Greek banking industry for the period 1982–1997. It also compares the 1982–92 and 1993–97 sub-periods, since after 1992 the Greek banking sector experienced substantial changes. The Malmquist productivity index and the DEA method are used to measure and decompose productivity growth and technical efficiency, respectively. Productivity growth is higher after 1992. Recent growth is mainly attributed to technical progress, while until 1992 growth is mainly attributed to improvements in efficiency. Furthermore, after 1992, pure efficiency is higher, and scale efficiency is lower, indicating that although banks achieved higher pure technical efficiency, they moved away from optimal scale. Finally, Tobit results show that size and specialization have positive effects on both pure and scale efficiency. Journal: Journal of Applied Economics Pages: 119-138 Issue: 1 Volume: 9 Year: 2006 Month: 5 X-DOI: 10.1080/15140326.2006.12040641 File-URL: http://hdl.handle.net/10.1080/15140326.2006.12040641 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:recsxx:v:9:y:2006:i:1:p:119-138 Template-Type: ReDIF-Article 1.0 Author-Name: Johannes Sauer Author-X-Name-First: Johannes Author-X-Name-Last: Sauer Author-Name: Klaus Frohberg Author-X-Name-First: Klaus Author-X-Name-Last: Frohberg Author-Name: Heinrich Hockmann Author-X-Name-First: Heinrich Author-X-Name-Last: Hockmann Title: Stochastic Efficiency Measurement: The Curse of Theoretical Consistency Abstract: The availability of efficiency estimation software — freely distributed via the internet and relatively easy to use — recently inflated the number of corresponding applications. The resulting efficiency estimates are used without a critical assessment with respect to the literature on theoretical consistency, flexibility and the choice of the appropriate functional form. The robustness of policy suggestions based on inferences from efficiency measures nevertheless crucially depends on theoretically well-founded estimates. This paper adresses stochastic efficiency measurement by critically reviewing the theoretical consistency of recently published technical efficiency estimates. The results confirm the need for a posteriori checking the regularity of the estimated frontier by the researcher and, if necessary, the a priori imposition of the theoretical requirements. Journal: Journal of Applied Economics Pages: 139-165 Issue: 1 Volume: 9 Year: 2006 Month: 5 X-DOI: 10.1080/15140326.2006.12040642 File-URL: http://hdl.handle.net/10.1080/15140326.2006.12040642 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:recsxx:v:9:y:2006:i:1:p:139-165 Template-Type: ReDIF-Article 1.0 Author-Name: Giovanni Trovato Author-X-Name-First: Giovanni Author-X-Name-Last: Trovato Author-Name: Marco Alfò Author-X-Name-First: Marco Author-X-Name-Last: Alfò Title: Credit Rationing and the Financial Structure of Italian Small and Medium Enterprises Abstract: Our aim is to analyze the effect of public subsidies on the development path of Italian small and medium enterprises (SMEs). Public subsidies to SMEs have been often used with the aim of favoring economic growth in less developed regions. The main theoretical arguments justifying this intervention are related to the idea that public subsidies can solve lack-of- capital problems deriving from asymmetric information. According to Stiglitz and Weiss (1981), public subsidies to rationed firms can reduce the informational gap, leading subsidized firms to reduce their financial constraints and to increase their investment levels. Results obtained modelling leverage, performance and investment behaviour in a panel of around 1,900 enterprises over the years 1989 to 1994 seem to confirm the working hypotheses. However, they can not be considered as conclusive and further research is needed in this context. Journal: Journal of Applied Economics Pages: 167-184 Issue: 1 Volume: 9 Year: 2006 Month: 5 X-DOI: 10.1080/15140326.2006.12040643 File-URL: http://hdl.handle.net/10.1080/15140326.2006.12040643 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:recsxx:v:9:y:2006:i:1:p:167-184 Template-Type: ReDIF-Article 1.0 Author-Name: Winai Wongsurawat Author-X-Name-First: Winai Author-X-Name-Last: Wongsurawat Title: Pornography and Social Ills: Evidence from the Early 1990s Abstract: Beginning from the hypothesis that private post office boxes accommodate consumption of pornographic magazines by lowering some aspects of the cost (risk of social stigmatization) associated with the purchasing of such items, I demonstrate that a positive correlation between the abundance of such boxes and the subscription rate to Penthouse magazine across markets in the United States can be observed. I then proceed to estimate the effect of pornography on violent sex crimes and family instability, with and without using P.O. Box availability as an instrumental variable. Results suggest that unobservable population characteristics severely bias upward the estimated harmfulness of adult magazines. My OLS estimates imply, like several previous studies, that consumption of pornography contributes to both higher frequencies of rapes and divorces. When instrumental variables are employed, however, the correlation between rapes and pornography turns negative while the statistical significance of the coefficient for pornography on the rate of divorces disappears. Journal: Journal of Applied Economics Pages: 185-213 Issue: 1 Volume: 9 Year: 2006 Month: 5 X-DOI: 10.1080/15140326.2006.12040644 File-URL: http://hdl.handle.net/10.1080/15140326.2006.12040644 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:recsxx:v:9:y:2006:i:1:p:185-213 Template-Type: ReDIF-Article 1.0 Author-Name: David E. Sahn Author-X-Name-First: David E. Author-X-Name-Last: Sahn Author-Name: Stephen D. Younger Author-X-Name-First: Stephen D. Author-X-Name-Last: Younger Title: Changes in Inequality and Poverty in Latin America: Looking Beyond Income to Health and Education Abstract: This paper uses Demographic and Health Survey data from six Latin American countries to analyze levels and trends of inequality for two important non-income measures of well- being, children's stature and adult women's educational attainment. Our purpose is to determine whether the worrying trend of increasing income inequality in Latin America is also found in non-income dimensions of well-being. We find that it is not. Almost across the board, health inequality, measured by children's stature, and education inequality, measured by young women's years of schooling, have fallen in these countries in the late 1980s and 1990s, often dramatically. Further, by decomposing changes in non-income dimensions of poverty into shifts in the mean and changes in the distribution of health and education, we show that reduced inequality has contributed to significant reductions in education poverty, and to a lesser extent, health poverty. This, too, is a very different result from the income inequality literature. Journal: Journal of Applied Economics Pages: 215-233 Issue: 2 Volume: 9 Year: 2006 Month: 11 X-DOI: 10.1080/15140326.2006.12040645 File-URL: http://hdl.handle.net/10.1080/15140326.2006.12040645 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:recsxx:v:9:y:2006:i:2:p:215-233 Template-Type: ReDIF-Article 1.0 Author-Name: Lourens Broersma Author-X-Name-First: Lourens Author-X-Name-Last: Broersma Author-Name: Frank A.G. den Butter Author-X-Name-First: Frank A.G. den Author-X-Name-Last: Butter Author-Name: Udo Kock Author-X-Name-First: Udo Author-X-Name-Last: Kock Title: A Cointegration Model for Search Equilibrium Wage Formation Abstract: In flow models of the labor market, wages are determined by negotiations between workers and employers on the surplus value of a realized match. From this perspective, this paper presents an econometric analysis of the influence of labor market flows on wage formation as an alternative to the traditional specification of wage equations in which unemployment represents Phillips-curve or wage-curve effects. The paper estimates a dynamic wage equation for the Netherlands using a cointegration approach. It finds that labor flows, and notably flows from outside the labor market, are important determinants of both short-run and long-run wage setting. Journal: Journal of Applied Economics Pages: 235-254 Issue: 2 Volume: 9 Year: 2006 Month: 11 X-DOI: 10.1080/15140326.2006.12040646 File-URL: http://hdl.handle.net/10.1080/15140326.2006.12040646 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:recsxx:v:9:y:2006:i:2:p:235-254 Template-Type: ReDIF-Article 1.0 Author-Name: Michel Dumont Author-X-Name-First: Michel Author-X-Name-Last: Dumont Title: Foreign Outsourcing, Labour Demand and the Choice of Functional Form Abstract: Elasticity of the demand for low-skilled and high-skilled labour in the European Union with respect to foreign outsourcing is estimated, using alternative flexible cost functions. The choice of functional form is apparently not immaterial, as different forms can lead to conflicting conclusions. Tests that can help to discriminate between different forms of functional specification show that a traditional generalized Leontief cost function is often rejected in favour of a minflex Laurent generalized Leontief cost function. Overall, the estimation results show that foreign outsourcing had a significant impact on the demand for low-skilled and high-skilled workers in the sample period. The pattern is however industry- specific and suggests, in line with some recent theoretical models, an ambiguous relationship between outsourcing and labour demand. There is some evidence that high-skilled labour and capital are (relative) complements. Journal: Journal of Applied Economics Pages: 255-273 Issue: 2 Volume: 9 Year: 2006 Month: 11 X-DOI: 10.1080/15140326.2006.12040647 File-URL: http://hdl.handle.net/10.1080/15140326.2006.12040647 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:recsxx:v:9:y:2006:i:2:p:255-273 Template-Type: ReDIF-Article 1.0 Author-Name: Viviana Fernandez Author-X-Name-First: Viviana Author-X-Name-Last: Fernandez Title: Extremal Dependence in European Capital Markets Abstract: For a sample of six countries with dirty/free float regimes over 1999–2002—the United States, Japan, the Czech Republic, Poland, Switzerland, and the United Kingdom, we investigate whether paired currencies exhibit a pattern of asymptotic dependence on the euro. That is, whether an extremely large appreciation or depreciation in the nominal exchange rate of one country might transmit to the euro, and vice versa. In addition, we investigate whether stock markets of European countries, outside the Euro zone, have exhibited extreme-value dependence on their exchange rates against the euro. In general, after controlling for volatility clustering and inertia in returns, we do not find evidence of extreme-value dependence either between paired exchange rates or between paired stock indices and exchanges rates. However, for asymptotic independent paired returns, we find that tail dependency of exchange rates is stronger under large appreciations than under large depreciations. In addition, we find a weak association between large currency depreciations and declining stock prices. Journal: Journal of Applied Economics Pages: 275-293 Issue: 2 Volume: 9 Year: 2006 Month: 11 X-DOI: 10.1080/15140326.2006.12040648 File-URL: http://hdl.handle.net/10.1080/15140326.2006.12040648 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:recsxx:v:9:y:2006:i:2:p:275-293 Template-Type: ReDIF-Article 1.0 Author-Name: Axel Heitmueller Author-X-Name-First: Axel Author-X-Name-Last: Heitmueller Title: Public-Private Sector Pay Differentials in a Devolved Scotland Abstract: The public-private sector wage gap in Scotland in 2000 is analysed using the extension sample of the British Household Panel Study (BHPS). Employing a switching regression model, and testing for double sample selection from the participation decision and sector choice, the wage gap is shown to be 10 % for males and 24 % for females. For males this is mainly due to differences in productive characteristics and selectivity, while for females the picture is more ambiguous. Findings also suggest that there exists a male private sector wage premium. While there is no evidence of a sample selection bias for females, the sector choice of males is systematically correlated with unobservables. Furthermore, the structural switching regression indicates that expected wage differentials between sectors are an important driving force for sectoral assignment. Journal: Journal of Applied Economics Pages: 295-323 Issue: 2 Volume: 9 Year: 2006 Month: 11 X-DOI: 10.1080/15140326.2006.12040649 File-URL: http://hdl.handle.net/10.1080/15140326.2006.12040649 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:recsxx:v:9:y:2006:i:2:p:295-323 Template-Type: ReDIF-Article 1.0 Author-Name: Alla A. Melkumian Author-X-Name-First: Alla A. Author-X-Name-Last: Melkumian Title: The Opportunity Cost of Being Constrained by the Type of Asset: Bonds Only or Stocks Only Abstract: I explore investors' welfare losses when they restrict themselves to invest in either stocks only or bonds only, but not in both. The restriction gives investors sub-optimal asset allocations that result in welfare losses. To measure these welfare losses I compare “only stock indices and Treasury bills” optimal portfolios and “only bond indices and Treasury bills” optimal portfolios with “stock and bond indices and Treasury bills” optimal portfolios using the concept of proportionate opportunity cost along with various CRRA utility functions. The original historical asset returns data set is used with a VAR in generating joint returns distributions for the portfolio formation period. I show that for investors with low levels of risk aversion welfare losses do not exceed 1.8% of initial wealth when they invest sub-optimally. For investors with medium and high levels of relative risk aversion, suboptimal portfolios of only one type of assets, stocks only or bonds only, along with Treasury bills, give expected utility about as high as optimal portfolios that include both types of assets, stocks and bonds. Journal: Journal of Applied Economics Pages: 325-343 Issue: 2 Volume: 9 Year: 2006 Month: 11 X-DOI: 10.1080/15140326.2006.12040650 File-URL: http://hdl.handle.net/10.1080/15140326.2006.12040650 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:recsxx:v:9:y:2006:i:2:p:325-343 Template-Type: ReDIF-Article 1.0 Author-Name: Amalia Morales-Zumaquero Author-X-Name-First: Amalia Author-X-Name-Last: Morales-Zumaquero Title: Explaining Real Exchange Rate Fluctuations Abstract: This paper attempts to explain the sources of real exchange rate fluctuations for a set of advanced economies and Central and Eastern European transition economies. To that end, we first estimate structural (identified) vector autoregression (SVAR) models, and decompose real and nominal exchange rate movements into those caused by real and nominal shocks. We then complete the previous step with an impulse-response analysis. There is evidence of instability in the variance decomposition of the real exchange rates for advanced economies across samples, with a growing importance of nominal shocks. Nominal shocks are also important in some transition economies. Journal: Journal of Applied Economics Pages: 345-360 Issue: 2 Volume: 9 Year: 2006 Month: 11 X-DOI: 10.1080/15140326.2006.12040651 File-URL: http://hdl.handle.net/10.1080/15140326.2006.12040651 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:recsxx:v:9:y:2006:i:2:p:345-360 Template-Type: ReDIF-Article 1.0 Author-Name: James F. Nieberding Author-X-Name-First: James F. Author-X-Name-Last: Nieberding Title: Estimating Overcharges in Antitrust Cases Using a Reduced-Form Approach: Methods and Issues Abstract: This paper presents several methods and discusses salient issues pertaining to the use of reduced-form models to estimate overcharges in antitrust matters (e.g., price-fixing) where “but-for” prices may be less than actual prices during the anticompetitive period. In particular, two common types of reduced-form estimations are discussed: the “dummy-variable approach” and the “forecasting approach”. Under either methodology, an error correction model is then specified as one way to address technical problems often found in applied time-series analysis—nonstationary data and the existence of short-term and long- term dynamics. Journal: Journal of Applied Economics Pages: 361-380 Issue: 2 Volume: 9 Year: 2006 Month: 11 X-DOI: 10.1080/15140326.2006.12040652 File-URL: http://hdl.handle.net/10.1080/15140326.2006.12040652 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:recsxx:v:9:y:2006:i:2:p:361-380 Template-Type: ReDIF-Article 1.0 Author-Name: Diego Nocetti Author-X-Name-First: Diego Author-X-Name-Last: Nocetti Title: Central Bank's Value at Risk and Financial Crises: An Application to the 2001 Argentine Crisis Abstract: Blejer and Schumacher (1999) were the first to suggest that Central Bank's Value at Risk (VaR), a widely used composite measure of potential portfolio losses in the corporate sector, could be used as an early warning indicator of financial crises. We extend their research in two aspects. First, we develop an operational model to calculate Central Bank's VaR and illustrate the methodology using data from the recent financial crisis in Argentina. Second, we compare the predictive performance of diverse measures based on the VaR approach to that of another well known early warning system, the signals approach, and several univariate leading indicators. The results reveal a strong relationship between the measures proposed and the crisis. Furthermore, one of the measures provides higher accuracy and announces the probability of a crisis sooner than the competing indicators. Journal: Journal of Applied Economics Pages: 381-402 Issue: 2 Volume: 9 Year: 2006 Month: 11 X-DOI: 10.1080/15140326.2006.12040653 File-URL: http://hdl.handle.net/10.1080/15140326.2006.12040653 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:recsxx:v:9:y:2006:i:2:p:381-402 Template-Type: ReDIF-Article 1.0 Author-Name: Eliyathamby A. Selvanathan Author-X-Name-First: Eliyathamby A. Author-X-Name-Last: Selvanathan Author-Name: Saroja Selvanathan Author-X-Name-First: Saroja Author-X-Name-Last: Selvanathan Title: Measurement of Inflation: An Alternative Approach Abstract: The stochastic approach to index numbers has attracted renewed attention in recent times (e.g., Clements and Izan, 1981 and 1987; Diewert, 1995; Giles and McCann, 1994; and Selvanathan and Rao, 1994). One of the attractions of this approach is that it provides standard errors for the index numbers. This paper reviews the stochastic approach and extends the existing work by presenting an alternative approach to measure the rate of inflation. This approach has been demonstrated using consumption expenditure data for three countries, Australia, the United Kingdom (UK) and the United States (US). Journal: Journal of Applied Economics Pages: 403-418 Issue: 2 Volume: 9 Year: 2006 Month: 11 X-DOI: 10.1080/15140326.2006.12040654 File-URL: http://hdl.handle.net/10.1080/15140326.2006.12040654 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:recsxx:v:9:y:2006:i:2:p:403-418 Template-Type: ReDIF-Article 1.0 Author-Name: Gualter F. M. Câmara Author-X-Name-First: Gualter F. M. Author-X-Name-Last: Câmara Author-Name: Francisco J. F. Silva Author-X-Name-First: Francisco J. F. Author-X-Name-Last: Silva Author-Name: José A. C. Vieira Author-X-Name-First: José A. C. Author-X-Name-Last: Vieira Author-Name: João C. A. Teixeira Author-X-Name-First: João C. A. Author-X-Name-Last: Teixeira Title: The effects of airline choice on accommodation type and length of stay: evidence of an islands region Abstract: This study aims to analyze the influence of the entrance of low-cost carriers in the Azores in terms of the determinants of the number of overnight stays and the choice of accommodation type. Different methods of statistical analysis were used for the empirical study. Estimates were considered based on variables related to the trip. In addition, a different variable was considered in the estimates of the type of accommodation: the tourist’s perception of the importance of the existence of several types of accommodations, quantified on a qualitative scale. The results indicate that tourists traveling to the Azores on low-cost carriers tend to stay fewer days at the destination, although these tourists may have other characteristics that predispose them to shorter stays. Finally, the results suggest that the characteristics related to travel are explanatory variables in the choice of accommodation type. Journal: Journal of Applied Economics Pages: 241-257 Issue: 1 Volume: 24 Year: 2021 Month: 01 X-DOI: 10.1080/15140326.2021.1920223 File-URL: http://hdl.handle.net/10.1080/15140326.2021.1920223 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:recsxx:v:24:y:2021:i:1:p:241-257 Template-Type: ReDIF-Article 1.0 Author-Name: Maciej Ryczkowski Author-X-Name-First: Maciej Author-X-Name-Last: Ryczkowski Title: Money and inflation in inflation-targeting regimes – new evidence from time–frequency analysis Abstract: This article investigates the post-1990 link between broad money growth and inflation in 16 full-fledged inflation-targeting regimes and four benchmark non-inflation-targeting regimes. This study employs the Christiano-Fitzgerald band-pass filter and continuous wavelet transform to analyze the co-movements across operational horizons and time. According to the band-pass filtering techniques, the link between money growth and inflation was weak and statistically nonsignificant over the investigated period: from 1990 onwards. The wavelet analysis demonstrated significant causality running from money growth to inflation, and strong significant co-movements between the two variables around the Great Recession at a typical business cycle frequency. This finding suggests that policymakers may need to respond to the short-run surges in money growth by reducing money growth rates. The empirical findings support the proposal that policymakers should return to a monetary framework that controls the money supply. Journal: Journal of Applied Economics Pages: 17-44 Issue: 1 Volume: 24 Year: 2021 Month: 01 X-DOI: 10.1080/15140326.2020.1830461 File-URL: http://hdl.handle.net/10.1080/15140326.2020.1830461 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:recsxx:v:24:y:2021:i:1:p:17-44 Template-Type: ReDIF-Article 1.0 Author-Name: Anabel Zárate-Marco Author-X-Name-First: Anabel Author-X-Name-Last: Zárate-Marco Author-Name: Jaime Vallés-Giménez Author-X-Name-First: Jaime Author-X-Name-Last: Vallés-Giménez Title: The interdependence of investment by different levels of government in a federal context Abstract: We use the Stochastic Frontier Approach to analyse for the first time the regions’ investment response to the central and local governments’ capital expenditure. The Spanish context is very interesting for this analysis because responsibilities are distributed between the three levels of government in a very interesting dual way: the distribution of spending responsibilities between central and regional governments corresponds to an exclusionary attribution of functions, while between regional and local levels, governments opt for cooperation. Results show that capital expenditure undertaken by the central government in the regions acts as substitute for regional investment, while capital expenditure by local governments appears to complement it. These results should be taken into account by public administrations when designing the distribution of responsibilities between different levels of government and their economic policy aims. Journal: Journal of Applied Economics Pages: 219-240 Issue: 1 Volume: 24 Year: 2021 Month: 01 X-DOI: 10.1080/15140326.2021.1926188 File-URL: http://hdl.handle.net/10.1080/15140326.2021.1926188 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:recsxx:v:24:y:2021:i:1:p:219-240 Template-Type: ReDIF-Article 1.0 Author-Name: Mehdi Seraj Author-X-Name-First: Mehdi Author-X-Name-Last: Seraj Author-Name: Cagay Coskuner Author-X-Name-First: Cagay Author-X-Name-Last: Coskuner Title: Real exchange rate effect on economic growth: comparison of fundamental equilibrium exchange rate and Balassa–Samuelson based Rodrik approach Abstract: This study reproduces the work of Dani Rodrik on real exchange rate undervaluation and economic growth for 93 countries over the period 1990–2018. While the empirical literature on the dynamics between the real exchange rate11It is a measure of the bilateral real exchange rate with respect to the US dollar. and economic growth is relatively comprehensive, little has been done to compare these dynamics within economies using the Balassa–Samuelson-based Rodrik approach (BS) and the fundamental equilibrium exchange rate model (FEER). This research, to the best of the authors’ knowledge, is one of the first to compare the fundamental equilibrium exchange rate model and Balassa–Samuelson-based Rodrik approach and use dynamic estimation on the Rodrik approach. The findings of the study support Rodrik’s conclusion that undervaluation has a significant impact on economic growth, although the results of FEER are more significant than those of BS. Furthermore, the first lag of undervaluation has a significant effect on economic growth. Journal: Journal of Applied Economics Pages: 541-554 Issue: 1 Volume: 24 Year: 2021 Month: 01 X-DOI: 10.1080/15140326.2021.1977083 File-URL: http://hdl.handle.net/10.1080/15140326.2021.1977083 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:recsxx:v:24:y:2021:i:1:p:541-554 Template-Type: ReDIF-Article 1.0 Author-Name: Yunsun Huh Author-X-Name-First: Yunsun Author-X-Name-Last: Huh Author-Name: Russell Kashian Author-X-Name-First: Russell Author-X-Name-Last: Kashian Title: Corporate board gender diversity and ethnic ownership of U.S. banks Abstract: This study examines the association between U.S. banks’ corporate board gender and ethnic ownership diversity, focusing on cultural gender norms relating to female leadership positions. Utilizing Federal Deposit Insurance Corporation (FDIC) Call Report and Summary of Deposit (SOD) data for 30 June 2018 and American Community Survey data for 2017, we analyze 136 Minority Depository Institutions (MDIs) and their matching sample of mainstream banks in the U.S. We find differential effects on both the gender composition of MDI corporate boards and the probability of having female members on corporate boards depending on the ethnic diversity of bank ownership. Black-owned banks show a strong positive impact, while Hispanic-owned banks show a strong negative impact, regarding board gender diversity, relative to mainstream banks. These results demonstrate the relationship between cultural gender norms and female leadership access across different ethnicities in the U.S. banking industry. Journal: Journal of Applied Economics Pages: 258-276 Issue: 1 Volume: 24 Year: 2021 Month: 01 X-DOI: 10.1080/15140326.2021.1920293 File-URL: http://hdl.handle.net/10.1080/15140326.2021.1920293 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:recsxx:v:24:y:2021:i:1:p:258-276 Template-Type: ReDIF-Article 1.0 Author-Name: P. Lynn Kennedy Author-X-Name-First: P. Lynn Author-X-Name-Last: Kennedy Author-Name: Pablo A. Garcia-Fuentes Author-X-Name-First: Pablo A. Author-X-Name-Last: Garcia-Fuentes Author-Name: Gustavo F. C. Ferreira Author-X-Name-First: Gustavo F. C. Author-X-Name-Last: Ferreira Title: An assessment of the relationship between sweetener prices and high fructose corn syrup deliveries in the United States Abstract: This paper uses an application of the Bertrand model to explain the relationship between HFCS deliveries and the prices of HFCS-42 and sugar. It finds that the HFCS deliveries and the prices of HFCS-42 and refined sugar are cointegrated over the period 1994:q1-2020:q1. The main results, based on the estimated long-run elasticities, show that a one percent increase in the price of HFCS-42 decreases HFCS deliveries by 0.153 percent. One implication of this result is that it would be helpful for the HFCS industry to prevent large increases in the HFCS price, which would prevent large decreases in HFCS deliveries and its share in the U.S. sweetener market. In addition, the price of sugar does not have a significant effect on HFCS deliveries. Journal: Journal of Applied Economics Pages: 633-650 Issue: 1 Volume: 24 Year: 2021 Month: 01 X-DOI: 10.1080/15140326.2021.1965460 File-URL: