Template-Type: ReDIF-Article 1.0
Author-Name: Tong Hun Lee
Author-X-Name-First: Tong Hun
Author-X-Name-Last: Lee
Author-Name: Keun Jon Chung
Author-X-Name-First: Keun Jon
Author-X-Name-Last: Chung
Title: On Measuring The True Cost of Living for the Developing Country: Case of Korea
Abstract:
In a rapidly developing country without an adequate mortgage market, it
is difficult to impute the cost of owning a home and, as a result, this
cost is often omitted from the Consumer Price Index (CPI). To resolve this
difficulty, by using an intertemporal consumption allocation model, this
paper develops a method for deriving the user cost of owner-occupied
housing which is in turn incorporated in the so-called True Cost of Living
Index (TCLI). When applied to Korea as an example, the statistical results
show substantially higher inflation than previously assumed, indicating
the importance of homeownership cost in measuring the standard of living
for a developing country. Thus, in both theory and practice, our TCLI
based on the Diewert-superlative chain index is superior to the
conventional fixed weight CPI, indicating its usefulness not just for
Korea but also for other countries [C43, D11, O53]
Journal: International Economic Journal
Pages: 1-14
Issue: 1
Volume: 11
Year: 1997
X-DOI: 10.1080/10168739700000001
File-URL: http://www.tandfonline.com/doi/abs/10.1080/10168739700000001
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Handle: RePEc:taf:intecj:v:11:y:1997:i:1:p:1-14
Template-Type: ReDIF-Article 1.0
Author-Name: Zhen Zhu
Author-X-Name-First: Zhen
Author-X-Name-Last: Zhu
Title: Dynamic Inconsistency and Exchange-Rate Target Zones: A Welfare Analysis
Abstract:
This paper examines the welfare implications of different exchange-rate
systems, especially an exchange-rate target-zone system, in a context of
monetary policy making and dynamic inconsistency. It is shown that when
there is uncertainty, there is a trade-off between commitment to a rule
and discretion. A free-floating exchange-rate system may have the same
loss function values in terms of price and output fluctuations as that of
a target zone. However, a target-zone system may be more attractive since
there is less exchange-rate fluctuation. Returning to a fixed-rate system
may be worse since it may bring about larger welfare losses especially
when supply shocks dominate. [F31, E52]
Journal: International Economic Journal
Pages: 15-38
Issue: 1
Volume: 11
Year: 1997
X-DOI: 10.1080/10168739700000002
File-URL: http://www.tandfonline.com/doi/abs/10.1080/10168739700000002
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Handle: RePEc:taf:intecj:v:11:y:1997:i:1:p:15-38
Template-Type: ReDIF-Article 1.0
Author-Name: Hassan Shirvani
Author-X-Name-First: Hassan
Author-X-Name-Last: Shirvani
Author-Name: Barry Wilbratte
Author-X-Name-First: Barry
Author-X-Name-Last: Wilbratte
Title: The Relationship Between The Real Exchange Rate and The Trade Balance: An Empirical Reassessment
Abstract:
This paper presents an empirical reassessment of the relationship between
the real exchange rate and the trade balance, using the multivariate
cointegration approach. Based on bilateral trade between the U. S. and the
other G7 countries, we find evidence that the trade balance is
unresponsive to the exchange rate in the very short run but is
significantly affected by it within two years. We also find evidence
supporting the empirical validity of the Marshall-Lerner condition,
indicating that devaluations do improve the trade balance in the long
run.[F32]
Journal: International Economic Journal
Pages: 39-50
Issue: 1
Volume: 11
Year: 1997
X-DOI: 10.1080/10168739700000003
File-URL: http://www.tandfonline.com/doi/abs/10.1080/10168739700000003
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Handle: RePEc:taf:intecj:v:11:y:1997:i:1:p:39-50
Template-Type: ReDIF-Article 1.0
Author-Name: Imad Moosa
Author-X-Name-First: Imad
Author-X-Name-Last: Moosa
Author-Name: Razzaque Bhatti
Author-X-Name-First: Razzaque
Author-X-Name-Last: Bhatti
Title: Are Asian Markets Integrated? Evidence for Six Countries Vis-A-Vis Japan
Abstract:
This paper presents some empirical evidence on the degree of integration
between the goods and financial markets of Japan and six Asian countries.
The evidence is obtained by testing two international parity conditions
using unconventional specifications: uncovered interest parity (UIP) and
ex ante purchasing power parity (PPP). The results of cointegration tests
are strongly supportive of the two conditions over the period 1980-1994.
The paper concludes that Asian goods and financial markets have reached a
high level of integration. [G14]
Journal: International Economic Journal
Pages: 51-67
Issue: 1
Volume: 11
Year: 1997
X-DOI: 10.1080/10168739700000004
File-URL: http://www.tandfonline.com/doi/abs/10.1080/10168739700000004
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Handle: RePEc:taf:intecj:v:11:y:1997:i:1:p:51-67
Template-Type: ReDIF-Article 1.0
Author-Name: Hans-Jurgen Engelbrecht
Author-X-Name-First: Hans-Jurgen
Author-X-Name-Last: Engelbrecht
Title: The Impact of International Trade on Real Wages in U.S. Manufacturing, 1985-1989
Abstract:
This study investigates the impact of international trade on real wages
earned in U.S. manufacturing during the period 1985-89. Many of the
previous studies which try to explain the structure of U.S. industry wages
include only the negative impact of increased import penetration, or they
exclude international trade variables altogether. In order to obtain a
more balanced assessment of trade effects, wage equations including, in
turn, an import-, export-, and net trade variable are estimated using a
generalised least squares procedure. A parsimonious modelling approach is
adopted which focuses on a few catch-all variables instead of the large
number of variables used in many micro wage studies. It is found that
trade had a positive impact on the average real wage, despite the massive
trade deficits during the period. Further analysis suggests that it
increased both the competitive wage and the amount of economic rent earned
by workers, with the impact on the former being stronger than the impact
on the latter. However, other variables, in particular capital intensity,
had even stronger positive impacts. [F14]
Journal: International Economic Journal
Pages: 69-86
Issue: 1
Volume: 11
Year: 1997
X-DOI: 10.1080/10168739700000005
File-URL: http://www.tandfonline.com/doi/abs/10.1080/10168739700000005
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Handle: RePEc:taf:intecj:v:11:y:1997:i:1:p:69-86
Template-Type: ReDIF-Article 1.0
Author-Name: Yoonbai Kim
Author-X-Name-First: Yoonbai
Author-X-Name-Last: Kim
Title: How Real are Real Exchange Rates?
Abstract:
This Paper analyzes the role of real disturbances in the real dollar
exchange rates of the mark, yen and the pound both during the post-1973
float and in the long-run historical date. The results indicate dominate
roles of real shocks in all three exchange rates in the post-1973 float
although a substantial portion of short-run variations in the mark and yen
contains monetary characteristics. In the long historical date, real
shocks are far less important explaining only a small portion of nominal
exchange rate movements and 50 to 80 percent of real exchange rate
movements. The analysis is based on the Mundell-Fleming-Dornbusch model as
the structural model and the multivariate method of time series
decomposition to incorporate the long-run invariance of the exchange rate
with respect to monetary shocks. [F31, F41]
Journal: International Economic Journal
Pages: 87-108
Issue: 1
Volume: 11
Year: 1997
X-DOI: 10.1080/10168739700000006
File-URL: http://www.tandfonline.com/doi/abs/10.1080/10168739700000006
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Handle: RePEc:taf:intecj:v:11:y:1997:i:1:p:87-108
Template-Type: ReDIF-Article 1.0
Author-Name: Mohsen Bahmani-Oskooee
Author-X-Name-First: Mohsen
Author-X-Name-Last: Bahmani-Oskooee
Author-Name: Hyun-Jae Rhee
Author-X-Name-First: Hyun-Jae
Author-X-Name-Last: Rhee
Title: Are Imports and Exports of Korea Cointegrated?
Abstract:
Few studies have investigated the long-run convergence between imports
and exports of a country. This paper investigates the Korean experience
and founds that korea's imports and exports are cointegrated. The results
indicate that Korea is not in violation of its international budget
constraint. [F10]
Journal: International Economic Journal
Pages: 109-114
Issue: 1
Volume: 11
Year: 1997
X-DOI: 10.1080/10168739700000007
File-URL: http://www.tandfonline.com/doi/abs/10.1080/10168739700000007
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Handle: RePEc:taf:intecj:v:11:y:1997:i:1:p:109-114
Template-Type: ReDIF-Article 1.0
Author-Name: Howell Zee
Author-X-Name-First: Howell
Author-X-Name-Last: Zee
Title: Endogenous Time Preference and Endogenous Growth
Abstract:
This paper develops a one-sector aggregate endogenous growth model with
intertemporal preference dependence. The resultant model possesses the
fundamental property of growth convergence, in the sense that countries
with identical parameters regarding technology, preference, and government
policy will converge to a steady state with the same (positive) growth
rate. A notable tax policy implication of the model is that, even in the
absence of externalities, the growth effects of an income tax are shown to
be a priori ambiguous and dependent on the relative magnitudes of the tax
rate and the tax elasticity of the savings rate.
Journal: International Economic Journal
Pages: 1-20
Issue: 2
Volume: 11
Year: 1997
X-DOI: 10.1080/10168739700000008
File-URL: http://www.tandfonline.com/doi/abs/10.1080/10168739700000008
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Handle: RePEc:taf:intecj:v:11:y:1997:i:2:p:1-20
Template-Type: ReDIF-Article 1.0
Author-Name: Anil Lal
Author-X-Name-First: Anil
Author-X-Name-Last: Lal
Title: Import Liberalization, Urban Unemployment, and Capital Mobility: a Welfare Analysis
Abstract:
This paper examines the issue of import liberalization in the presence of
urban unemployment when capital moves freely in and out of the rural area.
To this end, the specific-factors version of the Harris-Todaro model is
utilized. Formulas for the calculation of the shadow price of foreign
exchange and capital are derived under alternative forms of import
restrictions. It is shown that, as compared to an initial situation of
capital immobility, international capital mobility, induced by reduction
in alternative forms of import restrictions into the rural area is welfare
enhancing.
Journal: International Economic Journal
Pages: 21-37
Issue: 2
Volume: 11
Year: 1997
X-DOI: 10.1080/10168739700000009
File-URL: http://www.tandfonline.com/doi/abs/10.1080/10168739700000009
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Handle: RePEc:taf:intecj:v:11:y:1997:i:2:p:21-37
Template-Type: ReDIF-Article 1.0
Author-Name: Philip Bodman
Author-X-Name-First: Philip
Author-X-Name-Last: Bodman
Title: The Australian Trade Balance and Current Account: a Time Series Perspective
Abstract:
This paper examines the dynamic relationship between Australian imports
and exports in both the short and long-run using recent cointegration and
error-correction techniques. The analysis has direct implications over the
specification and estimation of Australian import and export functions and
resulting elasticity estimates. The paper also addresses the issue of
sustainability of persistent current account deficits in the Australian
context and provides a test of whether Australia is satisfying its
intertemporal (or present value) budget constraint (IBC).
Journal: International Economic Journal
Pages: 39-57
Issue: 2
Volume: 11
Year: 1997
X-DOI: 10.1080/10168739700000010
File-URL: http://www.tandfonline.com/doi/abs/10.1080/10168739700000010
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Handle: RePEc:taf:intecj:v:11:y:1997:i:2:p:39-57
Template-Type: ReDIF-Article 1.0
Author-Name: Farrokh Nourzad
Author-X-Name-First: Farrokh
Author-X-Name-Last: Nourzad
Title: The Short-and Long-Run Relationships Between the Exchange Rate of the Dollar and Producer Prices in the U.S.
Abstract:
This paper investigates empirically the relationship between exchange
rates and producer prices in the U.S. using a multivariate dynamic
framework. Cointegration tests reveal that is a stable long-run
relationship between prices, exchange rates and other factors according to
which depreciations lead to higher prices. However, the estimated effect
is not consistent with the pure form of the purchasing power parity
hypothesis. It is also found that in the short run, the rate of price
inflation. Finally, there appears to be bi-directional causality between
producer prices and exchange rates. [E31, F31, F41[
Journal: International Economic Journal
Pages: 59-71
Issue: 2
Volume: 11
Year: 1997
X-DOI: 10.1080/10168739700000011
File-URL: http://www.tandfonline.com/doi/abs/10.1080/10168739700000011
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Handle: RePEc:taf:intecj:v:11:y:1997:i:2:p:59-71
Template-Type: ReDIF-Article 1.0
Author-Name: Thomas Chiang
Author-X-Name-First: Thomas
Author-X-Name-Last: Chiang
Author-Name: Jose Trinidad
Author-X-Name-First: Jose
Author-X-Name-Last: Trinidad
Title: Risk and International Parity Conditions: A Synthesis from Consumption Based Models
Abstract:
Built on a consumption-based capital asset pricing model, this paper
presents a coherent theoretical framework from which the main
international parity conditions are derived. These conditions represent
market equilibria characterized by the equality of gross returns after
adjustment for risk premia. The spectrum of assets treated is broadened to
include equity markets. The parity conditions obtained from the model are
then used to characterize the relationships for the pricing of risks
encountered in international finance. Only two fundamental types of
aggregate risk matter when pricing any asset: equity risk and foreign
exchange rate risk. The relative riskiness of an asset can then be
approximately measured by a linear combination of equity and foreign
exchange risk premia. [F30, G12]
Journal: International Economic Journal
Pages: 73-101
Issue: 2
Volume: 11
Year: 1997
X-DOI: 10.1080/10168739700000012
File-URL: http://www.tandfonline.com/doi/abs/10.1080/10168739700000012
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Handle: RePEc:taf:intecj:v:11:y:1997:i:2:p:73-101
Template-Type: ReDIF-Article 1.0
Author-Name: Ky-Hyang Yuhn
Author-X-Name-First: Ky-Hyang
Author-X-Name-Last: Yuhn
Title: Financial Integration and Market Efficiency: Some International Evidence from Cointegration Tests
Abstract:
This study investigates whether the globalization of financial markets
enhances the efficiency of national stock markets. To this end, we have
developed a dynamic representation of cointegration which is consistent
with hypothesis that stock prices reflect the efficient discounting of new
information on market fundamentals and testes for market efficiency in
five industrialized markets (the United States, Canada, Japan, the United
Kingdom, and Germany) over the last two decades. Our empirical analysis
indicates that the U.S. and Canadian stock markets obey the long-run
equilibrium path implied by our dynamic cointegration model, but the
Japanese, British, and German markets do not exhibit such characteristics.
Thus, it can be claimed that the stock markets of the United States and
Canada are informationally efficient, whereas those of Japan, the United
Kingdom, and Germany are not. [G15, G14]
Journal: International Economic Journal
Pages: 103-116
Issue: 2
Volume: 11
Year: 1997
X-DOI: 10.1080/10168739700000013
File-URL: http://www.tandfonline.com/doi/abs/10.1080/10168739700000013
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Handle: RePEc:taf:intecj:v:11:y:1997:i:2:p:103-116
Template-Type: ReDIF-Article 1.0
Author-Name: Y. Stephen Chiu
Author-X-Name-First: Y. Stephen
Author-X-Name-Last: Chiu
Title: International Public Goods Coordination: Do Trade Barriers Matter?
Abstract:
This paper presents a model in which countries form economic unions which
each determine common commercial policy and coordinate public good
investment which generate cross-country externalities for its members. The
scenario that all countries integrate into unions of the same size is
studied. The focus is how the public good investment and national welfare
vary with degrees of trade barriers and regionalism. Results are compared
with those obtained in the public goods coordination literature that
assumes free trade or homogeneous private goods. [F15, H40]
Journal: International Economic Journal
Pages: 117-135
Issue: 2
Volume: 11
Year: 1997
X-DOI: 10.1080/10168739700000014
File-URL: http://www.tandfonline.com/doi/abs/10.1080/10168739700000014
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Handle: RePEc:taf:intecj:v:11:y:1997:i:2:p:117-135
Template-Type: ReDIF-Article 1.0
Author-Name: Kenneth Hanson
Author-X-Name-First: Kenneth
Author-X-Name-Last: Hanson
Author-Name: Kenneth Reinert
Author-X-Name-First: Kenneth
Author-X-Name-Last: Reinert
Title: The Distributional Effects of U.S. Textile and Apparel Protection
Abstract:
A number of studies have estimated the effects of U.S. textile and
apparel protection. Most of these studies have not addressed the impact of
these protective measures on the distribution of household income. This
paper addresses the income distribution issue using a computable general
equilibrium model of the United States with a disaggregated household
sector. We find that liberalization of textile and apparel import
restraints improves the real income of all household categories, but does
so more for higher income households. Therefore, liberalization of these
protective measures will be slightly regressive. [F13, F14]
Journal: International Economic Journal
Pages: 1-12
Issue: 3
Volume: 11
Year: 1997
X-DOI: 10.1080/10168739700000015
File-URL: http://www.tandfonline.com/doi/abs/10.1080/10168739700000015
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Handle: RePEc:taf:intecj:v:11:y:1997:i:3:p:1-12
Template-Type: ReDIF-Article 1.0
Author-Name: Lawrence Kaufmann
Author-X-Name-First: Lawrence
Author-X-Name-Last: Kaufmann
Title: A Model of Spillovers Through Labor Recruitment
Abstract:
This paper develops a model where spillovers can be generated through
domestic firm recruitment of employees at a multinational corporation
(MNC) where more advanced technologies are employed. It is shown that both
spillover and no-spilover equilibria are possible in the model, depending
on the marginal costs and benefits of recruitment. Spillover benefits
depend on demand parameters and the technological capabilities of the
domestic firm, and spillover costs are determined by the MNC's internal
wage. Compared with the no-spillover equilibrium, spillovers lead to fewer
technology transfers by the MNC and higher market prices. [031, F23]
Journal: International Economic Journal
Pages: 13-33
Issue: 3
Volume: 11
Year: 1997
X-DOI: 10.1080/10168739700000016
File-URL: http://www.tandfonline.com/doi/abs/10.1080/10168739700000016
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Handle: RePEc:taf:intecj:v:11:y:1997:i:3:p:13-33
Template-Type: ReDIF-Article 1.0
Author-Name: David Collie
Author-X-Name-First: David
Author-X-Name-Last: Collie
Title: Delegation and Strategic Trade Policy
Abstract:
In a trade policy game where the domestic government uses a tariff and
the foreign government uses an export subsidy, it is shown that the
domestic government should delegate to a policy-maker who attaches less
weight to the profits of the domestic firm than the welfare maximizing
government. This makes domestic trade policy less aggressive and increases
both domestic and foreign welfare. It is even possible that the optimal
policy-maker attaches a negative weight to the profits of the domestic
firm [F12, F13]
Journal: International Economic Journal
Pages: 35-46
Issue: 3
Volume: 11
Year: 1997
X-DOI: 10.1080/10168739700000017
File-URL: http://www.tandfonline.com/doi/abs/10.1080/10168739700000017
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Handle: RePEc:taf:intecj:v:11:y:1997:i:3:p:35-46
Template-Type: ReDIF-Article 1.0
Author-Name: Bruce Felmincham
Author-X-Name-First: Bruce
Author-X-Name-Last: Felmincham
Author-Name: Peter Mansfield
Author-X-Name-First: Peter
Author-X-Name-Last: Mansfield
Title: Rationality and the Risk Premium on the Australian dollar
Abstract:
A Model of the forward rate error of the USD/AUD spot exchange rate is
fitted to daily data for the period 15th December 1983 to 31st December
1991. This provides a data set of 2034 daily trading observations.
Explanations of the forecast error include a risk premium represented by a
constant plus the conditional variance generated from a GARCH (1,1)-M
analysis of the error process and information variables in the form of
lagged forward rate errors. The following conclusions are drawn form
estimates for the full sample: the USD/AUD spot rate is subject to a
constant premium: there is little evidence to support a time varying
component and the market is influenced by lagged forward errors. Sub
period estimation confirms these results, although a time varying premium
is evident prior to the February 1985 depreciation. The economic
implications of these findings are discussed. [F31]
Journal: International Economic Journal
Pages: 47-59
Issue: 3
Volume: 11
Year: 1997
X-DOI: 10.1080/10168739700000018
File-URL: http://www.tandfonline.com/doi/abs/10.1080/10168739700000018
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Handle: RePEc:taf:intecj:v:11:y:1997:i:3:p:47-59
Template-Type: ReDIF-Article 1.0
Author-Name: Jon Ford
Author-X-Name-First: Jon
Author-X-Name-Last: Ford
Author-Name: Henry Thompson
Author-X-Name-First: Henry
Author-X-Name-Last: Thompson
Title: Global Sensitivity of Neoclassical and Factor Proportions Models to Production Technology.
Abstract:
This paper pictures the global influence of various patterns of returns
to scale in the general equilibrium model of production with two factors
and two goods. Constant, increasing, and decreasing returns to scale at
the sectoral level are explicitly specified. The changing slope and
curvature of contract curves, isoquants, production frontiers, and
relative price lines are examined under various Cobb-Douglas and
exponential production functions. Fundamental properties of neoclassical
and factory proportions theory are thus illustrated. [D50, F11]
Journal: International Economic Journal
Pages: 61-74
Issue: 3
Volume: 11
Year: 1997
X-DOI: 10.1080/10168739700000019
File-URL: http://www.tandfonline.com/doi/abs/10.1080/10168739700000019
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Handle: RePEc:taf:intecj:v:11:y:1997:i:3:p:61-74
Template-Type: ReDIF-Article 1.0
Author-Name: Don Clark
Author-X-Name-First: Don
Author-X-Name-Last: Clark
Author-Name: David Walker
Author-X-Name-First: David
Author-X-Name-Last: Walker
Title: Do Outward-Oriented Developing Economies Industrialize Faster?
Abstract:
This paper investigates the relationship between trade policy orientation
and industrialization. Rates of industrial diffusion, rather than per
capita output growth rates, are related to Dollar's (1992) index of real
exchange rate distortion to establish the superiority of outward-oriented
strategies in fostering industrial development. Results suggest developing
countries will have more success in their efforts ot industrialize if they
adopt outward-oriented trade strategies. [F13, O4]
Journal: International Economic Journal
Pages: 75-83
Issue: 3
Volume: 11
Year: 1997
X-DOI: 10.1080/10168739700000020
File-URL: http://www.tandfonline.com/doi/abs/10.1080/10168739700000020
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Handle: RePEc:taf:intecj:v:11:y:1997:i:3:p:75-83
Template-Type: ReDIF-Article 1.0
Author-Name: James Kahn
Author-X-Name-First: James
Author-X-Name-Last: Kahn
Author-Name: Jong-Soo Lim
Author-X-Name-First: Jong-Soo
Author-X-Name-Last: Lim
Author-Name: Changyong Rhee
Author-X-Name-First: Changyong
Author-X-Name-Last: Rhee
Title: Birth, Death, and Dynamic Inefficiency in an Endogenous Growth Model
Abstract:
This paper builds a finite horizon endogenous growth model by
incorporating Lucas' (1988) human capital model into an uncertain lifetime
framework a la Buiter (1988). Our finite horizon model has different
policy implication from infinite horizon models. For example, a
non-positive link between capital income taxation and economic growth in
infinite horizon models does not hold in our finite horizon model. Also,
our finite horizon model shows that the short-run macro management policy
which has only the level effect in infinite horizon models can affect the
long-run economic growth. [O4]
Journal: International Economic Journal
Pages: 85-102
Issue: 3
Volume: 11
Year: 1997
X-DOI: 10.1080/10168739700000021
File-URL: http://www.tandfonline.com/doi/abs/10.1080/10168739700000021
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Handle: RePEc:taf:intecj:v:11:y:1997:i:3:p:85-102
Template-Type: ReDIF-Article 1.0
Author-Name: Bartholomew Armah
Author-X-Name-First: Bartholomew
Author-X-Name-Last: Armah
Author-Name: James Peoples
Author-X-Name-First: James
Author-X-Name-Last: Peoples
Title: Foreign Corporate Acquisition Activity Domestic Union Status in the U.S.
Abstract:
The Influence of corporate acquisitions on union membership may differ
when the acquiring firm if foreign instead of domestic. This study tests
this hypothesis by estimating union status equation that includes measures
of foreign and domestic acquisition activity. The findings suggest that
the tendency of foreign owners to acquire firms in less capital intensive
industries partly explain the higher probability of union membership in
industries experiencing foreign acquisition activity. [J3]
Journal: International Economic Journal
Pages: 103-115
Issue: 3
Volume: 11
Year: 1997
X-DOI: 10.1080/10168739700000022
File-URL: http://www.tandfonline.com/doi/abs/10.1080/10168739700000022
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Handle: RePEc:taf:intecj:v:11:y:1997:i:3:p:103-115
Template-Type: ReDIF-Article 1.0
Author-Name: Suk-In Chang
Author-X-Name-First: Suk-In
Author-X-Name-Last: Chang
Title: The Effects of Economic Integration Between North and South Korea: A Computable General Equilibrium Analysis
Abstract:
This paper investigates the potential impact of economic integration
between North and South Korea on the economy of South Korea. A
nine-sector, trade-focused, computable general equilibrium (CGE) model is
constructed. The model is used to quantify the likely consequences of
various forms of economic integration between the two Koreas. The
simulation results indicate that unless factor movement (labor inflow from
the North, and capital outflow to the same) are considered, any
preferential trading system between the two Koreas has an inconsequential
impact (positive or negative, aggregate or sectoral) from the viewpoint of
the south. Much greater effects, however, follow from factor movements.
[C68, D68, F13, F15]
Journal: International Economic Journal
Pages: 1-16
Issue: 4
Volume: 11
Year: 1997
X-DOI: 10.1080/10168739700000023
File-URL: http://www.tandfonline.com/doi/abs/10.1080/10168739700000023
File-Format: text/html
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Handle: RePEc:taf:intecj:v:11:y:1997:i:4:p:1-16
Template-Type: ReDIF-Article 1.0
Author-Name: John Baffore-Bonnie
Author-X-Name-First: John
Author-X-Name-Last: Baffore-Bonnie
Author-Name: Mohammed Khayum
Author-X-Name-First: Mohammed
Author-X-Name-Last: Khayum
Title: Economic Development, Life-Cycle Consumption and Planning Hirizon
Abstract:
This article presents estimates of consumer planning horizons for
countries at different levels of economic development. Within an
intertemporal optimization framework a direct relationship is observed
between the length of consumers' planning horizons and the level of
economic development. In particular, consumption behavior in a sample of
developed economies reflect longer planning horizons than in the sample of
less developed economics. The average planning horizon for a group of less
developed economies is about 7 months, while it is 1.6 and 3.8 years for
middle and high income economies, respectively. [E21, O50]
Journal: International Economic Journal
Pages: 17-37
Issue: 4
Volume: 11
Year: 1997
X-DOI: 10.1080/10168739700000024
File-URL: http://www.tandfonline.com/doi/abs/10.1080/10168739700000024
File-Format: text/html
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Handle: RePEc:taf:intecj:v:11:y:1997:i:4:p:17-37
Template-Type: ReDIF-Article 1.0
Author-Name: Roland Craigwell
Author-X-Name-First: Roland
Author-X-Name-Last: Craigwell
Author-Name: Sudesh Samaroo
Author-X-Name-First: Sudesh
Author-X-Name-Last: Samaroo
Title: Dynamic Modelling of the Current Accounts: Evidence from the Caribbean
Abstract:
This paper uses time series and pooled data to estimate the current
account function of a non-oil developing country (Barbados) and an oil
dependent economy (Trinidad and Tobago). The pooled data reveals that the
terms of trade (TOT), the government variable (BSGDP), foreign incomes
(FGDP), the prime rate and long term capital flows (LTKGDP) are
significant variables. The cointegration-error correction model suggests
that in Trinidad and Tobago, the exchange rate, BSGDP and FGDP are
important explanatory variables; for Barbados, TOT and the BSGDP ratio are
influential in the long-run while the latter ratio and LTKGDP are
important short run regressors. [F10, F11]
Journal: International Economic Journal
Pages: 39-50
Issue: 4
Volume: 11
Year: 1997
X-DOI: 10.1080/10168739700000025
File-URL: http://www.tandfonline.com/doi/abs/10.1080/10168739700000025
File-Format: text/html
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Handle: RePEc:taf:intecj:v:11:y:1997:i:4:p:39-50
Template-Type: ReDIF-Article 1.0
Author-Name: G. Chris Rodrigo
Author-X-Name-First: G. Chris
Author-X-Name-Last: Rodrigo
Author-Name: Will Martin
Author-X-Name-First: Will
Author-X-Name-Last: Martin
Title: Can The World Trading System Accommodate More East Asian Style Exporters?
Abstract:
A CGE model of world trade is used to examine whether many developing
countries can simultaneously expand manufactures exports along East Asian
lines without suffering serious terms of trade decline and consequent
welfare loss. Experiments are performed in which manufactures exports are
expanded for each developing region in turn and for all regions
simultaneously. When driven by productivity gains in manufactures exports
production, welfare gains are found to be significant and stable, even
enhanced by parallel advances in other developing regions: i.e. export
growth is mutually reinforcing as a result of extensive South-South
manufactures flow, a pattern that is intensifying. [F 17]
Journal: International Economic Journal
Pages: 51-72
Issue: 4
Volume: 11
Year: 1997
X-DOI: 10.1080/10168739700000026
File-URL: http://www.tandfonline.com/doi/abs/10.1080/10168739700000026
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Handle: RePEc:taf:intecj:v:11:y:1997:i:4:p:51-72
Template-Type: ReDIF-Article 1.0
Author-Name: Dipendra Sinha
Author-X-Name-First: Dipendra
Author-X-Name-Last: Sinha
Title: Determinants of Import Demand in Thailand
Abstract:
This study estimates an aggregate import demand function for Thailand.
The earlier studies on import demand based on time series date did not
deal with the issue of stationarity of the time series before estimation.
Using the cointegration approach, we find aggregate import demand for
Thailand to be price inelastic, cross price inelastic (with respect to
domestic price) and income inelastic in the short run. In the long run,
aggregate import demand is still price inelastic and cross price
inelastic. However, aggregate import demand is highly income elastic in
the long run. [C22, F14]
Journal: International Economic Journal
Pages: 73-873
Issue: 4
Volume: 11
Year: 1997
X-DOI: 10.1080/10168739700000027
File-URL: http://www.tandfonline.com/doi/abs/10.1080/10168739700000027
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Handle: RePEc:taf:intecj:v:11:y:1997:i:4:p:73-873
Template-Type: ReDIF-Article 1.0
Author-Name: Bun Song Lee
Author-X-Name-First: Bun Song
Author-X-Name-Last: Lee
Author-Name: Joseph Phillips
Author-X-Name-First: Joseph
Author-X-Name-Last: Phillips
Title: The Earnings Experience of Rural-Urban Migrants in Korea
Abstract:
Migration models in the Harris-Todaro tradition imply that urban informal
sector earnings are less than rural sector earnings. Examining the
situation for Korea, we find that both urban formal and informal sector
earnings exceed earnings opportunities in rural areas, making rural-urban
migration the best decision for the individual and for the Korean economy
in terms of maximizing output. A Dutch Disease model is offered as an
explanation for the unexpected strength of urban informal sector earnings.
The implication for policy makers is that government efforts may be better
directed toward mitigating the externalities caused by over-crowding,
rather than attempting to influence population movements. [J31]
Journal: International Economic Journal
Pages: 85-101
Issue: 4
Volume: 11
Year: 1997
X-DOI: 10.1080/10168739700000028
File-URL: http://www.tandfonline.com/doi/abs/10.1080/10168739700000028
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Handle: RePEc:taf:intecj:v:11:y:1997:i:4:p:85-101
Template-Type: ReDIF-Article 1.0
Author-Name: Mohsen Bahmani-Oskooee
Author-X-Name-First: Mohsen
Author-X-Name-Last: Bahmani-Oskooee
Author-Name: Hyun-Jae Rhee
Author-X-Name-First: Hyun-Jae
Author-X-Name-Last: Rhee
Title: Response of Domestic Production to Depreciation in Korea: an Application of Johansen's Conintegration Methodology
Abstract:
Theoretical and empirical studies concerned with the effects of
devaluation on domestic production have generally concluded that while in
industrial countries devaluation is expansionary, in developing nations it
is contractionary. In this paper we consider the experience of Korea
alone. After adopting a reduced form model from the literature, we
employed Johansen's cointegration and error-correction technique and used
quarterly data over 1971-94 to show that in Korea real depreciation of the
Korean won is indeed expansionary. [F31, F41]
Journal: International Economic Journal
Pages: 103-112
Issue: 4
Volume: 11
Year: 1997
X-DOI: 10.1080/10168739700000029
File-URL: http://www.tandfonline.com/doi/abs/10.1080/10168739700000029
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Handle: RePEc:taf:intecj:v:11:y:1997:i:4:p:103-112
Template-Type: ReDIF-Article 1.0
Author-Name: Sajid Anwar
Author-X-Name-First: Sajid
Author-X-Name-Last: Anwar
Title: International Transmission of Government Spending, Monopolistic Competition and North-South Trade
Abstract:
This paper utilises a North-South general equilibrium model where South
exports an intermediate good to North in exchange for differentiated
goods. The model is used to examine international transmission of
government spending and its welfare implications. It is shown that an
increase in government spending in North (South) can increase (decrease)
the number of differentiated goods produced, thereby decreasing
(increasing) the degree of monopoly power in North. Furthermore an
increase in government spending in South can decrease the welfare North,
but the impact of an increase in government spending in North the welfare
of South cannot be unambiguously determined. [F11, H41]
Journal: International Economic Journal
Pages: 113-126
Issue: 4
Volume: 11
Year: 1997
X-DOI: 10.1080/10168739700000030
File-URL: http://www.tandfonline.com/doi/abs/10.1080/10168739700000030
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Handle: RePEc:taf:intecj:v:11:y:1997:i:4:p:113-126
Template-Type: ReDIF-Article 1.0
Author-Name: Maxwell Fry
Author-X-Name-First: Maxwell
Author-X-Name-Last: Fry
Title: Savings, Investment, Growth and Financial Distortions in Pacific Asia and Other Developing Areas
Abstract:
I estimate a simultaneous-equation model in which the real deposit rate
of interest and the black market exchange rate premium affect saving,
investment, export growth and output growth. The estimates corroborate
earlier findings that directeffects of financial distortions on savings
are minuscule. Because a major determinant of savings is the output growth
rate, however, I find that saving is influenced substantially, albeit
indirectly, by financial distortions through their effect on investment,
export growth, and output growth. Simulations indicate that difference in
the average values of the financial distortion variables explain
approximately 50 percent of the difference in saving ratios and 75 percent
of the difference in out put growth rate between five Pacific Asian
countries and 11 countries in other developing areas. [E20, E44, F41, O11,
O16]
Journal: International Economic Journal
Pages: 1-24
Issue: 1
Volume: 12
Year: 1998
X-DOI: 10.1080/10168739800000001
File-URL: http://www.tandfonline.com/doi/abs/10.1080/10168739800000001
File-Format: text/html
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Handle: RePEc:taf:intecj:v:12:y:1998:i:1:p:1-24
Template-Type: ReDIF-Article 1.0
Author-Name: Chulho Jung
Author-X-Name-First: Chulho
Author-X-Name-Last: Jung
Author-Name: Khosrow Doroodian
Author-X-Name-First: Khosrow
Author-X-Name-Last: Doroodian
Title: The Persistence And Japan's Trade Surplus
Abstract:
In this study we use tiem-series data to examine the persistence of
Japanese trade balance surplus and the existence of a J-curve effect for
the period 1975 (I)-1990(I). We extend the earlier studies by applying the
Shiller lag model to the first differences of the variables that are
subject to a unite root process. The empirical findings support the
J-curve effect for Japan and also illustrate that it take 13 quarters
before the full effect of an exchange rate change on the trade balance is
realized. The results also suggest that in 1985(I), for example, a
once-and for -all real currency appreciation of 36.2 percent would remove
the average quarterly real trade balance surplus of 2.5 trillion yen in 13
quartets, ceteris paribys.[F30]
Journal: International Economic Journal
Pages: 25-37
Issue: 1
Volume: 12
Year: 1998
X-DOI: 10.1080/10168739800000002
File-URL: http://www.tandfonline.com/doi/abs/10.1080/10168739800000002
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Handle: RePEc:taf:intecj:v:12:y:1998:i:1:p:25-37
Template-Type: ReDIF-Article 1.0
Author-Name: Chan Il Park
Author-X-Name-First: Chan Il
Author-X-Name-Last: Park
Title: Transactions Demand for Money and the Inverse Relation Between Inflation and Output: the Case of Korean Economy
Abstract:
This study develops a model of inflation which combines the simple
quantity theory with the cash-in-advance model. The econometric results
show that (a) the transactions demand for money can explain, contrary to
the Phillips curve proposition, the negative relation between inflation
and real output growth; (b) the proposition that asset transactions may
influence the transactions demand for money independently of fluctuations
in real output and interest rate does not stand up even given an extremely
active stock market; and (c) the implication of Tsiang's cash-in-advance
model that international trade can be a separate source of the
transactions demand is not supported. Policy markers should take into
account the aggregate demand pressure in the form of nominal money supply
growth in excess of growth in money demand, rather than the nominal money
supply growth along. [E41]
Journal: International Economic Journal
Pages: 39-51
Issue: 1
Volume: 12
Year: 1998
X-DOI: 10.1080/10168739800000003
File-URL: http://www.tandfonline.com/doi/abs/10.1080/10168739800000003
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Handle: RePEc:taf:intecj:v:12:y:1998:i:1:p:39-51
Template-Type: ReDIF-Article 1.0
Author-Name: Menzie Chinn
Author-X-Name-First: Menzie
Author-X-Name-Last: Chinn
Author-Name: William Maloney
Author-X-Name-First: William
Author-X-Name-Last: Maloney
Title: Financial and Capital Account Liberalization in the Pacific Basin: Korea and Taiwan During the 1980's
Abstract:
This paper presents an alternative method of testing for financial
capital mobility in the absence of forward exchange markets. A model of
domestic interest rate determination during liberalization is applied to
Korean and Taiwanese data. A variety fo diagnostic and recursive tests are
used to isolate structural breaks in the data. It is shown that Korean
interest rates behave as if determined domestically until late 1988 or
early 1989, while Taiwanese rates exhibit this behavior until early 1989.
Thereafter, these economies' interest rates appear tightly linked to the
Euro Yen rate. These results contrast with those obtained by Reisen and
Yeches (1993) which indicated a single opening and closing for Korea, and
no structural break for Taiwan. They also differ from those results of Jwa
(1994) indicating two temporary openings for Korea. Greater integraton of
these domestic markets with world financial markets suggests that it will
be more difficult for these countries to stabilize their economies in the
face of capital inflows and outflows. [F32,F34]
Journal: International Economic Journal
Pages: 53-74
Issue: 1
Volume: 12
Year: 1998
X-DOI: 10.1080/10168739800000004
File-URL: http://www.tandfonline.com/doi/abs/10.1080/10168739800000004
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Handle: RePEc:taf:intecj:v:12:y:1998:i:1:p:53-74
Template-Type: ReDIF-Article 1.0
Author-Name: Yong Yang
Author-X-Name-First: Yong
Author-X-Name-Last: Yang
Title: International Taxation When Domestic Distributional Policy is Constrained
Abstract:
International capital trade benefits a nation as a whole but the gains
from trade are unevenly distributed among owners of various factors. The
traditional view in international taxation is that a small economy should
not tax capital trade. However, this view is valid only if the government
is free to choose domestic distributional policy. This paper investigates
what constitutes optimal international tax policy when domestic
distributional policy is constrained at a minimum rate. The finding is
that taxing capital trade could be welfare-improving. [F21, H21, H24]
Journal: International Economic Journal
Pages: 75-93
Issue: 1
Volume: 12
Year: 1998
X-DOI: 10.1080/10168739800000005
File-URL: http://www.tandfonline.com/doi/abs/10.1080/10168739800000005
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Handle: RePEc:taf:intecj:v:12:y:1998:i:1:p:75-93
Template-Type: ReDIF-Article 1.0
Author-Name: Young Seok Ahn
Author-X-Name-First: Young Seok
Author-X-Name-Last: Ahn
Author-Name: Slamet Seno Adji
Author-X-Name-First: Slamet Seno
Author-X-Name-Last: Adji
Author-Name: Thomas Willett
Author-X-Name-First: Thomas
Author-X-Name-Last: Willett
Title: The Effects of Inflation and Exchange Rate Policies on Direct Investment to Developing Countries
Abstract:
This study focuses on the effects of inflation and exchange rate policy
on direct investment flows to developing countries. We find that inflation
does have a substantial negative effect on capital inflows. Our estimates
indicate that this effect can be significantly reduced, but not
eliminated, by following exchange rate policies which avoid substantial
overvaluation of the currency. [F 30]
Journal: International Economic Journal
Pages: 95-104
Issue: 1
Volume: 12
Year: 1998
X-DOI: 10.1080/10168739800000006
File-URL: http://www.tandfonline.com/doi/abs/10.1080/10168739800000006
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Handle: RePEc:taf:intecj:v:12:y:1998:i:1:p:95-104
Template-Type: ReDIF-Article 1.0
Author-Name: Shen Chung-Hua
Author-X-Name-First: Shen
Author-X-Name-Last: Chung-Hua
Title: The Term Structure of Taiwan Money Market Rates And Rational Expectation
Abstract:
The expectation theory of the term structure was investigated in this
study by employing the 10 day short and 30, 90 and 180 day long commercial
paper rates in Taiwan. The results indicate that the theory is rejected
for the shorter maturity, such as (10,30) days rates, but cannot be
rejected for the longer maturities, such as (10, 90) and (10,180) day
rates. The reason that the short maturity does not work out well for the
expectation theory is probably due to noise, e.g. monthly factor,
contaminated in the high frequency date, but not in the low frequency
data. Since all rates are cointegrated, the policy “Operation
Twist” is not suggested. [C30,E43]
Journal: International Economic Journal
Pages: 105-119
Issue: 1
Volume: 12
Year: 1998
X-DOI: 10.1080/10168739800000007
File-URL: http://www.tandfonline.com/doi/abs/10.1080/10168739800000007
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Handle: RePEc:taf:intecj:v:12:y:1998:i:1:p:105-119
Template-Type: ReDIF-Article 1.0
Author-Name: Eric Wang
Author-X-Name-First: Eric
Author-X-Name-Last: Wang
Title: Sensitivities of Import Demand and Export Supply in an Open Developing Economy: the Evidence from Taiwan, 1961-1994
Abstract:
This study examines the time variations in the elasticities of derived
demand for imports and supply of exports regarding Taiwan's aggregate
production. It is to identify the long run relationship between production
behavior and development process. A translog cost function model is set up
to estimate the elasticity series in 1961-94. A regression model
incorporating spline time setting with economic variables is built for
testing the variations. Empirical results indicate that the elasticity of
import demand varies with foreign income and the elasticity of export
supply varies with domestic production capacity. Major exogenous events
are shown to have significant impacts on production decision. [F14]
Journal: International Economic Journal
Pages: 121-139
Issue: 1
Volume: 12
Year: 1998
X-DOI: 10.1080/10168739800000008
File-URL: http://www.tandfonline.com/doi/abs/10.1080/10168739800000008
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Handle: RePEc:taf:intecj:v:12:y:1998:i:1:p:121-139
Template-Type: ReDIF-Article 1.0
Author-Name: Wontack Hong
Author-X-Name-First: Wontack
Author-X-Name-Last: Hong
Title: Financing Export-Oriented Catching-Up in Korea: Credit-Rationing, Sustained High Growth and Financial Chaos
Abstract:
In the 1960s and 1970s, bank credits were rationed essentially on the
basis of firm's export-performance in Korea. Financial institutions did
not have the ability to properly evaluate prospective entrepreneurs and
potentially high return projects. It was cost-quality competition at the
international export market that screened firms for efficiency, and this
natural selection process of the fiercely competitive international market
compensated for the backwardness of the Korean financial sector, thereby
enabling Korea's sustained high growth. Credit-rationing on the basis of
firm's export performance very much overcame the adverse selection
problems in credit markets. Since the early 1980s, however, bank credit
has been rationed less and less in proportion to export performance, while
the nominal financial liberalization has failed to develop the Korean
financial sector. This may explain the financial chaos in the 1990s.
Journal: International Economic Journal
Pages: 141-153
Issue: 1
Volume: 12
Year: 1998
X-DOI: 10.1080/10168739800000009
File-URL: http://www.tandfonline.com/doi/abs/10.1080/10168739800000009
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Handle: RePEc:taf:intecj:v:12:y:1998:i:1:p:141-153
Template-Type: ReDIF-Article 1.0
Author-Name: Hui-Kuan Tseng
Author-X-Name-First: Hui-Kuan
Author-X-Name-Last: Tseng
Title: Exchange Rate Variability and Exchange Market Intervention: Spot vs. Forward
Abstract:
The paper compares forward and spot market interventions by examining
their effects on exchange rate fluctuations. Using a stochastic partial
equilibrium model, it is shown that the two interventions fail to limit
spot rate fluctuations caused by shocks that do not perturb traders'
hedging activity directly. When shocks perturb this hedging activity in
the first place, however, it is shown that intervention via spot exchange
may trigger very large fluctuations once it cannot sufficiently counteract
hedgers' and speculators' combined response to risk premia. In this case,
by contrast, the forward intervention can dampen exchange rate
variability. [F31]
Journal: International Economic Journal
Pages: 1-16
Issue: 2
Volume: 12
Year: 1998
X-DOI: 10.1080/10168739800000010
File-URL: http://www.tandfonline.com/doi/abs/10.1080/10168739800000010
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Handle: RePEc:taf:intecj:v:12:y:1998:i:2:p:1-16
Template-Type: ReDIF-Article 1.0
Author-Name: Pekka Ahtiala
Author-X-Name-First: Pekka
Author-X-Name-Last: Ahtiala
Title: Fiscal Policy under Flexible Exchange Rates: When is Expansion Contractionary?
Abstract:
In this paper the behaviour functions are specified to correspond to
their foundations in closed-economy macrotheory . The demand for real
money balances, in terms of the expenditure basket of goods, is specified
as a function of income in terms of the same basket. Imports are specified
as a function of expenditures, being functionally part of expenditures.
The supply of labor is specified as a function of the expenditure price.
Fiscal expansion, while expansionary in the real wage model, turns out to
be expansionary, neutral, or contractionary in the money wage model
depending on whether the income elasticity of the demand for money is
smaller than, equal to, or greater than one, also in the long run.
However, if interest payments on foreign securities are not smaller
relative to the trade balance, many of the effects are reversed. Output
and the exchange rate overshoot their steady-state levels in both cases.
[E1, F41]
Journal: International Economic Journal
Pages: 17-34
Issue: 2
Volume: 12
Year: 1998
X-DOI: 10.1080/10168739800000011
File-URL: http://www.tandfonline.com/doi/abs/10.1080/10168739800000011
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Handle: RePEc:taf:intecj:v:12:y:1998:i:2:p:17-34
Template-Type: ReDIF-Article 1.0
Author-Name: Chang-Kon Choi
Author-X-Name-First: Chang-Kon
Author-X-Name-Last: Choi
Title: Asymmetric Fluctuations and the Third Moments in the Real Business Cycle Theory
Abstract:
This paper examines the third moments in actual and simulated business
cycles. The main goal is to answer the question whether a business cycle
model can generate the asymmetry observed in the quarterly post war data.
The results indicate that for third moments, the RBC model does not fit
the data as well as it does for second moments. It is also shown that
transitory shock can be better than persistent shock in matching the third
moment, which implies an implication for modeling strategy of real
business cycles theory. [E32]
Journal: International Economic Journal
Pages: 35-53
Issue: 2
Volume: 12
Year: 1998
X-DOI: 10.1080/10168739800000012
File-URL: http://www.tandfonline.com/doi/abs/10.1080/10168739800000012
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Handle: RePEc:taf:intecj:v:12:y:1998:i:2:p:35-53
Template-Type: ReDIF-Article 1.0
Author-Name: Hwan Lin
Author-X-Name-First: Hwan
Author-X-Name-Last: Lin
Title: Import-Subsidy Coordination and the Gains from International Diffusion Of Differentiated Middle Products
Abstract:
This paper shows that under reasonable parameter values it is
independently rational for an importing country to impose a tariff on
differentiated middle products, which are invented by monopolists
worldwide in the high-technology sector. But to realize mutual gains,
countries must use import subsidies in a cooperative manner. To dictate
policy coordination, the paper computes the bilaterally coordinated
subsidy bands under different sets of parameter values, reflecting
monopoly power, spending share, and supply elasticities. [F12, F13]
Journal: International Economic Journal
Pages: 55-76
Issue: 2
Volume: 12
Year: 1998
X-DOI: 10.1080/10168739800000013
File-URL: http://www.tandfonline.com/doi/abs/10.1080/10168739800000013
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Handle: RePEc:taf:intecj:v:12:y:1998:i:2:p:55-76
Template-Type: ReDIF-Article 1.0
Author-Name: Laura Lu
Author-X-Name-First: Laura
Author-X-Name-Last: Lu
Author-Name: Panos Mourdoukoutas
Author-X-Name-First: Panos
Author-X-Name-Last: Mourdoukoutas
Title: Trade Efficiency and Trade Points: Small Versus Large Players
Abstract:
The impact of Trade Points on corporate performance depends on
assumptions about returns to scale, types of games played, and size of
gains in demand and revenues vis-$aacute;-viscosts. Specifically: (i) in a
world of profit- maximizing firms, when the contribution of Trade Points
to total revenues exceeds the additional costs, Trade Points help both
small firms and Large ones with the size of gains depending on the types
of returns to scale and the size of demand change: and (ii) whether to
connect to Trade Points depends on the type of games assumed and the size
of demand gains vis-$aacute;-viscosts. [F12, D00, L13, L86]
Journal: International Economic Journal
Pages: 77-91
Issue: 2
Volume: 12
Year: 1998
X-DOI: 10.1080/10168739800000014
File-URL: http://www.tandfonline.com/doi/abs/10.1080/10168739800000014
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Handle: RePEc:taf:intecj:v:12:y:1998:i:2:p:77-91
Template-Type: ReDIF-Article 1.0
Author-Name: Mehdi Monadjemi
Author-X-Name-First: Mehdi
Author-X-Name-Last: Monadjemi
Author-Name: Hyeonseung Huh
Author-X-Name-First: Hyeonseung
Author-X-Name-Last: Huh
Title: Private and Givernment Investment: A Study of Three OECD Countries
Abstract:
This paper examines the relationship between private investment and
government spending in Australia, Britain and the United States. Since all
time series data are stationary in first difference and cointegrated,
these series are represented by an error correction model. Variance
decomposition and impulse response functions are employed to investigate
the effects of government spending on private investment. Generally the
empirical results provide limited support for "crowding out" effects of
government investment on private investment. The rate of interest and the
corporate profit ability showed significant effects on private investment
in two out of three cases. [E62, E63]
Journal: International Economic Journal
Pages: 93-104
Issue: 2
Volume: 12
Year: 1998
X-DOI: 10.1080/10168739800000015
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Handle: RePEc:taf:intecj:v:12:y:1998:i:2:p:93-104
Template-Type: ReDIF-Article 1.0
Author-Name: Henry Thompson
Author-X-Name-First: Henry
Author-X-Name-Last: Thompson
Title: Production with Two Factors and Many Goods Large Firms in a Small Open Economy
Abstract:
A tractable general equilibrium model of a small open economy producing
many goods with two primary inputs is developed. Firms are large in that
their output decisions affect their costs. One sector produces many
different goods under variable costs, which arise through a link between
output and the cost of the firm. Comparative static results depend on
factor intensity and the degree of increasing costs. Some ambiguities
arise in the comparative static adjustments associated with the sector
producing the constant cost homogeneous good. [F1]
Journal: International Economic Journal
Pages: 107-116
Issue: 2
Volume: 12
Year: 1998
X-DOI: 10.1080/10168739800000016
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Handle: RePEc:taf:intecj:v:12:y:1998:i:2:p:107-116
Template-Type: ReDIF-Article 1.0
Author-Name: Xu Bin
Author-X-Name-First: Xu
Author-X-Name-Last: Bin
Title: Costly Monitoring in Financial Markets and Capital Outflow Restrictions
Abstract:
This paper examines welfare implications of removing capital outflow
restrictions in a country whose financial markets are relatively
inefficient in monitoring borrowers. A simple general equilibrium model is
developed in which credit is rationed in one of the two production sectors
due to costly information in financial markets. Opening to international
capital markets is shown to cause an outflow of domestic wealth but no
inflow of foreign credit, leading to more severe credit rationing. If the
domestic investment opportunities that are unexploited due to credit
rationing are sufficiently profitable, welfare of the country declines
after it removes capital outflow restrictions. [O16]
Journal: International Economic Journal
Pages: 117-136
Issue: 2
Volume: 12
Year: 1998
X-DOI: 10.1080/10168739800000017
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Template-Type: ReDIF-Article 1.0
Author-Name: Mark Holmes
Author-X-Name-First: Mark
Author-X-Name-Last: Holmes
Title: Inflation Convergence in the ERM: Evidence for Manufacturing and Services
Abstract:
Recent studies have concluded that the ERM has facilitated some degree of
inflation convergence among its members with limited evidence of German
leadership. These conclusions are based on national inflation measures
which reflect aggregated output thereby masking different experiences at
the sectoral level. This study examines inflation convergence in the ERM
for manufacturing and service sector output using time-varying parameter
analysis, common trends analysis and tests for weak exogeneity. For both
sectors, there is no evidence of German leadership. Inflation convergence
in manufacturing inflation, though limited, is more advanced than in
services. [E3, F0, F4]
Journal: International Economic Journal
Pages: 1-16
Issue: 3
Volume: 12
Year: 1998
X-DOI: 10.1080/10168739800000025
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Template-Type: ReDIF-Article 1.0
Author-Name: Yoopi Abimanyu
Author-X-Name-First: Yoopi
Author-X-Name-Last: Abimanyu
Title: Using Indonesia's Real Exchange Rate to Test Ricardian Equivalence
Abstract:
Using Indonesia as a study case, this paper analyzes the relationship
between the actual real exchange rate, the equilibrium real exchange rate,
and other macroeconomic variables. The estimate shows that, out of nine
explanatory independent variables, only government consumption and the
fiscal deficit have significant effects on the real exchange rate
variable. Increases in both government consumption and the fiscal deficit
appreciate the real exchange rate. This finding rejects Ricardian
equivalence. [E62, F41, O53].
Journal: International Economic Journal
Pages: 17-29
Issue: 3
Volume: 12
Year: 1998
X-DOI: 10.1080/10168739800000026
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Template-Type: ReDIF-Article 1.0
Author-Name: A. C. Arize
Author-X-Name-First: A. C.
Author-X-Name-Last: Arize
Title: The Effects of Exchange Rate Volatility on U.S. Imports: An Empirical Investigation
Abstract:
In this paper we obtain and interpret new estimates of the short- and
long-run influence of exchange-rate volatility (or risk) on the import
flows of the United States, in the generalized floating exchange-rate
period. The major finding is that there is a significant long-run negative
effect of exchange-rate volatility on the volume of imports, as well as, a
significant short-run negative effect. Therefore, it can be argued that
exchange-rate volatility will have significant effects on the allocation
of resources by market participants and that policy-makers can no longer
rely on an import demand with only conventional variables for long-term
international trade planning, forecasting and policy formulation. [F14,
F31]
Journal: International Economic Journal
Pages: 31-40
Issue: 3
Volume: 12
Year: 1998
X-DOI: 10.1080/10168739800000027
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Template-Type: ReDIF-Article 1.0
Author-Name: Philip Bodman
Author-X-Name-First: Philip
Author-X-Name-Last: Bodman
Title: A Contribution on the Empirics of Trade, Migration and Economic Growth for Australia and Canada
Abstract:
This paper examines the long-run dynamic relationship between openness,
migration and economic growth for Australia and Canada through the
estimation of a long-run aggregate production function for each economy
using the Johansen (1988) procedure. Through the disaggregation of the
capital input vector entering into each cointegrating relationship, the
paper also provides new evidence concerning the importance of human
capital, dwelling capital, government infrastructure capital and research
and development capital for long-run economic growth. The estimates from
the empirical analysis suggest that net migration, openness and
integration favours the productivity and growth performance of both
Australia and Canada, although the magnitude of these relationships is not
large. [E23, F15]
Journal: International Economic Journal
Pages: 41-62
Issue: 3
Volume: 12
Year: 1998
X-DOI: 10.1080/10168739800000028
File-URL: http://www.tandfonline.com/doi/abs/10.1080/10168739800000028
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Handle: RePEc:taf:intecj:v:12:y:1998:i:3:p:41-62
Template-Type: ReDIF-Article 1.0
Author-Name: Cristina Echevarria
Author-X-Name-First: Cristina
Author-X-Name-Last: Echevarria
Title: A Three-Factor Agricultural Production Function: The Case of Canada
Abstract:
This paper estimate a constant returns to scale agricultural production
function of the three basic factors of production. Such a function is a
useful tool for macroeconomic, Growth, and development studies. It uses
the shares approach that Solow used in 1957 and very disaggregated
Canadian data. The main results of this paper are that, first, in Canada
agriculture is less labor intensive than both services and industry, but
capital intensity is similar in the three sectors. Second, the share of
land in value added is estimated to be 16%. Third, total factor
productivity growth in Canada has been roughly the
same—0.3%—in agriculture and manufactures over the period
1971-91. [D24, O13, O41, O47]
Journal: International Economic Journal
Pages: 63-75
Issue: 3
Volume: 12
Year: 1998
X-DOI: 10.1080/10168739800000029
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Template-Type: ReDIF-Article 1.0
Author-Name: Sang-Ho Lee
Author-X-Name-First: Sang-Ho
Author-X-Name-Last: Lee
Title: R&D Spillovers, Technology Cartel, and Monopoly Regulation
Abstract:
In the presence of R&D spillovers, this paper analyzes the regulated
firms' R&D performances according to their noncooperative or cooperative
R&D activities. First, it analyzes the R&D equilibrium in local (natural)
monopolies, examines its welfare effects, and finds some relationship
between output regulation and R&D performance. Next, it proposes an
optimal R&D subsidy mechanism that induces regulated firms to implement
the social optimum, and discusses about the regulatory R&D subsidies
policy. [L5, H21]
Journal: International Economic Journal
Pages: 77-88
Issue: 3
Volume: 12
Year: 1998
X-DOI: 10.1080/10168739800000030
File-URL: http://www.tandfonline.com/doi/abs/10.1080/10168739800000030
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Handle: RePEc:taf:intecj:v:12:y:1998:i:3:p:77-88
Template-Type: ReDIF-Article 1.0
Author-Name: Mohsen Bahmani-Oskooee
Author-X-Name-First: Mohsen
Author-X-Name-Last: Bahmani-Oskooee
Title: Cointegration Approach to Estimate the Long-Run Trade Elasticities in LDCs
Abstract:
The Marshall-Lerner condition postulates that if the sum of import and
export demand elasticities add up to more than one, devaluation should
improve the trade balance in the long-run. This paper is the first to
employ a long-run method, i.e., cointegration technique to estimate trade
elasticities in less develop countries. In most cases the results reveal
that indeed trade elasticities are large enough to support devaluation as
a successful policy to improve the trade balance. [F10, F31]
Journal: International Economic Journal
Pages: 89-96
Issue: 3
Volume: 12
Year: 1998
X-DOI: 10.1080/10168739800000031
File-URL: http://www.tandfonline.com/doi/abs/10.1080/10168739800000031
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Handle: RePEc:taf:intecj:v:12:y:1998:i:3:p:89-96
Template-Type: ReDIF-Article 1.0
Author-Name: Udayan Roy
Author-X-Name-First: Udayan
Author-X-Name-Last: Roy
Title: Vertical Product Differentiation and the Value of Time
Abstract:
This paper presents a model of international trade in goods that are
ranked by quality. The model differs from existing theories of trade under
vertical product differentiation in several ways. The main difference is
in the way quality is modeled. But this paper also has different positive
implications for the pattern of trade and it provides a theoretical
explanation for Leontief Paradox-type empirical findings. The model
indicates that several of the most important empirical challenges faced by
the Heckscher-Ohlin-Vanek model can be dealt with by taking into account
the quality aspect of traded goods.[F1]
Journal: International Economic Journal
Pages: 97-111
Issue: 3
Volume: 12
Year: 1998
X-DOI: 10.1080/10168739800000032
File-URL: http://www.tandfonline.com/doi/abs/10.1080/10168739800000032
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Template-Type: ReDIF-Article 1.0
Author-Name: S. Bandyopadhyay
Author-X-Name-First: S.
Author-X-Name-Last: Bandyopadhyay
Author-Name: S. C. Bandyopadhyay
Author-X-Name-First: S. C.
Author-X-Name-Last: Bandyopadhyay
Title: Monopoly Unions and Corporatism: Implications for Strategic Trade Policy
Abstract:
This paper analyzes the effects of corporatism on wage, employment, and
optimal trade policy in the context of international market share rivalry.
A Striking result of the paper is that when an optimal (Nash)subsidy is in
place, wages, employment and the level of the optimal export subsidy
itself become independent of the degree of corporatism. This result breaks
down under free trade or when domestic policy makers endogenize the
foreign wage, yielding in the familiar negative relationship between the
degree of corporatism and wages. [F13, J51]
Journal: International Economic Journal
Pages: 1-22
Issue: 4
Volume: 12
Year: 1998
X-DOI: 10.1080/10168739800000018
File-URL: http://www.tandfonline.com/doi/abs/10.1080/10168739800000018
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Handle: RePEc:taf:intecj:v:12:y:1998:i:4:p:1-22
Template-Type: ReDIF-Article 1.0
Author-Name: Nicolaas Groenewold
Author-X-Name-First: Nicolaas
Author-X-Name-Last: Groenewold
Author-Name: Mohamed Ariff
Author-X-Name-First: Mohamed
Author-X-Name-Last: Ariff
Title: The Effects of De-Regulation on Share-Market Efficiency in the Asia-Pacific
Abstract:
Emerging markets have been the fastest growing share markets in the past
decade. There are 58 emerging markets. Yet, little is know about their
efficiency compared to the vast body of results on efficiency of the
developed markets. Little is also known of the way in de-regulation of
emerging financial market affects efficiency. This Paper use daily closing
values for share-price indexes for ten countries in the Asia-Pacific to
assess the effect on market-efficiency of liberalisation of both the
domestic capital-market regulation and the in the openness to
international financial flows. We find that several measures of
market-efficiency are unaffected by de-regulation while measure based on
regression and autocorrelation point to greater predictability (both
domestically and internationally) after de-regulation. This
counter-integration of international capital markets. The domestic
phenomenon remains a puzzle, however.
Journal: International Economic Journal
Pages: 23-47
Issue: 4
Volume: 12
Year: 1998
X-DOI: 10.1080/10168739800000019
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Handle: RePEc:taf:intecj:v:12:y:1998:i:4:p:23-47
Template-Type: ReDIF-Article 1.0
Author-Name: Benjamin Kim
Author-X-Name-First: Benjamin
Author-X-Name-Last: Kim
Author-Name: Noor Ghazali
Author-X-Name-First: Noor
Author-X-Name-Last: Ghazali
Title: The Liquidity Effect of Money Shocks on Short-Term Interest Rates: Some International Evidence
Abstract:
There has recently been resurgence of interest in the liquidity effect of
money shocks on short-term interest rates. This paper empirically
investigates the liquidity effect for some of the G-7 countries, using
single equation and vector autoregressive systems estimation methods.
Generalized autoregressive conditional heteroskedasticity (GARCH) is
employed to better capture the behaviour of interest rates and money. Our
results strongly indicate presence of the liquidity effect in most of the
countries. [E40, E52]
Journal: International Economic Journal
Pages: 49-63
Issue: 4
Volume: 12
Year: 1998
X-DOI: 10.1080/10168739800000020
File-URL: http://www.tandfonline.com/doi/abs/10.1080/10168739800000020
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Handle: RePEc:taf:intecj:v:12:y:1998:i:4:p:49-63
Template-Type: ReDIF-Article 1.0
Author-Name: Francois Doamekpor
Author-X-Name-First: Francois
Author-X-Name-Last: Doamekpor
Title: Contributions of State-Owned Enterprises to the Growth of Total Output
Abstract:
This paper explores the effects of public enterprises on the growth of
total output in thirty-seven countries. It uses a variant of the
Cobb-Douglas production function to estimate contributions to total
output. The object of this approach is to examine an alternative
methodology for evaluating issues surrounding the existence of public
enterprises. Within the constrains imposed by data availability on public
enterprises, I find that evidence of contribution to total output, using
the residual analysis method, is not as weak of fragile as previously
found. This weakness is found only when the ordinary least squares
regression method is used. [L32, O57]
Journal: International Economic Journal
Pages: 65-77
Issue: 4
Volume: 12
Year: 1998
X-DOI: 10.1080/10168739800000021
File-URL: http://www.tandfonline.com/doi/abs/10.1080/10168739800000021
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Handle: RePEc:taf:intecj:v:12:y:1998:i:4:p:65-77
Template-Type: ReDIF-Article 1.0
Author-Name: Jordan Shan
Author-X-Name-First: Jordan
Author-X-Name-Last: Shan
Author-Name: Fiona Sun
Author-X-Name-First: Fiona
Author-X-Name-Last: Sun
Title: Domestic Saving and Foreign Investment in Australia: A Granger Causality Test
Abstract:
This paper investigates the nature of the causal relationship between
domestic saving and foreign investment in Australia using the Granger
no-causality test procedure developed by Toda and Yamamoto (1995). The
findings in the paper suggest that foreign investment has Granger-caused
domestic saving in Australia but that no causality was found from saving
to foreign investment. Therefore, the results reported in the paper reject
the arguments by FitzGerald (1993) and support, indirectly, the Pitchford
(1990) hypothesis in relation to the foreign debt debate in Australia and
are consistent with the results of Layton and Makin (1993). [F21, F30]
Journal: International Economic Journal
Pages: 79-87
Issue: 4
Volume: 12
Year: 1998
X-DOI: 10.1080/10168739800000022
File-URL: http://www.tandfonline.com/doi/abs/10.1080/10168739800000022
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Handle: RePEc:taf:intecj:v:12:y:1998:i:4:p:79-87
Template-Type: ReDIF-Article 1.0
Author-Name: Dewan Abdullah
Author-X-Name-First: Dewan
Author-X-Name-Last: Abdullah
Title: Money Growth Variability and Stock Returns: An Innovations Accounting Analysis
Abstract:
This paper employs a seven variable vector autoregression system to
analyze the effects of money growth variability on British stock returns
using the London share price index. Other variables included in the model
are M1 money, budget deficits and surpluses, industrial production,
consumer price index, and a long term interest error variance
decompositions following Sims (1980). The results of the analysis suggest
that money growth variability accounts for 22.82% and 19.53% of the
variance of interests rates and stock returns respectively, and hence is
considered to be an important influence concerning the and uncertainty
associated with returns on investment in stocks and other financial
assets.[E44]
Journal: International Economic Journal
Pages: 89-104
Issue: 4
Volume: 12
Year: 1998
X-DOI: 10.1080/10168739800000023
File-URL: http://www.tandfonline.com/doi/abs/10.1080/10168739800000023
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Handle: RePEc:taf:intecj:v:12:y:1998:i:4:p:89-104
Template-Type: ReDIF-Article 1.0
Author-Name: William Smith
Author-X-Name-First: William
Author-X-Name-Last: Smith
Title: Birth, Death, and Consumption: Overlapping Generations and the Random Walk Hypothesis
Abstract:
This paper studies the time-series behavior of consumption in a model
that incorporates birth, death, and a precautionary motive for saving.
Consumption of an individual agent is a random walk. However, aggregate
consumption is a random walk if and only if the sum of the death rate and
population growth rate is zero. Failure of the random walk hypothesis
should not be attributed to finite horizons perse, but rather to
inter-generational transfers caused by birth and death. Unlike
certainty-equivalent models, the expected growth of consumption depends on
financial wealth, rather than wage income or human capital. [D91, E21]
Journal: International Economic Journal
Pages: 105-116
Issue: 4
Volume: 12
Year: 1998
X-DOI: 10.1080/10168739800000024
File-URL: http://www.tandfonline.com/doi/abs/10.1080/10168739800000024
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Handle: RePEc:taf:intecj:v:12:y:1998:i:4:p:105-116
Template-Type: ReDIF-Article 1.0
Author-Name: Tsai Pan-Long
Author-X-Name-First: Tsai
Author-X-Name-Last: Pan-Long
Title: Regional Intergration, Foreign Investment, And Optimal Trade And Investment Policies
Abstract:
Using an international duopoly model, this paper first investigates the
impacts of the formation of a North-South regional intergration (RI) on
both the developed member country and the developing nonmember country.