http://hdl.handle.net/10.1080/15140326.2021.1965460 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:recsxx:v:24:y:2021:i:1:p:633-650 Template-Type: ReDIF-Article 1.0 Author-Name: Jianwen Li Author-X-Name-First: Jianwen Author-X-Name-Last: Li Author-Name: Xiaofan Zhang Author-X-Name-First: Xiaofan Author-X-Name-Last: Zhang Author-Name: Jinyan Hu Author-X-Name-First: Jinyan Author-X-Name-Last: Hu Title: Strategic co-funding in informal finance market: evidence from China Abstract: Information asymmetry in the anonymous informal finance market drives the lenders to screen the borrowers by disclosed information. Using data from a powerful online peer-to-peer lending platform, we study the effects of formal financing records on successful funding and default outcomes in the informal finance market. We find that lenders are more likely to fund borrowers with formal financing records. Borrowers with formal credit are more likely to repay the loans entirely. Co-funding with the formal financial sector is strategic, corresponding to lower default risk. Moreover, without historical success records or with a low-income level, borrowers can use the formal credit signals to mitigate information asymmetry and improve the funding probability. These results are obtained after controlling for loan-level and borrower-level information, city-by-year-month, and day-of-week fixed effects. Several tests show our findings are unlikely to be an unintentional byproduct of the formal financial signals. Journal: Journal of Applied Economics Pages: 329-349 Issue: 1 Volume: 24 Year: 2021 Month: 01 X-DOI: 10.1080/15140326.2021.1932395 File-URL: http://hdl.handle.net/10.1080/15140326.2021.1932395 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:recsxx:v:24:y:2021:i:1:p:329-349 Template-Type: ReDIF-Article 1.0 Author-Name: Mesfin Mulu Ayalew Author-X-Name-First: Mesfin Mulu Author-X-Name-Last: Ayalew Title: Multilevel analysis of entrepreneurial intention of engineering graduating students in Ethiopia Abstract: Recently, entrepreneurship has been given serious devotion due to its importance on economic growth, job creation, sources of innovation and productivity. So, this paper aims to identify the determinants of entrepreneurial intention of engineering graduating students in Ethiopia. Stratified sampling technique was employed and data were collected via questionnaire from 921 students from the target population. The study utilized regression statistics to analyze the data. The data used for this study is hierarchally structured and hence multilevel binary logistic model was used to identify the relationship between predictor and outcome variables by taking into account both level-1 (students’ characteristics) and level-2 (universities characteristics) in regression relationships. The model result founds that personal attitude, perceived educational and relational support are the significant predictors of entrepreneurial intention of students at 5% level. The policymakers should facilitate entrepreneurship trainings to change attitude of students and strength the cooperation between students and fund raisers. Journal: Journal of Applied Economics Pages: 366-391 Issue: 1 Volume: 24 Year: 2021 Month: 01 X-DOI: 10.1080/15140326.2021.1949256 File-URL: http://hdl.handle.net/10.1080/15140326.2021.1949256 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:recsxx:v:24:y:2021:i:1:p:366-391 Template-Type: ReDIF-Article 1.0 Author-Name: Yanli Wang Author-X-Name-First: Yanli Author-X-Name-Last: Wang Author-Name: Xiaodong Lei Author-X-Name-First: Xiaodong Author-X-Name-Last: Lei Author-Name: Fan Yang Author-X-Name-First: Fan Author-X-Name-Last: Yang Author-Name: Na Zhao Author-X-Name-First: Na Author-X-Name-Last: Zhao Title: Financial friction, resource misallocation and total factor productivity: theory and evidence from China Abstract: We explore the impact of financial friction on resource misallocation and total factor productivity (TFP) of China. First, the mathematical models are derived to clarify the mechanism and consequence of resource misallocation, showing that financial friction leads to resource mismatch, and thus results in the loss of TFP. Second, taking the dataset of China as the research sample, we establish econometric models to explore the impacts of financial friction on resource allocation and TFP. The results show that financial friction has negative impact on the TFP of China. In addition, the friction of financial markets will lead to factor distortion. Furthermore, the results of mechanism analysis demonstrate that resource misallocation is an important channel through which financial friction deteriorates the TFP of China, which is verified at the enterprise and province levels, respectively. Journal: Journal of Applied Economics Pages: 393-408 Issue: 1 Volume: 24 Year: 2021 Month: 01 X-DOI: 10.1080/15140326.2021.1936836 File-URL: http://hdl.handle.net/10.1080/15140326.2021.1936836 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:recsxx:v:24:y:2021:i:1:p:393-408 Template-Type: ReDIF-Article 1.0 Author-Name: Abigail Gbemisola Adeyonu Author-X-Name-First: Abigail Gbemisola Author-X-Name-Last: Adeyonu Author-Name: Adebayo Musediku Shittu Author-X-Name-First: Adebayo Musediku Author-X-Name-Last: Shittu Author-Name: Mojisola Olanike Kehinde Author-X-Name-First: Mojisola Olanike Author-X-Name-Last: Kehinde Author-Name: Chioma Patricia Adekunle Author-X-Name-First: Chioma Patricia Author-X-Name-Last: Adekunle Title: Farm Households’ Demand Response to Escalating Food Prices in Nigeria Abstract: This study examined food demand response to rising food prices among farm households in Nigeria using the three waves of the General Household Survey (Panel) conducted between 2010 and 2016. Analysis was within the Quadratic Almost Ideal Demand System framework from which price elasticities and compensated and uncompensated expenditure were computed. The results show that higher prices of almost all of the food categories affected their demand by households. Harvest and location dummies as well as household demographic variables were found to influence household food demand. Poor households consumed less of all the food categories compared to their non-poor counterparts. Escalating prices result in a welfare loss of household expenditure on commodity groups such as rice, wheat, pulses, tuber and other food and non-food items. Overall, 70.1% of the households suffered welfare loss that amounted to an average of 7.52% of the household budget annually. Journal: Journal of Applied Economics Pages: 555-576 Issue: 1 Volume: 24 Year: 2021 Month: 01 X-DOI: 10.1080/15140326.2021.1980351 File-URL: http://hdl.handle.net/10.1080/15140326.2021.1980351 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:recsxx:v:24:y:2021:i:1:p:555-576 Template-Type: ReDIF-Article 1.0 Author-Name: Thomas H.W. Ziesemer Author-X-Name-First: Thomas H.W. Author-X-Name-Last: Ziesemer Title: Mission-oriented R&D and growth Abstract: We analyze the dynamic interaction of mission-oriented R&D expenditure stocks with domestic and foreign private and public R&D, total-factor-productivity (TFP), and gross domestic product (GDP) for seven EU countries. We use the vector-error-correction method. Permanent changes on mission-oriented R&D increase total-factor-productivity and GDP. On average across periods and countries, a 1% increase of mission-oriented R&D leads to an additional 0.485% public R&D, 0.705% private R&D, 0.485% for TFP, and 0.56% GDP. We also show years of positive gains, the sums of discounted net present values, and the average yearly gains/GDP ratio. Mission-oriented R&D has high internal rates of return. Journal: Journal of Applied Economics Pages: 460-477 Issue: 1 Volume: 24 Year: 2021 Month: 01 X-DOI: 10.1080/15140326.2021.1963395 File-URL: http://hdl.handle.net/10.1080/15140326.2021.1963395 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:recsxx:v:24:y:2021:i:1:p:460-477 Template-Type: ReDIF-Article 1.0 Author-Name: Marcelo Caffera Author-X-Name-First: Marcelo Author-X-Name-Last: Caffera Author-Name: Carlos Chávez Author-X-Name-First: Carlos Author-X-Name-Last: Chávez Author-Name: Analía Ardente Author-X-Name-First: Analía Author-X-Name-Last: Ardente Title: The deterrence effect of linear versus convex fines: laboratory evidence Abstract: Using experiments in which participants play the role of polluting firms, we study compliance behavior with emissions limits under two types of fines and two different regulatory instruments. We find that the market price of pollution permits and the probability of violating permits holdings are higher with a fine that is convex in the level of violation than with one that is linear. This effect operates through an increase in the prices asked by sellers, not in the bids made by the buyers of permits. We do not observe an effect of the type of the fine on the average level of violation or the number of firms in violation in the case of emission standards. We conclude that the type of fines may affect the cost-effectiveness of pollution control programs based on tradable pollution permits. Journal: Journal of Applied Economics Pages: 1-26 Issue: 1 Volume: 24 Year: 2021 Month: 01 X-DOI: 10.1080/15140326.2020.1848307 File-URL: http://hdl.handle.net/10.1080/15140326.2020.1848307 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:recsxx:v:24:y:2021:i:1:p:1-26 Template-Type: ReDIF-Article 1.0 Author-Name: Junjie Hong Author-X-Name-First: Junjie Author-X-Name-Last: Hong Author-Name: Zhihua Guan Author-X-Name-First: Zhihua Author-X-Name-Last: Guan Title: The key to system performance lies in implementation: empirical evidence from labor dispute data of Shanghai from 1918 to 1940 Abstract: The process of system implementation could be the key to determining system performance. This paper discusses this issue by using empirical methods to analyze Shanghai labor dispute cases. Although the labor dispute settlement system is designed to protect workers, empirical analyses show that government intervention will inhibit workers in labor disputes. Further analysis reveals that government intervention is selective based on the case reasons and differs in intensity. In addition, the events that affect government power may influence the case outcome. Journal: Journal of Applied Economics Pages: 114-140 Issue: 1 Volume: 24 Year: 2021 Month: 01 X-DOI: 10.1080/15140326.2021.1896320 File-URL: http://hdl.handle.net/10.1080/15140326.2021.1896320 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:recsxx:v:24:y:2021:i:1:p:114-140 Template-Type: ReDIF-Article 1.0 Author-Name: Florencia Roca Author-X-Name-First: Florencia Author-X-Name-Last: Roca Title: The influence of mandatory adoption of IFRS in Argentina on value relevance of accounting information Abstract: This study investigates the effect of mandatory adoption of International Financial Reporting Standards (IFRS) on the value relevance of accounting information in Argentina, which originated via the regulation that required all public non-financial companies to change the accounting standards, for fiscal periods starting in January 2012. As with most value-relevance studies, this research employs the Ohlson Model to examine the empirical association between equity prices and two main accounting variables: Net Earnings (representing the Income Statement) and the Book Value of Equity (representing the Balance Sheet). Panel data for 40 companies over a period of 23 years, from quarterly financial reports published by the Buenos Aires Stock Exchange (BCBA), are examined. The reported results suggest that mandatory adoption of IFRS in Argentina does not improve the value relevance of any of the tested variables. On the contrary, after the switch in accounting standards, the accounting numbers present a weaker association with the stock price. Journal: Journal of Applied Economics Pages: 154-172 Issue: 1 Volume: 24 Year: 2021 Month: 01 X-DOI: 10.1080/15140326.2021.1900695 File-URL: http://hdl.handle.net/10.1080/15140326.2021.1900695 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:recsxx:v:24:y:2021:i:1:p:154-172 Template-Type: ReDIF-Article 1.0 Author-Name: Ahmad Alkhataybeh Author-X-Name-First: Ahmad Author-X-Name-Last: Alkhataybeh Title: Working capital and R&D smoothing: evidence from the Tel Aviv stock exchange Abstract: This paper proposes new tests for financing constraints on R&D investment by directly examining the role played by working capital in smoothing the R&D expenditures of firms listed on the Tel Aviv stock exchange. It emphasizes the importance of working capital, not only for use but also as a source of funds. The findings offer new evidence for why levels of liquidity are important for R&D-intensive firms. Working capital alleviates the effects of transient finance shocks on the level of R&D, thereby averting the high adjustment costs that accompany changes in R&D. Journal: Journal of Applied Economics Pages: 91-102 Issue: 1 Volume: 24 Year: 2021 Month: 01 X-DOI: 10.1080/15140326.2021.1877599 File-URL: http://hdl.handle.net/10.1080/15140326.2021.1877599 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:recsxx:v:24:y:2021:i:1:p:91-102 Template-Type: ReDIF-Article 1.0 Author-Name: Rodrigo Valdes Author-X-Name-First: Rodrigo Author-X-Name-Last: Valdes Title: Sub-national economic effects of the resources sector in Chile Abstract: The significant contributions of resource sectors to national economies are well known; however, information on sub-national impacts is much scarcer. Using Chile as a case study, this paper investigates how disturbances in the price of copper impact the economies where this mineral is produced. The proposed method combines estimates of long-term copper prices with a general equilibrium model to simulate the differential effects of copper price variations. The results suggest that price variations affect the design and implementation of public and private policies, at economic and business levels. Journal: Journal of Applied Economics Pages: 141-153 Issue: 1 Volume: 24 Year: 2021 Month: 01 X-DOI: 10.1080/15140326.2021.1880243 File-URL: http://hdl.handle.net/10.1080/15140326.2021.1880243 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:recsxx:v:24:y:2021:i:1:p:141-153 Template-Type: ReDIF-Article 1.0 Author-Name: Paswel P Marenya Author-X-Name-First: Paswel P Author-X-Name-Last: Marenya Author-Name: Gebrelibanos Gebremariam Author-X-Name-First: Gebrelibanos Author-X-Name-Last: Gebremariam Author-Name: Dil B Rahut Author-X-Name-First: Dil B Author-X-Name-Last: Rahut Title: Performance of women-managed plots compared to men-managed plots among smallholder maize farmers in western and central Ethiopia Abstract: A more targeted approach towards improving women’s access to agricultural innovations is key to increase the overall agricultural productivity. This paper uses gender-disaggregated household and plot-level survey data from Ethiopia to explore the impacts of multiple agronomic practices disaggregated by the sex of the plot manager. Using a multinomial endogenous switching regression methodology, after controlling for endogeneity arising from observed and unobserved heterogeneity, we found that multiple agronomic practices have a positive and significant effect on maize yields and maize income. Crucially, subject to demographics, plot quality and agronomic practices (among others), we found that women-managed plots (WMP) had treatment effects (yields) that were statistically the same as those of men-managed plots (MMP) (and nominally higher in a number of cases). Journal: Journal of Applied Economics Pages: 523-540 Issue: 1 Volume: 24 Year: 2021 Month: 01 X-DOI: 10.1080/15140326.2021.1969856 File-URL: http://hdl.handle.net/10.1080/15140326.2021.1969856 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:recsxx:v:24:y:2021:i:1:p:523-540 Template-Type: ReDIF-Article 1.0 Author-Name: Zhihao Wu Author-X-Name-First: Zhihao Author-X-Name-Last: Wu Author-Name: Jingqi Dang Author-X-Name-First: Jingqi Author-X-Name-Last: Dang Author-Name: Yipu Pang Author-X-Name-First: Yipu Author-X-Name-Last: Pang Author-Name: Wei Xu Author-X-Name-First: Wei Author-X-Name-Last: Xu Title: Threshold effect or spatial spillover? The impact of agricultural mechanization on grain production Abstract: The increase in agricultural machinery input contribution rate has been the most significant structural change in the input factors of grain production in recent years. In this study, we constructed a threshold regression model and a spatial Durbin model to investigate the threshold effects and the spatial spillovers of agricultural mechanization level on grain production, using panel data of 13 prefecture-level cities in Jiangsu, China, from 2000 to 2016. The results reveal that agricultural mechanization has a single threshold effect on grain yield, and that there is a significant spatial spillover effect of agricultural mechanization on grain yield. This means that the improvement of the mechanization level in one region, will significantly promote the increase in the grain yield in its surrounding regions, due to the cross-regional operation of agricultural machinery. Journal: Journal of Applied Economics Pages: 478-503 Issue: 1 Volume: 24 Year: 2021 Month: 01 X-DOI: 10.1080/15140326.2021.1968218 File-URL: http://hdl.handle.net/10.1080/15140326.2021.1968218 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:recsxx:v:24:y:2021:i:1:p:478-503 Template-Type: ReDIF-Article 1.0 Author-Name: Can Xu Author-X-Name-First: Can Author-X-Name-Last: Xu Author-Name: Deming Yu Author-X-Name-First: Deming Author-X-Name-Last: Yu Author-Name: Hao Yang Author-X-Name-First: Hao Author-X-Name-Last: Yang Author-Name: Shiyao Yu Author-X-Name-First: Shiyao Author-X-Name-Last: Yu Title: 20 years of economic corridors development: a bibliometric analysis Abstract: The focus of this paper aims to comprehensively analyze the global high-level scientific output of economic corridors. In this study, bibliometric method is utilized not only to help identify core collaboration networks among authors, institutions, countries, but also to characterize research hotspots and research frontiers. This research has found that the number of papers dealing with economic corridors has appeared a trend of sustained growth. The most prolific country and institution are China and Chinese Academy of Science, respectively. The core of the international author cooperation community has not yet been formed. Relevant literature mainly focuses on the field of Environmental Sciences & Ecology. The hotspots include “Ecological environment protection”, “Economic development”, “Transportation”, “Resource utilization and saving” and “Belt and road initiative”. Environmental protection is a frontier subject. This finding is helpful to a comprehensive understanding of the development trend of economic corridors study. Journal: Journal of Applied Economics Pages: 173-192 Issue: 1 Volume: 24 Year: 2021 Month: 01 X-DOI: 10.1080/15140326.2021.1880246 File-URL: http://hdl.handle.net/10.1080/15140326.2021.1880246 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:recsxx:v:24:y:2021:i:1:p:173-192 Template-Type: ReDIF-Article 1.0 Author-Name: Z. Bragoudakis Author-X-Name-First: Z. Author-X-Name-Last: Bragoudakis Author-Name: D. Sideris Author-X-Name-First: D. Author-X-Name-Last: Sideris Title: Asymmetric price adjustment and the effects of structural reforms and low demand in the gasoline market: the case of Greece Abstract: The pricing mechanism in the gasoline market has often been the subject of public debate in Greece during the crisis years. Inefficient pricing could imply oligopolistic practices and losses to consumers’ welfare. A way to test for inefficient pricing, is by testing for asymmetries in the adjustment of domestic gasoline prices to world oil price changes. The present paper tests for asymmetric adjustment of gasoline prices to oil price variations in the Greek market and examines whether the structural reforms that took place in the post-2010 period had any impact on the functioning of the market. The analysis applies a consistent threshold cointegration technique and makes use of the most recent observations at the lowest frequency available. The results provide evidence in favour of symmetric behaviour, just for the recent period. This may reflect competitive behaviour by suppliers who had to interact in a new institutional framework following the reforms. Journal: Journal of Applied Economics Pages: 504-522 Issue: 1 Volume: 24 Year: 2021 Month: 01 X-DOI: 10.1080/15140326.2021.1922188 File-URL: http://hdl.handle.net/10.1080/15140326.2021.1922188 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:recsxx:v:24:y:2021:i:1:p:504-522 Template-Type: ReDIF-Article 1.0 Author-Name: Dmytro Osiichuk Author-X-Name-First: Dmytro Author-X-Name-Last: Osiichuk Author-Name: Paweł Mielcarz Author-X-Name-First: Paweł Author-X-Name-Last: Mielcarz Title: Predatory trade finance: the impact of bargaining power and financing constraints on the demand and supply of trade credit Abstract: We demonstrate that the “predator-prey” metaphor may be well-suited to describe trade finance mechanisms in emerging economies. Having analyzed the dynamics of trade credit in the Polish corporate sector over the period between 1997 and 2014, we found that suppliers of trade credit were smaller, younger, less liquid, less indebted, and more financially constrained than the beneficiaries thereof. The firms, which increased trade receivables during the analyzed period, improved their asset turnover ratio at the expense of operating profitability. In a quest for growth and cash flows, these firms appear to be forced to supply trade credit to their counterparties with a stronger bargaining position. Companies, which reported higher trade payables, enjoy higher cash flows and a better access to external financing, yet with no improvements to the operating KPIs. In contrast to the conventional wisdom, we hypothesize that trade credit bargaining may be a negative-sum game. Journal: Journal of Applied Economics Pages: 441-459 Issue: 1 Volume: 24 Year: 2021 Month: 01 X-DOI: 10.1080/15140326.2021.1963394 File-URL: http://hdl.handle.net/10.1080/15140326.2021.1963394 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:recsxx:v:24:y:2021:i:1:p:441-459 Template-Type: ReDIF-Article 1.0 Author-Name: Özcan Ceylan Author-X-Name-First: Özcan Author-X-Name-Last: Ceylan Title: Dynamics of global stock market correlations: the VIX and attention allocation Abstract: This paper investigates the dynamics of international stock return correlations between the U.S., the U.K., Germany and France. Estimated correlations are modeled in an ARDL framework to evaluate how the market-wide uncertainty in the U.S. affects international stock market comovements. Results show that a shock to the VIX leads to increases in cross-county correlations in the following week and that the correlations tend to decline in the second week that follows the shock. The revealed time pattern of the effect of the VIX may be explained in a behavioral framework through investors’ attention reallocation mechanism. Journal: Journal of Applied Economics Pages: 392-400 Issue: 1 Volume: 24 Year: 2021 Month: 01 X-DOI: 10.1080/15140326.2021.1949257 File-URL: http://hdl.handle.net/10.1080/15140326.2021.1949257 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:recsxx:v:24:y:2021:i:1:p:392-400 Template-Type: ReDIF-Article 1.0 Author-Name: Maurizio Bovi Author-X-Name-First: Maurizio Author-X-Name-Last: Bovi Title: The shapley value of age-period-cohort effects Abstract: The exact linear dependency among age, period and birth cohort makes it impossible to recover the true parameters of Age-Period-Cohort (APC) models. We then propose to extract reliable information from APC models via the Shapley decomposition, a model-agnostic procedure from game theory that allows to pin down the most likely contribution of each regressor in explaining the variance of the dependent variable. The rationale is that the predicted values of APC models are estimable and the allocation of the R2 to the APC regressors – interpreted here as the APC “effects” – satisfies desirable properties and produces robust estimates, in that complementing existing methods. We apply the method to the U.S. unemployment rate. Journal: Journal of Applied Economics Pages: 297-317 Issue: 1 Volume: 24 Year: 2021 Month: 01 X-DOI: 10.1080/15140326.2021.1932177 File-URL: http://hdl.handle.net/10.1080/15140326.2021.1932177 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:recsxx:v:24:y:2021:i:1:p:297-317 Template-Type: ReDIF-Article 1.0 Author-Name: Weiping Shen Author-X-Name-First: Weiping Author-X-Name-Last: Shen Author-Name: Yong Wang Author-X-Name-First: Yong Author-X-Name-Last: Wang Author-Name: Weijie Luo Author-X-Name-First: Weijie Author-X-Name-Last: Luo Title: Does the Porter hypothesis hold in China? Evidence from the low-carbon city pilot policy Abstract: Given the constraints of energy, environment, and climate change in the process of economic development, transitioning to a low-carbon economy by such means as the construction of low-carbon cities is a feasible approach to a sustainable development pattern that balances energy conservation, environmental protection, and economic growth. Utilizing the data of listed companies in China A-shares market over the period 2007–2016, we treat China’s low-carbon city pilot policy (LCCPP) as a quasi-natural experiment and adopt a difference-in-differences approach to explore the effect of LCCPP on the total factor productivity (TFP) of firms. Firm TFP is found to be negatively associated with the implementation of LCCPP. Our mechanism analysis reveals that the LCCPP stimulates innovation by firms in China, consistent with the weak Porter hypothesis. Moreover, the negative relationship between the LCCPP and TFP holds more strongly in larger firms or those located in the eastern region. Journal: Journal of Applied Economics Pages: 246-269 Issue: 1 Volume: 24 Year: 2021 Month: 01 X-DOI: 10.1080/15140326.2020.1858224 File-URL: http://hdl.handle.net/10.1080/15140326.2020.1858224 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:recsxx:v:24:y:2021:i:1:p:246-269 Template-Type: ReDIF-Article 1.0 Author-Name: Pu-yan Nie Author-X-Name-First: Pu-yan Author-X-Name-Last: Nie Author-Name: Chan Wang Author-X-Name-First: Chan Author-X-Name-Last: Wang Author-Name: Hong-xing Wen Author-X-Name-First: Hong-xing Author-X-Name-Last: Wen Author-Name: Ting Cui Author-X-Name-First: Ting Author-X-Name-Last: Cui Title: Durable goods with secondary markets Abstract: This article captures the effects of secondary markets on the durable goods with game theory technology. Firstly, under monopoly in production, secondary markets both improve the producer’s profits and extend the market size. Secondly, to improve the profits, the producer launches the secondary markets although he/she undertakes a loss in the secondary markets. Thirdly, under large preference (wealth) difference, the producer prices as a type of luxury. Finally, the conditions about the producer pricing are identified. In summary, this article establishes the general framework of durable goods. The wealth difference is considered to analyze the effects of wealth on the demand of both the new product market and the secondary markets. The producer’s optimal decisions depend on the number of all types of consumers. Both the wealth difference and the number of all types of consumers jointly determine the price of new and used goods. Journal: Journal of Applied Economics Pages: 577-591 Issue: 1 Volume: 24 Year: 2021 Month: 01 X-DOI: 10.1080/15140326.2021.1978269 File-URL: http://hdl.handle.net/10.1080/15140326.2021.1978269 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:recsxx:v:24:y:2021:i:1:p:577-591 Template-Type: ReDIF-Article 1.0 Author-Name: Kurt A. Hafner Author-X-Name-First: Kurt A. Author-X-Name-Last: Hafner Title: Output volatility and efficiency gains: evidence from Latin American gross value added Abstract: Based on gross value added (GVA) shares of economic activities from 1990 to 2014, the paper shows that convex growth-instability frontiers exist for 19 Latin American countries. Numerical simulations show that in 2011, Latin America's industry portfolios were below Markowitz's efficiency frontier, and that rearranging the shares of economic activities contributes to efficiency gains that are negatively linked to industrial diversification. Reducing output volatility, MERCOSUR countries with a low degree of industrial diversification would average relatively high efficiency gains, while the reverse is true for CACAM and CAN countries. Analyzing more recent industry portfolios, Latin American countries closed the efficiency frontier gap and captured efficiency gains in terms of lower output volatility and higher GVA growth rates. Convex growth-instability frontiers are confirmed by stochastic frontier analysis, which identifies variations in employment ratios and industrial diversification as the key sources of inefficiency. Journal: Journal of Applied Economics Pages: 277-296 Issue: 1 Volume: 24 Year: 2021 Month: 01 X-DOI: 10.1080/15140326.2021.1921518 File-URL: http://hdl.handle.net/10.1080/15140326.2021.1921518 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:recsxx:v:24:y:2021:i:1:p:277-296 Template-Type: ReDIF-Article 1.0 Author-Name: Adrian R. Fleissig Author-X-Name-First: Adrian R. Author-X-Name-Last: Fleissig Title: Habit persistence in tourist sub-industries Abstract: Habit persistence across six U.S. tourism sub-industries is estimated using a dynamic forward looking model. Estimates show that habits largely determine current expenditure for air transportation, shopping, accommodation, and other transportation. Estimated uncompensated price elasticities find that air transport and accommodation are price elastic in the short-run and long-run. Shopping is price inelastic in the short-run but price elastic in the long-run. An important result is that air transportation and other transportation are elastic substitutes for price changes in air transportation but inelastic substitutes for price changes in other related transportation. Estimates show that expenditure across most of the tourist sub-industries is closely related because they are gross complements. Food and beverages are necessities, price inelastic, and relatively unresponsive to changes in expenditure across the sub-industries. The estimates show that policy makers and tourist marketing should account for habit persistence and differences between the short-run and long-run. Journal: Journal of Applied Economics Pages: 103-113 Issue: 1 Volume: 24 Year: 2021 Month: 01 X-DOI: 10.1080/15140326.2021.1896294 File-URL: http://hdl.handle.net/10.1080/15140326.2021.1896294 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:recsxx:v:24:y:2021:i:1:p:103-113 Template-Type: ReDIF-Article 1.0 Author-Name: Guglielmo Maria Caporale Author-X-Name-First: Guglielmo Maria Author-X-Name-Last: Caporale Author-Name: Alex Plastun Author-X-Name-First: Alex Author-X-Name-Last: Plastun Author-Name: Viktor Oliinyk Author-X-Name-First: Viktor Author-X-Name-Last: Oliinyk Title: The frequency of one-day abnormal returns and price fluctuations in the forex Abstract: This paper analyses the explanatory power of the frequency of abnormal returns in the FOREX over the period 1994–2019. The following hypotheses are tested: frequency of abnormal returns is asignificant driver of price movements (H1); it does not exhibit seasonal patterns (H2); it is stable over time (H3). For our purposes avariety of statistical methods are applied including ADF, PP and KPSS tests, Granger causality tests, correlation analysis, regression analysis, Probit and Logit regression models. No evidence is found of either seasonal patterns or instability. However, there appears to be astrong positive (negative) relationship between returns in the FOREX and the frequency of positive (negative) abnormal returns. On the whole, the results suggest that the latter is an important driver of price dynamics in the FOREX, is informative about crises and can be the basis of profitable trading strategies, which is inconsistent with market efficiency. Journal: Journal of Applied Economics Pages: 401-415 Issue: 1 Volume: 24 Year: 2021 Month: 01 X-DOI: 10.1080/15140326.2021.1953914 File-URL: http://hdl.handle.net/10.1080/15140326.2021.1953914 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:recsxx:v:24:y:2021:i:1:p:401-415 Template-Type: ReDIF-Article 1.0 Author-Name: Zhang Shaohua Author-X-Name-First: Zhang Author-X-Name-Last: Shaohua Author-Name: Farzan Yahya Author-X-Name-First: Farzan Author-X-Name-Last: Yahya Author-Name: Huy Pham Author-X-Name-First: Huy Author-X-Name-Last: Pham Author-Name: Muhammad Waqas Author-X-Name-First: Muhammad Author-X-Name-Last: Waqas Title: Do Transparency and Anti-Monopoly Policies Matter for Financial Development? Evidence from a Panel ARDL-PMG Approach Abstract: We examine the effect of macroeconomic stability, transparent government policies, and anti-monopoly policies on financial market development using extensive panel data of 113 countries over the period 2007 to 2017. By applying ARDL-PMG and controlling for GDP, trade openness, and market size, our findings reveal that macroeconomic stability fosters financial market development in both developing and developed countries. Effective transparency policies facilitate the link between macroeconomic stability and financial market development in the long-run. Furthermore, we find that anti-monopoly policies curb corruption and bureaucratic power to improve financial markets in the short-run. Still, a higher level of competition is more vulnerable to information asymmetry and adverse selection in the long-run. Journal: Journal of Applied Economics Pages: 1-16 Issue: 1 Volume: 24 Year: 2021 Month: 01 X-DOI: 10.1080/15140326.2020.1838113 File-URL: http://hdl.handle.net/10.1080/15140326.2020.1838113 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:recsxx:v:24:y:2021:i:1:p:1-16 Template-Type: ReDIF-Article 1.0 Author-Name: Željana Aljinović Barać Author-X-Name-First: Željana Aljinović Author-X-Name-Last: Barać Author-Name: Paško Burnać Author-X-Name-First: Paško Author-X-Name-Last: Burnać Author-Name: Andrijana Rogošić Author-X-Name-First: Andrijana Author-X-Name-Last: Rogošić Author-Name: Slavko Šodan Author-X-Name-First: Slavko Author-X-Name-Last: Šodan Author-Name: Tina Vuko Author-X-Name-First: Tina Author-X-Name-Last: Vuko Title: Cigarette price elasticity in Croatia – analysis of household budget surveys Abstract: This study estimates both conditional and unconditional cigarette price elasticity of quantity demanded in Croatia. Authors use Deaton’s method, also known as the Almost Ideal Demand-System (AIDS), to obtain consistent estimates of the cigarette price elasticity on the sample of Croatian households. The data from household surveys (HBS) conducted in Croatia for three periods (2010, 2011 and 2014 year) is provided by the Croatian Bureau of Statistics (CBS). Estimated unconditional cigarette price elasticity is −1.38 and estimated conditional price elasticity is −0.63. Simulation of the tax effects shows that rising specific excise tax for 10 percent would result in 2 percent decrease in cigarette consumption while total tax revenues would increase by 1.97 percent. This study provides evidence that the demanded quantity for cigarettes is responsive to their prices. Consequently, this implies that tobacco tax policy can be used as an efficient tool for reducing cigarette consumption in Croatia. Journal: Journal of Applied Economics Pages: 318-328 Issue: 1 Volume: 24 Year: 2021 Month: 01 X-DOI: 10.1080/15140326.2021.1928421 File-URL: http://hdl.handle.net/10.1080/15140326.2021.1928421 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:recsxx:v:24:y:2021:i:1:p:318-328 Template-Type: ReDIF-Article 1.0 Author-Name: Michael Adusei Author-X-Name-First: Michael Author-X-Name-Last: Adusei Author-Name: Ngozi Adeleye Author-X-Name-First: Ngozi Author-X-Name-Last: Adeleye Title: Corporate disclosure and credit market development Abstract: The nexus between corporate disclosure and credit market development as well as whether the nexus is sensitive to the income classification of countries is not well delineated in the empirical literature. The objective of this paper is to interrogate these issues. In addressing these important issues, we rely on a panel of 122 countries and deploy a battery of econometric techniques. Generally, we find that corporate disclosure promotes credit market development. The results from the analysis of subsamples suggest that the effect of corporate disclosure on credit market development is sensitive to creditor rights protection and the income status of a country. In particular, there is evidence that the interaction between corporate disclosure and creditor rights protection significantly benefits the credit markets only in upper-middle-income countries. Journal: Journal of Applied Economics Pages: 205-230 Issue: 1 Volume: 24 Year: 2021 Month: 01 X-DOI: 10.1080/15140326.2021.1901644 File-URL: http://hdl.handle.net/10.1080/15140326.2021.1901644 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:recsxx:v:24:y:2021:i:1:p:205-230 Template-Type: ReDIF-Article 1.0 Author-Name: Faisal Abbas Author-X-Name-First: Faisal Author-X-Name-Last: Abbas Author-Name: Shoaib Ali Author-X-Name-First: Shoaib Author-X-Name-Last: Ali Author-Name: Ghulame Rubbaniy Author-X-Name-First: Ghulame Author-X-Name-Last: Rubbaniy Title: Economics of capital adjustment in the US commercial banks: empirical analysis Abstract: Using GMM framework on the data of the US commercial banks spanning over 2002 to 2018, this study shows that banks adjust their regulatory capital ratios faster than traditional capital ratios. Our results show that the speed of adjustment of regulatory capital ratios and traditional capital ratios increases in bank capital adequacy and bank liquidity, respectively. We also find that the speed of adjustment of regulatory capital ratios of too-big-to-fail banks is lower than well-capitalized, adequately-capitalized, nationally-chartered, and state-chartered banks. In addition, the speed of adjustment of regulatory capital ratios of commercial banks is higher in the post-crisis period than the pre-crisis era. Although scholars suggest that adjustment of capital ratios through rebalancing liabilities is more beneficial to the banks, our findings show that banks also use their assets side of balance sheet to rebalance their capital ratios. Journal: Journal of Applied Economics Pages: 71-90 Issue: 1 Volume: 24 Year: 2021 Month: 01 X-DOI: 10.1080/15140326.2021.1881877 File-URL: http://hdl.handle.net/10.1080/15140326.2021.1881877 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:recsxx:v:24:y:2021:i:1:p:71-90 Template-Type: ReDIF-Article 1.0 Author-Name: Gongxing Wu Author-X-Name-First: Gongxing Author-X-Name-Last: Wu Author-Name: Bismark Addai Author-X-Name-First: Bismark Author-X-Name-Last: Addai Author-Name: Liping Yu Author-X-Name-First: Liping Author-X-Name-Last: Yu Author-Name: Jiarui Ran Author-X-Name-First: Jiarui Author-X-Name-Last: Ran Title: Evaluation of economics journals based on structural equation dimension reduction method Abstract: Evaluation of economic journals is helpful to improve the quality of these journals. In this study, we adopt a new structural equation dimension reduction method to evaluate economics journals. We classify evaluation indexes based on cluster analysis and factor analysis to establish a structural equation model, normalize the regression coefficients to obtain the weight, and then weigh and summarize the first-level evaluation indexes for the ultimate dimension reduction and evaluation. The evaluation based on JCR 2019 Economics journals shows that the structural equation dimension reduction method overcomes the randomness of manual classification of evaluation indicators. The linear dimension reduction method is conducive to preserving a large amount of information of the original indicators; evaluating the first-level indicators facilitates the comprehensive evaluation of journals; the first-level indicators evaluation approach is more objective and reflects systematic academic evaluation. It should be noted that the stability of the structural equation has a significant impact on evaluation, which is generally suitable for a relatively mature academic evaluation. Journal: Journal of Applied Economics Pages: 592-608 Issue: 1 Volume: 24 Year: 2021 Month: 01 X-DOI: 10.1080/15140326.2021.1984163 File-URL: http://hdl.handle.net/10.1080/15140326.2021.1984163 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:recsxx:v:24:y:2021:i:1:p:592-608 Template-Type: ReDIF-Article 1.0 Author-Name: Xiaoling Yu Author-X-Name-First: Xiaoling Author-X-Name-Last: Yu Author-Name: Yirong Huang Author-X-Name-First: Yirong Author-X-Name-Last: Huang Author-Name: Kaitian Xiao Author-X-Name-First: Kaitian Author-X-Name-Last: Xiao Title: Global economic policy uncertainty and stock volatility: evidence from emerging economies Abstract: We investigate the impact of the global economic policy uncertainty (GEPU) on stock volatility for nine emerging economies (Brazil, Russia, India, China, South Africa, Mexico, Indonesia, South Korea, and Turkey). We employ an expanded GARCH-MIDAS approach to connect low-frequency GEPU data and high-frequency stock data, assuming that GEPU affects stock volatility via the long-run component of total volatility. We not only use DM and SPA tests to statically evaluate the out-of-sample forecasting ability of the extended model, taking traditional GARCH model and GARCH-MIDAS model as benchmarks, but also use the Fluctuation test to examine the time-varyingly relative forecasting performance in the presence of potential instability. From the in-sample estimation results, we find that GEPU has empirically significant impact on stock volatility for the nine emerging economies. The out-of-sample forecasting results show that the GEPU-based model can improve forecasting performance of stock volatility for emerging markets, especially in unstable environments. Journal: Journal of Applied Economics Pages: 416-440 Issue: 1 Volume: 24 Year: 2021 Month: 01 X-DOI: 10.1080/15140326.2021.1953913 File-URL: http://hdl.handle.net/10.1080/15140326.2021.1953913 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:recsxx:v:24:y:2021:i:1:p:416-440 Template-Type: ReDIF-Article 1.0 # input file: RECS_A_2062110_J.xml processed with: repec_from_jats12.xsl darts-xml-transformations-20220907T060133 git hash: 85d61bd949 Author-Name: Dejene Gizaw Kidane Author-X-Name-First: Dejene Gizaw Author-X-Name-Last: Kidane Title: Market integration and price transmission in the regional grain markets in Ethiopia Abstract: Persistent increases in basic food prices have become a critical challenge in Ethiopia since 2006. This paper assesses whether the structure of the grain market has contributed to the price increases. Traders having market power could create commodity price stickiness, implying that what goes up does not come down, leading to price increases. The study examines price linkages between principal grain markets in Ethiopia, using monthly prices from the wheat, maize, and teff markets. The Engle-Granger cointegration test is used to check for cointegration, while the Threshold Autoregressive Model is employed to investigate potential asymmetric price transmission. The findings indicate that major grain markets in Ethiopia are well integrated. Moreover, the threshold cointegration model reveals that they are characterized by symmetric adjustment. Hence, I argue that there is insufficient evidence to support the claim that market structure contributes to the price increase in Ethiopian grain markets. Journal: Journal of Applied Economics Pages: 784-801 Issue: 1 Volume: 25 Year: 2022 Month: 12 X-DOI: 10.1080/15140326.2022.2062110 File-URL: http://hdl.handle.net/10.1080/15140326.2022.2062110 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:recsxx:v:25:y:2022:i:1:p:784-801 Template-Type: ReDIF-Article 1.0 # input file: RECS_A_2045467_J.xml processed with: repec_from_jats12.xsl darts-xml-transformations-20220907T060133 git hash: 85d61bd949 Author-Name: Umeair Shahzad Author-X-Name-First: Umeair Author-X-Name-Last: Shahzad Author-Name: Lingge Zhao Author-X-Name-First: Lingge Author-X-Name-Last: Zhao Author-Name: Jing Liu Author-X-Name-First: Jing Author-X-Name-Last: Liu Author-Name: Fukai Luo Author-X-Name-First: Fukai Author-X-Name-Last: Luo Title: Corporate value and trade-credit policies: evidence from China Abstract: This study evaluates the nexus of enterprise value and trade-credit strategies. Fixed-effects modeling is used for the baseline outcomes, and a difference-in-difference approach is applied as a quasi-natural experiment. The estimates are robust to alternative measures and distant covariates. The findings validate that enterprise value has a positive (negative) impact on trade-credit (supplies), (demand). The said effect is more pronounced in SOEs, revealing a critical role in capital mobilization. The additional analyses show that financially constrained and equity reliant firms are more likely to exploit firm value in trade-credit management. The micro aspect of this study suggests that enterprise value can allow managers to shape non-price competitive strategies and it also offers incentives to maintain financial slack. On a macro level, the study suggests that enterprise value has a critical role in capital mobilization and enhancing the purchasing power in the overall economy. Journal: Journal of Applied Economics Pages: 412-432 Issue: 1 Volume: 25 Year: 2022 Month: 12 X-DOI: 10.1080/15140326.2022.2045467 File-URL: http://hdl.handle.net/10.1080/15140326.2022.2045467 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:recsxx:v:25:y:2022:i:1:p:412-432 Template-Type: ReDIF-Article 1.0 # input file: RECS_A_2107371_J.xml processed with: repec_from_jats12.xsl darts-xml-transformations-20220907T060133 git hash: 85d61bd949 Author-Name: Yuanyuan Gu Author-X-Name-First: Yuanyuan Author-X-Name-Last: Gu Author-Name: Mary Arends-Kuenning Author-X-Name-First: Mary Author-X-Name-Last: Arends-Kuenning Title: Investment in children’s higher education and household asset allocation in China Abstract: This paper explores how the anticipated expenditure on children’s college education affects household asset allocation, applying a two-stage budgeting model of asset demand by using the 2016 China Family Panel Studies Data (CFPS). The empirical results show that if a household plans to send a child to college, the probability of holding risky assets increases by 1.7 percentage points, and the probability of holding investable housing assets increases by 3.8 percentage points. Furthermore, we also find that as the expected year of college entry approaches, households prefer less liquid assets. When the expected year is still far in the future, they prefer liquid assets with high-risk and illiquid assets with high-return. These findings imply that policymakers should make reforms in the financial market and real estate market, as well as provide more kinds of investment products, thereby promoting household investment diversification. Journal: Journal of Applied Economics Pages: 1081-1126 Issue: 1 Volume: 25 Year: 2022 Month: 12 X-DOI: 10.1080/15140326.2022.2107371 File-URL: http://hdl.handle.net/10.1080/15140326.2022.2107371 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:recsxx:v:25:y:2022:i:1:p:1081-1126 Template-Type: ReDIF-Article 1.0 # input file: RECS_A_2034469_J.xml processed with: repec_from_jats12.xsl darts-xml-transformations-20220907T060133 git hash: 85d61bd949 Author-Name: Marek Louzek Author-X-Name-First: Marek Author-X-Name-Last: Louzek Title: An economic approach to marriage Abstract: The purpose of this paper is to outline an economic approach to marriage. The first part contains an introduction to the economics of a family. The second part analyses the marriage market. The third part discusses the division of household chores in a household. The fourth part examines marriage as a cooperative or non-cooperative game. The fifth part deals with the dilemma between monogamy and polygamy on marriage markets. The sixth part confronts the economics of marriage with the findings of sociobiology. Journal: Journal of Applied Economics Pages: 300-315 Issue: 1 Volume: 25 Year: 2022 Month: 12 X-DOI: 10.1080/15140326.2022.2034469 File-URL: http://hdl.handle.net/10.1080/15140326.2022.2034469 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:recsxx:v:25:y:2022:i:1:p:300-315 Template-Type: ReDIF-Article 1.0 # input file: RECS_A_2129145_J.xml processed with: repec_from_jats12.xsl darts-xml-transformations-20220907T060133 git hash: 85d61bd949 Author-Name: Sajad Ebrahimi Author-X-Name-First: Sajad Author-X-Name-Last: Ebrahimi Title: Financial constraint and output pricing: the case of international sanctions against Iran Abstract: This paper examines whether financial constraints of firms influence their pricing behavior. To do so, a product-level dataset is used from Iranian-listed manufacturing companies. This study employs the imposition of international sanctions against Iran in 2012 as an exogenous shock to identify the effect of financial constraints. According to the results financially restricted firms keep their prices lower than their counterparts to increase their internal financial resources. The results show the difference between output prices of constrained and unconstrained firms rising after the imposition of sanctions. In addition, this relationship is affected by the degree of export-orientation of firms, and only exporter firms that experienced the negative demand shock after the sanctions, set their price lower to reduce the financial pressures. Also, the degree of dependency on imported input does not play a significant role in the relationship and ownership structure of firms has a significant impact on the relationship. Journal: Journal of Applied Economics Pages: 1219-1238 Issue: 1 Volume: 25 Year: 2022 Month: 12 X-DOI: 10.1080/15140326.2022.2129145 File-URL: http://hdl.handle.net/10.1080/15140326.2022.2129145 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:recsxx:v:25:y:2022:i:1:p:1219-1238 Template-Type: ReDIF-Article 1.0 # input file: RECS_A_2153545_J.xml processed with: repec_from_jats12.xsl darts-xml-transformations-20220907T060133 git hash: 85d61bd949 Author-Name: Kai Wan Author-X-Name-First: Kai Author-X-Name-Last: Wan Author-Name: Xiaolin Yu Author-X-Name-First: Xiaolin Author-X-Name-Last: Yu Title: Impact of mixed ownership reforms on firm innovation–empirical evidence from China Abstract: Based on data from Chinese A-share listed companies from 2008–2018, an investigation is carried out upon the impact of mixed ownership reforms and relative control transfers on corporate innovation before and after the occurrence of mixed ownership reforms, and relative control transfers in state-owned and private enterprises, as well as their mechanisms of action. A double-difference propensity score matching method is adopted. It has been found that mixed ownership reforms are more likely to promote innovation in SOEs, particularly in monopolistic industries. A further sub-sample test reveals that in state-owned enterprises in monopolistic industries, the acquisition of relative control by private shares can amplify the innovation effect of mixed ownership reforms. In private companies in competitive industries, state-owned shares can only fuel innovation if they gain relative control. Reducing agency costs and easing financing constraints are important channels for mixed ownership reform to promote corporate innovation. Journal: Journal of Applied Economics Pages: 1339-1354 Issue: 1 Volume: 25 Year: 2022 Month: 12 X-DOI: 10.1080/15140326.2022.2153545 File-URL: http://hdl.handle.net/10.1080/15140326.2022.2153545 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:recsxx:v:25:y:2022:i:1:p:1339-1354 Template-Type: ReDIF-Article 1.0 # input file: RECS_A_2013007_J.xml processed with: repec_from_jats12.xsl darts-xml-transformations-20220907T060133 git hash: 85d61bd949 Author-Name: Zheng Li Author-X-Name-First: Zheng Author-X-Name-Last: Li Title: The intertemporal connection between preschool delay of gratification and later academic performance in primary schools: evidence from China Abstract: A child’s ability to resist temptation is an important non-cognitive skill and associated with lifetime benefits. Using a longitudinal dataset, this study links Chinese preschoolers’ delay of gratification to their later scholastic performance during primary education. An empirical investigation is conducted to explore the potential relation between them. The results show that this personality trait, revealed at age 4–5 years by using the marshmallow experiment, has a long-lasting and positive contribution, even after accounting for students’ cognitive performance and other non-cognitive skills measured at age 10–11 years. Our findings in a developing country context are supported by evidence from developed countries. Journal: Journal of Applied Economics Pages: 145-155 Issue: 1 Volume: 25 Year: 2022 Month: 12 X-DOI: 10.1080/15140326.2021.2013007 File-URL: http://hdl.handle.net/10.1080/15140326.2021.2013007 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:recsxx:v:25:y:2022:i:1:p:145-155 Template-Type: ReDIF-Article 1.0 # input file: RECS_A_2022828_J.xml processed with: repec_from_jats12.xsl darts-xml-transformations-20220907T060133 git hash: 85d61bd949 Author-Name: Bismark Addai Author-X-Name-First: Bismark Author-X-Name-Last: Addai Author-Name: Wenjin Tang Author-X-Name-First: Wenjin Author-X-Name-Last: Tang Author-Name: Annette Serwaa Agyeman Author-X-Name-First: Annette Serwaa Author-X-Name-Last: Agyeman Title: Examining the impact of income diversification on bank performance: Are foreign banks heterogeneous? Abstract: This study examines the heterogeneity of foreign banks in the income diversification and performance nexus. We utilize annual bank data across 46 countries in Sub-Saharan Africa over the period 2011–2018 and find that increased income diversification improves banks performance, and the Global and Emerging banks perform better than the regional African and domestic banks. Regarding how different foreign banks benefit from income diversification, we find that Global banks benefit from diversification more than their counterparts operating in the region. The Emerging country banks outperform the African and domestic banks, while the local banks in the region benefit from income diversification more than the regional African banks. The results of this study suggest that the emerging banks and the regional African banks do not always exhibit similar features like the Global banks. The observations in this study make significant contribution to the literature by providing new insight into the non-homogeneity of foreign banks in the income diversification pendulum. Journal: Journal of Applied Economics Pages: 1-21 Issue: 1 Volume: 25 Year: 2022 Month: 12 X-DOI: 10.1080/15140326.2021.2022828 File-URL: http://hdl.handle.net/10.1080/15140326.2021.2022828 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:recsxx:v:25:y:2022:i:1:p:1-21 Template-Type: ReDIF-Article 1.0 # input file: RECS_A_2008761_J.xml processed with: repec_from_jats12.xsl darts-xml-transformations-20220907T060133 git hash: 85d61bd949 Author-Name: Damian Pierri Author-X-Name-First: Damian Author-X-Name-Last: Pierri Author-Name: Enrique Kawamura Author-X-Name-First: Enrique Author-X-Name-Last: Kawamura Title: Life cycle, financial frictions and informal labor markets: the case of Chile Abstract: We study the implications of economic policies on household’s decisions. We focus on Chile in 2019. Using a life-cycle search model and survey data, we found that an equivalent change in labor tax rates and non-contributory pensions (NCP) have opposite effects on labor markets, specifically on informality and unemployment duration. NCP offers a milder trade-off as it produces a second-order increase in informality. However, due to the presence of informal labor markets and financial frictions, non-retired agents increase their current consumption only after a tax cut. That is, a positive wealth shock can reduce consumption. When we consider the impact on welfare, as households are assumed to value only consumption, cutting taxes seems to be preferred. We characterize labor market and consumption-savings decisions. We found two effects operating in opposite directions: substitution and wealth. The latter prevails suggesting that the life cycle aspects of the labor market are critical. Journal: Journal of Applied Economics Pages: 93-120 Issue: 1 Volume: 25 Year: 2022 Month: 12 X-DOI: 10.1080/15140326.2021.2008761 File-URL: http://hdl.handle.net/10.1080/15140326.2021.2008761 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:recsxx:v:25:y:2022:i:1:p:93-120 Template-Type: ReDIF-Article 1.0 # input file: RECS_A_2056407_J.xml processed with: repec_from_jats12.xsl