The RI is shown indeed to have trade diversion effect and to depress the
welfare of the nonmember country. It then derives explicitly the
conditions under which the nonmember exporting firm will make FDI into the
economic region after its formation. The optimal trade and investment
policies of the nonmember country after the RI are shown to be export
subsidies no matter there is FDI or not. Moreover, in the case with FDI,
the nonmember country should subsidize the export and the FDI of its firms
equally. [F21]
Journal: International Economic Journal
Pages: 1-18
Issue: 1
Volume: 13
Year: 1999
X-DOI: 10.1080/10168739900000025
File-URL: http://www.tandfonline.com/doi/abs/10.1080/10168739900000025
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Handle: RePEc:taf:intecj:v:13:y:1999:i:1:p:1-18
Template-Type: ReDIF-Article 1.0
Author-Name: Broll Udo
Author-X-Name-First: Broll
Author-X-Name-Last: Udo
Title: Export as an Option
Abstract:
This note studies the implications of a firm's advantage to allocate
production to different markets under exchange rate risk. As exchange rate
volatility increases, so does the value of the option to export. The
firm's flexibility can be seen as a real hedging instrument. This kind of
risk management policy has the advantage that the hedge instrument is
sensitive to the realization of foreign spot exchange rates. Multinational
firms, especially, can be regarded as flexible firms because of their use
of worldwide distribution facilities. [F31, J20]
Journal: International Economic Journal
Pages: 19-26
Issue: 1
Volume: 13
Year: 1999
X-DOI: 10.1080/10168739900000026
File-URL: http://www.tandfonline.com/doi/abs/10.1080/10168739900000026
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Handle: RePEc:taf:intecj:v:13:y:1999:i:1:p:19-26
Template-Type: ReDIF-Article 1.0
Author-Name: Diao Xinshen
Author-X-Name-First: Diao
Author-X-Name-Last: Xinshen
Author-Name: Somwaru Agapi
Author-X-Name-First: Somwaru
Author-X-Name-Last: Agapi
Title: Mercosur and the U.S.: an International General Equilibrium Evaluation of the Regional Integration
Abstract:
A dynamic general equilibrium model is constructed to analyze the effects
of the Southern Common Market (MERCOSUR) on the member countries as well
as on the U.S. economy. By taking into account dynamic adjustments, we
find that while the effects of MERCOSUR on its member countries'
investment, consumer welfare and national product are positive, the
respective effects on the U.S. economy are negative. Such negative effects
are small, as U.S.-MERCOSUR trade shares with respect to U.S. total trade
are quite small. When MERCOSUR additionally adopts its common external
tariff policy, growth in MERCOSUR's total trade implied an increase in
trade between MERCOSUR and other countries. In this case, both MERCOSUR
member countries and the U.S. are better off. [C68, F11, O41]
Journal: International Economic Journal
Pages: 27-93
Issue: 1
Volume: 13
Year: 1999
X-DOI: 10.1080/10168739900000027
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Handle: RePEc:taf:intecj:v:13:y:1999:i:1:p:27-93
Template-Type: ReDIF-Article 1.0
Author-Name: D. Giannaros
Author-X-Name-First: D.
Author-X-Name-Last: Giannaros
Author-Name: B. Kolluri
Author-X-Name-First: B.
Author-X-Name-Last: Kolluri
Author-Name: M. Panik
Author-X-Name-First: M.
Author-X-Name-Last: Panik
Title: An Empirical Analysis of The Effects of Government Spending on Capital Investment: Evidence from O.E.C.D. Countries.
Abstract:
This paper focuses on the possible “direct” effect in
increased government size on fixed capital formation. That is, we
hypothesize that as government increases its consumption as percentage of
GDP, investors modify their investment plans accordingly. It is our
contention that the direct effect of government size on fixed capital
investment manifest themselves through a downward shift in the investment
schedule. To test this hypothesis, we estimate an aggregate investment
function for eighteen O.E.C.D. countries for the period 1960-1994. Our
findings suggest a negative relationship between government size and fixed
capital investment. [ E22, E62]
Journal: International Economic Journal
Pages: 45-55
Issue: 1
Volume: 13
Year: 1999
X-DOI: 10.1080/10168739900000028
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Handle: RePEc:taf:intecj:v:13:y:1999:i:1:p:45-55
Template-Type: ReDIF-Article 1.0
Author-Name: Kim Myeong-Soo
Author-X-Name-First: Kim
Author-X-Name-Last: Myeong-Soo
Author-Name: N. Edward Coulson
Author-X-Name-First: N. Edward
Author-X-Name-Last: Coulson
Title: Sources of Fluctuations in the Housing Market
Abstract:
In this study, sources of economic fluctuations in the housing market are
investigated using U.S. data. A structural VAR (vector autoregressive)
model is set up with a new method of ordering the residuals introduced by
swanson and granger (1997) that is based on an analysis of the
contemporaneous error structure. To specify the sources of fluctuations in
the housing market, several important innovations are included in the
model: a marginal income tax rate shock, an interest rate shock, a factor
cost shock, a housing supply shock, an income shock, a housing demand
shock,a residential price shock, and a housing price shock. Empirical
results show that the interest rate shock appears to be the most
significant innovation among all shocks, although the marginal federal
income tax rate shock, the housing price shock, and the factor price for
housing supply shock also play important roles in explaininig fluctuations
in the housing market. [R0,R1]
Journal: International Economic Journal
Pages: 57-70
Issue: 1
Volume: 13
Year: 1999
X-DOI: 10.1080/10168739900000029
File-URL: http://www.tandfonline.com/doi/abs/10.1080/10168739900000029
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Handle: RePEc:taf:intecj:v:13:y:1999:i:1:p:57-70
Template-Type: ReDIF-Article 1.0
Author-Name: Robert Kohn
Author-X-Name-First: Robert
Author-X-Name-Last: Kohn
Title: Risk-Neutrality versus Risk A version in a Model of Production Efficiency under Uncertainty
Abstract:
In an economy in which pollution from one sector is multiplicatively and
stochastically damaging to another sector, there is efficiency when the
expected ratio of the marginal rate of substitution to the marginal rate
of transformation equals unity. When this ratio of variables is
decomposed, the expected marginal rate of substitution approximately
equals the expected marginal rate of transformation minus a correction
based on covariance and a second correction based on variance. Under one
definition of risk-neutrality both corrections vanish, whereas under
another definition, it is only the correction based on covariance that
vanishes. [Q25]
Journal: International Economic Journal
Pages: 71-79
Issue: 1
Volume: 13
Year: 1999
X-DOI: 10.1080/10168739900000030
File-URL: http://www.tandfonline.com/doi/abs/10.1080/10168739900000030
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Handle: RePEc:taf:intecj:v:13:y:1999:i:1:p:71-79
Template-Type: ReDIF-Article 1.0
Author-Name: Larue Bruno
Author-X-Name-First: Larue
Author-X-Name-Last: Bruno
Author-Name: Tanguay Luc
Author-X-Name-First: Tanguay
Author-X-Name-Last: Luc
Title: Regional Price Dynamics and Countervailing Duties: Did the Canada-U.S. Hog/Pork Dispute Have a Permanent Impact?
Abstract:
Leamer (1988:53) argues that permanent trade barriers trigger stronger
and more lasting responses than temporary ones. We analyze the effects of
U.S. countervailing duties (CVDs) imposed on Canadian hog and pork exports
by testing the stability of long run arbitrage/cointegration relations
between U.S., Quebec and Alberta hog prices. The CVDs induced large
deviations from the long run arbitrage relations but these effects
vanished with the removal of the pork CVD. Weak exogeneity tests show that
the U.S. hog price did not error correct during the dispute period and
confirm that CVDs contribute to insulate a large domestic market from
foreign competition. [F13]
Journal: International Economic Journal
Pages: 81-101
Issue: 1
Volume: 13
Year: 1999
X-DOI: 10.1080/10168739900000031
File-URL: http://www.tandfonline.com/doi/abs/10.1080/10168739900000031
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Handle: RePEc:taf:intecj:v:13:y:1999:i:1:p:81-101
Template-Type: ReDIF-Article 1.0
Author-Name: Tan Hui Boon
Author-X-Name-First: Tan Hui
Author-X-Name-Last: Boon
Author-Name: Baharumshah Ahmad Zubaidi
Author-X-Name-First: Baharumshah Ahmad
Author-X-Name-Last: Zubaidi
Title: Dynamic Causal Chain of Money, Output, Interest Rate and Prices in Malaysia: Evidence Based On Vector Error- Correction Modelling Analysis
Abstract:
The dynamic causal chain among money, real output, interest rate, and
inflation is Reexamined in the context of a small fast-growing economy
using the recently developed techniques of Johansen's multivariate
conitegration analysis followed by vector error-correction modelling,
Granger causality, variance decompositions, and impulse response
functions. The results of the multivariate cointegration tests suggested a
stable long-run equilibrium relationship exists among these macroeconomic
variables. The short-run results based on vector error-correction
modeling, on the other hand, support the New Keynesians' view that money
is non- neutral, at least in the short-run. It also indicates that
monetary policy can contribute to the stability of domestic prices. M1,
among the various definitions of money stock, has been identified as the
most effective intermediate monetary target to curb inflation. M3, in
turn, has been suggested as the most appropriate intermediate target to
promote sustainable economic growth with contained inflation. For this
economy, the deviation of the macroeconomic activity from its long-run
equilibrium is adjusted through changes in the money stock and prices
[E44]
Journal: International Economic Journal
Pages: 103-120
Issue: 1
Volume: 13
Year: 1999
X-DOI: 10.1080/10168739900000032
File-URL: http://www.tandfonline.com/doi/abs/10.1080/10168739900000032
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Handle: RePEc:taf:intecj:v:13:y:1999:i:1:p:103-120
Template-Type: ReDIF-Article 1.0
Author-Name: Yoon Chang-Ho
Author-X-Name-First: Yoon
Author-X-Name-Last: Chang-Ho
Title: Entrepreneurial Development in Late Industrialization: A Comparative Analysis
Abstract:
The paper examines the differences in entrepreneurial responses that
arise from the different historical backgrounds and transactional
efficiency of the market. Beginning from a brief survey of the comparative
study of early privatization policies and industrial organizations between
Korea and Taiwan, we examine Formation of entrepreneurship in a general
equilibrium framework with fixed set-up costs. We show that as the fixed
set-up costs increase, the number of active entrepreneurs decreases, while
the remaining risk-neutral entrepreneurs adopt riskier technologies and
increase the expected level of employment. By examining industry dynamics,
we explain why the growth pattern of some newly industrializing economies
like Korea shows increasing volatility over the sustained period of time.
Journal: International Economic Journal
Pages: 1-20
Issue: 2
Volume: 13
Year: 1999
X-DOI: 10.1080/10168739900000033
File-URL: http://www.tandfonline.com/doi/abs/10.1080/10168739900000033
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Handle: RePEc:taf:intecj:v:13:y:1999:i:2:p:1-20
Template-Type: ReDIF-Article 1.0
Author-Name: Apergis Nicholas
Author-X-Name-First: Apergis
Author-X-Name-Last: Nicholas
Title: Inflation Uncertainty and Momey Demand: Evidence from a Monetary Regime Changed and the Cases of Greece
Abstract:
This paper has extended a money demand equation to include uncertainty of
inflation as a specific argument. The empirical analysis shows that in
Greece inflation uncertainty is described well by an ARCH process. A money
demand equation that explicitly takes into consideration the inflation
uncertainty process seems to be capable of capturing any money demand
structural instabilities. These instabilities, in turn, are shown to have
been caused by the monetary deregulation process occurred in 1988. [E41,
E42]
Journal: International Economic Journal
Pages: 21-30
Issue: 2
Volume: 13
Year: 1999
X-DOI: 10.1080/10168739900000034
File-URL: http://www.tandfonline.com/doi/abs/10.1080/10168739900000034
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Handle: RePEc:taf:intecj:v:13:y:1999:i:2:p:21-30
Template-Type: ReDIF-Article 1.0
Author-Name: Khalifa Ghali
Author-X-Name-First: Khalifa
Author-X-Name-Last: Ghali
Author-Name: Al-Mutawa Ahmed
Author-X-Name-First: Al-Mutawa
Author-X-Name-Last: Ahmed
Title: The Intertemporal Causal Dynamics Between Fixed Capital Formation and Economic Growth in The Group-Of-Seven Countries
Abstract:
The debate between De Long and Summers (1991, 1992) and Blomstrom, Lipsey
and Zejan (1996) who reported conflicting results on the relationship
between fixed capital formation and economic growth raised doubts on
whether changes in a country's capital formation shares in GDP have an
influence on its future growth rates. This paper addresses the issue again
by examining the causal patterns between the share of fixed investment in
GDP and the growth rate of per capital real GDP on an individual country
basis, using time series on each of the group-of-seven countries. The
empirical results suggest that the causal relationship between these
variables may vary significantly across the major industrialized countries
that presumably belong to the same growth group. Most importantly, no
consistent evidence is found that causality is running in only one
direction. Rather, causality between fixed investment and growth seems to
have a country-specific nature and may run in either directions.
Journal: International Economic Journal
Pages: 31-37
Issue: 2
Volume: 13
Year: 1999
X-DOI: 10.1080/10168739900000035
File-URL: http://www.tandfonline.com/doi/abs/10.1080/10168739900000035
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Handle: RePEc:taf:intecj:v:13:y:1999:i:2:p:31-37
Template-Type: ReDIF-Article 1.0
Author-Name: Hahm Joon-Ho
Author-X-Name-First: Hahm
Author-X-Name-Last: Joon-Ho
Title: Consumption Growth, Income Growth and Earings Uncertainty: Simple Cross-Country Evidence
Abstract:
The Consumption growth/income growth parallel found in the low frequency
cross Country aggregate data has been interpreted as evidence against the
certainty equivalence life-cycle/permanent income hypothesis. This paper
analyzes existence of precautionary premia in consumption growth as a
potential source of the parallel, and tests the hypothesis that countries
with inherently larger earning uncertainty show systematically steeper
consumption growth paths and higher saving rates. Empirical results
indicate a potentially important role of precautionary saving motives in
explaining the cross-country differentials in consumption growth and
saving rate. However, the presence of precautionary premia is not enough
to account for the high correlation between average consumption growth and
average income growth across countries. I conclude that the consumption
growth/income growth parallel remains as a robust long-run empirical
relationship challenging the life-cycle/permanent income hypothesis.
Journal: International Economic Journal
Pages: 39-58
Issue: 2
Volume: 13
Year: 1999
X-DOI: 10.1080/10168739900000036
File-URL: http://www.tandfonline.com/doi/abs/10.1080/10168739900000036
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Handle: RePEc:taf:intecj:v:13:y:1999:i:2:p:39-58
Template-Type: ReDIF-Article 1.0
Author-Name: Chesney Marc
Author-X-Name-First: Chesney
Author-X-Name-Last: Marc
Author-Name: Bharat Hazari
Author-X-Name-First: Bharat
Author-X-Name-Last: Hazari
Author-Name: Pasquale SGRO
Author-X-Name-First: Pasquale
Author-X-Name-Last: SGRO
Title: Immigration, Unemployment and Welfare
Abstract:
The recent flows of immigrants to many countries has been categorized by
both legal/illegal migrants. Such migration flows have occurred despite
the presence of domestic unemployment of various categories of labour. It
has also been observed that migration has lowered the reward of unskilled
workers. These problems are analysed on the basis of two alternative
models: (i) where skilled workers and (ii) where unskilled workers are
unemployed. It is shown that migration may raise both skilled/unskilled
employment and welfare under plausible factor intensity conditions. More
importantly, illegal migration may help in lowering the relative price of
the non- traded good while the impact of migration on structural
adjustment is ambiguous.
Journal: International Economic Journal
Pages: 59-74
Issue: 2
Volume: 13
Year: 1999
X-DOI: 10.1080/10168739900000037
File-URL: http://www.tandfonline.com/doi/abs/10.1080/10168739900000037
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Handle: RePEc:taf:intecj:v:13:y:1999:i:2:p:59-74
Template-Type: ReDIF-Article 1.0
Author-Name: Karras Georgios
Author-X-Name-First: Karras
Author-X-Name-Last: Georgios
Title: Monetary Policy and the Exchange Rate: The Role of Openness
Abstract:
This paper examines whether the effects of monetary police on the
exchange rate depend on the openness of the economy. Theoretically,
openness can be shown to have an ambiguous effect on the ability of money
to influence the exchange rate, so the issue has to be resolved
empirically. Using annual data from the 1953-1990 period for a panel of 37
countries, the empirical results indicate that the effects of monetary
policy on the exchange rate are negatively affected by the economy' s
openness. Therefore, the more open the economy, the smaller the
(short-run) depreciation effects of a given increase in the money growth
rate (in the long run, relative PPP applies). This finding is robust to a
number to different specifications. [E52, F41]
Journal: International Economic Journal
Pages: 75-88
Issue: 2
Volume: 13
Year: 1999
X-DOI: 10.1080/10168739900000038
File-URL: http://www.tandfonline.com/doi/abs/10.1080/10168739900000038
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Handle: RePEc:taf:intecj:v:13:y:1999:i:2:p:75-88
Template-Type: ReDIF-Article 1.0
Author-Name: Leon Javoer
Author-X-Name-First: Leon
Author-X-Name-Last: Javoer
Title: Determinants of the Exchange Rate Regime: A Time Series Analysis for Chile
Abstract:
The objective of this paper is to examine the determinants of the
exchange rate regime within a time series approach, in order to overcome
limitations of the cross-section approach. The former approach is based
upon the assumption that policy makers would not change the regime until
the long term benefits would exceed the cost of the switch. This would
imply some inertia in regimes that will be better captured by a time
series analysis. The empirical results show that: (i) Chile opted captured
by a time series analysis. The empirical results show that: (i) Chile
opted for a fixed exchange rate regime as an anchor when domestic
inflation was relatively high with respect to world inflation, and (ii)
minimizing real consumption variability rather than real output
variability was a dominant target for Chilean authorities, with domestic
monetary disturbances favoring a more flexible arrangement, while real
shocks were absorbed by changes in the balanced of payments supporting a
fixed regime. [F31,F32]
Journal: International Economic Journal
Pages: 89-102
Issue: 2
Volume: 13
Year: 1999
X-DOI: 10.1080/10168739900000039
File-URL: http://www.tandfonline.com/doi/abs/10.1080/10168739900000039
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Handle: RePEc:taf:intecj:v:13:y:1999:i:2:p:89-102
Template-Type: ReDIF-Article 1.0
Author-Name: Merrill Whitney
Author-X-Name-First: Merrill
Author-X-Name-Last: Whitney
Author-Name: James Gaisford
Author-X-Name-First: James
Author-X-Name-Last: Gaisford
Title: An Inquiry Into the Rationale for Economic Espionage
Abstract:
Economic espionage can yield desirable strategic effects as well as cost
savings for firms in a spying country. The spying country will typically
gain even though counter-espionage operations will often be conducted by
target countries. When two producing countries spy on each other, it is
possible that both will be better off because of the technology transfer
which is implicit in espionage. Economic espionage is generally beneficial
to consumers. [F12, O031]
Journal: International Economic Journal
Pages: 103-123
Issue: 2
Volume: 13
Year: 1999
X-DOI: 10.1080/10168739900000040
File-URL: http://www.tandfonline.com/doi/abs/10.1080/10168739900000040
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Handle: RePEc:taf:intecj:v:13:y:1999:i:2:p:103-123
Template-Type: ReDIF-Article 1.0
Author-Name: Bernd Kempa
Author-X-Name-First: Bernd
Author-X-Name-Last: Kempa
Author-Name: Michael Nelles
Author-X-Name-First: Michael
Author-X-Name-Last: Nelles
Title: Sticky Prices and Alternative Monetary Feedback Rules: How Robust is the Overshooting Phenomenon?
Abstract:
The present paper incorporates a mechanism of rules-based central-bank
interventions into a Dornbusch-type framework. We show that the implied
reactions of exchange rates and interest and interest rate differentials
in response to a monetary shock depend crucially on the particular
monetary policy feedback rule. The Dornbusch case of postively correlated
and overshooting nominal and real exchange rates as well as nominal and
real interest rate differentials is only one of the possible scenarios of
our model. Different scenarios imply zero and negative correlations and
even multiple overshooting. [E58, F31, F41]
Journal: International Economic Journal
Pages: 1-18
Issue: 3
Volume: 13
Year: 1999
X-DOI: 10.1080/10168739900000001
File-URL: http://www.tandfonline.com/doi/abs/10.1080/10168739900000001
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Handle: RePEc:taf:intecj:v:13:y:1999:i:3:p:1-18
Template-Type: ReDIF-Article 1.0
Author-Name: Alif Darrat
Author-X-Name-First: Alif
Author-X-Name-Last: Darrat
Title: Are Financial Deepening and Economic Growth Causally Related? Another Look at the Evidence
Abstract:
This study investigates empirically the role of financial deepening in
economic growth in three middle-eastern countries (Saudi Arabia, Turkey,
and the United Arab emirates). Unlike many previous studies, I focus on
the causal link between the degree of financial deepening and economic
growth in order to discriminate between several alternative theoretical
hypotheses. To that end, I use multivariate Granger-causality tests within
an error-correction framework. The results generally support the view that
financial deepening is a necessary causal factor of economic growth,
although the strength of the evidence varies across countries and across
the proxies used to measure financial deepening. The causal relationships
are also predominately long-term in nature. Therefore, government policies
aimed at promoting financial deepening in these countries must be
persistent and sustainable in order to foster economic development. [E44,
O11, O16]
Journal: International Economic Journal
Pages: 19-35
Issue: 3
Volume: 13
Year: 1999
X-DOI: 10.1080/10168739900000002
File-URL: http://www.tandfonline.com/doi/abs/10.1080/10168739900000002
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Handle: RePEc:taf:intecj:v:13:y:1999:i:3:p:19-35
Template-Type: ReDIF-Article 1.0
Author-Name: Eor Myong-Keun
Author-X-Name-First: Eor
Author-X-Name-Last: Myong-Keun
Author-Name: Ardeshir Dalal
Author-X-Name-First: Ardeshir
Author-X-Name-Last: Dalal
Title: Income Redistribution Effects in the Presence of Region-Specific Factors
Abstract:
This paper examines the effect of changes in factor endowments on income
Distribution in a four-factor, there-commodity model, in which two of the
factors are region-specific while the other two are inter-regionally and
inter-sectorally mobile. We provide an intermediate run model which
bridges the gap between the Heckscher-Ohlin-Samuelson and the specific
factor models, and which yields Results which differ from both these
models. A simple derivation of factor Friendship patterns is made possible
by exploiting the properties of the GNP Function. The procedure used may
be applied to any n-commodity, (n+1)-factor Model. [F20]
Journal: International Economic Journal
Pages: 37-49
Issue: 3
Volume: 13
Year: 1999
X-DOI: 10.1080/10168739900000003
File-URL: http://www.tandfonline.com/doi/abs/10.1080/10168739900000003
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Handle: RePEc:taf:intecj:v:13:y:1999:i:3:p:37-49
Template-Type: ReDIF-Article 1.0
Author-Name: Fountas Stilianos
Author-X-Name-First: Fountas
Author-X-Name-Last: Stilianos
Author-Name: Wu Jyh-Lin
Author-X-Name-First: Wu
Author-X-Name-Last: Jyh-Lin
Title: Are the U.S. Current Account Deficits Really Sustainable?
Abstract:
We have tested for a long-run relationship between four U.S. Export
measures and analogous import measures (measured in nominal and real
terms, levels and deflated by GNP) in the 1967-1994 period using quarterly
data. Using various econometric tests that include standard Engle-Granger
cointegration tests and two tests that allow for test-determined breaks in
the cointegrating relationship, we have shown that the hypothesis of no
long-run relationship between exports and imports cannot be rejected. This
finding contrasts sharply with earlier literature and carries the
important policy implication that US current account deficits are not
sustainable. [F30]
Journal: International Economic Journal
Pages: 51-58
Issue: 3
Volume: 13
Year: 1999
X-DOI: 10.1080/10168739900000004
File-URL: http://www.tandfonline.com/doi/abs/10.1080/10168739900000004
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Handle: RePEc:taf:intecj:v:13:y:1999:i:3:p:51-58
Template-Type: ReDIF-Article 1.0
Author-Name: Kiseok Hong
Author-X-Name-First: Kiseok
Author-X-Name-Last: Hong
Title: Fluctuations In Consumer Durables Expenditure And Fixed Investment of Korea
Abstract:
This paper examines time series fluctuations of consumer durables
expenditure and Fixed investment. Empirical Studies in the past have
typically found that fluctuations in this expenditure series are
inconsistent with the standard framework of utility or profit
maximization. As a result, the Sources and patterns of the volatility of
the series have remained largely unexplained. This paper attempts to
provide an alternative description of the series, by exploiting time
series implications of the stock adjustment process. A simple stock
adjustment identity implies that purchases in durable goods should exhibit
strong reversion over time, and that the reversion is the primary source
of the volatility in durables expenditure series. Empirical results of the
paper support this hypothesis. [E27]
Journal: International Economic Journal
Pages: 59-65
Issue: 3
Volume: 13
Year: 1999
X-DOI: 10.1080/10168739900000005
File-URL: http://www.tandfonline.com/doi/abs/10.1080/10168739900000005
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Handle: RePEc:taf:intecj:v:13:y:1999:i:3:p:59-65
Template-Type: ReDIF-Article 1.0
Author-Name: Yousif. Al-Yousif
Author-X-Name-First: Yousif.
Author-X-Name-Last: Al-Yousif
Title: On the Role Exports in the Economic Growth of Malaysia: A Multivariate Analysis
Abstract:
In recent years a number if studies have attempted to examine the
export-led Growth hypothesis in the Malaysian context. The evidence is,
however mixed and inconclusive. This might be attributed to the fact that
previous studies are bivariate in that they only focus on the relationship
between exports and economic growth. Therefore, in the present paper we
reexamine the relationship between exports and economic growth in the
Malaysian context using a multivariate model in which other relevant
factors (exchange rate, labor, and capital) are allowed to exert their
influence on the two basic variables (exports and economic growth). Our
results are supportive of the export-led growth as a short-run phenomenon
in Malaysia. Over the long-run, however, our results supports, instead,
the internally generated growth hypothesis. [O47]
Journal: International Economic Journal
Pages: 67-75
Issue: 3
Volume: 13
Year: 1999
X-DOI: 10.1080/10168739900000006
File-URL: http://www.tandfonline.com/doi/abs/10.1080/10168739900000006
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Handle: RePEc:taf:intecj:v:13:y:1999:i:3:p:67-75
Template-Type: ReDIF-Article 1.0
Author-Name: Won Lee Kyung
Author-X-Name-First: Won Lee
Author-X-Name-Last: Kyung
Author-Name: James Schmidt
Author-X-Name-First: James
Author-X-Name-Last: Schmidt
Author-Name: George Rejda
Author-X-Name-First: George
Author-X-Name-Last: Rejda
Title: Unemployment Insurance and State Economic Activity
Abstract:
The unemployment insurance (UI) system collects premiums from firms and
provides temporary compensation to involuntarily unemployed workers. The
system has traditionally been viewed as an automatic stabilizer for
national and area economies. This paper examines the impacts that UI
benefits and contributions have had upon general economic activity in
California and Michigan, large states that have experienced episodes of
moderate and high unemployment rates, respectively, during the past two
decades. For each state, we prepare a multiequation model of the economy
and impose constraints represented by cointegrating vectors. Impulse
responses measuring the impact of UI benefits and contributions on the
economies are obtained from the models. The strengths of the responses are
assessed using significance tests based upon distributions that have been
derived for models containing cointegrating vectors. The results indicate
that UI benefits and contributions provide little impact of consequence
upon general economic activity in the two states. [E24]
Journal: International Economic Journal
Pages: 77-95
Issue: 3
Volume: 13
Year: 1999
X-DOI: 10.1080/10168739900000007
File-URL: http://www.tandfonline.com/doi/abs/10.1080/10168739900000007
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Handle: RePEc:taf:intecj:v:13:y:1999:i:3:p:77-95
Template-Type: ReDIF-Article 1.0
Author-Name: Shen Chung-Hua
Author-X-Name-First: Shen
Author-X-Name-Last: Chung-Hua
Author-Name: Huang Tai-Hsin
Author-X-Name-First: Huang
Author-X-Name-Last: Tai-Hsin
Title: Money Demand and Seasonal Cointegration
Abstract:
This paper employs a seasonal error correction modes (SECM) to examine
the Stability of Taiwan' narrow and broad money demand functions. With the
exception of the short term interest rate, these two monetary aggregates
and their determinants are found to have strong seasonal unit roots at
various frequencies. The demand functions for both narrow and broad money
are cointegrated with real GNP and export at the annual frequency, whereas
the demand for broad money is cointegrated with real GNP at the biannual
frequency. Furthermore, both money aggregates are cointegrated with real
GNP, exports and he interest rate at the zero frequency. A SECM is then
constructed for the respective narrow and broad money demand Functions, of
which the latter is found to be stable. [C30, C32, E41]
Journal: International Economic Journal
Pages: 97-123
Issue: 3
Volume: 13
Year: 1999
X-DOI: 10.1080/10168739900000008
File-URL: http://www.tandfonline.com/doi/abs/10.1080/10168739900000008
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Handle: RePEc:taf:intecj:v:13:y:1999:i:3:p:97-123
Template-Type: ReDIF-Article 1.0
Author-Name: Chi-Chur Cho
Author-X-Name-First: Chi-Chur
Author-X-Name-Last: Cho
Author-Name: Eden Yu
Author-X-Name-First: Eden
Author-X-Name-Last: Yu
Title: Export Promotion, Sectoral Unemployment and National Welfare
Abstract:
A competitive, general equilibrium model is developed to analyze the
effectiveness of export-promotion policy. We show that the employment and
welfare effects of Export promotion crucially depend on the foreign import
demand elasticity and the Home country's propensity to consume is export
commodity. Our result is that export Promotion hurts the economy in the
long run but it may improve the short-run welfare under certain plausible
conditions. [F11, O38] We are indebted to an anonymous referee for
insightful comments. The usual disclaimer applies.
Journal: International Economic Journal
Pages: 1-13
Issue: 4
Volume: 13
Year: 1999
X-DOI: 10.1080/10168739900000041
File-URL: http://www.tandfonline.com/doi/abs/10.1080/10168739900000041
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Handle: RePEc:taf:intecj:v:13:y:1999:i:4:p:1-13
Template-Type: ReDIF-Article 1.0
Author-Name: Jai-Young Choi
Author-X-Name-First: Jai-Young
Author-X-Name-Last: Choi
Title: Factor Growth, Urban Unemployment and Welfare Under Variable Returns to Scale
Abstract:
This paper analyzes the welfare implications of factor growth (i.e.,
labor growth and capital accumulation), in the mobile-capital
Harris-Todaro (H-T) model by allowing the presence of variable returns to
scale (VRS). It is shown that in contrast to the constant returns to scale
(CRS) case, factor growth under VRS may lower the welfare of a small
country and can affect the urban unemployed-employed ratio and the factor
prices. Further, under VRS, the Rybczynski-type of factor endowment-output
response requires much more stringent conditions (vis-a vis the CRS case).
[F12, O41]
Journal: International Economic Journal
Pages: 17-34
Issue: 4
Volume: 13
Year: 1999
X-DOI: 10.1080/10168739900000042
File-URL: http://www.tandfonline.com/doi/abs/10.1080/10168739900000042
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Handle: RePEc:taf:intecj:v:13:y:1999:i:4:p:17-34
Template-Type: ReDIF-Article 1.0
Author-Name: Horvath Julius
Author-X-Name-First: Horvath
Author-X-Name-Last: Julius
Author-Name: Grabowski Richard
Author-X-Name-First: Grabowski
Author-X-Name-Last: Richard
Title: Core and Periphery in the World Economy: An Empirical Assessment of the Integration of the Developing Countries Into the World Economy
Abstract:
In this paper a dynamic structural vector-autoregressive model is
utilized to Analyze the impact of shocks from the developed center (G-7)
on the less developed periphery. Three possibilities emerge with less
developed nations being negatively dependent on the center, positively
integrated with the center, or independent of the center. A less developed
country is classified as negatively dependent when shocks from the center
have a negative impact and are relatively important in explaining
variations in the output of the developing country. A less developed
country is positively integrated if the shocks from the center have
positive effects and explain a large share of the variation in output in
the developing country. The results indicate that from the sample of
eighty-six developed countries only five could be considered dependent,
while the others are roughly equally divided into those positively
integrated and those that are independent. [F02, F43, 050]
Journal: International Economic Journal
Pages: 35-51
Issue: 4
Volume: 13
Year: 1999
X-DOI: 10.1080/10168739900000043
File-URL: http://www.tandfonline.com/doi/abs/10.1080/10168739900000043
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Handle: RePEc:taf:intecj:v:13:y:1999:i:4:p:35-51
Template-Type: ReDIF-Article 1.0
Author-Name: Young-Han Kim
Author-X-Name-First: Young-Han
Author-X-Name-Last: Kim
Title: The Welfare Analysis of Trade Policies: The Optimal Government Intervention Timing under Incomplete Information
Abstract:
This paper examines the welfare effects of the government trade policy
when the government intervenes as a second mover under incomplete
information. When the government decides her trade policy after an
exporting firm decides its strategy, both the high quality firm (H) and
the low quality firm (L) use their first mover advantage to raise the
price in addition to H's upward price distortion for signaling purposes,
and the government offers export subsidies to compensate for the price
increase. It is shown that in the presence of a distortionary cost of
raising government revenue, social welfare is highest when the government
is a first mover, followed by non-intervention; social welfare is lowest
when the government is a second mover. [F13, F12, L13]
Journal: International Economic Journal
Pages: 53-70
Issue: 4
Volume: 13
Year: 1999
X-DOI: 10.1080/10168739900000044
File-URL: http://www.tandfonline.com/doi/abs/10.1080/10168739900000044
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Handle: RePEc:taf:intecj:v:13:y:1999:i:4:p:53-70
Template-Type: ReDIF-Article 1.0
Author-Name: Gupta-Kapoor Anju
Author-X-Name-First: Gupta-Kapoor
Author-X-Name-Last: Anju
Author-Name: Ramakrishnan Uma
Author-X-Name-First: Ramakrishnan
Author-X-Name-Last: Uma
Title: Is There A J-Curve? A New Estimation for Japan
Abstract:
The controversial J-curve phenomenon is empirically tested using
quarterly data for Japan between 1975:1 and 1996:4. The effects of an
appreciation of yen on the ratio of imports to exports (M/X) is analyzed
using an error correction model. The impulse response function indicates
that the J-curve holds for Japan during the flexible exchange rate regime.
[F31, F32, F40]
Journal: International Economic Journal
Pages: 71-79
Issue: 4
Volume: 13
Year: 1999
X-DOI: 10.1080/10168739900000045
File-URL: http://www.tandfonline.com/doi/abs/10.1080/10168739900000045
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Handle: RePEc:taf:intecj:v:13:y:1999:i:4:p:71-79
Template-Type: ReDIF-Article 1.0
Author-Name: Lee Young Whan
Author-X-Name-First: Lee Young
Author-X-Name-Last: Whan
Title: Aggregate Risk and Social Value of Information in A Production Economy
Abstract:
This paper examines the effect of the degree of aggregate risk on social
value of information in a production economy with a stock market. If the
risk is firm-specific and there is no aggregate risk, public information
will be socially harmful rather than valuable when there are no new
markets for signal-contingent trades. We show that this result can be
extended to the economy under small aggregate risk. In this case, the
welfare gain from the increase in production effieciency due to public
information is dominated by the welfare loss from the reduced risk-sharing
opportunities. Also, these results can be extended to the case of private
information due to the property of the generically fully revealing
rational expectations equilibrium. [D82]
Journal: International Economic Journal
Pages: 81-100
Issue: 4
Volume: 13
Year: 1999
X-DOI: 10.1080/10168739900000046
File-URL: http://www.tandfonline.com/doi/abs/10.1080/10168739900000046
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Handle: RePEc:taf:intecj:v:13:y:1999:i:4:p:81-100
Template-Type: ReDIF-Article 1.0
Author-Name: Noh Suk Jae
Author-X-Name-First: Noh Suk
Author-X-Name-Last: Jae
Title: Two And One Sided Conflict: Effectiveness and Scale in a Ratio Form of Conflict Technology
Abstract:
This paper investigates how resources are allocated in the conflict when
the conflict technology is given by a ratio form that has both
effectiveness and scale parameters. The analysis shows that the 'paradox
of power' as identified by Hirshleifer (1991) is not a general result in
the equilibrium of a conflict. In the interior solution of two sided
conflict, it is shown that, as resource disparity increases, the less
endowed agent becomes more aggressive by allocating a larger fraction of
resources to offense and smaller fractions both do defense and production.
As offense becomes more effective, the less endowed agent allocates a
larger fraction of his resources to offense. However, as scale effect
becomes larger, he allocates more resources to offense only when offense
is not relatively too much ineffective. In the Nash interior solution of
one sided conflict, when offense becomes more effective, the ratio of
offense to defense decreases but this reduces the fraction the prey
retains of his produced output. However, when scale effect becomes larger,
the prey retains a smaller portion of his produced output with a smaller
ratio of offense to defense only when offense is sufficiently more
effective relative to defense. [C70, D60, D74]
Journal: International Economic Journal
Pages: 101-118
Issue: 4
Volume: 13
Year: 1999
X-DOI: 10.1080/10168739900000047
File-URL: http://www.tandfonline.com/doi/abs/10.1080/10168739900000047
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Handle: RePEc:taf:intecj:v:13:y:1999:i:4:p:101-118
Template-Type: ReDIF-Article 1.0
Author-Name: Bahmani-Oskooee Mohsen
Author-X-Name-First: Bahmani-Oskooee
Author-X-Name-Last: Mohsen
Author-Name: Taggert Brooks
Author-X-Name-First: Taggert
Author-X-Name-Last: Brooks
Title: Cointegration Approach to Estimating Bilateral Trade Elasticities Between U.S. and Her Trading Partners
Abstract:
Almost all previous authors who estimated the trade elasticities relied
upon aggregate trade data. To avoid the aggregation bias, this paper
provides estimates of trade elasticities using bilateral data between the
United States and her six largest trading partners. Application of
cointegration analysis reveals that in many cases, bilateral trade
elasticities are large enough to justify real depreciation of the dollar
as a mean of improving U.S. trade balance.[F14]
Journal: International Economic Journal
Pages: 119-128
Issue: 4
Volume: 13
Year: 1999
X-DOI: 10.1080/10168739900000048
File-URL: http://www.tandfonline.com/doi/abs/10.1080/10168739900000048
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Handle: RePEc:taf:intecj:v:13:y:1999:i:4:p:119-128
Template-Type: ReDIF-Article 1.0
Author-Name: C. Y. Horioka
Author-X-Name-First: C. Y.
Author-X-Name-Last: Horioka
Author-Name: H. Fujisaki
Author-X-Name-First: H.
Author-X-Name-Last: Fujisaki
Author-Name: W. Watanabe
Author-X-Name-First: W.
Author-X-Name-Last: Watanabe
Author-Name: T. Kouno
Author-X-Name-First: T.
Author-X-Name-Last: Kouno
Title: Are Americans More Altruistic than the Japanese? A U.S.-Japan Comparison of Saving and Bequest Motives
Abstract:
This paper analyzes a variety of data on saving motives, bequest motives,
and bequest division from a U.S.-Japan survey conducted in 1996 by the
Japanese Ministry of Posts and Telecommunications and finds (1) that the
selfish life cycle model is the dominant model of household behavior in
both countries but that in is far more applicable in Japan, (2) that the
altruism model is far more applicable in the U.S. but that it is not the
dominant model of household behavior in either country, and (3) that the
dynasty model is more applicable in Japan but that it is of only limited
applicability even in Japan. [D12, D91, E21]
Journal: International Economic Journal
Pages: 1-31
Issue: 1
Volume: 14
Year: 2000
X-DOI: 10.1080/10168730000000001
File-URL: http://www.tandfonline.com/doi/abs/10.1080/10168730000000001
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Handle: RePEc:taf:intecj:v:14:y:2000:i:1:p:1-31
Template-Type: ReDIF-Article 1.0
Author-Name: Guy Ho Wang
Author-X-Name-First: Guy Ho
Author-X-Name-Last: Wang
Title: On The Dynamic Incentive of Price-Quality Differentiation By A Monopolist Firm
Abstract:
When consumers are theterogeneous in their preferences about the quality
of a product, a monopolist firm can take advantage of this heterogeneity,
thereby, increase the profit by offering different price-quality pairs.
This business practice is called the second degree price discrimination or
non-linear pricing. This paper extends the static non-linear pricing
problem into the dynamic one where the monopolist firm cannot precommit in
advance. The main result is that the dynamic non-linear pricing outcome is
the same as the static non-linear pricing outcome so that additional
opportunities to transact neither benefits nor hurts the monopolist firm.
[L12]
Journal: International Economic Journal
Pages: 33-45
Issue: 1
Volume: 14
Year: 2000
X-DOI: 10.1080/10168730000000002
File-URL: http://www.tandfonline.com/doi/abs/10.1080/10168730000000002
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Handle: RePEc:taf:intecj:v:14:y:2000:i:1:p:33-45
Template-Type: ReDIF-Article 1.0
Author-Name: A. C. Arize
Author-X-Name-First: A. C.
Author-X-Name-Last: Arize
Author-Name: Malindretos John
Author-X-Name-First: Malindretos
Author-X-Name-Last: John
Title: Does Inflation Variability Affect the Demand for Money in China? Evidence from Error-Correction Models
Abstract:
Theory suggests that inflation variability should affect real money
balances, although there is ambiguity about the sign of the effect. Using
cointegration and vector-error correction (VEC) modeling techniques, this
paper presents new evidence on the effect of inflation variability on the
demand for real money balances in China. The major result shows that
increases in the inflation variability exert a significant effect upon
money demand in both the short-run and the long-run. [E41]
Journal: International Economic Journal
Pages: 47-60
Issue: 1
Volume: 14
Year: 2000
X-DOI: 10.1080/10168730000000003
File-URL: http://www.tandfonline.com/doi/abs/10.1080/10168730000000003
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Handle: RePEc:taf:intecj:v:14:y:2000:i:1:p:47-60
Template-Type: ReDIF-Article 1.0
Author-Name: Comolli Paul
Author-X-Name-First: Comolli
Author-X-Name-Last: Paul
Title: A Theorem on the Gains from International Factor Mobility
Abstract:
This paper proves that for the case of a small country, which cannot
influence world factor prices, an expansion in the scope of international
factor mobility can never reduce its real national income. [F11, F20]
Journal: International Economic Journal
Pages: 61-69
Issue: 1
Volume: 14
Year: 2000
X-DOI: 10.1080/10168730000000004
File-URL: http://www.tandfonline.com/doi/abs/10.1080/10168730000000004
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Handle: RePEc:taf:intecj:v:14:y:2000:i:1:p:61-69
Template-Type: ReDIF-Article 1.0
Author-Name: Devadoss Stephen
Author-X-Name-First: Devadoss
Author-X-Name-Last: Stephen
Author-Name: Cooper Kevin
Author-X-Name-First: Cooper
Author-X-Name-Last: Kevin
Title: Simultaneous Price And Quantity Determination In A Joint Profit Maximizing Bilateral Monopoly Under Dynamic Optimization
Abstract:
A long standing controversial issue in the literature surrounding the
bilateral monopoly is the determinacy of equilibrium price and quantity
when the seller and buyer maximize their joint profits. This controversy
led to incorrect presentation of bilateral monopoly solutions in the
literature. In this study, we employ a dynamic optimization model to
simultaneously determine the equilibrium price and quantity transacted
between the buyer and seller. We also show that for the bilateral monopoly
to achieve equilibrium they must transact the intermediate product at the
hint profit maximizing level. Any deviation from this level will result in
one party exercising greater control than the other, and thus, will lead
to a situation of either pure monopsony or monopoly, or nonexistence of
both parties. [D43, C78,C61]
Journal: International Economic Journal
Pages: 71-84
Issue: 1
Volume: 14
Year: 2000
X-DOI: 10.1080/10168730000000005
File-URL: http://www.tandfonline.com/doi/abs/10.1080/10168730000000005
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Handle: RePEc:taf:intecj:v:14:y:2000:i:1:p:71-84
Template-Type: ReDIF-Article 1.0
Author-Name: Dong Qi Hong
Author-X-Name-First: Dong Qi
Author-X-Name-Last: Hong
Title: The Welfare Effects of U.S. Most-Favored-Nation Tariff Treatment of Exports From China: An Empirical Inquiry
Abstract:
This Study provides estimates of the elasticities of the U.S. import
demand for Chinese goods and of China's export supply to he U.S. and China
of granting Most-Favored-Nation (MFN) tariff treatment for China's
exports. In general, if Washington denies MFN status to Beijing,
Sino-American commercial as well as political relations world be seriously
harmed. [F13, F14]
Journal: International Economic Journal
Pages: 85-97
Issue: 1
Volume: 14
Year: 2000
X-DOI: 10.1080/10168730000000006
File-URL: http://www.tandfonline.com/doi/abs/10.1080/10168730000000006
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Handle: RePEc:taf:intecj:v:14:y:2000:i:1:p:85-97
Template-Type: ReDIF-Article 1.0
Author-Name: Jung Choong-Young
Author-X-Name-First: Jung
Author-X-Name-Last: Choong-Young
Author-Name: Kim Jae-Cheol
Author-X-Name-First: Kim
Author-X-Name-Last: Jae-Cheol
Author-Name: Lee Sang-Ho
Author-X-Name-First: Lee
Author-X-Name-Last: Sang-Ho
Title: An Incentive Contract With Asymmetric Information
Abstract:
This Paper considers the problem of designing an optimal incentive
contract between a retailer and a manufacturer when the former has private
information about demand and its own cost. Based on a multi-period
framework, we show that the incentive franchise contract can bring about
the fist-best outcome of vertical integration when the retailer has
complete information about consumers' preferences. [L42, D8]
Journal: International Economic Journal
Pages: 99-110
Issue: 1
Volume: 14
Year: 2000
X-DOI: 10.1080/10168730000000007
File-URL: http://www.tandfonline.com/doi/abs/10.1080/10168730000000007
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Handle: RePEc:taf:intecj:v:14:y:2000:i:1:p:99-110
Template-Type: ReDIF-Article 1.0
Author-Name: Nam Chong-Hyun
Author-X-Name-First: Nam
Author-X-Name-Last: Chong-Hyun
Author-Name: Kim Chang-Jin
Author-X-Name-First: Kim
Author-X-Name-Last: Chang-Jin
Title: Capital Accumulation And Trade Policy:The Case Of Korea
Abstract:
This paper investigates whether there are any systematic links between
Domestic savings and export growth in light of the Korean experience,
beginning with the early 1960s when trade policy shifted from an inward to
outward orientation. The paper also examines how domestic investment might
have been affected by the trade reforms. The study reveals that the
impressive growth of Korea's domestic savings over the 1960-95 period owes
in no small part to the Trade reforms and the subsequent rapid growth of
exports. Evidence also Suggests that the long-lasting investment boom
experienced by Korea over the 1960-95 period was initiated and maintained
to a significant degree by the trade reform of the 1960s and thereafter.
[F43, E21].
Journal: International Economic Journal
Pages: 111-131
Issue: 1
Volume: 14
Year: 2000
X-DOI: 10.1080/10168730000000008
File-URL: http://www.tandfonline.com/doi/abs/10.1080/10168730000000008
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Handle: RePEc:taf:intecj:v:14:y:2000:i:1:p:111-131
Template-Type: ReDIF-Article 1.0
Author-Name: Frank Wolak
Author-X-Name-First: Frank
Author-X-Name-Last: Wolak
Title: An Empirical Analysis of the Impact of Hedge Contracts on Bidding Behavior in a Competitive Electricity Market
Abstract:
A major concern in the design of wholesale electricity markets is the
potential for the exercise of market power by generating unit owners. To
better understand the determinants of generating unit owner market power
and how it is exercised, this paper derives a model of bidding behavior in
a competitive electricity market which incorporates various sources of
uncertainty and the impact of the electricity generator's position in the
financial hedge contract market on its expected profit-maximizing bidding
behavior. The model is first used to characterize the profit-maximizing
market price that a generator would like set by its bidding strategy for
several hedge contract and spot sales combinations. This model is applied
to bid and contract data obtained from the first three months of operation
of the National Electricity Market (NEM1) in Australia. This analysis
illustrates the sensitivity of expected profit-maximizing bidding
strategies to the amount of financial hedge contracts held by the
generating unit owner. It also provides strong evidence for the
effectiveness of financial hedge contracts as a means to mitigate market
power during the initial stages of operation of a wholesale electricity
market. [L 94]
Journal: International Economic Journal
Pages: 1-39
Issue: 2
Volume: 14
Year: 2000
X-DOI: 10.1080/10168730000000017
File-URL: http://www.tandfonline.com/doi/abs/10.1080/10168730000000017
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Handle: RePEc:taf:intecj:v:14:y:2000:i:2:p:1-39
Template-Type: ReDIF-Article 1.0
Author-Name: Shuai Xiaobing
Author-X-Name-First: Shuai
Author-X-Name-Last: Xiaobing
Title: Multinationals, Information Update, and Product Adaptation
Abstract:
This paper develops a dynamic model of decision making by multinational
firms. The firm chooses between exporting and producing abroad when it
expands the market. Bayes learning is incorporated into this model in
addition to fixed cost and transport cost Production in a foreign country
gives the firm new information about the demand function. This information
is applied to adjust the firm's expectation as well as output choice in
the future. This process not only reduces the risk encountered by a firm
in a foreign market, but also increases acceptance of the product which
the firm manufactures. This paper concludes even if producing abroad loses
money in the first period, the firm may still choose to set up plants in
foreign countries rather than exporting, due to the dynamic information
advantage associated with going multinational. [F23,F21]
Journal: International Economic Journal
Pages: 41-66
Issue: 2
Volume: 14
Year: 2000
X-DOI: 10.1080/10168730000000018
File-URL: http://www.tandfonline.com/doi/abs/10.1080/10168730000000018
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Handle: RePEc:taf:intecj:v:14:y:2000:i:2:p:41-66
Template-Type: ReDIF-Article 1.0
Author-Name: J Pentecost Eric
Author-X-Name-First: J Pentecost
Author-X-Name-Last: Eric
Author-Name: Ramlogan Carlyn
Author-X-Name-First: Ramlogan
Author-X-Name-Last: Carlyn
Title: The Savings Ratio and Financial Repression in Trinidad and Tobago
Abstract:
This paper investigates the hypothesis financial repression in the
context of the Determinates of the private savings ratio in Trinidad and
Tobago, using the Multivariate, cointegration time-series methodology.
Four alternative proxies are Used to represent financial repression,
including the real interest rate, the real interest Rate differential
between the world and domestic economy and two alternative Measures of
exchange rate misalignment, We find that there is strong evidence to
Support the hypothesis of financial repression in Trinidad and Tobago over
the sample Period and that financial liberalization may significantly
enhance the growth of real Per capita income. [E2, F4, O1]
Journal: International Economic Journal
Pages: 67-84
Issue: 2
Volume: 14
Year: 2000
X-DOI: 10.1080/10168730000000019
File-URL: http://www.tandfonline.com/doi/abs/10.1080/10168730000000019
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Handle: RePEc:taf:intecj:v:14:y:2000:i:2:p:67-84
Template-Type: ReDIF-Article 1.0
Author-Name: Jo Sunghan
Author-X-Name-First: Jo
Author-X-Name-Last: Sunghan
Title: Methodological Extensions of First-Order Adjustment Models: An Application to U.S. Industries
Abstract:
This paper empirically tests two industrial-organization models with a
sample of 182 U.S. industries, from to 1963 to 1967. The models extend
standard models and integrate them with dynamics associated with the "
persistence of profits" methodologies. We extend it by replacing the
traditional cross-section profit equation with a profit-adjustment
equation for U.S. industrial data. Our study measures the speed of
adjustment of profits and explicitly models steady-state profits, in
addition to the speed of structural adjustment and steady-state market
structure. We find that the structural-adjustment speed is slower than the
profit-adjustment speed and that nonzero economic profits tend to be quite
persistent
Journal: International Economic Journal
Pages: 85-111
Issue: 2
Volume: 14
Year: 2000
X-DOI: 10.1080/10168730000000020
File-URL: http://www.tandfonline.com/doi/abs/10.1080/10168730000000020
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Handle: RePEc:taf:intecj:v:14:y:2000:i:2:p:85-111
Template-Type: ReDIF-Article 1.0
Author-Name: Armah Bartholomew
Author-X-Name-First: Armah
Author-X-Name-Last: Bartholomew
Title: Does Latin America Have More to Gain From Exchange Rate Liberalization than Sub-Saharan Africa?
Abstract:
An examination of the relationship between exchange rate liberalization
and economic growth in selected Latin American and Sub-Saharan African
countries reveals evidence of a short-run causal relationship between the
two variables in both Latin America and Sub-Saharan Africa. Within each
region, exchange rate liberalization causes growth in some countries while
others exhibit reverse causality running from growth to exchange rate
leads to increased growth and growth induces exchange rate liberalization
in most Latin American countries, in the majority of Sub-Saharan African
countries studied, exchange rate liberalization reduces growth while
growth causes distortions in the exchange rate. Market imperfections,
expansionary fiscal and monetary policies under a fixed exchange rate
regime, and poor terms of trade are cited as possible explanations for the
findings for Sub-Saharan Africa. [F, O]
Journal: International Economic Journal
Pages: 113-132
Issue: 2
Volume: 14
Year: 2000
X-DOI: 10.1080/10168730000000021
File-URL: http://www.tandfonline.com/doi/abs/10.1080/10168730000000021
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Handle: RePEc:taf:intecj:v:14:y:2000:i:2:p:113-132
Template-Type: ReDIF-Article 1.0
Author-Name: Dua Pami
Author-X-Name-First: Dua
Author-X-Name-Last: Pami
Author-Name: Rashid Aneesa Ismail
Author-X-Name-First: Rashid Aneesa
Author-X-Name-Last: Ismail
Author-Name: Salvatore Dominick
Author-X-Name-First: Salvatore
Author-X-Name-Last: Dominick
Title: The Impact of Financial and Fiscal Variables on Economic Growth: The Case of India and Korea
Abstract:
This paper applies a simple macroeconomic model developed by Green and
Murinde (1993) to Korea and India and studies the potency of fiscal and
financial policies. The fiscal variables are real government spending, the
income tax rate, and the export tax rate; while financial policy variables
are the official interest rate, loans from commercial banks, foreign
reserves or the exchange rate and foreign capital inflows. Dummies for
political instability and financial reforms specific to the two countries
are also included. We find that while government expenditure, income taxes
and foreign capital inflow have the same effects in the two countries,
interest rates, money supply, foreign reserves and financial
liberalization have different effects, bringing out the differences in the
two economies, [E63, 011, 053]
Journal: International Economic Journal
Pages: 133-150
Issue: 2
Volume: 14
Year: 2000
X-DOI: 10.1080/10168730000000022
File-URL: http://www.tandfonline.com/doi/abs/10.1080/10168730000000022
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Handle: RePEc:taf:intecj:v:14:y:2000:i:2:p:133-150
Template-Type: ReDIF-Article 1.0
Author-Name: T. Chang
Author-X-Name-First: T.
Author-X-Name-Last: Chang
Author-Name: W. Fang
Author-X-Name-First: W.
Author-X-Name-Last: Fang
Author-Name: W. Liu
Author-X-Name-First: W.
Author-X-Name-Last: Liu
Author-Name: Thompson Henry
Author-X-Name-First: Thompson
Author-X-Name-Last: Henry
Title: Exports, Imports and Income in Taiwan: An Examination of the Export Led Growth Hypothesis
Abstract:
Cointegration and vector autoregression are used to examine relationships
among exports, imports, and income in Taiwan from 1971 to 1995. These
three series are cointegrated. There is bidirectional Granger causality
between exports and imports, and between imports and income. Impulse
responses and variance decompositions uncover only weak links from exports
to income. The export led growth hypothesis is not supported for Taiwan
during this period of rapid growth. [F1, F4, O0]
Journal: International Economic Journal
Pages: 151-160
Issue: 2
Volume: 14
Year: 2000
X-DOI: 10.1080/10168730000000023
File-URL: http://www.tandfonline.com/doi/abs/10.1080/10168730000000023
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Handle: RePEc:taf:intecj:v:14:y:2000:i:2:p:151-160
Template-Type: ReDIF-Article 1.0
Author-Name: Wontack Hong
Author-X-Name-First: Wontack
Author-X-Name-Last: Hong
Title: Engine of Export-Oriented Catching-Up: Small Firms
Abstract:
Big conglomerates dominate the Korean economic as do small firms the
Taiwan economy. I characterize Korea as a relatively low-trust society
with a pro-chaebol policy bias, and Taiwan as a relatively high-trust
society with an anti-big-conglomerate policy bias. I content that the
differences between Korea and Taiwan in size structure of firms reflect
the divergent responses of entrepreneurs to different, "semi-permanent"
socio-political conditions that determine the costs of market transactions
among firms. It may be desirable to change the size structure of firms,
but I maintain that the possibility of actual change in the size structure
is rather limited. [F14, L11]
Journal: International Economic Journal
Pages: 161-179
Issue: 2
Volume: 14
Year: 2000
X-DOI: 10.1080/10168730000000024
File-URL: http://www.tandfonline.com/doi/abs/10.1080/10168730000000024
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Handle: RePEc:taf:intecj:v:14:y:2000:i:2:p:161-179
Template-Type: ReDIF-Article 1.0
Author-Name: Krusell Per
Author-X-Name-First: Krusell
Author-X-Name-Last: Per
Author-Name: Kuruscu Burhanettin
Author-X-Name-First: Kuruscu
Author-X-Name-Last: Burhanettin
Author-Name: Anthony Smith
Author-X-Name-First: Anthony
Author-X-Name-Last: Smith
Title: Tax Policy with Quasi-Geometric Discounting
Abstract:
We study the effects of tazation in a model with a representative agent
with time Inconsistent preferences: discounting is quasi-geometric.
Utility is derived from Consumption and leisure, and tazation can be based
on consumption and investmentc Spending as well as on capital and labor
income. The model allows for closed form Solutions, and welfare
comparisons can be made across taxation systems. Optimal taxation analysis
in this model leads to time inconsistency issues for the government,
assuming that the government shares the consumer's preferences and Cannot
commit to future taxes. We study time-consistent policy equilibria for
Different tax constitutions. A tax constitution specifies what tax
instruments are Available, and we assume that the government can commit to
a tax constitution. The Results show that a constitution leaving the
government with no ability to tax results in Strictly higher welfare than
one where the government has full freedom to tax. Indeed, for some
parameter values, the best tax constitution of all is laissez faire (even
though the government is benevolent and fully rational). For other
parameter values, it may be optimal to allow the government to use a less
than fully restricted set of tax bases. [D6,E6,H2]
Journal: International Economic Journal
Pages: 1-40
Issue: 3
Volume: 14
Year: 2000
X-DOI: 10.1080/10168730000000025
File-URL: http://www.tandfonline.com/doi/abs/10.1080/10168730000000025
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Handle: RePEc:taf:intecj:v:14:y:2000:i:3:p:1-40
Template-Type: ReDIF-Article 1.0
Author-Name: Shirvani Hassan
Author-X-Name-First: Shirvani
Author-X-Name-Last: Hassan
Author-Name: Wilbrate Barry
Author-X-Name-First: Wilbrate
Author-X-Name-Last: Barry
Title: Does Consumption Respond More Strongly to Stock Market Declines Than to Increases?
Abstract:
This paper provides empirical evidence that positive and negative wealth
effects of stock prices on consumer expenditures are unequal. For the
three largest economies in the world, stock price declines are found to
have a more powerful effect than price increases. [F20, E30]
Journal: International Economic Journal
Pages: 41-49
Issue: 3
Volume: 14
Year: 2000
X-DOI: 10.1080/10168730000000026
File-URL: http://www.tandfonline.com/doi/abs/10.1080/10168730000000026
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Handle: RePEc:taf:intecj:v:14:y:2000:i:3:p:41-49
Template-Type: ReDIF-Article 1.0
Author-Name: Bahmani-Oskooee Mohsen
Author-X-Name-First: Bahmani-Oskooee
Author-X-Name-Last: Mohsen
Author-Name: Mirzaie Aghdas
Author-X-Name-First: Mirzaie
Author-X-Name-Last: Aghdas
Title: The Long-Run Effects of Depreciation of The Dollar on Sectoral Output
Abstract:
Almost all previous research that investigated the impact of currency
depreciation on domestic production relied on an aggregate measure of
total output, i.e. GDP. In this paper we investigate the long-run relation
between the exchange value of the dollar and production in eight different
sectors of the U.S. economy by the means of cointegration analysis. For
most sectors we find no evidence of a long-run relation between the value
of the dollar and sectoral output. [F31]
Journal: International Economic Journal
Pages: 51-61
Issue: 3
Volume: 14
Year: 2000
X-DOI: 10.1080/10168730000000027
File-URL: http://www.tandfonline.com/doi/abs/10.1080/10168730000000027
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Handle: RePEc:taf:intecj:v:14:y:2000:i:3:p:51-61
Template-Type: ReDIF-Article 1.0
Author-Name: Whang Seong Hyeon
Author-X-Name-First: Whang Seong
Author-X-Name-Last: Hyeon
Title: Conservative Monetary Policy Rule and Inflation Mitigation Policies
Abstract:
This paper studies an enforceable conservative monetary policy rule and
the welfare implications of inflation mitigation policies. By applying
Rogoff's idea of appointing a conservative central banker to Barro and
Gordon's framework, we derive the optimal degree of conservatism of
society when the policy rule is enforceable in a multi-period set-up. In
our work, the exact range of the parameter used to measure the degree of
conservatism for the enforceable policy rule is expressed by some
important parameters in the model such as the marginal cost of inflation,
the slope coefficient in the Phillips curve, and the time discount factor.
Using the basic set-up, we re-investigate Fischer and Summers' finding on
the welfare effects of some inflation mitigation policies for the case of
the reputational equilibrium under the conservative monetary policy rule.
[E50]
Journal: International Economic Journal
Pages: 63-74
Issue: 3
Volume: 14
Year: 2000
X-DOI: 10.1080/10168730000000028
File-URL: http://www.tandfonline.com/doi/abs/10.1080/10168730000000028
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Handle: RePEc:taf:intecj:v:14:y:2000:i:3:p:63-74
Template-Type: ReDIF-Article 1.0
Author-Name: Don Clark
Author-X-Name-First: Don
Author-X-Name-Last: Clark
Author-Name: Marchese Serafino
Author-X-Name-First: Marchese
Author-X-Name-Last: Serafino
Author-Name: Zarrilli Simonetta
Author-X-Name-First: Zarrilli
Author-X-Name-Last: Simonetta
Title: Do Dirty Industries Conduct Offshore Assembly In Developing Countries?
Abstract:
This paper investigates whether the cost of environmental regulation
influences the international location of polluting industries. Industries
that operate production facilities in developing countries are identified
through their use of the offshore assembly provisions in the U.S. tariff
Code. Pollutions Intensity of industry output is found to significantly
reduce the probability of conducting offshore assembly in developing
countries. This finding contradicts the arguments that developing
countries are becoming pollution havens as a result of offshore assembly
independent of their general disregard for the environment. Integrating
production across national boundaries might actually enhance worldwide
environmental quality. Relatively clean stages of the production process
are being transferred to developing countries with lax environmental
regulations, while polluting segments remain in the U.S. where strict
environmental controls are enforced. [F1, Q2]
Journal: International Economic Journal
Pages: 75-86
Issue: 3
Volume: 14
Year: 2000
X-DOI: 10.1080/10168730000000029
File-URL: http://www.tandfonline.com/doi/abs/10.1080/10168730000000029
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Handle: RePEc:taf:intecj:v:14:y:2000:i:3:p:75-86
Template-Type: ReDIF-Article 1.0
Author-Name: Jeong-Yoo Kim
Author-X-Name-First: Jeong-Yoo
Author-X-Name-Last: Kim
Title: Product Compatibility and Technological Innovation
Abstract:
This paper explores the relationship between the firms' compatibility
choice and quality improving technological progress in a static model. I
demonstrate that firms' compatibility choice in anticipation of quality
improving innovation critically depends on how users' expectations
regarding the network size are formed. In particular, if users have
rational expectations the firm with the small innovation will prefer full
compatibility whereas the firm with the large innovation will prefer
complete incompatibility,, and as a result, with the small innovation,
excessive standardization may occur. [D13]
Journal: International Economic Journal
Pages: 87-100
Issue: 3
Volume: 14
Year: 2000
X-DOI: 10.1080/10168730000000030
File-URL: http://www.tandfonline.com/doi/abs/10.1080/10168730000000030
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Handle: RePEc:taf:intecj:v:14:y:2000:i:3:p:87-100
Template-Type: ReDIF-Article 1.0
Author-Name: Kim Chung-Han
Author-X-Name-First: Kim
Author-X-Name-Last: Chung-Han
Title: Balassa-Samuelson Theory and Predictability of the US/UK Real Exchange Rate
Abstract:
This paper performs a theory-based forecast of the US/UK real exchange
rate. The theory is the Balassa-Samuelson hypothesis that productivity
differentials between two countries would determine long-run movements of
real exchange rates. The relative income and real exchange rate set a
bivariate system, which considers the heteroskedasticity in the real
exchange rate movements. The model, to which the Kalman filter and
Markov-switching algorithm are applied, is compared with the random walk
model and reports significant improvements in forecasting in the medium
and long term. [C53, F31]
Journal: International Economic Journal
Pages: 101-121
Issue: 3
Volume: 14
Year: 2000
X-DOI: 10.1080/10168730000000031
File-URL: http://www.tandfonline.com/doi/abs/10.1080/10168730000000031
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Handle: RePEc:taf:intecj:v:14:y:2000:i:3:p:101-121
Template-Type: ReDIF-Article 1.0
Author-Name: M. A. Mcpherson
Author-X-Name-First: M. A.
Author-X-Name-Last: Mcpherson
Author-Name: M. R. Redfearn
Author-X-Name-First: M. R.
Author-X-Name-Last: Redfearn
Author-Name: M. A. Tieslau
Author-X-Name-First: M. A.
Author-X-Name-Last: Tieslau
Title: A Re-Examination of the Linder Hypothesis: A Random-Effects Tobit Approach
Abstract:
This paper examines one of the main theories of international trade, the
Linder hypothesis, using data from the OECD countries. The paper makes two
primary contributions. First, significant empirical evidence is found in
support of Linder's hypothesis regarding demand similarity for 18 of the
19 OECD countries under investigation here. Second, the use of a censored
dependent variable in this analysis corrects a major methodological
shortcoming in the existing literature by including data on all potential
trading partners, even when the given OECD country has a zero or negative
desire to export to that potential trading partner. [F10]
Journal: International Economic Journal
Pages: 123-136
Issue: 3
Volume: 14
Year: 2000
X-DOI: 10.1080/10168730000000032
File-URL: http://www.tandfonline.com/doi/abs/10.1080/10168730000000032
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Handle: RePEc:taf:intecj:v:14:y:2000:i:3:p:123-136
Template-Type: ReDIF-Article 1.0
Author-Name: D. Carroll Christopher
Author-X-Name-First: D. Carroll
Author-X-Name-Last: Christopher
Title: Risky Habits and the Marginal Propensity to Consume Output of Permanent Income, or, How Much Would a Permanent Tax Cut Boost Japanese Consumption?
Abstract:
Papers in a variety of disparate literatures have recently suggested that
habit formation in consumption may explain several empirical puzzles,
ranging from the level and cyclical variability of the equity premium
(Abel, 1990, 1999: Constantinides, 1990; Jerman, 1998; Campbell and
Cochrane, 1999) to the 'excess smoothness' of aggregate consumption
(Fuhrer, 2000) to the apparent fact that increases in economic growth
cause subsequent increase in aggregate saving rates (Carroll and Weil,
1994: Bosworth, 1993; Attanasio, Picci, and Scorceu, 2000; Rodrik, 1999;
Layza, Schmidt-Hebbel, and Serven, 2000) This paper examines an
implication of these models that has mostly been overlooked: Habits strong
enough to solve these puzzles imply an immediate marginal propensity to
consume out of permanent shocks of much lees than one. When the model is
calibrated to roughly match the rise in the Japanese saving rate over the
postwar periode, it implies that the immediate MPC out of Permanent tax
cuts may be as low as 30 percent, suggesting that calls for a permanent
income tax cut as a quick means of stimulating aggregate demand in Japan
may be misguided. [D11, D81, D91, E10, E17, E21, H31]
Journal: International Economic Journal
Pages: 1-40
Issue: 4
Volume: 14
Year: 2000
X-DOI: 10.1080/10168730000000033
File-URL: http://www.tandfonline.com/doi/abs/10.1080/10168730000000033
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Handle: RePEc:taf:intecj:v:14:y:2000:i:4:p:1-40
Template-Type: ReDIF-Article 1.0
Author-Name: Irandoust Manuchehr
Author-X-Name-First: Irandoust
Author-X-Name-Last: Manuchehr
Author-Name: Sjoo Boo
Author-X-Name-First: Sjoo
Author-X-Name-Last: Boo
Title: The Behavior of the Current Account in Response to Unobservable and Observable Shocks
Abstract:
The intertemporal approach to the balance of payments states that
non-stationary flows in the current account will cointegrate or cotrend,
unless there are permanent productivity shocks or long-run policy
distortions. This paper examines the dynamics of the current account for a
small open economy, using data from Sweden. The results show borderline
cointegration for the current account. Recursive estimates disclose that
there is no stable tendency towards finding cointegration. Cointegration
is found for the first part of the sample, but from 1990 the cointegration
test performs badly until speculative attacks force Sweden to give up the
peg of the krona in 1992. In terms of the intertemporal approach, policy
could be creating the imbalance, solved with the depreciation in 1992,
after which the external accounts gradually move back to long-run
equilibrium. [F31, F32, F41]
Journal: International Economic Journal
Pages: 41-57
Issue: 4
Volume: 14
Year: 2000
X-DOI: 10.1080/10168730000000034
File-URL: http://www.tandfonline.com/doi/abs/10.1080/10168730000000034
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Handle: RePEc:taf:intecj:v:14:y:2000:i:4:p:41-57
Template-Type: ReDIF-Article 1.0
Author-Name: Kim Kyung Soo
Author-X-Name-First: Kim Kyung
Author-X-Name-Last: Soo
Title: Foreign Exchange Intervention For Internal Balance
Abstract:
This paper is concerned with the optimal combination of sterilization and
wage Indexation in a small open economy subject to various disturbances.
In most cases the Effects of these policy instruments are interdependent
such that they act like a single Instrument. At the optimum, in addition
to the well-known substitutability of foreign Exchange intervention and
wage indexation , the complementarity of foreign exchange Intervention and
sterilization is obtained. The relationship between the degree of Capital
mobility and the optimal combination of the policy instruments is also
examined. [E52, F4]
Journal: International Economic Journal
Pages: 59-75
Issue: 4
Volume: 14
Year: 2000
X-DOI: 10.1080/10168730000000035
File-URL: http://www.tandfonline.com/doi/abs/10.1080/10168730000000035
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Handle: RePEc:taf:intecj:v:14:y:2000:i:4:p:59-75
Template-Type: ReDIF-Article 1.0
Author-Name: Mackie James
Author-X-Name-First: Mackie
Author-X-Name-Last: James
Author-Name: J. Rousslang Donald
Author-X-Name-First: J. Rousslang
Author-X-Name-Last: Donald
Title: The Optimal Taxation of Income From International Investment: A Geometric Analysis
Abstract:
This paper examines how a capital-exporting country should tax foreign
investment Income when saving is variable and the goal is to maximize
global welfare. Other Recent studies have assumed either that countries
cooperate to achieve this goal, or that they act unilaterally to maximize
the national benefit. The present paper returns to the framework used by
earlier authors, in which the capital-exporting country acts unilaterally
and takes foreign tax rates as given. Unlike the previous studies, it is
found that if the capital-exporting country's investments do not alter
foreign rates of return, the optimal tax structure may involve higher
taxes for foreign than for domestic investment income. H21,H87]
Journal: International Economic Journal
Pages: 77-86
Issue: 4
Volume: 14
Year: 2000
X-DOI: 10.1080/10168730000000036
File-URL: http://www.tandfonline.com/doi/abs/10.1080/10168730000000036
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Handle: RePEc:taf:intecj:v:14:y:2000:i:4:p:77-86
Template-Type: ReDIF-Article 1.0
Author-Name: Lee In Kwon
Author-X-Name-First: Lee In
Author-X-Name-Last: Kwon
Title: Damage Estimation and Its Accuracy Antitrust Policy Implication
Abstract:
This paper empirically estimates antitrust damage based on the rich
information on cost factors in the bid-rigged Texas school milk market.
Empirical results demonstrate that damage estimate by antitrust agency is
a significantly underestimated amount of the true damage. This
understatement of true harm inevitably includes implementation biases in
the antitrust system. [K21, L13, L40]
Journal: International Economic Journal
Pages: 87-102
Issue: 4
Volume: 14
Year: 2000
X-DOI: 10.1080/10168730000000037
File-URL: http://www.tandfonline.com/doi/abs/10.1080/10168730000000037
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Handle: RePEc:taf:intecj:v:14:y:2000:i:4:p:87-102
Template-Type: ReDIF-Article 1.0
Author-Name: Kim Gi-Hong
Author-X-Name-First: Kim
Author-X-Name-Last: Gi-Hong
Title: The Role of Gatt in Trade Negotiations: A Game-Theoretic Perspective
Abstract:
The purpose of this paper is to explain theoretically the role of GATT in
tariff negotiations, without narrowly interpreting GATT as an agreement.
This paper, which establishes a game model where two nations are involved
in tariff negotiations, shows the following points. First, free trade is
difficult to realize even in a world with complete information. Second,
GATT can serve as a mechanism for nations to find a particular cooperative
tariff under incomplete information. Third, gradual tariff reduction can
be explained as the interaction between the gradual decline of domestic
political pressure and multilateral tariff negotiations under GATT. [F13]
Journal: International Economic Journal
Pages: 103-123
Issue: 4
Volume: 14
Year: 2000
X-DOI: 10.1080/10168730000000038
File-URL: http://www.tandfonline.com/doi/abs/10.1080/10168730000000038
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Handle: RePEc:taf:intecj:v:14:y:2000:i:4:p:103-123
Template-Type: ReDIF-Article 1.0
Author-Name: Osborne Evan
Author-X-Name-First: Osborne
Author-X-Name-Last: Evan
Title: Labor Surplus in Korea: A Reassessment
Abstract:
The paper estimates the Korean turning point, as defined in the
labor-surplus model of Lewis (1954) and Fei and Ranis (1964), using a wide
variety of data. The best estimate is somewhere in the period 1964-1968.
In addition, unlike previous estimation work several data series are shown
to support the entire model in addition to dating the turning point.
Caution is urge in the use of econometric estimations of
production-function parameters as a way to time the turning point. [O5]
Journal: International Economic Journal
Pages: 125-141
Issue: 4
Volume: 14
Year: 2000
X-DOI: 10.1080/10168730000000039
File-URL: http://www.tandfonline.com/doi/abs/10.1080/10168730000000039
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Handle: RePEc:taf:intecj:v:14:y:2000:i:4:p:125-141
Template-Type: ReDIF-Article 1.0
Author-Name: E. Young Song
Author-X-Name-First: E. Young
Author-X-Name-Last: Song
Title: The Return to Capital and Convergence in a Two Sector Model of Endogenous Growth
Abstract:
This paper obtains a simple algebraic derivation of the transitional
dynamics of a two-sector endogenous growth model. This paper finds that
the return to capital and the growth rate of output fall over time on the
transition path if the initial ratio of physical capital to human capital
is lower than the steady state level. It also shows that two sector
endogenous growth models are consistent with the evidence on conditional
convergence found by Barro (1991) and Mankiw, Romer, and Weil (1991).
Neoclassical growth models and endogenous growth models are impossible to
distinguish in terms of the falling rate of return on capital or in terms
of conditional convergence. [O41]
Journal: International Economic Journal
Pages: 143-163
Issue: 4
Volume: 14
Year: 2000
X-DOI: 10.1080/10168730000000040
File-URL: http://www.tandfonline.com/doi/abs/10.1080/10168730000000040
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Handle: RePEc:taf:intecj:v:14:y:2000:i:4:p:143-163
Template-Type: ReDIF-Article 1.0
Author-Name: Wasmer Etienne
Author-X-Name-First: Wasmer
Author-X-Name-Last: Etienne
Author-Name: Weil Philippe
Author-X-Name-First: Weil
Author-X-Name-Last: Philippe
Title: Credit Markets and Unemployment in the Short Run and in the Long Run
Abstract:
This paper examines the short run and long run responses of unemployment
to credit and labor market shocks in a world in which both credit and
labor market frictions keep the economy away from full employment. We
examine the respective contributions to equilibrium unemployement of
stochastic credit market frictions and of credit conditions. We examine
the contrasting effects of financial liberalization in the short run and
in the long run.[E44]
Journal: International Economic Journal
Pages: 1-19
Issue: 1
Volume: 15
Year: 2001
X-DOI: 10.1080/10168730100000001
File-URL: http://www.tandfonline.com/doi/abs/10.1080/10168730100000001
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Handle: RePEc:taf:intecj:v:15:y:2001:i:1:p:1-19
Template-Type: ReDIF-Article 1.0
Author-Name: Lisa Basurto
Author-X-Name-First: Lisa
Author-X-Name-Last: Basurto
Author-Name: Charles Delorme
Author-X-Name-First: Charles
Author-X-Name-Last: Delorme
Author-Name: David Kamerschen
Author-X-Name-First: David
Author-X-Name-Last: Kamerschen
Title: Rent Seeking, The Bracero Program And Current Mexican Farm Labor Policy
Abstract:
This Paper focus on how official support for labor importation
(specifically the Bracero program) varies with the economic rent available
to specific special interest groups. The Bracero program was the largest
temporary "guest worker" labor program in US history. This study examines
the motives underlying the House and Senate vote on the final extension of
the vote on the Bracero Program in 1963 and the current House vote on the
Mexican farm labor policy in 1996. It tests whether legislators respond to
the rent-seeking behavior of competing special interest groups. The actual
testimony on the Bracero program is used to identify some of the competing
special interest groups and to develop a prohibit model of the vote. [J4,
K2, N4]
Journal: International Economic Journal
Pages: 21-40
Issue: 1
Volume: 15
Year: 2001
X-DOI: 10.1080/10168730100000002
File-URL: http://www.tandfonline.com/doi/abs/10.1080/10168730100000002
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Handle: RePEc:taf:intecj:v:15:y:2001:i:1:p:21-40
Template-Type: ReDIF-Article 1.0
Author-Name: Chang Byoung-Ky
Author-X-Name-First: Chang
Author-X-Name-Last: Byoung-Ky
Title: Exchange Rate Pass-Through in an International Duopoly model with Brand Loyalty
Abstract:
In many markets, consumers who have previously purchased from one firm
have (or perceive) costs of switching to a competitor's product. This
study explicitly analyzes, in an international duopoly model with brand
loyalty, the effect of rival exchange rate on exchange rate pass-through.
In the case of the imperfect foresight, the exchange rate pass-through is
affected by the exchange rate uncertainty. Due to the brand loyalty,
current price decisions will affect future profits through market shares.
The expected future profit is affected by expected competition situations
that depend on the interactive movement of future exchange rates. [F31,
F12]
Journal: International Economic Journal
Pages: 41-59
Issue: 1
Volume: 15
Year: 2001
X-DOI: 10.1080/10168730100000003
File-URL: http://www.tandfonline.com/doi/abs/10.1080/10168730100000003
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Handle: RePEc:taf:intecj:v:15:y:2001:i:1:p:41-59
Template-Type: ReDIF-Article 1.0
Author-Name: Joon-Hwan Im
Author-X-Name-First: Joon-Hwan
Author-X-Name-Last: Im
Title: Optimal Currency Target Zones: How Wide Should Exchange Rate Bands Be?
Abstract:
This paper presents a model of an optimal currency band in which a
central bank with an infinite time horizon faces a trade-off between
interest rate deviation costs and exchange rate deviation costs. The bank
chooses optimal intervention points in order to minimize the value of the
loss function. The paper uses the Bellman inequalities for instantaneous
control of the regulated Brownian motion to derive an optimal currency
band and optimal intervention policy characterized by two barriers. This
model derives some interesting results. First, the width of currency band
depends positively on the uncertainty of the shock, the degree of
speculative pressure, and central bank's concern about the domestic money
market versus the foreign exchange market. Second, the central bank finds
it optimal not to intervene when the fundamental rate is inside a certain
band, whereas once it lies outside the band, the optimal policy is to move
it to the nearest boundary. [F31]
Journal: International Economic Journal
Pages: 61-93
Issue: 1
Volume: 15
Year: 2001
X-DOI: 10.1080/10168730100000004
File-URL: http://www.tandfonline.com/doi/abs/10.1080/10168730100000004
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Handle: RePEc:taf:intecj:v:15:y:2001:i:1:p:61-93
Template-Type: ReDIF-Article 1.0
Author-Name: Sung Yeung Kwack
Author-X-Name-First: Sung Yeung
Author-X-Name-Last: Kwack
Title: An Empirical Assessment Of Monetary Policy Responses To Capital Inflows In Asia Before The Financial Crisis
Abstract:
This paper highlights monetary policy implemented by monetary authorities
in response to a surge of capital inflows in Asia during the period
1985-1996. It statistically assesses the effectiveness of monetary policy
responses. Regression results show that Asian countries as a group took
the operation of a high rate of sterilization and the foreign exchange
market intervention which yielded a small change in the exchange rate.
Consequently, they succeeded in keeping nominal exchange rates at desired
levels and in limiting increases in monetary growth, despite a surge in
capital inflows. The adoption of floating exchange rates, it is concluded,
could have avoided the occurrence of financial crisis in Asia. [F32, F41]
Journal: International Economic Journal
Pages: 95-113
Issue: 1
Volume: 15
Year: 2001
X-DOI: 10.1080/10168730100000005
File-URL: http://www.tandfonline.com/doi/abs/10.1080/10168730100000005
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Handle: RePEc:taf:intecj:v:15:y:2001:i:1:p:95-113
Template-Type: ReDIF-Article 1.0
Author-Name: Sushanta Mallick
Author-X-Name-First: Sushanta
Author-X-Name-Last: Mallick
Title: Dynamics of Macroeconomic Adjustment with Growth: Some Simulation Results
Abstract:
This paper examines the impact of several macroeconomic policies, both
demand and supply management policies, on economic activity within a small
macroeconomic simulation model. The model is based on a standard
analytical framework that underlies adjustment policies in developing
economies (Des). The standard approach has been to use aggregate
government expenditure as an instrument of fiscal policy to shock economic
activity in a DE, with a negative dynamic response typically observed. In
the context of such a small macroeconomic simulation model we decompose
government expenditure into consumption and investment expenditure.
Simulation exercises with and without model-consistent expectations throw
up some contrasting results in the sense that fiscal policy can influence
output positively through the effects of public sector investment on
private investment in a DE such as India. [F43, E62]
Journal: International Economic Journal
Pages: 115-139
Issue: 1
Volume: 15
Year: 2001
X-DOI: 10.1080/10168730100000006
File-URL: http://www.tandfonline.com/doi/abs/10.1080/10168730100000006
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Handle: RePEc:taf:intecj:v:15:y:2001:i:1:p:115-139
Template-Type: ReDIF-Article 1.0
Author-Name: Ulrich Bindseil
Author-X-Name-First: Ulrich
Author-X-Name-Last: Bindseil
Title: A Coalition-Form Analysis Of The “One Country - One Vote” Rule In The Governing Council Of The European Central Bank
Abstract:
This paper analyses the “one country—one vote” rule
for monetary policy decision making of the Governing Council of the
European Central Bank in a framework of cooperative game theory. The
Shapley value is used as a solution concept. In contrast to former papers
analysing the allocation of abstract "voting power" in committees of
international organisations, preferences for monetary policy are modelled
to obtain a prediction about potential transfers implied by an equal
allocation of voting rights when countries are of different size. It is
shown that if the number of countries participating to a currency union
grows and the weight of the largest country within the currency union
becomes small, the allocation of voting rights becomes irrelevant in the
sense that transfers per country tend in any case to zero. [C71, E5, F02]
Journal: International Economic Journal
Pages: 145-164
Issue: 1
Volume: 15
Year: 2001
X-DOI: 10.1080/10168730100000007
File-URL: http://www.tandfonline.com/doi/abs/10.1080/10168730100000007
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Handle: RePEc:taf:intecj:v:15:y:2001:i:1:p:145-164
Template-Type: ReDIF-Article 1.0
Author-Name: Kit Pong Wong
Author-X-Name-First: Kit Pong
Author-X-Name-Last: Wong
Title: Currency Hedging For Export-Flexible Firms
Abstract:
This paper examines the production and hedging decisions of a competitive
exporting firm under exchange rate uncertainty. The firm possesses export
flexibility in that it can distribute its output to either the domestic
market or a foreign market, after observing the true realization of the
exchange rate. It is shown that the separation theorem does not hold under
export flexibility, i.e., the firm's optimal output depends on the firm's
preference and on the underlying exchange rate uncertainty. Furthermore,
the export- flexible firm underhedges its exchange rate risk exposure in a
currency forward market where in the forward exchange rate contains a
non-positive risk premium. [D21, F31]
Journal: International Economic Journal
Pages: 165-174
Issue: 1
Volume: 15
Year: 2001
X-DOI: 10.1080/10168730100000008
File-URL: http://www.tandfonline.com/doi/abs/10.1080/10168730100000008
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Handle: RePEc:taf:intecj:v:15:y:2001:i:1:p:165-174
Template-Type: ReDIF-Article 1.0
Author-Name: Bils Marks
Author-X-Name-First: Bils
Author-X-Name-Last: Marks
Author-Name: Chang Yongsung
Author-X-Name-First: Chang
Author-X-Name-Last: Yongsung
Title: Cyclical Movements in Hours and Effort Under Sticky Wages-super-*
Abstract:
We examine the response of a sticky-wage economy to various
real and nominal shocks. In addition to variations in hours, we allow for
an endogenous response in worker effort per hour. Despite wages being
predetermined, the labor market clears through the effort margin. We find
that the ability of a sticky-wage model to mimic U.S. business cycles is
much improved by allowing for reasonable effort movements. The model also
provides a ready explanation for the finding that TFP is negatively
affected by nominal shocks. [E24]
Journal: International Economic Journal
Pages: 1-26
Issue: 2
Volume: 15
Year: 2001
Month: 6
X-DOI: 10.1080/10168730100000033
File-URL: http://hdl.handle.net/10.1080/10168730100000033
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Handle: RePEc:taf:intecj:v:15:y:2001:i:2:p:1-26
Template-Type: ReDIF-Article 1.0
Author-Name: Lee Chulhee
Author-X-Name-First: Lee
Author-X-Name-Last: Chulhee
Title: Changes in Employment and Hours, and Family Income Inequality in the United.States, 1969--1989
Abstract:
This paper estimates how much changes in employment and hours
worked for family heads and spouses contributed to the rise in the family
income inequality between 1969 and 1989. Change in labor market activity
of family heads accounts for half of the increase in the income gap
between the top and bottom 10th families. The effect of change in work
effort on the income inequality is considerably weaker where four-fifths
of families in the middle of income distribution are considered. This
result is robust to changes in the selection of the population. The rise
in the inequality of labor market activity occurred largely within
families headed by prime-age men. The rise in the percentage of families
headed by female and the decline in employment rate for older family heads
are relatively minor factors. [J2, E2, N3]
Journal: International Economic Journal
Pages: 27-49
Issue: 2
Volume: 15
Year: 2001
Month: 6
X-DOI: 10.1080/10168730100000034
File-URL: http://hdl.handle.net/10.1080/10168730100000034
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Handle: RePEc:taf:intecj:v:15:y:2001:i:2:p:27-49
Template-Type: ReDIF-Article 1.0
Author-Name: Horowitz Ira
Author-X-Name-First: Horowitz
Author-X-Name-Last: Ira
Title: On Professor Kohn and Expected Utility: Correction and Clarification
Abstract:
As a result of an oversight and narrow assumption, Kohn and
Hollenhorst (1988) Derive an equation that does not hold in general and
that leads to some erroneous Inferences when relied upon in Kohn (1999).
The purpose of this note is to identify And clarify the problem and its
source, and to draw the appropriate inferences. [D80, Q25]
Journal: International Economic Journal
Pages: 51-56
Issue: 2
Volume: 15
Year: 2001
Month: 6
X-DOI: 10.1080/10168730100000035
File-URL: http://hdl.handle.net/10.1080/10168730100000035
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Handle: RePEc:taf:intecj:v:15:y:2001:i:2:p:51-56
Template-Type: ReDIF-Article 1.0
Author-Name: Robert E. Kohn
Author-X-Name-First: Robert E.
Author-X-Name-Last: Kohn
Title: On Professor Kohn and Expected Utility: Correction and Clarification-Rejoinder
Abstract:
Professor Horowitz correctly identifies the limitation of my
assuming separable utility functions to derive a marginal condition for
efficiency under uncertainty. Correction this limitation, he provides a
simple but powerful condition that encompasses the nonseparable as well as
the separable case. This condition replaces the dubious Equation (14)
derived in Kohn (1999). In a departure from von Neumann-Morgenstern
theory, for cases in which the decisions of a risk-averse community are
compared with those it would make were it risk-neutral, it is proposed
here that the same utility function holds for risk-neutrality as for
risk-aversion, but that the stochastic quantities be replaced by their
expected value in the former. [Q25]
Journal: International Economic Journal
Pages: 57-62
Issue: 2
Volume: 15
Year: 2001
Month: 6
X-DOI: 10.1080/10168730100000036
File-URL: http://hdl.handle.net/10.1080/10168730100000036
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Handle: RePEc:taf:intecj:v:15:y:2001:i:2:p:57-62
Template-Type: ReDIF-Article 1.0
Author-Name: Karras Georgios
Author-X-Name-First: Karras
Author-X-Name-Last: Georgios
Title: Long-Run Economic Growth In Europe: Is It Endogenous Or Neoclassical?
Abstract:
The growth effects of European economic and monetary
intergration and the progress of regional convergence across
Europe depend on whether economic in Europe is consistent with a
neoclassical or an endogenous growth model. Using annual data from the
1950-1992 period for each of 20 European economies, the paper finds that
steady-state real growth rates are generally unaffected by changes in the
investment rate, population growth, and government consumption, evidence
consistent with neoclassical growth theories. This Strengthens the
likelihood of regional (perhaps conditional) convergence, and suggests
that the effects of greater monetary and economic unification will be in
terms of higher incomes per capita, but not in terms of permanently higher
growth rates.[O40,F43]
Journal: International Economic Journal
Pages: 63-76
Issue: 2
Volume: 15
Year: 2001
Month: 6
X-DOI: 10.1080/10168730100000037
File-URL: http://hdl.handle.net/10.1080/10168730100000037
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Handle: RePEc:taf:intecj:v:15:y:2001:i:2:p:63-76
Template-Type: ReDIF-Article 1.0
Author-Name: Lee TongHung
Author-X-Name-First: Lee
Author-X-Name-Last: TongHung
Author-Name: Hwang Hoyoung
Author-X-Name-First: Hwang
Author-X-Name-Last: Hoyoung
Title: Money, Interest Rate and Foreign Exchange Rate As Indicator Variables Of Monetary Policy
Abstract:
Since monetary policy operations affect the ultimate targets
such as real income and prices with considerable time lags, this papers
attempts to identify the indicator variable of monetary policy in Korea by
using autoregression tests, variance docompositions of VAR forecasts and
cointegration analyses. The results show that in Korea unlike the U.S., a
broad concept of money, interest rate and foreign exchange rate, taken
together, could serve as the indicator variables. In particular, M3, But
not M2 nor MCT, is significantly related to real income both in the
short-run and in the long-run. Such a finding rejects the practice of
controlling either M2 or MCT which the Korean monetary authority had
exercised before implementing the recent IMF financial-reform program.
[E5]
Journal: International Economic Journal
Pages: 77-98
Issue: 2
Volume: 15
Year: 2001
Month: 6
X-DOI: 10.1080/10168730100000038
File-URL: http://hdl.handle.net/10.1080/10168730100000038
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Handle: RePEc:taf:intecj:v:15:y:2001:i:2:p:77-98
Template-Type: ReDIF-Article 1.0
Author-Name: Edward Oczkowski
Author-X-Name-First: Edward
Author-X-Name-Last: Oczkowski
Author-Name: Kishor Sharma
Author-X-Name-First: Kishor
Author-X-Name-Last: Sharma
Title: Imperfect Competition, Returns To Scale and Productivity Growth In Australian Manufacturing: A Smooth Transition Approach To Trade Liberalisation
Abstract:
This Paper examines the relationship between trade
liberalization and productivity growth for Australian manufacturing. An
imperfect competition, non-CRS, smooth transition empirical framework is
employed for analysis. GMM estimates of the logistic smooth transition
model imply that trade reform impacts take approximately four years to
complete, but do not occur over the same time period for all industries.
In response to trade reforms, for most industries a significant
improvement in productivity is estimated, these improvements are
associated with lower mark-ups and falling scale parameters. A minority of
industries however, experienced no change or falling productivity growth
in response to reforms, these industries tended to have the highest
absolute protection levels. [D24, F12, C52, L60]
Journal: International Economic Journal
Pages: 99-113
Issue: 2
Volume: 15
Year: 2001
Month: 6
X-DOI: 10.1080/10168730100000039
File-URL: http://hdl.handle.net/10.1080/10168730100000039
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Handle: RePEc:taf:intecj:v:15:y:2001:i:2:p:99-113
Template-Type: ReDIF-Article 1.0
Author-Name: Roberto A. De Santis
Author-X-Name-First: Roberto A.
Author-X-Name-Last: De Santis
Title: The 1990 Trade Liberalisation Policy of Turkey: An Applied General Equilibrium Assessment
Abstract:
I use a static multi-sector, multi-labour, multi-household
Applied General Equilibrium (AGE) model for Turkey to show that the trade
policy implemented by Turkish policy-makers in the 1990s is not trade
diverting. Aggregate welfare rises by 0.6% of the consumer income. Most
importantly, since agriculture and traditional the rural income), while
urban groups are worse off (-0.5% of the urban income). It is also shown
that overall income inequality declines by 1.1-1.7%, and that its main
source is the inter-income inequality between urban and rural areas, which
decreases by 8.9- 14.7%. [D58, F14, F17]
Journal: International Economic Journal
Pages: 115-132
Issue: 2
Volume: 15
Year: 2001
Month: 6
X-DOI: 10.1080/10168730100000040
File-URL: http://hdl.handle.net/10.1080/10168730100000040
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Handle: RePEc:taf:intecj:v:15:y:2001:i:2:p:115-132
Template-Type: ReDIF-Article 1.0
Author-Name: Radelet Steven
Author-X-Name-First: Radelet
Author-X-Name-Last: Steven
Author-Name: Sachs Jeffrey
Author-X-Name-First: Sachs
Author-X-Name-Last: Jeffrey
Author-Name: Lee Jong-Wha
Author-X-Name-First: Lee
Author-X-Name-Last: Jong-Wha
Title: The Determinants and Prospects of Economic Growth in Asia
Abstract:
This paper analyses Asia's growth experience in a broad historical and
international context. East Asian countries grew faster than the rest of
the world for four key reasons: they had substantial potential for
catching up, their geography and structural characteristics were by- and
large favorable, demographic changes worked in favor of more rapid growth,
and their economic policies and strategy were conducive to sustained
growth. Although the financial crisis of 1997 abruptly brought a halt to
Asia's period of robust growth, there was little in Asia's fundamental
growth strategy that inevitably led to the crisis. The key to the crisis
was too much short-term capital flowing into weak and under-supervised
financial systems. This suggests that with better financial management and
a return to the core policies that resulted in rapid growth, the East
Asian economies can again return to sustained growth. [O11, O40, O53]
Journal: International Economic Journal
Pages: 1-29
Issue: 3
Volume: 15
Year: 2001
X-DOI: 10.1080/10168730100000041
File-URL: http://www.tandfonline.com/doi/abs/10.1080/10168730100000041
File-Format: text/html
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Handle: RePEc:taf:intecj:v:15:y:2001:i:3:p:1-29
Template-Type: ReDIF-Article 1.0
Author-Name: Doyle Eleanor
Author-X-Name-First: Doyle
Author-X-Name-Last: Eleanor
Title: Export-Output Causality and the Role of Exports in Irish Growth: 1950-1997
Abstract:
Sources of Irish growth are examined using a recently developed Granger
causality procedure with particular focus on the role of Irish exports. As
augmented production function is employed where the inclusion of variables
in addition to exports ensures that different impacts on exports and
output are controlled for and thus, a more accurate testing of the
export-led-growth hypothesis is possible. The most important sources of
Irish growth are identified as the terms of trade and demand in industrial
countries i.e. external sources. Bi-directional causality is found for
exports and output implying a virtuous circle of growth and exports.
[F1,F4]
Journal: International Economic Journal
Pages: 31-54
Issue: 3
Volume: 15
Year: 2001
X-DOI: 10.1080/10168730100000042
File-URL: http://www.tandfonline.com/doi/abs/10.1080/10168730100000042
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Handle: RePEc:taf:intecj:v:15:y:2001:i:3:p:31-54
Template-Type: ReDIF-Article 1.0
Author-Name: Mansor Ibrhim
Author-X-Name-First: Mansor
Author-X-Name-Last: Ibrhim
Title: Financial Factors and the Empirical Behavior of Money Demand: A Case Study of Malaysia
Abstract:
The paper analyses the roles of financial factors in the behavior of M1
and M2 demands for Malaysia. The focus is on the possible changes in the
elasticities of the M1 and M2 money demands in the environment of
financial innovations and on the influence of real stock prices on the
holdings of monetary assets. Our results reinforce existing studies that
find the presence of the long-run M1 and M2 money demands and structural
instability in the dynamic specification of the M1 demand. However, we are
able to identify stable error-correction model for the post-1986 M1 demand
and for the M2 demand. Our results also indicate the reduction in the Long
run income and exchange rate elasticities of the money demands. Meanwhile,
the interest rate sensitivity of the demands becomes more inelastic.
Lastly, we document the significance of real stock prices in influencing
the demand behavior, indicating the dominance of the wealth effect over
the substitution effect. [E41, E44]
Journal: International Economic Journal
Pages: 55-72
Issue: 3
Volume: 15
Year: 2001
X-DOI: 10.1080/10168730100000043
File-URL: http://www.tandfonline.com/doi/abs/10.1080/10168730100000043
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Handle: RePEc:taf:intecj:v:15:y:2001:i:3:p:55-72
Template-Type: ReDIF-Article 1.0
Author-Name: Chinna Kannapiran
Author-X-Name-First: Chinna
Author-X-Name-Last: Kannapiran
Title: Stability of Money Demand and Monetary Policy in Papua New Guinea (PNG): An Error Correction Model Analysis
Abstract:
An error correction model (ECM) is used to study the Properties of money
demand and to evaluate the appropriate monetary policy in PNG. The study
confirms that the determinats of money demand are real GDP, nominal
interest and inflation rate. The income elasticity of money demand is very
low. The demand for money in PNG was stable during 1979-95, suggesting
that the monetary targeting regime by the PNG Central Bank is feasible.
However, as PNG proceeds with economic reforms that Includes financial
sector reform and a floating exchange rate regime, the stability of the
demand for money may have to be re-examined periodically. The best
approach for conducting the monetary policy in PNG is to target the
inflation rate. [E41, E52, C22]
Journal: International Economic Journal
Pages: 73-84
Issue: 3
Volume: 15
Year: 2001
X-DOI: 10.1080/10168730100000044
File-URL: http://www.tandfonline.com/doi/abs/10.1080/10168730100000044
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Handle: RePEc:taf:intecj:v:15:y:2001:i:3:p:73-84
Template-Type: ReDIF-Article 1.0
Author-Name: Kim Kyung-Soo
Author-X-Name-First: Kim
Author-X-Name-Last: Kyung-Soo
Author-Name: Lee Jaewoo
Author-X-Name-First: Lee
Author-X-Name-Last: Jaewoo
Title: Asset Price And Current Account Dynamics
Abstract:
We examine the interaction between asset market and current account in a
small open economy. In an overlapping generations economy in which land
and money are available assets, the interaction between the land price and
current account dynamics is shown to generate a plausible (asset price)
specie-flow mechanism. We apply them to a number of issues. Domestic
credit policy is neutral in the long run: one unit of foreign reserve
increase offsets one unit of credit reduction. Next, the association
between the endowment of land and foreign asset accumulation depends on
parameters of the model. Finally, we examine the dynamic adjustment s
following a once-and-for-all capital inflow. When the adjustment involves
running current account deficit, the recipient country's foreign reserve
position is permanently lowered. Furthermore, the steady state level of
national wealth is permanently reduced. [E4, F3]
Journal: International Economic Journal
Pages: 85-108
Issue: 3
Volume: 15
Year: 2001
X-DOI: 10.1080/10168730100000045
File-URL: http://www.tandfonline.com/doi/abs/10.1080/10168730100000045
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Handle: RePEc:taf:intecj:v:15:y:2001:i:3:p:85-108
Template-Type: ReDIF-Article 1.0
Author-Name: Georgios Kouretas
Author-X-Name-First: Georgios
Author-X-Name-Last: Kouretas
Author-Name: Leonidas Zarangas
Author-X-Name-First: Leonidas
Author-X-Name-Last: Zarangas
Title: Long-Run Purchasing Power Parity and Structural Change: The Official and Parallel Foreign Exchange Markets For Dollars In Greece
Abstract:
This paper examines the Purchasing Power Parity theory from a long-run
perspective in the presence of a parallel or 'black' market for US dollars
in Greece using monthly data for the recent float. Johansen's FIML
multivariate cointegration techniques is applied. Recent development
associated with this procedure are considered. First, a formal test
developed by Paruolo (1996) for the presence of I(2) and I(1) components
in a ultivariate context is applied along with the estimation of the roots
of the companion matrix for the correct determination of the cointegration
rank. Second, given that two significant cointegration vectors were found,
structural restrictions identifying the long-run relations of interest are
specified as proposed by Johansen and Juselius (1994) and Johansen
(1995b). Thus, the joint structure of PPP and long-run informational
market efficiency could not be rejected. Furthermore, estimation of the
error correction terms shows that the black market rate adjusts to
eliminate any deviation from long-run PPP. Finally, stability tests
proposed by Hansen and Johansen (1993) are applied and it is shown that
the dimension of the cointegration space is simple dependent while the
estimated coefficients do not exhibit instability in recursive
estimations. [F31 F33]
Journal: International Economic Journal
Pages: 109-128
Issue: 3
Volume: 15
Year: 2001
X-DOI: 10.1080/10168730100000046
File-URL: http://www.tandfonline.com/doi/abs/10.1080/10168730100000046
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Handle: RePEc:taf:intecj:v:15:y:2001:i:3:p:109-128
Template-Type: ReDIF-Article 1.0
Author-Name: Oscar Bajo-Rubio
Author-X-Name-First: Oscar
Author-X-Name-Last: Bajo-Rubio
Author-Name: Sosvilla-Rivero Simon
Author-X-Name-First: Sosvilla-Rivero
Author-X-Name-Last: Simon
Title: A Quantitative Analysis of the Effects of Capital Controls: Spain, 1986-1990
Abstract:
This Paper offers a quantitative assessment of the effectiveness of
capital controls in Spain during the period 1986-1990. The analysis is
based on a portfolio-balance model Previously estimated for the Spanish
economy, where the complete elimination of capital controls is simulated.
Our results suggest that capital controls would have avoided a net capital
outflow amounting to nearly a 4 per cent increase in the Spanish net
foreign asset position, as a quarterly average, during the first five
years of Spanish membership into the EU. [C32, F21, F36]
Journal: International Economic Journal
Pages: 129-146
Issue: 3
Volume: 15
Year: 2001
X-DOI: 10.1080/10168730100000047
File-URL: http://www.tandfonline.com/doi/abs/10.1080/10168730100000047
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Handle: RePEc:taf:intecj:v:15:y:2001:i:3:p:129-146
Template-Type: ReDIF-Article 1.0
Author-Name: Bin Xu
Author-X-Name-First: Bin
Author-X-Name-Last: Xu
Title: Entrepreneurial Selection, Financial Markets, and Patterns of International Trade
Abstract:
This paper introduces entrepreneurial selection and imperfect financial
markets to the 2x2x2 model of international trade. Entrepreneurs are
heterogeneous in ability and borrow from banks who do not observe their
ability. The pattern of international trade depends on (1) factor
abundance, (2) endogenously determined productivity, and (3) endogenously
determined financial market imperfections. We show that entrepreneurial
selection results in a diminished Rybczynski effect and financial market
imperfections further reduce the effect; hence differences in capital
abundance imply a smaller trade volume than predicted by the
Heckscher-Ohlin theorem. The results help to resolve a conflict between
the Heckscher-Ohlin model and data. [F11]
Journal: International Economic Journal
Pages: 147-167
Issue: 3
Volume: 15
Year: 2001
X-DOI: 10.1080/10168730100000048
File-URL: http://www.tandfonline.com/doi/abs/10.1080/10168730100000048
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Handle: RePEc:taf:intecj:v:15:y:2001:i:3:p:147-167
Template-Type: ReDIF-Article 1.0
Author-Name: W. Jansen Dennis
Author-X-Name-First: W. Jansen
Author-X-Name-Last: Dennis
Title: Limited Downside Risk In Portfolio Selection Among U.S. and Pacific Basin Equities
Abstract:
In this paper we domostrate safety first portfolio selection using
extreme value theory.We show that Roy's safety first criterion can be
improved on by exploiting the fat tail property of asset returns. Using
daily data for a set of international stock indices for the period
1986-May 2000, we calculate the so-called tail indexes, which are accurate
measures of the fat-tailedness of the stock return distributions, and use
these to calculate minimum threshold return levels given very low
exceedence probabilities for investors. This example is but one way that
the theory of extremes can be utilized in economics and finance. [G11]
Journal: International Economic Journal
Pages: 1-39
Issue: 4
Volume: 15
Year: 2001
X-DOI: 10.1080/10168730100000049
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Handle: RePEc:taf:intecj:v:15:y:2001:i:4:p:1-39
Template-Type: ReDIF-Article 1.0
Author-Name: Kevin Denny
Author-X-Name-First: Kevin
Author-X-Name-Last: Denny
Title: Asymmetric Central Bank Reaction Function: An Application of Smooth Transition Regression
Abstract:
This paper estimates a simple model of exchange rate policy where the
Central Bank optimises an objective function which takes into account
competitiveness, its commitment to the EMU and the cost of adjustment. We
allow for asymmetry in government behaviour whereby a key parameter, the
marginal adjustment cost of the effective exchange rate, takes on a
continuum of values depending on the value of the DeustscheMark/Irish
pound exchange rate. It is shown that he adjustment cost parameter is
decreasing in either the level of or the rate change of the DM rate
suggesting that the authorities display greater aversion to exchange rate
fluctuations as the domestic currency weakens. [C22, F31, F41]
Journal: International Economic Journal
Pages: 23-32
Issue: 4
Volume: 15
Year: 2001
X-DOI: 10.1080/10168730100000050
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Handle: RePEc:taf:intecj:v:15:y:2001:i:4:p:23-32
Template-Type: ReDIF-Article 1.0
Author-Name: E. C. Mamatzakis
Author-X-Name-First: E. C.
Author-X-Name-Last: Mamatzakis
Title: Public Spending and Private Investment: Evidence From Greece
Abstract:
The aim of this paper is to investigate whether there is a link between
disaggregated measures of government expenditures and private investment
in Greece. A cointegration analysis of a multivariate system of equations
is applied in order to empirically estimate the long run relationships
between private investment and different measure of government
expenditures. Subsequently IRF and VDC are estimated. Government
investment is found to assert a positive effect on private investment,
supporting in this way the capital accumulation process. On the other
hand, government consumption appears to compete for the same resources
with government investment, while it negatively affects private
investment. [E62]
Journal: International Economic Journal
Pages: 33-46
Issue: 4
Volume: 15
Year: 2001
X-DOI: 10.1080/10168730100000051
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Handle: RePEc:taf:intecj:v:15:y:2001:i:4:p:33-46
Template-Type: ReDIF-Article 1.0
Author-Name: In Kwon Lee
Author-X-Name-First: In Kwon
Author-X-Name-Last: Lee
Title: Asymmetry in the Response of Price-Cost Margins to the Level of Demand Across Booms and Slumps: the Case of U.S. Industries* I thank Editor of this journal and an anonymous referee for their helpful suggestions and
Abstract:
Haltiwanger and Harrington (1991) reveal that, while the gain from
deviating from a collusive agreement in an oligopolistic industry is
greatest during booms, it is most difficult to collude during recessions
since forgone profits inflicted on defection are relatively low in
recessions. Their numerical simulations show that firms price more
countercyclically during recessions than during booms to deter relatively
greater incentive to defect in recession. This paper tests for a potential
asymmetry in the response of margins to the level of demand across booms
and slumps, using panel data covering 180 U.S. four-digit level SIC
manufacturing industries over the 1963-1987 period. The principal findings
accept this theoretical prediction. [L1, L6]
Journal: International Economic Journal
Pages: 47-58
Issue: 4
Volume: 15
Year: 2001
X-DOI: 10.1080/10168730100000052
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Template-Type: ReDIF-Article 1.0
Author-Name: Choi Jay Pil
Author-X-Name-First: Choi Jay
Author-X-Name-Last: Pil
Title: Planned Obsolescence As A Signal of Quality
Abstract:
This paper provides a new rationale for planned obsolescence based on
imperfect information about the quality of durable goods. The source of
the inefficient choice of durability lies in the fact that the frequency
of repeat purchases and the future expected profit that can monitor the
quality of the good is inversely related to the durability of the good.
Since the repeat purchases are valued more for the high quality producer,
the returns to reduced durability is also greater for the high quality
producer. This asymmetry in the returns to reduced durabhilit y implies
that planned obsolescence can be used as a signal of quality. With
leasing, however, the durability choice incentive often runs in the other
direction, and the monopolist tends to choose excessively long lives for
his product. This is in sharp contrast to the durability literature where
leasing restores the incentive for the efficient choice of durability.
[L1, D8]
Journal: International Economic Journal
Pages: 59-79
Issue: 4
Volume: 15
Year: 2001
X-DOI: 10.1080/10168730100000053
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Handle: RePEc:taf:intecj:v:15:y:2001:i:4:p:59-79
Template-Type: ReDIF-Article 1.0
Author-Name: Nikiforos Laopodis
Author-X-Name-First: Nikiforos
Author-X-Name-Last: Laopodis
Title: Time-Varying Behavior and Asymmetry in EMS Exchange Rates
Abstract:
This paper explores the time-varying behavior of five EMS exchange rates
namely, the Belgian Franc, Dutch Guilder, French Franc, Italian Lira and
the Spanish Peseta vis-a-vis the Deutschemark from 1979 to 1998. The
returns were examined using the Sign- and Volatility-Switching GARCH
model, which is capable of accounting for potential asymmetries and the
reversals in a series' volatility structure. The results point to
significant sensitivities of the conditional variances of the French
franc, the lira and the peseta to adverse shocks but notable
responsiveness to favorable shocks by those of the other rates. Although
asymmetry in the volatility structure of all rates is found in the period
prior to Germany's reunification in 1990, it vanishes thereafter.
Volatility persistence for all rates is noticeable in the first period but
becomes more pronounced in the second, [F23, F31]
Journal: International Economic Journal
Pages: 81-94
Issue: 4
Volume: 15
Year: 2001
X-DOI: 10.1080/10168730100000054
File-URL: http://www.tandfonline.com/doi/abs/10.1080/10168730100000054
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Handle: RePEc:taf:intecj:v:15:y:2001:i:4:p:81-94
Template-Type: ReDIF-Article 1.0
Author-Name: Benjamin Nancy
Author-X-Name-First: Benjamin
Author-X-Name-Last: Nancy
Author-Name: Michael Ferrantino
Author-X-Name-First: Michael
Author-X-Name-Last: Ferrantino
Title: Trade Policy and Productivity Growth in OECD Manufacturing
Abstract:
Trade liberalization may promote economic growth in a number of ways,
including by accelerating the rate of technological change. Firms that
face more intense import competition may be spurred to greater rates of
innovation; firms which export may absorb new technologies through their
contact with international markets. This paper examines evidence on trade
policy and productivity growth for a sample of thirteen OECD countries and
including eighteen manufacturing sectors, using data primarily from the
1980s. Within individual sectors, there are strong productivity
convergence effects within the OECD. After controlling for convergence, we
find a positive association between high rates of productivity growth and
low tariffs, and between high productivity growth and strong export
performance. We found no particular association between high productivity
growth and import penetration. The results are consistent with the
possibility of positive linkages between trade liberalization and
accelerated productivity growth. [F1, O4]
Journal: International Economic Journal
Pages: 95-115
Issue: 4
Volume: 15
Year: 2001
X-DOI: 10.1080/10168730100000055
File-URL: http://www.tandfonline.com/doi/abs/10.1080/10168730100000055
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Handle: RePEc:taf:intecj:v:15:y:2001:i:4:p:95-115
Template-Type: ReDIF-Article 1.0
Author-Name: Chung Hyun-Sik
Author-X-Name-First: Chung
Author-X-Name-Last: Hyun-Sik
Author-Name: Rhee Hae-Chun
Author-X-Name-First: Rhee
Author-X-Name-Last: Hae-Chun
Title: Carbon Dioxide Emissions of Korea and Japan and Its Transmission Via International Trade
Abstract:
We estimated total CO2 emissions of Japan and South Korea for 1990 using
the familiar input-output model. The differences in CO2 emission between
two countries are decomposed into their components, and effects of
international trade on domestic CO2 emissions are analyzed for both
countries. We show that, even though the absolute level of emission is
much lower in South Korea than in Japan, total emission intensities are
generally higher in the former. Korean exports to Japan are more emission
intensive than the reverse, while exports of both countries to the rest of
the world are more emission intensive than their bilateral trade. [F14]
Journal: International Economic Journal
Pages: 117-136
Issue: 4
Volume: 15
Year: 2001
X-DOI: 10.1080/10168730100000056
File-URL: http://www.tandfonline.com/doi/abs/10.1080/10168730100000056
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Handle: RePEc:taf:intecj:v:15:y:2001:i:4:p:117-136
Template-Type: ReDIF-Article 1.0
Author-Name: Johnson Simon
Author-X-Name-First: Johnson
Author-X-Name-Last: Simon
Title: Coase and the Reform of Securities Markets
Abstract:
A growing body of evidence indicates that legal rules matter for
corporate Governance around the world. Countries with stronger investor
protection have more Developed capital markets, and find it easier to
finance economic development. Weak Corporate governance also appears to
make companies and countries vulnerable to large collapses. The origin of
the institutions lies with the history of competing political Systems
within Europe and colonization outside of Europe. Despite the importance
of long-standing historical influences, Effective legal reform has proved
possible in some Cases. The most successful reforms to date are those that
implement US standards of Disclosure. [G30, G38, K22, P10]
Journal: International Economic Journal
Pages: 1-19
Issue: 1
Volume: 16
Year: 2002
X-DOI: 10.1080/10168730200000001
File-URL: http://www.tandfonline.com/doi/abs/10.1080/10168730200000001
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Template-Type: ReDIF-Article 1.0
Author-Name: Magda Kandil
Author-X-Name-First: Magda
Author-X-Name-Last: Kandil
Title: Asymmetry In Economic Fluctuations In The Us Economy: The Pre-War And The 1946-1991 Periods Compared
Abstract:
The focus of this investigation is one the asymmetric effects of monetary
growth Shocks in the pre-and periods of United States history. The
downward Rigidity of nominal wages in the post -war period appears to be
an important factor in Differentiating the slope of the aggregate supply
curve over time. Accordingly, the Response of real output and price to
expansionary monetary growth shocks is similar in The pre-and post-war
periods. In contrast, the aggregate supply curve is flatter in the Face of
negative monetary growth shocks in the post-war period, exacerbating
output Contraction and moderating price deflaction. The apparent change in
the asymmetric Effects of m onetary growth shocks deflation. The apparent
change in the asymmetric States over time. [E30,E33,E34,E35]
Journal: International Economic Journal
Pages: 21-42
Issue: 1
Volume: 16
Year: 2002
X-DOI: 10.1080/10168730200000002
File-URL: http://www.tandfonline.com/doi/abs/10.1080/10168730200000002
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Template-Type: ReDIF-Article 1.0
Author-Name: Dasgupta Siddhartha
Author-X-Name-First: Dasgupta
Author-X-Name-Last: Siddhartha
Author-Name: Devadoss Stephen
Author-X-Name-First: Devadoss
Author-X-Name-Last: Stephen
Title: Equilibrium Contracts In a Bilateral Monopoly with Unequal Bargaining Powers
Abstract:
Real-world bilateral monopolies often indicate that one party exercises
slightly Superior bargaining power than the other party. We analyze
long-term, cooperative Contracts in bilateral monopolies with unequal
bargaining powers. We assume that the Two parties bargain for a
determinate price and quantity of the intermediate product by Optimizing a
joint objective which takes into account the profits and bargaining power
of Each party. We use a Bowley price leadership model to develop the
multi-period Contracts and derive conditions that induce a Nash
equilibrium at the jointly determined Points of operation. [C71,C78]
Journal: International Economic Journal
Pages: 43-71
Issue: 1
Volume: 16
Year: 2002
X-DOI: 10.1080/10168730200000003
File-URL: http://www.tandfonline.com/doi/abs/10.1080/10168730200000003
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Handle: RePEc:taf:intecj:v:16:y:2002:i:1:p:43-71
Template-Type: ReDIF-Article 1.0
Author-Name: Choudhry Taufiq
Author-X-Name-First: Choudhry
Author-X-Name-Last: Taufiq
Title: Financial Innovations And Demand For United States M1 And M2 Components
Abstract:
This paper investigates the effects OF THE Depository Institution
Deregulation and Monetary Control Act of 1980 on the demand function of
the United States M1, M2 and their components. The empirical tests are
conducted using monthly data from January 1959 to June 1997 and the
Johansen cointegration procedure. Results show that the stated monetary
act of 1980 considerably affected the income and interest rate demand
elasticities of both M1, M2 and their components. Results show a fall in
the M1 interest rate elasticity indicating M1 as possibly a more effective
monetary policy too after 1980. Results fail to show a stationary M2
demand function during the 1980s and 1990s after the 1980 monetary act.
The rate of adjustment of the monetary variables towards the long-run
equilibrium is also affected by the 1980 Act. [E41, E44]
Journal: International Economic Journal
Pages: 73-93
Issue: 1
Volume: 16
Year: 2002
X-DOI: 10.1080/10168730200000004
File-URL: http://www.tandfonline.com/doi/abs/10.1080/10168730200000004
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Handle: RePEc:taf:intecj:v:16:y:2002:i:1:p:73-93
Template-Type: ReDIF-Article 1.0
Author-Name: M. Renuka
Author-X-Name-First: M.
Author-X-Name-Last: Renuka
Author-Name: K. P. Kalirajan
Author-X-Name-First: K. P.
Author-X-Name-Last: Kalirajan
Title: How IncomeElastic Is The Consumers Demand For Services In Singapore?
Abstract:
Although economic theory indicares that services are income elastic,
empirical Evidence on this issue has not been conclusive. Using time
series dat from 1965 to 1996 this paper ettempts to test whether
consumer's demand for services is income elastic in Singapore. Unlike in
other studies,the stationary of the macro economic variables used in this
analysis is tested to obtain more reliable estimates. The empirical
results show that demand for services is not income elastic in Singapore.
[C12, C22]
Journal: International Economic Journal
Pages: 95-104
Issue: 1
Volume: 16
Year: 2002
X-DOI: 10.1080/10168730200000005
File-URL: http://www.tandfonline.com/doi/abs/10.1080/10168730200000005
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Handle: RePEc:taf:intecj:v:16:y:2002:i:1:p:95-104
Template-Type: ReDIF-Article 1.0
Author-Name: Beum-Jo Park
Author-X-Name-First: Beum-Jo
Author-X-Name-Last: Park
Title: Asymmetric Volatility of Exchange Rate Returns Under The EMS: Some Evidence From Quantile Regression Approach for Tgarch Models
Abstract:
This paper investigates the systematic impact of the European Monetary
System EMS) on asymmetry in volatility of exchange rates vis-a-vis the
Deutsche Mark. It seems plausible that the symmetric fluctuation band in
the EMS affects asymmetric volatility and this id dominant at extreme
returns. To examine the plausibility, this paper proposes quantile
regression for threshold GARCH models (QRTGARCH), which allows an
asymmetric reaction of conditional volatility to shocks without any rigid
distributional assumptions. Further, it is well suited to precisely
capture the asymmetric behaviors of conditional volatility over different
levels of returns. The empirical finding suggests that the EMS seems to
have some systematic effect on the asymmetry in volatility at moderate
level of unpredictable returns. Especially, the estimation results of the
QRTGARCH show that after the EMS conditional volatility for most of EMS
currencies tends to grow more significantly in reaction to positive shock
than negative shock at 0.1 quantile of returns distribution, so that as
the unpredictable returns go down, the systematic effect of the EMS on
asymmetry in volatility becomes more significant. Impressive as these
results may be, the systematic effect can vary with levels of
unpredictable returns. [F31, C22, or C51]
Journal: International Economic Journal
Pages: 105-125
Issue: 1
Volume: 16
Year: 2002
X-DOI: 10.1080/10168730200000006
File-URL: http://www.tandfonline.com/doi/abs/10.1080/10168730200000006
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Handle: RePEc:taf:intecj:v:16:y:2002:i:1:p:105-125
Template-Type: ReDIF-Article 1.0
Author-Name: Tang Linghui
Author-X-Name-First: Tang
Author-X-Name-Last: Linghui
Title: Incomplete contracts And Vertically Integrated Multinational Enterprises
Abstract:
This paper conducts an empirical analysis of intra-firm trade for
vertically integrated multinational enterprises (VMNEs). Within the
context of incomplete contracts, the study attempts to explain
cross-industry variations in the relative importance of intra firm trade.
Using data for U.S. based multinationals from 1989 to 1996, it is found
that the shares of U.S. intra-firm exports and imports are positively
related to the non contractible a activities of U.S. intra-firm while they
are negatively related to the non contractible activities of foreign
affiliates. [F23, f10, L22]
Journal: International Economic Journal
Pages: 127-138
Issue: 1
Volume: 16
Year: 2002
X-DOI: 10.1080/10168730200000007
File-URL: http://www.tandfonline.com/doi/abs/10.1080/10168730200000007
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Handle: RePEc:taf:intecj:v:16:y:2002:i:1:p:127-138
Template-Type: ReDIF-Article 1.0
Author-Name: Malley Jim
Author-X-Name-First: Malley
Author-X-Name-Last: Jim
Author-Name: Molana Hassan
Author-X-Name-First: Molana
Author-X-Name-Last: Hassan
Title: Fiscal Policy And The Composition Of Private Consumption: Some Evidence From The U.A. And Canada
Abstract:
This paper develops a generalized version of the life-cycle model in
which consumers' preferences are defined over components of consumption
and are affected by the level of public expenditure on goods and services.
The model implies that the crowding out of private consumption could in
fact be a direct demand side phenomenon caused by the way preferences
respond to a change in public spending. Evidence from U.S. and Canadian
data for the period 1935-1995 confirms this theoretical conjecture as well
as implying that in both countries demand for durable goods is likely to
show relatively large swings which may undermine the stability of the
sector and harm the supply side. [E22. E62].
Journal: International Economic Journal
Pages: 139-158
Issue: 1
Volume: 16
Year: 2002
X-DOI: 10.1080/10168730200000008
File-URL: http://www.tandfonline.com/doi/abs/10.1080/10168730200000008
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Handle: RePEc:taf:intecj:v:16:y:2002:i:1:p:139-158
Template-Type: ReDIF-Article 1.0
Author-Name: Adrian Pagan
Author-X-Name-First: Adrian
Author-X-Name-Last: Pagan
Title: Learning About Models and Their Fit to Data
Abstract:
The paper asks what is the most informative way of assessing the fit of a
model to data. often an answer comes from the context. In particular, from
a consideration of how the model is to be used. Such information often
leads one to seek transformations of the data that deliver the requisite
information. Even in those instances in which we are sure of the best way
of looking at fit, e.g. by the mean of the sample scores of an alternative
model, it is often useful to augment the information provided by these
tests through a decomposition of them. In time series such decolpositions
have often involved recursive analyses. In this paper we propose that he
moments underlying tests be re-written as an integrated conditional
moment, where the conditioning variable is chosen to elicit useful
information. The idea is potentially useful in assessing non-linear
models. To implement the approach non-parametric methods generally need to
be applied to simulated data in order to perform the decomposition. A
range of applications of the idea, drawn from published articles, is used
to illustrate the advantages of the method. [C10]
Journal: International Economic Journal
Pages: 1-18
Issue: 2
Volume: 16
Year: 2002
X-DOI: 10.1080/10168730200000009
File-URL: http://www.tandfonline.com/doi/abs/10.1080/10168730200000009
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Handle: RePEc:taf:intecj:v:16:y:2002:i:2:p:1-18
Template-Type: ReDIF-Article 1.0
Author-Name: Ali Darrat
Author-X-Name-First: Ali
Author-X-Name-Last: Darrat
Title: On Budget Deficits And Interest Rates: Another Look At The Evidence
Abstract:
This paper revisits the relationship between government budget deficits
and interest rates in Greece. Contrary to the results of Vamvoukas (1997),
the evidence I deduce from system estimations of error-correction models
consistently denies any causal impact of the deficits on interest rates.
Indeed, the high correlation observed between the two variables appears to
the outcome of interest rates causing purposeful changes in the stance of
fiscal policy. These findings stand up to numerous sensitivity tests and
provide further support to the overwhelming evidence against the
crowding-out hypothesis, [E6, H6]
Journal: International Economic Journal
Pages: 19-29
Issue: 2
Volume: 16
Year: 2002
X-DOI: 10.1080/10168730200000010
File-URL: http://www.tandfonline.com/doi/abs/10.1080/10168730200000010
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Handle: RePEc:taf:intecj:v:16:y:2002:i:2:p:19-29
Template-Type: ReDIF-Article 1.0
Author-Name: George Vamvoukas
Author-X-Name-First: George
Author-X-Name-Last: Vamvoukas
Title: Budget Deficits and Interest Rates in a Small Open
Abstract:
Additional empirical research on the links between budget deficits and
interest rates Is highly relevant for the ongoing discussion about the
validity of the Keynesian Proposition and the Ricardian equivalence. This
study using data from a small open Economy investigates the empirical
framework of both paradigms by applying SURE Technique and impulse
response functions. SURE results lead to the indication that a
bidirectional pattern of causality might exist between budget deficits and
interest rates. Impulse response functions show that deficits and interest
rates follow a joint feedback Causality. This result is consistent with
the Keynesian proposition, because changes in Interest rates are a
response to positive movements in budget deficits. [E43, H62]
Journal: International Economic Journal
Pages: 31-36
Issue: 2
Volume: 16
Year: 2002
X-DOI: 10.1080/10168730200000011
File-URL: http://www.tandfonline.com/doi/abs/10.1080/10168730200000011
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Handle: RePEc:taf:intecj:v:16:y:2002:i:2:p:31-36
Template-Type: ReDIF-Article 1.0
Author-Name: Abeysinghe Tilak
Author-X-Name-First: Abeysinghe
Author-X-Name-Last: Tilak
Author-Name: Choy Keen
Author-X-Name-First: Choy
Author-X-Name-Last: Keen
Title: On the Use of Innovation Correlations to Study Cyclical Co-Movements in GDP and Its Components
Abstract:
Innovation cross correlations are sometimes used as indicators of
cyclical co-movements among economic variables. This note shows that care
is needed in making inferences about business cycle co-movements between
GDP and its components from an innovation cross correlation analysis
because of the effect of the national income accounting identity. The
point is illustrated with an empirical example from Singapore. [C22, E32]
Journal: International Economic Journal
Pages: 37-45
Issue: 2
Volume: 16
Year: 2002
X-DOI: 10.1080/10168730200000012
File-URL: http://www.tandfonline.com/doi/abs/10.1080/10168730200000012
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Handle: RePEc:taf:intecj:v:16:y:2002:i:2:p:37-45
Template-Type: ReDIF-Article 1.0
Author-Name: Shan Jordan
Author-X-Name-First: Shan
Author-X-Name-Last: Jordan
Title: A Macroeconometric Model of Income Disparity in China
Abstract:
This Paper examines what impacts, if any, macroeconomic performances and
macroeconomic policy have and on income inequality in China during the
period 1995-1998. A vector autoregression mode (VAR) is estimated which
includes measures of macroeconomic performance, such as inflation and
unemployment, and of macroeconomic policy such as money supply and fiscal
expenditure. The VAR techniques, “innovation accounting” and
“Granger causality,” are utilized to examine the causal
linkage, if any, between “macro-factors” and income
disparity in China. We find that fiscal spending and unemployment appear
to be the most important sources of change income dispersion as far as the
“macro” factors are concerned. [C32, D31,011 and 053]
Journal: International Economic Journal
Pages: 47-63
Issue: 2
Volume: 16
Year: 2002
X-DOI: 10.1080/10168730200000013
File-URL: http://www.tandfonline.com/doi/abs/10.1080/10168730200000013
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Handle: RePEc:taf:intecj:v:16:y:2002:i:2:p:47-63
Template-Type: ReDIF-Article 1.0
Author-Name: Benarroch Michael
Author-X-Name-First: Benarroch
Author-X-Name-Last: Michael
Author-Name: James Gaisford
Author-X-Name-First: James
Author-X-Name-Last: Gaisford
Title: Learning, experience and the dynamics of north-south Trade and technology transfer
Abstract:
This paper examines the dynamics of learning and experience that underlie
technology transfer using a North-South trade model with a continuum of
goods. Since North is historically more experienced than South, it
initially produces the most advanced goods and pays higher wages. Whenever
there is a market-driven transfer of technology and production over time,
there will be some wage convergence as South gradually gains experience.
Nevertheless, wage inequality must persist in the steady state. Product
innovation typically increases steady-state wage inequality because new
goods are produced in North, and North ultimately learns than South. [F12,
O19]
Journal: International Economic Journal
Pages: 65-83
Issue: 2
Volume: 16
Year: 2002
X-DOI: 10.1080/10168730200000014
File-URL: http://www.tandfonline.com/doi/abs/10.1080/10168730200000014
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Handle: RePEc:taf:intecj:v:16:y:2002:i:2:p:65-83
Template-Type: ReDIF-Article 1.0
Author-Name: Bahmani-Oskooee Mohsen
Author-X-Name-First: Bahmani-Oskooee
Author-X-Name-Last: Mohsen
Author-Name: Shin Sungwon
Author-X-Name-First: Shin
Author-X-Name-Last: Sungwon
Title: Stability of the Demand for Money in Korea
Abstract:
Cointegration technique is now a common method of estimating an money
demand function. Couple studies that applied this technique to money
demand in korea, interpreted their finding of cointegration as a sign of
stable money demand. In this paper we show that even though M2 monetary
aggregate is cointegrated with income, interest rate and exchange rate,
application of CUSUM and CUSUMSQ tests to the residuals of an
error-correction model reveal that it is unstable. [E41]
Journal: International Economic Journal
Pages: 85-95
Issue: 2
Volume: 16
Year: 2002
X-DOI: 10.1080/10168730200000015
File-URL: http://www.tandfonline.com/doi/abs/10.1080/10168730200000015
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Handle: RePEc:taf:intecj:v:16:y:2002:i:2:p:85-95
Template-Type: ReDIF-Article 1.0
Author-Name: Mansoorian Arman
Author-X-Name-First: Mansoorian
Author-X-Name-Last: Arman
Author-Name: Neaime Simon
Author-X-Name-First: Neaime
Author-X-Name-Last: Simon
Title: Habits And Durability In Consumption And The Effects Of Exchange Rate Policies
Abstract:
The effects of exchange rate policies are worked out in a model in which
consumption goods are durable, and money enters the utility function. The
interaction of habits and durability results in a non-monotonic adjustment
of consumption expenditures, and the current account. As money does not
exhibit durability, its dynamics are montonic, and determined mainly by
habits effects. Hence, an increase in the rate of depreciation of the
domestic currency will very likely lead to a nomonotonic adjustment of
consumption and the current account, while the adjustment of real money
holdings will be monotonic [F31, F32, F41]
Journal: International Economic Journal
Pages: 97-114
Issue: 2
Volume: 16
Year: 2002
X-DOI: 10.1080/10168730200000016
File-URL: http://www.tandfonline.com/doi/abs/10.1080/10168730200000016
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Handle: RePEc:taf:intecj:v:16:y:2002:i:2:p:97-114
Template-Type: ReDIF-Article 1.0
Author-Name: Hahm Sang-Moon
Author-X-Name-First: Hahm
Author-X-Name-Last: Sang-Moon
Title: Monetary Bands And Monetary Neutrality
Abstract:
This paper attempts to provide an explanation of the short-run monetary
non-neutrality in an economy where agents have full current information
and no nominal prices are set in advance. This non-neutrality arises due
to the government's setting of nominal target bands. If the current money
supply is near the upper bound of the band, any increase in money supply
will require the monetary authority to take immediate action to reduce it.
This serves to decrease the expected rate of inflation, thus increasing
the demand for real balances and production. This paper also shows that if
readjustments of nominal target bands are likely to occur, then the
positive effect of money on output becomes attenuated. [E32, E52]
Journal: International Economic Journal
Pages: 115-128
Issue: 2
Volume: 16
Year: 2002
X-DOI: 10.1080/10168730200000017
File-URL: http://www.tandfonline.com/doi/abs/10.1080/10168730200000017
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Handle: RePEc:taf:intecj:v:16:y:2002:i:2:p:115-128
Template-Type: ReDIF-Article 1.0
Author-Name: Shimono Keiko
Author-X-Name-First: Shimono
Author-X-Name-Last: Keiko
Author-Name: Ishikawa Miho
Author-X-Name-First: Ishikawa
Author-X-Name-Last: Miho
Title: Estimating the Size of Bequests in Japan: 1986-1994
Abstract:
In this paper, we present a simple method for estimating the amount and
the size of bequests, which is applicable to other countries as well,
because it needs only four different kinds of published aggregate data. We
estimate the amount of bequests in Japan for 1986, 1988, 1989, 1990, 1992
and 1994 - the period of the Japanese bubble economy and the subsequent
recession. Bequests, however, have continued to increase with ageing
population from 40 to 60 per cent of net household assets and 30 to 40 per
cent of national wealth even in the current recession. Our study confirms
the Importance of bequest, even although only one in four Japanese has an
intended bequest motive. [D39, E21, H31]
Journal: International Economic Journal
Pages: 1-21
Issue: 3
Volume: 16
Year: 2002
X-DOI: 10.1080/10168730200000018
File-URL: http://www.tandfonline.com/doi/abs/10.1080/10168730200000018
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Handle: RePEc:taf:intecj:v:16:y:2002:i:3:p:1-21
Template-Type: ReDIF-Article 1.0
Author-Name: Jalal Siddiki
Author-X-Name-First: Jalal
Author-X-Name-Last: Siddiki
Title: Trade and Financial Liberalisation and Endogenous Growth in Bangladesh
Abstract:
This paper empirically explores the joint impact of financial and trade
liberalisation on economic growth in Bangladesh using various time series
techniques, endogenous growth theory and annual data from 1975-95. Our
empirical results are in accordance with the predictions of endogenous
growth theory that both financial and trade liberalisation, along with
investment in human capital enhance economic growth, suggesting the case
for liberalisation of both the financial and trade sectors and suggesting
that government initiatives in education policy may expedite economic
growth. Results are robust across methodologies. [E52, F43, O11, O53]
Journal: International Economic Journal
Pages: 23-37
Issue: 3
Volume: 16
Year: 2002
X-DOI: 10.1080/10168730200000019
File-URL: http://www.tandfonline.com/doi/abs/10.1080/10168730200000019
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Handle: RePEc:taf:intecj:v:16:y:2002:i:3:p:23-37
Template-Type: ReDIF-Article 1.0
Author-Name: Sangdai Ryoo
Author-X-Name-First: Sangdai
Author-X-Name-Last: Ryoo
Title: Testing for Sunspot in the Foreign Exchange Market
Abstract:
It has been shown that the nonfundamental uncertainty called sunspots
matters in many areas of the economy. Noting the fact that nationwide
capital movement and the speculative demand for foreign currencies are
rapidly increasing, this paper conducts empirical tests on the sunspot
exchange rate model. The empirical result shows that the sunspot
equilibrium exchange rate deviating from Purchasing Power Parity (PPP) and
Interest Rate Parity (IRP) is consistent with the real data. More
importantly, the Generalized Method of Moments (GMM) over-identification
test is shown to support the evidence that more general Euler equations
are in favor of our sunspot equilibrium exchange rate model. [C52, E44]
Journal: International Economic Journal
Pages: 39-58
Issue: 3
Volume: 16
Year: 2002
X-DOI: 10.1080/10168730200000020
File-URL: http://www.tandfonline.com/doi/abs/10.1080/10168730200000020
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Handle: RePEc:taf:intecj:v:16:y:2002:i:3:p:39-58
Template-Type: ReDIF-Article 1.0
Author-Name: Roberto De Santis
Author-X-Name-First: Roberto
Author-X-Name-Last: De Santis
Title: Indra-Industry Trade, Endogenous Technical Change, Wage Inequality and Welfare
Abstract:
By using alternative intra-industry trade models (1. New goods cannot be
introduced into the economy; 2. The possibility for a set of capital goods
available in the economy to vary; the models consider the existence of
intersectoral linkages), I show by means of Applied General Equilibrium
(AGE) analysis that trade rises wage inequality between skilled and
unskilled workers; but the impact on wage inequality is far larger, when
countries are assumed to exchange differentiated capital goods. The latter
result has been obtained by using an imperfect competitive model, which
embodies a sector bias technological change that arises from trade. In
addition, the gains from trade, insignificant under the standard trade
hypotheses, are extraordinarily large when endogenous technological change
is taken into account. The main policy conclusion is that if policy makers
of flexible wage economies introduce trade barriers to reduce wage
inequality, these protective measures, by affecting the diffusion of
technology, would cause a large welfare loss. [D58, f12, F43, J3, O3]
Journal: International Economic Journal
Pages: 59-78
Issue: 3
Volume: 16
Year: 2002
X-DOI: 10.1080/10168730200000021
File-URL: http://www.tandfonline.com/doi/abs/10.1080/10168730200000021
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Handle: RePEc:taf:intecj:v:16:y:2002:i:3:p:59-78
Template-Type: ReDIF-Article 1.0
Author-Name: Wong Kit Pong
Author-X-Name-First: Wong Kit
Author-X-Name-Last: Pong
Title: Export-Flexible Firms and Forward Markets
Abstract:
This paper examines the production and hedging decisions of an exporting
firm under exchange rate uncertainty. The firm is export flexible in that
it can distribute its output to either the domestic market or a foreign
market, after observing the realized spot exchange rate. The firm is a
monopoly in the domestic market but a price-taker in the foreign market.