darts-xml-transformations-20220907T060133 git hash: 85d61bd949 Author-Name: Marco V. Sánchez Author-X-Name-First: Marco V. Author-X-Name-Last: Sánchez Author-Name: Martín Cicowiez Author-X-Name-First: Martín Author-X-Name-Last: Cicowiez Title: Optimising policies to achieve agricultural transformation objectives: an application for Ethiopia Abstract: Policymakers seek objectives that can be conflicting under a budget constraint. Solving this problem requires a multi-criteria decision-making technique whereby equations of a dynamic computable general equilibrium model are constraints to a policy optimisation problem. We illustrate this approach in the framework of agricultural transformation objectives. Using data for Ethiopia we show the potential conflict between policy objectives and how policies are optimally determined to arrive at the best possible compromise. Should Ethiopian policymakers pursue increasing agri-food GDP, rural household welfare, or agri-food exports, for example, they will not necessarily observe strong trade-offs between these objectives. However, if they invest in different agricultural sectors to achieve such objectives, the way in which they finance the investment will result in macroeconomic trade-offs. Only when the new investment is mostly allocated to oilseeds and coffee will there be not only simultaneous but also maximised improvement in all three policy objectives. Journal: Journal of Applied Economics Pages: 765-783 Issue: 1 Volume: 25 Year: 2022 Month: 12 X-DOI: 10.1080/15140326.2022.2056407 File-URL: http://hdl.handle.net/10.1080/15140326.2022.2056407 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:recsxx:v:25:y:2022:i:1:p:765-783 Template-Type: ReDIF-Article 1.0 # input file: RECS_A_2084687_J.xml processed with: repec_from_jats12.xsl darts-xml-transformations-20220907T060133 git hash: 85d61bd949 Author-Name: Antonio Menezes Author-X-Name-First: Antonio Author-X-Name-Last: Menezes Author-Name: Dario Sciulli Author-X-Name-First: Dario Author-X-Name-Last: Sciulli Title: The effects of contract-type mismatch and matching frictions on unemployment duration: evidence for Portugal Abstract: This paper analyses the impact of matching frictions in the Portuguese labour market on individual unemployment hazard rates and unemployment durations. The coexistence of permanent contracts and temporary contracts in the Portuguese (dual) labour-market is akin to a matching friction, with a contract-type mismatch between jobseekers who prefer permanent contracts, whereas firms, in turn, prefer to offer temporary contracts. The paper uses a rich micro dataset which allows to compute a time and space varying contract-type mismatch index, over 86 local labour markets (job-centers of the Portuguese Public Employment System) and five years. Employing discrete time hazard models and a stock-flow matching mechanism, we find that local labour markets with higher contract-type mismatch rates are characterized by lower hazard rates and longer unemployment duration. Improving the desirability of temporary contracts and information about local contract-type mismatch rates may reduce matching frictions and average unemployment duration. Journal: Journal of Applied Economics Pages: 936-961 Issue: 1 Volume: 25 Year: 2022 Month: 12 X-DOI: 10.1080/15140326.2022.2084687 File-URL: http://hdl.handle.net/10.1080/15140326.2022.2084687 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:recsxx:v:25:y:2022:i:1:p:936-961 Template-Type: ReDIF-Article 1.0 # input file: RECS_A_2021748_J.xml processed with: repec_from_jats12.xsl darts-xml-transformations-20220907T060133 git hash: 85d61bd949 Author-Name: Xu Si Author-X-Name-First: Xu Author-X-Name-Last: Si Author-Name: Fu-Ling Chu Author-X-Name-First: Fu-Ling Author-X-Name-Last: Chu Title: The impact of the Public Pension Program on the elderly’s medical expenditures: a regression discontinuity approach Abstract: The surge in aging societies has increased the relevance of retirement as a research topic. Utilizing the public data obtained from the China Family Panel Studies, this paper applies a regression discontinuity approach to assess the impact of China’s current Public Pension Program on the medical expenditures of the elderly. The results reveal that the Public Pension Program increases out-of-pocket medical expenditures, hospitalization expenditures, and other injury and illness expenses. The results also report that being insured by Basic Social Health Insurance has a mitigating effect on the medical expenditures of the elderly; furthermore, there are significant differences in the use of medical resources between regions and urban and rural areas in China. Therefore, ensuring the sustainability of pension funds and social health insurance funds and developing customized private insurance according to areas can play a positive role in improving the use of medical resources and relieving the medical burden on the elderly population. Journal: Journal of Applied Economics Pages: 178-196 Issue: 1 Volume: 25 Year: 2022 Month: 12 X-DOI: 10.1080/15140326.2021.2021748 File-URL: http://hdl.handle.net/10.1080/15140326.2021.2021748 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:recsxx:v:25:y:2022:i:1:p:178-196 Template-Type: ReDIF-Article 1.0 # input file: RECS_A_2045469_J.xml processed with: repec_from_jats12.xsl darts-xml-transformations-20220907T060133 git hash: 85d61bd949 Author-Name: Hany Guirguis Author-X-Name-First: Hany Author-X-Name-Last: Guirguis Author-Name: Tin Shan (Michael) Suen Author-X-Name-First: Tin Shan (Michael) Author-X-Name-Last: Suen Title: Advances in estimating the Phillips curve Abstract: Many studies have documented the missing relationship between PCE inflation and the labor market slack in the last 20 years. This paper first presents evidence of a strong sensitivity of price inflation to labor market tightness once we remove the late 90s from our sample and account for the Phillips curve’s endogeneity and nonlinearity. However, the Phillips curve can neither explain nor forecast the Core PCE inflation rate since 1995. This shortcoming is of great concern, given that the Fed utilizes the Core PCE as its primary tool to measure inflation and formulate its monetary policy. Second, we propose the Underlying Inflation Gauge (UIG) and the Median CPI to measure inflation better. We show that the Convex Phillips curve successfully explains and forecasts more than 90% of the UIG inflation movements from 1995:05 to 2019:03 Journal: Journal of Applied Economics Pages: 621-642 Issue: 1 Volume: 25 Year: 2022 Month: 12 X-DOI: 10.1080/15140326.2022.2045469 File-URL: http://hdl.handle.net/10.1080/15140326.2022.2045469 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:recsxx:v:25:y:2022:i:1:p:621-642 Template-Type: ReDIF-Article 1.0 # input file: RECS_A_2039889_J.xml processed with: repec_from_jats12.xsl darts-xml-transformations-20220907T060133 git hash: 85d61bd949 Author-Name: Fakhri J. Hasanov Author-X-Name-First: Fakhri J. Author-X-Name-Last: Hasanov Author-Name: Moayad H. Al Rasasi Author-X-Name-First: Moayad H. Author-X-Name-Last: Al Rasasi Author-Name: Salah S. Alsayaary Author-X-Name-First: Salah S. Author-X-Name-Last: Alsayaary Author-Name: Ziyadh Alfawzan Author-X-Name-First: Ziyadh Author-X-Name-Last: Alfawzan Title: Money demand under a fixed exchange rate regime: the case of Saudi Arabia Abstract: This paper reviews earlier studies and shows that the money demand (MD) relationship under a fixed exchange rate (ER) regime differs from that under a floating ER regime, mainly due to the limited role of monetary policy in the former regime. It then empirically demonstrates that an open-economy model augmented with country-specific factors is a better framework for characterizing the MD function under a fixed ER regime by applying cointegration and equilibrium correction modeling to the Saudi data as a case study. The main message for monetary authorities is that there are other factors, besides those theoretically predicted, shaping MD under a fixed ER regime. This information is important for providing adequate money supply to support economic growth and maintain the stability of the fixed ER, as well as for checking the stability of the MD to make appropriate policy decisions. Journal: Journal of Applied Economics Pages: 385-411 Issue: 1 Volume: 25 Year: 2022 Month: 12 X-DOI: 10.1080/15140326.2022.2039889 File-URL: http://hdl.handle.net/10.1080/15140326.2022.2039889 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:recsxx:v:25:y:2022:i:1:p:385-411 Template-Type: ReDIF-Article 1.0 # input file: RECS_A_2056300_J.xml processed with: repec_from_jats12.xsl darts-xml-transformations-20220907T060133 git hash: 85d61bd949 Author-Name: Musefiu Adebowale Adeleke Author-X-Name-First: Musefiu Adebowale Author-X-Name-Last: Adeleke Author-Name: Olabanji Benjamin Awodumi Author-X-Name-First: Olabanji Benjamin Author-X-Name-Last: Awodumi Title: Modelling time and frequency connectedness among energy, agricultural raw materials and food markets Abstract: The study analyzes volatility connectedness of energy, agricultural raw materials and food markets for both time and frequency domains (January 1960 to August 2020). The DY and BK approaches are adopted at both commodity-group and sub-group levels. Time domain estimates indicate that the energy market produced more risk spillover in the food market than raw material market. Rubber contributes the largest to spillover in the crude oil and sugar markets. Estimates from frequency domain reveal that raw material and food markets are net transmitter and net recipient of volatility spillover, respectively, at the lowest and highest frequency domains. Crude oil is the largest source of spillover in the tobacco, meat and natural gas markets in the high-frequency band. Finally, the meat and crude oil markets are the largest receiver of shock spillover from all other markets over the low- and high-frequency bands, respectively. Policy implications are derived from the findings. Journal: Journal of Applied Economics Pages: 644-662 Issue: 1 Volume: 25 Year: 2022 Month: 12 X-DOI: 10.1080/15140326.2022.2056300 File-URL: http://hdl.handle.net/10.1080/15140326.2022.2056300 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:recsxx:v:25:y:2022:i:1:p:644-662 Template-Type: ReDIF-Article 1.0 # input file: RECS_A_2029071_J.xml processed with: repec_from_jats12.xsl darts-xml-transformations-20220907T060133 git hash: 85d61bd949 Author-Name: Caroline Stiel Author-X-Name-First: Caroline Author-X-Name-Last: Stiel Author-Name: Alexander Schiersch Author-X-Name-First: Alexander Author-X-Name-Last: Schiersch Title: Testing the superstar firm hypothesis Abstract: Firms with superior productivity, labeled superstar firms, are argued to be the link between rising concentration and the fall of the aggregate labor share in the US. This analysis confirms that similar evidence is found within the European context: the market share and firm size increase, whereas the labor share decreases with productivity. One of the much discussed mechanisms behind this development is the spreading of fixed overhead labor costs: Highly productive firms gain market share, and can simultaneously spread fixed overhead labor costs over more output, thereby reducing their own labor share and the aggregated labor share of the industry. We show that this mechanism can be tested empirically. However, using German firm-level data, we do not find any empirical evidence of it. Our analysis contributes to the ongoing debate by removing one of the proposed mechanisms from the list of potential explanations for the rise of superstar firms. Journal: Journal of Applied Economics Pages: 583-603 Issue: 1 Volume: 25 Year: 2022 Month: 12 X-DOI: 10.1080/15140326.2022.2029071 File-URL: http://hdl.handle.net/10.1080/15140326.2022.2029071 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:recsxx:v:25:y:2022:i:1:p:583-603 Template-Type: ReDIF-Article 1.0 # input file: RECS_A_2104553_J.xml processed with: repec_from_jats12.xsl darts-xml-transformations-20220907T060133 git hash: 85d61bd949 Author-Name: Naseem Faraz Author-X-Name-First: Naseem Author-X-Name-Last: Faraz Author-Name: Ghulam Samad Author-X-Name-First: Ghulam Author-X-Name-Last: Samad Title: Public Sector Enterprises (PSEs) in Post-Privatization: Evidence from Pakistan Abstract: Privatization of public-sector enterprises (PSEs) has generated billions of dollars to support fiscal and macroeconomic imbalances in several developing countries. A limited literature evaluates the recent privatization program impacts on the PSEs. This study empirically investigated the privatization impact on the performance and efficiency of the firms in post-privatization period in Pakistan. Firm-level data are used to evaluate the privatization effects on performance and efficiency of the privatized PSEs. We use difference-in-difference approach that exploits within-firm variation in the outcome variables over time. The regression results show that the performance of only few firms improved while it remains negative or insignificant largely. The efficiency of the firms is also not improved significantly in post-privatization period. Journal: Journal of Applied Economics Pages: 1239-1259 Issue: 1 Volume: 25 Year: 2022 Month: 12 X-DOI: 10.1080/15140326.2022.2104553 File-URL: http://hdl.handle.net/10.1080/15140326.2022.2104553 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:recsxx:v:25:y:2022:i:1:p:1239-1259 Template-Type: ReDIF-Article 1.0 # input file: RECS_A_2016350_J.xml processed with: repec_from_jats12.xsl darts-xml-transformations-20220907T060133 git hash: 85d61bd949 Author-Name: Pablo A. Garcia-Fuentes Author-X-Name-First: Pablo A. Author-X-Name-Last: Garcia-Fuentes Author-Name: P. Lynn Kennedy Author-X-Name-First: P. Lynn Author-X-Name-Last: Kennedy Author-Name: Gustavo F. C. Ferreira Author-X-Name-First: Gustavo F. C. Author-X-Name-Last: Ferreira Title: Price response of the high fructose corn syrup industry in the United States: a Bertrand model application Abstract: This paper uses a Bertrand duopoly model application and derives a high fructose corn syrup (HFCS) price reaction function that shows the response of the price of HFCS to changes in the price of sugar. It conducts cointegration analysis and assesses the performance of the HFCS price reaction model by estimating a Dynamic Ordinary Least-Squares model. It finds that the prices of HFCS-55, sugar, and corn are cointegrated over the period 1981:1 to 2017:12. The estimated long-run relationship shows that a one percent increase in the price of sugar increases the price of HFCS-55 by 0.19 percent. Additionally, the price of corn has a positive effect on the price of HFCS-55. The model and the results offer important insights for antitrust litigation. Journal: Journal of Applied Economics Pages: 156-177 Issue: 1 Volume: 25 Year: 2022 Month: 12 X-DOI: 10.1080/15140326.2021.2016350 File-URL: http://hdl.handle.net/10.1080/15140326.2021.2016350 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:recsxx:v:25:y:2022:i:1:p:156-177 Template-Type: ReDIF-Article 1.0 # input file: RECS_A_2072675_J.xml processed with: repec_from_jats12.xsl darts-xml-transformations-20220907T060133 git hash: 85d61bd949 Author-Name: Wen Yue Author-X-Name-First: Wen Author-X-Name-Last: Yue Title: Human capital and firms’ markup: evidence from China Abstract: Based on the university enrollment expansion policy implemented by the Chinese government in 1999, I use the difference-in-difference method to explore the effects of human capital expansion on firms’ markup and the influencing mechanism. Findings suggest that human capital expansion significantly promotes the improvement of firms’ markup, which remains true after a series of robustness tests. The analysis of the influencing mechanism shows that on the one hand, human capital expansion promotes the improvement of firms’ production efficiency and improves their markup through the production efficiency channel. On the other hand, human capital expansion improves the market pricing power of firms and exerts a significant positive impact on their markup through the market pricing channel. Further analysis also shows the varying impacts of human capital expansion on the markup of different types of firms. This study enhances the understanding of the microeconomic effects of human capital expansion from the markup perspective. Journal: Journal of Applied Economics Pages: 878-906 Issue: 1 Volume: 25 Year: 2022 Month: 12 X-DOI: 10.1080/15140326.2022.2072675 File-URL: http://hdl.handle.net/10.1080/15140326.2022.2072675 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:recsxx:v:25:y:2022:i:1:p:878-906 Template-Type: ReDIF-Article 1.0 # input file: RECS_A_2124085_J.xml processed with: repec_from_jats12.xsl darts-xml-transformations-20220907T060133 git hash: 85d61bd949 Author-Name: Johane Dikgang Author-X-Name-First: Johane Author-X-Name-Last: Dikgang Author-Name: Zafeer Ravat Author-X-Name-First: Zafeer Author-X-Name-Last: Ravat Author-Name: Jugal Mahabir Author-X-Name-First: Jugal Author-X-Name-Last: Mahabir Title: Influences of various pricing points: an experimental study of plastic bags in Johannesburg, South Africa Abstract: Policymakers have little experience regarding designing the right levels of pricing for plastic bags. The ineffectiveness of charging for bags, in countries such as South Africa, makes it imperative that we map the demand curve. Getting the charge “right” depends on the size of the externality. Charging for bags is therefore an effective intervention to encourage consumers to carry their own bags to the stores. We employ a contingent behaviour (CB) dataset necessary to estimate the charge level that is likely to lead to a reduction in bag use over time. The results of the random effects Tobit model suggest that the current charge of US$0.03 was found to be too low, and highly inelastic. A charge of US$0.50 has potential to reduce unnecessary plastic use and is still lower than the price of alternatives; therefore, there is no danger of consumers shifting to alternatives that may cause more harm. Journal: Journal of Applied Economics Pages: 1200-1218 Issue: 1 Volume: 25 Year: 2022 Month: 12 X-DOI: 10.1080/15140326.2022.2124085 File-URL: http://hdl.handle.net/10.1080/15140326.2022.2124085 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:recsxx:v:25:y:2022:i:1:p:1200-1218 Template-Type: ReDIF-Article 1.0 # input file: RECS_A_1816132_J.xml processed with: repec_from_jats12.xsl darts-xml-transformations-20220907T060133 git hash: 85d61bd949 Author-Name: Emile du Plessis Author-X-Name-First: Emile Author-X-Name-Last: du Plessis Title: Dynamic forecasting of banking crises with a Qual VAR Abstract: This paper applies a Qual VAR approach to generate a continuous banking crisis indicator from an underlying latent variable using a Markov Chain Monte Carlo algorithm. Four decades of banking crises are assessed by accounting for the evolutionary nature of precursors, as measured through periodic, regional, and developmental effects using a representative sample of countries. Aggregate results from forecast error variance decomposition show that banking sector variables explain nearly half of total variation, external sector a third and real sector a fifth. Findings suggest that recursive out-of-sample forecasts up to 12-months preceding a banking crisis render vital early warning signals, and as based on quarterly data, support expeditious response times. In out-of-sample forecasting, the Qual VAR outperforms a probit model. Improved forecasting performance may assist banking oversight departments and support remediation efforts of policymakers to adequately and timeously respond to banking crises. Journal: Journal of Applied Economics Pages: 477-503 Issue: 1 Volume: 25 Year: 2022 Month: 12 X-DOI: 10.1080/15140326.2020.1816132 File-URL: http://hdl.handle.net/10.1080/15140326.2020.1816132 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:recsxx:v:25:y:2022:i:1:p:477-503 Template-Type: ReDIF-Article 1.0 # input file: RECS_A_2045468_J.xml processed with: repec_from_jats12.xsl darts-xml-transformations-20220907T060133 git hash: 85d61bd949 Author-Name: Yoichiro Fujii Author-X-Name-First: Yoichiro Author-X-Name-Last: Fujii Author-Name: Noriko Inakura Author-X-Name-First: Noriko Author-X-Name-Last: Inakura Title: Do individuals have consistent risk preferences across domains?: evidence from the Japanese insurance market Abstract: The risk attitude plays an important role in analyzing decision making under uncertainty. It is essential to confirm whether the risk aversion parameter in a certain situation, called “domain,” can be applied to other situations. Using a dataset on hospitalization insurance policies in Japan, this study tests whether individuals’ risk preferences remain consistent across domains. Based on the assumption of expected utility maximizer, we derive a plausible distribution of the degree of risk aversion. We find that degree of risk aversion is consistent between hospitalization benefits and additional insurance for specific diseases. Contrarily, the degree of risk aversion from hospitalization benefits has a negative relationship with that based on a survey question on the self-assessment of general preferences. This result indicates that the imputation of risk aversion from the literature would distort research results markedly if characteristics of the domains targeted by both previous research and this study differ. Journal: Journal of Applied Economics Pages: 605-621 Issue: 1 Volume: 25 Year: 2022 Month: 12 X-DOI: 10.1080/15140326.2022.2045468 File-URL: http://hdl.handle.net/10.1080/15140326.2022.2045468 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:recsxx:v:25:y:2022:i:1:p:605-621 Template-Type: ReDIF-Article 1.0 # input file: RECS_A_2007725_J.xml processed with: repec_from_jats12.xsl darts-xml-transformations-20220907T060133 git hash: 85d61bd949 Author-Name: Mingming Jiang Author-X-Name-First: Mingming Author-X-Name-Last: Jiang Author-Name: Rongrong Sun Author-X-Name-First: Rongrong Author-X-Name-Last: Sun Author-Name: Bo Zhang Author-X-Name-First: Bo Author-X-Name-Last: Zhang Title: Social networks and household financial decisions: evidence from China Abstract: Based on three waves of a nationwide household survey in China, we demonstrate that social networks facilitate household financial market participation and risky asset holding. By constructing an index that considers various dimensions of social networks, our extensive empirical analysis suggests that a higher value of the social network index significantly increases the probability of a household’s market participation and the fraction of risky assets holding in both formal and informal financial markets. This finding is robust across different waves of survey data; it is also robust to alternative index construction, estimation techniques, and variable definitions. We derive explicit expressions for the coefficients and standard errors of the interaction effects in the Probit and Tobit models and reveal that the impact of social networks is transmitted to household financial decisions through two channels: an information channel and a risk-sharing channel. Journal: Journal of Applied Economics Pages: 58-92 Issue: 1 Volume: 25 Year: 2022 Month: 12 X-DOI: 10.1080/15140326.2021.2007725 File-URL: http://hdl.handle.net/10.1080/15140326.2021.2007725 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:recsxx:v:25:y:2022:i:1:p:58-92 Template-Type: ReDIF-Article 1.0 # input file: RECS_A_2036566_J.xml processed with: repec_from_jats12.xsl darts-xml-transformations-20220907T060133 git hash: 85d61bd949 Author-Name: Mingming Jiang Author-X-Name-First: Mingming Author-X-Name-Last: Jiang Author-Name: Jianhong Qi Author-X-Name-First: Jianhong Author-X-Name-Last: Qi Author-Name: Zhitong Zhang Author-X-Name-First: Zhitong Author-X-Name-Last: Zhang Title: Under the same roof? The Green Belt and Road Initiative and firms’ heterogeneous responses Abstract: Launched in 2017 the Green Belt and Road policy acts as an important upgrade to China’s recent core foreign strategy (i.e., the Belt and Road Initiative) and aims to balance the economic development and environmental harmony in countries along the routes. In this paper, we take the implementation of this green policy as a quasi-natural experiment and employ a difference-in-difference method to identify the impact of the policy on Chinese outward direct investment (ODI) firms. We find that the policy has a significant and robust effect on improving the overall performance of ODI firms. Under the same policy roof, however, the seemingly similar impact masks the distinct responses of state-owned and non-state-owned enterprises. Non-state-owned enterprises improve their performance by pursuing green credits and technology upgrades. State-owned enterprises achieve improved performance through better compliance with the green policy and the accompanying government subsidies, in addition to technology upgrades. Journal: Journal of Applied Economics Pages: 316-338 Issue: 1 Volume: 25 Year: 2022 Month: 12 X-DOI: 10.1080/15140326.2022.2036566 File-URL: http://hdl.handle.net/10.1080/15140326.2022.2036566 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:recsxx:v:25:y:2022:i:1:p:316-338 Template-Type: ReDIF-Article 1.0 # input file: RECS_A_2053940_J.xml processed with: repec_from_jats12.xsl darts-xml-transformations-20220907T060133 git hash: 85d61bd949 Author-Name: Gil Kim Author-X-Name-First: Gil Author-X-Name-Last: Kim Author-Name: David Vera Author-X-Name-First: David Author-X-Name-Last: Vera Title: The effect of oil price fluctuation on the economy: what can we learn from alternative models? Abstract: Following the exisiting literature, we present the most up-to-date estimates of oil shocks and the response of the U.S. economy. Regardless of model specifications, oil supply shocks have a negative effect on the U.S. real GDP, albeit the magnitude of responses is different across models. Aggregate demand shocks and oil-market specific shocks appear to have a positive effect on CPI, while there is little evidence of inflationary impact from the oil supply shocks. Overall, our results suggest that to evaluate the impact of an unexpected change on the price of oil on economic activity, identifying the source of the price of oil fluctuation might be one of the critical steps since the response of the GDP and CPI could vary depending on the source of the shocks. Journal: Journal of Applied Economics Pages: 856-877 Issue: 1 Volume: 25 Year: 2022 Month: 12 X-DOI: 10.1080/15140326.2022.2053940 File-URL: http://hdl.handle.net/10.1080/15140326.2022.2053940 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:recsxx:v:25:y:2022:i:1:p:856-877 Template-Type: ReDIF-Article 1.0 # input file: RECS_A_2045849_J.xml processed with: repec_from_jats12.xsl darts-xml-transformations-20220907T060133 git hash: 85d61bd949 Author-Name: Jia Ji Author-X-Name-First: Jia Author-X-Name-Last: Ji Title: Exchange rate pass-through to domestic inflation in a pricing model incorporating distribution chain structure Abstract: This study investigates the pass-through of exchange rate shocks to different aggregate prices in China. The baseline analysis is carried out with vector autoregressive models incorporating a distribution chain of pricing, and various modifications are examined for robustness. The central results show an appreciation of the local currency tends to suppress domestic inflation at the early production stages, although the pass-through effect only amounts to a moderate degree for consumer prices. As the contribution of external factors to the persistently low inflation environment mostly has been modest, the paper suggests that the monetary authority can contribute to the permanent component of low exchange rate pass-through to domestic inflation, by continually conducting a credible and efficient stable-inflation policy. Journal: Journal of Applied Economics Pages: 432-453 Issue: 1 Volume: 25 Year: 2022 Month: 12 X-DOI: 10.1080/15140326.2022.2045849 File-URL: http://hdl.handle.net/10.1080/15140326.2022.2045849 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:recsxx:v:25:y:2022:i:1:p:432-453 Template-Type: ReDIF-Article 1.0 # input file: RECS_A_2110640_J.xml processed with: repec_from_jats12.xsl darts-xml-transformations-20220907T060133 git hash: 85d61bd949 Author-Name: Neil R. Meredith Author-X-Name-First: Neil R. Author-X-Name-Last: Meredith Author-Name: Anne Macy Author-X-Name-First: Anne Author-X-Name-Last: Macy Author-Name: Amy Meredith Author-X-Name-First: Amy