It is shown that the separation theorem holds if selling exclusively in
the domestic market is suboptimal even under the most unfavorable sport
exchange rate. Otherwise, the firm's optimal output depends on its
preference and on the underlying exchange rate uncertainty. Furthermore,
the export-flexible firm underhedges its exchange rate risk exposure in a
currency forward market wherein the forward exchange rate contains a
non-positive risk premium. [D21, F31]
Journal: International Economic Journal
Pages: 81-95
Issue: 3
Volume: 16
Year: 2002
X-DOI: 10.1080/10168730200000022
File-URL: http://www.tandfonline.com/doi/abs/10.1080/10168730200000022
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Handle: RePEc:taf:intecj:v:16:y:2002:i:3:p:81-95
Template-Type: ReDIF-Article 1.0
Author-Name: Kim Chong-Sup
Author-X-Name-First: Kim
Author-X-Name-Last: Chong-Sup
Title: A Trade Model of Intermediate Products With Transportation Cost
Abstract:
This paper presents a trade model of intermediate products where a
country has the same production technology as the outside world, and the
source of trade is the unbalance in the factor endowment. The decision as
to how much to process the raw material before exporting depends on the
capital requirements for the processing, and the change in transportation
cost due to the processing. The lower the requirements of capital coupled
with a more rapid fall in the transportation cost in the earlier stage of
production, the more probable that the country will export the processed
intermediate good instead of the raw material.
Journal: International Economic Journal
Pages: 97-113
Issue: 3
Volume: 16
Year: 2002
X-DOI: 10.1080/10168730200000023
File-URL: http://www.tandfonline.com/doi/abs/10.1080/10168730200000023
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Handle: RePEc:taf:intecj:v:16:y:2002:i:3:p:97-113
Template-Type: ReDIF-Article 1.0
Author-Name: Aditya Bhattacharjea
Author-X-Name-First: Aditya
Author-X-Name-Last: Bhattacharjea
Title: Infant Industry Protection Revisited
Abstract:
In 1791, Alexander Hamilton suggested that assuring protection to
domestic entrants Could pre-empt entry-degterrence by foreign firms. This
paper reformulates his Argument in game-theoretic terms with asymmetric
cost information, imposing the Requirement that both the foreign firm's
threat and the home governments's promise of Protection should be
credible. It derives a simple optimal tariff formula that depends Only on
the expectation of foreign costs. It then shows that this tariff can lead
to Welfare-decreasing entry, but only if thee foreign is relatively
inefficient. However, If the formula is applied with dynamic consistency,
and is rationally anticipated by both foreign and domestic firms, it
prevents foreign entry-deterrence and improves deomestic welfare. [F13,
019]
Journal: International Economic Journal
Pages: 115-133
Issue: 3
Volume: 16
Year: 2002
X-DOI: 10.1080/10168730200000024
File-URL: http://www.tandfonline.com/doi/abs/10.1080/10168730200000024
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Handle: RePEc:taf:intecj:v:16:y:2002:i:3:p:115-133
Template-Type: ReDIF-Article 1.0
Author-Name: Apergis Nicholas
Author-X-Name-First: Apergis
Author-X-Name-Last: Nicholas
Author-Name: Eleftheriou Sophia
Author-X-Name-First: Eleftheriou
Author-X-Name-Last: Sophia
Title: Measuring Exchange Market Pressure and the Degree of Exchange Market Intervention for the Greek Drachma
Abstract:
This paper presents exchange market pressure and intervention indices
than can be applied as tools for policy analysis in the case of Greece. A
small open economy model is presented that helps to assess Greek exchange
rate policy, within a framework characterized for a strong preference to
eliminate excessive exchange rate volatility to meet the Maastricht
criteria of low inflation and a fixed domestic currency. [F31]
Journal: International Economic Journal
Pages: 135-145
Issue: 3
Volume: 16
Year: 2002
X-DOI: 10.1080/10168730200000025
File-URL: http://www.tandfonline.com/doi/abs/10.1080/10168730200000025
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Handle: RePEc:taf:intecj:v:16:y:2002:i:3:p:135-145
Template-Type: ReDIF-Article 1.0
Author-Name: Yuen Chi-Wa
Author-X-Name-First: Yuen
Author-X-Name-Last: Chi-Wa
Title: Openness And The Output-Inflation Tradeoff: Floating Vs. Fixed Exchange Rates
Abstract:
The paper is an attempt to understand how globalization (in the form of
opening up an otherwise closed economy to commodity trade and foreign
investment) would interact with the exchange rate regime chosen by a small
open economy to determine its output-inflation tradeoff. Based on the
stochastic dynamic Mundell-Fleming model, our theory suggests that, under
“normal” circumstances, the Phillips curve would be flatter
under a fixed exchange rate regime. We also provide some empirical support
based on Hong Kong data. [E2; F3]
Journal: International Economic Journal
Pages: 1-26
Issue: 4
Volume: 16
Year: 2002
X-DOI: 10.1080/10168730200000026
File-URL: http://www.tandfonline.com/doi/abs/10.1080/10168730200000026
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Handle: RePEc:taf:intecj:v:16:y:2002:i:4:p:1-26
Template-Type: ReDIF-Article 1.0
Author-Name: M. Frenkel
Author-X-Name-First: M.
Author-X-Name-Last: Frenkel
Author-Name: G. Shimidt
Author-X-Name-First: G.
Author-X-Name-Last: Shimidt
Author-Name: G. Stadtmann
Author-X-Name-First: G.
Author-X-Name-Last: Stadtmann
Author-Name: Nickle Christiane
Author-X-Name-First: Nickle
Author-X-Name-Last: Christiane
Title: The Effects of Capital Controls on Exchange Rate Volatility and Output
Abstract:
This paper extends the Dornbusch model of overshooting exchange rates to
discuss both exchange rate and output effects of capital controls that
involve additional costs for International asset transactions.We show
that, on the one hand, such capital controls have the merit of reducing
the volatility of exchange rate volatility in the sort run and induces
costs for the real sector in the form of lower equilibrium output levels.
[F32, F41]
Journal: International Economic Journal
Pages: 27-51
Issue: 4
Volume: 16
Year: 2002
X-DOI: 10.1080/10168730200000027
File-URL: http://www.tandfonline.com/doi/abs/10.1080/10168730200000027
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Handle: RePEc:taf:intecj:v:16:y:2002:i:4:p:27-51
Template-Type: ReDIF-Article 1.0
Author-Name: Robert C. Shelburne
Author-X-Name-First: Robert C.
Author-X-Name-Last: Shelburne
Title: Bilateral Intra-Industry Trade in a Multi-Country Helpman-Krugman Model
Abstract:
The factors that explain the level of intra-industry trade and its share
of total trade in a multi-country version of the Helpman-Krugman model are
derived. The role of similarity of endowment ratios and similarity of
economic sizes differ in the multi-country version from the two country
version of this model. It is also demonstrated that the volume of total
trade, the volume of intra-industry trade and the volume of inter-industry
trade can each be described by a modified gravity equation. A new
diagrammatical device is introduced that illustrates the relationship
between trade volume and similarity in country size. [F12]
Journal: International Economic Journal
Pages: 53-73
Issue: 4
Volume: 16
Year: 2002
X-DOI: 10.1080/10168730200000028
File-URL: http://www.tandfonline.com/doi/abs/10.1080/10168730200000028
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Handle: RePEc:taf:intecj:v:16:y:2002:i:4:p:53-73
Template-Type: ReDIF-Article 1.0
Author-Name: Gervais Jean-Philippe
Author-X-Name-First: Gervais
Author-X-Name-Last: Jean-Philippe
Author-Name: Harvey E. Lapan
Author-X-Name-First: Harvey E.
Author-X-Name-Last: Lapan
Title: Endogenous Choice of Trade Instrument Under Uncertainty
Abstract:
This Paper endogenizes the choice between import tariffs and quotas of
two policy active countries in a duopsonistic world market. Without
uncertainty, import quotas are welfare superior to import tariffs in
equilibrium. If two importers can precommit to a type of instrument before
deciding the level of the instrument to use in a future period, an import
quota equilibrium emerges. We introduce asymmetric risk in the import
demand schedule of the two importers. There exists a range of parameters
in which a mixed equilibrium emerges, i.e. one country uses a tariff while
the other restricts trade with an import quota. The likelihood that both
importers choose a different trade instrument in equilibrium is increasing
with the correlation coefficient of the two random shocks. [F13]
Journal: International Economic Journal
Pages: 75-96
Issue: 4
Volume: 16
Year: 2002
X-DOI: 10.1080/10168730200000029
File-URL: http://www.tandfonline.com/doi/abs/10.1080/10168730200000029
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Handle: RePEc:taf:intecj:v:16:y:2002:i:4:p:75-96
Template-Type: ReDIF-Article 1.0
Author-Name: Howard Michael
Author-X-Name-First: Howard
Author-X-Name-Last: Michael
Title: Causality Between Exports, Imports and Income In Trinidad and Tobago
Abstract:
This study examines the relationship between exports, imports and income
in the economy of Trinidad and Tobago, using the methodology of Granger
causality and error correction modeling. Our results show that there is
unidirectional Granger causation from exports to income (GDP), and
bidirectional causation between exports and imports and imports and
income. The Economy of Trinidad and Tobago is a petroleum exporting
economy where oil-export booms raise income levels, but this is usually
followed by a slump. The bivariate models should be interpreted with
caution because of the possibility of omitted variable bias. [F14, C22]
Journal: International Economic Journal
Pages: 97-106
Issue: 4
Volume: 16
Year: 2002
X-DOI: 10.1080/10168730200000030
File-URL: http://www.tandfonline.com/doi/abs/10.1080/10168730200000030
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Handle: RePEc:taf:intecj:v:16:y:2002:i:4:p:97-106
Template-Type: ReDIF-Article 1.0
Author-Name: Amalia Morales Zumaquero
Author-X-Name-First: Amalia Morales
Author-X-Name-Last: Zumaquero
Title: Purchasing Power Parity By sectors From Selected European Countries: Cointegration and Structural Breaks
Abstract:
In this paper we study the long-run Purchasing Power Parity (PPP)
hypothesis by traded and non-traded sectors using cointegration techniques
in the presence of structural breaks, for a set of European countries
during the period 1975:1-1995:12. This approach is complementary to many
existing approaches to investigate the PPP Hypothesis. We find evidence in
favor of long-run PPP hypothesis when commodity prices and used in the
presence of structural breaks. This result lends support to the
integration process in the European Union. [C22, F30]
Journal: International Economic Journal
Pages: 107-119
Issue: 4
Volume: 16
Year: 2002
X-DOI: 10.1080/10168730200000031
File-URL: http://www.tandfonline.com/doi/abs/10.1080/10168730200000031
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Handle: RePEc:taf:intecj:v:16:y:2002:i:4:p:107-119
Template-Type: ReDIF-Article 1.0
Author-Name: Mark J. Holmes
Author-X-Name-First: Mark J.
Author-X-Name-Last: Holmes
Author-Name: Maghrebi Nabil
Author-X-Name-First: Maghrebi
Author-X-Name-Last: Nabil
Title: Non-Linearities, Regime Switching and the Relationship Between Asian Equity and Foreign Exchange Markets
Abstract:
Journal: International Economic Journal
Pages: 121-139
Issue: 4
Volume: 16
Year: 2002
X-DOI: 10.1080/10168730200000032
File-URL: http://www.tandfonline.com/doi/abs/10.1080/10168730200000032
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Handle: RePEc:taf:intecj:v:16:y:2002:i:4:p:121-139
Template-Type: ReDIF-Article 1.0
Author-Name: Bernhard Heitger
Author-X-Name-First: Bernhard
Author-X-Name-Last: Heitger
Title: MINIMUM WAGES AND EMPLOYMENT: THE CASE OF GERMAN UNIFICATION
Abstract:
Analysis in terms of the two-sector open economy shows that in bringing
the market economy to East Germany, West Germany seems to have disregarded
important fundamentals. Premature formation of a currency union led to a
substantial real appreciation of the East German currency. Premature
implementation of the West German system of wage bargaining resulted in
inappropriate minimum wage schedules. Both measures made East German
production possibilities and employment decline. [E24, P23]
Journal: International Economic Journal
Pages: 1-15
Issue: 1
Volume: 17
Year: 2001
X-DOI: 10.1080/10168730300080001
File-URL: http://www.tandfonline.com/doi/abs/10.1080/10168730300080001
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Handle: RePEc:taf:intecj:v:17:y:2001:i:1:p:1-15
Template-Type: ReDIF-Article 1.0
Author-Name: R. W. Hafer
Author-X-Name-First: R. W.
Author-X-Name-Last: Hafer
Author-Name: Ali Kutan
Author-X-Name-First: Ali
Author-X-Name-Last: Kutan
Title: FINANCIAL INNOVATION AND THE DEMAND FOR MONEY: EVIDENCE FROM THE PHILIPPINES
Abstract:
This paper tests whether financial innovations in the Philippines
distorted the long-run relation between real money balances, income and
interest rates. Using data for the monetary base, M1 and M3 over the
period 1980-1998, we cannot reject the hypothesis that there does not
exist a standard money demand relation between M1 and M3, real income and
interest rates. However, when we allow for the impact of financial
innovations, this finding is reversed for M1. Estimates of ECM models for
these measures also show that financial innovations impacted real money
balances for M1, but not M3. This evidence supports the Philippine central
bank's choice of a monetary aggregate as its policy instrument to achieve
its policy objectives. [E41, E58]
Journal: International Economic Journal
Pages: 17-27
Issue: 1
Volume: 17
Year: 2001
X-DOI: 10.1080/10168730300080002
File-URL: http://www.tandfonline.com/doi/abs/10.1080/10168730300080002
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Handle: RePEc:taf:intecj:v:17:y:2001:i:1:p:17-27
Template-Type: ReDIF-Article 1.0
Author-Name: Robert Kohn
Author-X-Name-First: Robert
Author-X-Name-Last: Kohn
Title: ON SHIBATA'S NEGATION OF LUMP-SUM TRANSFERS IN GLOBAL WARMING CONTROL
Abstract:
When all countries tax domestic emissions of a pure global pollutant at a
rate equal to global marginal damage, some of these countries - typically,
developing countries - are likely to be worse off. To win the cooperation
of such developing countries, it is often advocated that they receive
lump-sum compensation from the industrialized countries. To the contrary,
Shibata (1996, p.298) argues that it is “not possible to make
developing countries any better off by lump-sum transfers of the [tax]
revenues.” This pessimistic outlook is challenged in the present
paper, which reaffirms the case for international lump-sum transfers.
[F02, H23, Q23, Q25]
Journal: International Economic Journal
Pages: 29-41
Issue: 1
Volume: 17
Year: 2001
X-DOI: 10.1080/10168730300080003
File-URL: http://www.tandfonline.com/doi/abs/10.1080/10168730300080003
File-Format: text/html
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Handle: RePEc:taf:intecj:v:17:y:2001:i:1:p:29-41
Template-Type: ReDIF-Article 1.0
Author-Name: Hirofumi Shibata
Author-X-Name-First: Hirofumi
Author-X-Name-Last: Shibata
Title: ON SHIBATA'S NEGATION OF LUMP-SUM TRANSFERS IN GLOBAL WARMING CONTROL: REJOINDER
Abstract:
Kohn's criticism of my negation of the role of lump-sum transfers
financed by a global emission tax is based on two unacceptable premises.
(1) He assumes a world consisting of cooperative nations. But if nations
were cooperative no corrective tax is needed as they could internalize
external diseconomies without a super national governmental intervention.
A global tax analysis must assume non-cooperative nations as I did. (2) He
treats lump-sum transfers as negotiable payments for compliance by the
country unfavorable affected by the tax. But the standard interpretation
of the lump-sum transfers is payments that do not influence private
economic decisions. In my analysis lump-sum transfers have their usual
interpretation. This rejoinder also reinforces my original claim with a
formal proof that every nation's post-tax welfare is independent of
lump-sum transfers and of their aggregate resources. [F02, H23, Q23, Q25]
Journal: International Economic Journal
Pages: 43-55
Issue: 1
Volume: 17
Year: 2001
X-DOI: 10.1080/10168730300080004
File-URL: http://www.tandfonline.com/doi/abs/10.1080/10168730300080004
File-Format: text/html
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Handle: RePEc:taf:intecj:v:17:y:2001:i:1:p:43-55
Template-Type: ReDIF-Article 1.0
Author-Name: Alberto Bucci
Author-X-Name-First: Alberto
Author-X-Name-Last: Bucci
Title: HORIZONTAL INNOVATION, MARKET POWER AND GROWTH
Abstract:
I build a generalised model of horizontal product innovation and economic
growth taking explicitly into account the most relevant insights stemming
from the recent literature on this topic. What results from the analysis
is that, when innovation is both deterministic and horizontal, the
relationship between market power and aggregate growth is not robust at
all. It is also found that not only technology, but also the
inter-sectoral competition for the same resource affects growth. This is
particularly relevant in terms of public policies aimed at the strategic
allocation of skilled workers to the different sectors of the economy.
[D43, L16, O31, O41]
Journal: International Economic Journal
Pages: 57-82
Issue: 1
Volume: 17
Year: 2001
X-DOI: 10.1080/10168730300080005
File-URL: http://www.tandfonline.com/doi/abs/10.1080/10168730300080005
File-Format: text/html
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Handle: RePEc:taf:intecj:v:17:y:2001:i:1:p:57-82
Template-Type: ReDIF-Article 1.0
Author-Name: Sanghack Lee
Author-X-Name-First: Sanghack
Author-X-Name-Last: Lee
Title: TWO-STAGE CONTESTS WITH ADDITIVE CARRYOVERS*
Abstract:
This paper examines two-stage contests in which players in two groups
compete for a prize. In the first stage, each group selects a finalist
through intra-group competition. In the second stage the finalists compete
for the prize. The first-stage efforts are carried over to the second
stage through the contest success function and cost functions. The
carryover of efforts proves to increase aggregate efforts when the
carryovers are player-specific. In the case of group-specific carryovers,
however, the aggregate efforts may either increase or decrease in the
carryover rates, depending upon the value of the exponent R of the contest
success function. [D62, D72, D74]
Journal: International Economic Journal
Pages: 83-99
Issue: 1
Volume: 17
Year: 2001
X-DOI: 10.1080/10168730300080006
File-URL: http://www.tandfonline.com/doi/abs/10.1080/10168730300080006
File-Format: text/html
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Handle: RePEc:taf:intecj:v:17:y:2001:i:1:p:83-99
Template-Type: ReDIF-Article 1.0
Author-Name: Nejib Hachicha
Author-X-Name-First: Nejib
Author-X-Name-Last: Hachicha
Title: EXPORTS, EXPORT COMPOSITION AND GROWTH: A SIMULTANEOUS ERROR-CORRECTION MODEL FOR TUNISIA
Abstract:
The export-economic growth relationship has been dealt with in several
empirical studies concerning cross-section and time series data. Although
this research has contributed to measure the impact of exports on economic
growth, it still has three main drawbacks. First, the studies on
cross-section data suppose homogeneous production techniques for the
countries involved. Second, most of the research introduces a bias in the
estimation of the export impact on economic growth since it neglects all
effects of simultaneity between these two variables. Finally, most of the
estimated regressions in these studies may constitute 'spurious'
regressions since the analysis of the stationarity of the variables is
missing. This paper considers the Tunisian case and tries to study the
dynamics between growth and exports through a simultaneous error
correction model. The study shows the presence of a positive and
significant relationship between exports and economic growth driven by
manufactured exports rather than food-processing exports and international
tourism. The measurement of such a relationship is understated if the
simultaneity between export expansion and G.D.P growth is ignored. [C 32,
C 51, C 52, F 43]
Journal: International Economic Journal
Pages: 101-120
Issue: 1
Volume: 17
Year: 2001
X-DOI: 10.1080/10168730300080007
File-URL: http://www.tandfonline.com/doi/abs/10.1080/10168730300080007
File-Format: text/html
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Handle: RePEc:taf:intecj:v:17:y:2001:i:1:p:101-120
Template-Type: ReDIF-Article 1.0
Author-Name: George Hondroyiannis
Author-X-Name-First: George
Author-X-Name-Last: Hondroyiannis
Title: THE WAGE GROWTH AND INFLATION NEXUS IN A DYNAMIC MULTIVARIATE CONTEXT: NEW EVIDENCE FROM GREECE
Abstract:
Different macroeconomic schools of thought have provided different
explanations for the relationship between the price level and wage level.
This paper investigates the linkages between price level and wage level
employing quarterly data in Greece over the period 1980-98. To account for
influences on the bivariate relationship of monetary and exchange rate
policies, money supply and exchange rate were added to the model. In the
empirical analysis the Johansen maximum likelihood technique is applied to
search for a long-run relationship among the macroeconomic variables. The
application of vector error-correction models is used to investigate the
response of inflation and wage inflation to monetary and exchange rate
policies aiming at testing the sources of price-wage variations. The
estimation results employing the vector error-correction models indicate
that a unidirectional causality exists from wages to price level. In
addition, the results indicate that inflation in the long run is
determined by changes in money supply and exchange rate. The results imply
that since wages have an impact on price level, wage inflation can be used
as monetary policy information variable. [C22, Å31]
Journal: International Economic Journal
Pages: 121-138
Issue: 1
Volume: 17
Year: 2001
X-DOI: 10.1080/10168730300080008
File-URL: http://www.tandfonline.com/doi/abs/10.1080/10168730300080008
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Handle: RePEc:taf:intecj:v:17:y:2001:i:1:p:121-138
Template-Type: ReDIF-Article 1.0
Author-Name: James Gaisford
Author-X-Name-First: James
Author-X-Name-Last: Gaisford
Author-Name: William Kerr
Author-X-Name-First: William
Author-X-Name-Last: Kerr
Title: DEADLOCK IN GENEVA: THE BATTLE OVER EXPORT SUBSIDIES IN AGRICULTURE
Abstract:
This article provides a systematic game-theoretic analysis of retaliatory
export subsidies where each country's government is driven by political
-economy considerations. The model provides a powerful explanation of both
the grain wars of the 1980s and the difficulties facing the post-Uruguay
Round negotiations in Geneva over further reductions in agricultural
export subsidies. While an initial round of cuts in export subsidies can
be designed to confer political-economy benefits on both the US and EU
governments, subsequent reductions need not be mutually beneficial for the
two governments. The EU's current intransigence over export subsidies,
therefore, appears to have a solid political-economy basis. [F13, Q17]
Journal: International Economic Journal
Pages: 1-17
Issue: 2
Volume: 17
Year: 2001
X-DOI: 10.1080/10168730300080009
File-URL: http://www.tandfonline.com/doi/abs/10.1080/10168730300080009
File-Format: text/html
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Handle: RePEc:taf:intecj:v:17:y:2001:i:2:p:1-17
Template-Type: ReDIF-Article 1.0
Author-Name: Angelos Antzoulatos
Author-X-Name-First: Angelos
Author-X-Name-Last: Antzoulatos
Author-Name: Naveen Seth
Author-X-Name-First: Naveen
Author-X-Name-Last: Seth
Title: BANK LENDING TO LDCs: LESSONS FROM THE 1970s
Abstract:
We use a recently-compiled database with monthly observations, to analyse
the determinants of syndicated loans to Latin American (L.A.) and East
Asian countries, for the period 1972-1982. Our results indicate that the
loans were to a large extent supply-driven, and thus provide econometric
evidence that “overlending” was a significant determinant of
them along with economic fundamentals in the borrowing countries. They
also suggest that E. Asia's recent currency and banking crises will not
likely develop into another “debt crisis”, precipitated by a
prolonged withdrawal of private capital from the region. [F34, G15, N25,
N26]
Journal: International Economic Journal
Pages: 19-36
Issue: 2
Volume: 17
Year: 2001
X-DOI: 10.1080/10168730300080010
File-URL: http://www.tandfonline.com/doi/abs/10.1080/10168730300080010
File-Format: text/html
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Handle: RePEc:taf:intecj:v:17:y:2001:i:2:p:19-36
Template-Type: ReDIF-Article 1.0
Author-Name: Justino De La Cruz Martinez
Author-X-Name-First: Justino De La Cruz
Author-X-Name-Last: Martinez
Title: DEMAND SHOCKS: EVIDENCE FROM A VECTOR AUTOREGRESSION MODEL OF MEXICO'S RECESSION AND RECOVERY IN THE 1990s
Abstract:
We analyze the recession and recovery of Mexico during the 1990s by
estimating a vector autoregression of aggregate expenditures. The model
suggests that, in addition to fiscal, monetary, and exchange rates
policies, “expectational” shocks played a significant role
in the 1995 recession but not in the insuring recovery. This indicates
that when policy factors explain only a portion of the shocks, the
public's pessimism and anxiety about the future should be considered
important in policymaking. Finally, contrary to the conventional believe
that depreciation will raise economic growth, this study finds that Peso
depreciation will bring about a recession. [E32, C32]
Journal: International Economic Journal
Pages: 37-53
Issue: 2
Volume: 17
Year: 2001
X-DOI: 10.1080/10168730300080011
File-URL: http://www.tandfonline.com/doi/abs/10.1080/10168730300080011
File-Format: text/html
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Handle: RePEc:taf:intecj:v:17:y:2001:i:2:p:37-53
Template-Type: ReDIF-Article 1.0
Author-Name: Christian Pierdzioch
Author-X-Name-First: Christian
Author-X-Name-Last: Pierdzioch
Title: NON-SEPARABLE CONSUMPTION-LABOR CHOICE AND THE INTERNATIONAL TRANSMISSION OF MONETARY POLICY SHOCKS: A NOTE
Abstract:
This paper derives in the model developed by Obstfeld and Rogoff (1995) a
steady state that is stationary in the presence of monetary policy shocks.
To this end, the impact of monetary policy shocks on the current account
is shut off by assuming that the preferences of households exhibit a
particular non-separability between consumption and labor supply. [F31,
F41]
Journal: International Economic Journal
Pages: 55-64
Issue: 2
Volume: 17
Year: 2001
X-DOI: 10.1080/10168730300080012
File-URL: http://www.tandfonline.com/doi/abs/10.1080/10168730300080012
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Handle: RePEc:taf:intecj:v:17:y:2001:i:2:p:55-64
Template-Type: ReDIF-Article 1.0
Author-Name: Sang Hyup Lee
Author-X-Name-First: Sang Hyup
Author-X-Name-Last: Lee
Title: A DURATION ANALYSIS OF THE ADOPTION OF PRIVATIZATION POLICY: EVIDENCE FROM THE TELECOMMUNICATIONS SECTOR IN THE ASIA-PACIFIC REGION
Abstract:
This paper provides an econometric analysis of the determinants of
privatization of the telecommunications sector in the Asia-Pacific region.
The following conclusions are drawn from the estimates of the Weibull
models: 1) rather than the absolute level of network penetration, what
really matters most in the privatization process is a country's telecom
sector performance over a period of time; and 2) contrary to our
presumption, a country's incentive for privatization does not hinge much
on the overall budget deficit of the government. Policy implications of
the main findings are discussed. [L96]
Journal: International Economic Journal
Pages: 65-78
Issue: 2
Volume: 17
Year: 2001
X-DOI: 10.1080/10168730300080013
File-URL: http://www.tandfonline.com/doi/abs/10.1080/10168730300080013
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Handle: RePEc:taf:intecj:v:17:y:2001:i:2:p:65-78
Template-Type: ReDIF-Article 1.0
Author-Name: Joon-Ho Hahm
Author-X-Name-First: Joon-Ho
Author-X-Name-Last: Hahm
Author-Name: Jinho Kim
Author-X-Name-First: Jinho
Author-X-Name-Last: Kim
Title: COST-AT-RISK AND BENCHMARK GOVERNMENT DEBT PORTFOLIO IN KOREA
Abstract:
This paper provides a framework to identify and achieve a benchmark
portfolio structure for government debt based upon the trade-off between
expected debt-service-cost and risk. Using actual Korean government debt
data, we empirically derive a medium-term efficient frontier conditional
upon the existing portfolio structure. In addition, a target benchmark
portfolio is identified from the efficient frontier by employing a penalty
function with cost-at-risk and duration gap as two penalty factors. The
target portfolio identified above also implies an optimal borrowing policy
as to the maturity mix of the government bond issuance. [H6, G1, F3]
Journal: International Economic Journal
Pages: 79-103
Issue: 2
Volume: 17
Year: 2001
X-DOI: 10.1080/10168730300080014
File-URL: http://www.tandfonline.com/doi/abs/10.1080/10168730300080014
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Handle: RePEc:taf:intecj:v:17:y:2001:i:2:p:79-103
Template-Type: ReDIF-Article 1.0
Author-Name: Kiseok Hong
Author-X-Name-First: Kiseok
Author-X-Name-Last: Hong
Title: CONSUMER DURABLES AND THE INTEREST RATE
Abstract:
This paper investigates the relationship between consumption of a durable
good and the interest rate. According to the standard Permanent Income
Hypothesis (PIH), a rise in the interest rate is expected to decrease
durables consumption, and the magnitude of the interest rate effect should
meet certain restrictions. This implication of the PIH is tested using US
data. Empirical results of this paper indicate that, although durables
consumption is negatively correlated with the interest rate, the magnitude
of the estimated effect is substantially smaller than requested by the
standard theory. This suggests that the influence of monetary policy on
durables expenditure may not be as large as previous authors claim. In
attempts to explain the small effects of the interest rate, frictions such
as adjustment costs and liquidity constraints are examined. [E21]
Journal: International Economic Journal
Pages: 105-127
Issue: 2
Volume: 17
Year: 2001
X-DOI: 10.1080/10168730300080015
File-URL: http://www.tandfonline.com/doi/abs/10.1080/10168730300080015
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Handle: RePEc:taf:intecj:v:17:y:2001:i:2:p:105-127
Template-Type: ReDIF-Article 1.0
Author-Name: Don Clark
Author-X-Name-First: Don
Author-X-Name-Last: Clark
Author-Name: Denise Stanley
Author-X-Name-First: Denise
Author-X-Name-Last: Stanley
Title: DETERMINANTS OF INTRAINDUSTRY TRADE BETWEEN THE UNITED STATES AND INDUSTRIAL NATIONS
Abstract:
This paper investigates determinants of intraindustry trade between the
United States and twenty-two industrial nations. Included here are
country-level characteristics suggested by modern models of monopolistic
competition and trade and industry-level variables relating to imperfect
competition, scale economies, and product differentiation. Country-level
determinants of intraindustry trade include relative factor endowment
differences, relative country size differences, distance, trade
orientation, and the trade balance. Measures of factor intensity, scale
economies, market structure, and product differentiation are included as
country-level variables. Findings generally support predictions of modern
trade theories. [F1]
Journal: International Economic Journal
Pages: 1-17
Issue: 3
Volume: 17
Year: 2003
Keywords: F1,
X-DOI: 10.1080/10168730300080016
File-URL: http://www.tandfonline.com/doi/abs/10.1080/10168730300080016
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Handle: RePEc:taf:intecj:v:17:y:2003:i:3:p:1-17
Template-Type: ReDIF-Article 1.0
Author-Name: M. T. Alguacil
Author-X-Name-First: M. T.
Author-X-Name-Last: Alguacil
Author-Name: V. Orts
Author-X-Name-First: V.
Author-X-Name-Last: Orts
Title: Inward Foreign Direct Investment and Imports in Spain
Abstract:
In this paper, we investigate the links between inward foreign direct
investment and imports in Spain. We show that FDI in this country has been
trade-oriented, encouraging greater imports. Foreign production thus
magnifies its potential gains with the conventional benefits of trade. A
cointegration analysis in a multivariate VAR model is applied for Granger
temporal causality testing. The strength and direction of the causal
relationship are shown through the dynamic variance decomposition and the
impulse response technique. [Fl0, F20, F21]
Journal: International Economic Journal
Pages: 19-38
Issue: 3
Volume: 17
Year: 2003
X-DOI: 10.1080/10168730300000002
File-URL: http://www.tandfonline.com/doi/abs/10.1080/10168730300000002
File-Format: text/html
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Handle: RePEc:taf:intecj:v:17:y:2003:i:3:p:19-38
Template-Type: ReDIF-Article 1.0
Author-Name: Dimitris Christopoulos
Author-X-Name-First: Dimitris
Author-X-Name-Last: Christopoulos
Author-Name: EFthymios Tsionas
Author-X-Name-First: EFthymios
Author-X-Name-Last: Tsionas
Title: A Reassessment Of Balance Of Payments Constrained Growth: Results From Panel Unit Root And Panel Cointegration Tests
Abstract:
The paper reassesses the empirical evidence for Thirlwall's law in seven
industrial countries by using panel unit root and panel cointegration
tests including Johansen maximum likelihood cointegration tests. Current
practice restricts attention to time series residual based cointegration
tests, which are known to have low power and are subject to normalization
problems. Since economic time series are typically short, it is desirable
to exploit panel data in order to draw sharper inferences. The empirical
results reveal that imports are cointegrated with terms of trade and
income (although residual-based tests indicate the opposite). We find
that, with the exception of Australia, Thirlwall's law holds. [C22, C23,
O40, O57]
Journal: International Economic Journal
Pages: 39-54
Issue: 3
Volume: 17
Year: 2003
X-DOI: 10.1080/10168730300000003
File-URL: http://www.tandfonline.com/doi/abs/10.1080/10168730300000003
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Handle: RePEc:taf:intecj:v:17:y:2003:i:3:p:39-54
Template-Type: ReDIF-Article 1.0
Author-Name: Seon-Jae Kim
Author-X-Name-First: Seon-Jae
Author-X-Name-Last: Kim
Title: Information Technology and Its Impact on Economic Growth and Productivity In Korea
Abstract:
The purpose of this study is to examine the impact of IT on economic
growth and productivity in Korea during the 1971-2000 periods. The growth
contributions from standard input factors, IT capital inputs, and the
business cycle effect are calculated on the basis of the growth accounting
framework. The study also examines the source of productivity growth,
using the extended growth model and drawing attention to the role that IT
and knowledge capital may have played. The results show that IT capital
contributed 16.3 percent to the output growth and has a strong positive
effect on the growth of labor productivity in the long run. [04]
Journal: International Economic Journal
Pages: 55-75
Issue: 3
Volume: 17
Year: 2003
X-DOI: 10.1080/10168730300000004
File-URL: http://www.tandfonline.com/doi/abs/10.1080/10168730300000004
File-Format: text/html
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Handle: RePEc:taf:intecj:v:17:y:2003:i:3:p:55-75
Template-Type: ReDIF-Article 1.0
Author-Name: Don Clark
Author-X-Name-First: Don
Author-X-Name-Last: Clark
Author-Name: Denise Stanley
Author-X-Name-First: Denise
Author-X-Name-Last: Stanley
Title: Determinants of Intraindustry Trade Between the United States and Industrial Nations
Abstract:
This paper investigates determinants of intraindustry trade between the
United States and twenty-two industrial nations. Included here are
country-level characteristics suggested by modern models of monopolistic
competition and trade and industry-level variables relating to imperfect
competition, scale economies, and product differentiation. Country-level
determinants of intraindustry trade include relative factor endowment
differences, relative country size differences, distance, trade
orientation, and the trade balance. Measures of factor intensity, scale
economies, market structure, and product differentiation are included as
country-level variables. Findings generally support predictions of modern
trade theories. [F1]
Journal: International Economic Journal
Pages: 1-18
Issue: 3
Volume: 17
Year: 2003
X-DOI: 10.1080/10168730300000001
File-URL: http://www.tandfonline.com/doi/abs/10.1080/10168730300000001
File-Format: text/html
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Handle: RePEc:taf:intecj:v:17:y:2003:i:3:p:1-18
Template-Type: ReDIF-Article 1.0
Author-Name: Stephen Devadoss
Author-X-Name-First: Stephen
Author-X-Name-Last: Devadoss
Author-Name: Wongun Song
Author-X-Name-First: Wongun
Author-X-Name-Last: Song
Title: Oligopsonistic Intermediate Input and Patterns of Trade
Abstract:
We examine the validities of traditional trade theorems and patterns of
trade for an economy with an oligopsonistic intermediate input.
Specifically, the model consists of two final goods. one intermediate
good, and two primary factors. One final good and the intermediate good
are produced using primary factors, capital and labor. The second final
good is produced using the intermediate good and labor. All markets
operate under perfect competition except the intermediate good market,
which is oligopsonistic. This model reflects the real world phenomena of
oligopsony power excerted by some industries (e.g., the food processing
industry) in the intermediate good purchases. Our analysis shows that some
of the traditional trade theorems and H.O trade pattern may be overturned
if the factor intensity of the competitive sector lies between those of
oligopsony and intermediate good sectors. [F12]
Journal: International Economic Journal
Pages: 77-97
Issue: 3
Volume: 17
Year: 2003
X-DOI: 10.1080/10168730300000005
File-URL: http://www.tandfonline.com/doi/abs/10.1080/10168730300000005
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Handle: RePEc:taf:intecj:v:17:y:2003:i:3:p:77-97
Template-Type: ReDIF-Article 1.0
Author-Name: Mohamed Jellal
Author-X-Name-First: Mohamed
Author-X-Name-Last: Jellal
Author-Name: Francois-Charles Wolff
Author-X-Name-First: Francois-Charles
Author-X-Name-Last: Wolff
Title: Dual Labor Markets And Strategic Efficiency Wage
Abstract:
We consider a dual labor markets model in which the primary sector
requires the presence of eMiciency wage, while the secondary sector is
competitive. We show that the Solow condition does not hold in a
Stackelberg equilibrium where the primary sector acts as a leader and the
secondary one as a follower.[J41]
Journal: International Economic Journal
Pages: 99-112
Issue: 3
Volume: 17
Year: 2003
X-DOI: 10.1080/10168730300000006
File-URL: http://www.tandfonline.com/doi/abs/10.1080/10168730300000006
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Handle: RePEc:taf:intecj:v:17:y:2003:i:3:p:99-112
Template-Type: ReDIF-Article 1.0
Author-Name: Gongpil Choi
Author-X-Name-First: Gongpil
Author-X-Name-Last: Choi
Title: Structural Changes and the Scope of Inflation Targeting in Korea
Abstract:
A small, open macroeconomic model that accounts for new financial
accelerator effects (the effects of fluctuations in asset prices on bank
credit and economic activity) is developed to evaluate various policy
rules for inflation targeting. Given the conditions of asset markets and
the fragility of the financial sector, monetary policy responses can
potentially amplify the financial accelerator effect. Simulations are used
to compare various forms of inflation targeting using a model that
emphasizes long-term inflation expectations, output changes, and the asset
price channels. The simulations suggest that a successful outcome can be
obtained by adhering to simple forward-looking rules, rather than
backward-looking policy rules. Furthermore, inflation targeting can
contribute to price as well as output stability by helping to keep the
financial accelerator from being activated. Inflation targeting in
emerging economies can provide an environment conducive to long-term
capital market development. [E51,F3,F4]
Journal: International Economic Journal
Pages: 113-142
Issue: 3
Volume: 17
Year: 2003
X-DOI: 10.1080/10168730300000007
File-URL: http://www.tandfonline.com/doi/abs/10.1080/10168730300000007
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Handle: RePEc:taf:intecj:v:17:y:2003:i:3:p:113-142
Template-Type: ReDIF-Article 1.0
Author-Name: Dene Hurley
Author-X-Name-First: Dene
Author-X-Name-Last: Hurley
Title: Horizontal and Vertical Intra-Industry Trade: The Case of Asean Trade in Manufactures
Abstract:
For over two decades prior to the Asian Currency crisis of 1997, the
economies of the ASEAN-5 underwent an impressive economic expansion while
increasing their openness to trade. This paper examines the role of
intra-industry trade (IIT) in intra-ASEAN trade. Focusing on trade in
manufactures, it breaks down IIT by vertically (VIIT) and horizontally
(HIIT) differentiated goods, and identifies country-specific factors which
drive them. By 1996, while 60% of the total intra-ASEAN trade constituted
IIT, the share of IIT in trade in manufactures was even higher, dominated
by VIIT which reflected differences in capital-labor intensity. Market
size and foreign direct investment also influenced both VIIT and HIIT.
[F14]
Journal: International Economic Journal
Pages: 1-14
Issue: 4
Volume: 17
Year: 2003
X-DOI: 10.1080/10168730300080023
File-URL: http://www.tandfonline.com/doi/abs/10.1080/10168730300080023
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Handle: RePEc:taf:intecj:v:17:y:2003:i:4:p:1-14
Template-Type: ReDIF-Article 1.0
Author-Name: Chae-Deug Yi
Author-X-Name-First: Chae-Deug
Author-X-Name-Last: Yi
Title: An Empirical Analysis of Ricardian Equivalence on Real Exchange Rate and Current Account: Korea
Abstract:
This paper investigates the responses of real exchange rate and current
account as well as consumption in a small open economy to fiscal policies
using an alternative time horizon model. Cointegration tests present that
there is no stable relationship between the fiscal variables and the real
exchange rate, current account, or consumption. The maximum likelihood
estimation suggests that fiscal policies seem not to be much effective as
the conventional or finite horizon model predicts. REP with infinite
horizons seems to be more conceivable to explaining the fluctuation of
consumption, real exchange rate, and current account in Korea. [F31, F32]
Journal: International Economic Journal
Pages: 61-83
Issue: 4
Volume: 17
Year: 2003
X-DOI: 10.1080/10168730300080027
File-URL: http://www.tandfonline.com/doi/abs/10.1080/10168730300080027
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Handle: RePEc:taf:intecj:v:17:y:2003:i:4:p:61-83
Template-Type: ReDIF-Article 1.0
Author-Name: M. Imam Alam
Author-X-Name-First: M. Imam
Author-X-Name-Last: Alam
Title: Manufactured Exports, Capital Good Imports, and Economic Growth: Experience of Mexico and Brazil
Abstract:
This paper examines the export-led growth hypothesis using data from two
Latin American countries, Mexico and Brazil, in a production function
framework. It addresses some of the limitations of existing methods of
testing the hypothesis. Contrary to popular belief, we do not find any
evidence to support the hypothesis. Imported capital goods appear to be
very significant in the growth process of these two countries. To check
the robustness of the results, this study uses two different cointegrating
procedures to determine the number of cointegrating vectors, and three
different methods to estimate the parameters of the long-run relations.
The results are robust across estimation techniques. [F43, F14, O47, O54]
Journal: International Economic Journal
Pages: 85-105
Issue: 4
Volume: 17
Year: 2003
X-DOI: 10.1080/10168730300080028
File-URL: http://www.tandfonline.com/doi/abs/10.1080/10168730300080028
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Handle: RePEc:taf:intecj:v:17:y:2003:i:4:p:85-105
Template-Type: ReDIF-Article 1.0
Author-Name: Jeong-Yoo Kim
Author-X-Name-First: Jeong-Yoo
Author-X-Name-Last: Kim
Title: Entry Deterrence and Entry Inducement in an Industry with Complementary Products
Abstract:
This paper discusses the possibility of signal jamming between multiple
informed incumbents with conflicting interests and examines the
implication of the possibility in the limit pricing literature. I find
fully separating equilibria where the incumbent competing against the
entrant does not use limit pricing in an optimal response to
“inductive pricing” by another incumbent desiring entry
i.e., charging a lower price than the static equilibrium price to induce
entry. Thus, contrary to Milgrom and Roborts, the consequences of
asymmetric information for welfare are ambiguous even in fully separating
equilibria. [L11]
Journal: International Economic Journal
Pages: 107-123
Issue: 4
Volume: 17
Year: 2003
X-DOI: 10.1080/10168730300080029
File-URL: http://www.tandfonline.com/doi/abs/10.1080/10168730300080029
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Handle: RePEc:taf:intecj:v:17:y:2003:i:4:p:107-123
Template-Type: ReDIF-Article 1.0
Author-Name: JoaoRicardo Faria
Author-X-Name-First: JoaoRicardo
Author-X-Name-Last: Faria
Author-Name: Francisco Galrao Caneiro
Author-X-Name-First: Francisco Galrao
Author-X-Name-Last: Caneiro
Title: Devalution, Output and Wages
Abstract:
This paper analyses the relationship between the real exchange rate, real
wages and aggregate output. We present a model in which changes in
aggregate output and in the real exchange rate precede changes in real
wages, and where output is expected to positively affect real wages while
changes in the real exchange rate are expected to negatively affect real
wages. The empirical analysis is carried out for the case of Brazil, a
country which has recently undergone an exchange-rate-based stabilization
plan and where the impact of exchange rate anchoring on the real sector
seems to be relevant. Using monthly data for the period 1985 to 2001,
Granger causality tests and Johansen's Maximum likelihood estimates
confirmed the assumptions of our model by showing that real wages are
positively affected by output and negatively impacted by the real exchange
rate in the long run. [F31, F41, J39]
Journal: International Economic Journal
Pages: 15-27
Issue: 4
Volume: 17
Year: 2003
X-DOI: 10.1080/751248069
File-URL: http://www.tandfonline.com/doi/abs/10.1080/751248069
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Handle: RePEc:taf:intecj:v:17:y:2003:i:4:p:15-27
Template-Type: ReDIF-Article 1.0
Author-Name: Debashis Pal
Author-X-Name-First: Debashis
Author-X-Name-Last: Pal
Author-Name: Mark White
Author-X-Name-First: Mark
Author-X-Name-Last: White
Title: Intra-Industry Trade And Strategic Trade Police In The Presence of Public Firms
Abstract:
The literature on intra-industry trade and strategic trade policy has
always considered only profit-maximizing private firms being active in
international trade. This paper incorporates state-owned public firms in
the context of intra-industry trade. The existence of welfare-maximizing
public firms significantly affects intra-industry trade and strategic
trade policy. Compared to when both firms are private, the existence of
public firms lowers optimal tariffs and subsidies, but also lowers the
total volume of trade between the two countries. The lower volume of
trade, however, does not translate into lower levels of welfare for the
trading countries. [F12, F13, D43, L32]
Journal: International Economic Journal
Pages: 29-41
Issue: 4
Volume: 17
Year: 2003
X-DOI: 10.1080/751248070
File-URL: http://www.tandfonline.com/doi/abs/10.1080/751248070
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Handle: RePEc:taf:intecj:v:17:y:2003:i:4:p:29-41
Template-Type: ReDIF-Article 1.0
Author-Name: Nejib Hachicha
Author-X-Name-First: Nejib
Author-X-Name-Last: Hachicha
Title: Capital Inflows-National Saving Dynamics in Tunisia: Evidence from Cointegration, Weak Exogeneity and Simultaneous Error Correction Modelling
Abstract:
The negative relationship between capital inflows and savings in less
developed countries is an accepted fact in the existing literature.
However, this result is based essentially on standard econometrics which
ignores the nonstationarity of these two variables. This study
investigates the 'direct' and 'indirect' effect of capital inflows on
savings in Tunisia using Johansen's multivariate cointegration technique,
weak exogeneity test and simultaneous error correction modelling. In the
short and long run, the econometric estimates show that capital inflows
have a negative effect on domestic savings, which invalidates the
Chenery-Strout thesis. Nevertheless, the direction of causality between
the aggregates being dealt with still remains a subject of debate. Relying
on time-series data of the Tunisian economy, Granger's causality test
shows a causal relationship in the long term running from domestic savings
to capital inflows. In the short term, however, this paper reveals a
two-way causation. [E20, F35, C32, C51]
Journal: International Economic Journal
Pages: 43-60
Issue: 4
Volume: 17
Year: 2003
X-DOI: 10.1080/751248071
File-URL: http://www.tandfonline.com/doi/abs/10.1080/751248071
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Handle: RePEc:taf:intecj:v:17:y:2003:i:4:p:43-60
Template-Type: ReDIF-Article 1.0
Author-Name: Warwick McKibbin
Author-X-Name-First: Warwick
Author-X-Name-Last: McKibbin
Author-Name: Jong-Wha Lee
Author-X-Name-First: Jong-Wha
Author-X-Name-Last: Lee
Author-Name: Inkyo Cheong
Author-X-Name-First: Inkyo
Author-X-Name-Last: Cheong
Title: A dynamic analysis of the Korea-Japan free trade area: simulations with the G-cubed Asia-Pacific model
Abstract:
This paper explores the effects of the proposed free trade agreement
between Japan and Korea. Our experiments are based on a new dynamic
simulation model, called the Asia-Pacific G-cubed Model, which
incorporates the rational expectations and intertemporal optimizing
behaviour of agents. The simulations show that both Korea and Japan
benefit from the bilateral FTA although other countries lose. The output
gains from the FTA are estimated to be larger when trade liberalization is
undertaken by a tariff reduction that is more gradually phased-in than
rapid. JEL Classification: F15
Journal: International Economic Journal
Pages: 3-32
Issue: 1
Volume: 18
Year: 2004
Keywords: Japan, Korea, FTA, dynamic,
X-DOI: 10.1080/1351161042000180610
File-URL: http://www.tandfonline.com/doi/abs/10.1080/1351161042000180610
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Handle: RePEc:taf:intecj:v:18:y:2004:i:1:p:3-32
Template-Type: ReDIF-Article 1.0
Author-Name: Jens Suedekum
Author-X-Name-First: Jens
Author-X-Name-Last: Suedekum
Title: Selective migration, union wage setting and unemployment disparities in West Germany
Abstract:
There are wide and persistent disparities between regional unemployment
rates in West Germany. Furthermore, regions with high unemployment tend to
have relatively low effective wages and vice versa. Internal migration is
driven by these spatial disparities. However, mobility will not work as an
adjustment mechanism, but rather perpetuate regional imbalances if there
is a skill bias within the group of internal migrants. JEL Classification:
J6, R11
Journal: International Economic Journal
Pages: 33-48
Issue: 1
Volume: 18
Year: 2004
Keywords: Regional unemployment, internal migration, collective bargaining,
X-DOI: 10.1080/1351161042000180629
File-URL: http://www.tandfonline.com/doi/abs/10.1080/1351161042000180629
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Handle: RePEc:taf:intecj:v:18:y:2004:i:1:p:33-48
Template-Type: ReDIF-Article 1.0
Author-Name: Felix Rioja
Author-X-Name-First: Felix
Author-X-Name-Last: Rioja
Title: Infrastructure and sectoral output along the road to development
Abstract:
Public infrastructure is one of the foundations for economic growth.
Empirical research has found that public infrastructure can have different
effects in different sectors of the economy. The theoretical literature,
however, has concentrated in one-sector growth models. This paper develops
a three-sector model (agriculture, manufacturing and services) to study
the effects of infrastructure. The model is calibrated and solved
numerically using parameters from seven Latin American countries. Results
show that the largest gains would have been obtained at an early stage of
development in the decade of the 1960s. The seven Latin American countries
would have also benefited from additional public investment in the 1990s,
especially the service sector. This result also has implications for the
early 2000s, as infrastructure expenditures have not increased from the
1990s levels. JEL Classification: O4, H5
Journal: International Economic Journal
Pages: 49-64
Issue: 1
Volume: 18
Year: 2004
Keywords: Public infrastructure, multi-sector model, Latin America,
X-DOI: 10.1080/1351161042000180638
File-URL: http://www.tandfonline.com/doi/abs/10.1080/1351161042000180638
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Handle: RePEc:taf:intecj:v:18:y:2004:i:1:p:49-64
Template-Type: ReDIF-Article 1.0
Author-Name: Nicholas Odhiambo
Author-X-Name-First: Nicholas
Author-X-Name-Last: Odhiambo
Title: Money and physical capital are complementary in kenya
Abstract:
In this paper, two models have been used to test the relevance of
McKinnon's complementarity hypothesis in Kenya. In the first model, the
demand for money has been included in the savings function and,
simultaneously, the savings rate has been included in the real money
balances function. In the second model, the investment variable has been
included in the money demand function. Contrary to the results obtained
from some previous studies, the paper finds strong support for McKinnon's
complementarity hypothesis in both models. This applies irrespective of
whether the models are estimated in a static long-run formulation
(cointegration model) or in the dynamic formulation (error correction
model). The paper therefore concludes that money and physical capital are
complementary in Kenya.
Journal: International Economic Journal
Pages: 65-78
Issue: 1
Volume: 18
Year: 2004
Keywords: JEL Classification: E2, H5, Kenya, money, physical capital, Johanssen-Juselius Coitegration Model,
X-DOI: 10.1080/1351161042000180647
File-URL: http://www.tandfonline.com/doi/abs/10.1080/1351161042000180647
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Handle: RePEc:taf:intecj:v:18:y:2004:i:1:p:65-78
Template-Type: ReDIF-Article 1.0
Author-Name: Chulhee Lee
Author-X-Name-First: Chulhee
Author-X-Name-Last: Lee
Title: Intra-household transfers and old-age security in America, 1890-1950
Abstract:
This paper explores the economic status of the elderly in late nineteenth
and early twentieth century America. It has been widely believed that
reduced earnings of ageing workers in these periods were fully
supplemented by increased earnings of children. The patterns of individual
consumption expenditures, however, indicate that children's supports were
no longer an important means of old-age security after the end of the
nineteenth century. Older males who were out of the labour force were much
poorer than active workers of a similar age. The retired were not as much
protected by family support as active workers. This result indicates that
the previous studies based mainly on active workers overstate the extent
of economic progress of the entire elderly population in the industrial
era. This study tends to support the conventional belief that the rise of
the welfare state was a response to the emerging social problems in the
era of industrialization such as unemployment, poverty, and dependence of
the elderly.
Journal: International Economic Journal
Pages: 79-102
Issue: 1
Volume: 18
Year: 2004
Keywords: JEL Classification: J14, Ageing, expenditure, family strategy, retirement, income,
X-DOI: 10.1080/1351161042000180656
File-URL: http://www.tandfonline.com/doi/abs/10.1080/1351161042000180656
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Handle: RePEc:taf:intecj:v:18:y:2004:i:1:p:79-102
Template-Type: ReDIF-Article 1.0
Author-Name: Imad Moosa
Author-X-Name-First: Imad
Author-X-Name-Last: Moosa
Author-Name: Jae Kim
Author-X-Name-First: Jae
Author-X-Name-Last: Kim
Title: Direct and indirect forecasting of the money multiplier and velocity of circulation in the United Kingdom
Abstract:
This paper compares the direct and indirect methods of predicting the
money multiplier and velocity of circulation in the UK economy. Forecasts
are generated using the autoregressive (AR) model and Harvey's structural
time series model. In addition to point forecasts, prediction intervals
(calculated by using the recently proposed bootstrap-after-bootstrap) are
used for comparing forecasting accuracy. The results turn out to be mixed
but the overall evidence seems to be in favour of the direct method. It is
suggested that this may be due to the pooling of time series (as implied
by the definition), which reduces the noise associated with individual
time series.
Journal: International Economic Journal
Pages: 103-118
Issue: 1
Volume: 18
Year: 2004
Keywords: JEL Classification: E5, Autoregressive model, bootstrap, Harvey's Structural Time Series Model,
X-DOI: 10.1080/1351161042000180665
File-URL: http://www.tandfonline.com/doi/abs/10.1080/1351161042000180665
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Handle: RePEc:taf:intecj:v:18:y:2004:i:1:p:103-118
Template-Type: ReDIF-Article 1.0
Author-Name: Hong Zhang
Author-X-Name-First: Hong
Author-X-Name-Last: Zhang
Title: The impact of China's accession to the WTO on its economy: an imperfect competitive CGE analysis
Abstract:
To examine the impact of trade barrier reductions on the Chinese economy
following its WTO accession, a single-country, static CGE (Computable
General Equilibrium) model is constructed, which incorporates certain
elements of imperfect competition in China's current economic situation.
China's real GDP and total employment are expected to rise by small
degrees, while the general price level may decline by a few percentage
points. Total imports would rise by more than 10%, whereas total exports
would increase far less. China's trade surplus is, therefore, likely to
shrink substantially and its dependence upon foreign trade is likely to
rise by a few percentage points. A sensitivity analysis confirms the
robustness of the simulation results. A comparison with other CGE studies
on China's trade liberalization also shows the plausibility of this
study's predictions. JEL Classification: F17, C68
Journal: International Economic Journal
Pages: 119-137
Issue: 1
Volume: 18
Year: 2004
Keywords: China, trade liberalization, CGE model, imperfect competition,
X-DOI: 10.1080/10168730410001684596
File-URL: http://www.tandfonline.com/doi/abs/10.1080/10168730410001684596
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Handle: RePEc:taf:intecj:v:18:y:2004:i:1:p:119-137
Template-Type: ReDIF-Article 1.0
Author-Name: Rodney Paul
Author-X-Name-First: Rodney
Author-X-Name-Last: Paul
Title: A time-series approach to the determination of savings rates
Abstract:
Time series analysis is used to study the savings rate and its
determinants. The real effective exchange rate is introduced as a new
independent variable in the savings function. Borrowing constraints, the
current account balance, real rate of interest, macroeconomic stability,
and age dependency are shown to be significant determinants of the savings
rate. In addition, the real effective exchange rate is found to be
significant across countries. Violations of Purchasing Power Parity are
shown to explain some of the differences in savings rates between Canada,
Japan, the United Kingdom and the United States.
Journal: International Economic Journal
Pages: 147-159
Issue: 2
Volume: 18
Year: 2004
Keywords: Savings, purchasing power parity, time-series,
X-DOI: 10.1080/1016873042000228303
File-URL: http://www.tandfonline.com/doi/abs/10.1080/1016873042000228303
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Handle: RePEc:taf:intecj:v:18:y:2004:i:2:p:147-159
Template-Type: ReDIF-Article 1.0
Author-Name: Taeyoung Doh
Author-X-Name-First: Taeyoung
Author-X-Name-Last: Doh
Author-Name: Keunkwan Ryu
Author-X-Name-First: Keunkwan
Author-X-Name-Last: Ryu
Title: Analysis of loan guarantees among the Korean Chaebol affiliates
Abstract:
This paper analyses corporate loan guarantees among the Korean chaebol
affiliates. Loan guarantees are found to be efficiency-neutral under a set
of ideal conditions characterized by perfect and symmetric information, no
agency problem, and no governmental interference in private financial
contracts. In reality though, corporate loan guarantees have negative as
well as positive effects. The negative effects of loan guarantees arise
from the agency problem between the controlling minority shareholders and
outside investors. Government's implicit support to financial institutions
worsens the problem. Without such distortions, a loan guarantee by the
guarantor firm may signal the quality of the investment project of the
borrowing firm, if the guarantor firm has more information than the
lending bank with regards to the type of the borrowing firm's investment
project.
Journal: International Economic Journal
Pages: 161-178
Issue: 2
Volume: 18
Year: 2004
Keywords: Agency problem, chaebol, controlling minority shareholder, information asymmetry, loan guarantee,
X-DOI: 10.1080/1016873042000228312
File-URL: http://www.tandfonline.com/doi/abs/10.1080/1016873042000228312
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Handle: RePEc:taf:intecj:v:18:y:2004:i:2:p:161-178
Template-Type: ReDIF-Article 1.0
Author-Name: Aidan Hollis
Author-X-Name-First: Aidan
Author-X-Name-Last: Hollis
Author-Name: Lasheng Yuan
Author-X-Name-First: Lasheng
Author-X-Name-Last: Yuan
Title: Competition policy in open economies
Abstract:
What is the effect of national antitrust policies in a world with
international trade? Traditionally, economic analysis of mergers has
assumed a closed economy, which—as we show in this paper—may
lead to errant policy in an open economy. We use a very simple model to
highlight some key issues in optimal competition policy when trade is
important, and compare the nationally optimal number of firms with the
globally optimal number of firms in a free trade environment. We show that
countries will choose a competition policy that is 'too strict' in the
sense that they will prefer to have more firms than is globally optimal,
implying that convergence in competition policy should generally lead to a
reduction in the number of firms. We also examine the strategic
interaction between domestic and foreign competition policy when there is
free trade and show that small and large countries will react very
differently to changes in the other's policies.
Journal: International Economic Journal
Pages: 179-193
Issue: 2
Volume: 18
Year: 2004
Keywords: Competition policy, trade,
X-DOI: 10.1080/1016873042000228321
File-URL: http://www.tandfonline.com/doi/abs/10.1080/1016873042000228321
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Handle: RePEc:taf:intecj:v:18:y:2004:i:2:p:179-193
Template-Type: ReDIF-Article 1.0
Author-Name: Chung-Hua Shen
Author-X-Name-First: Chung-Hua
Author-X-Name-Last: Shen
Author-Name: Shyh-Wei Chen
Author-X-Name-First: Shyh-Wei
Author-X-Name-Last: Chen
Title: Long swing in appreciation and short swing in depreciation and does the market not know it?—the case of Taiwan
Abstract:
This paper finds an asymmetric swing in Taiwan's exchange rate. In
contrast to the developed countries, whose exchange rates exhibit long
swings in both appreciation and depreciation regimes, the long swing only
exists in an appreciation regime for Taiwan. A short swing, however, is
found during a depreciation regime in Taiwan. These results may reflect to
some extent the central bank's preference, which is to have a let-it-go
policy during depreciation and a slowdown policy in appreciation. In
addition, it may simply reflect the Japanese yen's influences.
Journal: International Economic Journal
Pages: 195-213
Issue: 2
Volume: 18
Year: 2004
Keywords: Long swing, uncovered interest parity, central bank preference,
X-DOI: 10.1080/1016873042000228330
File-URL: http://www.tandfonline.com/doi/abs/10.1080/1016873042000228330
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Handle: RePEc:taf:intecj:v:18:y:2004:i:2:p:195-213
Template-Type: ReDIF-Article 1.0
Author-Name: Chongmin Kim
Author-X-Name-First: Chongmin
Author-X-Name-Last: Kim
Title: Corporate financial policy with pension accounts: an extension of the Modigliani-Miller theorem
Abstract:
We build a model of an incomplete market economy with a firm, which we
apply to the study of corporate financial policies with pension accounts.
We show that prior to ERISA, even though the sponsoring firm's integral
financial policy is neutral for its market value, it may affect the
economy by creating a pension call option. On the other hand, in the
post-ERISA periods, the firm's financial policy is not only neutral for
its value but also has no real effect on the economy. Thus, the
Modigliani-Miller theorem is valid in this sense.
Journal: International Economic Journal
Pages: 215-236
Issue: 2
Volume: 18
Year: 2004
Keywords: Integral financial policy, ERISA, Modigliani-Miller theorem,
X-DOI: 10.1080/1016873042000228349
File-URL: http://www.tandfonline.com/doi/abs/10.1080/1016873042000228349
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Handle: RePEc:taf:intecj:v:18:y:2004:i:2:p:215-236
Template-Type: ReDIF-Article 1.0
Author-Name: Harald Battermann
Author-X-Name-First: Harald
Author-X-Name-Last: Battermann
Author-Name: Udo Broll
Author-X-Name-First: Udo
Author-X-Name-Last: Broll
Title: Price uncertainty, future markets and correlation
Abstract:
This paper examines the optimal trade and hedging decisions of a
competitive exporting firm which faces concurrently hedgeable exchange
rate risk and non-hedgeable inflation risk. The macroeconomic interaction
between exchange rate and domestic inflation rate risk is described by a
state variable. The (strong) correlation is pivotal in determining the
optimal risk management. It is shown how optimal hedging strategies are
affected by state-dependent preferences of the firm. The optimal hedge
policy is to minimize the variation of marginal utility of final wealth
across states of nature instead of minimizing the variance of final
wealth.
Journal: International Economic Journal
Pages: 237-243
Issue: 2
Volume: 18
Year: 2004
Keywords: Exchange rate risk, inflation risk, state-dependent preferences, hedging, strong correlation,
X-DOI: 10.1080/1016873042000228358
File-URL: http://www.tandfonline.com/doi/abs/10.1080/1016873042000228358
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Handle: RePEc:taf:intecj:v:18:y:2004:i:2:p:237-243
Template-Type: ReDIF-Article 1.0
Author-Name: Song-Zan Chiou Wei
Author-X-Name-First: Song-Zan Chiou
Author-X-Name-Last: Wei
Author-Name: Zhen Zhu
Author-X-Name-First: Zhen
Author-X-Name-Last: Zhu
Title: Equality of interest rates revisited: the multi-country evidence
Abstract:
One influential aspect of international integration of financial markets
is the possibility of reducing divergences between domestic interest rates
and foreign interest rates or increasing the degree to which yields in
different financial markets move together over time. In this study, we
investigate the convergence of the real interest rates using the Kalman
filter. Applying the modified Hall et al. (1997) approach, we model the
risk premium and convergence of real interest rates using the time-varying
parameter estimation techniques. We present evidence of risk premium and
convergence for two blocks of countries—The Asian-Pacific countries
including the US, Japan, Taiwan and South Korea and the US-European group
including France, the UK, Germany and the US.
Journal: International Economic Journal
Pages: 245-257
Issue: 2
Volume: 18
Year: 2004
Keywords: Financial market integration, real interest rates, Kalman filter,
X-DOI: 10.1080/1016873042000228367
File-URL: http://www.tandfonline.com/doi/abs/10.1080/1016873042000228367
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Handle: RePEc:taf:intecj:v:18:y:2004:i:2:p:245-257
Template-Type: ReDIF-Article 1.0
Author-Name: Augustine Arize
Author-X-Name-First: Augustine
Author-X-Name-Last: Arize
Author-Name: John Malindretos
Author-X-Name-First: John
Author-X-Name-Last: Malindretos
Author-Name: Elias Grivoyannis
Author-X-Name-First: Elias
Author-X-Name-Last: Grivoyannis
Title: Foreign exchange reserves and import demand in a developing economy: the case of Pakistan
Abstract:
Conventional specifications of import demand in LDCs have commonly been
plagued by implausible and unstable parameter estimates. This paper shows
the importance of imposing long-run income homogeneity and of including
foreign exchange reserves when estimating import demand function for an
LDC. Using several cointegration techniques, it is shown that there is one
linear relationship among real imports, real income, relative import
prices and real foreign exchange reserves. In addition, by employing
stability tests for cointegrated systems by Hansen (1992a), the paper
shows that only when foreign exchange reserves and long-run unit-income
homogeneity are accounted for does a constant parameter, long-run
equilibrium relation emerge for Pakistan. Also, the ensuing short-run
dynamic model is constant and data-coherent. Finally, the study provides
information on the speed of adjustment to equilibrium and the median and
mean time lags of adjustments of real imports to changes in their
determinants. The results indicate a quick response of real imports to
changes in their determinants.
Journal: International Economic Journal
Pages: 259-274
Issue: 2
Volume: 18
Year: 2004
Keywords: Foreign exchange-reserves, import demand, cointegration,
X-DOI: 10.1080/1016873042000228376
File-URL: http://www.tandfonline.com/doi/abs/10.1080/1016873042000228376
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Handle: RePEc:taf:intecj:v:18:y:2004:i:2:p:259-274
Template-Type: ReDIF-Article 1.0
Author-Name: Shekar Bose
Author-X-Name-First: Shekar
Author-X-Name-Last: Bose
Title: Price volatility of south-east fishery's quota species: an empirical analysis
Abstract:
This study investigates the autoregressive conditional heteroscedasticity
(ARCH) and generalized-ARCH (GARCH) effects in the price series of
Australian South-East Fishery's quota species. It is found that in all
cases significant ARCH and/or GARCH effects are present. To search for the
origins of these effects a weakly exogenous variable (trading volume) is
introduced to the conditional variance equation of the ARCH and GARCH
models, provided that such effects are observed in the first stage of
investigation. It is found that in 14 cases the estimated coefficients of
the trading volume are negative. In all cases, the 'trading volume'
variable does not contribute to the removal of the ARCH and/or GARCH
effects. Finally, the policy implications of the findings are discussed.
Journal: International Economic Journal
Pages: 283-297
Issue: 3
Volume: 18
Year: 2001
Keywords: JEL Classification: C3, D4, D8, Q0, Price volatility, Sydney fish market, South-east fishery, Australia,
X-DOI: 10.1080/1016873042000269966
File-URL: http://www.tandfonline.com/doi/abs/10.1080/1016873042000269966
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Handle: RePEc:taf:intecj:v:18:y:2001:i:3:p:283-297
Template-Type: ReDIF-Article 1.0
Author-Name: Begona Eguia
Author-X-Name-First: Begona
Author-X-Name-Last: Eguia
Author-Name: Cruz Echevarria
Author-X-Name-First: Cruz
Author-X-Name-Last: Echevarria
Title: Population age structure and private consumption in Spain
Abstract:
In this paper we study the effect of population age distribution upon
private consumption expenditure in Spain from 1964 to 1997 using aggregate
data. We obtain four main results. First, changes in the population
pyramid have substantial effects upon the behaviour of private
consumption. Second, the pattern of the coefficients of the demographic
variables is not consistent with the simplest version of the life cycle
hypothesis. Third, we estimate the impact of the demographic transition
upon consumption and find positive values associated with episodes in
which the shares of groups of individuals with expenditure levels higher
(lower) than the mean increased (decreased). Fourth, the results are
robust to alternative specifications for the population age distribution.
Journal: International Economic Journal
Pages: 299-319
Issue: 3
Volume: 18
Year: 2001
Keywords: JEL Classification: E20, J19, Aggregate data, demographic heterogeneity, age, consumption,
X-DOI: 10.1080/1016873042000269975
File-URL: http://www.tandfonline.com/doi/abs/10.1080/1016873042000269975
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Handle: RePEc:taf:intecj:v:18:y:2001:i:3:p:299-319
Template-Type: ReDIF-Article 1.0
Author-Name: Fuhmei Wang
Author-X-Name-First: Fuhmei
Author-X-Name-Last: Wang
Title: Insulation properties of separating exchange markets
Abstract:
Insulation properties play an important role for countries in favour of
separating rates for separating transactions. Such properties insulate the
open economy from monetary and real shocks, of domestic and foreign
origins. Through theoretical and numerical analyses, we find that in a
unified flexible exchange rate system, portfolio holders' expectations
drive the price adjustment, leading to expectations of exchange rate
changes. In separating exchange markets, the financial rate reflects the
instability of portfolio holders' expectations and capital flows; however,
the real exchange rate and hence the macroeconomy is stable. Uncertainty
of shocks ceases to affect the real sector of the economy.
Journal: International Economic Journal
Pages: 321-335
Issue: 3
Volume: 18
Year: 2001
Keywords: JEL Classification: F310, F410, Insulation properties, separating exchange markets,
X-DOI: 10.1080/1016873042000269984
File-URL: http://www.tandfonline.com/doi/abs/10.1080/1016873042000269984
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Handle: RePEc:taf:intecj:v:18:y:2001:i:3:p:321-335
Template-Type: ReDIF-Article 1.0
Author-Name: Lai Yew Wah
Author-X-Name-First: Lai Yew
Author-X-Name-Last: Wah
Title: The role of domestic demand in the economic growth of Malaysia: a cointegration analysis
Abstract:
For the past four decades (1961-2000), the Malaysian economy grew at an
impressive average rate of 6.8% per annum. The rapid growth has been
attributed, in part, to the tremendous success in the export-oriented
industrialization policy. Several empirical studies on export-led growth
for Malaysia have, however, led to inconclusive and mixed results. This
may be due to the exclusion of domestic demand in the bivariate or
multivariate models used in the studies. This study re-examines the role
of domestic demand in economic growth in Malaysia. Using a three-variable
cointegration analysis, the study shows that there exist short run
bilateral causalities among the three variables, which implies that both
the export-led growth and domestic demand-generated growth hypotheses are
at least valid in the short run. On the other hand, the results are not
supportive of the export-led growth hypothesis in the long run. Instead,
the highly significant positive impact of domestic expenditure on economic
growth implies that use of domestic demand as the catalyst for growth is
appropriate.
Journal: International Economic Journal
Pages: 337-352
Issue: 3
Volume: 18
Year: 2001
Keywords: JEL Classification: F43, Domestic demand, economic growth, cointegration,
X-DOI: 10.1080/1016873042000269993
File-URL: http://www.tandfonline.com/doi/abs/10.1080/1016873042000269993
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Handle: RePEc:taf:intecj:v:18:y:2001:i:3:p:337-352
Template-Type: ReDIF-Article 1.0
Author-Name: In Kwon Lee
Author-X-Name-First: In Kwon
Author-X-Name-Last: Lee
Title: Determinants of cyclical properties of the price-cost margin in US manufacturing industries
Abstract:
Supergame theoretical predictions tell that oligopoly pricing may be
procyclical or counter-cyclical. Industry by industry analysis shows that
the speed of industry growth and the size of fixed cost are crucial in
distinguishing characteristically counter-cyclical industries from
procyclical industries. Counter-cyclical industries are characterized by
high growth of demand and low fixed costs. Procyclical industries are
characterized by low growth of demand and high fixed costs.
Journal: International Economic Journal
Pages: 353-364
Issue: 3
Volume: 18
Year: 2001
Keywords: JEL Classification: C72, L11, L60, Procyclical industries, counter-cyclical industries, price-cost margin, growth rate of demand, fixed cost,
X-DOI: 10.1080/1016873042000270009
File-URL: http://www.tandfonline.com/doi/abs/10.1080/1016873042000270009
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Handle: RePEc:taf:intecj:v:18:y:2001:i:3:p:353-364
Template-Type: ReDIF-Article 1.0
Author-Name: Tarun Kabiraj
Author-X-Name-First: Tarun
Author-X-Name-Last: Kabiraj
Author-Name: Ching Chyi Lee
Author-X-Name-First: Ching Chyi
Author-X-Name-Last: Lee
Title: Synergy, learning and the changing industrial structure
Abstract:
In a set-up of two local firms and one foreign firm, we construct a model
to capture the dynamics of local industrial structure induced by formation
and breakdown of cross-border joint ventures (JVs). There is a synergic
gain to the JV, and the partners learn from each other. Firms play a
repeated game. We characterize the resulting industrial configurations
under different scenarios as defined by the extent of cost saving. In
particular, we show that when cost saving is moderate, an alliance formed
between two firms in the first period, breaks up and a new alliance is
formed in the second period, but again it breaks up; thereafter the market
becomes an oligopoly of all three firms.
Journal: International Economic Journal
Pages: 365-387
Issue: 3
Volume: 18
Year: 2001
Keywords: JEL Classification: F23, L13, O33, Synergy, learning, joint venture, subsidiary, industry structure,
X-DOI: 10.1080/1016873042000270018
File-URL: http://www.tandfonline.com/doi/abs/10.1080/1016873042000270018
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Handle: RePEc:taf:intecj:v:18:y:2001:i:3:p:365-387
Template-Type: ReDIF-Article 1.0
Author-Name: Ahmad Zubaidi Baharumshah
Author-X-Name-First: Ahmad Zubaidi
Author-X-Name-Last: Baharumshah
Title: Stock prices and long-run demand for money: evidence from Malaysia
Abstract:
This paper investigates the money demand function for Malaysia in the
1971-1996 period using the multivariate cointegration and error correction
model methodology. The results suggest that a stable long-run relationship
exist between real M2, the interest rate differential, income and stock
prices. Stock prices have a significant negative substitute effect on
long-run as well as short-run broad-money demand (M2) and its omission can
lead to serious misspecification in the money demand function. The
analysis from the vector error correction model (VECM) and the Toda &
Yamamoto (1995) causality tests find that money is endogenous and that
there is at least a unidirectional relationship between stock prices and
real M2. Stock prices Granger cause real M2 indirectly through income
between interest rates and stock prices and stock prices and money stock.
This paper comes to the conclusion that due to the endogeneity of money,
M2 cannot be completely controlled by Malaysia's central bank. Therefore,
in formulating future monetary policy, the response of money demand to
stock prices should be considered.
Journal: International Economic Journal
Pages: 389-407
Issue: 3
Volume: 18
Year: 2001
Keywords: JEL Classification: E41, E44, Money demand, cointegration, exogeneity, causality,
X-DOI: 10.1080/1016873042000270027
File-URL: http://www.tandfonline.com/doi/abs/10.1080/1016873042000270027
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Handle: RePEc:taf:intecj:v:18:y:2001:i:3:p:389-407
Template-Type: ReDIF-Article 1.0
Author-Name: Hyung Bae
Author-X-Name-First: Hyung
Author-X-Name-Last: Bae
Title: Limited liability effect on product safety
Abstract:
This paper analyses how limited liability and capital size affect a
firm's investment for product safety. Firms become bankrupt when their
products cause accidents and they cannot compensate for the damages
incurred. Relatively small firms obtain greater expected profit because
they do not need to pay full damage when their products cause accidents
and they become bankrupt. Thus, smaller firms may have greater incentives
than larger firms to participate in risky projects. But relatively small
firms may invest more for product safety because increasing their
investments is not costly in case of bankruptcy.
Journal: International Economic Journal
Pages: 409-417
Issue: 3
Volume: 18
Year: 2001
Keywords: JEL Classification: D21, Limited liability, product safety,
X-DOI: 10.1080/1016873042000275752
File-URL: http://www.tandfonline.com/doi/abs/10.1080/1016873042000275752
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Handle: RePEc:taf:intecj:v:18:y:2001:i:3:p:409-417
Template-Type: ReDIF-Article 1.0
Author-Name: David McKenzie
Author-X-Name-First: David
Author-X-Name-Last: McKenzie
Title: An Econometric analysis of IBRD creditworthiness
Abstract:
This paper finds that one can econometrically ascertain the determinants
of default to the International Bank for Reconstruction and Development
(IBRD) through panel logit analysis. Creditworthiness is found to be
determined by political and external factors in addition to economic
variables. Default to the IBRD is seen to fall into a graduated hierarchy
of default, whereby default occurs first to Paris Club and Commercial Bank
creditors, with subsequent default to the IBRD being triggered by a high
proportion of IBRD and short-term debt in the portfolio and other economic
and political factors.
Journal: International Economic Journal
Pages: 427-448
Issue: 4
Volume: 18
Year: 2001
Keywords: Sovereign default, creditworthiness, international lenders, JEL Classification: F34, G15, G29,
X-DOI: 10.1080/1016873042000299927
File-URL: http://www.tandfonline.com/doi/abs/10.1080/1016873042000299927
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Handle: RePEc:taf:intecj:v:18:y:2001:i:4:p:427-448
Template-Type: ReDIF-Article 1.0
Author-Name: Gwanghoon Lee
Author-X-Name-First: Gwanghoon
Author-X-Name-Last: Lee
Title: The quality of human capital, educational reform and economic growth
Abstract:
Using a general equilibrium growth model with a costly schooling process,
this paper analyses the effect on economic growth of educational reform
that allocates more resources to the schooling sector to raise the quality
of human capital. It shows that the positive effect of improved quality on
the economic growth could be offset by the reverse effect of reduced human
capital formation that arises from the distortion of resource
reallocation. An appropriate tax-subsidy scheme is shown to remove this
reverse effect of educational reform.
Journal: International Economic Journal
Pages: 449-465
Issue: 4
Volume: 18
Year: 2001
Keywords: Human capital, resource allocation, economic development, JEL Classification: O12, O41, I28,
X-DOI: 10.1080/1016873042000299936
File-URL: http://www.tandfonline.com/doi/abs/10.1080/1016873042000299936
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Handle: RePEc:taf:intecj:v:18:y:2001:i:4:p:449-465
Template-Type: ReDIF-Article 1.0
Author-Name: Salah Nusair
Author-X-Name-First: Salah
Author-X-Name-Last: Nusair
Title: Testing for PPP in developing countries using confirmatory analysis and different base countries: an application to Asian countries
Abstract:
Previous studies on PPP have tested either the null hypothesis of
non-stationary or the null of a stationary real exchange rate and used the
US as the base country and focused on industrialized countries. It has
been argued that testing either null is insufficient to confirm the
presence of PPP. It has also been noticed that the results are sensitive
to the choices of the base country; for instance, the US versus Germany.
In contrast to previous studies, this paper uses different unit root
tests, confirmatory analysis, and different base countries to test PPP for
a sample of developing countries in Asia during the current float.
Overall, the results do not seem to be sensitive to the choice of the base
country, and joint rejections are not present but joint non-rejections are
far more common. Using Perron's test, which allows for a one-time break in
the series, the results indicate evidence of stationarity for Indonesia,
Korea, Malaysia and Thailand when the US is the base country. When Japan
is the base country, evidence of stationarity is detected only for
Indonesia.
Journal: International Economic Journal
Pages: 467-489
Issue: 4
Volume: 18
Year: 2001
Keywords: PPP, the ADF test, the PP test, the ADF-GLS test, the KPSS test, structural break, JEL Classification: F31, F41, C12,
X-DOI: 10.1080/1016873042000299945
File-URL: http://www.tandfonline.com/doi/abs/10.1080/1016873042000299945
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Handle: RePEc:taf:intecj:v:18:y:2001:i:4:p:467-489
Template-Type: ReDIF-Article 1.0
Author-Name: Choong-Young Jung
Author-X-Name-First: Choong-Young
Author-X-Name-Last: Jung
Title: An incentive pricing with two types of qualities and users
Abstract:
This paper analyses quality discrimination when the monopolist provides
two types of qualities for two-types of users, for example, in the
software market. The users using software are confronted with two types of
quality in using the software: one is related to learning, while the other
is operation. In addition, the users are discriminated by the frequency of
utilization for software, for example, low-demand and high-demand users.
In this paper, the characteristics for bi-directional quality distortion
in both learning quality and operation quality are analysed. It is shown
that the distortion can occur both for low demanders and for high
demanders. Finally, from public policy, a subsidy mechanism is introduced.
Journal: International Economic Journal
Pages: 491-504
Issue: 4
Volume: 18
Year: 2001
Keywords: Quality distortion, operation quality, learning quality, subsidy, JEL Classification: D4, D5, D8, L1,
X-DOI: 10.1080/1016873042000299954
File-URL: http://www.tandfonline.com/doi/abs/10.1080/1016873042000299954
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Handle: RePEc:taf:intecj:v:18:y:2001:i:4:p:491-504
Template-Type: ReDIF-Article 1.0
Author-Name: Tapan Biswas
Author-X-Name-First: Tapan
Author-X-Name-Last: Biswas
Author-Name: Jolian McHardy
Author-X-Name-First: Jolian
Author-X-Name-Last: McHardy
Title: On the intensity and balance of intra-European migration
Abstract:
This paper seeks to examine changes in the balance of intra-European
migration during the years 1985-99. We construct two indices for measuring
intra-European migration between each member state and the rest of the
EU15. Non-parametric tests indicate that there is a close and increasing
relationship between real GDP per capita and the pattern of net migration
within Europe. Further, statistical tests suggest that, on the whole,
intra-European migration has actually become more balanced after the
implementation of the Schengen agreement in 1995. A Chow test also reveals
that 1995 is the break-year after which levels of intra-European migration
shifted upwards.
Journal: International Economic Journal
Pages: 505-520
Issue: 4
Volume: 18
Year: 2001
Keywords: Migration, Europe, Schengen Agreement, JEL Classification: F22, J61, O52,
X-DOI: 10.1080/1016873042000299963
File-URL: http://www.tandfonline.com/doi/abs/10.1080/1016873042000299963
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Handle: RePEc:taf:intecj:v:18:y:2001:i:4:p:505-520
Template-Type: ReDIF-Article 1.0
Author-Name: Yongseung Jung
Author-X-Name-First: Yongseung
Author-X-Name-Last: Jung
Title: Liquidity effects and habit formation in a sticky price model
Abstract:
This paper sets up a sticky price model with external habit formations.
It shows that the cross-correlation between output and interest rates as
well as prices match the data well when there is habit formation.
Consumption as well as output display a hump-shaped response to a positive
monetary shock when there is habit formation. The paper also shows that
the sticky price model with Abel's (1990, 1999) external habit formation
succeeds in generating liquidity effects.
Journal: International Economic Journal
Pages: 521-546
Issue: 4
Volume: 18
Year: 2001
Keywords: Habit formation, leading indicator, monetary policy, sticky price, JEL Classification: E31, E52,
X-DOI: 10.1080/1016873042000299972
File-URL: http://www.tandfonline.com/doi/abs/10.1080/1016873042000299972
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Handle: RePEc:taf:intecj:v:18:y:2001:i:4:p:521-546
Template-Type: ReDIF-Article 1.0
Author-Name: Nikolaos Dritsakis
Author-X-Name-First: Nikolaos
Author-X-Name-Last: Dritsakis
Author-Name: Antonios Adamopoulos
Author-X-Name-First: Antonios
Author-X-Name-Last: Adamopoulos
Title: Financial development and economic growth in Greece: an empirical investigation with Granger causality analysis
Abstract:
This paper empirically examines the causal relationship between the
degree of openness of the economy, financial development and economic
growth by using a multivariate autoregressive VAR model in Greece for the
examined period 1960:I-2000:IV. The results of cointegration analysis
suggest that there is one cointegrated vector among GDP, financial
development and the degree of openness of the economy. Granger causality
tests based on error correction models show that there is a causal
relationship between financial development and economic growth, but also
between the degree of openness of the economy and economic growth.
Journal: International Economic Journal
Pages: 547-559
Issue: 4
Volume: 18
Year: 2001
Keywords: Financial development, economic growth, openness, Granger causality,
X-DOI: 10.1080/1016873042000299981
File-URL: http://www.tandfonline.com/doi/abs/10.1080/1016873042000299981
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Handle: RePEc:taf:intecj:v:18:y:2001:i:4:p:547-559
Template-Type: ReDIF-Article 1.0
Author-Name: Jin Hwa Jung
Author-X-Name-First: Jin Hwa
Author-X-Name-Last: Jung
Author-Name: Kang-Shik Choi
Author-X-Name-First: Kang-Shik
Author-X-Name-Last: Choi
Title: Gender wage differentials and discrimination in Korea: comparison by knowledge intensity of industries
Abstract:
This study estimates the relative size of the non-productivity-related
gender wage gap across industries with differing knowledge intensities.
More specifically, a gender wage premium was estimated from a modified
Mincerian earnings equation, and an Oaxaca's discrimination coefficient
was computed. Empirical evidence indicates that gender wage differentials
tend to be less subject to potential discrimination in knowledge-based
industries than in other industries with lower knowledge intensity. The
estimated discrimination effect is least noticeable in top hierarchical
occupations such as professionals and technicians, while it is most
sizeable in production workers and sales/service workers, regardless of
industrial affiliation.
Journal: International Economic Journal
Pages: 561-579
Issue: 4
Volume: 18
Year: 2001
Keywords: Wage differentials, discrimination, knowledge intensity, Korea JEL Classification: J31, J71,
X-DOI: 10.1080/1016873042000299990
File-URL: http://www.tandfonline.com/doi/abs/10.1080/1016873042000299990
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Handle: RePEc:taf:intecj:v:18:y:2001:i:4:p:561-579
Template-Type: ReDIF-Article 1.0
Author-Name: Richard Beil
Author-X-Name-First: Richard
Author-X-Name-Last: Beil
Author-Name: George Ford
Author-X-Name-First: George
Author-X-Name-Last: Ford
Author-Name: John Jackson
Author-X-Name-First: John
Author-X-Name-Last: Jackson
Title: On the relationship between telecommunications investment and economic growth in the United States
Abstract:
Using a time series of 50 years, the relationships between investment by
telecommunications firms and Gross Domestic Product in the United States
are examined. Granger-Sims causality tests are conducted, with proper
allowance for both the non-stationarity of the data and lag length. These
tests indicate that investment by telecommunications firms is caused by,
but does not cause, economic activity, and the findings are robust across
lag lengths. The evidence suggests that policies aimed at stimulating the
US economy by accelerating investment by telecommunications firms may not
be successful.
Journal: International Economic Journal
Pages: 3-9
Issue: 1
Volume: 19
Year: 2005
Keywords: Telecommunications, growth, Granger causality,
X-DOI: 10.1080/1351161042000320399
File-URL: http://www.tandfonline.com/doi/abs/10.1080/1351161042000320399
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Handle: RePEc:taf:intecj:v:19:y:2005:i:1:p:3-9
Template-Type: ReDIF-Article 1.0
Author-Name: Yutaka Suzuki
Author-X-Name-First: Yutaka
Author-X-Name-Last: Suzuki
Title: Integration versus non-integration: specific investments and ex-post resource distribution
Abstract:
I adopt a non-cooperative game theoretic approach to an incomplete
contracting transaction model, a la Grossman & Hart (1986), Hart & Moore
(1990) and Bolton & Whinston (1993), consisting of one upstream firm and
two downstream firms. When the downstream firms need to make
relation-specific investments, they can increase their ex-post bargaining
position by vertically integrating ex-ante with the upstream firm with an
essential asset. By introducing an explicit mechanism, bidding, which the
firms can use to transfer the control right of the upstream asset, I
compare the regimes of vertical integration (ex-ante) with ex-post
renegotiation and non-integration, analyse equilibrium investment
incentives, and show that vertical integration will evolve under certain
conditions.
Journal: International Economic Journal
Pages: 11-35
Issue: 1
Volume: 19
Year: 2005
Keywords: Integration versus non-integration, asset ownership, specific investment, bidding, alternating-offer bargaining games with breakdown probability,
X-DOI: 10.1080/1351161042000320434
File-URL: http://www.tandfonline.com/doi/abs/10.1080/1351161042000320434
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Handle: RePEc:taf:intecj:v:19:y:2005:i:1:p:11-35
Template-Type: ReDIF-Article 1.0
Author-Name: Sunku Hahn
Author-X-Name-First: Sunku
Author-X-Name-Last: Hahn
Title: Pricing of a new product with consumer learning
Abstract:
Sometimes firms sell their products only for a limited time. This
phenomenon can be interpreted as the firms' strategy to increase their
profits by prohibiting consumers from learning their personal values of
the product as time passes. This explanation can also be used to explain
the firms' strategy to set low prices on their new products for only a
limited time.
Journal: International Economic Journal
Pages: 37-49
Issue: 1
Volume: 19
Year: 2005
Keywords: Deadline of purchase, consumer learning, increasing price,
X-DOI: 10.1080/1351161042000320362
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Handle: RePEc:taf:intecj:v:19:y:2005:i:1:p:37-49
Template-Type: ReDIF-Article 1.0
Author-Name: Inci Parlaktuna
Author-X-Name-First: Inci
Author-X-Name-Last: Parlaktuna
Title: Exchange market pressure in Turkey 1993-2004: an application of the girton-roper monetary model
Abstract:
In this paper, Lance Girton & Don Roper's (1977) monetary model of
Exchange Market Pressure (EMP) is applied to the Turkish economy in the
period of 1993-2004. The results provide strong evidence of negative
relation between domestic credit and exchange market pressure (EMP) and
indicate that the Central Bank of the Republic of Turkey (TCMB) absorbed
most of the exchange market pressure by adjusting the foreign reserves.
Journal: International Economic Journal
Pages: 51-62
Issue: 1
Volume: 19
Year: 2005
Keywords: Exchange market pressure, exchange market intervention, monetary approach to Balance of Payments (BOP) and to exchange rate determination,
X-DOI: 10.1080/1351161042000320371
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Handle: RePEc:taf:intecj:v:19:y:2005:i:1:p:51-62
Template-Type: ReDIF-Article 1.0
Author-Name: Ahmed Asseery
Author-X-Name-First: Ahmed
Author-X-Name-Last: Asseery
Title: Evidence of non-linearities in the bilateral real exchange rates of the British pound
Abstract:
Using the UK as the base country, this study investigates the nature of
the inherent non-stationarity of the major bilateral real exchange rates
for the post Bretton Woods era. Non-linearity is shown to be pervasive in
both the changes in the real exchange rates and the residuals of the ADF
model. The study proposes that misalignments of nominal exchange rates may
work as signals in the export market and the financial market. The study,
intuitively, argues that the dynamic motions of misalignments cause
confusion to exporters as they take it as price changing positions by
their foreign competitors, to the extent that exporters find it easier in
some situations to resort to habits or routines in setting up their
international prices rather than to attempts at optimization to reach a
Stackelberg price position. The study uses a non-linear three-regime SETAR
model as a parsimonious representation of this asymmetric pricing
behaviour. Fluctuations in a bilateral real exchange rate, in excess and
beyond fluctuations in relative prices, which give rise to non-linearity
in the second moment of real exchange rate, are attributed to the dynamic
motions of speculation on the nominal exchange rate in the financial
market triggered continuously by signals of misalignments. This
non-linearity is proved to be non-detectable but a second-generation
SETAR-IGARCH model seems to be capable of capturing this type of
non-linearity, implying that signals in the financial market are fully
anticipated by rational agents.
Journal: International Economic Journal
Pages: 63-90
Issue: 1
Volume: 19
Year: 2005
Keywords: Bilateral real exchange rate, SETAR-IGARCH, pricing-to-market, non-linearity, Stackelberg price position, BDS test,
X-DOI: 10.1080/1351161042000320380
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Handle: RePEc:taf:intecj:v:19:y:2005:i:1:p:63-90
Template-Type: ReDIF-Article 1.0
Author-Name: Hyung Bae
Author-X-Name-First: Hyung
Author-X-Name-Last: Bae
Title: Impact of labour unions on the merger incentive of firms
Abstract:
This paper analyses the impact of labour unions on the merger incentives
of firms. We find that a horizontal merger takes place if there is some
synergy effect. However, a vertical merger takes place only if the synergy
effect is bigger than a certain size.
Journal: International Economic Journal
Pages: 91-94
Issue: 1
Volume: 19
Year: 2005
Keywords: Merger (horizontal, vertical), union, Shapley value,
X-DOI: 10.1080/1351161042000320407
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Handle: RePEc:taf:intecj:v:19:y:2005:i:1:p:91-94
Template-Type: ReDIF-Article 1.0
Author-Name: Winston Chang
Author-X-Name-First: Winston
Author-X-Name-Last: Chang
Author-Name: Hajime Sugeta
Author-X-Name-First: Hajime
Author-X-Name-Last: Sugeta
Title: Cost asymmetry, oligopolistic competition and optimal trade and industrial policies
Abstract:
Optimal trade and industrial policies are examined in an export-rivalry
and a home-market model with general cost heterogeneity among firms. The
roles of the demand and cost structures in policy determination are
systematically analysed. It is shown that the equal-markup property holds
in both models under the firm-specific industrial policy. A more efficient
firm has a higher subsidy or a lower tax rate than an inefficient one. In
the home market model under free trade, the firm-specific industrial
policy always calls for subsidies to all home firms. Under the
firm-specific trade policy, it is shown that the difference between any
two tariff rates exactly equals 100% of the difference between the foreign
firms' marginal costs, the home industry is always granted some positive
level of protection, and a production-tax-cum-import-subsidy policy is
never optimal.
Journal: International Economic Journal
Pages: 95-114
Issue: 1
Volume: 19
Year: 2005
Keywords: Cost asymmetry, trade and industrial policies,
X-DOI: 10.1080/1351161042000320416
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Handle: RePEc:taf:intecj:v:19:y:2005:i:1:p:95-114
Template-Type: ReDIF-Article 1.0
Author-Name: Moawia Alghalith
Author-X-Name-First: Moawia
Author-X-Name-Last: Alghalith
Title: Input demand with cost uncertainty
Abstract:
We simultaneously extend the models developed by Stewart, Paroush & Wolf,
and Viaene & Zilcha. That is, allowing output to adjust and using a
general utility, general distributions and a two-variable-input production
function, we show the impact of the cost risk and increasing risk aversion
on each input demand, output, input productivity (marginal and average),
and the inputs ratio.
Journal: International Economic Journal
Pages: 115-123
Issue: 1
Volume: 19
Year: 2005
Keywords: Cost uncertainty, input price uncertainty, risk aversion, utility,
X-DOI: 10.1080/1351161042000320425
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Handle: RePEc:taf:intecj:v:19:y:2005:i:1:p:115-123
Template-Type: ReDIF-Article 1.0
Author-Name: John Heywood
Author-X-Name-First: John
Author-X-Name-Last: Heywood
Author-Name: Sunwoong Kim
Author-X-Name-First: Sunwoong
Author-X-Name-Last: Kim
Title: Editors' introduction
Abstract:
Journal: International Economic Journal
Pages: 125-128
Issue: 2
Volume: 19
Year: 2005
X-DOI: 10.1080/10168730500080774
File-URL: http://www.tandfonline.com/doi/abs/10.1080/10168730500080774
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Handle: RePEc:taf:intecj:v:19:y:2005:i:2:p:125-128
Template-Type: ReDIF-Article 1.0
Author-Name: Richard Freeman
Author-X-Name-First: Richard
Author-X-Name-Last: Freeman
Title: Labour market institutions without blinders: The debate over flexibility and labour market performance
Abstract:
The debate over the influence of labour market flexibility on performance
is unlikely to be settled by additional studies using aggregate data and
making cross-country comparisons. While this approach holds little
promise, micro-analysis of workers and firms and increased use of
experimental methods represent a path forward. Steps along this path could
help end the current 'lawyer's case' empiricism in which priors dominate
evidence.
Journal: International Economic Journal
Pages: 129-145
Issue: 2
Volume: 19
Year: 2005
Keywords: Flexibility, performance, aggregate data,
X-DOI: 10.1080/10168730500080675
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Handle: RePEc:taf:intecj:v:19:y:2005:i:2:p:129-145
Template-Type: ReDIF-Article 1.0
Author-Name: David Ellerman
Author-X-Name-First: David
Author-X-Name-Last: Ellerman
Title: The two institutional logics: exit-oriented versus commitment-oriented institutional designs
Abstract:
Throughout human affairs there are two dual logics. Albert Hirschman
investigated the two logics as the parallel-oriented logic of exit and the
series-oriented logic of commitment, loyalty, and voice. Economics focuses
almost exclusively on the logic of exit and questions of institutional
design are seen through that lens. One goal here is to flesh out the
alternative commitment-oriented logic of institutional design. The large
Japanese-style firm is a major example of the commitment-oriented
institutional design. Another point is that each logic has an internal
consistency so some 'mix and match' hybrids can be more lethal than
vigorous. In the East Asian crisis, highly leveraged firms from a
commitment-oriented system of relational finance had 'taken advantage' of
the new funds available from globalized financiers operating under the
exit-oriented logic of arms-length finance - and the hybrid proved to be
unviable. Overall, my goal is to illustrate the two institutional logics
that offer two different and often incompatible ways to approach questions
of flexibility, performance, and efficiency.
Journal: International Economic Journal
Pages: 147-168
Issue: 2
Volume: 19
Year: 2005
Keywords: Exit, voice, commitment, lethal hybrids,
X-DOI: 10.1080/10168730500080642
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Handle: RePEc:taf:intecj:v:19:y:2005:i:2:p:147-168
Template-Type: ReDIF-Article 1.0
Author-Name: Lei Delsen
Author-X-Name-First: Lei
Author-X-Name-Last: Delsen
Author-Name: Erik Poutsma
Author-X-Name-First: Erik
Author-X-Name-Last: Poutsma
Title: Labour market institutions and economic performance in the Netherlands
Abstract:
The central question of this article is whether or not effectiveness and
efficiency are improved by the stronger reliance on markets given Dutch
labour market institutions and their resulting corporatist wage formation.
In answering this question, besides the influence on the production costs
(neoclassical approach), we explicitly deal with and quantify the 'hidden'
transaction costs (institutional economics approach) of more decentralized
labour relations, flexibilization of the labour market, and working
conditions 'a la carte'. The results presented cast doubt on both the
efficiency and the effectiveness of recently introduced tailor-made
solutions in the Dutch economy.
Journal: International Economic Journal
Pages: 169-196
Issue: 2
Volume: 19
Year: 2005
Keywords: Corporatism, economic performance, Netherlands, transaction costs,
X-DOI: 10.1080/10168730500080576
File-URL: http://www.tandfonline.com/doi/abs/10.1080/10168730500080576
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Handle: RePEc:taf:intecj:v:19:y:2005:i:2:p:169-196
Template-Type: ReDIF-Article 1.0
Author-Name: Kirsten Daniel
Author-X-Name-First: Kirsten
Author-X-Name-Last: Daniel
Author-Name: W. S. Siebert
Author-X-Name-First: W. S.
Author-X-Name-Last: Siebert
Title: Does employment protection reduce the demand for unskilled labour?
Abstract:
We propose a model in which workers with little education or in the tails
of the age distribution - the inexperienced and the old - have more chance
of job failure (mismatch). Recruits' average education should then
increase and the standard deviation of starting age decrease when strict
employment protection raises hiring and firing costs. We test the model
using annual distributions of recruits' characteristics from a 1975-1995
panel of plants in Belgium, the Netherlands, Italy, the UK and the US. The
model's predictions are supported using the Blanchard-Wolfers index of
employment protection as well as our alternative index.
Journal: International Economic Journal
Pages: 197-222
Issue: 2
Volume: 19
Year: 2005
Keywords: Employment protection, labour demand, unskilled workers, firm panel data,
X-DOI: 10.1080/10168730500080998
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Handle: RePEc:taf:intecj:v:19:y:2005:i:2:p:197-222
Template-Type: ReDIF-Article 1.0
Author-Name: Injae Lee
Author-X-Name-First: Injae
Author-X-Name-Last: Lee
Author-Name: Dong-bae Kim
Author-X-Name-First: Dong-bae
Author-X-Name-Last: Kim
Title: Unions and the use of flexible staffing in korea: evidence from an establishment survey
Abstract:
Using data from the KLI Workplace Survey 2002, this study investigates
the effects of unions on the use of flexible staffing arrangements. We
find that union representation is positively associated with the
employer's use of more flexible forms of employment. This union effect
cannot be attributed to the unobserved characteristics of unionized
establishments, which may promote the intensive use of flexible staffing
arrangements. Our findings cast doubt on the claim that the union effect
is a statistical artefact arising from a sorting process in which firms
with higher propensities to use flexible staffing arrangements are more
likely to be unionized.
Journal: International Economic Journal
Pages: 223-234
Issue: 2
Volume: 19
Year: 2005
Keywords: Flexible staffing arrangement, union, endogeneity bias,
X-DOI: 10.1080/10168730500080964
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Handle: RePEc:taf:intecj:v:19:y:2005:i:2:p:223-234
Template-Type: ReDIF-Article 1.0
Author-Name: John Heywood
Author-X-Name-First: John
Author-X-Name-Last: Heywood
Author-Name: Uwe Jirjahn
Author-X-Name-First: Uwe
Author-X-Name-Last: Jirjahn
Author-Name: Georgi Tsertsvadze
Author-X-Name-First: Georgi
Author-X-Name-Last: Tsertsvadze
Title: Does profit sharing reduce conflict with the boss? Evidence from Germany
Abstract:
This paper argues that, in general, profit sharing aligns the interests
of workers and the firm and that this alignment reduces the extent of
conflict between workers and management. This paper also argues that this
general result will not carry over to the workers least able to respond to
the alignment of interests with greater effort and that it will not apply
to supervisors. After describing the German use of profit sharing, we use
German data to show that for non-supervisory workers in excellent health,
profit sharing reduces conflict but that for those who are not in
excellent health and for supervisors, profit sharing does not reduce
conflict. We also show that independent from profit sharing, conflict with
the boss is greater for the aged and for those not in excellent health.
Journal: International Economic Journal
Pages: 235-250
Issue: 2
Volume: 19
Year: 2005
Keywords: Profit sharing, mutual monitoring, cooperation, supervisor, health,
X-DOI: 10.1080/10168730500080741
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Handle: RePEc:taf:intecj:v:19:y:2005:i:2:p:235-250
Template-Type: ReDIF-Article 1.0
Author-Name: Takao Kato
Author-X-Name-First: Takao
Author-X-Name-Last: Kato
Author-Name: Ju HO Lee
Author-X-Name-First: Ju HO
Author-X-Name-Last: Lee
Author-Name: Kang-sung Lee
Author-X-Name-First: Kang-sung
Author-X-Name-Last: Lee
Author-Name: Jang-soo Ryu
Author-X-Name-First: Jang-soo
Author-X-Name-Last: Ryu
Title: Employee participation and involvement in korea: evidence from a new survey and field research
Abstract:
This paper provides evidence on the incidence, scope and nature of
employee participation in Korea. The key findings include: (i) the
incidence of works councils (WCs) is higher than in most other countries;
(ii) not all WCs are functioning well with a little less than 70% of
Korean firms having functioning WCs; (iii) WCs may be a substitute for
traditional collective bargaining; (iv) there are complementarities
between EI (Employee Involvement) programmes and trade unions (especially
FKTU-affiliated unions); between EI programmes and training; and between
representative participation at the top and direct participation at the
shopfloor; (v) there is evidence of dysfunctional and weak quality
circles; and (vi) consistent with our hypotheses, firms with EI programmes
(especially effective EI programmes) are generally larger, more capital
intensive, spend more on training and more productive than other firms.
Finally, we use qualitative data from two large manufacturing firms to
explore further the use of employee participation and involvement
programmes in Korea.
Journal: International Economic Journal
Pages: 251-281
Issue: 2
Volume: 19
Year: 2005
Keywords: Employee participation, works councils, quality circles,
X-DOI: 10.1080/10168730500080923
File-URL: http://www.tandfonline.com/doi/abs/10.1080/10168730500080923
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Handle: RePEc:taf:intecj:v:19:y:2005:i:2:p:251-281
Template-Type: ReDIF-Article 1.0
Author-Name: Joonmo Cho
Author-X-Name-First: Joonmo
Author-X-Name-Last: Cho
Author-Name: Sunwoong Kim
Author-X-Name-First: Sunwoong
Author-X-Name-Last: Kim
Title: On using mandatory retirement to reduce workforce in korea
Abstract:
Since the financial crisis in 1998, many Korean corporations with low
profitability and excessive liabilities cut operating costs. They had to
deal with exorbitant wage increases that outpaced productivity and were
generated by the traditional seniority-based wage system. The empirical
analysis of this study suggests that those companies with many long tenure
workers under the Japanese-style personnel management system are more
likely to utilize mandatory retirement in order to adjust employment.
Moreover, blue-collar jobs are more likely to be associated with mandatory
retirement. This suggests that the labour unions may tacitly approve of
this practice.
Journal: International Economic Journal
Pages: 283-303
Issue: 2
Volume: 19
Year: 2005
Keywords: Mandatory retirement, employment adjustment, labour cost, labour union,
X-DOI: 10.1080/10168730500080550
File-URL: http://www.tandfonline.com/doi/abs/10.1080/10168730500080550
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Handle: RePEc:taf:intecj:v:19:y:2005:i:2:p:283-303
Template-Type: ReDIF-Article 1.0
Author-Name: Alejandra Cox Edwards
Author-X-Name-First: Alejandra Cox
Author-X-Name-Last: Edwards
Title: Pension reforms and employment
Abstract:
The Chilean social security reform became effective in November 1980,
replacing a traditional pay-as-you-go system with a unified system based
on a minimum required contribution towards an individual account. The
reform lowered the combined contribution rates towards old age and
disability pension and tightened the link between contributions and
benefits increasing individuals' valuation of contributions. This paper
offers estimates of 'money's worth' ratios for 'typical contributors'
before and after reform, indicating that the post-reform money's worth of
each peso of contribution increased substantially for all groups, and
particularly for women. Using aggregate data on employment and output from
1960 to 2002, estimates imply that a 10% reduction in the payroll tax led
to a 2% increase in employment, and to a 0.7 point expansion in labour
force participation.
Journal: International Economic Journal
Pages: 305-319
Issue: 2
Volume: 19
Year: 2005
Keywords: Pay-as-you-go, unified system, individual account, labour force participation,
X-DOI: 10.1080/10168730500080600
File-URL: http://www.tandfonline.com/doi/abs/10.1080/10168730500080600
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Handle: RePEc:taf:intecj:v:19:y:2005:i:2:p:305-319
Template-Type: ReDIF-Article 1.0
Author-Name: Xiangdong Wei
Author-X-Name-First: Xiangdong
Author-X-Name-Last: Wei
Author-Name: Steve Russell
Author-X-Name-First: Steve
Author-X-Name-Last: Russell
Author-Name: Robert Sandy
Author-X-Name-First: Robert
Author-X-Name-Last: Sandy
Title: Analysing workplace safety policies in hong kong with a simulation method
Abstract:
Despite its impressive economic performance and high per-capita income,
Hong Kong's workplace safety record lags behind leading industrial
countries. This paper develops a computable equilibrium model of workplace
safety in Hong Kong that predicts the changes in safety levels after
substantial policy modifications. We find that accident rates would fall
if workers' compensation insurance was more experience-rated or if fines
for violations of the safety codes were raised. We also find that a
progressive injury tax aimed at accident-prone firms would sharply lower
the accident rate. In contrast, large increases in workers' compensation
benefits have only a minor effect on the safety level.
Journal: International Economic Journal
Pages: 321-353
Issue: 2
Volume: 19
Year: 2005
Keywords: Compensating differentials, workplace safety, computable equilibrium model,
X-DOI: 10.1080/10168730500080493
File-URL: http://www.tandfonline.com/doi/abs/10.1080/10168730500080493
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Handle: RePEc:taf:intecj:v:19:y:2005:i:2:p:321-353
Template-Type: ReDIF-Article 1.0
Author-Name: Alfred Guender
Author-X-Name-First: Alfred
Author-X-Name-Last: Guender
Title: On discretion versus commitment and the role of the direct exchange rate channel in a forward-looking open economy model
Abstract:
This paper compares optimal monetary policy under discretion and
commitment in an economy where the direct exchange rate channel is
operative. The stabilization bias under discretion is shown to be weaker
in an open economy relative to a closed economy. In an open economy, a
'less conservative central banker', one that attaches a smaller weight to
the variance of inflation in the loss function, can be appointed to
replicate the behaviour of real output that eventuates under commitment.
Evaluating the social loss function under discretion and commitment, we
find that the existence of a direct exchange rate channel in the Phillips
Curve mitigates the pronounced differences between the two strategies in
case of high persistence in the stochastic shocks.
Journal: International Economic Journal
Pages: 355-377
Issue: 3
Volume: 19
Year: 2005
Keywords: Exchange rate channel, commitment, discretion, stabilization bias,
X-DOI: 10.1080/10168730500199657
File-URL: http://www.tandfonline.com/doi/abs/10.1080/10168730500199657
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Handle: RePEc:taf:intecj:v:19:y:2005:i:3:p:355-377
Template-Type: ReDIF-Article 1.0
Author-Name: Moise Sidiropoulos
Author-X-Name-First: Moise
Author-X-Name-Last: Sidiropoulos
Author-Name: Jamel Trabelsi
Author-X-Name-First: Jamel
Author-X-Name-Last: Trabelsi
Author-Name: Costas Karfakis
Author-X-Name-First: Costas
Author-X-Name-Last: Karfakis
Title: Has the 'franc fort' exchange rate policy affected the inflationary dynamics? Theory and new evidence
Abstract:
This paper examines the impact of the 'franc fort' policy implemented in
France from 1983 on the inflationary dynamics by means of a square root
Kalman filter approach. An interesting aspect of the analysis is the
evidence that the 'franc fort' exchange rate policy had a significant
impact on the inflationary dynamics in France through its credibility
effects. These results confirm the imported credibility hypothesis
according to which the French authorities accelerated the disinflation
process by importing the German monetary policy credibility through the
'hard peg' of the franc-DM exchange rate. These findings show that
inflation dynamics in France began to converge significantly to that in
Germany after the implementation of the 'franc fort' policy, making more
credible the plan for the final transition to the euro. Moreover, this
analysis may also reveal much about the nature of potential success of the
current initiative of the new member countries now in the process of
joining the EU and looking eventually to adopt the euro.
Journal: International Economic Journal
Pages: 379-395
Issue: 3
Volume: 19
Year: 2005
Keywords: Franc fort, inflationary dynamics, square root Kalman filter,
X-DOI: 10.1080/10168730500199400
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Handle: RePEc:taf:intecj:v:19:y:2005:i:3:p:379-395
Template-Type: ReDIF-Article 1.0
Author-Name: Shyh-fang Ueng
Author-X-Name-First: Shyh-fang
Author-X-Name-Last: Ueng
Title: A theory of efficient coexistence
Abstract:
Neighbours have to coexist over an infinite horizon. Neither of them can
eradicate the other or extricate him or herself from the bondage. Their
respective resources regenerate themselves periodically. Hence, the
capacities for production and war repeatedly recuperate from exhaustion.
This paper uses a simple dynamic model to study the cooperation and
conflict between two neighbours. It is shown that the way for one party to
enhance its own prosperity without inducing a war with its neighbour is to
collaborate on mutually beneficial projects and divide the output
according to each side's contribution. Rejecting potential collaboration
or dividing the joint output disproportionately risks the eruption of war.
If the duration that one side is prepared to fight exceeds that of the
other, the one with a shorter duration will concede defeat before the war
starts. Nonetheless, when the planned durations of war of both sides are
identical, the first-strike advantage induces them to wage war
simultaneously.
Journal: International Economic Journal
Pages: 397-416
Issue: 3
Volume: 19
Year: 2005
Keywords: Neighbours, collaboration, war, division of joint output,
X-DOI: 10.1080/10168730500199574
File-URL: http://www.tandfonline.com/doi/abs/10.1080/10168730500199574
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Handle: RePEc:taf:intecj:v:19:y:2005:i:3:p:397-416
Template-Type: ReDIF-Article 1.0
Author-Name: Delia Ionascu
Author-X-Name-First: Delia
Author-X-Name-Last: Ionascu
Author-Name: Kresimir zigic
Author-X-Name-First: Kresimir
Author-X-Name-Last: zigic
Title: Free trade versus strategic trade as a choice between two 'second best' policies: A symmetric versus asymmetric information analysis
Abstract:
We analyse the following policy dilemma: strategic trade policy versus
free trade when the domestic government is bound to intervene only after
the domestic firm's strategic variable in the form of R&D investment is
chosen, and when the information can be either symmetric or asymmetric.
The novel feature of our model is that the information asymmetry stems
from the assumption that the government may not a priori know the true
mode of competition. The intervention in the above set-up allows the
domestic firm to manipulate the domestic government and results in a
socially inefficient choice of the strategic variable. However, commitment
to free trade leads to forgoing the benefits from profit-shifting. Yet,
from the social point of view, free trade may be optimal even under the
assumption of symmetric information. Due to costly signalling, this result
is reinforced in the case of asymmetric information.
Journal: International Economic Journal
Pages: 417-446
Issue: 3
Volume: 19
Year: 2005
Keywords: Strategic trade policy, free trade, first-best versus second-best policy, government's commitment, signalling,
X-DOI: 10.1080/10168730500199640
File-URL: http://www.tandfonline.com/doi/abs/10.1080/10168730500199640
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Handle: RePEc:taf:intecj:v:19:y:2005:i:3:p:417-446
Template-Type: ReDIF-Article 1.0
Author-Name: Imho Kang
Author-X-Name-First: Imho
Author-X-Name-Last: Kang
Author-Name: Jeong-yoo Kim
Author-X-Name-First: Jeong-yoo
Author-X-Name-Last: Kim
Title: Standardization in electronic money
Abstract:
Electronic money services are provided by the combination of Integrated
Circuit (IC) cards and terminals. The compatibility of different brands of
electronic money can be enabled by firms' joint adoption of standard
terminals. In this paper, we analyse the effect of achieving compatibility
among different brands of electronic money. We show that, if the unit
production cost of a standard terminal is not so much different from that
of a non-standard one, firms' joint adoption of standard terminals will
increase the total sales of IC cards and the network size of terminals,
thus raising consumers' surplus and firms' profits. On the other hand, if
the unit cost of a standard terminal is so high that firms are discouraged
from voluntarily adopting standard ones, the government may employ
subsides to enhance efficiency. However, if the duty of implementing
standardization is placed solely on the firms without subsidies, all the
agents, including consumers and retailers, will be left worse off.
Journal: International Economic Journal
Pages: 447-459
Issue: 3
Volume: 19
Year: 2005
Keywords: Electronic money, network externality, two-sided market, standardization, compatibility,
X-DOI: 10.1080/10168730500199442
File-URL: http://www.tandfonline.com/doi/abs/10.1080/10168730500199442
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Handle: RePEc:taf:intecj:v:19:y:2005:i:3:p:447-459
Template-Type: ReDIF-Article 1.0
Author-Name: Mohsen Bahmani-oskooee
Author-X-Name-First: Mohsen
Author-X-Name-Last: Bahmani-oskooee
Author-Name: Charikleia Economidou
Author-X-Name-First: Charikleia
Author-X-Name-Last: Economidou
Title: How stable is the demand for money in Greece?
Abstract:
The cointegration technique is now a common method of estimating any
money demand function. Numerous studies that applied this technique to
estimate the money demand function in Greece, interpreted their finding of
cointegration as a sign of stable money demand. In this paper, after
incorporating CUSUM and CUSUMSQ tests into cointegration analysis, we show
that even though M1 and M2 monetary aggregates are cointegrated with
income and interest rate, the M2 money demand function is unstable while
M1 is stable.
Journal: International Economic Journal
Pages: 461-472
Issue: 3
Volume: 19
Year: 2005
Keywords: Money demand, cointegration, stability test, Greece,
X-DOI: 10.1080/10168730500199558
File-URL: http://www.tandfonline.com/doi/abs/10.1080/10168730500199558
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Handle: RePEc:taf:intecj:v:19:y:2005:i:3:p:461-472
Template-Type: ReDIF-Article 1.0
Author-Name: William Miles
Author-X-Name-First: William
Author-X-Name-Last: Miles
Title: Do frontier equity markets exhibit common trends and still provide diversification opportunities?
Abstract:
Many small, frontier equity markets in regions such as Africa and Eastern
Europe have opened in recent years. As in other larger emerging markets,
important issues for investors are the extent of financial integration
with exchanges in other countries and, if some reasonable degree of
integration is found, whether such markets still provide diversification
opportunities. Here, we will examine a frequently used metric of
integration by testing for the existence of common trends, or
cointegration, in these frontier markets. While common stochastic trends
are found, results show that coefficients on cointegrating vectors are at
times negative, and reaction to deviations from the long-run trend are
often slow, thus indicating that frontier markets are a good source of
diversification opportunities despite a degree of integration.
Journal: International Economic Journal
Pages: 473-482
Issue: 3
Volume: 19
Year: 2005
Keywords: Portfolio choice, international financial markets,
X-DOI: 10.1080/10168730500199475
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Handle: RePEc:taf:intecj:v:19:y:2005:i:3:p:473-482
Template-Type: ReDIF-Article 1.0
Author-Name: Philip Bodman
Author-X-Name-First: Philip
Author-X-Name-Last: Bodman
Author-Name: Mark Crosby
Author-X-Name-First: Mark
Author-X-Name-Last: Crosby
Title: Are business cycles independent in the G7?
Abstract:
In this paper we examine the relationships between business cycles in the
G7 countries. We focus on whether recessionary periods in one country are
independent of the timing of recessions in other countries in the G7,
using three different methods for dating recessions. We find that the
evidence is mixed on whether phases of the business cycle in North America
and in European countries are independent, or whether there is a common
phase structure in the business cycle across all the G7 economies. NBER
dates suggest that business cycles are synchronised, while other methods
for generating business cycle chronologies are more consistent with
regional, rather than international cycles. We also find mixed evidence on
whether the UK is synchronised with European countries, while Japan quite
clearly has the cycle that is most independent of other G7 countries.
Journal: International Economic Journal
Pages: 483-499
Issue: 4
Volume: 19
Year: 2005
Keywords: G7, business cycles, recessions,
X-DOI: 10.1080/10168730500381917
File-URL: http://www.tandfonline.com/doi/abs/10.1080/10168730500381917
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Handle: RePEc:taf:intecj:v:19:y:2005:i:4:p:483-499
Template-Type: ReDIF-Article 1.0
Author-Name: Madhu Mohanty
Author-X-Name-First: Madhu
Author-X-Name-Last: Mohanty
Title: An alternative method of estimating the worker's reservation wage
Abstract:
This study follows the standard bivariate decision theory of employment
and proposes an alternative technique to estimate reservation wages of
employed, unemployed and out-of-labor-force (OLF) workers. The validity of
this approach is demonstrated by testing several reservation wage
hypotheses recommended in earlier studies. Using reservation wages
estimated under this new approach, the study further examines the
determinants of this important variable.
Journal: International Economic Journal
Pages: 501-522
Issue: 4
Volume: 19
Year: 2005
Keywords: Reservation wages, bivariate probit, selection bias, participation decision,
X-DOI: 10.1080/10168730500382170
File-URL: http://www.tandfonline.com/doi/abs/10.1080/10168730500382170
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Handle: RePEc:taf:intecj:v:19:y:2005:i:4:p:501-522
Template-Type: ReDIF-Article 1.0
Author-Name: Ho-Chuan Huang
Author-X-Name-First: Ho-Chuan
Author-X-Name-Last: Huang
Author-Name: Wan-hsiu Cheng
Author-X-Name-First: Wan-hsiu
Author-X-Name-Last: Cheng
Title: Tests of the CAPM under structural changes
Abstract:
In accordance with the empirical regularity of time-varying betas we
estimate and test for the Sharpe-Lintner CAPM by allowing for structural
change(s) in betas. Empirical applications using BM- and size-sorted
decile portfolios suggest the following interesting results. Firstly,
there exists at least one break for all the portfolios under
consideration. Secondly, the estimated break dates are quite similar for
some of the portfolios, indicating the possible existence of a common
break using multivariate time series. Finally, we find the CAPM can be
consistent with the data in some regimes but may appear to be inconsistent
with the data in some other regimes. This particularly appealing feature
has been completely ruled out under the conventional single-equation
framework.
Journal: International Economic Journal
Pages: 523-541
Issue: 4
Volume: 19
Year: 2005
Keywords: CAPM, beta, structural change,
X-DOI: 10.1080/10168730500381990
File-URL: http://www.tandfonline.com/doi/abs/10.1080/10168730500381990
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Template-Type: ReDIF-Article 1.0
Author-Name: Tomoe Moore
Author-X-Name-First: Tomoe
Author-X-Name-Last: Moore
Author-Name: Christopher Green
Author-X-Name-First: Christopher
Author-X-Name-Last: Green
Title: Other financial institutions' portfolio behaviour and policy implications: A study of India
Abstract:
Applied literature has largely neglected the asset decision of other
financial institutions (OFIs), though it may possess important policy
implications. In this paper, portfolio behaviour of OFIs in India is
modelled by using the annual flow of funds data for 1951/52 to 1993/94.
The long-run model of the Almost Ideal Demand System and the allied
concepts of cointegration generated economically and statistically
plausible results. We find a strong influence of interest rates on
portfolio behavior, thereby the role of interest rates on resource
allocation. The paper concludes that the macroeconomic management through
monetary policy actions may not be unnecessarily limited through the
channel of OFIs in the post-financial reform regime in India.
Journal: International Economic Journal
Pages: 543-562
Issue: 4
Volume: 19
Year: 2005
Keywords: Other financial institutions, financial liberalization, interest rates, Almost Ideal Demand System, India,
X-DOI: 10.1080/10168730500382089
File-URL: http://www.tandfonline.com/doi/abs/10.1080/10168730500382089
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Handle: RePEc:taf:intecj:v:19:y:2005:i:4:p:543-562
Template-Type: ReDIF-Article 1.0
Author-Name: Jose Sanchez-fung
Author-X-Name-First: Jose
Author-X-Name-Last: Sanchez-fung
Title: Estimating a monetary policy reaction function for the dominican republic
Abstract:
The paper specifies and estimates a hybrid McCallum-Taylor monetary
policy reaction function for the Dominican Republic (DR). The estimated
reactions suggest that the Central Bank of the DR has been biased towards
targeting the exchange rate. These findings are in line with the evidence
on the fear-of-floating characteristic of developing countries. An
evaluation of the estimated rule's historical performance shows that
monetary base growth below (above) that implied by the 'average' policy
reaction is associated with better (worse) macroeconomic performance.
Journal: International Economic Journal
Pages: 563-577
Issue: 4
Volume: 19
Year: 2005
Keywords: Monetary policy reaction function, McCallum and Taylor rules, multiple exchange rates, Dominican Republic,
X-DOI: 10.1080/10168730500382121
File-URL: http://www.tandfonline.com/doi/abs/10.1080/10168730500382121
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Handle: RePEc:taf:intecj:v:19:y:2005:i:4:p:563-577
Template-Type: ReDIF-Article 1.0
Author-Name: Masao Oda
Author-X-Name-First: Masao
Author-X-Name-Last: Oda
Author-Name: Robert Stapp
Author-X-Name-First: Robert
Author-X-Name-Last: Stapp
Author-Name: Ichiro Mihara
Author-X-Name-First: Ichiro
Author-X-Name-Last: Mihara
Title: On the new export sector in developing countries
Abstract:
Many developing countries are establishing a new export sector by
accepting foreign direct investment. Developing a three-sectors
three-factors general equilibrium model with tariff, this paper considers
the condition under which the acceptance of direct investment is desirable
for the developing countries. We show that the factor intensity rankings
among the sectors play a key role on the welfare effects and that direct
investment increases the output of both the new export and the traditional
export sector and promotes the export-led growth in developing countries.
Journal: International Economic Journal
Pages: 579-587
Issue: 4
Volume: 19
Year: 2005
Keywords: New export sector, direct investment, factor intensity,
X-DOI: 10.1080/10168730500199608
File-URL: http://www.tandfonline.com/doi/abs/10.1080/10168730500199608
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Template-Type: ReDIF-Article 1.0
Author-Name: Andreas Andersson
Author-X-Name-First: Andreas
Author-X-Name-Last: Andersson
Author-Name: Par Osterholm
Author-X-Name-First: Par
Author-X-Name-Last: Osterholm
Title: Population age structure and real exchange rates in the OECD
Abstract:
Macroeconomic theory predicts that variations in population cohort sizes
will lead to demographically induced real exchange rate movements. While
such effects have previously been established for individual countries,
this paper exploits cross-sectional time series data to test the
prediction for a larger number of economies. A reduced form model with
population age shares as regressors is estimated using a panel of 25 OECD
countries between 1971 and 2002. The results confirm that demographic
structure has significant explanatory power for the real exchange rate and
the estimated relationship supports age structure effects in accordance
with the life cycle hypothesis.
Journal: International Economic Journal
Pages: 1-18
Issue: 1
Volume: 20
Year: 2006
Keywords: Demography, real exchange rates, panel data, forecasts,
X-DOI: 10.1080/14765280500520261
File-URL: http://www.tandfonline.com/doi/abs/10.1080/14765280500520261
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Template-Type: ReDIF-Article 1.0
Author-Name: Jan Ondrich
Author-X-Name-First: Jan
Author-X-Name-Last: Ondrich
Author-Name: J. David Richardson
Author-X-Name-First: J. David
Author-X-Name-Last: Richardson
Author-Name: Shuo Zhang
Author-X-Name-First: Shuo
Author-X-Name-Last: Zhang
Title: A further investigation of the link between trade and income
Abstract:
The link between openness and income has received increasing attention as
countries try to justify their trade-promoting policies. Recent work of
Frankel & Romer (1999) examines the effect of trade on income. We explore
how the estimates of the trade effect change when we relax their
assumption of heteroscedasticity in the bilateral trade equation they use
to construct the instrument for the IV regression. Because the instrument
is constructed through a nonlinear transformation, unequal disturbance
variances imply inconsistency and not just inefficiency of the
Frankel-Romer estimates. We find a smaller positive effect of trade than
that found by Frankel & Romer.
Journal: International Economic Journal
Pages: 19-36
Issue: 1
Volume: 20
Year: 2006
Keywords: Trade, income, heteroscedasticity, instrumental variable,
X-DOI: 10.1080/10168730500515464
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Template-Type: ReDIF-Article 1.0
Author-Name: Nicolas Peridy
Author-X-Name-First: Nicolas
Author-X-Name-Last: Peridy
Title: Pollution effects of free trade areas: Simulations from a general equilibrium model
Abstract:
A two-factors, two-goods, three-countries general equilibrium model is
developed to assess the effects of a Free Trade Area (FTA) on pollution
emissions. It also makes it possible to compare the effects of a
discriminating commercial policy with alternative-non
discriminating-policies, such as full trade liberalization or
non-discriminating protection. A theoretical model is first developed in
order to take into account country-differences in factor endowment,
environmental regulation, pollution abatement technology, marginal
disutilities of pollution, as well as terms of trade effects. This model
is subsequently calibrated and computed in accordance with empirical
evidence. The main conclusion shows that the move from protection to FTA
reduces world pollution emissions. A second result indicates that, in case
of full trade liberalization, world pollution is further reduced.
Journal: International Economic Journal
Pages: 37-62
Issue: 1
Volume: 20
Year: 2006
Keywords: Trade, free trade areas, environment, pollution, general equilibrium models,
X-DOI: 10.1080/10168730500515431
File-URL: http://www.tandfonline.com/doi/abs/10.1080/10168730500515431
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Template-Type: ReDIF-Article 1.0
Author-Name: Mohammad Afzal
Author-X-Name-First: Mohammad
Author-X-Name-Last: Afzal
Title: Causality between exports, world income and economic growth in Pakistan
Abstract:
This paper investigates the direction of causation between GDP
representing economic growth, exports and its different categories,
imports and world income. After experiencing vigorous import-substitution
in the past decades, Pakistan adopted an outward-looking strategy in the
late 1980s with an emphasis on export promotion. A strong and stable
relationship between GDP and exports and bi-directional causality between
manufactured exports and GDP has been found. Export promotion policy is
pursued consistently with an emphasis on manufactured exports and this is
most likely to contribute adequately to economic growth in the long run.
Journal: International Economic Journal
Pages: 63-77
Issue: 1
Volume: 20
Year: 2006
Keywords: Exports, economic growth, world income, cointegration, causality,
X-DOI: 10.1080/10168730500515399
File-URL: http://www.tandfonline.com/doi/abs/10.1080/10168730500515399
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Handle: RePEc:taf:intecj:v:20:y:2006:i:1:p:63-77
Template-Type: ReDIF-Article 1.0
Author-Name: Shidong Zhang
Author-X-Name-First: Shidong
Author-X-Name-Last: Zhang
Author-Name: Thomas Lowinger
Author-X-Name-First: Thomas
Author-X-Name-Last: Lowinger
Title: An empirical test of purchasing power parity in selected developing countries: a panel data approach
Abstract:
This paper examines the empirical validity of Purchasing Power Parity
(PPP) for certain large developing economies by using a panel unit root
methodology. The test results show that a long run real exchange rate
depreciation trend exists in certain developing countries. Without
considering this depreciation trend, it is hard to verify the stationarity
and to explain the existence of the extremely long half-lives of the real
exchange rates. When a linear time trend is included in the tests, the
results tend to support the stationarity of the underlying real exchange
rate processes, and the half-lives are significantly shorter and their
range can be explained by transitory disturbances.
Journal: International Economic Journal
Pages: 79-86
Issue: 1
Volume: 20
Year: 2006
Keywords: Purchasing power parity, panel unit root, half-life,
X-DOI: 10.1080/10168730500515266
File-URL: http://www.tandfonline.com/doi/abs/10.1080/10168730500515266
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Handle: RePEc:taf:intecj:v:20:y:2006:i:1:p:79-86
Template-Type: ReDIF-Article 1.0
Author-Name: Igbekele Ajibefun
Author-X-Name-First: Igbekele
Author-X-Name-Last: Ajibefun
Author-Name: Adebiyi Daramola
Author-X-Name-First: Adebiyi
Author-X-Name-Last: Daramola
Author-Name: Abiodun Falusi
Author-X-Name-First: Abiodun
Author-X-Name-Last: Falusi
Title: Technical efficiency of small scale farmers: An application of the stochastic frontier production function to rural and urban farmers in Ondo State, Nigeria
Abstract:
The main objective of this study was to estimate empirically the
technical efficiency of rural and urban small-scale farmers in Ondo State,
Nigeria, using the stochastic frontier production function. With the rapid
urbanization being currently experienced in Nigeria, the socio-economic
and the farming environment in both the rural and urban centres are
undergoing transformation. This study involved collection and analysis of
data on 200 food crop farmers from rural and urban centres in Ondo state
of Nigeria. The results of analysis show that there are wide differences
in the socio-economic and production inputs of the farmers from rural and
urban centres. While farmers from rural centres have relatively larger
farms, the urban farmers have better access to production inputs,
especially, fertilizer. However, rural farmers, with a mean technical
efficiency of 0.66 are found to be more technically efficient than urban
farmers, who have a mean technical efficiency of 0.57. There is a wide
confidence interval around the point estimates of the technical efficiency
scores. Level of education, farming experience and land are found to have
negative effects on technical inefficiency of both rural and urban farms.
The marginal effect of inefficiency variables is, however, found to be
highest for education among both rural and urban farms.
Journal: International Economic Journal
Pages: 87-107
Issue: 1
Volume: 20
Year: 2006
Keywords: Technical efficiency, returns-to-scale, rural and urban farmers, Nigeria,
X-DOI: 10.1080/10168730500515498
File-URL: http://www.tandfonline.com/doi/abs/10.1080/10168730500515498
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Handle: RePEc:taf:intecj:v:20:y:2006:i:1:p:87-107
Template-Type: ReDIF-Article 1.0
Author-Name: Shyh-Wei Chen
Author-X-Name-First: Shyh-Wei
Author-X-Name-Last: Chen
Author-Name: Chung-Hua Shen
Author-X-Name-First: Chung-Hua
Author-X-Name-Last: Shen
Title: Is there a duration dependence in Taiwan's business cycles?
Abstract:
This paper intends to investigate the duration dependent feature of
Taiwan's business cycles. The constant Markov switching model is revised
to take account of the duration dependent feature. The most innovative
findings herein are that there is no duration dependence for contraction
for the circa pre-1990 periods and no duration dependence for expansion
for the circa post-1990 periods. However, there is duration dependence for
economic expansion for the circa pre-1990 and duration dependence for
contraction for circa post-1990 periods, respectively. In addition, the
recessionary dates identified by the duration dependent Markov switching
model are identical to the officially defined recessionary chronologies.
Journal: International Economic Journal
Pages: 109-128
Issue: 1
Volume: 20
Year: 2006
Keywords: Duration dependence, business cycle, Markov switching model, Gibbs sampling,
X-DOI: 10.1080/10168730500515357
File-URL: http://www.tandfonline.com/doi/abs/10.1080/10168730500515357
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Handle: RePEc:taf:intecj:v:20:y:2006:i:1:p:109-128
Template-Type: ReDIF-Article 1.0
Author-Name: Gregory Chow
Author-X-Name-First: Gregory
Author-X-Name-Last: Chow
Author-Name: Yan Shen
Author-X-Name-First: Yan
Author-X-Name-Last: Shen
Title: Demand for education in China
Abstract:
This paper offers an explanation of the quantitative changes in education
spending by the framework of demand analysis, including the changes in the
ratio of educational funding to GDP in the period 1991-2002. The income
effect is estimated mainly by using cross-provincial data, while time
series data are used to estimate the price effect. Changes in government
and non-government spending through time can be satisfactorily explained
by the income and price effects. Demand for education services in the
three levels of primary school, secondary school and higher education, and
aggregate demand for all education services are investigated. The relation
between income inequality and inequality in education opportunities is
briefly discussed. Ten important findings are stated.
Journal: International Economic Journal
Pages: 129-147
Issue: 2
Volume: 20
Year: 2006
X-DOI: 10.1080/02664760600699468
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Handle: RePEc:taf:intecj:v:20:y:2006:i:2:p:129-147
Template-Type: ReDIF-Article 1.0
Author-Name: Joseph Gagnon
Author-X-Name-First: Joseph
Author-X-Name-Last: Gagnon
Title: The effect of exchange rates on prices, wages, and profits: A case study of the United Kingdom in the 1990s
Abstract:
During the 1990s the United Kingdom experienced large and sudden exchange
rate movements that had no apparent impact on overall consumer prices.
This paper shows that the stability of UK consumer prices was made
possible in part by offsetting movements in the price-cost margins of
foreign exporters and in part by offsetting price-cost margins in the UK
distribution sector. At the same time, UK manufacturers experienced margin
swings in the opposite direction, largely due to their role as exporters.
Thus, sterling depreciation boosted the profits of UK manufacturers and
squeezed the profits of UK distributors, while sterling appreciation had
the opposite effects.
Journal: International Economic Journal
Pages: 149-160
Issue: 2
Volume: 20
Year: 2006
Keywords: Appreciation, depreciation, operating surplus, pass-through,
X-DOI: 10.1080/10168730600756570
File-URL: http://www.tandfonline.com/doi/abs/10.1080/10168730600756570
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Handle: RePEc:taf:intecj:v:20:y:2006:i:2:p:149-160
Template-Type: ReDIF-Article 1.0
Author-Name: Mark Holmes
Author-X-Name-First: Mark
Author-X-Name-Last: Holmes
Author-Name: Ping Wang
Author-X-Name-First: Ping
Author-X-Name-Last: Wang
Title: Asymmetric adjustment towards long-run PPP: Some new evidence for Asian economies
Abstract:
This paper investigates relative purchasing power parity for a sample of
nine Asian economies during the post-Bretton Woods floating exchange rate
era. While most existing studies of purchasing power parity employ linear
tests of non-stationarity or non-cointegration, we employ a new
cointegration test, recently advocated by Enders & Siklos and Enders &
Dibooglu, that tests for an asymmetric adjustment towards parity with
respect to positive and negative real exchange rate deviations from
parity. In most cases, we find that long-run purchasing power parity is
most likely to hold with respect to positive deviations only.
Journal: International Economic Journal
Pages: 161-177
Issue: 2
Volume: 20
Year: 2006
Keywords: PPP, cointegration, asymmetries,
X-DOI: 10.1080/10168730600699481
File-URL: http://www.tandfonline.com/doi/abs/10.1080/10168730600699481
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Handle: RePEc:taf:intecj:v:20:y:2006:i:2:p:161-177
Template-Type: ReDIF-Article 1.0
Author-Name: Noh-Sun Kwark
Author-X-Name-First: Noh-Sun
Author-X-Name-Last: Kwark
Author-Name: Yong-Sang Shyn
Author-X-Name-First: Yong-Sang
Author-X-Name-Last: Shyn
Title: International R&D spillovers revisited: Human capital as an absorptive capacity for foreign technology
Abstract:
This paper examines aspects of R&D spillovers across countries, in
particular, the role of international trade and human capital as the
catalysts for international diffusion of technology. We present a new way
of measuring foreign R&D stocks embodied in foreign intermediate goods and
capital equipment, which we argue is free from the criticism of previous
measures. With the pooled panel data spanning 1970 through 1995 for 103
countries, we find that the effects of foreign R&D on total factor
productivity growth of both industrial countries and developing countries
are substantial and that human capital is the most influential channel for
absorbing foreign R&D spillovers.
Journal: International Economic Journal
Pages: 179-196
Issue: 2
Volume: 20
Year: 2006
Keywords: R&D spillovers, human capital, international technology diffusion,
X-DOI: 10.1080/10168730600699556
File-URL: http://www.tandfonline.com/doi/abs/10.1080/10168730600699556
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Handle: RePEc:taf:intecj:v:20:y:2006:i:2:p:179-196
Template-Type: ReDIF-Article 1.0
Author-Name: Masahiro Hori
Author-X-Name-First: Masahiro
Author-X-Name-Last: Hori
Author-Name: Satoshi Shimizutani
Author-X-Name-First: Satoshi
Author-X-Name-Last: Shimizutani
Title: Did Japanese consumers become more prudent during 1998-1999? Evidence from household-level data
Abstract:
This paper explores empirically whether Japanese consumers became more
prudent in the second half of the 1990s, a decade in which Japan
registered historically low economic growth. Employing the methodology
developed by Dynan (1993), this study uses micro-level data from the
Family Savings Survey and the Family Income and Expenditure Survey to
estimate the coefficient of prudence for Japanese households in the second
half of the 1990s. The estimates reveal that the coefficient of prudence
is positive and statistically significant in the 1998-1999 period. The
obtained value for the coefficient of prudence is four, which is much
higher than that estimated for US households (not significantly different
from zero) or UK households (around 2). The estimated coefficient for
young households is higher still, which is consistent with simulation
studies conducted by Gourinchas & Parker (2002) showing that precaution is
the most important saving motive for younger households.