Author-X-Name-Last: Meredith Title: Income elasticity of demand for tanning bed usage: evidence from survey data Abstract: Using data on U.S. adults from the National Health Interview Survey (NHIS), we estimate the causal income elasticity of tanning bed usage conditional upon use. While controlling for individual characteristics, we employ instrumented probit and count data estimation to show that tanning bed usage is a normal good that is a necessity for all adults, women and men alike. Results suggest an income elasticity magnitude of 0.823 for all adults, which implies that a 10 percent increase in instrumented income increases tanning bed usage by 8.23 percent. When examining 18-25 year olds, the magnitude increases to 1.563—a 10 percent increase in instrumented income causes a 15.63 percent increase in tanning bed usage. The findings add to research on health behaviors and suggest that policymakers wanting to discourage tanning bed usage may have to tax consumption considerably or enhance public health campaigns to prevent and curb usage. Journal: Journal of Applied Economics Pages: 1156-1181 Issue: 1 Volume: 25 Year: 2022 Month: 12 X-DOI: 10.1080/15140326.2022.2110640 File-URL: http://hdl.handle.net/10.1080/15140326.2022.2110640 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:recsxx:v:25:y:2022:i:1:p:1156-1181 Template-Type: ReDIF-Article 1.0 # input file: RECS_A_2065064_J.xml processed with: repec_from_jats12.xsl darts-xml-transformations-20220907T060133 git hash: 85d61bd949 Author-Name: Shen Gao Author-X-Name-First: Shen Author-X-Name-Last: Gao Author-Name: Chenghan Hou Author-X-Name-First: Chenghan Author-X-Name-Last: Hou Author-Name: Long Zhao Author-X-Name-First: Long Author-X-Name-Last: Zhao Title: On the economics of CO2 contracts in the enhanced oil recovery industry Abstract: While Carbon Dioxide based Enhanced Oil Recovery (CO2 -EOR) is often regarded as one of the most economically viable methods of carbon capture, utilization and storage (CCUS), little is known about the existing CO2 supply contracts in the CO2 -EOR industry. By studying a sample of 103 CO2 sales contracts in the U.S. in the 1980s and 1990s, this paper aims to find out what drives the key terms in these contracts. In particular, a special price adjustment clause is included to peg the CO2 price to the oil price. Our analyses suggest that the probability that the pegging term is used is positively associated with the contract length. Besides, initial oil prices, volatile historical oil prices, and the net CO2 utilization also positively impacts the adoption of the price-pegging adjustment mechanism. Journal: Journal of Applied Economics Pages: 802-818 Issue: 1 Volume: 25 Year: 2022 Month: 12 X-DOI: 10.1080/15140326.2022.2065064 File-URL: http://hdl.handle.net/10.1080/15140326.2022.2065064 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:recsxx:v:25:y:2022:i:1:p:802-818 Template-Type: ReDIF-Article 1.0 # input file: RECS_A_2012408_J.xml processed with: repec_from_jats12.xsl darts-xml-transformations-20220907T060133 git hash: 85d61bd949 Author-Name: Fenni Li Author-X-Name-First: Fenni Author-X-Name-Last: Li Author-Name: Junbiao Zhang Author-X-Name-First: Junbiao Author-X-Name-Last: Zhang Author-Name: Chunbo Ma Author-X-Name-First: Chunbo Author-X-Name-Last: Ma Title: Does family life cycle influence farm households’ adoption decisions concerning sustainable agricultural technology? Abstract: The literature examining the role played by family life cycle in farm households’ decisions to adopt sustainable agricultural technology (SAT) remains scant. To bridge this gap, we evaluate the impact of family life cycle on farm households’ adoption of SATs by using multivariate probit regression analyses of survey data from 902 farm households in Hubei Province, China. The results show that most farm households belong to the middle stages of the family life cycle. Straw returning is the most frequently adopted SAT among farm households. Farm households’ SAT adoption decisions are closely related to family life cycle. SAT adoption by farm households differs at each family life cycle stage. Based on this finding, when stimulating SAT adoption, the government should consider the different capital endowments and needs of farm households at different family life cycle stages as well as conduct differential and targeted technology promotion measures. Journal: Journal of Applied Economics Pages: 121-144 Issue: 1 Volume: 25 Year: 2022 Month: 12 X-DOI: 10.1080/15140326.2021.2012408 File-URL: http://hdl.handle.net/10.1080/15140326.2021.2012408 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:recsxx:v:25:y:2022:i:1:p:121-144 Template-Type: ReDIF-Article 1.0 # input file: RECS_A_2011582_J.xml processed with: repec_from_jats12.xsl darts-xml-transformations-20220907T060133 git hash: 85d61bd949 Author-Name: Stein Monteiro Author-X-Name-First: Stein Author-X-Name-Last: Monteiro Title: Asymmetric information, credential assessment services and earnings of new immigrants Abstract: Based on the 2016 Canadian Census of Population, some immigrant groups have higher entry-earning returns on their ability than others, and experience a lot more variation in earnings given similar variations in ability compared to other groups. The uneven variance in earnings given similar variances in ability is an indication of statistically discriminated immigrant groups due to information gaps. I show that credential assessment is an essential service to reduce information gaps between employers and immigrant workers. While assessors do not reveal an immigrant worker’s true ability without error, they may supply contextual and/or specific information about the worker and their source country. The more about the source country that goes unexplained, variance in ability and immigration increases, while variance in earnings decreases. However, these results are generated only if the credential assessor faces considerable difficulty in learning about the source country and migrants are of low ability. Journal: Journal of Applied Economics Pages: 663-690 Issue: 1 Volume: 25 Year: 2022 Month: 12 X-DOI: 10.1080/15140326.2021.2011582 File-URL: http://hdl.handle.net/10.1080/15140326.2021.2011582 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:recsxx:v:25:y:2022:i:1:p:663-690 Template-Type: ReDIF-Article 1.0 # input file: RECS_A_2043720_J.xml processed with: repec_from_jats12.xsl darts-xml-transformations-20220907T060133 git hash: 85d61bd949 Author-Name: Tongwei Qiu Author-X-Name-First: Tongwei Author-X-Name-Last: Qiu Author-Name: Xianlei Ma Author-X-Name-First: Xianlei Author-X-Name-Last: Ma Author-Name: Biliang Luo Author-X-Name-First: Biliang Author-X-Name-Last: Luo Author-Name: S.T. Boris Choy Author-X-Name-First: S.T. Boris Author-X-Name-Last: Choy Author-Name: Qinying He Author-X-Name-First: Qinying Author-X-Name-Last: He Title: Land defragmentation in China: does rental transaction inside acquaintance networks matter? Abstract: Using household-level data collected from three provinces in China, this paper investigates the links between land rentals conducted by acquaintances and land fragmentation. The econometric results indicate that the land rentals between acquaintances and those between non-acquaintances have similar effects on defragmentation when considering the endogeneity problem. Moreover, the land rentals between acquaintances have an increasingly positive impact on defragmentation as land rents increase. Further evidence shows that there is no significant difference in land rents between rental transactions conducted by acquaintances and those conducted by non-acquaintances, implying increasing marketization of land rentals inside acquaintance networks. Our findings validate the belief that the land rentals between acquaintances in China today have enormous potential for defragmentation. Journal: Journal of Applied Economics Pages: 260-279 Issue: 1 Volume: 25 Year: 2022 Month: 12 X-DOI: 10.1080/15140326.2022.2043720 File-URL: http://hdl.handle.net/10.1080/15140326.2022.2043720 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:recsxx:v:25:y:2022:i:1:p:260-279 Template-Type: ReDIF-Article 1.0 # input file: RECS_A_2099726_J.xml processed with: repec_from_jats12.xsl darts-xml-transformations-20220907T060133 git hash: 85d61bd949 Author-Name: Ahmet Ihsan Kaya Author-X-Name-First: Ahmet Ihsan Author-X-Name-Last: Kaya Author-Name: Jakob de Haan Author-X-Name-First: Jakob Author-X-Name-Last: de Haan Title: Capital flows, EU integration and the global financial crisis: an empirical analysis Abstract: We investigate the impact of European Union (EU) integration on capital flows to prospective new EU member states. Using annual data between 1992 and 2020, our results suggest that although EU integration increased net capital flows before the Global Financial Crisis (GFC), it was not able to shield countries from the general decline in capital flows that occurred after the GFC. Furthermore, the results show that the impact of EU integration mainly runs through improved institutional quality. We also find considerable heterogeneity in the drivers of different types of capital flows (FDI, portfolio investments, and other capital flows) that we consider. Journal: Journal of Applied Economics Pages: 1025-1049 Issue: 1 Volume: 25 Year: 2022 Month: 12 X-DOI: 10.1080/15140326.2022.2099726 File-URL: http://hdl.handle.net/10.1080/15140326.2022.2099726 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:recsxx:v:25:y:2022:i:1:p:1025-1049 Template-Type: ReDIF-Article 1.0 # input file: RECS_A_2023421_J.xml processed with: repec_from_jats12.xsl darts-xml-transformations-20220907T060133 git hash: 85d61bd949 Author-Name: Zixuan Wang Author-X-Name-First: Zixuan Author-X-Name-Last: Wang Author-Name: Li Li Author-X-Name-First: Li Author-X-Name-Last: Li Author-Name: Jie Tang Author-X-Name-First: Jie Author-X-Name-Last: Tang Author-Name: Binglei Xie Author-X-Name-First: Binglei Author-X-Name-Last: Xie Author-Name: Jiaoju Ge Author-X-Name-First: Jiaoju Author-X-Name-Last: Ge Title: Effect of ride sharing on air quality: evidence from Shenzhen, China Abstract: Ride-sharing service has rapidly developed around the world in recent years. In this paper, we examine how ride-sharing service affects urban air pollutants based on DIDI trip and air quality data in Shenzhen, China. With the control of weather factors, we apply spatial panel models to analyse the relationship between ride-sharing service and air quality. Our research shows: 1) PM2.5, PM10, O3, NO2, and Air Quality Index (AQI) increased when DIDI order increases, while CO and SO2 are not significantly affected. 2) After analysing the air quality impact of the new policy governing ride-sharing service, the results show that most air pollutants, namely PM2.5, PM10, NO2, CO, and AQI, have significantly decreased. It implies that the ride-sharing service acts more like a substitute of public transportation than a complement as ride-sharing service has increased the number of cars on road and deteriorated the urban air quality. Journal: Journal of Applied Economics Pages: 197-219 Issue: 1 Volume: 25 Year: 2022 Month: 12 X-DOI: 10.1080/15140326.2021.2023421 File-URL: http://hdl.handle.net/10.1080/15140326.2021.2023421 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:recsxx:v:25:y:2022:i:1:p:197-219 Template-Type: ReDIF-Article 1.0 # input file: RECS_A_2007724_J.xml processed with: repec_from_jats12.xsl darts-xml-transformations-20220907T060133 git hash: 85d61bd949 Author-Name: Marta Martínez-Matute Author-X-Name-First: Marta Author-X-Name-Last: Martínez-Matute Author-Name: Alberto Urtasun Author-X-Name-First: Alberto Author-X-Name-Last: Urtasun Title: Uncertainty and firms’ labour decisions. Evidence from European countries Abstract: Uncertainty affects employers’ decisions about their workforce as well as capital. We exploit differences in how firms change the size of their workforce when uncertainty increases. Using data from the Wage Dynamic Network Survey for 25 European countries, we first construct, unlike the usual aggregate indicators, a set of uncertainty indicators exploiting each firm’s microeconomic environment. We combine variability from the country, sector and size of the firm. Secondly, we investigate the effect of uncertainty on a firm’s strategies to adjust labour through hiring and firing. The results reveal that firms reduce hiring and recur to individual layoffs more frequently when uncertainty increases. An increase of one standard deviation in the uncertainty indicator is associated with an increase in the probability of having frozen hiring by from 9% to 16% of a standard deviation. We also find more significant effects when firms face credit constraints and labour adjustment costs are higher. Journal: Journal of Applied Economics Pages: 220-241 Issue: 1 Volume: 25 Year: 2022 Month: 12 X-DOI: 10.1080/15140326.2021.2007724 File-URL: http://hdl.handle.net/10.1080/15140326.2021.2007724 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:recsxx:v:25:y:2022:i:1:p:220-241 Template-Type: ReDIF-Article 1.0 # input file: RECS_A_2118514_J.xml processed with: repec_from_jats12.xsl darts-xml-transformations-20220907T060133 git hash: 85d61bd949 Author-Name: Dat T Nguyen Author-X-Name-First: Dat T Author-X-Name-Last: Nguyen Author-Name: Tu DQ Le Author-X-Name-First: Tu DQ Author-X-Name-Last: Le Title: The interrelationships between bank risk and charter value in ASIAN-5 Abstract: This study examines the interrelationships between bank risk and charter value in five countries in Southeast Asia (ASEAN-5) from 2006 to 2019 using a simultaneous equations model. The findings show a two-way relationship between bank risk and charter value. More specifically, the positive relationship between charter value and bank risk implies that banks with a more excellent charter value tend to pursue fast growth strategies and thus may face a higher risk. This positive link, however, only holds up to a certain level of charter value. On the other hand, the negative impact of bank risk on charter value argues that more risky banks tend to generate lower returns, thus reducing charter value. Additionally, a bidirectional relationship between them still holds when using an alternative measure of bank risk and controlling for the global financial crisis and governance indicators. Therefore, our findings provide critical implications for policymakers, managers, and academics. Journal: Journal of Applied Economics Pages: 1182-1199 Issue: 1 Volume: 25 Year: 2022 Month: 12 X-DOI: 10.1080/15140326.2022.2118514 File-URL: http://hdl.handle.net/10.1080/15140326.2022.2118514 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:recsxx:v:25:y:2022:i:1:p:1182-1199 Template-Type: ReDIF-Article 1.0 # input file: RECS_A_2053829_J.xml processed with: repec_from_jats12.xsl darts-xml-transformations-20220907T060133 git hash: 85d61bd949 Author-Name: Elizabeth Schroeder Author-X-Name-First: Elizabeth Author-X-Name-Last: Schroeder Author-Name: Carol Horton Tremblay Author-X-Name-First: Carol Horton Author-X-Name-Last: Tremblay Author-Name: Victor J. Tremblay Author-X-Name-First: Victor J. Author-X-Name-Last: Tremblay Title: CEO confidence bias and strategic choice: a general framework Abstract: An owner of a firm may choose to hire an unbiased CEO or one with confidence bias. We develop a model that demonstrates that the owner’s optimal choice depends on whether the firm and rival choice variables are strategic substitutes or strategic complements. When choice variables are strategic substitutes or strategic complements for both firms, owners optimize by hiring overconfident CEOs. When choice variables are substitutes for one firm and complements for the rival firm, each firm optimizes by hiring an underconfident CEO. We show that the model applies to price and output competition, advertising, research and development spending, and product design. Journal: Journal of Applied Economics Pages: 731-740 Issue: 1 Volume: 25 Year: 2022 Month: 12 X-DOI: 10.1080/15140326.2022.2053829 File-URL: http://hdl.handle.net/10.1080/15140326.2022.2053829 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:recsxx:v:25:y:2022:i:1:p:731-740 Template-Type: ReDIF-Article 1.0 # input file: RECS_A_2050992_J.xml processed with: repec_from_jats12.xsl darts-xml-transformations-20220907T060133 git hash: 85d61bd949 Author-Name: Sin-Huei Ng Author-X-Name-First: Sin-Huei Author-X-Name-Last: Ng Author-Name: Zhehan Zhuang Author-X-Name-First: Zhehan Author-X-Name-Last: Zhuang Author-Name: Moau-Yong Toh Author-X-Name-First: Moau-Yong Author-X-Name-Last: Toh Author-Name: Tze-San Ong Author-X-Name-First: Tze-San Author-X-Name-Last: Ong Author-Name: Boon-Heng Teh Author-X-Name-First: Boon-Heng Author-X-Name-Last: Teh Title: Exploring herding behavior in an innovative-oriented stock market: evidence from ChiNext Abstract: We adopt the cross-sectional absolute deviation model (CSAD) to test the herding behavior of ChiNext, a decade-old NASDAQ-style stock market in China, based on its stocks from 2015-2019. Our findings show that the herding behavior is prevalent, implying that such behavior is widespread in a relatively new stock market themed with growth-oriented innovative enterprises and dominated by individual investors instead of institutional investors. Moreover, we find that herding tends to be more severe during the periods of falling market than rising market. We explain that several distinct attributes of the individual investors cause them to sell during the falling market, an act contrary to the standard account of the “disposition effect of holding the losers” in behavioral finance. We contribute to the herding behavior literature for a relatively new innovative-oriented stock market as well as our understanding of the investors’ circumstances, which may disprove the often-quoted disposition effect. Journal: Journal of Applied Economics Pages: 523-542 Issue: 1 Volume: 25 Year: 2022 Month: 12 X-DOI: 10.1080/15140326.2022.2050992 File-URL: http://hdl.handle.net/10.1080/15140326.2022.2050992 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:recsxx:v:25:y:2022:i:1:p:523-542 Template-Type: ReDIF-Article 1.0 # input file: RECS_A_2151253_J.xml processed with: repec_from_jats12.xsl darts-xml-transformations-20220907T060133 git hash: 85d61bd949 Author-Name: José Luis Miralles-Quirós Author-X-Name-First: José Luis Author-X-Name-Last: Miralles-Quirós Author-Name: María Mar Miralles-Quirós Author-X-Name-First: María Mar Author-X-Name-Last: Miralles-Quirós Title: Intraday Bitcoin price shocks: when bad news is good news Abstract: Since the formulation of the Efficient Market Hypothesis, countless studies have been developed that try to either prove or refute it. Event studies, analysing the impact of different events on asset prices, are one of the most important research fields but there is a lack of evidence on cryptocurrencies. For that reason, we analyse the existence of over- and under- reaction effects on Bitcoin after hourly price shocks defined by filter sizes. We also do this using three alternative approaches. Our results show clear evidence of overreaction after negative shocks. We also observe that these overreactions tend to be greater as more hours pass after the event, with those that occur between 6 and 24 hours after the event being especially important. These results have important economic implications because they show that investors would be able to develop a profitable trading strategy simply by focusing on investing after negative shocks. Journal: Journal of Applied Economics Pages: 1294-1313 Issue: 1 Volume: 25 Year: 2022 Month: 12 X-DOI: 10.1080/15140326.2022.2151253 File-URL: http://hdl.handle.net/10.1080/15140326.2022.2151253 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:recsxx:v:25:y:2022:i:1:p:1294-1313 Template-Type: ReDIF-Article 1.0 # input file: RECS_A_2021128_J.xml processed with: repec_from_jats12.xsl darts-xml-transformations-20220907T060133 git hash: 85d61bd949 Author-Name: G. Falavigna Author-X-Name-First: G. Author-X-Name-Last: Falavigna Author-Name: R. Ippoliti Author-X-Name-First: R. Author-X-Name-Last: Ippoliti Title: Model definitions to identify appropriate benchmarks in judiciary Abstract: In this manuscript we present a comparative analysis of benchmarks based on technical efficiency scores computed using Data Envelopment Analysis with two different model specifications. In one case, we adopt the number of settled cases as output and human resources as input; in the other case, we adopt the same model definition but with judicial expenditure as additional key input. Our findings show that the model specification containing both judicial expenditure and human resources is more appropriate than the model based only on human resources. Moreover, we show that, without considering the additional variable costs generated within the production process, those courts incorrectly identified as benchmarks might mislead the policy makers dealing with the reform process. Journal: Journal of Applied Economics Pages: 339-360 Issue: 1 Volume: 25 Year: 2022 Month: 12 X-DOI: 10.1080/15140326.2021.2021128 File-URL: http://hdl.handle.net/10.1080/15140326.2021.2021128 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:recsxx:v:25:y:2022:i:1:p:339-360 Template-Type: ReDIF-Article 1.0 # input file: RECS_A_2007723_J.xml processed with: repec_from_jats12.xsl darts-xml-transformations-20220907T060133 git hash: 85d61bd949 Author-Name: María Paz Espinosa Author-X-Name-First: María Paz Author-X-Name-Last: Espinosa Author-Name: Eva Ferreira Author-X-Name-First: Eva Author-X-Name-Last: Ferreira Title: Gender implicit bias and glass ceiling effects Abstract: Implicit gender bias may affect hiring and promotion decisions, implying inefficiencies in the outcome of selection processes. We focus on the dynamics of gender bias when selecting candidates for a committee or position, and obtain the long-run female share as well as the conditions for a glass ceiling effect in a hierarchical structure. Candidate selection is modeled as a Markov process, where the outcome of the dynamic selection process is affected by bias asymmetries and incumbency advantages. Moreover, we formalize and characterize different types of glass ceiling, analyze how the gap between the groups evolves in the corporate hierarchy and show that the dynamics of promotion may indeed generate glass ceilings. Journal: Journal of Applied Economics Pages: 37-57 Issue: 1 Volume: 25 Year: 2022 Month: 12 X-DOI: 10.1080/15140326.2021.2007723 File-URL: http://hdl.handle.net/10.1080/15140326.2021.2007723 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:recsxx:v:25:y:2022:i:1:p:37-57 Template-Type: ReDIF-Article 1.0 # input file: RECS_A_2041158_J.xml processed with: repec_from_jats12.xsl darts-xml-transformations-20220907T060133 git hash: 85d61bd949 Author-Name: Marion Aouad Author-X-Name-First: Marion Author-X-Name-Last: Aouad Title: Is physician location sensitive to changes in patients’ financial responsibility? Abstract: This study examines how changes to patients’ financial responsibility affect physicians’ behavior. This is achieved by examining a health insurance reform that changes patients’ relative financial responsibilities for a medical service that can be received at one of two locations. In particular, this study examines how physicians’ treatment location decisions change after the reform. This study finds that physicians who previously work across the two locations are increasingly observed working at the location that becomes cheaper for patients. Thus, physicians’ responsiveness to new policies may be an important lever by which certain demand-side health insurance reforms successfully operate. Journal: Journal of Applied Economics Pages: 280-299 Issue: 1 Volume: 25 Year: 2022 Month: 12 X-DOI: 10.1080/15140326.2022.2041158 File-URL: http://hdl.handle.net/10.1080/15140326.2022.2041158 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:recsxx:v:25:y:2022:i:1:p:280-299 Template-Type: ReDIF-Article 1.0 # input file: RECS_A_2043114_J.xml processed with: repec_from_jats12.xsl darts-xml-transformations-20220907T060133 git hash: 85d61bd949 Author-Name: Shoaib Ali Author-X-Name-First: Shoaib Author-X-Name-Last: Ali Author-Name: Imran Yousaf Author-X-Name-First: Imran Author-X-Name-Last: Yousaf Author-Name: Sumayya Chughtai Author-X-Name-First: Sumayya Author-X-Name-Last: Chughtai Author-Name: Syed Zulfiqar Ali Shah Author-X-Name-First: Syed Zulfiqar Author-X-Name-Last: Ali Shah Title: Role of bank competition in determining liquidity creation: evidence from GCC countries Abstract: This study aims to investigate the impact of banking-sector concentration on the banks’ liquidity creation in GCC countries over the period from 2012 to 2018 by using a dynamic GMM panel procedure. The results suggest that increased bank competition reduces banks’ liquidity creation across the GCC countries. The study’s findings are in line with the ‘financial fragility hypothesis” according to which banks to reduce their lending activities when competition is high in the market. The evidence suggests that the banking industry is different from others, and pro-competitive policies in the banking industry can reduce liquidity provision by banks. In the context of policy implications, a concentrated banking system discourages capital provision to firms; hence, regulators have to take appropriate measures to resolve the problem of a reduced supply of capital. Government must regulate the banking sector by keeping in view their long-run goal as competition is a double-edged sword in banking. Journal: Journal of Applied Economics Pages: 242-259 Issue: 1 Volume: 25 Year: 2022 Month: 12 X-DOI: 10.1080/15140326.2022.2043114 File-URL: http://hdl.handle.net/10.1080/15140326.2022.2043114 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:recsxx:v:25:y:2022:i:1:p:242-259 Template-Type: ReDIF-Article 1.0 # input file: RECS_A_2087341_J.xml processed with: repec_from_jats12.xsl darts-xml-transformations-20220907T060133 git hash: 85d61bd949 Author-Name: Hongguang Sui Author-X-Name-First: Hongguang Author-X-Name-Last: Sui Author-Name: Xijie Li Author-X-Name-First: Xijie Author-X-Name-Last: Li Author-Name: Ali Raza Author-X-Name-First: Ali Author-X-Name-Last: Raza Author-Name: Shihua Zhang Author-X-Name-First: Shihua Author-X-Name-Last: Zhang Title: Impact of trade policy uncertainty on export products quality: new evidence by considering role of social capital Abstract: An increase in trade policy uncertainty raises policymakers’ concerns, as it can be harmful to investments and growth globally. This study examines the impact of reducing trade policy uncertainty on export product quality. Based on the ASEAN–China Free Trade Area (ACFTA), the difference-in-difference, two-way fixed, and triple difference methods were used to conduct benchmark tests. The results show that reducing trade policy uncertainty improves export product quality. Social capital has strengthened the role of the changing trade environments. The results were robust after the PSM-DID, placebo test, and deletion of outliers. Furthermore, the role of social capital is incorporated into the regression model. From the perspective of informal internal systems, this study expands the theoretical view of regional trade integration research and answers the current trade strategy adjustment and export transformation policy concerns. Journal: Journal of Applied Economics Pages: 997-1024 Issue: 1 Volume: 25 Year: 2022 Month: 12 X-DOI: 10.1080/15140326.2022.2087341 File-URL: http://hdl.handle.net/10.1080/15140326.2022.2087341 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:recsxx:v:25:y:2022:i:1:p:997-1024 Template-Type: ReDIF-Article 1.0 # input file: RECS_A_2144009_J.xml processed with: repec_from_jats12.xsl darts-xml-transformations-20220907T060133 git hash: 85d61bd949 Author-Name: M. Antonella Mancino Author-X-Name-First: M. Antonella Author-X-Name-Last: Mancino Author-Name: Tarek Attia Author-X-Name-First: Tarek Author-X-Name-Last: Attia Title: Do psychopathic traits predict criminal activity? Abstract: Psychopathy evidence is frequently used for court decisions involving young criminals, claiming that is it an important predictor of crime. We investigate the effect of psychopathy on crime using a unique panel dataset of young offenders, which allows to analyze several dimensions of psychopathy, controlling for a wide range of usually unobservable characteristics. We find that psychopathy is an important predictor of crime. We show that the effect is two times larger (and closer to usual