Journal: International Economic Journal
Pages: 197-209
Issue: 2
Volume: 20
Year: 2006
Keywords: Precautionary saving, coefficient of prudence, Euler equation, household data,
X-DOI: 10.1080/10168730600699523
File-URL: http://www.tandfonline.com/doi/abs/10.1080/10168730600699523
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Handle: RePEc:taf:intecj:v:20:y:2006:i:2:p:197-209
Template-Type: ReDIF-Article 1.0
Author-Name: Don Clark
Author-X-Name-First: Don
Author-X-Name-Last: Clark
Title: Country and industry-level determinants of vertical specialization-based trade
Abstract:
This paper investigates country and industry-level determinants of
vertical specialization-based trade. Industries that engage in this
pattern of trade are identified through their use of offshore assembly
provisions in the US tariff code. Findings explain why industries engage
in vertical specialization-based trade and shed light on factors that
enter production location decisions. Identifying factors that encourage
vertical specialization-based production and trade will enhance our
understanding of industry strategy and how trade patterns will evolve as
the process of globalization continues. Results suggest vertical
specialization-based trade will continue to grow relative to total trade.
Journal: International Economic Journal
Pages: 211-225
Issue: 2
Volume: 20
Year: 2006
Keywords: Vertical specialization, production sharing, offshore assembly provisions,
X-DOI: 10.1080/10168730600699515
File-URL: http://www.tandfonline.com/doi/abs/10.1080/10168730600699515
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Handle: RePEc:taf:intecj:v:20:y:2006:i:2:p:211-225
Template-Type: ReDIF-Article 1.0
Author-Name: Darrin Downes
Author-X-Name-First: Darrin
Author-X-Name-Last: Downes
Author-Name: Winston Moore
Author-X-Name-First: Winston
Author-X-Name-Last: Moore
Author-Name: Dwayne Jackson
Author-X-Name-First: Dwayne
Author-X-Name-Last: Jackson
Title: Financial liberalization and the stationarity of money multiplier
Abstract:
In countries without an explicit inflation targeting mechanism, a stable
relationship between the monetary base and the money supply allows
policymakers to implement changes in monetary policy with a reasonable
degree of certainty about the impact on the money supply. The relationship
can, however, be influenced by major structural shifts such as financial
sector reforms. The present study finds that when structural change bought
about by financial liberalisation is ignored, the unit root hypothesis is
spuriously accepted. However, once this break is incorporated into the
analysis, the multiplier exhibits no presence of a stochastic trend.
Journal: International Economic Journal
Pages: 227-240
Issue: 2
Volume: 20
Year: 2006
Keywords: Money multiplier, financial liberalisation, Caribbean,
X-DOI: 10.1080/10168730600699507
File-URL: http://www.tandfonline.com/doi/abs/10.1080/10168730600699507
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Handle: RePEc:taf:intecj:v:20:y:2006:i:2:p:227-240
Template-Type: ReDIF-Article 1.0
Author-Name: Young-Sun Lee
Author-X-Name-First: Young-Sun
Author-X-Name-Last: Lee
Author-Name: Hyung-Gon Jeong
Author-X-Name-First: Hyung-Gon
Author-X-Name-Last: Jeong
Title: The determinants of economic growth of transition economies: Economic reform versus initial conditions
Abstract:
This study analyzes factors for economic recovery of transition economies
in Europe and the Commonwealth of Independent States for the period of the
1990s. Covariance structure analysis is employed to estimate the
structural equation system, and exploratory factor analysis is conducted
to measure initial conditions and economic policy as latent variables. The
result of analysis shows that the effect of initial conditions is negative
and the impact of economic reform on growth is positive. However, the
negative effect of initial conditions had overridden the positive impact
of economic policy as of 2000. The reason that transition economies could
not recover their pre-transition GDP level (even after ten years of
transition history) seems to stem from the negative influence of initial
conditions on growth rather than the slow speed of economic reform.
Journal: International Economic Journal
Pages: 241-252
Issue: 2
Volume: 20
Year: 2006
Keywords: Transition economy, growth, economic reform, covariance analysis, initial conditions,
X-DOI: 10.1080/10168730600699572
File-URL: http://www.tandfonline.com/doi/abs/10.1080/10168730600699572
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Handle: RePEc:taf:intecj:v:20:y:2006:i:2:p:241-252
Template-Type: ReDIF-Article 1.0
Author-Name: Dani Rodrik
Author-X-Name-First: Dani
Author-X-Name-Last: Rodrik
Title: The social cost of foreign exchange reserves
Abstract:
There has been a very rapid rise since the early 1990s in foreign
reserves held by developing countries. These reserves have climbed to
almost 30% of developing countries' GDP and 8 months of imports. Assuming
reasonable spreads between the yield on reserve assets and the cost of
foreign borrowing, the income loss to these countries amounts to close to
1% of GDP. Conditional on existing levels of short-term foreign borrowing,
this does not seem too steep a price as an insurance premium against
financial crises. But why developing countries have not tried harder to
reduce short-term foreign liabilities in order to achieve the same level
of liquidity (thereby paying a smaller cost in terms of reserve
accumulation) remains an important puzzle.
Journal: International Economic Journal
Pages: 253-266
Issue: 3
Volume: 20
Year: 2006
Keywords: Reserves,, external debt,
X-DOI: 10.1080/10168730600879331
File-URL: http://www.tandfonline.com/doi/abs/10.1080/10168730600879331
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Handle: RePEc:taf:intecj:v:20:y:2006:i:3:p:253-266
Template-Type: ReDIF-Article 1.0
Author-Name: Yves Bourdet
Author-X-Name-First: Yves
Author-X-Name-Last: Bourdet
Author-Name: Hans Falck
Author-X-Name-First: Hans
Author-X-Name-Last: Falck
Title: Emigrants' remittances and Dutch Disease in Cape Verde
Abstract:
Emigrants' remittances have increased rapidly over the past two decades.
While earlier studies have focused on their microeconomic effect on
incomes and poverty in recipient countries, the present study concentrates
on the macroeconomic impact of remittances on the real exchange rate in
Cape Verde. A main conclusion is that remittances give rise to a sort of
Dutch Disease effect and thereby have an adverse effect on the
competitiveness of the tradable sector. The magnitude of this effect in
Cape Verde is not that large, however. The changing orientation of
official aid to more growth-oriented aid, combined with a more
export-oriented domestic policy, has contributed to limiting the adverse
impact of emigrants' remittances on the competitiveness of the Cape
Verdean economy.
Journal: International Economic Journal
Pages: 267-284
Issue: 3
Volume: 20
Year: 2006
Keywords: Remittances,, real exchange rate,, Dutch Disease,, development assistance,
X-DOI: 10.1080/10168730600879323
File-URL: http://www.tandfonline.com/doi/abs/10.1080/10168730600879323
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Handle: RePEc:taf:intecj:v:20:y:2006:i:3:p:267-284
Template-Type: ReDIF-Article 1.0
Author-Name: Wong Hock Tsen
Author-X-Name-First: Wong Hock
Author-X-Name-Last: Tsen
Title: Granger causality tests among openness to international trade, human capital accumulation and economic growth in China: 1952-1999
Abstract:
This study examines Granger causality among openness to international
trade, human capital accumulation and economic growth in China using time
series data over the period from 1952 to 1999 and a sub-period, i.e. a
period from 1978 to 1999. For the 1952-1999 period, economic growth is
found to Granger cause human capital accumulation and not vice versa. For
the 1978-1999 period, economic growth and openness to international trade,
economic growth and human capital accumulation, and human capital
accumulation and openness to international trade are found to have
bidirectional Granger causality, respectively. Thus, there is a dynamic
relationship among openness to international trade, human capital
accumulation and economic growth. The experience of economic reform in
China could be an example to other developing countries.
Journal: International Economic Journal
Pages: 285-302
Issue: 3
Volume: 20
Year: 2006
Keywords: Openness to international trade, human capital accumulation, economic growth, China, Granger causality,
X-DOI: 10.1080/10168730600879356
File-URL: http://www.tandfonline.com/doi/abs/10.1080/10168730600879356
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Handle: RePEc:taf:intecj:v:20:y:2006:i:3:p:285-302
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: Social security expenditure and GDP in OECD countries: A cointegrated panel analysis
Abstract:
Using panel data unit root tests and panel cointegration tests, as well
as estimation techniques appropriate for heterogeneous panels such as the
full modified OLS, this paper re-examines the long-run co-movement and the
causal relationship between GDP and social security expenditure in a
bivariate model, employing data on 25 OECD countries from 1980 to 2001.
Our cointegration test results show strong evidence in favour of the
existence of a long-run equilibrium cointegrating relationship between GDP
and social security expenditure after allowing for a heterogeneous country
effect. Regarding the panel-based error correction model, we find that GDP
and social security expenditure lack short-run causality, but reveal the
existence of long-run bidirectional causality. This shows that, in the
long run, economic growth must be based on a social welfare policy that
should be carried out, and economic growth can facilitate contiguous
development in a social welfare policy. Lastly, we also provide evidence
to support that social security expenditure can affect growth through the
savings and human capital accumulation in OECD countries.
Journal: International Economic Journal
Pages: 303-320
Issue: 3
Volume: 20
Year: 2006
Keywords: Social security expenditure, economic growth, panel cointegration, causality,
X-DOI: 10.1080/10168730600879372
File-URL: http://www.tandfonline.com/doi/abs/10.1080/10168730600879372
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Handle: RePEc:taf:intecj:v:20:y:2006:i:3:p:303-320
Template-Type: ReDIF-Article 1.0
Author-Name: Alain Maurin
Author-X-Name-First: Alain
Author-X-Name-Last: Maurin
Author-Name: Sandra Sookram
Author-X-Name-First: Sandra
Author-X-Name-Last: Sookram
Author-Name: Patrick Kent Watson
Author-X-Name-First: Patrick Kent
Author-X-Name-Last: Watson
Title: Measuring the size of the hidden economy in Trinidad & Tobago, 1973-1999
Abstract:
In this paper, an attempt is made to measure the hidden economy of
Trinidad & Tobago over the period 1973-1999, within the Structural
Cointegrating VAR (SCVAR) framework. Using a Tanzi-type currency demand
approach as a starting point, a multiple equation SCVAR model is estimated
that contains two long-run relationships linking the demand for currency
with other variables. The model is evaluated on the basis of its
persistence profiles, its impulse responses and other statistical
criteria. It is solved using a Gauss-Siedel algorithm and is used to
establish that the size of the hidden economy rose from a low of about 14%
of measured GDP in the early 1970s to a high of 36% in 1981, and is
currently about 20% of measured GDP. Hidden economic activity is also
found to be highly positively correlated with activity in the regular
economy.
Journal: International Economic Journal
Pages: 321-341
Issue: 3
Volume: 20
Year: 2006
Keywords: Caribbean, Trinidad & Tobago, hidden economy, structural cointegrating VAR models,
X-DOI: 10.1080/10168730600879406
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Handle: RePEc:taf:intecj:v:20:y:2006:i:3:p:321-341
Template-Type: ReDIF-Article 1.0
Author-Name: Adam Honig
Author-X-Name-First: Adam
Author-X-Name-Last: Honig
Title: A model of liability dollarization and myopic governments
Abstract:
Liability dollarization of the domestic banking system represents a
source of vulnerability for emerging market countries. The root cause is a
lack of faith in the domestic currency, which ultimately stems from the
belief that the government will not follow policies that promote long-run
currency stability. This paper presents a model in which government myopia
determines the unofficial dollarization of bank credit. Specifically,
myopic politicians will choose low interest rates to expand short-run
output in order to get re-elected, but this choice has the long-run
consequence of increasing dollar lending. Increased liability
dollarization is shown to force the hand of future decision-makers into
choosing fixed exchange rates because of the fear that large depreciations
will destroy balance sheets. The results imply that institutional reforms
are necessary to reverse liability dollarization.
Journal: International Economic Journal
Pages: 343-355
Issue: 3
Volume: 20
Year: 2006
Keywords: Liability dollarization, government myopia,
X-DOI: 10.1080/10168730600879414
File-URL: http://www.tandfonline.com/doi/abs/10.1080/10168730600879414
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Handle: RePEc:taf:intecj:v:20:y:2006:i:3:p:343-355
Template-Type: ReDIF-Article 1.0
Author-Name: Akihiko Kaneko
Author-X-Name-First: Akihiko
Author-X-Name-Last: Kaneko
Title: Specialization in a dynamic trade model: An overlapping generations case
Abstract:
We explore a small open economy with overlapping generations to show that
demographic structure is an important factor for the determination of a
production pattern in the dynamic trade theory. In the representative
agent model, Baxter (1992) shows that even if there are two commodities
and two production factors, there is a Ricardian implication that opening
up to trade leads to perfect specialization in a small open economy. In
contrast, using the overlapping generations model, we find that the
heterogeneity of the economic agents generally makes imperfect
specialization occur. We also find that whether the stability condition
holds or not is crucial for the determination of the long-run production
pattern.
Journal: International Economic Journal
Pages: 357-368
Issue: 3
Volume: 20
Year: 2006
Keywords: Specialization, dynamic Heckscher-Ohlin model, overlapping generations,
X-DOI: 10.1080/10168730600879422
File-URL: http://www.tandfonline.com/doi/abs/10.1080/10168730600879422
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Handle: RePEc:taf:intecj:v:20:y:2006:i:3:p:357-368
Template-Type: ReDIF-Article 1.0
Author-Name: Kazuhiro Tetsu
Author-X-Name-First: Kazuhiro
Author-X-Name-Last: Tetsu
Title: Regional development and rural-based export processing zones in developing countries
Abstract:
Many empirical, descriptive and theoretical studies have revealed various
aspects of export processing zones (EPZs), but little attention has been
given to the issue of the location of EPZs. In this paper, we provide a
new theoretical approach to it: a general equilibrium model that consists
of two regions and makes possible a comparison between the economic
effects of an expansion of an EPZ in the rural region and that of
multinational corporations (MNCs) in the urban region. The result is
interesting: expanding the EPZ in the rural region may be a less desirable
policy for a developing country than expanding the MNC sector in the urban
region.
Journal: International Economic Journal
Pages: 369-383
Issue: 3
Volume: 20
Year: 2006
Keywords: Export processing zones, foreign capital inflow, backward linkages, regional development,
X-DOI: 10.1080/10168730600879448
File-URL: http://www.tandfonline.com/doi/abs/10.1080/10168730600879448
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Handle: RePEc:taf:intecj:v:20:y:2006:i:3:p:369-383
Template-Type: ReDIF-Article 1.0
Author-Name: Kari Heimonen
Author-X-Name-First: Kari
Author-X-Name-Last: Heimonen
Title: Time-Varying Fundamentals of the Euro-Dollar Exchange Rate
Abstract:
This study examines changes in the impact of the economic fundamentals on
the euro-dollar exchange rate. First, the monetary model is augmented with
the equity markets and the model is estimated in its structural form.
Second, the time-varying impacts of the long-run fundamentals representing
equilibrium in different markets on the euro-dollar exchange rate are
examined using Kalman filtering. The time-varying structural model
indicated that the relative importance of the different fundamentals was
not equal and the impact of the fundamentals was time-dependent.
Journal: International Economic Journal
Pages: 385-407
Issue: 4
Volume: 20
Year: 2006
Keywords: Exchange rate, euro-dollar, structural form, Kalman filtering,
X-DOI: 10.1080/10168730600883515
File-URL: http://www.tandfonline.com/doi/abs/10.1080/10168730600883515
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Handle: RePEc:taf:intecj:v:20:y:2006:i:4:p:385-407
Template-Type: ReDIF-Article 1.0
Author-Name: Gamal Atallah
Author-X-Name-First: Gamal
Author-X-Name-Last: Atallah
Title: Opportunity Costs, Competition, and Firm Selection
Abstract:
The paper questions the standard economic assumptions that competing
economic agents have identical reservation utility levels, and that when
differences in opportunity costs exist, they can be conveniently
represented by fixed costs. Asymmetries in opportunity costs are
considered in relation to current efficiency. The effect of this
interchangeability of skills is studied in the context of the effect of
entry on firm selection in a Cournot setting. It is found that inefficient
firms are more likely to crowd out efficient ones when the relationship
between current efficiency and opportunity costs is strong, and when the
fixed costs of changing markets are high. Moreover, in the long-run, firms
with intermediate cost levels are likely to induce the exit of low and
high cost firms. The model sheds light on the benefits of diversification
by multiproduct and multinational firms, and their relationship to skill
transferability.
Journal: International Economic Journal
Pages: 409-430
Issue: 4
Volume: 20
Year: 2006
Keywords: Entry, exit, firm selection, firm survival, opportunity costs, skill transferability, diversification,
X-DOI: 10.1080/10168730601039976
File-URL: http://www.tandfonline.com/doi/abs/10.1080/10168730601039976
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Handle: RePEc:taf:intecj:v:20:y:2006:i:4:p:409-430
Template-Type: ReDIF-Article 1.0
Author-Name: Anusua Datta
Author-X-Name-First: Anusua
Author-X-Name-Last: Datta
Author-Name: Hamid Mohtadi
Author-X-Name-First: Hamid
Author-X-Name-Last: Mohtadi
Title: Endogenous Imitation and Technology Absorption in a Model of North-South Trade
Abstract:
This paper considers the transfer of technology from the North to the
South that occurs through trade in high-technology goods and explicitly
models the 'reverse-engineering' process that allows the South to
assimilate new technologies. A key finding of this study is that the
South's rate of growth is dictated by the size of the country's human
capital, which determines its absorptive capacity and its ability to
assimilate knowledge from the North. We find that while a Southern country
that is poor in human capital can only imitate, Southern countries that
possess sufficiently large human capital endowments, beyond a certain
threshold, signal the onset of innovation. We also find that the North
enjoys a higher rate of innovation and growth with trade than without.
North's gains are the highest when it trades with a human-capital 'poor'
South, because imitation increases South's demand for Northern
intermediates. But trade with the Southern countries that are human
capital rich (and therefore involved in innovation), dampens their demand
for Northern imports, adversely affecting North's growth. The model
predicts growth convergence between the North and a South that is well
passed the threshold for innovation.
Journal: International Economic Journal
Pages: 431-459
Issue: 4
Volume: 20
Year: 2006
Keywords: Innovation, imitation, technology transfer, human-capital, endogenous growth,
X-DOI: 10.1080/10168730601027005
File-URL: http://www.tandfonline.com/doi/abs/10.1080/10168730601027005
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Handle: RePEc:taf:intecj:v:20:y:2006:i:4:p:431-459
Template-Type: ReDIF-Article 1.0
Author-Name: Yanhong Zhang
Author-X-Name-First: Yanhong
Author-X-Name-Last: Zhang
Author-Name: Hui Chang
Author-X-Name-First: Hui
Author-X-Name-Last: Chang
Author-Name: Jean Gauger
Author-X-Name-First: Jean
Author-X-Name-Last: Gauger
Title: The Threshold Effect of Exchange Rate Volatility on Trade Volume: Evidence from G-7 Countries
Abstract:
This paper uses a threshold model to examine a possible threshold effect
in the impact of exchange rate volatility on trade volume for the
bilateral trade volumes between the US and other G-7 countries. A
grid-searching method is used to obtain the threshold points, and
time-series econometric techniques are applied to estimate the long run
stable relationships as well as short-run dynamics. The results support
the existence of nonlinearity in the effect of exchange rate volatility,
and indicate that trade volume tends to increase when exchange rate
volatility surpasses a certain threshold point.
Journal: International Economic Journal
Pages: 461-476
Issue: 4
Volume: 20
Year: 2006
Keywords: Exchange rate volatility, trade, threshold,
X-DOI: 10.1080/10168730601027039
File-URL: http://www.tandfonline.com/doi/abs/10.1080/10168730601027039
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Handle: RePEc:taf:intecj:v:20:y:2006:i:4:p:461-476
Template-Type: ReDIF-Article 1.0
Author-Name: Vassilis Rapanos
Author-X-Name-First: Vassilis
Author-X-Name-Last: Rapanos
Title: Tax Incidence in a Model with Efficiency Wages and Unemployment
Abstract:
The purpose of the present paper is to examine the effects of taxation on
income distribution in a model with efficiency wages and involuntary
unemployment. Central to our efficiency-wage model is the hypothesis that
firms set wages above market-clearing levels, whenever the productivity of
labor depends on the real wage paid by the firm, and unemployment. Within
a two sector general equilibrium model we study the incidence of factor
and commodity taxes on income distribution, and unemployment. Our findings
differ substantially from those derived by the traditional neoclassical
analysis, originally developed by Harberger, and as it has been extended
by several authors.
Journal: International Economic Journal
Pages: 477-494
Issue: 4
Volume: 20
Year: 2006
Keywords: Tax incidence, efficiency wages,
X-DOI: 10.1080/10168730601027070
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Handle: RePEc:taf:intecj:v:20:y:2006:i:4:p:477-494
Template-Type: ReDIF-Article 1.0
Author-Name: Yin-Wong Cheung
Author-X-Name-First: Yin-Wong
Author-X-Name-Last: Cheung
Author-Name: Kon Lai
Author-X-Name-First: Kon
Author-X-Name-Last: Lai
Title: A Reappraisal of the Border Effect on Relative Price Volatility
Abstract:
Engel & Rogers (1996) find that crossing the US-Canada border can
considerably raise relative price volatility and that exchange rate
fluctuations explain about one-third of the volatility increase. Using a
decomposition method, this study re-evaluates the border effect. It is
shown that cross-country heterogeneity in price volatility can induce a
bias in measuring the border effect unless proper adjustment is made to
correct it. We further examine the implication of symmetric sampling for
the border effect estimation under the decomposition approach. Two
conditions governing the strength of the border effect are identified. In
particular, the more dissimilar the price shocks are across countries, the
greater the border effect will be. Decomposition estimates also suggest
that exchange rate fluctuations actually account for a large majority of
the border effect.
Journal: International Economic Journal
Pages: 495-513
Issue: 4
Volume: 20
Year: 2006
Keywords: Relative price volatility, exchange rate volatility, national border, distance, dissimilar shocks,
X-DOI: 10.1080/10168730601027120
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Handle: RePEc:taf:intecj:v:20:y:2006:i:4:p:495-513
Template-Type: ReDIF-Article 1.0
Author-Name: Bin Peng
Author-X-Name-First: Bin
Author-X-Name-Last: Peng
Title: Pricing Geometric Asian Options under the CEV Process
Abstract:
This paper discusses the pricing of geometric Asian options when the
underlying stock follows the constant elasticity of variance (CEV)
process. We build a binomial tree method to estimate the CEV process and
use it to price geometric Asian options. We find that the binomial tree
method for the lognormal case can effectively solve the computational
problems arising from the inherent complexities of geometric Asian options
when the stock price follows the CEV process. We present numerical results
to demonstrate the validity and the convergence of the approach for the
different parameter values set in the CEV process.
Journal: International Economic Journal
Pages: 515-522
Issue: 4
Volume: 20
Year: 2006
Keywords: Exotic options, geometric Asian options, binomial tree method, CEV process,
X-DOI: 10.1080/10168730500515316
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Handle: RePEc:taf:intecj:v:20:y:2006:i:4:p:515-522
Template-Type: ReDIF-Article 1.0
Author-Name: Quan Le
Author-X-Name-First: Quan
Author-X-Name-Last: Le
Author-Name: Meenakshi Rishi
Author-X-Name-First: Meenakshi
Author-X-Name-Last: Rishi
Title: Corruption and Capital Flight: An Empirical Assessment
Abstract:
This paper considers the role of corruption in impelling capital flight.
Identifying corruption as one dimension of poor governance, the empirical
analysis explores direct linkages between corruption and capital flight in
a broad sample of countries. The novelty of this investigation is that it
is based on a portfolio choice model of asset allocation that explicitly
recognizes corruption as contributing to the variance of domestic
investment risk. The main testable proposition emerging from our
theoretical specification is stated thus: does corruption impel capital
flight by raising the risk of domestic investment, ceteris paribus? An
econometric analysis suggests that, holding other determinants of capital
flight constant, corruption does have a positive and significant impact on
capital flight. Based on these results, the paper concludes that
advocating good governance by combating corruption makes a great deal of
sense for countries aiming to staunch capital flight. Capital flight and
corruption are some of the main causes of the poverty in the South.
Without capital flight and corruption the debt crisis would not exist in
its current form. Capital Flight and Corruption Treaty NGO Alternative
Treaties at the 1992 Global Forum
Journal: International Economic Journal
Pages: 523-540
Issue: 4
Volume: 20
Year: 2006
Keywords: Capital flight, governance, corruption, economic risk,
X-DOI: 10.1080/10168730601027161
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Template-Type: ReDIF-Article 1.0
Author-Name: Anders Sørensen
Author-X-Name-First: Anders
Author-X-Name-Last: Sørensen
Title: Inter-industry Wage Differentials and Allocative Inefficiency
Abstract:
Do inter-industry wage differentials reveal information on allocative
inefficiency, implying that reallocation of labor input from low- to
high-wage sectors improves aggregate productivity? This question is
addressed by introducing wage-weighted averages of sector employment
growth in growth regressions using panel data for selected OECD countries
over the period 1971-93. For the 1970s, it is found that reallocation of
labor between sectors with different wages did not contribute to
explaining economic growth, whereas it did for the 1980s. Hence,
observable wage differentials only reflect allocative inefficiency after
1980.
Journal: International Economic Journal
Pages: 1-26
Issue: 1
Volume: 21
Year: 2007
Keywords: Inter-industry wage differentials, growth,
X-DOI: 10.1080/10168730601180994
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Handle: RePEc:taf:intecj:v:21:y:2007:i:1:p:1-26
Template-Type: ReDIF-Article 1.0
Author-Name: Sunwoong Kim
Author-X-Name-First: Sunwoong
Author-X-Name-Last: Kim
Author-Name: Yoon-Ha Yoo
Author-X-Name-First: Yoon-Ha
Author-X-Name-Last: Yoo
Title: Policies to Reduce Rent Seeking in Controlled Markets
Abstract:
We analyze the effects of various policies to reduce rent seeking in the
controlled market in which buyers have heterogeneous valuation regarding
the coveted good. The good is allocated according to the buyer-specific
signal ('test score'), which is determined by the quantity of wasteful
'rent seeking' exerted by the buyer. We consider three common forms of
market control: minimum qualification score, quota, and price ceiling. The
potential buyers with higher valuations are more likely to receive the
good in equilibrium, while they exert more rent-seeking efforts.
Marginally relaxing market control does not necessarily decrease the
aggregated amount of rent-seeking activities, and the effectiveness of
policy measures usually depends on the current degree of competitiveness
in the market.
Journal: International Economic Journal
Pages: 27-47
Issue: 1
Volume: 21
Year: 2007
Keywords: Rent seeking, screening, contest, quota, price control,
X-DOI: 10.1080/10168730601180853
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Template-Type: ReDIF-Article 1.0
Author-Name: Namhoon Kwon
Author-X-Name-First: Namhoon
Author-X-Name-Last: Kwon
Title: Entry Invitations in a Market with Network Effects
Abstract:
This paper reinvestigates the well-known claim by Economides (1996) that
the network effects can lead a monopolist to give away its technology for
free. This so-called 'open' strategy is likely to be adopted when marginal
network effects are strong but not too strong relative to marginal price
effects. Highly elastic demand and highly convex costs also increase the
likelihood of such a strategy. I first study the case in which the
post-entry market structure is of the Cournot type and later compare the
results with the Stackelberg case.
Journal: International Economic Journal
Pages: 49-59
Issue: 1
Volume: 21
Year: 2007
Keywords: Network effects, open strategy, Cournot, Stackelberg,
X-DOI: 10.1080/10168730601180879
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Template-Type: ReDIF-Article 1.0
Author-Name: Chul Chung
Author-X-Name-First: Chul
Author-X-Name-Last: Chung
Title: Technological Progress, Terms of Trade, and Monopolistic Competition
Abstract:
This paper examines welfare implications of technological progress in the
new trade model with monopolistic competition. Our result shows that
labor-augmenting technological progress turns the terms of trade against
the growing country while capital-augmenting technological progress shifts
them in favor of the growing country. Unlike the Findlay-Grubert theorem,
both technological progresses are welfare-enhancing. The key channel for
this welfare effect is the love of variety in the new trade model.
Journal: International Economic Journal
Pages: 61-70
Issue: 1
Volume: 21
Year: 2007
Keywords: Findlay-Grubert theorem, technological progress, terms of trade, monopolistic competition, welfare,
X-DOI: 10.1080/10168730601180887
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Handle: RePEc:taf:intecj:v:21:y:2007:i:1:p:61-70
Template-Type: ReDIF-Article 1.0
Author-Name: Soyoung Kim
Author-X-Name-First: Soyoung
Author-X-Name-Last: Kim
Author-Name: Sunghyun Henry Kim
Author-X-Name-First: Sunghyun Henry
Author-X-Name-Last: Kim
Title: Financial Panic and Exchange Rate Overshooting during Currency Crises
Abstract:
During currency crises, some currencies depreciate more than the
post-crisis exchange rate level, which can be described as exchange rate
overshooting. Previous studies have claimed that a tight monetary policy,
represented by an increase in the interest rate, stabilizes an exchange
rate by causing currency appreciation, thereby explaining overshooting.
This paper tests the hypothesis that overshooting simply reflects the
overreaction of investors due to financial panic during currency crises,
regardless of subsequent domestic policies. Empirical results suggest
that: (1) the positive relationship between monetary tightening and the
overshooting measure is very sensitive to sample selection; and (2) the
measure of financial panic has a significant and positive relationship
with the measure of overshooting in non-European countries.
Journal: International Economic Journal
Pages: 71-89
Issue: 1
Volume: 21
Year: 2007
Keywords: Currency crisis, financial panic, exchange rate overshooting,
X-DOI: 10.1080/10168730601180929
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Handle: RePEc:taf:intecj:v:21:y:2007:i:1:p:71-89
Template-Type: ReDIF-Article 1.0
Author-Name: Akira Okamoto
Author-X-Name-First: Akira
Author-X-Name-Last: Okamoto
Title: Optimal Tax Combination in an Aging Japan
Abstract:
This paper searches for a desirable tax combination in the coming aging
society. It looks at the Japanese tax and social security systems through
an extended life-cycle general equilibrium simulation model and evaluates
the macroeconomic and welfare effects of alternative tax policies in an
aging Japan. Simulation results show that an increase in the rate of tax
on consumption and a decrease in the rate of tax on interest income may be
a desirable tax combination under conditions of revenue neutrality,
because the combination substantially promotes capital formation and
brings with it a significant improvement in social welfare.
Journal: International Economic Journal
Pages: 91-114
Issue: 1
Volume: 21
Year: 2007
Keywords: Aging population, tax reform, life-cycle general equilibrium model, simulation analysis,
X-DOI: 10.1080/10168730601180978
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Handle: RePEc:taf:intecj:v:21:y:2007:i:1:p:91-114
Template-Type: ReDIF-Article 1.0
Author-Name: Julian Ramajo
Author-X-Name-First: Julian
Author-X-Name-Last: Ramajo
Author-Name: Agustin Garcia
Author-X-Name-First: Agustin
Author-X-Name-Last: Garcia
Author-Name: Montserrat Ferre
Author-X-Name-First: Montserrat
Author-X-Name-Last: Ferre
Title: The Effects of Public Expenditure on Private Consumption: A Disaggregated Analysis for Spain (1970-1997)
Abstract:
The main purpose of this article is to provide empirical evidence for
Spain on the dependency relationship between government spending and
private consumption at the disaggregated level. To this end, we will use
two approaches that extend traditional consumption models, allowing for
non-separability of consumers' preferences between public and private
goods and services. The results obtained show significant links between
public and private consumption and, in particular, they point towards the
importance of carrying out the analysis at the disaggregated level: there
is evidence that some components of public and private consumption act as
substitutes, whereas others act as complements.
Journal: International Economic Journal
Pages: 115-131
Issue: 1
Volume: 21
Year: 2007
Keywords: Fiscal policy, private consumption, government spending, Spanish economy,
X-DOI: 10.1080/10168730601180838
File-URL: http://www.tandfonline.com/doi/abs/10.1080/10168730601180838
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Handle: RePEc:taf:intecj:v:21:y:2007:i:1:p:115-131
Template-Type: ReDIF-Article 1.0
Author-Name: Charalambos Pattichis
Author-X-Name-First: Charalambos
Author-X-Name-Last: Pattichis
Author-Name: Marios Maratheftis
Author-X-Name-First: Marios
Author-X-Name-Last: Maratheftis
Author-Name: Stavros Zenios
Author-X-Name-First: Stavros
Author-X-Name-Last: Zenios
Title: Is the Cyprus Pound Real Effective Exchange Rate Misaligned? A BEER Approach
Abstract:
This paper investigates whether the real effective exchange rate of the
Cyprus pound is misaligned by generating measures of the equilibrium rate
using the Behavioral Equilibrium Exchange Rate (BEER) approach. Several
measures of the equilibrium exchange rate were derived and used to check
for the existence of exchange rate misalignment. The results suggest that,
during the 1990s, the actual real effective exchange rate and the various
equilibrium measures generated move closely together and there is no
evidence of any significant and persistent misalignment. However, the
empirical evidence suggests persistent overvaluation during the 1980s.
Journal: International Economic Journal
Pages: 133-154
Issue: 1
Volume: 21
Year: 2007
Keywords: Equilibrium exchange rates, misalignment, Cyprus pound,
X-DOI: 10.1080/10168730601181026
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Handle: RePEc:taf:intecj:v:21:y:2007:i:1:p:133-154
Template-Type: ReDIF-Article 1.0
Author-Name: Purna Chandra Parida
Author-X-Name-First: Purna Chandra
Author-X-Name-Last: Parida
Author-Name: Pravakar Sahoo
Author-X-Name-First: Pravakar
Author-X-Name-Last: Sahoo
Title: Export-led Growth in South Asia: A Panel Cointegration Analysis
Abstract:
In this paper, we attempt to examine the export-led and manufacturing
export-led growth hypothesis for four South Asian Countries; namely,
India, Pakistan, Bangladesh and Sri Lanka, using Pedroni's panel
cointegration technique for the period 1980-2002. In this context we
estimate growth accounting equations to investigate the impact of exports,
manufacturing exports and other important physical and human capital
variables on both total GDP and non-export GDP. The study finds long-run
equilibrium relationship between GDP (and non-export GDP) and exports
along with other variables supporting export-led growth hypothesis. The
results also substantiate the existence of manufacturing export-led growth
hypothesis. Further, we find that export, fixed capital formation, public
expenditure on health and education have statistically significant
coefficients re-emphasizing the importance of these variables for higher
economic growth.
Journal: International Economic Journal
Pages: 155-175
Issue: 2
Volume: 21
Year: 2007
Keywords: Exports, economic growth, South-Asia, panel cointegration,
X-DOI: 10.1080/10168730701345414
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Handle: RePEc:taf:intecj:v:21:y:2007:i:2:p:155-175
Template-Type: ReDIF-Article 1.0
Author-Name: Wook Sohn
Author-X-Name-First: Wook
Author-X-Name-Last: Sohn
Title: A Theory of Conflicts of Interest in Banking Relationships
Abstract:
This paper highlights a dark side of banking relationships by elucidating
the conditions under which a pre-existing relationship between a lending
bank and a borrower can be detrimental to positive valuation effects of
loan announcements. The effect of a pre-existing relationship is more
likely to be negative when the pre-existing loans are large and firms'
screening costs are low. A theoretical model shows that loan
announcement's positive effect on borrowers' value due to the standard
information advantage can be more than offset by the bank's conflict of
interest when the bank's asset quality reputation is poor, i.e. when the
probability of the bank holding a bad loan is large.
Journal: International Economic Journal
Pages: 177-198
Issue: 2
Volume: 21
Year: 2007
Keywords: Conflicts of interest, banking relationships, soft-budget constraint, sequential equilibrium,
X-DOI: 10.1080/10168730701345422
File-URL: http://www.tandfonline.com/doi/abs/10.1080/10168730701345422
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Handle: RePEc:taf:intecj:v:21:y:2007:i:2:p:177-198
Template-Type: ReDIF-Article 1.0
Author-Name: Yemane Wolde-Rufael
Author-X-Name-First: Yemane
Author-X-Name-Last: Wolde-Rufael
Title: Another look at the Relationship between Telecommunications Investment and Economic Activity in the United States
Abstract:
In a recent issue of this journal, Beil et al. (2005, hereafter, BFJ)
examined the relationship between telecommunications investment and
economic growth in the United States over the period 1947-1996. Based on
results from Granger-Sims test, BFJ conclude that '… investment by
telecommunications firms is caused by, but does not cause, economic
activity, and the findings are robust across lag lengths'. However, using
another version of the Granger causality test due to Toda & Yamamoto
(1995) and the same data set transformed into natural logarithms, the
evidence in this paper indicates a feedback where there was a
bi-directional causality between telecommunications investment and
economic growth. This seems to suggest that policies aimed at stimulating
the US economy by accelerating investment in the telecommunications sector
may be successful.
Journal: International Economic Journal
Pages: 199-205
Issue: 2
Volume: 21
Year: 2007
Keywords: Telecommunications investment, GDP, modified Granger causality,
X-DOI: 10.1080/10168730701345372
File-URL: http://www.tandfonline.com/doi/abs/10.1080/10168730701345372
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Handle: RePEc:taf:intecj:v:21:y:2007:i:2:p:199-205
Template-Type: ReDIF-Article 1.0
Author-Name: Abhijit Sharma
Author-X-Name-First: Abhijit
Author-X-Name-Last: Sharma
Author-Name: Michael Dietrich
Author-X-Name-First: Michael
Author-X-Name-Last: Dietrich
Title: The Structure and Composition of India's Exports and Industrial Transformation (1980-2000)
Abstract:
This paper analyses structural change in Indian manufactured exports
empirically for 143 (mainly manufacturing) industrial groupings. Trade
indices such as Balassa's revealed comparative advantage (RCA) index and
variants are used. Detailed econometric analysis is employed to examine
structural change. The stability and the process of the intertemporal
evolution of the RCA indices is considered. Three technology categories
(high technology, medium technology and low technology) are analysed
individually. Our results point towards substantial industrial
restructuring in manufactured exports. We find evidence of
despecialisation within India's manufactured exports for the time period
studied, which is consistent with increasing specialisation in a subset of
manufactured exports.
Journal: International Economic Journal
Pages: 207-231
Issue: 2
Volume: 21
Year: 2007
Keywords: India, comparative advantage, manufactured exports,
X-DOI: 10.1080/10168730701345471
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Handle: RePEc:taf:intecj:v:21:y:2007:i:2:p:207-231
Template-Type: ReDIF-Article 1.0
Author-Name: Axel Borrmann
Author-X-Name-First: Axel
Author-X-Name-Last: Borrmann
Author-Name: Matthias Busse
Author-X-Name-First: Matthias
Author-X-Name-Last: Busse
Author-Name: Manuel De La Rocha
Author-X-Name-First: Manuel
Author-X-Name-Last: De La Rocha
Title: Consequences of Economic Partnership Agreements between East and Southern African Countries and the EU for Inter- and Intra-regional Integration
Abstract:
The European Union is currently negotiating Economic Partnership
Agreements (EPAs) with six African, Caribbean and Pacific country
groupings, aiming at establishing mutual free trade. This paper
empirically assesses the impact of the EPAs on trade flows and government
revenues for 22 East and Southern African countries and discusses
implications for intra-regional integration. The results indicate that
while moderate trade effects can be expected, relatively large budget
effects are likely to occur in a number of these countries, exposing them
to considerable structural and financial adjustment requirements. In
addition, EPAs would strengthen the need to consolidate overlapping
intra-regional integration schemes.
Journal: International Economic Journal
Pages: 233-253
Issue: 2
Volume: 21
Year: 2007
Keywords: Economic partnership agreement, EU, ACP countries, East and Southern Africa,
X-DOI: 10.1080/10168730701345398
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Handle: RePEc:taf:intecj:v:21:y:2007:i:2:p:233-253
Template-Type: ReDIF-Article 1.0
Author-Name: Edward N. Gamber
Author-X-Name-First: Edward N.
Author-X-Name-Last: Gamber
Author-Name: Amy K. S. Scott
Author-X-Name-First: Amy K. S.
Author-X-Name-Last: Scott
Title: A Threshold Analysis of the Relationship Between Governance and Growth
Abstract:
Quality of governance has been found to be significant in economic
growth. We investigate, using a threshold technique, whether the quality
of governance matters equally across all levels of economic development.
We find that the quality of governance is most significant for only a
subset of relatively poor countries, while education is most significant
for the poorest countries, and region is most significant for the
wealthiest.
Journal: International Economic Journal
Pages: 255-278
Issue: 2
Volume: 21
Year: 2007
X-DOI: 10.1080/10168730701345240
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Handle: RePEc:taf:intecj:v:21:y:2007:i:2:p:255-278
Template-Type: ReDIF-Article 1.0
Author-Name: Oscar Afonso
Author-X-Name-First: Oscar
Author-X-Name-Last: Afonso
Author-Name: Paulo B. Vasconcelos
Author-X-Name-First: Paulo B.
Author-X-Name-Last: Vasconcelos
Title: Re-examining International Technological-Knowledge Diffusion
Abstract:
In the standard models of North-South technological-knowledge diffusion,
the larger the initial technological-knowledge gap between countries, the
greater the Southern catching up. However, this result does not adjust
well to Southern reality as a whole. The purpose of this paper is to
demonstrate that the disparity between the theoretical outcome and the
empirical findings can be reduced by considering that: (i) the South can
only imitate Northern technological knowledge when it is sufficiently
close to the Northern frontier; (ii) the advantage of the South's moderate
backwardness, together with its imitation capacity, is a mechanism of
catching up with the North; and (iii) the Southern catching-up
specification can be country specific. In particular, we show that the
behavior of the South's relative level of employed human capital affects
Southern imitation capacity and depends on the catching-up specifications.
Journal: International Economic Journal
Pages: 279-296
Issue: 2
Volume: 21
Year: 2007
Keywords: North-South, R&D, Human capital, convergence, numerical computations,
X-DOI: 10.1080/10168730701345307
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Handle: RePEc:taf:intecj:v:21:y:2007:i:2:p:279-296
Template-Type: ReDIF-Article 1.0
Author-Name: Christian Pierdzioch
Author-X-Name-First: Christian
Author-X-Name-Last: Pierdzioch
Title: Households' Preferences and Exchange Rate Overshooting
Abstract:
This paper uses a 'New-Open-Economy Macroeconomic' model to study the
effect of a shock to Households' preferences on exchange rate dynamics.
The special features of the model are that Households' preferences exhibit
a 'catching-up with the Joneses' effect and that international financial
markets are imperfectly integrated. Results of numerical simulations of
the model demonstrate that these features imply that, in an otherwise
standard 'New-Open-Economy Macroeconomic' model, a shock to Households'
preferences can give rise to an overshooting of the exchange rate.
Journal: International Economic Journal
Pages: 297-316
Issue: 2
Volume: 21
Year: 2007
Keywords: Preference shock, financial markets, catching-up with the Joneses, exchange rate overshooting,
X-DOI: 10.1080/10168730701345356
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Handle: RePEc:taf:intecj:v:21:y:2007:i:2:p:297-316
Template-Type: ReDIF-Article 1.0
Author-Name: Yothin Jinjarak
Author-X-Name-First: Yothin
Author-X-Name-Last: Jinjarak
Title: On the Causality between Trade Credits and Imports: Evidence and Possible Implication for Trade Penalties on Debt Defaults
Abstract:
This study investigates the association between trade credits and imports
of developing countries. Made available by its creditors, the main
function of trade credits is to facilitate cross-border transactions of
goods and services. This study finds that the reliance of imports on trade
credits varies across regions and income: towards the end of the 1990s,
the trade credits to imports ratio ranged from 0.20 for East Asia & the
Pacific to 0.87 for Africa, and from 0.24 for high-income countries to
0.79 for low-income countries. Applying panel and cross-country
estimation, we find that past trade credits help predict current imports,
but past imports do not alter the future path of trade credits. Further,
the positive association between trade credits and imports is larger for
countries more dependent upon trade credits. The findings support the
notion that countries make debt repayments to avoid any potential
disruption on the line of trade credits. We also find that the trade
credits penalty could materialize within less than two quarters.
Journal: International Economic Journal
Pages: 317-333
Issue: 3
Volume: 21
Year: 2007
Keywords: Debt repayment, international loans, trade finance,
X-DOI: 10.1080/10168730701568304
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Handle: RePEc:taf:intecj:v:21:y:2007:i:3:p:317-333
Template-Type: ReDIF-Article 1.0
Author-Name: Rangan Gupta
Author-X-Name-First: Rangan
Author-X-Name-Last: Gupta
Title: Financial Liberalization and Inflationary Dynamics: An Open Economy Analysis
Abstract:
This paper analyzes the effects of financial liberalization on inflation.
We develop an open economy monetary endogenous growth general equilibrium
model, with financial intermediaries subjected to obligatory 'high'
reserve ratio, serving as the source of financial repression. When
calibrated to four Southern European semi-industrialized countries, namely
Greece, Italy, Spain and Portugal, which typically had high reserve
requirements, the model indicates a positive inflation-financial
repression relationship irrespective of the specification of preferences.
But the strength of the relationship obtained from the model is found to
be much smaller in size than the corresponding empirical estimates.
Journal: International Economic Journal
Pages: 335-360
Issue: 3
Volume: 21
Year: 2007
Keywords: Inflation financial markets and the macroeconomy,
X-DOI: 10.1080/10168730701541228
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Handle: RePEc:taf:intecj:v:21:y:2007:i:3:p:335-360
Template-Type: ReDIF-Article 1.0
Author-Name: A. K. M. Azhar
Author-X-Name-First: A. K. M.
Author-X-Name-Last: Azhar
Author-Name: Robert J. R. Elliott
Author-X-Name-First: Robert J. R.
Author-X-Name-Last: Elliott
Title: Trade and Specialisation in Pollution Intensive Industries: North-South Evidence
Abstract:
The pollution haven hypothesis (PHH) and the capital-labour hypothesis
(KLH) state that the relative level of a country's environmental
regulations and capital and labour endowments determines its comparative
advantage respectively. Since these hypotheses lead to conflicting
predictions as to whether the North or the South will specialise in
pollution-intensive production, this paper examines whether changes in
trade and specialisation patterns allow us to distinguish between
pollution haven and factor endowment effects. We employ a methodology that
enables us to present North-South trade patterns over time and to identify
those periods when trade patterns were consistent with either the PHH
and/or the KLH as a foundation for undertaking more detailed econometric
studies.
Journal: International Economic Journal
Pages: 361-380
Issue: 3
Volume: 21
Year: 2007
Keywords: Pollution Haven Hypothesis, trade box, specialisation,
X-DOI: 10.1080/10168730701529926
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Handle: RePEc:taf:intecj:v:21:y:2007:i:3:p:361-380
Template-Type: ReDIF-Article 1.0
Author-Name: Carmen D. Alvarez-Albelo
Author-X-Name-First: Carmen D.
Author-X-Name-Last: Alvarez-Albelo
Author-Name: Monica Pigem-Vigo
Author-X-Name-First: Monica
Author-X-Name-Last: Pigem-Vigo
Title: Quality of Imports Relative to Exports, and the Transmission of Sustained Growth through the Terms of Trade
Abstract:
This paper shows that an economy can import sustained growth, in spite of
not possessing mechanisms to absorb foreign knowledge. To do that, it
develops a two-country model of exogenous growth with investment-specific
technological change. In autarky, one country sustainably grows while the
other economy remains stagnant. In the trade situation, the
quality-adjusted terms of trade become increasingly favourable to the
second economy, which results in the transmission of growth. The
continuous improvement in the quality of imported capital goods relative
to exported consumption goods is the reason why this occurs. Moreover,
this mechanism leads to convergence in per capita income if trade involves
incomplete specialisation.
Journal: International Economic Journal
Pages: 381-398
Issue: 3
Volume: 21
Year: 2007
Keywords: Trade, terms of trade, quality-adjusted prices, growth transmission, convergence,
X-DOI: 10.1080/10168730701520537
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Handle: RePEc:taf:intecj:v:21:y:2007:i:3:p:381-398
Template-Type: ReDIF-Article 1.0
Author-Name: Pei-Cheng Liao
Author-X-Name-First: Pei-Cheng
Author-X-Name-Last: Liao
Title: International R&D Rivalry with Spillovers and Policy Cooperation in R&D Subsidies and Taxes
Abstract:
We have investigated non-cooperative and jointly optimal R&D policies in
the framework of Spencer & Brander (1983) in the presence of R&D
spillovers. When R&D activities are strategic substitutes and the R&D game
exhibits a positive externality, the result of Spencer & Brander (1983)
reverses: the non-cooperative policy is a tax while the jointly optimal
policy is a subsidy. Moreover, when R&D activities are strategic
complements, the usual result of the prisoners' dilemma in the strategic
subsidy game does not hold, implying that a welfare intervention is
preferable over laissez-faire. When spillovers are sufficiently large, the
joint welfare increases with subsidies being higher than those under
non-cooperation.
Journal: International Economic Journal
Pages: 399-417
Issue: 3
Volume: 21
Year: 2007
Keywords: R&D spillovers, R&D subsidy/tax, strategic substitutes/complements, externality,
X-DOI: 10.1080/10168730701520545
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Handle: RePEc:taf:intecj:v:21:y:2007:i:3:p:399-417
Template-Type: ReDIF-Article 1.0
Author-Name: Benhua Yang
Author-X-Name-First: Benhua
Author-X-Name-Last: Yang
Title: Autocracy, Democracy, and FDI Inflows to the Developing Countries
Abstract:
This paper investigates the relationship between political regimes and
Foreign Direct Investment (FDI) inflows to the developing countries for a
sample of 134 countries over the 1983-2002 period. Using two categorical
measures of regime type and three different measures of FDI, this study
finds that, regardless of the measures of regime type, democracies are not
significantly associated with either FDI in level or FDI as a ratio to
GDP; democracy is positively related to a higher level of per capita FDI,
but this result is not robust to alternative measures of political regime.
Taken as a whole, there is no evidence of a systematic relationship
between democracy and FDI inflows. This result suggests that being a
democracy does not help attract higher levels of FDI.
Journal: International Economic Journal
Pages: 419-439
Issue: 3
Volume: 21
Year: 2007
Keywords: Autocracy, democracy, regime, foreign direct investment, developing countries,
X-DOI: 10.1080/10168730601027179
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Handle: RePEc:taf:intecj:v:21:y:2007:i:3:p:419-439
Template-Type: ReDIF-Article 1.0
Author-Name: James Rude
Author-X-Name-First: James
Author-X-Name-Last: Rude
Author-Name: Jean-Philippe Gervais
Author-X-Name-First: Jean-Philippe
Author-X-Name-Last: Gervais
Title: An Analysis of a Rules-based Approach to Disciplining Export Credits in Agriculture
Abstract:
This paper examines the comparative static effects of rules-based
disciplines for government supported export credit arrangements. The
arrangements provide traders in the country offering the guarantees more
favourable borrowing conditions. This may provide an advantage relative to
rival exporters since the supported trader may offer better financial
terms to importers. Rules that discipline implicit interest rate subsidies
are appropriate when an importing country does not face liquidity
constraints when borrowing. However, these rules may not be appropriate
with liquidity constraints because of the potential for additionality and
benefits for all exporting countries. Rules on benchmarks for insurance
premiums are always appropriate because insurance subsidies unambiguously
have the potential to distort markets.
Journal: International Economic Journal
Pages: 441-463
Issue: 3
Volume: 21
Year: 2007
Keywords: Export credit, WTO agreement on agriculture, export subsidy,
X-DOI: 10.1080/10168730601027195
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Handle: RePEc:taf:intecj:v:21:y:2007:i:3:p:441-463
Template-Type: ReDIF-Article 1.0
Author-Name: MD. Akhtaruzzaman
Author-X-Name-First: MD.
Author-X-Name-Last: Akhtaruzzaman
Title: Globalization, Financial Liberalization and the Behavior of the Long Run Money Demand in the Bangladesh Economy
Abstract:
The paper estimates the long run demand for money function in the
Bangladesh economy using cointegration and the Vector Error Correction
Modeling (VECM) technique. The cointegration results suggest that although
the process of globalization has shown no significant impact on money
demand by the fact that the foreign interest rate is seen as statistically
not significant, the financial liberalization has an important impact,
reflected in the statistically significant role of domestic interest rate,
in influencing both M1 and M2 money demand. An estimate of VECMs also
reveals the fact that the short run speed of adjustment is moderately
influenced by the financial reform measures to establish the long run
relation between money balances, income and domestic interest rates. The
phenomenon of credit constraint in the context of a developing country has
shown no significant role in influencing money demand, which may imply
that the stage of financial development is getting higher level in the
Bangladesh economy. The existence of exchange rate depreciation in the
cointegration relation with the expected sign suggests that currency
substitution is now effective in the monetary sector and, therefore, its
impact should be considered in the Bangladesh monetary policy matrix.
Journal: International Economic Journal
Pages: 465-490
Issue: 3
Volume: 21
Year: 2007
Keywords: Demand for money, financial liberalization, financial reforms, asset substitutability, currency substitution,
X-DOI: 10.1080/10168730601027153
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Handle: RePEc:taf:intecj:v:21:y:2007:i:3:p:465-490
Template-Type: ReDIF-Article 1.0
Author-Name: Felipa De Mello-Sampayo
Author-X-Name-First: Felipa
Author-X-Name-Last: De Mello-Sampayo
Title: The Location of the United States' FDI Under the Share Gravity Model
Abstract:
This paper examines the geographical distribution of US MNEs FDI using
the share gravity model, which adds a competition factor to the classical
gravity formulation. The aim is to show that, unlike previous applications
of the gravity model to FDI, the share of FDI pertaining to a location is
determined not only by its own characteristics but also by those of
competing locations. A dynamic share gravity model is estimated for a
panel of both industrialised and developing countries using five
alternative measures of FDI. The results vindicate the superiority of the
share relative to the classical version of the gravity model in that the
competition factor has a significantly negative impact on the FDI share.
Journal: International Economic Journal
Pages: 491-519
Issue: 4
Volume: 21
Year: 2007
Keywords: Foreign Direct Investment, multinational enterprises, gravity model, dynamic panel data model,
X-DOI: 10.1080/10168730701529942
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Handle: RePEc:taf:intecj:v:21:y:2007:i:4:p:491-519
Template-Type: ReDIF-Article 1.0
Author-Name: Saade Chami
Author-X-Name-First: Saade
Author-X-Name-Last: Chami
Author-Name: Selim Elekdag
Author-X-Name-First: Selim
Author-X-Name-Last: Elekdag
Author-Name: Ivan Tchakarov
Author-X-Name-First: Ivan
Author-X-Name-Last: Tchakarov
Title: What are the Potential Economic Benefits of Enlarging the Gulf Cooperation Council?
Abstract:
This paper uses a variant of the IMF's Global Economy Model (GEM) to
estimate the macroeconomic benefits of Yemen's accession into the Gulf
Cooperation Council (GCC). After calibrating the model to Yemen and the
GCC block, several simulations are carried out to estimate the potential
impact of economic integration on both regions. The paper draws two
fundamental conclusions. First, regional integration enhances competition
which produces large economic benefits for both Yemen and the GCC. In
particular, we show that in some cases economic integration can increase
GDP in Yemen by up to 14% and in the GCC by up to 7% over the long run.
Second, even if market structures do not improve substantially, GCC
enlargement can still generate substantial spillover gains in each block.
More specifically, one measure of economic prosperity measured by
consumption can increase by up to 7% in Yemen and up to 8% in the GCC.
Journal: International Economic Journal
Pages: 521-548
Issue: 4
Volume: 21
Year: 2007
Keywords: Regional integration, competition, IMF's Global Economy Model (GEM),
X-DOI: 10.1080/10168730701699059
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Handle: RePEc:taf:intecj:v:21:y:2007:i:4:p:521-548
Template-Type: ReDIF-Article 1.0
Author-Name: Jose Mendez-Naya
Author-X-Name-First: Jose
Author-X-Name-Last: Mendez-Naya
Title: Strategic Distortion of the Objectives of Trade Policy
Abstract:
By employing a simple three-country model in which there are two
exporting countries and one consuming country, this paper analyses the
consequences of one-country strategic distortion of the objectives of
trade policy. It finds that although an exporting country can benefit from
strategic distortion, it would be preferred that the importing country
distorts its policy. Furthermore, it is found that preferential trading
agreements can emerge endogenously.
Journal: International Economic Journal
Pages: 549-557
Issue: 4
Volume: 21
Year: 2007
Keywords: Trade policy, economic integration, commitment, distortion of objective functions,
X-DOI: 10.1080/10168730701698978
File-URL: http://www.tandfonline.com/doi/abs/10.1080/10168730701698978
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Handle: RePEc:taf:intecj:v:21:y:2007:i:4:p:549-557
Template-Type: ReDIF-Article 1.0
Author-Name: Stephanos Papadamou
Author-X-Name-First: Stephanos
Author-X-Name-Last: Papadamou
Author-Name: Georgios Oikonomou
Author-X-Name-First: Georgios
Author-X-Name-Last: Oikonomou
Title: The Monetary Transmission Mechanism: Evidence from Eight Economies in Transition
Abstract:
We examine in this paper the importance of banks' behavior in the
transmission of the monetary policy to the real economy. Monthly data from
eight economies in transition that recently became members of the European
Union and the techniques of cointegration and Error Correction models are
used, in order to investigate the relationship between intermediation
margin spread (IMS, official lending rate minus deposit rate) and
industrial production. Given the low development of corporate bond market
and the dependence of non-financial agents on banking credits, we find
that in many countries the IMS is an important leading indicator of
industrial production. However, in countries characterized by credit
access constraints (Estonia and Latvia) evidence for the traditional money
channel is found. Evidence for both money and credit channels is found in
Poland and Hungary. These results imply that a common monetary policy
implemented by the European Central Bank may be transmitted in different
ways across the new members of the enlarged European Union with different
effects on real output in each country.
Journal: International Economic Journal
Pages: 559-576
Issue: 4
Volume: 21
Year: 2007
Keywords: Monetary policy, transmission mechanism, credit channel, VAR/VEC models,
X-DOI: 10.1080/10168730701698887
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Handle: RePEc:taf:intecj:v:21:y:2007:i:4:p:559-576
Template-Type: ReDIF-Article 1.0
Author-Name: Hakan Berument
Author-X-Name-First: Hakan
Author-X-Name-Last: Berument
Author-Name: Nazli Konac
Author-X-Name-First: Nazli
Author-X-Name-Last: Konac
Author-Name: Ozge Senay
Author-X-Name-First: Ozge
Author-X-Name-Last: Senay
Title: Openness and the Effectiveness of Monetary Policy: A Cross-country Analysis
Abstract:
This paper evaluates the relationship between a country's openness to
trade and the effectiveness of monetary policy in changing output growth
and inflation in 29 different countries. Using quarterly data from the
1957-2003 period, empirical estimates based on individual country
specifications show that the direction, significance and nature of the
relationship between openness and the effectiveness of monetary policy on
output growth as well as inflation vary considerably across countries.
Journal: International Economic Journal
Pages: 577-591
Issue: 4
Volume: 21
Year: 2007
Keywords: Openness, monetary policy,
X-DOI: 10.1080/10168730701699018
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Handle: RePEc:taf:intecj:v:21:y:2007:i:4:p:577-591
Template-Type: ReDIF-Article 1.0
Author-Name: Haiwen Zhou
Author-X-Name-First: Haiwen
Author-X-Name-Last: Zhou
Title: Factor Endowment, the Choice of Technology, and the Volume of Trade
Abstract:
This paper studies impacts of factor endowment on international trade in
a general equilibrium model in which firms choose their technologies
endogenously. Although countries only differ in factor endowment ex ante,
countries may also differ in their chosen technologies. If industries
choose different capital-labor intensities in equilibrium, the
Heckscher-Ohlin theorem, factor price equalization theorem, the Rybczynski
theorem, and the Stolper-Samuelson theorem hold. If industries choose the
same capital-labor intensity in equilibrium, the volume of trade is zero.
None of the four theorems applies.
Journal: International Economic Journal
Pages: 593-611
Issue: 4
Volume: 21
Year: 2007
Keywords: Choice of technology, factor endowment, factor price equalization, Heckscher-Ohlin model, volume of trade,
X-DOI: 10.1080/10168730701699075
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Handle: RePEc:taf:intecj:v:21:y:2007:i:4:p:593-611
Template-Type: ReDIF-Article 1.0
Author-Name: Andrea Mangani
Author-X-Name-First: Andrea
Author-X-Name-Last: Mangani
Title: Measuring Variety and Quality of Products with Trademarks
Abstract:
The variety and quality of products has a great importance in the
analysis of international trade flows. Several theoretical models show
that larger and richer economies produce and export goods characterized by
higher variety and quality. Accordingly, empirical studies have tried to
quantify this relationship by investigating directly the composition of
trade. In this paper we propose the use of trademarks to estimate the
variety and quality of goods and services. We consider the Community
trademark applications filed by 120 countries and distinguish the variety
of the underlying products across classes (extensive margin) from the
variety within classes (intensive margin). Then we estimate the quality of
a country's goods and services observing how much its trademarks are
extended on multiple classes (quality margin). The empirical analysis
consists of simple cross-sections of the 'applicant' countries. The
extensive margin is found to account for about 40% of the higher number of
entries of larger and richer economies, while differences in quality seem
to explain about 10% of national differences in trademark applications.
These findings partially confirm those of previous empirical studies,
although the nature of the data and the methods of classification lead to
some quantitative discrepancies and to a different interpretation of the
results.
Journal: International Economic Journal
Pages: 613-631
Issue: 4
Volume: 21
Year: 2007
Keywords: Trademarks, product variety, product quality, international trade,
X-DOI: 10.1080/10168730701699109
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Handle: RePEc:taf:intecj:v:21:y:2007:i:4:p:613-631
Template-Type: ReDIF-Article 1.0
Author-Name: Beiling Yan
Author-X-Name-First: Beiling
Author-X-Name-Last: Yan
Title: International Trade as Determined by Income and Income Distribution
Abstract:
In standard trade theory, consumption is normally assumed to be
homothetic. Consequently, income and its distribution have no role in
determining international trade patterns. This paper examines the
assumption and its implications. The assumption of homothetic preferences
is rejected at the 1% level. It further demonstrates that the
Heckscher-Ohlin-Vanek (HOV) model modified by allowing for non-homothetic
taste improves the performance of HOV prediction and explains some of the
trade puzzles and paradoxes.
Journal: International Economic Journal
Pages: 633-651
Issue: 4
Volume: 21
Year: 2007
Keywords: Income distribution, homothetic preference, international trade, factor content of trade,
X-DOI: 10.1080/10168730701699141
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Handle: RePEc:taf:intecj:v:21:y:2007:i:4:p:633-651
Template-Type: ReDIF-Article 1.0
Author-Name: Manouchehr Mokhtari
Author-X-Name-First: Manouchehr
Author-X-Name-Last: Mokhtari
Author-Name: Doha Abdelhamid
Author-X-Name-First: Doha
Author-X-Name-Last: Abdelhamid
Title: Neocapture: regulatory competition in an open market world
Abstract:
This paper shows that inter-regulatory competition can have powerful
pro-consumer effects in an open economy world even when the consumers have
little political influence. These findings overturn the welfare
implications of capture theories that show that regulators do not
vigorously pursue public interests. The paper also points to the kinds of
markets where the political competition has more or less powerful effects
(fixed cost technology case). Since markets have become more integrated
over time, there are obvious implications for the evolution of regulation.
Journal: International Economic Journal
Pages: 1-24
Issue: 1
Volume: 22
Year: 2008
Keywords: globalization, regulatory competition, regulatory collusion, capture theory, economic theory of regulation, game theory,
X-DOI: 10.1080/10168730801886812
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Template-Type: ReDIF-Article 1.0
Author-Name: Vasilios Kosteas
Author-X-Name-First: Vasilios
Author-X-Name-Last: Kosteas
Title: Foreign direct investment and productivity spillovers: a quantile analysis
Abstract:
This paper estimates the within-plant and spillover productivity effects
of foreigninvestment in Mexican manufacturing plants. It contributes to
the existing literature by analyzing whether FDI of North American origin
differs from FDI from the rest of the world. I also use quantile
regression analysis to determine whether spillovers are equal for plants
of different productivity levels. The results indicate positive and
significant spillovers from the presence of foreign firms. However, these
spillovers accrue only to plants at the upper end of the productivity
distribution. Furthermore, North American based FDI appears to yield
slightly larger spillovers relative to FDI from the rest of the world;
however the difference is not statistically significant. A deeper look at
this issue reveals that Canadian FDI yields large productivity spillovers
relative to both US and rest of the world FDI. These differences are
highly statistically significant.
Journal: International Economic Journal
Pages: 25-41
Issue: 1
Volume: 22
Year: 2008
Keywords: foreign direct investment, productivity, spillovers, Mexico,
X-DOI: 10.1080/10168730801886929
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Handle: RePEc:taf:intecj:v:22:y:2008:i:1:p:25-41
Template-Type: ReDIF-Article 1.0
Author-Name: Marcelo Sanchez
Author-X-Name-First: Marcelo
Author-X-Name-Last: Sanchez
Title: The link between interest rates and exchange rates: do contractionary depreciations make a difference?
Abstract:
This paper revisits the relationship between interest rates and exchange
rates using a simple model that incorporates the role of exchange rate
pass-through into domestic prices and distinguishes between cases of
expansionary and contractionary depreciations. The model results show that
the correlation between exchange rates and interest rates, conditional on
an adverse risk premium shock, is negative for expansionary depreciations
and positive for contractionary ones. For this type of shock, interest
rates are found to be raised to prevent the contractionary effect of a
depreciation regardless of whether the latter effect is strong or mild.
Interest rates are predicted to eventually rise in response to an adverse
net export shock in contractionary depreciation cases, and to be lowered
in the case of expansionary ones.
Journal: International Economic Journal
Pages: 43-61
Issue: 1
Volume: 22
Year: 2008
Keywords: transmission mechanism, emerging market economies, exchange rate, monetary policy,
X-DOI: 10.1080/10168730801898981
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Template-Type: ReDIF-Article 1.0
Author-Name: Petri Maki-Franti
Author-X-Name-First: Petri
Author-X-Name-Last: Maki-Franti
Title: Money and stock returns: is there habit formation for holding liquid assets?
Abstract:
Assuming a utility function, which is non-separable in money and
consumption, we derive a simple, non-linear asset pricing model, according
to which investors' willingness to hold liquid assets in their portfolio
can be described by a sort of habit formation. The parameters of the
empirical model derived from our theoretical model are estimated with the
Smooth Transition Regression (STR) models for the US data. The results of
our econometric exercise to test the hypothesis of habit formation remain
mixed, but we find evidence that supports some existing, related attempts
to explain stock returns by the liquidity of the economy relative to
investors' target level for liquidity.
Journal: International Economic Journal
Pages: 63-80
Issue: 1
Volume: 22
Year: 2008
Keywords: asset pricing models, liquidity,
X-DOI: 10.1080/10168730801886945
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Template-Type: ReDIF-Article 1.0
Author-Name: Dale Squires
Author-X-Name-First: Dale
Author-X-Name-Last: Squires
Author-Name: Christopher Reid
Author-X-Name-First: Christopher
Author-X-Name-Last: Reid
Author-Name: Yongil Jeon
Author-X-Name-First: Yongil
Author-X-Name-Last: Jeon
Title: Productivity growth in natural resource industries and the environment: an application to the Korean tuna purse-seine fleet in the Pacific Ocean
Abstract:
Measures of multifactor productivity growth in natural resource
industries are misleading without accounting for the effects on the
environment. This paper introduces environmental effects into an
output-oriented Malmquist index of multifactor productivity growth in
order to evaluate growth in productivity and technical efficiency for
Korean purse seine vessels fishing for tuna in the Western and Central
Pacific Ocean.
Journal: International Economic Journal
Pages: 81-93
Issue: 1
Volume: 22
Year: 2008
Keywords: productivity, technical change, environment, natural resources, Malmquist index, Pacific tuna fisheries, Korea,
X-DOI: 10.1080/10168730801886978
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Handle: RePEc:taf:intecj:v:22:y:2008:i:1:p:81-93
Template-Type: ReDIF-Article 1.0
Author-Name: Pontus Braunerhjelm
Author-X-Name-First: Pontus
Author-X-Name-Last: Braunerhjelm
Author-Name: Per Thulin
Author-X-Name-First: Per
Author-X-Name-Last: Thulin
Title: Can countries create comparative advantages? R&D expenditures, high-tech exports and country size in 19 OECD countries, 1981-1999
Abstract:
This paper analyses how increased R&D expenditures and market size
influence the distribution of comparative advantage. Previous studies
report ambiguous results and also refer to periods when markets where much
more segmented and production factors less mobile. The empirical analysis
comprises 19 OECD-countries and spans the period 1981 to 1999. It is shown
how an increase in R&D-expenditures by one percentage point implies a
three-percentage point increase in high-technology exports, whereas market
size fails to attain significance. In addition, institutional factors
influence the dynamics of comparative advantage.
Journal: International Economic Journal
Pages: 95-111
Issue: 1
Volume: 22
Year: 2008
Keywords: dynamic comparative advantage, R&D, market size, institutions,
X-DOI: 10.1080/10168730801887026
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Handle: RePEc:taf:intecj:v:22:y:2008:i:1:p:95-111
Template-Type: ReDIF-Article 1.0
Author-Name: Chee Wooi Hooy
Author-X-Name-First: Chee Wooi
Author-X-Name-Last: Hooy
Title: Does trade regionalism increase stock market segmentation within a trading bloc?