estimates) when measures of cognitive and non-cognitive skills are not accounted for, highlighting the importance of having comprehensive data on individual heterogeneity to isolate the effect of psychopathy on crime from the effect of confounding factors. Our results are robust to alternative measures of psychopathy and criminal participation. The findings suggest that court decisions should focus both on psychopathic characteristics and skills when deciding about an adolescenc’s sentence. Journal: Journal of Applied Economics Pages: 1260-1293 Issue: 1 Volume: 25 Year: 2022 Month: 12 X-DOI: 10.1080/15140326.2022.2144009 File-URL: http://hdl.handle.net/10.1080/15140326.2022.2144009 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:recsxx:v:25:y:2022:i:1:p:1260-1293 Template-Type: ReDIF-Article 1.0 # input file: RECS_A_2052001_J.xml processed with: repec_from_jats12.xsl darts-xml-transformations-20220907T060133 git hash: 85d61bd949 Author-Name: Joanna Clifton-Sprigg Author-X-Name-First: Joanna Author-X-Name-Last: Clifton-Sprigg Title: Should I stay or should I go? migration intentions of teenagers with parents working abroad Abstract: This paper investigates how having a parent working abroad affects subsequent intentions of teenagers to emigrate, using unique data for Poland. Results show that parental employment abroad is positively associated with children’s intentions to emigrate, more so for males than females. The findings highlight the intergenerational nature of migratory trends within families. This is particularly important for a country like Poland, which alongside other Central and Eastern European economies, has been experiencing significant population outflows for almost two decades and is gradually turning towards a foreign-born workforce. Journal: Journal of Applied Economics Pages: 563-582 Issue: 1 Volume: 25 Year: 2022 Month: 12 X-DOI: 10.1080/15140326.2022.2052001 File-URL: http://hdl.handle.net/10.1080/15140326.2022.2052001 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:recsxx:v:25:y:2022:i:1:p:563-582 Template-Type: ReDIF-Article 1.0 # input file: RECS_A_2110012_J.xml processed with: repec_from_jats12.xsl darts-xml-transformations-20220907T060133 git hash: 85d61bd949 Author-Name: Daxin Dong Author-X-Name-First: Daxin Author-X-Name-Last: Dong Author-Name: Peng Liu Author-X-Name-First: Peng Author-X-Name-Last: Liu Title: Corporate social responsibility and trade credit during periods of monetary contraction Abstract: This paper studies whether firms’ corporate social responsibility (CSR) affects their access to trade credit in response to monetary contraction shocks. Based on US firm-level data from 1995Q1 to 2014Q1, we find that after monetary contraction shocks, firms with higher levels of CSR receive more trade credit than firms with lower levels of CSR. Moreover, the beneficial impact of CSR is stronger for firms in regions with higher social trust and in more competitive industries. The interpretation of the observed phenomena is that the high-CSR firms are regarded as more trustworthy. Journal: Journal of Applied Economics Pages: 1127-1155 Issue: 1 Volume: 25 Year: 2022 Month: 12 X-DOI: 10.1080/15140326.2022.2110012 File-URL: http://hdl.handle.net/10.1080/15140326.2022.2110012 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:recsxx:v:25:y:2022:i:1:p:1127-1155 Template-Type: ReDIF-Article 1.0 # input file: RECS_A_2068178_J.xml processed with: repec_from_jats12.xsl darts-xml-transformations-20220907T060133 git hash: 85d61bd949 Author-Name: My Nguyen Author-X-Name-First: My Author-X-Name-Last: Nguyen Author-Name: Kien Le Author-X-Name-First: Kien Author-X-Name-Last: Le Title: The impacts of armed conflicts on prenatal and delivery care utilization Abstract: This study investigates the extent to which exposure to armed conflicts during pregnancy influences women’s utilization of prenatal and delivery care in 35 developing countries between 1990 and 2018. Exploiting the variation across residential districts and conception months-years in a difference-in-differences framework, we find that women exposed to armed conflicts during pregnancy tend to receive insufficient prenatal and delivery care evident by the declines in the composite indices of Prenatal Care and Delivery Care by 6.76 and 6.83% compared to the sample averages, respectively. Given the importance of prenatal care and delivery care to the health of mothers and newborns, our findings call for effective interventions to support mothers and babies during and after conflicts. Journal: Journal of Applied Economics Pages: 819-838 Issue: 1 Volume: 25 Year: 2022 Month: 12 X-DOI: 10.1080/15140326.2022.2068178 File-URL: http://hdl.handle.net/10.1080/15140326.2022.2068178 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:recsxx:v:25:y:2022:i:1:p:819-838 Template-Type: ReDIF-Article 1.0 # input file: RECS_A_2044979_J.xml processed with: repec_from_jats12.xsl darts-xml-transformations-20220907T060133 git hash: 85d61bd949 Author-Name: Luciano Campos Author-X-Name-First: Luciano Author-X-Name-Last: Campos Author-Name: Jesús Ruiz Andújar Author-X-Name-First: Jesús Author-X-Name-Last: Ruiz Andújar Title: Common and idiosyncratic components of Latin American business cycles connectedness Abstract: This paper investigates the evolution of business cycles synchronization in Latin America since the 1990ʹs. To do so, a Vector Autoregressive model is fed, alternatively, with the countries’ Industrial Production Indexes and with these series filtered by the US financial conditions index, which is considered a common component affecting business cycles in the region. Additionally, a Markov switching model is estimated to identify regional recessions. Our findings indicate that business cycles connectedness rise significantly during regional recessions and that the common factor plays an important role. The evidence supports the usefulness of policy coordination among Latin American economies to cushion the spillover effects of exogenous shocks, and helps to identify subgroups of countries for which such coordination is recommendable. Journal: Journal of Applied Economics Pages: 691-722 Issue: 1 Volume: 25 Year: 2022 Month: 12 X-DOI: 10.1080/15140326.2022.2044979 File-URL: http://hdl.handle.net/10.1080/15140326.2022.2044979 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:recsxx:v:25:y:2022:i:1:p:691-722 Template-Type: ReDIF-Article 1.0 # input file: RECS_A_2152562_J.xml processed with: repec_from_jats12.xsl darts-xml-transformations-20220907T060133 git hash: 85d61bd949 Author-Name: Oscar Bajo-Rubio Author-X-Name-First: Oscar Author-X-Name-Last: Bajo-Rubio Title: Exports and long-run growth: The case of Spain, 1850-2020 Abstract: We analyse in this paper the relationship between international trade and economic growth from the point of view of one of the most traditional hypotheses within this field, namely, the export-led growth hypothesis, for the case of Spain in a long-term perspective of 170 years. Exports seem to have played a positive, though modest, role in promoting economic growth in the Spanish economy over the whole period, mostly due to the higher productivity associated with the export sector. The contribution of exports to growth, however, seems to have been stronger in the final years of the 19th century, unlike the rest of the period, where it proved to be negligible. Journal: Journal of Applied Economics Pages: 1314-1337 Issue: 1 Volume: 25 Year: 2022 Month: 12 X-DOI: 10.1080/15140326.2022.2152562 File-URL: http://hdl.handle.net/10.1080/15140326.2022.2152562 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:recsxx:v:25:y:2022:i:1:p:1314-1337 Template-Type: ReDIF-Article 1.0 # input file: RECS_A_2094668_J.xml processed with: repec_from_jats12.xsl darts-xml-transformations-20220907T060133 git hash: 85d61bd949 Author-Name: Ivan Huljak Author-X-Name-First: Ivan Author-X-Name-Last: Huljak Author-Name: Reiner Martin Author-X-Name-First: Reiner Author-X-Name-Last: Martin Author-Name: Diego Moccero Author-X-Name-First: Diego Author-X-Name-Last: Moccero Author-Name: Cosimo Pancaro Author-X-Name-First: Cosimo Author-X-Name-Last: Pancaro Title: Do non-performing loans matter for bank lending and the business cycle in euro area countries? Abstract: We estimate the impact of changes in non-performing loan (NPL) ratios on aggregate banking sector variables and the macroeconomy by estimating a panel Bayesian VAR model for twelve euro area countries. The main findings are as follows: i) An impulse response analysis shows that an exogenous increase in the change in NPL ratios tends to depress bank lending volumes, widens bank lending spreads and leads to a fall in real GDP growth and residential real estate prices; ii) A forecast error variance decomposition shows that shocks to the change in NPL ratios explain a relatively large share of the variance of the variables in the VAR, particularly for countries that experienced a large increase in NPL ratios during the recent crises; and iii) A three-year structural out-of-sample scenario analysis suggests that reducing banks’ NPL ratios can produce significant benefits in terms of improved macroeconomic and financial conditions. Journal: Journal of Applied Economics Pages: 1050-1080 Issue: 1 Volume: 25 Year: 2022 Month: 12 X-DOI: 10.1080/15140326.2022.2094668 File-URL: http://hdl.handle.net/10.1080/15140326.2022.2094668 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:recsxx:v:25:y:2022:i:1:p:1050-1080 Template-Type: ReDIF-Article 1.0 # input file: RECS_A_1927441_J.xml processed with: repec_from_jats12.xsl darts-xml-transformations-20220907T060133 git hash: 85d61bd949 Author-Name: Raymond Kwong Author-X-Name-First: Raymond Author-X-Name-Last: Kwong Author-Name: Helen Wong Author-X-Name-First: Helen Author-X-Name-Last: Wong Title: Value-at-risk in the presence of asset price bubbles Abstract: In this study, we respond to the criticism that the value-at-risk (VaR) measure fails during financial crises and is only applicable during periods without asset price bubbles. We propose a new dating mechanism that is based on the work of Phillips (2015) to date-stamp the origination and termination of the asset price bubbles. Our method relaxed the minimum bubble duration constraint in the original model, and the empirical application statistically identified the bubbles periods in nine stock markets (Australia, Canada, China, Germany, Spain, Hong Kong, Japan, the United Kingdom, and the United States). We choose the two most widely adopted VaR models (RiskMetrics and RiskMetrics 2006) to test the performance. Our results show that the RiskMetrics model fails in most periods, whereas the RiskMetrics 2006 performs efficiently in the periods with asset price bubbles. These results prove the criticism that all the VaR models fail during crises as invalid. Journal: Journal of Applied Economics Pages: 361-384 Issue: 1 Volume: 25 Year: 2022 Month: 12 X-DOI: 10.1080/15140326.2021.1927441 File-URL: http://hdl.handle.net/10.1080/15140326.2021.1927441 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:recsxx:v:25:y:2022:i:1:p:361-384 Template-Type: ReDIF-Article 1.0 # input file: RECS_A_2045466_J.xml processed with: repec_from_jats12.xsl darts-xml-transformations-20220907T060133 git hash: 85d61bd949 Author-Name: Lu Wang Author-X-Name-First: Lu Author-X-Name-Last: Wang Author-Name: Guangxing Wang Author-X-Name-First: Guangxing Author-X-Name-Last: Wang Author-Name: Huan Yu Author-X-Name-First: Huan Author-X-Name-Last: Yu Author-Name: Fei Wang Author-X-Name-First: Fei Author-X-Name-Last: Wang Title: Prediction and analysis of residential house price using a flexible spatiotemporal model Abstract: House price prediction has traditionally been approached using linear or spatial linear hedonic models and focused on big cities. In this study, we developed a flexible spatiotemporal model (FSTM) to explore the spatiotemporal characteristics of the residential house price and the impact factors in middle-small cities. The FSTM integrated both spatial and temporal components of the residential house price, accounted for its spatiotemporal characteristics, and reproduced its spatial variability and temporal trends. The results showed that the governmental policy had a significant influence on the house price and led to the characteristics being different from those in big cities. The significant factors also included the density of roads, the density of banks, density of supermarkets, the area used by public and user shared area within a building. This study implied that FSTM provided the potential for spatiotemporal prediction of the residential house price in the middle-small cities. Journal: Journal of Applied Economics Pages: 503-522 Issue: 1 Volume: 25 Year: 2022 Month: 12 X-DOI: 10.1080/15140326.2022.2045466 File-URL: http://hdl.handle.net/10.1080/15140326.2022.2045466 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:recsxx:v:25:y:2022:i:1:p:503-522 Template-Type: ReDIF-Article 1.0 # input file: RECS_A_2046989_J.xml processed with: repec_from_jats12.xsl darts-xml-transformations-20220907T060133 git hash: 85d61bd949 Author-Name: Xinyu Wang Author-X-Name-First: Xinyu Author-X-Name-Last: Wang Author-Name: Lele Zhang Author-X-Name-First: Lele Author-X-Name-Last: Zhang Author-Name: Qiuying Cheng Author-X-Name-First: Qiuying Author-X-Name-Last: Cheng Author-Name: Song Shi Author-X-Name-First: Song Author-X-Name-Last: Shi Author-Name: Huawei Niu Author-X-Name-First: Huawei Author-X-Name-Last: Niu Title: What drives risk in China’s soybean futures market? Evidence from a flexible GARCH-MIDAS model Abstract: Modeling futures market risk simultaneously influenced by macro low-frequency information and daily risk factors is a valuable challenge. We propose a new general framework for it based on the flexible GARCH-MIDAS model. It uses a skewed t distribution to describe the asymmetry of long and short trading positions, allows for a different number of trading days per month, and can identify the optimal combination of risky factors. We also derive its impact response function on how low-frequency factors directly influence the high-frequency futures market risk. Through an exhaustive empirical analysis of the Chinese soybean futures market, we not only find its excellent out-of-sample market risk forecasting performance but also offer systematic recommendations for improving risk management. Journal: Journal of Applied Economics Pages: 454-475 Issue: 1 Volume: 25 Year: 2022 Month: 12 X-DOI: 10.1080/15140326.2022.2046989 File-URL: http://hdl.handle.net/10.1080/15140326.2022.2046989 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:recsxx:v:25:y:2022:i:1:p:454-475 Template-Type: ReDIF-Article 1.0 # input file: RECS_A_2096954_J.xml processed with: repec_from_jats12.xsl darts-xml-transformations-20220907T060133 git hash: 85d61bd949 Author-Name: Weilong Wu Author-X-Name-First: Weilong Author-X-Name-Last: Wu Author-Name: Tang Jing Author-X-Name-First: Tang Author-X-Name-Last: Jing Author-Name: Yang Xiaoli Author-X-Name-First: Yang Author-X-Name-Last: Xiaoli Title: Can high-speed train improve the innovation ability of enterprises? Abstract: This paper analyzes the impact of high-speed train construction on enterprise innovation and its specific mechanisms by establishing high-speed train-city-firm level panel data and constructing a multi-period DID model in China. The results show that, firstly, the construction of a high-speed train significantly improves the innovation level of enterprises, and the construction of the first high-speed train can increase the number of patents of local listed enterprises by about 11.5%. Second, the impact of high-speed train construction on the innovation level of listed enterprises is mainly through the internal human capital and external marketization of enterprises. Specifically, the high-speed train construction affects innovation by weakening the transportation distance; on the other hand, it improves the external market environment and enhances the market competition, making firms seek innovation actively. Journal: Journal of Applied Economics Pages: 962-982 Issue: 1 Volume: 25 Year: 2022 Month: 12 X-DOI: 10.1080/15140326.2022.2096954 File-URL: http://hdl.handle.net/10.1080/15140326.2022.2096954 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:recsxx:v:25:y:2022:i:1:p:962-982 Template-Type: ReDIF-Article 1.0 # input file: RECS_A_2052000_J.xml processed with: repec_from_jats12.xsl darts-xml-transformations-20220907T060133 git hash: 85d61bd949 Author-Name: Josep Maria Raya Author-X-Name-First: Josep Maria Author-X-Name-Last: Raya Author-Name: Claudia Vargas Author-X-Name-First: Claudia Author-X-Name-Last: Vargas Title: How to become a cashless economy and what are the determinants of eliminating cash Abstract: This paper aims to ascertain the determinants by which individuals decide to use credit cards as a payment method rather than cash; that is, to understand changes in socioeconomic factors on the long-term use of alternatives to cash. Using the data from the waves (2002–2017) of the Spanish Survey of Household Finances (SSHF) and a panel data estimation (static and dynamic), we identify education, age, income and wealth as the main drivers of credit cards as a payment method. We disentangle the effect of age and the cohort effect. We check for nonlinearity problems and card use persistence. A secondary aim is to establish, using a controlled experiment, some of the financial consequences of being a cashless economy. Journal: Journal of Applied Economics Pages: 543-562 Issue: 1 Volume: 25 Year: 2022 Month: 12 X-DOI: 10.1080/15140326.2022.2052000 File-URL: http://hdl.handle.net/10.1080/15140326.2022.2052000 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:recsxx:v:25:y:2022:i:1:p:543-562 Template-Type: ReDIF-Article 1.0 # input file: RECS_A_1997045_J.xml processed with: repec_from_jats12.xsl darts-xml-transformations-20220907T060133 git hash: 85d61bd949 Author-Name: Wanjun Yao Author-X-Name-First: Wanjun Author-X-Name-Last: Yao Author-Name: Chunan Wang Author-X-Name-First: Chunan Author-X-Name-Last: Wang Title: Agricultural land marketization and productivity: evidence from China Abstract: The marketization of agricultural land affects the average land productivity not only through improving land allocation efficiency but also through reducing land price under the perfect market. The effect of the improvement of land allocation efficiency on the average land productivity is positive. However, when the agricultural land market is imperfect, the effect of the decrease in land price under the perfect market on the average land productivity is negative. By using the China Health and Nutrition Survey (CHNS) database and the empirical framework for the inverse relationship between farm size and land productivity, this paper empirically finds that these two channels improve and reduce average land productivity by 34.4% and 1.4%, respectively, implying that agricultural land marketization in China improves the average land productivity by 32.9%. Journal: Journal of Applied Economics Pages: 22-36 Issue: 1 Volume: 25 Year: 2022 Month: 12 X-DOI: 10.1080/15140326.2021.1997045 File-URL: http://hdl.handle.net/10.1080/15140326.2021.1997045 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:recsxx:v:25:y:2022:i:1:p:22-36 Template-Type: ReDIF-Article 1.0 # input file: RECS_A_1977079_J.xml processed with: repec_from_jats12.xsl darts-xml-transformations-20220907T060133 git hash: 85d61bd949 Author-Name: Fernando Sánchez López Author-X-Name-First: Fernando Author-X-Name-Last: Sánchez López Title: The effect of international visitors on poverty alleviation in Mexico: an approach from the misery index Abstract: The effectiveness of tourism as an instrument in combating poverty has emerged as an important subject of research. Tourism’s impact on poverty has traditionally been analyzed from the perspective of income or household consumption per capita. In contrast to these approaches, we analyzed the effect of the arrival of international visitors on poverty in Mexico by way of its impact on a modified misery index. To carry out this study, we used a bivariate structural vector autoregressive model, which indicates a negative unidirectional relationship from the international visitors to the misery index. Additionally, the historical decomposition shows that during the first COVID-19 wave, the changes in the international visitors highly explained the variations in the misery index. Journal: Journal of Applied Economics Pages: 839-855 Issue: 1 Volume: 25 Year: 2022 Month: 12 X-DOI: 10.1080/15140326.2021.1977079 File-URL: http://hdl.handle.net/10.1080/15140326.2021.1977079 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:recsxx:v:25:y:2022:i:1:p:839-855 Template-Type: ReDIF-Article 1.0 # input file: RECS_A_2045846_J.xml processed with: repec_from_jats12.xsl darts-xml-transformations-20220907T060133 git hash: 85d61bd949 Author-Name: Wen Chen Author-X-Name-First: Wen Author-X-Name-Last: Chen Author-Name: Ying Wu Author-X-Name-First: Ying Author-X-Name-Last: Wu Title: Does intellectual property protection stimulate digital economy development? Abstract: The digital economy plays an important role in society and the economy. However, we know little about what factors affect the development of the digital economy. Using a self-developed index for measuring Chinese provincial-level digital economy development, this paper examines the impact of intellectual property protection on the digital economy. We find that there is a U-shaped relationship between intellectual property protection and digital economy. Our findings remain valid after a battery of robustness tests. Our findings support the importance of intellectual property protection in developing the digital economy. Journal: Journal of Applied Economics Pages: 723-730 Issue: 1 Volume: 25 Year: 2022 Month: 12 X-DOI: 10.1080/15140326.2022.2045846 File-URL: http://hdl.handle.net/10.1080/15140326.2022.2045846 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:recsxx:v:25:y:2022:i:1:p:723-730 Template-Type: ReDIF-Article 1.0 # input file: RECS_A_2048342_J.xml processed with: repec_from_jats12.xsl darts-xml-transformations-20220907T060133 git hash: 85d61bd949 Author-Name: Lina Ma Author-X-Name-First: Lina Author-X-Name-Last: Ma Author-Name: Fengju Xu Author-X-Name-First: Fengju Author-X-Name-Last: Xu Author-Name: Najaf Iqbal Author-X-Name-First: Najaf Author-X-Name-Last: Iqbal Title: The impact of capital enrichment on total factor productivity from the perspective of innovation capability Abstract: Innovation capability of manufacturing industry is one of the most important factors that determine a country’s competitiveness. This paper expounds the theoretical and empirical relationship among innovation capability (IC), capital enrichment (CE) and total factor productivity (TFP) by using the yearly panel data of 28 Chinese manufacturing segments from 2011 to 2018. The intermediary effect model and threshold model are used for empirical analysis, findings suggest that 1) IC not only directly promotes TFP but also indirectly through CE, indicating that CE has an intermediary effect on the relationship between IC and TFP. 2) The positive effect of CE on TFP is influenced by the “double threshold effect” of IC. Compared with industries having low IC, this positive effect in high IC industries is first enhanced then weakened and later re-enhanced. 3) There is a significant difference in IC and CE among different manufacturing segments. Journal: Journal of Applied Economics Pages: 644-667 Issue: 1 Volume: 25 Year: 2022 Month: 12 X-DOI: 10.1080/15140326.2022.2048342 File-URL: http://hdl.handle.net/10.1080/15140326.2022.2048342 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:recsxx:v:25:y:2022:i:1:p:644-667 Template-Type: ReDIF-Article 1.0 # input file: RECS_A_2072674_J.xml processed with: repec_from_jats12.xsl darts-xml-transformations-20220907T060133 git hash: 85d61bd949 Author-Name: Yuxin Cai Author-X-Name-First: Yuxin Author-X-Name-Last: Cai Author-Name: Zeqi Zhu Author-X-Name-First: Zeqi Author-X-Name-Last: Zhu Author-Name: Qi Xue Author-X-Name-First: Qi Author-X-Name-Last: Xue Author-Name: Xinyu Song Author-X-Name-First: Xinyu Author-X-Name-Last: Song Title: Does bitcoin hedge against the economic policy uncertainty: based on the continuous wavelet analysis Abstract: This article aims to test a causal nexus between bitcoin market and economic policy uncertainty. We use the continuous wavelet analysis to investigate lead-lag relationship between bitcoin market and economic policy uncertainty in different time-frequency domains. Our findings show the negative relationship between bitcoin returns and economic policy uncertainty around the period of bitcoin’s currency recognition and COVIC-19 pandemic crisis both daily and monthly time series test. Furthermore, we find that the causality relationship between bitcoin and economic policy uncertainty is relatively indistinct around the period of bitcoin’s currency recognition, while bitcoin returns are leading economic policy uncertainty changes during COVID-19 pandemic crisis, indicating the economic policy uncertainty fluctuation trend can refer to the fluctuation of bitcoin, bitcoin can be viewed as a leading indicator, but it could not be employed as a safe-haven asset hedge against uncertainty during the period of COVID-19 pandemic. Journal: Journal of Applied Economics Pages: 983-996 Issue: 1 Volume: 25 Year: 2022 Month: 12 X-DOI: 10.1080/15140326.2022.2072674 File-URL: http://hdl.handle.net/10.1080/15140326.2022.2072674 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:recsxx:v:25:y:2022:i:1:p:983-996 Template-Type: ReDIF-Article 1.0 # input file: RECS_A_2073149_J.xml processed with: repec_from_jats12.xsl darts-xml-transformations-20220907T060133 git hash: 85d61bd949 Author-Name: Chokri Zehri Author-X-Name-First: Chokri Author-X-Name-Last: Zehri Title: Dampen macroeconomic volatility: a useful role of capital controls on international trade Abstract: Capital controls may adversely affect international trade. This study aims to demonstrate the usefulness of capital controls for reducing macroeconomic volatilities and then mitigating their negative effects on international trade. Using quarterly data, we applied a dynamic panel approach to a sample of 26 countries over the period 2010–2020. By diversifying the estimation techniques and using different capital control indexes, our results show that a capital control policy supports international trade and reduces exchange rate and interest differentials volatilities. The impact of capital controls is asymmetric when considering the role of financial development, the cyclical behavior of capital controls, and the simultaneous use of macroprudential policies. This study raises some policy implications, particularly, the necessary coordination and adjustment of the macroeconomic policies and the importance of targeting long-lasting controls when applying a restrictive policy. Journal: Journal of Applied Economics Pages: 907-935 Issue: 1 Volume: 25 Year: 2022 Month: 12 X-DOI: 10.1080/15140326.2022.2073149 File-URL: http://hdl.handle.net/10.1080/15140326.2022.2073149 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:recsxx:v:25:y:2022:i:1:p:907-935 Template-Type: ReDIF-Article 1.0 # input file: RECS_A_2242110_J.xml processed with: repec_from_jats12.xsl darts-xml-transformations-20230119T200553 git hash: 724830af20 Author-Name: Trang Thi Thuy Nguyen Author-X-Name-First: Trang Thi Thuy Author-X-Name-Last: Nguyen Author-Name: Binh Thai Pham Author-X-Name-First: Binh Thai Author-X-Name-Last: Pham Author-Name: Hector Sala Author-X-Name-First: Hector Author-X-Name-Last: Sala Title: World uncertainty and national fiscal balances Abstract: The Great Recession and the COVID-19 pandemic shared two of its critical macroeconomic consequences: a major increase in world uncertainty and great stress on public finances. In this paper, we show that not only these are not independent phenomena but, on the contrary, world economic uncertainties are relevant in determining country-specific fiscal balances. We provide consistent evidence for 143 countries over the period 1990–2019 that the former harms fiscal balances irrespective of the degree of economic development. In this way, an increase of 0.1 points in the world uncertainty index triggers, on average, 0.15 GDP percentage points deterioration in the fiscal balance. This average value is subject to significant non-linearities characterized by larger negative effects the higher the fiscal balance is. In a critical period in