Abstract:
Whether trade regionalism remains a stumbling block to economic
globalization remains a debatable issue. This paper investigates the
impact of trade regionalism on stock market segmentation for the case of
AFTA, EU and NAFTA. We exploit the pricing error of the trading-bloc
capital asset pricing model (TB-CAPM) as an indicator for stock market
segmentation based on Akdogan (1992) and Adler and Qi (2003). We use
intra-trade ratio as the indicator for trade regionalism. Controlling for
other determinants for market integration, evidence is found that trade
regionalism helps to explain stock market segmentation in EU and NAFTA,
which are both dominated by developed countries. For NAFTA, the higher the
intra-trade ratio the lower the degree of market segmentation within the
trading bloc. For EU however, the intra-trade ratio contributes to higher
stock market segmentation.
Journal: International Economic Journal
Pages: 113-126
Issue: 1
Volume: 22
Year: 2008
Keywords: stock market segmentation, trade regionalism, TB-CAPM, intra-trade ratio,
X-DOI: 10.1080/10168730801887083
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Handle: RePEc:taf:intecj:v:22:y:2008:i:1:p:113-126
Template-Type: ReDIF-Article 1.0
Author-Name: Pan-Long Tsai
Author-X-Name-First: Pan-Long
Author-X-Name-Last: Tsai
Author-Name: Ching-Lung Tsay
Author-X-Name-First: Ching-Lung
Author-X-Name-Last: Tsay
Title: Outward foreign direct investment and inward international labor migration: substitutes or complements?
Abstract:
Motivated by the positive relationship between outward FDI and inward ILM
observed in Taiwan in the 1990s, this study proposed a formal model to
explain the phenomenon. With deterioration in international
competitiveness owing to a continuing rise in the domestic wage rate
and/or appreciation of the domestic currency, it was shown that relocating
production abroad is a natural reaction by manufacturing firms unless a
sufficient number of guest workers can be imported. As the importation of
labor was restricted to a level lower than that required for maintaining
international competitiveness, a simultaneous increase in outward FDI and
inward ILM would appear. When labor inflows are limited, importing guest
workers can lead to more employment of the domestic labor if the demand
for labor is sufficiently elastic.
Journal: International Economic Journal
Pages: 127-139
Issue: 1
Volume: 22
Year: 2008
Keywords: foreign direct investment, international labor migration, guest workers,
X-DOI: 10.1080/10168730801887125
File-URL: http://www.tandfonline.com/doi/abs/10.1080/10168730801887125
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Handle: RePEc:taf:intecj:v:22:y:2008:i:1:p:127-139
Template-Type: ReDIF-Article 1.0
Author-Name: Ricardo Hausmann
Author-X-Name-First: Ricardo
Author-X-Name-Last: Hausmann
Author-Name: Maya Horii
Author-X-Name-First: Maya
Author-X-Name-Last: Horii
Author-Name: Federico Sturzenegger
Author-X-Name-First: Federico
Author-X-Name-Last: Sturzenegger
Title: The growing current account surpluses in East Asia: the effect of dark matter assets
Abstract:
In a series of papers we have developed the notion that net foreign
assets could be better approximated by capitalizing the net investment
income line of the balance of payments statistics. Hidden assets or
changes in financial costs may change the net return of net foreign assets
even when the valuation of assets remains unchanged. By capitalizing the
net investment income a more realistic picture emerges on the true burden
or return of net foreign assets. This paper estimates external positions
for East Asian economies using this methodology and compares the results
with that of official accounts. We find that, until the late 1990s, net
investment income increased relatively little, signaling that net foreign
assets had not grown as suggested by the large current account surpluses
of these countries. This is consistent with the fact that the region had
attracted large amounts of foreign direct investment, for which the
transfer of technology and knowledge are not accurately captured by the
valuation of the foreign asset position. Since 2002, however, the trend
has reversed, indicating much larger surpluses than officially registered.
We discuss individual country cases.
Journal: International Economic Journal
Pages: 141-161
Issue: 2
Volume: 22
Year: 2008
Keywords: current account imbalances, dark matter, east Asia,
X-DOI: 10.1080/10168730802079581
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Template-Type: ReDIF-Article 1.0
Author-Name: Jurgen Von Hagen
Author-X-Name-First: Jurgen
Author-X-Name-Last: Von Hagen
Author-Name: Jizhong Zhou
Author-X-Name-First: Jizhong
Author-X-Name-Last: Zhou
Title: The interaction between capital controls and exchange rate regimes: evidence from developing countries
Abstract:
This paper provides an empirical analysis of the interaction between
capital controls and exchange rate policies in developing countries in the
1980s and 1990s. We estimate a simultaneous-equations panel mixed logit
model for the joint determination of two decisions. We find strong
influences from de jure exchange rate regimes on capital account policies
but somewhat weaker feedback impacts. With de facto exchange rate regimes
the influences in both directions are similar to each other.
Journal: International Economic Journal
Pages: 163-185
Issue: 2
Volume: 22
Year: 2008
Keywords: capital controls, exchange rate regimes, simultaneous equations model, panel mixed logit model,
X-DOI: 10.1080/10168730802079698
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Handle: RePEc:taf:intecj:v:22:y:2008:i:2:p:163-185
Template-Type: ReDIF-Article 1.0
Author-Name: Stefan Norrbin
Author-X-Name-First: Stefan
Author-X-Name-Last: Norrbin
Author-Name: Onsurang Pipatchaipoom
Author-X-Name-First: Onsurang
Author-X-Name-Last: Pipatchaipoom
Author-Name: Lilla Bors
Author-X-Name-First: Lilla
Author-X-Name-Last: Bors
Title: How robust is the natural resource curse?
Abstract:
Prior research has found that countries rich in resources grow slower
than countries with few natural resources. This paper re-examines the
natural resource curse using updated data. In addition, the robustness of
the results to various sample choices is investigated. The resource curse
appears to be sensitive to the sample of countries used in the regression.
In fact, eliminating a single country eliminates the significance of the
curse. However, extending the methodology to allow for variation of the
growth rate across decades improves the robustness of the negative effect
of natural resources on the growth rate.
Journal: International Economic Journal
Pages: 187-200
Issue: 2
Volume: 22
Year: 2008
Keywords: growth, natural resources, parameter robustness, jack-knifing,
X-DOI: 10.1080/10168730802079722
File-URL: http://www.tandfonline.com/doi/abs/10.1080/10168730802079722
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Handle: RePEc:taf:intecj:v:22:y:2008:i:2:p:187-200
Template-Type: ReDIF-Article 1.0
Author-Name: Song-Ken Hsu
Author-X-Name-First: Song-Ken
Author-X-Name-Last: Hsu
Author-Name: Ming-Fang Tsai
Author-X-Name-First: Ming-Fang
Author-X-Name-Last: Tsai
Author-Name: Chih-Hai Yang
Author-X-Name-First: Chih-Hai
Author-X-Name-Last: Yang
Title: Market structure, external exposure and industry profitability: evidence from taiwan
Abstract:
This article aims to investigate empirically the influences of
concentration, exports, and exchange rate on industry profitability in a
small open economy, in Taiwan. Developing a simple theoretical framework
and utilizing panel data of four-digit manufacturing industries over the
period 1986-96 to test our findings indicate that concentration has a
positive impact on profit margin, while the impacts of export intensity
and external exposure are significantly negative. This result indicates
that export-intensive industries tend to have a lower profitability in
Taiwan, because export firms act as price takers in international markets.
Moreover, the exchange rate is found to have a relatively strong and
significant effect on industry profitability, whereby the devaluation of
the New Taiwan Dollar hurts more those industries with a higher share of
imported inputs during the sample period.
Journal: International Economic Journal
Pages: 201-214
Issue: 2
Volume: 22
Year: 2008
Keywords: concentration, export, exchange rate, industry profitability,
X-DOI: 10.1080/10168730802079805
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Handle: RePEc:taf:intecj:v:22:y:2008:i:2:p:201-214
Template-Type: ReDIF-Article 1.0
Author-Name: Jui-Chuan Chang
Author-X-Name-First: Jui-Chuan
Author-X-Name-Last: Chang
Title: The credit channel of monetary transmission in a small open economy
Abstract:
This paper studies the credit channel of monetary transmission in a small
open economy. We develop a simple general equilibrium model by extending
Bernanke and Blinder's (1988) CC-LM framework and Edwards and Vegh's
(1997) banking specification. Under a floating exchange rate regime and
with imperfect capital mobility, we establish that bank-lending behavior
may amplify, neutralize or attenuate the impact of monetary policy on
output, price and the nominal exchange rate as compared to the standard
interest rate channel. An important explanatory factor is the sensitivity
of banks and firms to loans and market interest rates. This examination is
important to consider in light of the standard AD-AS model at the
policy-making level, and in light of recent empirical evidence regarding
the credit channel as an important element of the monetary transmission
mechanism.
Journal: International Economic Journal
Pages: 215-230
Issue: 2
Volume: 22
Year: 2008
Keywords: credit channel, monetary transmission, open economy,
X-DOI: 10.1080/10168730802079938
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Handle: RePEc:taf:intecj:v:22:y:2008:i:2:p:215-230
Template-Type: ReDIF-Article 1.0
Author-Name: Donggyun Shin
Author-X-Name-First: Donggyun
Author-X-Name-Last: Shin
Author-Name: Kwanho Shin
Author-X-Name-First: Kwanho
Author-X-Name-Last: Shin
Title: Fluctuations of unemployment and inter- and intra-sectoral reallocations of workers
Abstract:
This paper investigates how both inter- and intra-sectoral reallocations
of workers contribute to fluctuations in the aggregate unemployment rate.
On the basis of the Panel Study of Income Dynamics (PSID) data for the
1986-96 period, we construct a monthly longitudinal data set that enables
us to track each individual's experience of unemployment duration as well
as labor movement across and within sectors. This data set shows strong
evidence that inter-sectoral reallocations of workers play a major role in
explaining fluctuations in the unemployment rate at the business cycle
frequency. While the number of intra-sectoral movers is generally greater
and more countercyclical than that of inter-sectoral movers, the longer
duration of unemployment of the latter enables the impact of
inter-sectoral movements to be more pronounced in explaining fluctuations
in the unemployment rate. Moreover, the asymmetric effects that increase,
rather than decrease, in unemployment are by far better explained by
inter-sectoral movers, which suggests that high unemployment is closely
associated with inter-sectoral reallocations of workers.
Journal: International Economic Journal
Pages: 231-251
Issue: 2
Volume: 22
Year: 2008
Keywords: fluctuations of unemployment, sectoral shocks, sectoral reallocations, duration of unemployment,
X-DOI: 10.1080/10168730802079979
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Handle: RePEc:taf:intecj:v:22:y:2008:i:2:p:231-251
Template-Type: ReDIF-Article 1.0
Author-Name: Chulhee Lee
Author-X-Name-First: Chulhee
Author-X-Name-Last: Lee
Title: Rising family income inequality in the United States, 1968-2000: impacts of changing labor supply, wages, and family structure
Abstract:
This study estimates what fraction of the rise in family income
inequality in the United States between 1968 and 2000 is accounted for by
the change in each of the family income components, such as wages,
employment, hours of work of family heads and spouses, family structure,
and other incomes. The increased disparities in other incomes and labor
supply account for 29% and 28%, respectively, of the rise in the
difference in incomes between the top 10% and bottom 10% families.
Structural changes in wages, largely regarded as the major culprit for the
increase in income inequality, explain less than a quarter of the rise in
the measure of family income inequality. Changing fractions of families
with both husband and wife and changes in the composition of the income
sources account for 11% and 16%, respectively, of the widening income gap.
The relative importance of the effect of changing labor supply declined
over time, while that of wage changes increased. For the upper half of the
income distribution, wage changes were the dominant cause of the increase
in the gap between the richest 10th and middle-income families. In sharp
contrast, changes in labor supply and other incomes were the principal
causes of the growing distance between the poor and middle-income families
for the lower half of the income distribution.
Journal: International Economic Journal
Pages: 253-272
Issue: 2
Volume: 22
Year: 2008
Keywords: income distribution, inequality, employment, hours of work, wage,
X-DOI: 10.1080/10168730802080001
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Handle: RePEc:taf:intecj:v:22:y:2008:i:2:p:253-272
Template-Type: ReDIF-Article 1.0
Author-Name: Salah Nusair
Author-X-Name-First: Salah
Author-X-Name-Last: Nusair
Title: Testing for the Fisher hypothesis under regime shifts: an application to Asian countries
Abstract:
Previous empirical studies on the Fisher hypothesis have focused on
developed countries, thus leaving developing countries with no or very few
studies. This paper tests the validity of the hypothesis for six Asian
countries over the period 1978-2005 using a cointegration procedure
developed by Gregory and Hansen (1996) that allows for the presence of a
one-time endogenously determined structural break in the cointegrating
vector. The results indicate evidence in favor of the Fisher hypothesis
for only Korea and Singapore after allowing for a regime shift and for
Malaysia and Thailand with no evidence of regime shift. The results
indicate the presence of the full Fisher effect for Korea and the partial
effect for Malaysia, Singapore, and Thailand.
Journal: International Economic Journal
Pages: 273-284
Issue: 2
Volume: 22
Year: 2008
Keywords: Fisher hypothesis, regime shift, cointegration, residual-based tests,
X-DOI: 10.1080/10168730802095660
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Handle: RePEc:taf:intecj:v:22:y:2008:i:2:p:273-284
Template-Type: ReDIF-Article 1.0
Author-Name: Rosaria Rita Canale
Author-X-Name-First: Rosaria Rita
Author-X-Name-Last: Canale
Author-Name: Alberto Montagnoli
Author-X-Name-First: Alberto
Author-X-Name-Last: Montagnoli
Author-Name: Oreste Napolitano
Author-X-Name-First: Oreste
Author-X-Name-Last: Napolitano
Title: Speculation and monetary policy behaviour in the 1992 currency crisis: the Italian case
Abstract:
The paper proposes an explanation for the 1992 currency crisis as the
result of monetary policy behaviour and private agents' speculation. Our
analysis reveals how speculators' expectations and the behaviour of the
monetary policy authority were formed on the widespread beliefs about the
future value of income. We show that the real effects of monetary policy
measures represent the link between the action of the central bank and
speculation.
Journal: International Economic Journal
Pages: 285-297
Issue: 3
Volume: 22
Year: 2008
Keywords: exchange rate, financial crisis, expected income, Kalman filter,
X-DOI: 10.1080/10168730802288125
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Handle: RePEc:taf:intecj:v:22:y:2008:i:3:p:285-297
Template-Type: ReDIF-Article 1.0
Author-Name: Liutang Gong
Author-X-Name-First: Liutang
Author-X-Name-Last: Gong
Title: Social status, inflation uncertainty and growth in a cash-in-advance economy
Abstract:
In a stochastic monetary model with the cash-in-advance constraint and
the social-status concern, this paper studies the effects of inflation and
inflation variability on growth. It is shown that the Tobin effect still
holds under deterministic monetary growth. The effect of inflation on
growth, however, is ambiguous under stochastic monetary growth: the effect
is positive when an agent's desire for social status is relatively strong
and negative when this desire is relatively weak. It is also found that
inflation variability always stimulates growth.
Journal: International Economic Journal
Pages: 299-314
Issue: 3
Volume: 22
Year: 2008
Keywords: inflation uncertainty, social status, economic growth, cash-in-advance constraint,
X-DOI: 10.1080/10168730802294545
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Handle: RePEc:taf:intecj:v:22:y:2008:i:3:p:299-314
Template-Type: ReDIF-Article 1.0
Author-Name: Huseyin Tastan
Author-X-Name-First: Huseyin
Author-X-Name-Last: Tastan
Author-Name: Nuri Yildirim
Author-X-Name-First: Nuri
Author-X-Name-Last: Yildirim
Title: Business cycle asymmetries in Turkey: an application of Markov-switching autoregressions
Abstract:
This paper examines business cycle characteristics of the Turkish economy
in the liberalization (post-1980) period using a Markov-switching
Autoregressive (MSAR) model framework. The importance of the model
selection process is emphasized in an extensive search for the appropriate
MS model. The business cycle properties are found to be very sensitive to
the state dimension, the choice of the MS model (classified according to
regime-dependent parameters) and the autoregressive lag order. The chosen
two-regime MS model suggests four recessionary and five expansionary
phases in the post-1980 period. Business cycle phases are found to be
asymmetric with the probability of switching from a recession to expansion
exceeding the probability of switching from expansion to recession. The
paper also provides evidence on the usefulness of a non-linear model as
compared with a linear alternative in the context of business cycle
research in an emerging economy using various parametric and
non-parametric tests. Non-linear and linear models are compared and
evaluated using kernel density and conditional expectation estimates by
simulating data from respective models.
Journal: International Economic Journal
Pages: 315-333
Issue: 3
Volume: 22
Year: 2008
Keywords: Markov switching AR model, business cycle, asymmetry tests, emerging economy, Turkey,
X-DOI: 10.1080/10168730802376151
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Handle: RePEc:taf:intecj:v:22:y:2008:i:3:p:315-333
Template-Type: ReDIF-Article 1.0
Author-Name: George Tawadros
Author-X-Name-First: George
Author-X-Name-Last: Tawadros
Title: The endogeneity of the optimum currency area criteria: an application to ASEAN
Abstract:
In this paper, the endogeneity hypothesis of the optimum currency area
criteria is tested for seven economies who are members of the Association
of South East Asian Nations (ASEAN). The empirical evidence presented
shows that greater trade flows between these countries will lead to
increased specialisation according to their comparative advantage,
resulting in more divergent business cycles across ASEAN. As such, the
endogeneity hypothesis of the optimum currency area criteria is rejected.
This finding suggests that the ASEAN economies have not yet achieved a
sufficient degree of harmonisation and convergence in their business
cycles through trade, implying that these countries are not yet
synchronised enough to enjoy the benefits of monetary unification.
Journal: International Economic Journal
Pages: 335-343
Issue: 3
Volume: 22
Year: 2008
Keywords: optimum currency area criteria, endogeneity, ASEAN, instrumental variables,
X-DOI: 10.1080/10168730802288141
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Handle: RePEc:taf:intecj:v:22:y:2008:i:3:p:335-343
Template-Type: ReDIF-Article 1.0
Author-Name: Thanasis Stengos
Author-X-Name-First: Thanasis
Author-X-Name-Last: Stengos
Author-Name: Aurangzeb Aurangzeb
Author-X-Name-First: Aurangzeb
Author-X-Name-Last: Aurangzeb
Title: An empirical investigation of the relationship between education and growth in Pakistan
Abstract:
In this paper we try to examine the impact of education on growth in
Pakistan for the time period of 1973-2001. Education, measured as gross
enrollments and total expenditures, is broken down into primary, secondary
and tertiary as well as by gender in each of the above categories. Time
series techniques are used to determine whether education, for each
category, has a causal impact on growth. The robustness of these results
is then examined using the Levine-Renelt (1992) methodology. We find that
secondary and higher education has a strong and robust impact on growth,
whereas, at the primary level only initial female enrolments show a causal
but not robust impact on growth.
Journal: International Economic Journal
Pages: 345-359
Issue: 3
Volume: 22
Year: 2008
Keywords: human capital, economic development,
X-DOI: 10.1080/10168730802294677
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Handle: RePEc:taf:intecj:v:22:y:2008:i:3:p:345-359
Template-Type: ReDIF-Article 1.0
Author-Name: Irina Bunda
Author-X-Name-First: Irina
Author-X-Name-Last: Bunda
Author-Name: Jean-Baptiste Desquilbet
Author-X-Name-First: Jean-Baptiste
Author-X-Name-Last: Desquilbet
Title: The bank liquidity smile across exchange rate regimes
Abstract:
Combining panel data on bank liquidity at the individual level and data
on their macroeconomic environment, for a sample of commercial banks in
emerging countries between 1995 and 2004, we show that there exists a
'bank liquidity smile across exchange rate regimes'. In extreme regimes at
both ends of the line, i.e. for pure floating exchange rate regimes at one
end and currency boards and dollarised economies at the other end, bank
assets are more liquid than in intermediate regimes.
Journal: International Economic Journal
Pages: 361-386
Issue: 3
Volume: 22
Year: 2008
Keywords: bank liquidity, exchange rate regimes, currency boards, emerging countries,
X-DOI: 10.1080/10168730802287952
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Handle: RePEc:taf:intecj:v:22:y:2008:i:3:p:361-386
Template-Type: ReDIF-Article 1.0
Author-Name: Winston Moore
Author-X-Name-First: Winston
Author-X-Name-Last: Moore
Author-Name: Marlon Williams
Author-X-Name-First: Marlon
Author-X-Name-Last: Williams
Title: Evidence on the sectoral monetary transmission process under a fixed exchange rate regime
Abstract:
Traditional macroeconomic models suggest that monetary policy changes are
largely ineffective in fixed exchange rate economies. However, Edwards and
Vegh (1997) present a model that shows this might not be the case, as a
tightening in monetary policy raises financial costs faced by firms and
therefore lowers real wages and, by extension, consumption. This paper
empirically tests this hypothesis using data on a country with one of the
longest running fixed exchange rate regimes (1975-present). The results of
the study confirm the theoretical predictions of Edwards and Vegh, but
they also show that the propagation of nominal shocks in fixed exchange
rate systems is comparatively slower than in countries with a more
flexible exchange rate regime.
Journal: International Economic Journal
Pages: 387-398
Issue: 3
Volume: 22
Year: 2008
Keywords: monetary transmission, fixed exchange rates, cointegration,
X-DOI: 10.1080/10168730802288067
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Handle: RePEc:taf:intecj:v:22:y:2008:i:3:p:387-398
Template-Type: ReDIF-Article 1.0
Author-Name: Ghazi Boulila
Author-X-Name-First: Ghazi
Author-X-Name-Last: Boulila
Author-Name: Lobna Bousrih
Author-X-Name-First: Lobna
Author-X-Name-Last: Bousrih
Author-Name: Mohamed Trabelsi
Author-X-Name-First: Mohamed
Author-X-Name-Last: Trabelsi
Title: Social capital and economic growth: empirical investigations on the transmission channels
Abstract:
This paper explores the possible transmission channels of social capital
to economic growth for a sample of some developed and developing countries
during the period 1980-2000, using a simultaneous equation model. The main
results of this paper are, first, the level of trust as a measure of
social capital and growth are significantly and positively correlated;
second, a high level of trust also has an indirect effect on economic
activity through its effect on institutional development; third, such
results are found to be robust statistically with the extreme bound
analysis (EBA). It corroborates the fact that an improvement of the social
infrastructure with high levels of trust and cooperation between
individuals not only has a direct but also an indirect effect on economic
growth through the development of institutions in the economy.
Journal: International Economic Journal
Pages: 399-417
Issue: 3
Volume: 22
Year: 2008
Keywords: social capital, institution and economic growth,
X-DOI: 10.1080/10168730802287994
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Handle: RePEc:taf:intecj:v:22:y:2008:i:3:p:399-417
Template-Type: ReDIF-Article 1.0
Author-Name: Yu Chen
Author-X-Name-First: Yu
Author-X-Name-Last: Chen
Title: Opening-up or institutional development? Evidence from China
Abstract:
'Trade fundamentalists' and 'institutionalists' disagree about whether
openness or institutions are more important for economic growth. This
paper would like to propose a new perspective: openness and institutional
development interact with each other. The materialization of the effects
of openness on economic growth depends on the existence of adequate
institutions, and in the other way around openness may speed up
institutional development in the direction of becoming more
growth-enhancing. We analyze China's opening-up and institutional
development in the past two decades to illustrate the interaction. We then
empirically test for the interactions between openness and institutional
development, using a panel of Chinese provinces over the past two decades.
The results are positive.
Journal: International Economic Journal
Pages: 419-430
Issue: 4
Volume: 22
Year: 2008
Keywords: openness, institutions, economic growth, China (Asia),
X-DOI: 10.1080/10168730802497387
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Handle: RePEc:taf:intecj:v:22:y:2008:i:4:p:419-430
Template-Type: ReDIF-Article 1.0
Author-Name: Eskander Alvi
Author-X-Name-First: Eskander
Author-X-Name-Last: Alvi
Author-Name: Seife Dendir
Author-X-Name-First: Seife
Author-X-Name-Last: Dendir
Title: On attenuation of moral hazard in risk sharing in poor urban economies
Abstract:
This paper examines how risk sharing is shaped by moral hazard and
enforcement concerns. The existing literature mostly looks at each concern
in isolation and misses out on an interesting tradeoff between insurance
and production (effort) that is introduced by jointly incorporating moral
hazard and enforcement problems. We show that self-enforcement of
contracts requires reduced insurance which in turn softens the moral
hazard stance, thereby enhancing effort. Households therefore work harder
and produce more output, though they are less insured. This offers an
explanation of why informal risk sharing persists despite potentially
significant monitoring and enforcement difficulties.
Journal: International Economic Journal
Pages: 431-444
Issue: 4
Volume: 22
Year: 2008
Keywords: risk sharing, moral hazard, commitment problems, poor urban economies,
X-DOI: 10.1080/10168730802497429
File-URL: http://www.tandfonline.com/doi/abs/10.1080/10168730802497429
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Handle: RePEc:taf:intecj:v:22:y:2008:i:4:p:431-444
Template-Type: ReDIF-Article 1.0
Author-Name: Stilianos Fountas
Author-X-Name-First: Stilianos
Author-X-Name-Last: Fountas
Author-Name: Menelaos Karanasos
Author-X-Name-First: Menelaos
Author-X-Name-Last: Karanasos
Title: Are economic growth and the variability of the business cycle related? Evidence from five European countries
Abstract:
We use a long series of annual data that span over 100 years to examine
the relationship between output growth and its uncertainty in five
European countries. Using the GARCH methodology to proxy uncertainty, we
obtain two important results. First, more uncertainty about output leads
to a higher rate of growth in three of the five countries. Second, output
growth reduces its uncertainty in all countries except one. Our results
are robust to alternative specifications and provide strong support to the
recent emphasis by macroeconomists on the joint examination of economic
growth and the variability of the business cycle.
Journal: International Economic Journal
Pages: 445-459
Issue: 4
Volume: 22
Year: 2008
Keywords: output growth, output growth uncertainty, GARCH,
X-DOI: 10.1080/10168730802497478
File-URL: http://www.tandfonline.com/doi/abs/10.1080/10168730802497478
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Handle: RePEc:taf:intecj:v:22:y:2008:i:4:p:445-459
Template-Type: ReDIF-Article 1.0
Author-Name: Marcus Dittrich
Author-X-Name-First: Marcus
Author-X-Name-Last: Dittrich
Title: Union wage setting in a dual labour market: the role of centralisation
Abstract:
This paper analyses the centralisation of union wage bargaining when the
workers' outside option is determined endogenously. A dual labour market
model is developed where the wage rate in the first sector is either the
result of decentralised bargaining at the firm level or of centralised
bargaining at the sector level. Workers' outside option is employment in a
competitive sector. Labour market outcome depends on whether the union
takes into account the connection between wages in both sectors. Wage
setting centralisation increases social welfare if union's bargaining
power at the firm level is relatively high and/or the union at the sector
level represents a relatively large number of workers.
Journal: International Economic Journal
Pages: 461-470
Issue: 4
Volume: 22
Year: 2008
Keywords: union wage bargaining, dual labour market, endogenous outside option, degree of centralisation,
X-DOI: 10.1080/10168730802497536
File-URL: http://www.tandfonline.com/doi/abs/10.1080/10168730802497536
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Handle: RePEc:taf:intecj:v:22:y:2008:i:4:p:461-470
Template-Type: ReDIF-Article 1.0
Author-Name: Abhijit Sen Gupta
Author-X-Name-First: Abhijit Sen
Author-X-Name-Last: Gupta
Title: Does capital account openness lower inflation?
Abstract:
This paper investigates the relationship between capital account openness
and inflation since the 1980s. It argues that widespread capital account
liberalization during the last two decades appears to have contributed to
the worldwide disinflation observed during the same period. The paper
builds a theoretical model to motivate the presence of a negative link
between financial integration and inflation. It tests the prediction of
the theoretical model by employing static and dynamic panel data
procedures. Financial integration appears to discipline monetary
authorities, or to help them convince the private sector that they will be
more disciplined in the future.
Journal: International Economic Journal
Pages: 471-487
Issue: 4
Volume: 22
Year: 2008
Keywords: capital account openness, inflation, discipline effect,
X-DOI: 10.1080/10168730802497551
File-URL: http://www.tandfonline.com/doi/abs/10.1080/10168730802497551
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Handle: RePEc:taf:intecj:v:22:y:2008:i:4:p:471-487
Template-Type: ReDIF-Article 1.0
Author-Name: Alfons Palangkaraya
Author-X-Name-First: Alfons
Author-X-Name-Last: Palangkaraya
Author-Name: Andreas Waldkirch
Author-X-Name-First: Andreas
Author-X-Name-Last: Waldkirch
Title: Relative factor abundance and FDI factor intensity in developed countries
Abstract:
This study looks at the link between the patterns of trade-revealed
comparative advantage and net inward foreign direct investment in five
developed countries: the United Kingdom, the United States, Japan, France,
and Italy. It thus extends earlier work by Maskus and Webster (1995) who
analyzed two countries, the United Kingdom and South Korea. Despite
assertions in the literature that market access is the primary motive for
foreign direct investment flows among developed countries, this study
shows that there is a significant role for comparative advantage in
determining inflows of foreign direct investment in developed countries,
especially in the services industry.
Journal: International Economic Journal
Pages: 489-508
Issue: 4
Volume: 22
Year: 2008
Keywords: foreign direct investment, comparative advantage, Heckscher-Ohlin-Vanek,
X-DOI: 10.1080/10168730802497577
File-URL: http://www.tandfonline.com/doi/abs/10.1080/10168730802497577
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Handle: RePEc:taf:intecj:v:22:y:2008:i:4:p:489-508
Template-Type: ReDIF-Article 1.0
Author-Name: Michael Gast
Author-X-Name-First: Michael
Author-X-Name-Last: Gast
Author-Name: Roland Herrmann
Author-X-Name-First: Roland
Author-X-Name-Last: Herrmann
Title: Determinants of foreign direct investment of OECD countries 1991-2001
Abstract:
It is the objective of this paper to identify the determinants that led
to the increase in worldwide foreign direct investment during the 1990s.
The paper also addresses the question of whether these factors influenced
exports differently. Therefore, using data from 22 countries reporting to
the OECD, gravity models for bilateral FDI stocks/flows and exports are
estimated, first in a cross-section setting for 1999 and then as a panel
data set for the period 1991-2001. In order to control for EU-specific
effects, a distinction is made between intra-EU25 observations and
observations outside the EU25 area. Regressions are repeated with exports
as a dependent variable in order to elaborate how far determinants of
trade flows are identical or how far they differ. In the panel context,
the results show that a change in total market size is an important aspect
that leads both FDI and exports in the same direction. Only exports are
significantly influenced by relative market size. Stock market booms boost
FDI but not exports. Political indicators and exchange rate changes
suggest that exports are demand-driven while FDI is supply-driven.
Overall, FDI and exports tended to flow relatively less abundantly to
distant countries than to nearby countries over the period under
consideration. This supports the idea of a complementary relationship
between investment and trade. However, this trend is reversed for exports
within the EU25 area.
Journal: International Economic Journal
Pages: 509-524
Issue: 4
Volume: 22
Year: 2008
Keywords: foreign direct investment and international trade, multinational firms, models with panel data,
X-DOI: 10.1080/10168730802497601
File-URL: http://www.tandfonline.com/doi/abs/10.1080/10168730802497601
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Handle: RePEc:taf:intecj:v:22:y:2008:i:4:p:509-524
Template-Type: ReDIF-Article 1.0
Author-Name: Mark Weder
Author-X-Name-First: Mark
Author-X-Name-Last: Weder
Title: Money growth rules as stabilization policies in open economies
Abstract:
High degrees of relative risk aversion induces indeterminacy in
cash-in-advance economies. In a small open economy context, this paper
finds that endogenous money growth rules can pre-empt such sunspot
equilibria in an open economy context. The most promising candidates are
policies that actively target past inflation movements or aggregate demand
as well as the expected price level.
Journal: International Economic Journal
Pages: 525-537
Issue: 4
Volume: 22
Year: 2008
Keywords: cash-in-advance economies, Taylor rules, sunspot equilibria,
X-DOI: 10.1080/10168730802497635
File-URL: http://www.tandfonline.com/doi/abs/10.1080/10168730802497635
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Handle: RePEc:taf:intecj:v:22:y:2008:i:4:p:525-537
Template-Type: ReDIF-Article 1.0
Author-Name: Daron Djerdjian
Author-X-Name-First: Daron
Author-X-Name-Last: Djerdjian
Title: Economies of Scale, Ideology and Trade Policy
Abstract:
This paper analyses trade policy within a modified version of the
well-known political economy models of Hillman (1989) and Long & Vousden
(1991). The modified model incorporates economies of scale in production
and cast doubts on viewing trade policy as solely determined by political
ideology and re-election motives. Cross-country analyses confirm our
predictions and establish that strategic economic as well as political
concerns are dominant in trade policy.
Journal: International Economic Journal
Pages: 1-21
Issue: 1
Volume: 23
Year: 2009
Keywords: Economies of scale, ideology, trade policy, protection, welfare,
X-DOI: 10.1080/10168730802696475
File-URL: http://www.tandfonline.com/doi/abs/10.1080/10168730802696475
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Handle: RePEc:taf:intecj:v:23:y:2009:i:1:p:1-21
Template-Type: ReDIF-Article 1.0
Author-Name: Jie Li
Author-X-Name-First: Jie
Author-X-Name-Last: Li
Author-Name: Ramkishen Rajan
Author-X-Name-First: Ramkishen
Author-X-Name-Last: Rajan
Title: Foreign Direct Investment and Technology Transfer Under Uncertainty in a Liberalizing Host Economy
Abstract:
This paper tackles the issue of investment and optimal 'choice' of market
structure for a foreign multinational enterprise (MNE) in a newly
liberalized economy under uncertainty and in the presence of sunk costs. A
minimalist duopolistic model is developed whereby a foreign investor's
subjective belief about the probability distribution of policy uncertainty
is endogenized as a function of the aggregate output in the tradable goods
sector. The main propositions derived from the model are consistent with
some unconventional empirical findings in the literature on Foreign Direct
Investment (FDI), technology transfer to and crowding out of domestic
firms in LDEs.
Journal: International Economic Journal
Pages: 23-41
Issue: 1
Volume: 23
Year: 2009
Keywords: Cournot, FDI, MNE, Stackelberg, technology transfer, uncertainty,
X-DOI: 10.1080/10168730802696483
File-URL: http://www.tandfonline.com/doi/abs/10.1080/10168730802696483
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Handle: RePEc:taf:intecj:v:23:y:2009:i:1:p:23-41
Template-Type: ReDIF-Article 1.0
Author-Name: Barbara Dluhosch
Author-X-Name-First: Barbara
Author-X-Name-Last: Dluhosch
Title: Trade and the Redistributive State
Abstract:
According to popular belief, welfare-state arrangements will become
unsustainable in face of low-cost competition from abroad. Yet, in
contrast to much of the theoretical work that predicts a
race-to-the-bottom, empirical studies do not seem to support the notion
that globalization is necessarily the demise of the welfare state. Whereas
most of the literature approaches the issue of globalization and the
redistributive state from a normative angle, this paper provides a
political-economy-explanation. It shows that, with majoritarian
redistribution and endogenous labor supply, redistributive tax rates
actually tend to be higher in the integrated as opposed to the isolated
economy. Depending on factor differentials within the population as well
as technology parameters, redistributive budget-to-GNP ratios may
nevertheless be lower, even if the redistributive tax rate increases.
Journal: International Economic Journal
Pages: 43-64
Issue: 1
Volume: 23
Year: 2009
Keywords: Globalization, trade, welfare state, majoritarian redistribution, political economy,
X-DOI: 10.1080/10168730802696608
File-URL: http://www.tandfonline.com/doi/abs/10.1080/10168730802696608
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Handle: RePEc:taf:intecj:v:23:y:2009:i:1:p:43-64
Template-Type: ReDIF-Article 1.0
Author-Name: William Miles
Author-X-Name-First: William
Author-X-Name-Last: Miles
Title: Central Bank Independence, Inflation and Uncertainty: The Case of Colombia
Abstract:
Colombia undertook reform of its central bank in 1991, pushing it in the
direction of greater independence. We find that this reform led to a
significant decrease in the level of inflation, as well as inflation
uncertainty, suggesting an increase in credibility. However, there has
also been an increase in inflation persistence since reform. The lower
mean but greater persistence of inflation indicates that central bank
independence has shifted the Phillips curve inward but also flattened it,
a result consistent with recent research for the Euro-zone and the United
States. Finally, further analysis reveals that, in accordance with the
Friedman-Ball hypothesis, higher inflation raises uncertainty in Colombia,
but that uncertainty does not increase inflation.
Journal: International Economic Journal
Pages: 65-79
Issue: 1
Volume: 23
Year: 2009
Keywords: Central bank independence, Colombia,
X-DOI: 10.1080/10168730802696624
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Handle: RePEc:taf:intecj:v:23:y:2009:i:1:p:65-79
Template-Type: ReDIF-Article 1.0
Author-Name: Wei-Bin Zhang
Author-X-Name-First: Wei-Bin
Author-X-Name-Last: Zhang
Title: Agglomeration and Returns to Scale with Capital and Public Goods in a Multi-Regional Economy
Abstract:
This paper develops a multi-regional growth model with amenity, capital
accumulation and regional public goods. The economy consists of any number
of regions and each region consists of the industrial sector and public
sector. The industrial sector provides goods in perfectly competitive
markets. The public sector, which is financed by the regional government's
tax incomes, supplies regional public goods. The public goods affect both
firms and households. We show the existence of a unique equilibrium in the
dynamic system. The comparative statics analysis also provides some
important insights. For instance, if environmental improvement occurs in
the advanced (less advanced) region, the national output rises (falls). If
a region has a high rate of technological change and the other region
remains technologically stationary, economic activities and labor force
tend to be located in the technologically advancing region. If the
propensity to save is increased, national output is increased and more
people will be located in the technologically advanced region.
Journal: International Economic Journal
Pages: 81-109
Issue: 1
Volume: 23
Year: 2009
Keywords: Multi-region growth, economic geography, capital accumulation, endogenous amenity, public goods,
X-DOI: 10.1080/10168730802696673
File-URL: http://www.tandfonline.com/doi/abs/10.1080/10168730802696673
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Handle: RePEc:taf:intecj:v:23:y:2009:i:1:p:81-109
Template-Type: ReDIF-Article 1.0
Author-Name: Isabel Ruiz
Author-X-Name-First: Isabel
Author-X-Name-Last: Ruiz
Author-Name: Elias Shukralla
Author-X-Name-First: Elias
Author-X-Name-Last: Shukralla
Author-Name: Carlos Vargas-Silva
Author-X-Name-First: Carlos
Author-X-Name-Last: Vargas-Silva
Title: Remittances, Institutions and Growth: A Semiparametric Study
Abstract:
In this article we re-examine the relationship between remittances and
economic growth placing special attention on the nonlinearity of this
relationship. Previous studies have ignored the non-linearity of the
relationship between remittances and economic growth or have used a
quadratic term to capture nonlinearity. We show that the relationship
between remittances and growth is neither linear nor quadratic and propose
the use of a semiparametric model to avoid the risk of misspecification
bias from imposing an arbitrary functional form. We find evidence of a
positive relationship between remittances and growth in parametric
estimations; however, such a relationship disappears when nonlinearity is
taken into account using non-parametric techniques.
Journal: International Economic Journal
Pages: 111-119
Issue: 1
Volume: 23
Year: 2009
Keywords: Migration, remittances, economic growth,
X-DOI: 10.1080/10168730802696715
File-URL: http://www.tandfonline.com/doi/abs/10.1080/10168730802696715
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Handle: RePEc:taf:intecj:v:23:y:2009:i:1:p:111-119
Template-Type: ReDIF-Article 1.0
Author-Name: Gouranga Das
Author-X-Name-First: Gouranga
Author-X-Name-Last: Das
Author-Name: Hiranya Nath
Author-X-Name-First: Hiranya
Author-X-Name-Last: Nath
Author-Name: Halis Murat Yildiz
Author-X-Name-First: Halis Murat
Author-X-Name-Last: Yildiz
Title: International Productivity Differences and the Roles of Domestic Investment, FDI and Trade
Abstract:
This paper calculates Theil's entropy index to measure the extent of
productivity differences across 92 countries for the period from 1970 to
2003. While there is evidence of increasing differences in productivity
across these countries, we observe different patterns when we group the
countries by income levels. These differences seem to be decreasing among
middle income developing and developed countries, whereas they seem to be
widening among low and high income developing countries. The results of
our multivariate time series analysis also suggest that FDI increases
productivity differences among low and high income developing countries,
whereas GDI reduces these differences among low income countries in the
long-run. Granger causality test results indicate that while an increase
in GDI leads to a decline in growth of trade, a higher growth of trade
appears to be important for attracting FDI to middle income countries.
Furthermore, a reduction in productivity differences and a higher FDI
growth lead to higher growth of trade in developed countries.
Journal: International Economic Journal
Pages: 121-142
Issue: 1
Volume: 23
Year: 2009
Keywords: Productivity differences, Theil's index, entropy, domestic investment, foreign direct investment, trade openness, cointegration, Granger causality,
X-DOI: 10.1080/10168730802700277
File-URL: http://www.tandfonline.com/doi/abs/10.1080/10168730802700277
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Handle: RePEc:taf:intecj:v:23:y:2009:i:1:p:121-142
Template-Type: ReDIF-Article 1.0
Author-Name: Samrat Goswami
Author-X-Name-First: Samrat
Author-X-Name-Last: Goswami
Author-Name: Rangan Gupta
Author-X-Name-First: Rangan
Author-X-Name-Last: Gupta
Title: An Endogenous Growth Model of a Financially Repressed Small Open Economy
Abstract:
The paper develops a monetary endogenous growth model of a financially
repressed small open economy, characterized by curb markets, capital
mobility, transaction costs in domestic and foreign capital markets, and a
flexible exchange rate system, to analyze the impact of financial
liberalization - interest rate deregulation and lower multiple reserve
requirements - on growth and inflation. When the model is calibrated to
match world figures, we find that interest rate deregulation enhances
growth and reduces inflation in steady-state. For relatively smaller
transaction costs in the curb market, the above result is, however,
reversed. Under such circumstances, lowering the transaction costs in the
foreign capital market tends to restore the growth-enhancing
(inflation-reducing) capabilities of interest rate deregulation. Lower
reserve requirements, though, always ensures lower (higher) steady-state
inflation (growth).
Journal: International Economic Journal
Pages: 143-161
Issue: 1
Volume: 23
Year: 2009
Keywords: Financial repression, growth and inflation, unofficial financial markets, monetary policy,
X-DOI: 10.1080/10168730802696772
File-URL: http://www.tandfonline.com/doi/abs/10.1080/10168730802696772
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Handle: RePEc:taf:intecj:v:23:y:2009:i:1:p:143-161
Template-Type: ReDIF-Article 1.0
Author-Name: Bharati Basu
Author-X-Name-First: Bharati
Author-X-Name-Last: Basu
Author-Name: Jianfeng Yao
Author-X-Name-First: Jianfeng
Author-X-Name-Last: Yao
Title: Foreign Direct Investment and Skill Formation in China
Abstract:
Using panel data analyses, this paper examines the relation between human
capital formation and Foreign Direct Investment (FDI) in China. It shows
that FDI has a significant effect on human capital formation, at least for
the period 1995-2001. When we estimate the relationship between FDI and
skill formation for the coastal and non-coastal provinces separately, the
positive relationship is maintained, and this relationship also holds when
we consider investment in real estate or the ratio of number of foreign
firms to total number of firms investing in China. The results stand
robust in the causality test and the sensitivity analysis.
Journal: International Economic Journal
Pages: 163-179
Issue: 2
Volume: 23
Year: 2009
Keywords: China, FDI and skill formation,
X-DOI: 10.1080/10168730902901106
File-URL: http://www.tandfonline.com/doi/abs/10.1080/10168730902901106
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Handle: RePEc:taf:intecj:v:23:y:2009:i:2:p:163-179
Template-Type: ReDIF-Article 1.0
Author-Name: Don Clark
Author-X-Name-First: Don
Author-X-Name-Last: Clark
Title: Intraindustry Specialization and the Proposed Korea-United States Free Trade Agreement
Abstract:
Changes in intraindustry specialization indicators over the 2000-2007
period are used to assess factor adjustment pressures that may arise in
Korea from the proposed Korea-United States Free Trade Agreement (KORUS
FTA). There is considerable scope for intraindustry specialization between
Korea and the United States. Results show few industries in Korea are
candidates for adjustment problems. The 14 industries that may face
adjustment pressures account for 13% of all Korean imports from the United
States. Long tariff phase-out periods, tariff-rate quotas and import
safeguards will be used to ease factor adjustment pressures in
import-sensitive industries.
Journal: International Economic Journal
Pages: 181-195
Issue: 2
Volume: 23
Year: 2009
Keywords: Economic integration, free trade agreement, intraindustry specialization,
X-DOI: 10.1080/10168730902901163
File-URL: http://www.tandfonline.com/doi/abs/10.1080/10168730902901163
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Handle: RePEc:taf:intecj:v:23:y:2009:i:2:p:181-195
Template-Type: ReDIF-Article 1.0
Author-Name: Nishaal Gooroochurn
Author-X-Name-First: Nishaal
Author-X-Name-Last: Gooroochurn
Title: Optimal Commodity Taxation in the Presence of Tourists
Abstract:
This paper sets up a simple extension of the basic Ramsey model to
include tourism and it provides a theoretical analysis of the efficiency,
equity and disincentive of work effects of commodity taxation in the
presence of tourists. Tourism is a special export commodity for which the
effect of a commodity tax is a mixture of domestic and export tax effects.
It is found that commodity taxation has a lower marginal excess burden
with tourists than without, although this may not be the case when tourist
arrival is endogenised. We also found that taxing tourism has a positive
equity effect because domestic demand for tourism products is mostly from
richer household groups. Finally, since tourism products are complementary
to leisure, taxing tourism has also a positive disincentive of work
effect.
Journal: International Economic Journal
Pages: 197-209
Issue: 2
Volume: 23
Year: 2009
Keywords: Optimal taxation, tourism,
X-DOI: 10.1080/10168730902901239
File-URL: http://www.tandfonline.com/doi/abs/10.1080/10168730902901239
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Handle: RePEc:taf:intecj:v:23:y:2009:i:2:p:197-209
Template-Type: ReDIF-Article 1.0
Author-Name: Gokhan Akay
Author-X-Name-First: Gokhan
Author-X-Name-Last: Akay
Title: New Look on the Specific Factor Model: Empirical Evidence from Manufacturing Industries in Tanzania
Abstract:
This study analyzes the impact of trade on wages in the context of the
specific factor model by focusing on the link between trade and the
average real wage. A recent paper by Jones & Ruffin (2008) shows how one
can use the specific factor model to predict how labor should fare from an
improvement in the terms of trade, an increase in the price of exportables
relative to importables. For this purpose, I use annual firm-level data on
the manufacturing sector in Tanzania during the period 1992 to 1998. I
find that a ceteris paribus increase in the price of exportables may
benefit labor in the food-beverage industry but hurt labor in the
textile-garment, wood-furniture and metal-machinery industries. There are
industries where the specific factor model predicts that exporting would
help workers, but where the Stolper-Samuelson theorem of the
Hecksher-Ohlin model predicts the reverse.
Journal: International Economic Journal
Pages: 211-226
Issue: 2
Volume: 23
Year: 2009
Keywords: Specific factor model, wages, terms of trade, elasticity of substitution,
X-DOI: 10.1080/10168730902903334
File-URL: http://www.tandfonline.com/doi/abs/10.1080/10168730902903334
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Handle: RePEc:taf:intecj:v:23:y:2009:i:2:p:211-226
Template-Type: ReDIF-Article 1.0
Author-Name: Mostafa Malki
Author-X-Name-First: Mostafa
Author-X-Name-Last: Malki
Author-Name: Henry Thompson
Author-X-Name-First: Henry
Author-X-Name-Last: Thompson
Author-Name: Osei-Agyeman Yeboah
Author-X-Name-First: Osei-Agyeman
Author-X-Name-Last: Yeboah
Title: A Specific Factor Model of FTAA and North Carolina Textile and Apparel Industries
Abstract:
Textile and apparel industries in the US face import competition that
promises to increase under the Free Trade Area of the Americas. The
present paper utilizes a specific factors model of production and trade to
predict the potential impact of FTAA on the textile and apparel industries
in North Carolina. Income is redistributed across six labor skill groups
in North Carolina, and returns to capital in textiles and apparel fall as
does output. In spite of falling prices for textiles and apparels, the
model predicts higher wages based on rising prices of other products.
Journal: International Economic Journal
Pages: 227-236
Issue: 2
Volume: 23
Year: 2009
Keywords: FTAA, textiles, apparels,
X-DOI: 10.1080/10168730902903375
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Handle: RePEc:taf:intecj:v:23:y:2009:i:2:p:227-236
Template-Type: ReDIF-Article 1.0
Author-Name: Eiji Yamamura
Author-X-Name-First: Eiji
Author-X-Name-Last: Yamamura
Author-Name: Inyong Shin
Author-X-Name-First: Inyong
Author-X-Name-Last: Shin
Title: Effects of Income Inequality on Growth through Efficiency Improvement and Capital Accumulation
Abstract:
In the present paper, the inverted-U shape relationship between economic
growth and inequality found in Chen (2003) is re-examined. We decompose
productivity growth into efficiency improvement, capital accumulation and
technological progress and then ascertain their determinants by employing
fixed effects and dynamic panel models. In particular, this paper focuses
on the question of how economic inequality affects capital accumulation
and efficiency improvement. Key findings are that inequality enhances
efficiency improvement as well as capital accumulation and then undermines
them as inequality widens. However, other factors such as human capital,
openness and government consumption have different effects on them.
Journal: International Economic Journal
Pages: 237-258
Issue: 2
Volume: 23
Year: 2009
Keywords: Inequality, economic growth, fixed effects,
X-DOI: 10.1080/10168730902903391
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Handle: RePEc:taf:intecj:v:23:y:2009:i:2:p:237-258
Template-Type: ReDIF-Article 1.0
Author-Name: Luis Gil-Alana
Author-X-Name-First: Luis
Author-X-Name-Last: Gil-Alana
Author-Name: Carlos Pestana Barros
Author-X-Name-First: Carlos Pestana
Author-X-Name-Last: Barros
Title: A Historical Perspective of Inflation in Latin America. A New Approach Based on Fractional Integration with a Structural Break
Abstract:
This paper deals with the analysis of inflation in Latin America across
the 20th century. We use annual data from 18 countries using a methodology
based on fractional integration. However, given the structure of the
inflation rates in these countries, we allow for the possibility of a
structural break that is endogenously determined by the model. The results
show that for most of the countries the break-date takes place in the late
1980s or early 1990s, and the orders of integration are in all cases
higher than 0.5 and, in many cases, smaller than 1, implying
non-stationary mean reverting behaviour.
Journal: International Economic Journal
Pages: 259-279
Issue: 2
Volume: 23
Year: 2009
Keywords: Inflation, Latin America, fractional integration, structural break,
X-DOI: 10.1080/10168730902903417
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Handle: RePEc:taf:intecj:v:23:y:2009:i:2:p:259-279
Template-Type: ReDIF-Article 1.0
Author-Name: Enzo Valentini
Author-X-Name-First: Enzo
Author-X-Name-Last: Valentini
Title: Underground Economy, Evasion and Inequality
Abstract:
Economic theory is paying increasing attention to a non-observed economy
(NOE) and its causes. Recently, a couple of works (Rosser et al., 2000,
2003) have claimed that there is a positive relationship between income
inequality and the size of NOE. This supposed relationship is not so clear
and deserves in-depth analysis. There is a crucial aspect that has been
completely avoided in these studies: income inequality is mainly measured
using 'regular' incomes and this fact could lead to some bias. The
existence of a certain size of NOE implies some income evasion that can
affect the inequality indexes used in the study of the relationship
between NOE and inequality. Including the regional share of NOE in a wage
equation, I find that, in the specific case of the Italian private sector
employees, the income evasion attached to NOE tends to reduce inequality
measured by regular wages statistics.
Journal: International Economic Journal
Pages: 281-290
Issue: 2
Volume: 23
Year: 2009
Keywords: Underground economy, inequality, tax evasion,
X-DOI: 10.1080/10168730902903433
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Handle: RePEc:taf:intecj:v:23:y:2009:i:2:p:281-290
Template-Type: ReDIF-Article 1.0
Author-Name: Alberto Bucci
Author-X-Name-First: Alberto
Author-X-Name-Last: Bucci
Title: Scale Effects, Savings and Factor Shares in a Human Capital-based Growth Model with Physical Capital Accumulation
Abstract:
Using a balanced-growth model with physical and human capital
accumulation, we analyze quantitatively the long-run effects of changes in
the savings rate and in income distribution (i.e. the shares of physical
and human capital in income) on investment in skill acquisition, income
growth, and the ratio of human to physical capital. In the long run, the
ratio of physical to human capital is constant, so that these two factor
inputs can grow at the same rate. This rate is a function of the economy's
exogenous technological and preference parameters and depends positively
on the share of skills invested in human capital formation. We also find
that population growth is neither necessary nor conducive to economic
growth, that the level of real income depends linearly on the level of
human capital and that it is independent of population size.
Journal: International Economic Journal
Pages: 291-307
Issue: 3
Volume: 23
Year: 2009
Keywords: Economic growth, human and physical capital investments, scale effects,
X-DOI: 10.1080/10168730903119385
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Handle: RePEc:taf:intecj:v:23:y:2009:i:3:p:291-307
Template-Type: ReDIF-Article 1.0
Author-Name: Suk Jae Noh
Author-X-Name-First: Suk Jae
Author-X-Name-Last: Noh
Title: Appropriation, Formal and Informal Sectors, and Efficient Endowment Distribution
Abstract:
By adding an informal sector whose output is not subject to appropriative
interactions and assuming complementarity in the inputs for market
production, this paper investigates how possible asymmetries in conflict
affect the allocation of resources. It is shown that when the existing gap
in relative appropriative skills is being closed, more resources are
allocated to appropriative activities in the economy. We are, in this
case, more likely to see a reduction in market activities but an increase
in home activities. A poorer party is a natural producer rather than a
natural fighter, which is the usual characterization of a less endowed
party in the conflict analysis. By conducting a welfare analysis, this
paper shows that a market-output-maximizing initial distribution of
resources endowment is such that when one party has a comparative
advantage in market production over appropriation, its initial fraction of
total resource endowment should be greater than its relative productivity
in market production.
Journal: International Economic Journal
Pages: 309-323
Issue: 3
Volume: 23
Year: 2009
Keywords: Appropriation, market production, home production, initial distribution of resource endowment,
X-DOI: 10.1080/10168730903119393
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Handle: RePEc:taf:intecj:v:23:y:2009:i:3:p:309-323
Template-Type: ReDIF-Article 1.0
Author-Name: Sunku Hahn
Author-X-Name-First: Sunku
Author-X-Name-Last: Hahn
Title: Promotions Solely Based on Initial Evaluations
Abstract:
This paper analyzes a case where a competition for a promotion chance
among the employees may cause an inefficiency inside a firm or an
organization. It is shown that a firm or an organization can avoid the
inefficiency by promoting employees not based on their job performances
after entering a firm or an organization, but based on the initial
evaluation scores that the employees get before they enter it. This means
that there exist some cases where using only the monetary compensation
turns out to be more efficient rather than using the promotion chance as
an incentive for the employees.
Journal: International Economic Journal
Pages: 325-337
Issue: 3
Volume: 23
Year: 2009
Keywords: Promotion, initial evaluation, job performance,
X-DOI: 10.1080/10168730903119419
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Handle: RePEc:taf:intecj:v:23:y:2009:i:3:p:325-337
Template-Type: ReDIF-Article 1.0
Author-Name: Fadzlan Sufian
Author-X-Name-First: Fadzlan
Author-X-Name-Last: Sufian
Title: Financial Disruptions and Bank Productivity Growth: Evidence from the Malaysian Experience
Abstract:
This paper examines, for the first time, the productivity of the
Malaysian banking sector around the Asian financial crisis 1997. The
non-parametric Malmquist Productivity Index (MPI) is used to compute
individual banks' productivity levels. We find that the Malaysian banking
sector has exhibited productivity regress due to the decline in
efficiency. The results seem to suggest that the domestic banks have
exhibited productivity progress attributed to technological change, while
the foreign banks have exhibited productivity regress due to efficiency
decline. We find that the large banks tend to experience productivity
growth attributed to technological progress, while the small banks tend to
experience productivity decline due to technological regress. The
empirical results suggest that the small banks with its limited
capabilities are at a disadvantage compared with their larger counterparts
in terms of technological advancements, thus, rejecting the divisibility
theory.
Journal: International Economic Journal
Pages: 339-369
Issue: 3
Volume: 23
Year: 2009
Keywords: Financial disruptions, bank productivity, Malmquist productivity index, Malaysia,
X-DOI: 10.1080/10168730903119427
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Handle: RePEc:taf:intecj:v:23:y:2009:i:3:p:339-369
Template-Type: ReDIF-Article 1.0
Author-Name: Marina Murat
Author-X-Name-First: Marina
Author-X-Name-Last: Murat
Author-Name: Barbara Pistoresi
Author-X-Name-First: Barbara
Author-X-Name-Last: Pistoresi
Title: Migrant Networks: Empirical Implications for the Italian Bilateral Trade
Abstract:
A significant number of empirical studies, focusing on different
countries, have found a positive link between migration and trade. This
paper studies the relationship between emigration, immigration and trade
using Italian data. The sample regards 51 foreign trading partners and
spans from 1990 to 2005. The results suggest that networks of Italian
emigrants in foreign countries boost bilateral trade. The effects of
immigrants are weak on exports and negative on imports. Results do not
change when cultural and institutional dissimilarities between countries
are considered.
Journal: International Economic Journal
Pages: 371-390
Issue: 3
Volume: 23
Year: 2009
Keywords: International migration, Italian bilateral trade,
X-DOI: 10.1080/10168730903119435
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Handle: RePEc:taf:intecj:v:23:y:2009:i:3:p:371-390
Template-Type: ReDIF-Article 1.0
Author-Name: Thanh Le
Author-X-Name-First: Thanh
Author-X-Name-Last: Le
Title: Trade, Remittances, Institutions, and Economic Growth
Abstract:
This paper empirically investigates the role of trade, remittances, and
institutions in economic development in a large sample of developing
countries using recently developed instruments for all these variables.
Both cross-country (over 30 years) and dynamic panel data (over 5-year
periods) regressions of growth rates on instrumented trade, remittances,
and institutions provide evidence of a significant impact of trade,
institutions, and remittances on growth. While institutions foster growth,
remittances hamper it. The effect of trade on growth is positive in
cross-sectional regressions but ambiguous in dynamic panel data
regressions. These results are indicative of a more important role for
trade in explaining growth in the very long run compared with over shorter
horizons.
Journal: International Economic Journal
Pages: 391-408
Issue: 3
Volume: 23
Year: 2009
Keywords: Economic growth, trade, remittances, institutions,
X-DOI: 10.1080/10168730903119443
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Handle: RePEc:taf:intecj:v:23:y:2009:i:3:p:391-408
Template-Type: ReDIF-Article 1.0
Author-Name: Siong Hook Law
Author-X-Name-First: Siong Hook
Author-X-Name-Last: Law
Title: Trade Openness, Capital Flows and Financial Development in Developing Economies
Abstract:
This paper examines the impact of trade openness and capital flows on
financial development in developing countries using a dynamic panel GMM
estimation technique. The empirical results reveal that trade openness and
capital flows are statistically significant determinants of financial
development. Simultaneous opening of both the trade and capital accounts
also appear to have positive impacts on financial development. The
evidence also suggests that openness leads to improved financial
development through institutional quality and competition channels.
However, the institutional channel outperforms competition in ensuring the
positive effects of openness on financial market depth in developing
countries.
Journal: International Economic Journal
Pages: 409-426
Issue: 3
Volume: 23
Year: 2009
Keywords: Financial development, trade openness, capital flows, dynamic panel GMM analysis,
X-DOI: 10.1080/10168730903268398
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Handle: RePEc:taf:intecj:v:23:y:2009:i:3:p:409-426
Template-Type: ReDIF-Article 1.0
Author-Name: Joung Yeo Angela No
Author-X-Name-First: Joung Yeo Angela
Author-X-Name-Last: No
Title: International Transmission of Technology and Trade: The Role of Cross-country Heterogeneity
Abstract:
In the framework where the channel of international transmission of
technology is trade in intermediate inputs, this paper investigates the
role of heterogeneities across countries. In particular, this paper
analyzes how cross-country differences in production structure, national
innovative capacity, and absorptive capacity affect the scope and
magnitude of international R&D spillovers on productivity. The study is
based on the industry-level data set that covers eight OECD countries from
1970 to 1995. It finds that accounting for cross-country differences in
each of production structure (using country-specific input-output
relations) and national innovative capacity (using patents granted per R&D
investment) yields significantly different spillover effects than previous
studies. This suggests that the effect of international R&D spillovers
depends on both production structure and the pattern of international
trade. Further, it finds the absorptive capacity of a country is
positively related to spillovers.
Journal: International Economic Journal
Pages: 427-446
Issue: 3
Volume: 23
Year: 2009
Keywords: International trade, technology transmission, productivity, R&D, cross-country heterogeneity,
X-DOI: 10.1080/10168730903119476
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Handle: RePEc:taf:intecj:v:23:y:2009:i:3:p:427-446
Template-Type: ReDIF-Article 1.0
Author-Name: Yin-Wong Cheung
Author-X-Name-First: Yin-Wong
Author-X-Name-Last: Cheung
Author-Name: Hiro Ito
Author-X-Name-First: Hiro
Author-X-Name-Last: Ito
Title: A Cross-Country Empirical Analysis of International Reserves
Abstract:
Using data from more than 100 economies for the period of 1975 to 2005,
we conduct an extensive empirical analysis of the determinants of
international reserve holdings. Four groups of determinants, namely,
traditional macro variables, financial variables, institutional variables,
and dummy variables that control for individual economies' characteristics
are considered. We find that the relationship between international
reserves and their determinants is significantly different between
developed and developing economies and is not stable over time. The
estimation results indicate that, especially during the recent period, a
developed economy tends to hold a lower level of international reserves
than a developing one. Furthermore, there is only limited evidence that
East Asian economies including China and Japan are accumulating an
excessive amount of international reserves.
Journal: International Economic Journal
Pages: 447-481
Issue: 4
Volume: 23
Year: 2009
Keywords: Developed versus developing economies, excess hoarding, macro determinants, financial factors, institutional variables,
X-DOI: 10.1080/10168730903372208
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Handle: RePEc:taf:intecj:v:23:y:2009:i:4:p:447-481
Template-Type: ReDIF-Article 1.0
Author-Name: Enrico Saltari
Author-X-Name-First: Enrico
Author-X-Name-Last: Saltari
Author-Name: Giuseppe Travaglini
Author-X-Name-First: Giuseppe
Author-X-Name-Last: Travaglini
Title: The Productivity Slowdown Puzzle. Technological and Non-technological Shocks in the Labor Market
Abstract:
In this paper we address the question of whether labor supply shifts are
the only source of the productivity slowdown that occurred across European
countries in the last 15 years. This explanation implies that labor demand
shifts are irrelevant. Using a simple dynamic model of the labor market,
we show that the poor economic performance of the European countries can
only be accounted for by a combination of two shocks: an adverse
technological shock to the labor demand and a positive non-technological
shock to the labor supply resulting from changes in institutions. We use a
structural VAR model to estimate the contribution of these two shocks to
the dynamics of employment and productivity. Our main conclusion is that
technological shocks explain the decrease of the growth rate of
productivity but not the increase in employment. The non-technological
shocks, on the other hand, can capture the increase of employment but not
the slowdown of labor productivity. Thus, both shocks are necessary to
provide a complete picture of the employment-productivity trade off in
Europe during the last 15 years.
Journal: International Economic Journal
Pages: 483-509
Issue: 4
Volume: 23
Year: 2009
Keywords: Productivity slowdown, labor market, SVAR,
X-DOI: 10.1080/10168730903377819
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Handle: RePEc:taf:intecj:v:23:y:2009:i:4:p:483-509
Template-Type: ReDIF-Article 1.0
Author-Name: Bradley Ewing
Author-X-Name-First: Bradley
Author-X-Name-Last: Ewing
Author-Name: Benhua Yang
Author-X-Name-First: Benhua
Author-X-Name-Last: Yang
Title: The Differential Growth Effect of FDI across US Regions
Abstract:
In this paper we examine and assess the differential impact of FDI on
growth in eight US regions, as defined by the Bureau of Economic Analysis
(BEA). The results show that the manufacturing FDI-growth relationship
tends to vary across regions. In particular, while the New England,
Mideast, Great Lakes, Rocky Mountains and Far West regions experienced a
positive growth effect of manufacturing FDI over the sample period
1977-2001, other regions showed little evidence of such a relationship.
Using disaggregated data across manufacturing sectors, we also find that
there are great regional variations concerning the FDI-growth nexus, and
only the Great Lakes and Far West regions experienced a beneficial impact
of FDI on growth in all five manufacturing sectors examined.
Journal: International Economic Journal
Pages: 511-525
Issue: 4
Volume: 23
Year: 2009
Keywords: FDI, growth, manufacturing,
X-DOI: 10.1080/10168730903372232
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Handle: RePEc:taf:intecj:v:23:y:2009:i:4:p:511-525
Template-Type: ReDIF-Article 1.0
Author-Name: Hugo Reis
Author-X-Name-First: Hugo
Author-X-Name-Last: Reis
Author-Name: Antonio Rua
Author-X-Name-First: Antonio
Author-X-Name-Last: Rua
Title: An Input-Output Analysis: Linkages versus Leakages
Abstract:
Resorting to input-output analysis, the relationships between production
sectors are investigated. For such assessment, the distinction between
imported and domestically supplied inputs, which has been disregarded so
far in empirical analysis, is crucial. Besides an accurate measurement of
domestic linkages, it also allows us to evaluate the importance of
international trade in the production process. Moreover, the interaction
between domestic linkages and leakages resulting from international trade
can also be analysed. The study of such links improves our knowledge on
the economic production structure and how it has evolved over time, which
is essential for policy making. Using as a case study a small open
European economy, the Portuguese one, we assess sectoral interdependence
and trade effects for individual sectors as well as for the economy as a
whole.
Journal: International Economic Journal
Pages: 527-544
Issue: 4
Volume: 23
Year: 2009
Keywords: Input-output analysis, intersectoral linkages, coefficient of interdependence, coefficient of leakage,
X-DOI: 10.1080/10168730903372323
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Handle: RePEc:taf:intecj:v:23:y:2009:i:4:p:527-544
Template-Type: ReDIF-Article 1.0
Author-Name: Sohrab Abizadeh
Author-X-Name-First: Sohrab
Author-X-Name-Last: Abizadeh
Author-Name: Manish Pandey
Author-X-Name-First: Manish
Author-X-Name-Last: Pandey
Title: Trade Openness, Structural Change and Total Factor Productivity
Abstract:
The impact of trade openness on growth of total factor productivity (TFP)
is investigated. Given the differences in tradability of goods across
sectors as well as the ongoing structural change, we examine whether trade
openness has had a differential impact on TFP growth of the three main
sectors of an economy. While the positive impact of openness on TFP growth
for the aggregate economy is confirmed, openness has had no appreciable
impact on the growth of TFP in the agricultural and industrial sectors. We
find that the positive effect of openness on TFP growth for the economy as
a whole was mostly due to the positive relationship between the two
variables for the services sector. Further, we conclude that the lack of a
general consensus in past studies could be due to their neglect of
structural change and temporal factors when analyzing the trade-TFP nexus.
Journal: International Economic Journal
Pages: 545-559
Issue: 4
Volume: 23
Year: 2009
Keywords: Trade, openness, sectors, total factor productivity,
X-DOI: 10.1080/10168730903372273
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Handle: RePEc:taf:intecj:v:23:y:2009:i:4:p:545-559
Template-Type: ReDIF-Article 1.0
Author-Name: Ajit Karnik
Author-X-Name-First: Ajit
Author-X-Name-Last: Karnik
Author-Name: Mala Lalvani
Author-X-Name-First: Mala
Author-X-Name-Last: Lalvani
Title: Heterogeneity in Growth Processes: Estimating Growth Regressions using Panel Data
Abstract:
This paper is concerned with estimating growth regressions for a panel of
104 countries with data spread over a 24-year period. The paper employs
panel data estimation techniques. An important concern is whether growth
regressions estimated for a large group can be replicated for smaller
sub-groups of countries. The problem of parameter heterogeneity is
investigated, and the results of the paper show that there is considerable
parameter heterogeneity in the growth equations across groups. The major
conclusion of the paper is that growth processes appear to be widely
divergent across sub-groups of countries making the task of prescribing
policy far more challenging and, hence, pointing to the need to
incorporate country-specific institutional and political factors while
recommending policies for growth.
Journal: International Economic Journal
Pages: 561-590
Issue: 4
Volume: 23
Year: 2009
Keywords: Growth regressions, parameter heterogeneity, panel data estimation techniques,
X-DOI: 10.1080/10168730903372224
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Handle: RePEc:taf:intecj:v:23:y:2009:i:4:p:561-590
Template-Type: ReDIF-Article 1.0
Author-Name: Yener Kandogan
Author-X-Name-First: Yener
Author-X-Name-Last: Kandogan
Title: Trade Creation and Diversion Effects of Europe's Regional Liberalization Agreements
Abstract:
After a short review of recent developments in gravity modeling and an
overview of the liberalization agreements in Europe, this paper measures
the trade creation and diversion effects of major European agreements
based on the results of a correctly specified triple-indexed gravity model
with bilateral fixed effects. Discussion of the resulting trade creation
and diversion focuses on the role of partner and non-partner country
characteristics including size and relative factor endowments, as well as
date, reciprocity, industry coverage, and rate of liberalization
characteristics of the agreement.