which public debts have climbed to unprecedented historical levels, economic stability appears as a non-negligible factor in the forthcoming process of public accounts rebalancing. Journal: Journal of Applied Economics Issue: 1 Volume: 26 Year: 2023 Month: 12 X-DOI: 10.1080/15140326.2023.2242110 File-URL: http://hdl.handle.net/10.1080/15140326.2023.2242110 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:recsxx:v:26:y:2023:i:1:p:2242110 Template-Type: ReDIF-Article 1.0 # input file: RECS_A_2163580_J.xml processed with: repec_from_jats12.xsl darts-xml-transformations-20230119T200553 git hash: 724830af20 Author-Name: Gumilang Aryo Sahadewo Author-X-Name-First: Gumilang Aryo Author-X-Name-Last: Sahadewo Title: School quality and labor market earnings: some new results on an old debate Abstract: This study addresses an open debate in the literature about the direct effects of measures of school quality on workers’ earnings in the labor market. Card and Kureges (1996) argue that the young sample that Betts (1995) uses understates the effects of the measures of school quality on earnings. The main objective of this study is to investigate the effects of the measures of school quality on earnings at older age, using a recent version of the 1979 National Longitudinal Survey of Youth. The replication of Betts’ analysis show that the measures of school quality did not affect earnings when workers were young. However, the estimation shows that the percentage of teachers with a graduate degree significantly affects workers’ prime-age earnings. The findings support Card and Krueger’s claim that the measures of school quality affected workers’ earnings at older age. More importantly, the results reconcile different findings from two strands of studies in the literature using state-level and individual-level data. Journal: Journal of Applied Economics Issue: 1 Volume: 26 Year: 2023 Month: 12 X-DOI: 10.1080/15140326.2022.2163580 File-URL: http://hdl.handle.net/10.1080/15140326.2022.2163580 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:recsxx:v:26:y:2023:i:1:p:2163580 Template-Type: ReDIF-Article 1.0 # input file: RECS_A_2212455_J.xml processed with: repec_from_jats12.xsl darts-xml-transformations-20230119T200553 git hash: 724830af20 Author-Name: Xiaoxing Liu Author-X-Name-First: Xiaoxing Author-X-Name-Last: Liu Author-Name: Khurram Shehzad Author-X-Name-First: Khurram Author-X-Name-Last: Shehzad Title: Analyzing time-different connectedness among systemic financial markets during the financial crisis and conventional era: New evidence from the VARX-DCC-MEGARCH model Abstract: This investigation utilized the VARX-DCC-MEGARCH model assimilated with skewed-t density to analyze the time-different (i.e., daytime, overnight, and daily) connectedness among S&P 500, DAX 30, FTSE-100, Nikkei 225, and Shanghai Composite Index. This investigation discovered that the current daytime returns transmission from the DAX 30, FTSE 100, and Nikkei 225 index to ensuing overnight returns of the S&P 500 index was inconsequential during the stable period. The study also quantified that shocks befallen in the current overnight returns of the S&P 500 partake bidirectional and negative ties with shocks that occurred in subsequent day-wise returns of the DAX 30 index. Moreover, during crises, only the Shanghai composite index spillovers the volatility of the FTSE 100 index. The study revealed a leverage effect for the day-wise return of the S&P 500, DAX 30, and overnight returns of the FTSE 100 index. Journal: Journal of Applied Economics Issue: 1 Volume: 26 Year: 2023 Month: 12 X-DOI: 10.1080/15140326.2023.2212455 File-URL: http://hdl.handle.net/10.1080/15140326.2023.2212455 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:recsxx:v:26:y:2023:i:1:p:2212455 Template-Type: ReDIF-Article 1.0 # input file: RECS_A_2160139_J.xml processed with: repec_from_jats12.xsl darts-xml-transformations-20230119T200553 git hash: 724830af20 Author-Name: Melaku Abegaz Author-X-Name-First: Melaku Author-X-Name-Last: Abegaz Author-Name: Gibson Nene Author-X-Name-First: Gibson Author-X-Name-Last: Nene Title: Gender wage and productivity gaps in the Ethiopian manufacturing sector Abstract: The paper uses firm-level data to examine gender wage and productivity gaps in the Ethiopian manufacturing sector for the period 1996–2010. It investigates gender wage differentials between skilled and unskilled workers after controlling for factors affecting average wages. Our findings show significant gender wage and productivity gaps and the segregation of female workers into low-paying firms. Controlling for average productivity reduces the magnitude of the wage gap but does not eliminate it. However, results using a simultaneaous estimation of wage equation and production function at a firm-level indicate no significant difference between the gender wage and productivity gaps. As such, further investigation into the sources of the dual gaps using matched employer-employee data is necessary. The Ethiopian government should focus on skill development to improve the productivity of female workers and address the segregation of female workers into low-paying firms. Journal: Journal of Applied Economics Issue: 1 Volume: 26 Year: 2023 Month: 12 X-DOI: 10.1080/15140326.2022.2160139 File-URL: http://hdl.handle.net/10.1080/15140326.2022.2160139 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:recsxx:v:26:y:2023:i:1:p:2160139 Template-Type: ReDIF-Article 1.0 # input file: RECS_A_2286566_J.xml processed with: repec_from_jats12.xsl darts-xml-transformations-20230119T200553 git hash: 724830af20 Author-Name: Haohan Luo Author-X-Name-First: Haohan Author-X-Name-Last: Luo Author-Name: Ying Wu Author-X-Name-First: Ying Author-X-Name-Last: Wu Title: The unintended consequences of environmental tax for green innovation: evidence from China Abstract: Can all types of tax burdens negatively affect corporate innovation activities? The Chinese Environmental Protection Tax Law provides a chance to investigate the impact of environmental taxes on corporate green innovation. Using a large sample of Chinese listed firms for the 2015–2019 period and the difference-in-difference method, this paper finds that environmental taxes promote corporate green innovation. This result is robust to a battery of sensitivity tests and is more prominent for firms facing intense product market competition, firms with more financial constraints, and firms located in lower marketization regions. Mechanism tests find that firms engage in green innovation to cater to government environmental governance. Additional analyses find that environmental taxes have a significant effect on green innovation efficiency and green utility model innovation but fail to impact green invention innovations. Our study provides new and different evidence of the impact of taxes on corporate innovation and has important policy implications. Journal: Journal of Applied Economics Issue: 1 Volume: 26 Year: 2023 Month: 12 X-DOI: 10.1080/15140326.2023.2286566 File-URL: http://hdl.handle.net/10.1080/15140326.2023.2286566 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:recsxx:v:26:y:2023:i:1:p:2286566 Template-Type: ReDIF-Article 1.0 # input file: RECS_A_2279444_J.xml processed with: repec_from_jats12.xsl darts-xml-transformations-20230119T200553 git hash: 724830af20 Author-Name: Ahmad Alkhataybeh Author-X-Name-First: Ahmad Author-X-Name-Last: Alkhataybeh Author-Name: Safaa Adnan AlSmadi Author-X-Name-First: Safaa Adnan Author-X-Name-Last: AlSmadi Author-Name: Alaaeddin Al-Tarawneh Author-X-Name-First: Alaaeddin Author-X-Name-Last: Al-Tarawneh Author-Name: Mohammad A. Khataybeh Author-X-Name-First: Mohammad A. Author-X-Name-Last: Khataybeh Author-Name: Mohammad Ziad Shakhatreh Author-X-Name-First: Mohammad Ziad Author-X-Name-Last: Shakhatreh Title: Ownership structure and corporate cash holdings in Jordan: the role of government ownership Abstract: Using a dataset of 107 listed firms in Jordan from 2009 to 2018, we employed the generalized method of moments (GMM) to examine the effect of ownership structure on the level of corporate cash holdings. We found that higher government ownership is associated with higher cash holdings. On the other hand, different forms of ownership, namely block holding and individual and foreign ownership, were found to be insignificant. We further examined why firms in Jordan hold cash, concluding that when the level of government ownership rises, firms do not employ cash reserves for investments nor for dividend payments, which in light of governmental political purposes could be a clear indicator of agency problems. Journal: Journal of Applied Economics Issue: 1 Volume: 26 Year: 2023 Month: 12 X-DOI: 10.1080/15140326.2023.2279444 File-URL: http://hdl.handle.net/10.1080/15140326.2023.2279444 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:recsxx:v:26:y:2023:i:1:p:2279444 Template-Type: ReDIF-Article 1.0 # input file: RECS_A_2220468_J.xml processed with: repec_from_jats12.xsl darts-xml-transformations-20230119T200553 git hash: 724830af20 Author-Name: Weiwei Yang Author-X-Name-First: Weiwei Author-X-Name-Last: Yang Author-Name: He Wang Author-X-Name-First: He Author-X-Name-Last: Wang Author-Name: Huobao Xie Author-X-Name-First: Huobao Author-X-Name-Last: Xie Title: Does financial deleveraging affect governments’ desirability of privatization? Evidence from the Chinese listed local SOEs Abstract: The rapid growth of local SOEs in China largely depends on high leverage, thus local governments and their SOEs will face harder budget constraints when the central bank implements tight credit policies. Using a sample of listed local SOEs in the Chinese A-share market, this paper attempts to investigate the relationship between financial deleveraging and privatization of local SOEs. We find that privatization of the Chinese local SOEs increases significantly during financial deleveraging, and this effect is more pronounced among SOEs with less tax contribution, fewer employees and that cause greater financial burden to the local governments. This paper broadens the research on environmental factors that drive politicians to privatize. Journal: Journal of Applied Economics Issue: 1 Volume: 26 Year: 2023 Month: 12 X-DOI: 10.1080/15140326.2023.2220468 File-URL: http://hdl.handle.net/10.1080/15140326.2023.2220468 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:recsxx:v:26:y:2023:i:1:p:2220468 Template-Type: ReDIF-Article 1.0 # input file: RECS_A_2167151_J.xml processed with: repec_from_jats12.xsl darts-xml-transformations-20230119T200553 git hash: 724830af20 Author-Name: Alev Atak Author-X-Name-First: Alev Author-X-Name-Last: Atak Author-Name: Gabriel Montes-Rojas Author-X-Name-First: Gabriel Author-X-Name-Last: Montes-Rojas Author-Name: Jose Olmo Author-X-Name-First: Jose Author-X-Name-Last: Olmo Title: Functional coefficient quantile regression model with time-varying loadings Abstract: This paper proposes a functional coefficient quantile regression model with heterogeneous and time-varying regression coefficients and factor loadings. Estimation of the model coefficients is done in two stages. First, we estimate the unobserved common factors from a linear factor model with exogenous covariates. Second, we plug-in an affine transformation of the estimated common factors to obtain the functional coefficient quantile regression model. The quantile parameter estimators are consistent and asymptotically normal. The application of this model to the quantile process of a cross-section of U.S. firms’ excess returns confirms the predictive ability of firm-specific covariates and the good performance of the local estimator of the heterogeneous and time-varying quantile coefficients. Journal: Journal of Applied Economics Issue: 1 Volume: 26 Year: 2023 Month: 12 X-DOI: 10.1080/15140326.2023.2167151 File-URL: http://hdl.handle.net/10.1080/15140326.2023.2167151 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:recsxx:v:26:y:2023:i:1:p:2167151 Template-Type: ReDIF-Article 1.0 # input file: RECS_A_2283339_J.xml processed with: repec_from_jats12.xsl darts-xml-transformations-20230119T200553 git hash: 724830af20 Author-Name: Jinsub Choi Author-X-Name-First: Jinsub Author-X-Name-Last: Choi Title: School finance centralization and revenue levels: evidence from a school finance reform Abstract: This paper studies whether the centralization of public school finance affects school revenue levels. The theoretical framework indicates that centralization has price and income effects on the pivotal voter’s demand for school revenue, but the overall effect is ambiguous. A public school finance reform in Michigan (U.S. state), which centralized its school finance system by restricting local discretion on school revenue, provides a good policy variation for a quasi-experimental design. Using district-level panel data on school finance in Michigan and neighboring states over the fiscal-year period of 1990–2004, I find that the reform has a negative effect on revenue levels. The sixth year after the reform and onwards, the reform reduces per-pupil revenue by $1,300 on average. The reform reduces revenue levels in both low- and high-revenue districts, but the higher-revenue districts tend to sustain more pronounced reductions. Journal: Journal of Applied Economics Issue: 1 Volume: 26 Year: 2023 Month: 12 X-DOI: 10.1080/15140326.2023.2283339 File-URL: http://hdl.handle.net/10.1080/15140326.2023.2283339 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:recsxx:v:26:y:2023:i:1:p:2283339 Template-Type: ReDIF-Article 1.0 # input file: RECS_A_2237692_J.xml processed with: repec_from_jats12.xsl darts-xml-transformations-20230119T200553 git hash: 724830af20 Author-Name: Shengquan Wang Author-X-Name-First: Shengquan Author-X-Name-Last: Wang Author-Name: Yuan Gao Author-X-Name-First: Yuan Author-X-Name-Last: Gao Author-Name: Mingjin Luo Author-X-Name-First: Mingjin Author-X-Name-Last: Luo Title: What drives income inequality? Bayesian evidence from the emerging market economies Abstract: What drives income inequality in emerging market economies? To end it, we approach this topic utilizing Bayesian model averaging and 27 emerging market economies panel dataset from 1990 to 2019. First, differently, we find a U-shaped Kuznets curve in emerging market economies rather than the notable inverted U-shaped curve. Besides, we find four strictly robust determinants of income inequality in emerging market economies, including the population aging, the female labor force participation, the unemployment level and the share of labor compensation in output. These results remain stable through a series of robustness checks. In most cases, the government expenditure and real exchange rate could also robustly drive the dynamics of income inequality in emerging market economies. Further, a comparative analysis suggests that financial development, inflation, human capital condition, total factor productivity and urbanization are distinct determinants of income inequality in the market economies. Journal: Journal of Applied Economics Issue: 1 Volume: 26 Year: 2023 Month: 12 X-DOI: 10.1080/15140326.2023.2237692 File-URL: http://hdl.handle.net/10.1080/15140326.2023.2237692 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:recsxx:v:26:y:2023:i:1:p:2237692 Template-Type: ReDIF-Article 1.0 # input file: RECS_A_2255444_J.xml processed with: repec_from_jats12.xsl darts-xml-transformations-20230119T200553 git hash: 724830af20 Author-Name: Ala’a Adden Abuhommous Author-X-Name-First: Ala’a Adden Author-X-Name-Last: Abuhommous Title: Corporate life cycle and credit scoring Abstract: This paper examines how the corporate life cycle affects credit scoring. Previous empirical studies have shown that the life cycle has an impact on financial policies, creditworthiness, risk and performance. This study utilizes panel data of U.S. listed companies for the period 1985–2017. The Dickinson model, which divides the life cycle into four stages (introduction, growth, mature, and decline), is used. The Probit model is employed to investigate this relationship. The findings show that firms in the introduction, growth, and maturity stages have a favorable and significant impact on the likelihood of a positive credit rating change (upgrade). Conversely, firms in the decline stage show a negative relationship with credit rating positive upgrades. This suggests that credit rating agencies consider a firm’s life cycle status. Therefore, firms should strive to reach the growth and mature phases in order to benefit from higher credit ratings. Journal: Journal of Applied Economics Issue: 1 Volume: 26 Year: 2023 Month: 12 X-DOI: 10.1080/15140326.2023.2255444 File-URL: http://hdl.handle.net/10.1080/15140326.2023.2255444 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:recsxx:v:26:y:2023:i:1:p:2255444 Template-Type: ReDIF-Article 1.0 # input file: RECS_A_2146861_J.xml processed with: repec_from_jats12.xsl darts-xml-transformations-20230119T200553 git hash: 724830af20 Author-Name: Sarvar Gurbanov Author-X-Name-First: Sarvar Author-X-Name-Last: Gurbanov Author-Name: Jeyhun I. Mikayilov Author-X-Name-First: Jeyhun I. Author-X-Name-Last: Mikayilov Author-Name: Shahriyar Mukhtarov Author-X-Name-First: Shahriyar Author-X-Name-Last: Mukhtarov Author-Name: Sakit Yagubov Author-X-Name-First: Sakit Author-X-Name-Last: Yagubov Title: Forecasting 2030 CO2 reduction targets for Russia as a major emitter using different estimation scenarios Abstract: This study firstly analyzes the impact of energy intensities and income on CO2 emissions in Russia, applying different estimation methods to the data period from 1990 to 2020. In addition, the study forecasts CO2 emissions considering 2030 targets under different assumptions and assesses the achievability of the set target. The estimation results concluded that the GDP and fossil fuel intensities of GDP have a statistically positive impact on CO2 emissions. Also, we found that the forecasted value for 2030, for the business-as-usual case, is 1750 MtCO2, with 95% confidence interval values of 1703 MtCO2 and 1796 MtCO2. This result shows that Russia needs to undergo substantial policy interventions to achieve its targets to reduce CO2 emissions. As the fifth biggest emitter, Russia missing its emissions targets will have undesirable implications for the rest of the world. Based on the projection results, the paper discusses some potential policy interventions. Journal: Journal of Applied Economics Issue: 1 Volume: 26 Year: 2023 Month: 12 X-DOI: 10.1080/15140326.2022.2146861 File-URL: http://hdl.handle.net/10.1080/15140326.2022.2146861 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:recsxx:v:26:y:2023:i:1:p:2146861 Template-Type: ReDIF-Article 1.0 # input file: RECS_A_2281167_J.xml processed with: repec_from_jats12.xsl darts-xml-transformations-20230119T200553 git hash: 724830af20 Author-Name: Qihang Xue Author-X-Name-First: Qihang Author-X-Name-Last: Xue Author-Name: Huimin Wang Author-X-Name-First: Huimin Author-X-Name-Last: Wang Author-Name: Jian Wei Author-X-Name-First: Jian Author-X-Name-Last: Wei Title: Internet technology and regional financial fraud: evidence from Broadband expansion in China Abstract: Combined with data from the Broadband China pilots, panel data on financial fraud in prefecture-level cities from China Judgments Online are used to examine the impact of internet technology on financial fraud. We find that internet technology has significantly increased city financial fraud. The causal effect still exists after the model validity test, excluding the selection bias of Broadband China pilot cities and the reporting effect of the internet. Furthermore, the trust effect is an important mechanism, and heterogeneity analysis shows that internet technology has a more significant impact on the financial fraud committed by highly educated and young fraudsters and on high-tech-dependent financial fraud. Journal: Journal of Applied Economics Issue: 1 Volume: 26 Year: 2023 Month: 12 X-DOI: 10.1080/15140326.2023.2281167 File-URL: http://hdl.handle.net/10.1080/15140326.2023.2281167 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:recsxx:v:26:y:2023:i:1:p:2281167 Template-Type: ReDIF-Article 1.0 # input file: RECS_A_2230623_J.xml processed with: repec_from_jats12.xsl darts-xml-transformations-20230119T200553 git hash: 724830af20 Author-Name: Aigerim Zhangaliyeva Author-X-Name-First: Aigerim Author-X-Name-Last: Zhangaliyeva Author-Name: Masaki Nakabayashi Author-X-Name-First: Masaki Author-X-Name-Last: Nakabayashi Title: Legacy of the Czar: Complementarity between education and work in Russia Abstract: Vocational school graduates enjoy a higher employment probability than other types of graduates across industrial economies. This may result from either the signaling effects of vocational school degrees or skill complementarity between vocational schooling and work experience. Regarding wage regressions, signaling effects should make the coefficient of the interaction term between years of schooling and work experience negative, whereas complementarity between education and work experience should increase this coefficient because the cross-derivative of output with respect to schooling and work experience is positive. Thus, the negativity of the interaction term between years of schooling and work experience decreases as schooling becomes more complementary to work. We find that the negativity of the interaction term is smaller for vocational track graduates than for general track graduates in Russia. This result is arguably because the Russian vocational track emphasizes complementarity between education and work to a greater degree than its general track. Journal: Journal of Applied Economics Issue: 1 Volume: 26 Year: 2023 Month: 12 X-DOI: 10.1080/15140326.2023.2230623 File-URL: http://hdl.handle.net/10.1080/15140326.2023.2230623 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:recsxx:v:26:y:2023:i:1:p:2230623 Template-Type: ReDIF-Article 1.0 # input file: RECS_A_2212348_J.xml processed with: repec_from_jats12.xsl darts-xml-transformations-20230119T200553 git hash: 724830af20 Author-Name: Roberto Cellini Author-X-Name-First: Roberto Author-X-Name-Last: Cellini Title: Suicide and the economy: a regional analysis of italy Abstract: This note investigates the empirical pattern of suicides across Italy over the last 15 years. Typically, a country shares similar basic cultural and social macro-features. Yet in Italy there are marked variations across the regions such that it provides a useful setting to examine the economic factors that influence suicidality. The results align with some earlier work positing an N-shaped Kuznets curve linking income and the suicide rate. Female participation in the labour market emerges as a robust explanatory factor for male and female suicide rates. Journal: Journal of Applied Economics Issue: 1 Volume: 26 Year: 2023 Month: 12 X-DOI: 10.1080/15140326.2023.2212348 File-URL: http://hdl.handle.net/10.1080/15140326.2023.2212348 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:recsxx:v:26:y:2023:i:1:p:2212348 Template-Type: ReDIF-Article 1.0 # input file: RECS_A_2160897_J.xml processed with: repec_from_jats12.xsl darts-xml-transformations-20230119T200553 git hash: 724830af20 Author-Name: Yingxian Tan Author-X-Name-First: Yingxian Author-X-Name-Last: Tan Author-Name: Yahui Wang Author-X-Name-First: Yahui Author-X-Name-Last: Wang Title: Private investment and public stimulus: a bargaining model Abstract: Local governments often provide tax-subsidy programs to attract corporate investment. Using a game-theoretic real options model between a firm and a government, this paper aims to explore the interaction between the government’s tax-subsidy policy and the firm’s investment and financing decisions. The optimal incentive policies are derived for cooperative and non-cooperative bargaining settings between a government and a firm. We show that it is optimal for the government to offer a tax-subsidy combination in the cooperative setting. However, this is not true for the non-cooperative setting, in which the optimal policy is to only levy taxes with no investment subsidy. Whereas firms always have an incentive to rely on debt financing in the non-cooperative setting, firms are reluctant to issue debt in the cooperative setting. Finally, it is generally optimal for the government to collect taxes at a lower rate in the case of high risk high-tech enterprises. Journal: Journal of Applied Economics Issue: 1 Volume: 26 Year: 2023 Month: 12 X-DOI: 10.1080/15140326.2022.2160897 File-URL: http://hdl.handle.net/10.1080/15140326.2022.2160897 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:recsxx:v:26:y:2023:i:1:p:2160897 Template-Type: ReDIF-Article 1.0 # input file: RECS_A_2194599_J.xml processed with: repec_from_jats12.xsl darts-xml-transformations-20230119T200553 git hash: 724830af20 Author-Name: Changying Li Author-X-Name-First: Changying Author-X-Name-Last: Li Title: Welfare implications of overlapping ownership with endogenous quality Abstract: In the context of a vertically differentiated duopoly model with endogenous quality choice, we analyzes the welfare effect of overlapping ownership when the market is fully covered. The results show that overlapping ownership, while detrimental for consumer surplus, may increase or decrease social welfare and firms’ profits. In particular, when the overlapping ownership structure is such that the lower-quality firm acquires a positive share of the higher-quality firm’s profit, an increase in overlapping ownership reduces the lower-quality firm’s incentive to compete against its rival, leading to a higher level of industry profit and, therefore, a higher level of overall welfare. Journal: Journal of Applied Economics Issue: 1 Volume: 26 Year: 2023 Month: 12 X-DOI: 10.1080/15140326.2023.2194599 File-URL: http://hdl.handle.net/10.1080/15140326.2023.2194599 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:recsxx:v:26:y:2023:i:1:p:2194599 Template-Type: ReDIF-Article 1.0 # input file: RECS_A_2207325_J.xml processed with: repec_from_jats12.xsl darts-xml-transformations-20230119T200553 git hash: 724830af20 Author-Name: Chengchun Li Author-X-Name-First: Chengchun Author-X-Name-Last: Li Author-Name: Huanhuan Lu Author-X-Name-First: Huanhuan Author-X-Name-Last: Lu Author-Name: Min Wu Author-X-Name-First: Min Author-X-Name-Last: Wu Author-Name: Da Teng Author-X-Name-First: Da Author-X-Name-Last: Teng Title: The role of instituions in the corporate debt-productivity relationship: evidence from listed firms in China Abstract: This paper examines the relationship between corporate debt and firm productivity. We add to the existing literature by investigating the contingency effect of institutional quality in the corporate debt-productivity nexus. Using data for 2,084 Chinese listed firms, we find that corporate debt and political institutional quality have significant and negative impacts on productivity while legal institutional quality is significantly and positively associated with productivity. Also, our results reveal that both financial and fintech-supporting institutional factors exert negative contingency effects in the corporate debt-productivity relationship. Our findings provide a reasonable guideline for emerging market countries aiming to address the corporate debt overhang problem or seeking factors to boost firm productivity growth. Journal: Journal of Applied Economics Issue: 1 Volume: 26 Year: 2023 Month: 12 X-DOI: 10.1080/15140326.2023.2207325 File-URL: http://hdl.handle.net/10.1080/15140326.2023.2207325 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:recsxx:v:26:y:2023:i:1:p:2207325 Template-Type: ReDIF-Article 1.0 # input file: RECS_A_2188634_J.xml processed with: repec_from_jats12.xsl darts-xml-transformations-20230119T200553 git hash: 724830af20 Author-Name: Patrick Jaquart Author-X-Name-First: Patrick Author-X-Name-Last: Jaquart Author-Name: Marvin Motz Author-X-Name-First: Marvin Author-X-Name-Last: Motz Author-Name: Lutz Köhler Author-X-Name-First: Lutz Author-X-Name-Last: Köhler Author-Name: Christof Weinhardt Author-X-Name-First: Christof Author-X-Name-Last: Weinhardt Title: The impact of active and passive investment on market efficiency: a simulation study Abstract: We create a simulated financial market and examine the effect of different levels of active and passive investment on fundamental market efficiency. In our simulated market, active, passive, and random investors interact with each other through issuing orders. Active and passive investors select their portfolio weights by optimizing Markowitz-based utility functions. We find that higher fractions of active investment within a market lead to an increased fundamental market efficiency. The marginal increase in fundamental market efficiency per additional active investor is lower in markets with higher levels of active investment. Furthermore, we find that a large fraction of passive investors within a market may facilitate technical price bubbles, resulting in market failure. By examining the effect of specific parameters on market outcomes, we find that that lower transaction costs, lower individual forecasting errors of active investors, and less restrictive portfolio constraints tend to increase fundamental market efficiency in the market. Journal: Journal of Applied Economics Issue: 1 Volume: 26 Year: 2023 Month: 12 X-DOI: 10.1080/15140326.2023.2188634 File-URL: http://hdl.handle.net/10.1080/15140326.2023.2188634 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:recsxx:v:26:y:2023:i:1:p:2188634 Template-Type: ReDIF-Article 1.0 # input file: RECS_A_2163581_J.xml processed with: repec_from_jats12.xsl darts-xml-transformations-20230119T200553 git hash: 724830af20 Author-Name: José A. C. Vieira Author-X-Name-First: José A. C. Author-X-Name-Last: Vieira Author-Name: Francisco J. F. Silva Author-X-Name-First: Francisco J. F. Author-X-Name-Last: Silva Author-Name: João C. A. Teixeira Author-X-Name-First: João C. A. Author-X-Name-Last: Teixeira Author-Name: António J. V. F. G. Menezes Author-X-Name-First: António J. V. F. G. Author-X-Name-Last: Menezes Author-Name: Sancha N. B. de Azevedo Author-X-Name-First: Sancha N. B. Author-X-Name-Last: de Azevedo Title: Climbing the ladders of job satisfaction and employee organizational commitment: cross-country evidence using a semi-nonparametric approach Abstract: Satisfied and committed employees play a major positive role in business performance in today’s globalized and competitive landscape. This paper contributes to the literature on the empirical determinants of job satisfaction and organizational commitment, drawing on a rich micro dataset for 36 countries, using a flexible semi-nonparametric approach, which nests and outperforms the standard ordered probit model. The findings indicate that job satisfaction and organizational commitment can be fostered by instruments which can be controlled by management. Our results shed timely light on how managers can improve job satisfaction and organizational commitment and address implications of the Great Resignation. However, despite the ever-increasing pace of globalization and expanding role of multinationals across the globe in shaping work environments, our results uncover that significant cross-country differences in job satisfaction and organizational commitment do exist, even after controlling for a plethora of job-and-workplace manageable attributes and individual (including religious dimensions) related characteristics. Journal: Journal of Applied Economics Issue: 1 Volume: 26 Year: 2023 Month: 12 X-DOI: 10.1080/15140326.2022.2163581 File-URL: http://hdl.handle.net/10.1080/15140326.2022.2163581 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:recsxx:v:26:y:2023:i:1:p:2163581 Template-Type: ReDIF-Article 1.0 # input file: RECS_A_2259245_J.xml processed with: repec_from_jats12.xsl darts-xml-transformations-20230119T200553 git hash: 724830af20 Author-Name: Shiue-Hung Lin Author-X-Name-First: Shiue-Hung Author-X-Name-Last: Lin Title: The measurement of zombie enterprise under information asymmetry–a case of China’s iron and steel industry Abstract: The problem of zombie enterprises originated in Japan’s bubble economy around 1990. Afterward, after China’s oversupply problem in 2016, it gained attention and received policy support from the Chinese government in solving related problems. The contribution of this measurement is to integrate the investor’s demand index for listed companies and the company’s actual production and operation performance simultaneously. Based on the panel data of 28 Chinese-listed iron and steel enterprises from 2003 to 2022, the simulation and empirical analysis are carried out. Our research found that the 28 listed steel enterprises in China generally performed poorly from 2007 to 2016, and even some steel enterprises had negative operating profits, but they still survived in the market. In addition, there is a problem of information asymmetry between the actual operation of the enterprise and the capital or financial market in the listed steel industry in China. Journal: Journal of Applied Economics Issue: 1 Volume: 26 Year: 2023 Month: 12 X-DOI: 10.1080/15140326.2023.2259245 File-URL: http://hdl.handle.net/10.1080/15140326.2023.2259245 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:recsxx:v:26:y:2023:i:1:p:2259245 Template-Type: ReDIF-Article 1.0 # input file: RECS_A_2185975_J.xml processed with: repec_from_jats12.xsl darts-xml-transformations-20230119T200553 git hash: 724830af20 Author-Name: Constantin Rudolf Salomo Bürgi Author-X-Name-First: Constantin Rudolf Salomo Author-X-Name-Last: Bürgi Title: How to deal with missing observations in surveys of professional forecasters Abstract: Survey forecasts are prone to entry and exit of forecasters as well as forecasters not contributing every period leading to gaps. These gaps make it difficult to compare individual forecasters to each other and raises the question of how to deal with the missing observations. This is addressed for the variables GDP, CPI inflation, and unemployment for the US. The theoretically optimal method of filling in missing observations is derived and compared to several competing methods. It is found that not filling in missing observations and taking the previous value do not perform particularly well. For the other methods assessed, there is no clear superior approach for all use cases, but the theoretically optimal one usually performs quite well. Journal: Journal of Applied Economics Issue: 1 Volume: 26 Year: 2023 Month: 12 X-DOI: 10.1080/15140326.2023.2185975 File-URL: http://hdl.handle.net/10.1080/15140326.2023.2185975 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:recsxx:v:26:y:2023:i:1:p:2185975 Template-Type: ReDIF-Article 1.0 # input file: RECS_A_2223953_J.xml processed with: repec_from_jats12.xsl darts-xml-transformations-20230119T200553 git hash: 724830af20 Author-Name: Xueting Deng Author-X-Name-First: Xueting Author-X-Name-Last: Deng Author-Name: Yuqing Zheng Author-X-Name-First: Yuqing Author-X-Name-Last: Zheng Author-Name: J.S. Butler Author-X-Name-First: J.S. Author-X-Name-Last: Butler Title: An empirical analysis of e-cigarette addiction Abstract: This paper examines the role of addiction in influencing the demand for e-cigarettes using the Nielsen Retail Scanner Data and the Nielsen Consumer Panel Data between 2012 and 2017. With a comparison of a myopic addiction model, a forward-looking model, and a rational addiction model, this paper tests whether the consumption of e-cigarettes is addictive and rational. Results from both the macro data and the microdata support the rational addictiveness of e-cigarettes. Applying an OLS method and an instrumental variable method in causal inference, results show that the long-run price elasticity estimates are larger than the estimates of the short-run price elasticity of demand for e-cigarettes. Estimates of both long-run and short-run elasticities are greater than one, −1.50 and −1.05, suggesting e-cigarette demand is elastic in both the long run and short run. Journal: Journal of Applied Economics Issue: 1 Volume: 26 Year: 2023 Month: 12 X-DOI: 10.1080/15140326.2023.2223953 File-URL: http://hdl.handle.net/10.1080/15140326.2023.2223953 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:recsxx:v:26:y:2023:i:1:p:2223953 Template-Type: ReDIF-Article 1.0 # input file: RECS_A_2272112_J.xml processed with: repec_from_jats12.xsl darts-xml-transformations-20230119T200553 git hash: 724830af20 Author-Name: Antonio Carlos de Campos Author-X-Name-First: Antonio Carlos Author-X-Name-Last: de Campos Author-Name: Luís Lopes Author-X-Name-First: Luís Author-X-Name-Last: Lopes Author-Name: Carlos Carreira Author-X-Name-First: Carlos Author-X-Name-Last: Carreira Title: Spatial location and agglomeration economies in exports: empirical evidence by technological intensities in Brazil Abstract: This study investigates spatial autocorrelation and the formation of spatial export clusters of Brazilian mesoregions based on technological intensity. It also analyzes how regional knowledge and agglomeration economies explain regional exports, using spatial econometric techniques. Brazilian exports exhibit a stronger spatial autocorrelation. Non-manufacturing sectors, which are less technology-intensive, exhibit lower spatial dependence than manufacturing sectors. The results also show an autocorrelation between exports and R&D expenditure, identifying the formation of clusters in the southeastern and southern regions. R&D expenditure fosters the growth of regional exports and the spatial lag effects of exports and R&D expenditure are significant in the high technology-intensive manufacturing sector. Journal: Journal of Applied Economics Issue: 1 Volume: 26 Year: 2023 Month: 12 X-DOI: 10.1080/15140326.2023.2272112 File-URL: http://hdl.handle.net/10.1080/15140326.2023.2272112 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:recsxx:v:26:y:2023:i:1:p:2272112 Template-Type: ReDIF-Article 1.0 # input file: RECS_A_2232965_J.xml processed with: repec_from_jats12.xsl darts-xml-transformations-20230119T200553 git hash: 724830af20 Author-Name: Juan Pedro Eberhard Author-X-Name-First: Juan Pedro Author-X-Name-Last: Eberhard Author-Name: Javier Fernandez Author-X-Name-First: Javier Author-X-Name-Last: Fernandez Author-Name: Catalina Lauer Author-X-Name-First: Catalina Author-X-Name-Last: Lauer Title: Effects of maternity on labor outcomes and employment quality for women in Chile Abstract: Parenthood have a significant impact on engagement in the labor force. Parents may decide to look for jobs with specific characteristics, and in some cases, they may decide to not participate in the labor market. Using survey data from Chile, we use a propensity score matching estimation to compare various labor outcomes of women and men with and without children. We found that maternity has an impact on several dimensions of labor engagement. To study how these multidimensional effects are compounded at the individual level, we use a quality of employment (QoE) index to estimate the drop in job quality post-childbirth. We found a drop in quality only for mothers. Moreover, for less educated women, the drop in QoE is equivalent to no longer being hired under contract. For single mothers, the drop is equivalent to a reduction in wages that would make the family fall below the poverty line. Journal: Journal of Applied Economics Issue: 1 Volume: 26 Year: 2023 Month: 12 X-DOI: 10.1080/15140326.2023.2232965 File-URL: http://hdl.handle.net/10.1080/15140326.2023.2232965 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:recsxx:v:26:y:2023:i:1:p:2232965 Template-Type: ReDIF-Article 1.0 # input file: RECS_A_2158009_J.xml processed with: repec_from_jats12.xsl darts-xml-transformations-20230119T200553 git hash: 724830af20 Author-Name: Paul Carrillo-Maldonado Author-X-Name-First: Paul Author-X-Name-Last: Carrillo-Maldonado Author-Name: Javier Díaz-Cassou Author-X-Name-First: Javier Author-X-Name-Last: Díaz-Cassou Author-Name: Miguel Flores Author-X-Name-First: Miguel Author-X-Name-Last: Flores Title: What are the main variables that influence the dynamics of Ecuador’s sovereign risk? Abstract: This paper analyzes the determinants of Ecuador’s sovereign spreads as measured by the EMBI index. We use Bayesian algorithms to estimate a structural vector autoregressive model with three blocks (international, regional, and domestic). Global variables drive most of the dynamics of the Ecuadorian EMBI, also influenced by the evolution of sovereign risks in other Latin American countries like Chile and Peru. We likewise show that the increase in public debt is the primary domestic variable affecting the Ecuadorian EMBI. Journal: Journal of Applied Economics Issue: 1 Volume: 26 Year: 2023 Month: 12 X-DOI: 10.1080/15140326.2022.2158009 File-URL: http://hdl.handle.net/10.1080/15140326.2022.2158009 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:recsxx:v:26:y:2023:i:1:p:2158009 Template-Type: ReDIF-Article 1.0 # input file: RECS_A_2285129_J.xml processed with: repec_from_jats12.xsl darts-xml-transformations-20230119T200553 git hash: 724830af20 Author-Name: Wen Yue Author-X-Name-First: Wen Author-X-Name-Last: Yue Title: Export duration and export product quality of firms: evidence from China Abstract: This study analyzes how export duration affects firms’ export product quality. On the basis of Chinese firms’ micro data, we find that export duration has a significantly positive effect on the export product quality of firms by promoting their productivity and innovation ability. This study shows that the effect of export duration on the product quality of firms is not only reflected in the stage when they enter the export market. After entering the export market, the extension of export duration is also conducive to the improvement of firms’ product quality, supporting the wide presence of the effects of learning by exporting. Therefore, this study provides new empirical evidence to further understand the influence of export market on firms’ product quality. Journal: Journal of Applied Economics Issue: 1 Volume: 26 Year: 2023 Month: 12 X-DOI: 10.1080/15140326.2023.2285129 File-URL: http://hdl.handle.net/10.1080/15140326.2023.2285129 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:recsxx:v:26:y:2023:i:1:p:2285129 Template-Type: ReDIF-Article 1.0 # input file: RECS_A_2279446_J.xml processed with: repec_from_jats12.xsl darts-xml-transformations-20230119T200553 git hash: 724830af20 Author-Name: Pu-Yan Nie Author-X-Name-First: Pu-Yan Author-X-Name-Last: Nie Author-Name: Hong-Xing Wen Author-X-Name-First: Hong-Xing Author-X-Name-Last: Wen Author-Name: Chan Wang Author-X-Name-First: Chan Author-X-Name-Last: Wang Title: Optimal collective reputation Abstract: Collective reputation, such as watches “made in Switzerland”, affects the whole industry all over the world. This article highlights the relationship between competition and collective reputation. First, collective quality level depends on firms objectives. Second, the collectively determined quality of profit incentive firms reaches social optimal level. Finally, quality restriction is more efficient than subsidies to promote collective quality. The policy implication is that antitrust policy should not care about jointly determined quality for profit incentive firms. Further, cooperative innovation is encouraged to promote the collective reputation or cooperative innovation promotes the values of patents by collective reputation. Journal: Journal of Applied Economics Issue: 1 Volume: 26 Year: 2023 Month: 12 X-DOI: 10.1080/15140326.2023.2279446 File-URL: http://hdl.handle.net/10.1080/15140326.2023.2279446 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:recsxx:v:26:y:2023:i:1:p:2279446 Template-Type: ReDIF-Article 1.0 # input file: RECS_A_2183629_J.xml processed with: repec_from_jats12.xsl darts-xml-transformations-20230119T200553 git hash: 724830af20 Author-Name: Jingwan Liu Author-X-Name-First: Jingwan Author-X-Name-Last: Liu Author-Name: Wei Tang Author-X-Name-First: Wei Author-X-Name-Last: Tang Author-Name: Xingzhu Zhao Author-X-Name-First: Xingzhu Author-X-Name-Last: Zhao Title: Celebrity shareholders and corporate risk: Based on empirical evidence gathered from Chinese companies listed on the New Third Board Abstract: Using the 2014 to 2019 Forbes China Celebrity Lists, this study empirically examined the relationship between celebrity shareholders and corporate risk. The findings suggest that celebrity shareholders increased corporate risk. And the main reason is that the capital structure of the enterprise changes significantly after the celebrity shares in the enterprise. Furthermore, this study finds that celebrity shareholders had a greater impact on corporate risk among firms with no independent directors, a high proportion of management shareholders, a low proportion of institutional investors and those belonging to the Innovation tier. Based on China’s unique cultural and market environment, the findings of this study enrich the literature on the impact of celebrities and corporate risk, revealing the economic consequences of celebrity securitization. Journal: Journal of Applied Economics Issue: 1 Volume: 26 Year: 2023 Month: 12 X-DOI: 10.1080/15140326.2023.2183629 File-URL: http://hdl.handle.net/10.1080/15140326.2023.2183629 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:recsxx:v:26:y:2023:i:1:p:2183629 Template-Type: ReDIF-Article 1.0 # input file: RECS_A_2207326_J.xml processed with: repec_from_jats12.xsl darts-xml-transformations-20230119T200553 git hash: 724830af20 Author-Name: Qiang Chen Author-X-Name-First: Qiang Author-X-Name-Last: Chen Author-Name: Ji Qi Author-X-Name-First: Ji Author-X-Name-Last: Qi Title: How much should we trust R2 and adjusted R2: evidence from regressions in top economics journals and Monte Carlo simulations Abstract: R2 and adjusted R2 may exaggerate a model’s true ability to predict the dependent variable in the presence of overfitting, whereas leave-one-out R2 (LOOR2) is robust to overfitting. We demonstrate this by replicating 279 regressions from 100 papers in top economics journals, where the median increases of R2 and adjusted R2 over LOOR2 reach 40.2% and 21.4% respectively. The inflation of test errors over training errors increases with the severity of overfitting as measured by the number of regressors and nonlinear terms, and the presence of outliers, but decreases with the sample size. These results are further validated by Monte Carlo simulations. Journal: Journal of Applied Economics Issue: 1 Volume: 26 Year: 2023 Month: 12 X-DOI: 10.1080/15140326.2023.2207326 File-URL: http://hdl.handle.net/10.1080/15140326.2023.2207326 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:recsxx:v:26:y:2023:i:1:p:2207326 Template-Type: ReDIF-Article 1.0 # input file: RECS_A_2261756_J.xml processed with: repec_from_jats12.xsl darts-xml-transformations-20230119T200553 git hash: 724830af20 Author-Name: António Miguel Martins Author-X-Name-First: António Miguel Author-X-Name-Last: Martins Author-Name: Pedro Correia Author-X-Name-First: Pedro Author-X-Name-Last: Correia Author-Name: Susana Cró Author-X-Name-First: Susana Author-X-Name-Last: Cró Title: Stock market reaction to the military conflict between Russia and Ukraine: an event study for the European tourism and hospitality industry Abstract: This paper examines the short-term market reaction of European tourism and hospitality industry to the beginning of the military conflict between Russia and Ukraine (24 February 2022). Using an event study, for a sample of 165 listed firms, we observe a negative and statistically significant stock price reaction at and around the beginning of the military conflict between Russia and Ukraine. These results are consistent with investor sentiment hypothesis and asset-pricing perspective. These reactions are reinforced or mitigated by firm-specific characteristics such as liquidity, size, profitability, and institutional ownership. Finally, we find that listed firms located in: (i) countries in which Russia and Ukraine are the largest source of inbound foreign tourists, and (ii) countries formerly occupied by the Soviet Union and/or that share a common border with Russia, tend to show more negative abnormal returns. Journal: Journal of Applied Economics Issue: 1 Volume: 26 Year: 2023 Month: 12 X-DOI: 10.1080/15140326.2023.2261756 File-URL: http://hdl.handle.net/10.1080/15140326.2023.2261756 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:recsxx:v:26:y:2023:i:1:p:2261756 Template-Type: ReDIF-Article 1.0 # input file: RECS_A_2222964_J.xml processed with: repec_from_jats12.xsl darts-xml-transformations-20230119T200553 git hash: 724830af20 Author-Name: Tin H. Ho Author-X-Name-First: Tin H. Author-X-Name-Last: Ho Author-Name: Dat T. Nguyen Author-X-Name-First: Dat T. Author-X-Name-Last: Nguyen Author-Name: Thu B. Luu Author-X-Name-First: Thu B. Author-X-Name-Last: Luu Author-Name: Tu D.Q. Le Author-X-Name-First: Tu D.Q. Author-X-Name-Last: Le Author-Name: Thanh D. Ngo Author-X-Name-First: Thanh D. Author-X-Name-Last: Ngo Title: Bank performance during the COVID-19 pandemic: does income diversification help? Abstract: The Covid-19 pandemic’s economic effect led to tighter credit standards and a decline in the market for many types of loans. With a rich database of 1,231 banks in 90 countries from 2018Q1 to 2021Q4, we conducted a timely, broad-based international study to investigate whether non-interest activities, serving as a shock absorber, can promote bank performance before and during the Covid−19 pandemic. When using a dynamic panel data model with a system GMM estimator, our findings indicate that banks should be encouraged to diversify their income sources to reduce the adverse effects of the shock. With comparative analysis, we also found heterogeneous effects of income diversification on bank performance by its components, in pre-Covid−19 and during-Covid−19 periods, in both developed and developing countries. This study implies that bank managers should diversify income sources, especially fee-based services, trading activities, and foreign currency, to foster financial performance and stability during exogenous shocks. Journal: Journal of Applied Economics Issue: 1 Volume: 26 Year: 2023 Month: 12 X-DOI: 10.1080/15140326.2023.2222964 File-URL: http://hdl.handle.net/10.1080/15140326.2023.2222964 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:recsxx:v:26:y:2023:i:1:p:2222964 Template-Type: ReDIF-Article 1.0 # input file: RECS_A_2258616_J.xml processed with: repec_from_jats12.xsl darts-xml-transformations-20230119T200553 git hash: 724830af20 Author-Name: Khalid Usman Author-X-Name-First: Khalid Author-X-Name-Last: Usman Title: The linkages between trade, financial openness, and economic growth in China: an ARDL-bound test approach Abstract: This research examines the linkages between trade, financial openness, and economic growth in China from 1992 to 2021, using Granger causality analysis in the ECM model to identify the trend of a causal relationship between the variables. The results confirm the validity of export-led growth and the supply-leading hypotheses in China. Moreover, China’s broad money is output-oriented, and the significance of exports to China’s economy is supported by the influence of real income and imports caused by exports. Lastly, the research highlights that domestic credit expansion by the banking industry stimulates global trade growth; however, import changes cause broad money fluctuations. Policymakers can utilize these findings to identify the trend of the growth and development of the trade and financial industry of the economy, as there is substantial proof that a meaningful relationship is occurring between economic growth, trade, and the financial development sectors of the economy. Journal: Journal of Applied Economics Issue: 1 Volume: 26 Year: 2023 Month: 12 X-DOI: 10.1080/15140326.2023.2258616 File-URL: http://hdl.handle.net/10.1080/15140326.2023.2258616 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:recsxx:v:26:y:2023:i:1:p:2258616 Template-Type: ReDIF-Article 1.0 # input file: RECS_A_2168464_J.xml processed with: repec_from_jats12.xsl darts-xml-transformations-20230119T200553 git hash: 724830af20 Author-Name: Leonardo Maldonado Author-X-Name-First: Leonardo Author-X-Name-Last: Maldonado Title: Living in darkness: rural poverty in Venezuela Abstract: This paper uses nighttime lights imagery and gridded population datasets to estimate 2000–2020 rural poverty rates for Venezuela at the state and municipality levels. Then, I examine if there has been a significant change in rural poverty during the economic collapse ongoing since 2013–2014. The main finding reveals that most of the Venezuelan territory experienced a considerable increase in rural poverty rates between 2014 and 2020. Furthermore, I confirm how new rural poor areas appear across the country in clusters, surrounding municipalities with moderate to high poverty rates. This suggests that in recent years, more Venezuelans have sunk in darkness. Journal: Journal of Applied Economics Issue: 1 Volume: 26 Year: 2023 Month: 12 X-DOI: 10.1080/15140326.2023.2168464 File-URL: http://hdl.handle.net/10.1080/15140326.2023.2168464 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:recsxx:v:26:y:2023:i:1:p:2168464 Template-Type: ReDIF-Article 1.0 # input file: RECS_A_2178798_J.xml processed with: repec_from_jats12.xsl darts-xml-transformations-20230119T200553 git hash: 724830af20 Author-Name: Inbae Ji Author-X-Name-First: Inbae Author-X-Name-Last: Ji Author-Name: Jeffrey D. Vitale Author-X-Name-First: Jeffrey D. Author-X-Name-Last: Vitale Author-Name: Pilja P. Vitale Author-X-Name-First: Pilja P. Author-X-Name-Last: Vitale Author-Name: Brian D. Adam Author-X-Name-First: Brian D. Author-X-Name-Last: Adam Title: Technical efficiency of U.S. Western Great Plains wheat farms using stochastic frontier analysis Abstract: Technical efficiency (TE) is an important measure of farm performance. This study measured the TE of wheat farms across six states in the U.S. Western Great Plains based on production and farm management-specific variables. Significant factors positively influencing efficiency were insecticide use, farm size, and tillage. Alternatively, government payments, crop insurance, off-farm income, and crop share rates had negative effects on efficiency. Kansas and Oklahoma farms were more efficient than Nebraska and Wyoming farms in the sample. Average TE score of 0.56 indicates a substantial gap between average producers and the most efficient ones located near the TE frontier. Benchmarking the highly efficient farms provides best-management practices enabling less-efficient farms move closer to the efficient frontier. Extension specialists and collaboration among farms could transfer the skills and techniques through workshops, webinars, fact sheets, and social media pages. Journal: Journal of Applied Economics Issue: 1 Volume: 26 Year: 2023 Month: 12 X-DOI: 10.1080/15140326.2023.2178798 File-URL: http://hdl.handle.net/10.1080/15140326.2023.2178798 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:recsxx:v:26:y:2023:i:1:p:2178798 Template-Type: ReDIF-Article 1.0 # input file: RECS_A_2241167_J.xml processed with: repec_from_jats12.xsl darts-xml-transformations-20230119T200553 git hash: 724830af20 Author-Name: Ali Hojati Najafabadi Author-X-Name-First: Ali Author-X-Name-Last: Hojati Najafabadi Author-Name: Mohammad H. Rahmati Author-X-Name-First: Mohammad H. Author-X-Name-Last: Rahmati Author-Name: Seyed Ali Madanizadeh Author-X-Name-First: Seyed Ali Author-X-Name-Last: Madanizadeh Title: The dynamic of discriminatory reform: how does discretionary pricing neutralize the productivity gains of energy subsidy reform in Iran? Abstract: A distortion caused by previous policies could distort the results of reforms. This may explain why policies to reduce industrial fuel subsidies have not necessarily resulted in increases in aggregate productivity in countries with mandated pricing. To identify and measure these distortions’ effects, we estimate a structural dynamic firm model with endogenous technology adaptation using data from the manufacturing firms in Iran. By connecting two price distortions and their results on the real sector, results suggest significant room for a distributional policy. We estimated dispersion elasticity comparable to the price elasticity of energy consumption in the manufacturing sector. Results suggest that the intensive margin is the primary driver of energy price elasticity, whereas the other channels mostly offset it. Moreover, total factor productivity slightly improves in light of a reduction in energy consumption if, at the same time, the redistribution policy boosts the aggregate demands. Journal: Journal of Applied Economics Issue: 1 Volume: 26 Year: 2023 Month: 12 X-DOI: 10.1080/15140326.2023.2241167 File-URL: http://hdl.handle.net/10.1080/15140326.2023.2241167 File-Format: text/html File-Restriction: Access to full text is restricted to subscribers. Handle: RePEc:taf:recsxx:v:26:y:2023:i:1:p:2241167