Journal: International Economic Journal
Pages: 591-615
Issue: 4
Volume: 23
Year: 2009
Keywords: Gravity model, fixed effects,
X-DOI: 10.1080/10168730903372257
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Handle: RePEc:taf:intecj:v:23:y:2009:i:4:p:591-615
Template-Type: ReDIF-Article 1.0
Author-Name: Pierre Canac
Author-X-Name-First: Pierre
Author-X-Name-Last: Canac
Author-Name: Hassan Shirvani
Author-X-Name-First: Hassan
Author-X-Name-Last: Shirvani
Author-Name: Barry Wilbratte
Author-X-Name-First: Barry
Author-X-Name-Last: Wilbratte
Title: The Stability of the Demand for Money in Monetary Unions: Some Empirical Evidence from WAEMU
Abstract:
Previous studies of the stability of the demand for money have been
largely conducted in the context of individual countries. To the extent
that these countries have control over their monetary policies, such an
approach is well justified. However, for monetary unions, where the
control over monetary policy is usually vested in a central or outside
authority, it is more appropriate to examine the stability of the money
demand for the union as a collective entity. This paper follows this
approach with respect to a West African monetary union, the WAEMU, whose
monetary policies are largely dictated by the French authorities. Using
cointegration theory and CUSUM stability tests, we find evidence that the
demand for broad money is stable in this union. Given the empirical
results, the paper draws inferences regarding their implications for the
formulation of optimal monetary policy for the WAEMU.
Journal: International Economic Journal
Pages: 617-628
Issue: 4
Volume: 23
Year: 2009
Keywords: Cointegration, stability tests, structural break, money demand, monetary union,
X-DOI: 10.1080/10168730903372190
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Handle: RePEc:taf:intecj:v:23:y:2009:i:4:p:617-628
Template-Type: ReDIF-Article 1.0
Author-Name: Jong-Wha Lee
Author-X-Name-First: Jong-Wha
Author-X-Name-Last: Lee
Author-Name: Kwanho Shin
Author-X-Name-First: Kwanho
Author-X-Name-Last: Shin
Title: Exchange Rate Regimes and Economic Linkages
Abstract:
We investigate how the exchange rate regime influences economic linkages
between countries. We divide the exchange rate regime into three
classifications: currency union, peg and floating exchange rates. Unlike
most studies that solely focus on the relationship between anchor and
client countries, we infer the exchange rate regime between any two
countries based on their relationship to the common anchor currency. Then
we empirically explore how the various exchange rate regimes impact on
bilateral trade, output co-movement and risk sharing. The extent of risk
sharing is measured by consumption co-movement relative to output
co-movement. We find that while currency union has the greatest effect,
the peg regime also significantly boosts trade. We also find that while
the peg regime contributes to both output and consumption co-movements,
currency union strengthens only consumption co-movement and possibly
lowers output co-movement. We interpret these findings to indicate that
currency union, the strictest form of pegged regimes, leads to higher
industry specialization and better risk sharing opportunities than the
less strict peg regime.
Journal: International Economic Journal
Pages: 1-23
Issue: 1
Volume: 24
Year: 2010
Keywords: Exchange rate regime, trade, output co-movement, consumption co-movement, risk sharing,
X-DOI: 10.1080/10168731003589741
File-URL: http://www.tandfonline.com/doi/abs/10.1080/10168731003589741
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Template-Type: ReDIF-Article 1.0
Author-Name: Chun-Ping Chang
Author-X-Name-First: Chun-Ping
Author-X-Name-Last: Chang
Author-Name: Chien-Chiang Lee
Author-X-Name-First: Chien-Chiang
Author-X-Name-Last: Lee
Title: A Re-examination of German Government Approval and Economic Performance: Is There a Stable Relationship between Them?
Abstract:
This paper studies the stability between the government approval and
macroeconomic series for Germany during 1977-2004 allowing structural
breaks. We first execute traditional cointegration tests without breaks,
and the results reveal weak evidence of a link between the political and
economic variables. However, using Hansen's (1992) tests for parameter
instability suggest that such a relationship between politics and economy
may be unstable. After allowing for the structural breaks in the series
and conducting Gregory and Hansen's (1996) cointegration test, we find
that a clear cointegrated relationship undoubtedly exists between approval
rates and macroeconomics; we discover that some events indeed affect the
government's popularity. Overall, once we locate structural breakpoints,
such as when the West German government was succeeded by Helmut Kohl in
1982, then we begin to distinguish the actual cointegrated relationships
between the approval rate of government and macroeconomics before and
after the structural breakpoint.
Journal: International Economic Journal
Pages: 25-43
Issue: 1
Volume: 24
Year: 2010
Keywords: Structural breaks, political business cycle, performance of government, macroeconomics,
X-DOI: 10.1080/10168731003589691
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Handle: RePEc:taf:intecj:v:24:y:2010:i:1:p:25-43
Template-Type: ReDIF-Article 1.0
Author-Name: Hiroyuki Nishiyama
Author-X-Name-First: Hiroyuki
Author-X-Name-Last: Nishiyama
Author-Name: Masao Yamaguchi
Author-X-Name-First: Masao
Author-X-Name-Last: Yamaguchi
Title: Foreign Direct Investment and the Unionization Rate
Abstract:
This paper examines the effect of foreign direct investment (FDI) on home
wages by using a model assuming that two complementary intermediate goods
are combined into a final product by an international/domestic division of
labour. We find that FDI triggers higher (lower) home wages in the case
that the ratio of non-unionized workers to unionized workers is
sufficiently low (high). In addition, even if domestic and foreign
production are complementary, the wages in the case of FDI can become
lower than those in the case without FDI, in contrast to Skaksen and
Sorensen (2001).
Journal: International Economic Journal
Pages: 45-52
Issue: 1
Volume: 24
Year: 2010
Keywords: Foreign direct investment, multinational firms, wage bargaining, firm's outside option, unionization rate,
X-DOI: 10.1080/10168731003589725
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Template-Type: ReDIF-Article 1.0
Author-Name: Severine Menguy
Author-X-Name-First: Severine
Author-X-Name-Last: Menguy
Title: Enlargement of the Economic and Monetary Union: To which Structurally Heterogeneous Countries?
Abstract:
We study the consequences of the entry of a structurally heterogeneous
country on the well-being of the current members of a monetary union.
Welfare would be increased if the new country is more open, if it has a
smaller sensibility of its demand to the interest rate, and also generally
if its supply function has a lower sensibility to inflation.
Journal: International Economic Journal
Pages: 53-70
Issue: 1
Volume: 24
Year: 2010
Keywords: Euro-area, enlargement, monetary policy, fiscal policy, structural heterogeneity,
X-DOI: 10.1080/10168731003589824
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Template-Type: ReDIF-Article 1.0
Author-Name: U. Michael Bergman
Author-X-Name-First: U. Michael
Author-X-Name-Last: Bergman
Author-Name: Michael Hutchison
Author-X-Name-First: Michael
Author-X-Name-Last: Hutchison
Title: Expansionary Fiscal Contractions: Re-evaluating the Danish Case
Abstract:
The Expansionary Fiscal Contraction (EFC) hypothesis predicts that a
major fiscal consolidation leads to an economic expansion under certain
circumstances. We test this hypothesis, and the implied non-linear
responses of the economy to large and small changes in fiscal policy,
using data from the 1983 Danish fiscal reform. We use a structural
VAR/event study methodology following Blanchard and Perotti (2002) that
explicitly allows us to distinguish between normally marginal changes in
fiscal policy and comprehensive fiscal reforms. We find that 'marginal
changes' in fiscal policy (expenditure and tax changes) have the expected
Keynesian effects on output and consumption. However, we find no evidence
that the large fiscal consolidation in Denmark slowed the economy after
controlling for a host of exogenous shocks and business cycle effects.
Rather, we find some support for the hypothesis that the exogenous fiscal
contraction in Denmark was a credible regime shift and, together with
other reforms undertaken at the time, increased both private consumption
and aggregate output.
Journal: International Economic Journal
Pages: 71-93
Issue: 1
Volume: 24
Year: 2010
Keywords: Expansionary fiscal contraction, structural VAR/event study, non-linearities,
X-DOI: 10.1080/10168731003589857
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Handle: RePEc:taf:intecj:v:24:y:2010:i:1:p:71-93
Template-Type: ReDIF-Article 1.0
Author-Name: Jose Mendez Naya
Author-X-Name-First: Jose Mendez
Author-X-Name-Last: Naya
Title: Mixed Oligopoly and Foreign Direct Investment
Abstract:
By using a mixed duopoly model, this paper analyses the effects of
domestic firm ownership status on foreign direct investment decisions. It
is shown that, although public ownership can be understood as a
protectionist device, foreign direct investment can only be an equilibrium
strategy if the level of privatization of the domestic economy is high
enough. Furthermore it is proved that foreign direct investment is harmful
from a home welfare point of view.
Journal: International Economic Journal
Pages: 95-101
Issue: 1
Volume: 24
Year: 2010
Keywords: Mixed duopoly, tariffs, foreign direct investment,
X-DOI: 10.1080/10168731003589774
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Handle: RePEc:taf:intecj:v:24:y:2010:i:1:p:95-101
Template-Type: ReDIF-Article 1.0
Author-Name: Danilo Pelletiere
Author-X-Name-First: Danilo
Author-X-Name-Last: Pelletiere
Author-Name: Kenneth Reinert
Author-X-Name-First: Kenneth
Author-X-Name-Last: Reinert
Title: World Exports of New and Used Automobiles: A Gravity Model Comparison among the European Union, Japan and the United States
Abstract:
This paper considers new and used automobile exports of the European
Union, Japan and the United States within a gravity model framework. This
standard framework has similar explanatory power for the new and used
automobile exports of the European Union and the United States, as well as
for the new automobile exports of Japan, but not for Japan's used
automobile exports, a finding the paper associates with the importance of
left-hand driving in determining the markets for Japan's used (but not
'made to order' new) automobile exports. The paper concludes that, while
used automobiles are somewhat more important to lower income markets,
controlling for discrimination and other factors, used automobile trade
clearly supplements new automobile trade from the prospective of the
importing country.
Journal: International Economic Journal
Pages: 103-110
Issue: 1
Volume: 24
Year: 2010
Keywords: Gravity model, international automobile trade, new trade theory,
X-DOI: 10.1080/10168731003589709
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Handle: RePEc:taf:intecj:v:24:y:2010:i:1:p:103-110
Template-Type: ReDIF-Article 1.0
Author-Name: Mina Baliamoune-Lutz
Author-X-Name-First: Mina
Author-X-Name-Last: Baliamoune-Lutz
Author-Name: Stefan Lutz
Author-X-Name-First: Stefan
Author-X-Name-Last: Lutz
Title: Pre-emption, Predation, and Minimum Quality Standards
Abstract:
We present a model of vertical product differentiation and exit where a
domestic and a foreign firm face fixed setup costs and quality-dependent
costs of production and compete in quality and price in the domestic
market. Quality-dependent costs are quadratic in qualities, but
independent of the quantities produced. The domestic government may impose
a minimum quality standard binding for both foreign and domestic firms. In
the presence of an initial cost advantage of the domestic firm, a
sufficiently high minimum quality standard set by the domestic government
will enable the domestic firm to induce exit of the foreign firm, i.e. to
engage in predation. However, the same standard would lead to predation by
the foreign firm, if the foreign firm had the initial cost advantage!
Journal: International Economic Journal
Pages: 111-123
Issue: 1
Volume: 24
Year: 2010
Keywords: Vertical product differentiation, oligopoly, trade, quality, country asymmetries,
X-DOI: 10.1080/10168731003589790
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Handle: RePEc:taf:intecj:v:24:y:2010:i:1:p:111-123
Template-Type: ReDIF-Article 1.0
Author-Name: Kakali Mukhopadhyay
Author-X-Name-First: Kakali
Author-X-Name-Last: Mukhopadhyay
Author-Name: Paul Thomassin
Author-X-Name-First: Paul
Author-X-Name-Last: Thomassin
Title: Impact of Regional Economic Integration in East Asia
Abstract:
The current study evaluates the economy wide impact of trade
liberalization in the ASEAN region along with China, Japan and Korea
(ASEAN + 3) by the year 2020 using the GTAP framework. The study
also assesses the environmental impact of the trade liberalization in the
region focusing on the seven environmental indicators (CO2, CH4, N2O, BOD,
COD, Suspended Solid and Industrial Waste). The result shows that the
countries under agreement (ASEAN + 3) will benefit with
increased output, expansion of trade and welfare due to trade reforms.
Further, the integration will increase the global welfare, although the
regions not under agreement in the world will show a decline in output
growth. Vietnam will be gaining with the highest output growth among the
ASEAN region; however, the impact on the environment would not be
favourable. The environmental impact reveals a mixed outcome for
participating countries under the agreement. The paper provides useful
insight in pursuing greater trade liberalization among the countries under
the study.
Journal: International Economic Journal
Pages: 125-153
Issue: 2
Volume: 24
Year: 2010
Keywords: Free trade agreement, East and South East Asia, GTAP, scenario, environment,
X-DOI: 10.1080/10168731003657746
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Template-Type: ReDIF-Article 1.0
Author-Name: Koichi Yoshimine
Author-X-Name-First: Koichi
Author-X-Name-Last: Yoshimine
Title: The Transmission of US Business Cycles to the Canadian Economy
Abstract:
As the substantial share of the Canadian trade occurs with the United
States, one would expect that the fluctuations in US macroeconomic
aggregates are rapidly transmitted to the Canadian economy. Specifically,
the transmission should occur through changes in the flow of goods and
financial assets. However, the standard general equilibrium models fail to
show such a relationship. In this paper, I consider a small open-economy
model taking the fluctuations of US variables as given and explicitly
incorporating the flows of intermediate goods and financial assets. The
simulation results show that the model can reproduce the actual data
reasonably well when the trade share of intermediate goods is properly
calibrated and the flow of financial asset is absent. That is,
transmission does occur through trade in goods but not through assets.
Journal: International Economic Journal
Pages: 155-170
Issue: 2
Volume: 24
Year: 2010
Keywords: International business cycles, international transmissions, small open economy,
X-DOI: 10.1080/10168737.2010.486886
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Handle: RePEc:taf:intecj:v:24:y:2010:i:2:p:155-170
Template-Type: ReDIF-Article 1.0
Author-Name: Keunsuk Chung
Author-X-Name-First: Keunsuk
Author-X-Name-Last: Chung
Title: Foreign Debt, Foreign Direct Investment and Volatility
Abstract:
We investigate how foreign debt and foreign direct investment (FDI)
affect the growth and welfare of a stochastically growing small open
economy. First, we find that foreign debt influences the growth of
domestic wealth by lowering the cost of capital, while FDI affects the
country's welfare by providing an additional source of permanent income.
Second, a decline in domestic investment may improve domestic welfare as
FDI replaces the gap. Even when the welfare deteriorates, its magnitude is
mitigated, leaving more room for discretionary fiscal policy. Third, a
fiscal policy aimed to stabilize domestic output fluctuations needs to be
conducted not to crowd out the welfare benefit of FDI too much. Fourth, an
economy with both types of foreign capital experiences wider welfare
swings by external volatility shocks than the one with foreign debt alone,
while the welfare effects from domestic volatility shocks are mitigated.
The welfare effects of fiscal shocks are much smaller with both types of
foreign capital. Lastly, the first-best labor income tax covers the
government absorption by the labor's share of total output, and the
capital income tax covers the rest. Investment is penalized or subsidized
depending on the social marginal cost-gain differential.
Journal: International Economic Journal
Pages: 171-196
Issue: 2
Volume: 24
Year: 2010
Keywords: Foreign direct investment, foreign debt, inelastic debt supply, volatility,
X-DOI: 10.1080/10168731003649628
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Handle: RePEc:taf:intecj:v:24:y:2010:i:2:p:171-196
Template-Type: ReDIF-Article 1.0
Author-Name: Maurice Schiff
Author-X-Name-First: Maurice
Author-X-Name-Last: Schiff
Author-Name: Yanling Wang
Author-X-Name-First: Yanling
Author-X-Name-Last: Wang
Title: North-South Technology Spillovers: The Relative Impact of Openness and Foreign R&D
Abstract:
This paper examines the relative contribution of openness and the R&D
content of trade to North-South trade-related knowledge diffusion and TFP
growth. The measure of foreign R&D used in the literature on trade-related
knowledge diffusion imposes identical contributions to TFP of openness and
the R&D content of trade. We show that this restriction is not warranted
and that openness has a greater impact on TFP than R&D. This finding is
particularly strong in low R&D-intensity industries and - as might be
expected - not as strong in R&D-intensive ones. The results indicate that
the impact of openness on TFP in developing countries is larger than
previously obtained in this literature, and that developing countries can
obtain larger productivity gains from trade liberalization than previously
thought.
Journal: International Economic Journal
Pages: 197-207
Issue: 2
Volume: 24
Year: 2010
Keywords: International trade, technology spillovers,
X-DOI: 10.1080/10168737.2010.486889
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Handle: RePEc:taf:intecj:v:24:y:2010:i:2:p:197-207
Template-Type: ReDIF-Article 1.0
Author-Name: Sherif Khalifa
Author-X-Name-First: Sherif
Author-X-Name-Last: Khalifa
Title: Heterogeneity in Ability and Inheritance, Disparities, and Development
Abstract:
This paper investigates the impact of income inequality on economic
growth. A two-period overlapping generations model is developed where
agents are heterogeneous in innate abilities and inheritance. In the first
period, they receive their inheritance and their abilities are revealed.
There are only two types of abilities: high and low. Individuals decide on
their education level, and divide their inheritance between spending on
education and saving. In the second period, individuals supply their labor
and allocate the labor income and the return to their saving between
consumption and bequests to their offsprings. Initial capital stock is
owned entirely by the capitalists. In this context, a more equal
distribution of income enhances economic growth if the economy is lower
than a threshold capital-labor ratio, while income inequality has an
insignificant effect above this threshold. The predictions of the model
are tested empirically using the Hansen (1999) threshold estimation. The
results, using a panel of 70 countries for the period 1971-1999, suggest
that there is a statistically significant threshold income per capita,
below which the coefficient on the relationship between inequality and
economic growth is significantly negative and above which the estimate is
not significant.
Journal: International Economic Journal
Pages: 209-236
Issue: 2
Volume: 24
Year: 2010
Keywords: Income inequality, economic growth,
X-DOI: 10.1080/10168737.2010.486893
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Handle: RePEc:taf:intecj:v:24:y:2010:i:2:p:209-236
Template-Type: ReDIF-Article 1.0
Author-Name: Hooi Hooi Lean
Author-X-Name-First: Hooi
Author-X-Name-Last: Hooi Lean
Author-Name: B. N. Ghosh
Author-X-Name-First: B. N.
Author-X-Name-Last: Ghosh
Title: Economic Integration in Asia: Quo Vadis Malaysia?
Abstract:
Neo-liberal globalization has accelerated the space of economic
integration in Asia, particularly between the rising superpowers of China
and India and other Asian nations. In this connection, this paper examines
the degree of economic integration between Malaysia and the rapidly
developing economies of China and India on the one hand and the United
States and Japan on the other. This study shows that Malaysia is more
integrated with China and India than with the United States and Japan. It
is not that global integration is becoming less significant in Malaysia
but that regional integration is becoming more deterministic.
Journal: International Economic Journal
Pages: 237-248
Issue: 2
Volume: 24
Year: 2010
Keywords: China and India, Asian economy, TYDL causality, economic integration,
X-DOI: 10.1080/10168737.2010.486891
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Handle: RePEc:taf:intecj:v:24:y:2010:i:2:p:237-248
Template-Type: ReDIF-Article 1.0
Author-Name: Hrushikesh Mallick
Author-X-Name-First: Hrushikesh
Author-X-Name-Last: Mallick
Title: Factors Determining the Exchange Rate Movement under a Partial Capital Mobility Regime
Abstract:
The study examines the rupee-US dollar exchange rate (Rs/$) behaviour in
the presence of increasing and ample capital inflows in the post-reform
period in India. Using monthly data (1994:4 to 2007:8) the study estimates
a basic exchange rate model in a time series framework in order to assess
the relative significance of capital inflows in the presence of interest
rate, inflation rate and growth rate differentials and other factors
(forward exchange rate/expected exchange rate) in influencing the
rupee-dollar exchange rate behaviour. It finds the dominance of foreign
institutional investments affecting the rupee-dollar exchange rate and, to
a certain extent, it is seen that the influence of the growth rate
differential affects the exchange rate behaviour in India.
Journal: International Economic Journal
Pages: 249-266
Issue: 2
Volume: 24
Year: 2010
Keywords: Exchange rate, capital mobility, interest rate, inflation, block Granger causality,
X-DOI: 10.1080/10168737.2010.486887
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Handle: RePEc:taf:intecj:v:24:y:2010:i:2:p:249-266
Template-Type: ReDIF-Article 1.0
Author-Name: Edward Ghartey
Author-X-Name-First: Edward
Author-X-Name-Last: Ghartey
Title: Cointegration and Causal Relationship between Taxes and Spending for Kenya, Nigeria and South Africa
Abstract:
Causal relationships between taxes and spending are examined for three
African countries using the GDP as a control variable, and dummy variables
to address structural changes in Nigeria and South Africa. There is one
cointegration equation between nominal fiscal variables in all three
countries, one cointegration equation for Kenya and two cointegration
equations for Nigeria and South Africa for the real fiscal variables and
their respective dummy variables. Short-term results of the nominal
variables show fiscal independence for all three countries. In real terms,
taxes cause spending for Kenya and Nigeria and a weak fiscal
synchronization for South Africa. There is long run fiscal synchronization
in nominal terms for all three countries, and in real terms for both
Nigeria and South Africa, while real taxes cause spending in Kenya.
Long-run estimates show a unit increase in nominal (real) taxes
translating into a less than proportionate increase in nominal (real)
spending for Kenya and South Africa, and a more than proportionate
increase in nominal (real) spending for Nigeria. Fiscal imbalance is not a
threat in the budgetary process in Kenya and South Africa, but an issue of
concern in Nigeria, where oil revenues are a major source of support for
budget short falls.
Journal: International Economic Journal
Pages: 267-282
Issue: 2
Volume: 24
Year: 2010
Keywords: Autoregressive distributed lag error-correction model, taxes, spending, causality, cointegration,
X-DOI: 10.1080/10168730903510674
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Handle: RePEc:taf:intecj:v:24:y:2010:i:2:p:267-282
Template-Type: ReDIF-Article 1.0
Author-Name: Alan Deardorff
Author-X-Name-First: Alan
Author-X-Name-Last: Deardorff
Author-Name: Jee-Hyeong Park
Author-X-Name-First: Jee-Hyeong
Author-X-Name-Last: Park
Title: A Story of Trade-induced Industrialization
Abstract:
We offer a simple variant of the standard Heckscher-Ohlin Model that
explains how a developing country, by opening up to trade with a large
capital-abundant economy, can be induced to shift resources into more
capital-intensive production than that which it was producing in autarky.
As a result, it experiences a rise in its return to capital and, if
capital is internationally mobile, both an increase in its capital stock
and an increase in trade. These results arise in a model in which both a
traditional and a modern sector can produce final goods that are perfect
substitutes. The modern sector uses intermediate inputs that differ in
their relative capital intensities, while being both more capital
intensive than the traditional sector. The results of this model accord
well with the experience of the Asian Tiger economies during the early
decades of their export-oriented industrialization.
Journal: International Economic Journal
Pages: 283-296
Issue: 3
Volume: 24
Year: 2010
Keywords: Industrialization, trade, intermediate inputs, Heckscher-Ohlin Model, Asian Tiger economies,
X-DOI: 10.1080/10168737.2010.503457
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Handle: RePEc:taf:intecj:v:24:y:2010:i:3:p:283-296
Template-Type: ReDIF-Article 1.0
Author-Name: Ayman Reda
Author-X-Name-First: Ayman
Author-X-Name-Last: Reda
Title: Religious and Economic Preferences: An Empirical Analysis of State Tax Rates and Public Spending
Abstract:
In an attempt to examine the role of religion and religious institutions
in the formation of economic and political preferences, we empirically
test the relationship between religious and economic variables in the
context of the 50 US states. Specifically, we test whether changes in the
religious composition of states over time influences state tax rates
(public revenue), and state spending patterns (public expenditure). We use
church membership rates and religious contributions as alternative
measures of a state's religiosity level. The results report a weak
relationship between state tax rates and the religiosity of the state
population over time. However, a negative relationship was observed
between religiosity and public welfare spending, and a positive
relationship between religiosity and public education spending. Variations
arise when Catholics are included in the analysis of public spending.
Journal: International Economic Journal
Pages: 297-316
Issue: 3
Volume: 24
Year: 2010
Keywords: Denomination, liberal, conservative, religion, government,
X-DOI: 10.1080/10168737.2010.503452
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Handle: RePEc:taf:intecj:v:24:y:2010:i:3:p:297-316
Template-Type: ReDIF-Article 1.0
Author-Name: Jorge Andraz
Author-X-Name-First: Jorge
Author-X-Name-Last: Andraz
Author-Name: Nelia Norte
Author-X-Name-First: Nelia
Author-X-Name-Last: Norte
Title: Are the Portuguese Regions Converging to a Single Steady State?
Abstract:
This paper is concerned with examining the economic performance of the
Portuguese regions Nuts III. In particular, it seeks to present empirical
evidence about the degree of convergence in their economic performance
since 1990 when regions became the recipients of the European Community
Structural Funds. Panel data regressions are estimated and the results
suggest structural differences among regions leading to the existence of
different steady state levels of income. Moreover, regions are converging
to different steady states at an annual rate of 2.15%. As a corollary,
results suggest that national policies, while contributing to improving
the country's living standards relative to the European average, might not
have been able to achieve the economic cohesion of the country.
Journal: International Economic Journal
Pages: 317-327
Issue: 3
Volume: 24
Year: 2010
Keywords: Convergence, steady-state, fixed and random effects, Portugal,
X-DOI: 10.1080/10168737.2010.503460
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Handle: RePEc:taf:intecj:v:24:y:2010:i:3:p:317-327
Template-Type: ReDIF-Article 1.0
Author-Name: Sunku Hahn
Author-X-Name-First: Sunku
Author-X-Name-Last: Hahn
Author-Name: Song-Uk Kim
Author-X-Name-First: Song-Uk
Author-X-Name-Last: Kim
Title: A Pre-purchase Product Trial of a Monopolist with Multiple Products
Abstract:
For the heterogeneous consumers who do not know their individual
utilities from a new product, a pre-purchase product trial would be
helpful. We found out that a monopoly firm with two similar products would
have a strong incentive not to allow a pre-purchase product trial, even
though it is socially optimal to allow it. Furthermore, it is more likely
for a monopoly firm with a pre-purchase product trial policy to introduce
a new product to the market when introducing a new product is socially
optimal.
Journal: International Economic Journal
Pages: 329-342
Issue: 3
Volume: 24
Year: 2010
Keywords: Monopoly, product trial, heterogeneous consumers,
X-DOI: 10.1080/10168737.2010.503585
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Handle: RePEc:taf:intecj:v:24:y:2010:i:3:p:329-342
Template-Type: ReDIF-Article 1.0
Author-Name: Yaya Keho
Author-X-Name-First: Yaya
Author-X-Name-Last: Keho
Title: Effect of Financial Development on Economic Growth: Does Inflation Matter? Time Series Evidence from the UEMOA Countries
Abstract:
An important issue in the finance and growth literature is whether the
strength of the relationship between finance and growth may depend on
inflation rate. This paper uses time-series data to examine this evidence
for seven African countries. The technique of principal component analysis
is used to construct an overall index for financial development. This
summary measure is used to estimate nonlinear growth equations. The
empirical findings did not provide significant evidence of nonlinearity in
the finance-growth relationship. Financial development has no significant
effect on economic growth regardless of the level of inflation.
Journal: International Economic Journal
Pages: 343-355
Issue: 3
Volume: 24
Year: 2010
Keywords: Financial development, economic growth, inflation, threshold effects,
X-DOI: 10.1080/10168730903502416
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Template-Type: ReDIF-Article 1.0
Author-Name: Mark David Witte
Author-X-Name-First: Mark David
Author-X-Name-Last: Witte
Title: Currency Invoicing: The Role of 'Herding' and Exchange Rate Volatility
Abstract:
This paper analyzes an individual firm's choice of invoicing currency
under exchange rate volatility. Greater exchange rate volatility amplifies
the representative firm's desire to 'herd' relative to all other
considerations that may affect the currency denomination decision. By
'herding' a firm chooses a currency of denomination so that the firm's
price and the competition's price are affected by the exchange rate in a
similar manner. Contrary to previous research, the results herein suggest
that individual firms may invoice in a relatively volatile currency as
long as its competitor's invoice in the same volatile currency.
Journal: International Economic Journal
Pages: 357-374
Issue: 3
Volume: 24
Year: 2010
Keywords: Currency invoicing, exchange rate, vehicle currency, price adjustment, menu costs,
X-DOI: 10.1080/10168730903510666
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Handle: RePEc:taf:intecj:v:24:y:2010:i:3:p:357-374
Template-Type: ReDIF-Article 1.0
Author-Name: Young Wook Han
Author-X-Name-First: Young Wook
Author-X-Name-Last: Han
Title: The Effects of US Macroeconomic Surprises on the Intraday Movements of Foreign Exchange Rates: Cases of USD-EUR and USD-JPY Exchange Rates
Abstract:
This paper characterizes the intraday dynamics of the high frequency US
Dollar (USD)-Euro (EUR) and US Dollar (USD)-Japanese Yen (JPY) foreign
exchange rates that have been subject to macroeconomic fundamentals. Even
though the FIGARCH model with a normality assumption is found to be a good
starting point, it appears to be inappropriate to represent the underlying
movements of the high frequency returns due to the occurrences of jumps.
Hence, this paper relies on the FIGARCH model with the mixture
distribution that allows for the time-varying jumps that are determined by
the US macroeconomic surprises. This paper generally finds that the US
macroeconomic surprises are closely related to the intraday movements in
the volatility process of the high frequency returns process through the
jumps. In particular, the US macroeconomic surprises appear to affect the
movements in the volatility process of the foreign exchange rates
asymmetrically depending on the signs of the surprises and spuriously
increasing the long memory persistence in the volatility process due to
the jumps.
Journal: International Economic Journal
Pages: 375-396
Issue: 3
Volume: 24
Year: 2010
Keywords: Intraday foreign exchange rates, time-varying jumps, FIGARCH, long memory property, US macroeconomic surprises, mixture distribution,
X-DOI: 10.1080/10168737.2010.504777
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Template-Type: ReDIF-Article 1.0
Author-Name: Ching-Chuan Tsong
Author-X-Name-First: Ching-Chuan
Author-X-Name-Last: Tsong
Title: Are Real Exchange Rates Mean Reverting in Developing Economies in Asia? A Covariate Stationarity Approach
Abstract:
Previous studies on the stationarity properties of the real exchange
rates in developing countries in Asia have generally produced mixed
results. The unit root behavior is puzzling because it contradicts the
purchasing power parity (PPP) hypothesis. This study examines
international data on 15 developing countries by employing the covariate
stationarity test proposed by Jansson (2004). The covariates used are
motivated by economic theory, including inflation, money supply, income
and current account. Our results show strong evidence in support of the
hypothesis. On the contrary, the unit root test with the alternative
hypothesis of nonlinear mean reversion provides inadequate evidence in
favor of PPP.
Journal: International Economic Journal
Pages: 397-412
Issue: 3
Volume: 24
Year: 2010
Keywords: Real exchange rate, purchasing power parity, covariate stationarity test,
X-DOI: 10.1080/10168737.2010.504778
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Handle: RePEc:taf:intecj:v:24:y:2010:i:3:p:397-412
Template-Type: ReDIF-Article 1.0
Author-Name: Hans-Georg Petersen
Author-X-Name-First: Hans-Georg
Author-X-Name-Last: Petersen
Author-Name: Ulrich Thiessen
Author-X-Name-First: Ulrich
Author-X-Name-Last: Thiessen
Title: Editors' Introduction: Shadow Economy in High Income Countries - Much Ado about Nothing?
Abstract:
Journal: International Economic Journal
Pages: 413-419
Issue: 4
Volume: 24
Year: 2010
X-DOI: 10.1080/10168737.2010.525970
File-URL: http://www.tandfonline.com/doi/abs/10.1080/10168737.2010.525970
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Handle: RePEc:taf:intecj:v:24:y:2010:i:4:p:413-419
Template-Type: ReDIF-Article 1.0
Author-Name: Hans-Georg Petersen
Author-X-Name-First: Hans-Georg
Author-X-Name-Last: Petersen
Author-Name: Ulrich Thiessen
Author-X-Name-First: Ulrich
Author-X-Name-Last: Thiessen
Author-Name: Pierre Wohlleben
Author-X-Name-First: Pierre
Author-X-Name-Last: Wohlleben
Title: Shadow Economy, Tax Evasion, and Transfer Fraud - Definition, Measurement, and Data Problems
Abstract:
The paper tries to shed some light on the definition of the shadow
economy, in order to separate shadow activities from market activities and
household production. A total income concept is applied, which is based on
the labor force being engaged in market, shadow and household activities.
Based on such a clear concept, tax evasion can be defined and identified
in the market sector and is also usually taking place in the shadow
economy, where it is often accompanied by evasion of social security
contributions as well as transfer fraud. Money usage in the three sectors
is then critically analyzed, and measurement as well as data problems are
seriously taken into consideration. The results of our research project
suggest that the size of the shadow economy as estimated with the currency
approach often yields the highest possible values. Other approaches and
plausibility considerations produce much lower values, which seem to be
much more realistic. Consequently, policy considerations to strengthen the
control mechanisms should be met with utmost skepticism.
Journal: International Economic Journal
Pages: 421-441
Issue: 4
Volume: 24
Year: 2010
Keywords: Shadow economy, total income concept, currency approach, money velocity, payment habits, tax evasion, transfer fraud,
X-DOI: 10.1080/10168737.2010.525973
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Handle: RePEc:taf:intecj:v:24:y:2010:i:4:p:421-441
Template-Type: ReDIF-Article 1.0
Author-Name: Friedrich Schneider
Author-X-Name-First: Friedrich
Author-X-Name-Last: Schneider
Author-Name: Andreas Buehn
Author-X-Name-First: Andreas
Author-X-Name-Last: Buehn
Author-Name: Claudio Montenegro
Author-X-Name-First: Claudio
Author-X-Name-Last: Montenegro
Title: New Estimates for the Shadow Economies all over the World
Abstract:
This paper presents estimations of the shadow economies for 162
countries, including developing, Eastern European, Central Asian, and high
income OECD countries over 1999 to 2006/2007. According to our
estimations, the weighted average size of the shadow economy (as a
percentage of 'official' GDP) in Sub-Saharan Africa is 37.6%, in Europe
and Central Asia (mostly transition countries) 36.4% and in high income
OECD countries 13.4%. We find that an increased burden of taxation (direct
and indirect ones), combined with (labour market) regulations and the
quality of public goods and services as well as the state of the
'official' economy are the driving forces of the shadow economy.
Journal: International Economic Journal
Pages: 443-461
Issue: 4
Volume: 24
Year: 2010
Keywords: Shadow economy of 162 countries, tax burden, quality of state institutions, regulation, MIMIC model,
X-DOI: 10.1080/10168737.2010.525974
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Handle: RePEc:taf:intecj:v:24:y:2010:i:4:p:443-461
Template-Type: ReDIF-Article 1.0
Author-Name: Bernard Fortin
Author-X-Name-First: Bernard
Author-X-Name-Last: Fortin
Author-Name: Guy Lacroix
Author-X-Name-First: Guy
Author-X-Name-Last: Lacroix
Author-Name: Dominique Pinard
Author-X-Name-First: Dominique
Author-X-Name-Last: Pinard
Title: Evaluation of the Underground Economy in Quebec: A Microeconomic Approach
Abstract:
The main purpose of this paper is to estimate the size and the growth of
Quebec's underground economy, and the corresponding loss of taxes for the
government. Our approach is based on a method developed by Pissarides and
Weber (1989) and extended by Lyssiotou et al. (2004). The basic hypothesis
is that individuals can under-report their earnings from self-employment
but not from paid work, from which taxes are directly deducted. We
estimate a consumer demand system in which the marginal propensity to
consume is allowed to vary with the two types of earnings. We next
estimate the amount of self-employment earnings that are under-reported.
From this estimate, we calculate the relative size of the underground
economy in Quebec. We use data from Statistics Canada's Survey of
Household Spending. According to our results, Quebec's underground economy
amounted to 4.6% of GDP in 1997 and increased slightly to 5.7% in 2002.
For the government, this represents approximately $3.3 billion in forgone
taxes for the year 2002. This estimate is very close to those reported by
Gervais (1994) and Fortin and Lacroix (2009) using very different
estimation methods and data.
Journal: International Economic Journal
Pages: 463-479
Issue: 4
Volume: 24
Year: 2010
Keywords: Underground economy, demand system, household behaviour, generalized methods of moments, tax evasion, self-employment income,
X-DOI: 10.1080/10168737.2010.525983
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Handle: RePEc:taf:intecj:v:24:y:2010:i:4:p:463-479
Template-Type: ReDIF-Article 1.0
Author-Name: Ulrich Thiessen
Author-X-Name-First: Ulrich
Author-X-Name-Last: Thiessen
Title: The Shadow Economy in International Comparison: Options for Economic Policy Derived from an OECD Panel Analysis
Abstract:
Building on new behavioral theories, using a data set of about 450
variables and augmenting the Sala-i-Martin definition of robustness, we
find evidence in support of the hypothesis that the standard causes of the
shadow economy (SE), taxes, the administrative burden and labor market
regulations, are not per se crucial in determining the size of the SE.
Many of the robust influences emanate from relatively new theories such as
elements of direct democracy, social interaction effects, and happiness,
and from the institutional literature on the relative importance of
specific institutions for economic performance. Most of them can well be
affected by governments. Hence, if one believes the SE to be a problem in
high income industrial countries, governments could address it through
many ways, including their own behavior. And these could be more
successful than a strategy built on more government control, increased
punishment and less freedom, as adopted by some OECD countries.
Simulations of the size of the SE demonstrate their sensitivity to the
required velocity assumption and show that previous estimates, including
those of the so-called Mimic model, appear to be based on very high
velocity assumptions. A moderate velocity assumption yields macro
estimates of the SE consistent with the micro evidence, i.e. not more than
a few percent of official GDP. Finally, for the first time, we separate
the relatively large 'crime-related' shadow activity from the
'non-criminal' one.
Journal: International Economic Journal
Pages: 481-509
Issue: 4
Volume: 24
Year: 2010
Keywords: Shadow economy, currency and mimic method, policy response,
X-DOI: 10.1080/10168737.2010.525986
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Handle: RePEc:taf:intecj:v:24:y:2010:i:4:p:481-509
Template-Type: ReDIF-Article 1.0
Author-Name: Marcus Ruge
Author-X-Name-First: Marcus
Author-X-Name-Last: Ruge
Title: Determinants and Size of the Shadow Economy - A Structural Equation Model
Abstract:
The main objective of this paper is to analyze the determinants of the
shadow economy within a coherent Structural Equation Model using a data
set of 11 latent variables with 58 indicators from 35 countries. The
shadow economy is closely connected to its determinants; a higher wealth
and development level, a better administrative system, lower taxes and
social security payments and the extent of labor market regulations
determine the level of shadow economy. Germany ranks 16th of 35 countries
by shadow economy, with a score of 3.6, with the best being New Zealand,
1.0, and the worst Romania, 10.
Journal: International Economic Journal
Pages: 511-523
Issue: 4
Volume: 24
Year: 2010
Keywords: Shadow economy, tax system, labor system, SEM, PLS,
X-DOI: 10.1080/10168737.2010.525988
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Handle: RePEc:taf:intecj:v:24:y:2010:i:4:p:511-523
Template-Type: ReDIF-Article 1.0
Author-Name: Kari Takala
Author-X-Name-First: Kari
Author-X-Name-Last: Takala
Author-Name: Matti Viren
Author-X-Name-First: Matti
Author-X-Name-Last: Viren
Title: Is Cash Used Only in the Shadow Economy?
Abstract:
This paper analyzes the use of cash in the Euro area. It attempts to give
at least a partial answer to the question of whether cash is predominantly
used in the shadow economy and whether, consequently, the behavior of cash
balances is useful in monitoring changes in the shadow economy. The paper
shows that - contrary to what is often assumed - recent developments in
cash demand (including changes in denomination structure) can be fairly
well explained by certain economic and institutional factors. Changes in
cash demand do not seem to correspond to changes in existing measures of
the shadow economy, nor do cross-country comparisons reveal close
correspondence.
Journal: International Economic Journal
Pages: 525-540
Issue: 4
Volume: 24
Year: 2010
Keywords: Shadow economy, cash demand, hoarding, interest rates,
X-DOI: 10.1080/10168737.2010.525992
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Template-Type: ReDIF-Article 1.0
Author-Name: Sascha Hokamp
Author-X-Name-First: Sascha
Author-X-Name-Last: Hokamp
Author-Name: Michael Pickhardt
Author-X-Name-First: Michael
Author-X-Name-Last: Pickhardt
Title: Income Tax Evasion in a Society of Heterogeneous Agents - Evidence from an Agent-based Model
Abstract:
We analyze the evolution and extent of income tax evasion under
alternative governmental policies in an agent-based model with
heterogeneous agents. A novel aspect of our modeling is the use of an
exponential utility function, which allows us to assume rather realistic
audit probabilities and to yield more realistic results with respect to
the extent of tax evasion. Further, the introduction of lapse of time
effects constitutes another novel aspect of our model. Among other things,
the model allows for assessing the impact of alternative policies on tax
evasion. Subject to the model features, we find that ethical norms and
lapse of time effects reduce the extent of tax evasion particularly
strongly.
Journal: International Economic Journal
Pages: 541-553
Issue: 4
Volume: 24
Year: 2010
Keywords: Income tax evasion, heterogeneous population, lapse of time, ethical behavior, agent-based models,
X-DOI: 10.1080/10168737.2010.525994
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Handle: RePEc:taf:intecj:v:24:y:2010:i:4:p:541-553
Template-Type: ReDIF-Article 1.0
Author-Name: Dominik Enste
Author-X-Name-First: Dominik
Author-X-Name-Last: Enste
Title: Shadow Economy - The Impact of Regulation in OECD-countries
Abstract:
A comprehensive regulation index covering five major fields (labour,
product and capital market; education/innovation and the quality of
institutions) has been used to analyse the relationship between the
density of regulations and the size of shadow economies. The empirical
results from 25 OECD countries for the time period 1995-2005 show that -
apart from tax burden and tax morale - the main causes are labour and
product market regulations, overall regulations and poor quality of
official public institutions and administration. An overview of relevant
findings on the impact of regulation on irregular activities complements
these findings.
Journal: International Economic Journal
Pages: 555-571
Issue: 4
Volume: 24
Year: 2010
Keywords: Regulation, quality of institutions, shadow economy, underground economy, random effects models,
X-DOI: 10.1080/10168737.2010.525996
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Template-Type: ReDIF-Article 1.0
Author-Name: Catalina Granda-Carvajal
Author-X-Name-First: Catalina
Author-X-Name-Last: Granda-Carvajal
Title: The Unofficial Economy and the Business Cycle: A Test for Theories
Abstract:
The shadow economy is an extensive phenomenon worldwide. It poses several
questions, the consequences of fluctuations in economic activity being
among the major ones. Based on official data, this paper establishes a set
of cyclical properties of macroeconomic aggregates and studies how these
vary across countries with the size of the unofficial sector. Through
comparisons with the existing literature on business cycles in economies
featuring underground activities, the obtained 'stylized facts' are used
to test the relevance of theoretical predictions on the influence of the
shadow economy. Using this procedure allows us to confirm that the
evidence is not entirely of the sort suggested in business cycle models.
In particular, some important macro aggregates and cyclical properties
have been neglected in the analysis altogether, while others have been
paid too much attention for no apparent empirical reason. Some possible
avenues for future research can be drawn from this exercise.
Journal: International Economic Journal
Pages: 573-586
Issue: 4
Volume: 24
Year: 2010
Keywords: Shadow economy, business cycles, model evaluation,
X-DOI: 10.1080/10168737.2010.525998
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Handle: RePEc:taf:intecj:v:24:y:2010:i:4:p:573-586
Template-Type: ReDIF-Article 1.0
Author-Name: Gaetano Lisi
Author-X-Name-First: Gaetano
Author-X-Name-Last: Lisi
Author-Name: Maurizio Pugno
Author-X-Name-First: Maurizio
Author-X-Name-Last: Pugno
Title: Entrepreneurship and the Hidden Economy: An Extended Matching Model
Abstract:
This paper develops a labour market matching model in order to address
the problem of the persistence of the hidden sector and of its regional
concentration, as in Italy and in the enlarged Europe. The main novel
features of the model are that entrepreneurial ability affects job
productivity, and that regular firms receive negative externalities from
the hidden sector, which may capture the pressure typically exerted by
corruption and organised crime, and positive externalities from the other
regular firms. At least one interior equilibrium emerges, thus providing
an explanation for the so-called 'shadow puzzle', with the possibility
that tougher monitoring may reduce both the hidden sector and
unemployment. If externalities are non-linear, two equilibria may emerge,
thus accounting for regional dualism. The 'better' equilibrium is in fact
characterised by a smaller hidden sector, higher levels of overall
productivity, output, entrepreneurial ability used, extra-profits,
relative wages, and more favourable externalities.
Journal: International Economic Journal
Pages: 587-605
Issue: 4
Volume: 24
Year: 2010
Keywords: Entrepreneurship, hidden economy, shadow economy, underground economy, matching models,
X-DOI: 10.1080/10168737.2010.526000
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Handle: RePEc:taf:intecj:v:24:y:2010:i:4:p:587-605
Template-Type: ReDIF-Article 1.0
Author-Name: Stephan Muehlbacher
Author-X-Name-First: Stephan
Author-X-Name-Last: Muehlbacher
Author-Name: Erich Kirchler
Author-X-Name-First: Erich
Author-X-Name-Last: Kirchler
Title: Tax Compliance by Trust and Power of Authorities
Abstract:
The following is a summary of Kirchler et al.'s (2008a) framework for tax
compliance. The 'slippery slope' framework distinguishes two forms of
compliance. Whereas voluntary compliance is driven by trust in tax
authorities, enforced compliance depends on the power of authorities. It
is assumed, however, that the interplay of trust and power is crucial for
both forms of compliance. The framework serves as a guideline for tax
research and tax policy.
Journal: International Economic Journal
Pages: 607-610
Issue: 4
Volume: 24
Year: 2010
Keywords: Tax compliance, trust, power,
X-DOI: 10.1080/10168737.2010.526005
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Handle: RePEc:taf:intecj:v:24:y:2010:i:4:p:607-610
Template-Type: ReDIF-Article 1.0
Author-Name: Claudio Quintano
Author-X-Name-First: Claudio
Author-X-Name-Last: Quintano
Author-Name: Paolo Mazzocchi
Author-X-Name-First: Paolo
Author-X-Name-Last: Mazzocchi
Title: Some Alternative Estimates of Underground Economies in 12 New EU Member States
Abstract:
This paper investigates alternative estimates of the Non-Observed Economy
(NOE) for 12 new European Union (EU) Member Countries during the
transition period by an exploration of the reliability of the Gross
Domestic Product (GDP) figures. The authors analyze several methodologies
applied in various countries performing the Eurostat (2005) Pilot Projects
on the Exhaustiveness (PPE); having in mind the different methods of
measuring the shadow economy, the authors examine the relationship between
selected economic aggregates to estimate the size and growth of the
unrecorded sector using the Latent Variable Method to validate - as far as
available - the official data, and to quantify the NOE phenomenon. The
empirical results obtained by using this different estimation method do
not reveal the same convergence as the national statistical offices have
shown. These experiences include, to various degrees, the lack of coverage
being dependent on the different types of underground economic activities.
Journal: International Economic Journal
Pages: 611-628
Issue: 4
Volume: 24
Year: 2010
Keywords: Underground economy, latent variable method,
X-DOI: 10.1080/10168737.2010.526007
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Handle: RePEc:taf:intecj:v:24:y:2010:i:4:p:611-628
Template-Type: ReDIF-Article 1.0
Author-Name: Egle Tafenau
Author-X-Name-First: Egle
Author-X-Name-Last: Tafenau
Author-Name: Helmut Herwartz
Author-X-Name-First: Helmut
Author-X-Name-Last: Herwartz
Author-Name: Friedrich Schneider
Author-X-Name-First: Friedrich
Author-X-Name-Last: Schneider
Title: Regional Estimates of the Shadow Economy in Europe
Abstract:
The aim of the paper is to estimate the extent of the shadow economy in
the regions of the European Union. For this purpose the
multiple-indicators multiple-causes approach combined with elements of
spatial econometrics is implemented. The analysis shows that the shadow
economy is most extensive in Eastern and Southern Europe, confirming
results from previous literature. Within countries, the poorest regions
tend to exhibit the highest shadow economy quotas. The smallest extent of
shadow activities is obtained for the Netherlands and the United Kingdom,
while in Poland the shadow economy is most extensive.
Journal: International Economic Journal
Pages: 629-636
Issue: 4
Volume: 24
Year: 2010
Keywords: Shadow economy, European Union, MIMIC modelling, spatial effects,
X-DOI: 10.1080/10168737.2010.526010
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Handle: RePEc:taf:intecj:v:24:y:2010:i:4:p:629-636
Template-Type: ReDIF-Article 1.0
Author-Name: Jaymin Lee
Author-X-Name-First: Jaymin
Author-X-Name-Last: Lee
Title: The Performance of Industrial Policy: Evidence from Korea
Abstract:
This paper first shows that Korea implemented industrial policy properly,
promoting infant industries rather than mature ones. The paper then shows
that infant industries promoted by industrial policy have matured over
time, as well as grown faster than mature industries not promoted by
industrial policy. However, this happened as industrial policy was being
lifted, rather than as it was being implemented. The paper also shows
that, although industrial policy may pay off more easily than previously
thought, Korean industrial policy fails to pay off because it distorted
the price mechanism too severely and for too long. The analysis of the
paper suggests that industrial policy in latecomer countries, when
implemented to address market failure, should be much more moderate than
what Korea implemented.
Journal: International Economic Journal
Pages: 1-27
Issue: 1
Volume: 25
Year: 2011
Keywords: Industrial policy, infant industry, cost-benefit analysis, protection, subsidy,
X-DOI: 10.1080/10168737.2011.550122
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Template-Type: ReDIF-Article 1.0
Author-Name: Chiara Broccolini
Author-X-Name-First: Chiara
Author-X-Name-Last: Broccolini
Author-Name: Alessia Lo Turco
Author-X-Name-First: Alessia
Author-X-Name-Last: Lo Turco
Author-Name: Andrea Presbitero
Author-X-Name-First: Andrea
Author-X-Name-Last: Presbitero
Author-Name: Stefano Staffolani
Author-X-Name-First: Stefano
Author-X-Name-Last: Staffolani
Title: Individual Earnings, International Outsourcing and Technological Change: Evidence from Italy
Abstract:
The aim of this paper is to evaluate empirically the relative effects of
international outsourcing of materials and services and of ICT capital
deepening on wage inequality between blue and white collars in the Italian
manufacturing industry during the period 1985-1999. We merge an
administrative data set on workers' wages and individual characteristics
with data on imported inputs from Italian input-output tables and other
sector-level variables. Our results confirm that both material and service
outsourcing widen the skilled/unskilled wage gap while ICT capital
deepening positively affects real wages regardless of the worker's status.
However, important differences emerge when the overall sample is split
between traditional and innovative sectors.
Journal: International Economic Journal
Pages: 29-46
Issue: 1
Volume: 25
Year: 2011
Keywords: International outsourcing, ICT, wage inequality,
X-DOI: 10.1080/10168731003658744
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Template-Type: ReDIF-Article 1.0
Author-Name: Rangan Gupta
Author-X-Name-First: Rangan
Author-X-Name-Last: Gupta
Title: Currency Substitution and Financial Repression
Abstract:
In this paper, we use a general equilibrium overlapping generations
monetary endogenous growth model of a small open economy, to analyze
whether financial repression, measured via the 'high' mandatory
reserve-deposit requirements of financial intermediaries, is an optimal
response of a consolidated government following an increase in the degree
of currency substitution. We find that higher currency substitution can
yield higher reserve requirements, but the result depends crucially on how
the consumer weighs money in the utility function relative to domestic and
foreign consumptions, and also the size of the government.
Journal: International Economic Journal
Pages: 47-61
Issue: 1
Volume: 25
Year: 2011
Keywords: Currency substitution, endogenous growth models, financial repression, small open economy, public finance,
X-DOI: 10.1080/10168731003753875
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Handle: RePEc:taf:intecj:v:25:y:2011:i:1:p:47-61
Template-Type: ReDIF-Article 1.0
Author-Name: Denis Kan
Author-X-Name-First: Denis
Author-X-Name-Last: Kan
Author-Name: Bernadette Andreosso-O'Callaghan
Author-X-Name-First: Bernadette
Author-X-Name-Last: Andreosso-O'Callaghan
Author-Name: Helena Lenihan
Author-X-Name-First: Helena
Author-X-Name-Last: Lenihan
Title: Assessing the Feasibility of Monetary Integration in the Former Soviet Republics
Abstract:
The disintegration of the USSR brought with it a turbulent period of
transition for the newly emerged independent states. This initiated a
process of economic decentralisation and a re-allocation of resources.
Various regional formations aiming to create a single market or even a
common currency area have been proposed amongst the former Soviet states.
Despite this, very little in terms of economic integration has been
achieved so far. Economies within the CIS are divergent in terms of size
and economic structure, with external shocks being more prominent for
regional countries. The empirical analysis provided here examines the
sustainability of optimum currency area arrangements within the CIS. The
results present weak evidence to support monetary arrangements in the
region, nonetheless some evidence was found for Russia-Belarus and to some
extent Russia-Kazakhstan. Russia remains the dominant, most diversified
and advanced economy in the region. In the case of a monetary union with
regional countries, the union is likely to happen by absorption. External
shocks have divergent effects on regional countries; the differences to a
large extent are attributed to the magnitude of responses, further
weakening the argument in favour of the OCA in the region.
Journal: International Economic Journal
Pages: 63-89
Issue: 1
Volume: 25
Year: 2011
Keywords: Optimum currency area, CIS, integration,
X-DOI: 10.1080/10168737.2010.487538
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Handle: RePEc:taf:intecj:v:25:y:2011:i:1:p:63-89
Template-Type: ReDIF-Article 1.0
Author-Name: Carlos Ibarra
Author-X-Name-First: Carlos
Author-X-Name-Last: Ibarra
Title: Monetary Policy and Real Currency Appreciation: A BEER Model for the Mexican Peso
Abstract:
A notable feature of the Mexican economy since the late 1980s was the
persistent real appreciation of the peso. The appreciation - a key
development that helps to explain Mexico's slow rate of economic growth -
took place despite changes in the exchange-rate regime, yet with an
unchanging focus of monetary policy on gradually reducing the inflation
rate. Thus, the frequent assumption that only real-side variables (as
opposed to monetary ones) have a lasting or 'long-run' effect on the real
exchange may not suit the recent Mexican case. The paper presents the
results of an econometric study of exchange rate determination in Mexico
for the period 1990Q1-2006Q4. The study is based on the so-called BEER
(Behavioral Equilibrium Exchange Rate) model, which relies on Johansen's
cointegration methodology and jointly considers real-side and monetary
determinants. The estimation results - in the form of two- and
three-equation cointegration models - show that, controlling for the
influence of real-side determinants, the peso-dollar interest differential
had a statistically and economically significant long-run effect on the
peso's real exchange rate.
Journal: International Economic Journal
Pages: 91-110
Issue: 1
Volume: 25
Year: 2011
Keywords: Real currency appreciation, real exchange rate, monetary policy, Mexican peso, BEER model, Johansen's cointegration methodology,
X-DOI: 10.1080/10168737.2010.487539
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Handle: RePEc:taf:intecj:v:25:y:2011:i:1:p:91-110
Template-Type: ReDIF-Article 1.0
Author-Name: George Ford
Author-X-Name-First: George
Author-X-Name-Last: Ford
Author-Name: Thomas Koutsky
Author-X-Name-First: Thomas
Author-X-Name-Last: Koutsky
Author-Name: Lawrence Spiwak
Author-X-Name-First: Lawrence
Author-X-Name-Last: Spiwak
Title: The Frontier of Broadband Adoption Across the OECD: A Comparison of Performance
Abstract:
We assess the performance and efficiency of OECD countries with respect
to broadband Internet subscription. Using the econometric techniques of
Least Squares and Stochastic Frontier Analysis, we estimate scores
indicating the efficiency with which a country converts its economic and
demographic endowments into broadband subscriptions. With very few
exceptions, we find that broadband subscription in OECD countries is
consistent with those endowments - about two thirds of OECD countries have
an efficiency rate of 90% or better. We find that economic and demographic
endowments explain nearly all of the variation in broadband subscriptions
(85%). This finding suggests that public policy's role for broadband
adoption should be targeted at improving or mitigating the adverse effects
of underlying demographic and economic conditions, such as computer
ownership and education programs.
Journal: International Economic Journal
Pages: 111-123
Issue: 1
Volume: 25
Year: 2011
Keywords: Internet, OECD, stochastic frontier analysis, broadband, telecommunications, economic development,
X-DOI: 10.1080/10168737.2010.487540
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Handle: RePEc:taf:intecj:v:25:y:2011:i:1:p:111-123
Template-Type: ReDIF-Article 1.0
Author-Name: Marcelo Sanchez
Author-X-Name-First: Marcelo
Author-X-Name-Last: Sanchez
Title: Modelling Anti-inflationary Monetary Targeting in Romania
Abstract:
This paper characterises Romania's experience with anti-inflationary
monetary targeting over the period 1999-2005 prior to the country's switch
to inflation targeting. We uncover the National Bank of Romania's
preferences, conditional on an estimated macro-model. We find that
Romania's monetary targeting regime can be characterised by a concern for
price stability and an additional role for smoothing of the central bank's
instrument (base money growth). Exchange rate variability and output gap
stability appear not to significantly enter the National Bank of Romania's
objective function.
Journal: International Economic Journal
Pages: 125-145
Issue: 1
Volume: 25
Year: 2011
Keywords: Monetary targeting, optimal monetary policy, Romania,
X-DOI: 10.1080/10168737.2010.487541
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Handle: RePEc:taf:intecj:v:25:y:2011:i:1:p:125-145
Template-Type: ReDIF-Article 1.0
Author-Name: Germana Corrado
Author-X-Name-First: Germana
Author-X-Name-Last: Corrado
Title: Modeling Guarantees, Over-Indebtedness and Financial Crises in an Open Economy
Abstract:
This work develops a simple framework to analyse how financial
intermediaries' balance sheet problems combined with financial guarantees
make an economy more vulnerable to financial crises. A 'double default'
problem - that is, the default of financial intermediaries on their debt
repayments and of the government on its guarantees to bailout
intermediaries' losses - is modelled in this study. The possibility of
multiple equilibria, including a crisis equilibrium where the government
is not able or willing to honor its guarantees towards the domestic
financial sector, arises from the interplay of all the above elements:
financial intermediaries' level of indebtedness, government implicit
guarantees and high-risk creditors' lending. This work also produces
predictions concerning the vulnerability to a financial crisis: multiple
equilibria are possible only in certain ranges of the fundamentals.
Journal: International Economic Journal
Pages: 147-172
Issue: 1
Volume: 25
Year: 2011
Keywords: Financial guarantees, risk premium, multiple equilibria,
X-DOI: 10.1080/10168737.2010.487542
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Handle: RePEc:taf:intecj:v:25:y:2011:i:1:p:147-172
Template-Type: ReDIF-Article 1.0
Author-Name: Rebeca Jimenez-Rodriguez
Author-X-Name-First: Rebeca
Author-X-Name-Last: Jimenez-Rodriguez
Title: Macroeconomic Structure and Oil Price Shocks at the Industrial Level
Abstract:
This paper analyses the role of the macroeconomic structure in the
response of industrial output to an oil price shock in six OECD countries.
The modelling of the macroeconomic structure is important in examining the
effect of an oil price shock on the industry-level output, since the
analysis of the transmission mechanisms helps us to better understand the
response of industrial output to such a shock. Thus, cross-country
differences found in the responses of industrial output to oil price
shocks within the European Monetary Union can be partially explained by
differences in the transmission mechanisms of such shocks.
Journal: International Economic Journal
Pages: 173-189
Issue: 1
Volume: 25
Year: 2011
Keywords: Oil price shock, identified VAR, manufacturing industries,
X-DOI: 10.1080/10168737.2010.487913
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Handle: RePEc:taf:intecj:v:25:y:2011:i:1:p:173-189
Template-Type: ReDIF-Article 1.0
Author-Name: Mohammad Kabir
Author-X-Name-First: Mohammad
Author-X-Name-Last: Kabir
Author-Name: Ruhul Salim
Author-X-Name-First: Ruhul
Author-X-Name-Last: Salim
Title: Analysing Potential Effects of Preferential Liberalisation in Some Asian Emerging Economies
Abstract:
This paper examines the ex-ante effects of possible trade liberalisation
of some Asian emerging economies through forming a regional economic bloc
called BIMSTEC by adopting SMART and GTAP models. Based on estimated
export supply elasticity, the results of SMART simulation reveal that the
highest net trade effect takes place for India, the biggest economy in the
bloc, followed by Bangladesh for tariff elimination. The two countries
also derive substantial welfare gains. The proportionate revenue loss is
remarkably higher for smaller countries such as Nepal, Myanmar and
Bangladesh. GTAP simulation suggests that Bangladesh incurs a net welfare
loss by joining the FTA. The overall intra-bloc export is likely to
increase. These results imply that there is a need for designing proper
compensation mechanism and technical support for the smaller economies to
offset the possible adverse effects.
Journal: International Economic Journal
Pages: 191-213
Issue: 2
Volume: 25
Year: 2011
Keywords: Regionalization, trade liberalization, economic modelling,
X-DOI: 10.1080/10168737.2011.586805
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Handle: RePEc:taf:intecj:v:25:y:2011:i:2:p:191-213
Template-Type: ReDIF-Article 1.0
Author-Name: Mantu Kumar Mahalik
Author-X-Name-First: Mantu Kumar
Author-X-Name-Last: Mahalik
Author-Name: Hrushikesh Mallick
Author-X-Name-First: Hrushikesh
Author-X-Name-Last: Mallick
Title: What Causes Asset Price Bubble in an Emerging Economy? Some Empirical Evidence in the Housing Sector of India
Abstract:
This study examines the dynamic causal relationships between house prices
and their five determinants - real income, short-run real interest rates,
real stock price index, real effective exchange rate, and real non-food
bank credit - by using the quarterly data from 1996:Q1 to 2007:Q1 for
India. Using the cointegration test and the vector error-correction model
(VECM), the study finds that in the long run, real income significantly
and positively influences the housing prices while real non-food bank
credit adversely influences it. The variance decomposition results suggest
that it is the shocks to the non-food bank credit that mainly explains the
variability in housing prices, besides its own shocks being the most
influential while other factors are not significant. This suggests that
the role of credit availability as a supply side determinant cannot be
underestimated in the dynamic behaviour of housing prices in emerging
economies.
Journal: International Economic Journal
Pages: 215-237
Issue: 2
Volume: 25
Year: 2011
Keywords: Housing price, stock price, interest rate, bank credit, exchange rate,
X-DOI: 10.1080/10168737.2011.586806
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Handle: RePEc:taf:intecj:v:25:y:2011:i:2:p:215-237
Template-Type: ReDIF-Article 1.0
Author-Name: Shu-Ling Chen
Author-X-Name-First: Shu-Ling
Author-X-Name-Last: Chen
Author-Name: Hyeongwoo Kim
Author-X-Name-First: Hyeongwoo
Author-X-Name-Last: Kim
Title: Nonlinear Mean Reversion across National Stock Markets: Evidence from Emerging Asian Markets
Abstract:
This paper seeks empirical evidence of nonlinear mean-reversion in
relative national stock price indices for Emerging Asian countries. It is
well known that conventional linear unit root tests suffer from low power
against the stationary nonlinear alternative. Implementing the nonlinear
unit root tests proposed by Kapetanios et al. (2003) and Cerrato et al.
(2009) for the relative stock prices of Emerging Asian markets, we find
strong evidence of nonlinear mean reversion, whereas linear tests fail to
reject the unit root null for most cases. We also report some evidence
that stock markets in China and Taiwan are highly localized.
Journal: International Economic Journal
Pages: 239-250
Issue: 2
Volume: 25
Year: 2011
Keywords: Linear unit root test, nonlinear unit root test, nonlinear panel unit root test, international relative stock prices,
X-DOI: 10.1080/10168737.2011.580569
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Handle: RePEc:taf:intecj:v:25:y:2011:i:2:p:239-250
Template-Type: ReDIF-Article 1.0
Author-Name: Tuck Cheong Tang
Author-X-Name-First: Tuck
Author-X-Name-Last: Cheong Tang
Author-Name: Koi Nyen Wong
Author-X-Name-First: Koi Nyen
Author-X-Name-Last: Wong
Title: Foreign Direct Investment, Merchandise and Services Trade in a Transition Economy: The Case of Cambodia
Abstract:
Since the liberalization of trade and investment in the 1990s, inward
foreign direct investment (FDI) has been seen to play a greater role in
forging trade flows, integration into the regional and international
markets and economic development for a transition economy such as
Cambodia. Despite her recent progress in attracting FDI and fostering
trade, the direction of causality between inward FDI, exports and imports
of merchandise as well as services has not been empirically explored. The
findings show that inward FDI not only can promote both merchandise and
services exports but also indicate the presence of backward and forward
linkages, which could result in positive externalities. However, based on
the impulse response analysis, it seems that merchandise exports are more
vulnerable than services exports to an unanticipated shift in FDI inflows
in the medium run.
Journal: International Economic Journal
Pages: 251-267
Issue: 2
Volume: 25
Year: 2011
Keywords: Causality, Cambodia, trade, foreign direct investment,
X-DOI: 10.1080/10168737.2011.580581
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Handle: RePEc:taf:intecj:v:25:y:2011:i:2:p:251-267
Template-Type: ReDIF-Article 1.0
Author-Name: Toru Kikuchi
Author-X-Name-First: Toru
Author-X-Name-Last: Kikuchi
Author-Name: Kazumichi Iwasa
Author-X-Name-First: Kazumichi
Author-X-Name-Last: Iwasa
Title: Competing Industrial Standards and the Impact of Trade Liberalization
Abstract:
The main purpose of this study is to illustrate, with simple trade
theory, the relationship between competing industrial standards and trade
liberalization. We assume that there are two competing industrial
standards in an international context, each of which applies to a group of
differentiated products. A product can be used only in combination with
other products based on the same industrial standard. We examine the
impact of trade liberalization (i.e., a decline in trade costs) on
consumers' choice of a standard. It will be shown that the degree of
indirect network effects, captured with substitution between
differentiated products, plays an important role as a determinant of the
impact of trade liberalization.
Journal: International Economic Journal
Pages: 269-284
Issue: 2
Volume: 25
Year: 2011
Keywords: Competing industrial standards, trade liberalization,
X-DOI: 10.1080/10168737.2011.587380
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Handle: RePEc:taf:intecj:v:25:y:2011:i:2:p:269-284
Template-Type: ReDIF-Article 1.0
Author-Name: Barbara Annicchiarico
Author-X-Name-First: Barbara
Author-X-Name-Last: Annicchiarico
Author-Name: Giancarlo Marini
Author-X-Name-First: Giancarlo
Author-X-Name-Last: Marini
Author-Name: Giovanni Piersanti
Author-X-Name-First: Giovanni
Author-X-Name-Last: Piersanti
Title: Budget Deficits and Exchange-Rate Crises
Abstract:
This paper investigates currency crises in an optimizing general
equilibrium model with overlapping generations. It is shown that a rise in
government budget deficits financed by future taxes generates a
decumulation of external assets, leading up to a speculative attack and
forcing the monetary authorities to abandon the peg.
Journal: International Economic Journal
Pages: 285-303
Issue: 2
Volume: 25
Year: 2011
Keywords: Budget deficits, foreign exchange reserves, currency crises,
X-DOI: 10.1080/10168737.2010.504779
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Handle: RePEc:taf:intecj:v:25:y:2011:i:2:p:285-303
Template-Type: ReDIF-Article 1.0
Author-Name: I- Ming Chiu
Author-X-Name-First: I- Ming
Author-X-Name-Last: Chiu
Author-Name: Tetsuji Yamada
Author-X-Name-First: Tetsuji
Author-X-Name-Last: Yamada
Author-Name: Chia-Ching Chen
Author-X-Name-First: Chia-Ching
Author-X-Name-Last: Chen
Title: Health and Income Variation - A Panel Data Study on the Developed and Less Developed Economies
Abstract:
In this paper, human capital in the form of 'health status' is introduced
into a neoclassical economic growth model as one of the main factors
differentiating rich and poor countries. Various panel data models are
used to examine how health and other growth factors affect average income
in different countries. Our main empirical finding indicates that a
one-year increase in life expectancy (the health status measure) raises
GDP per capita by 0.5-0.9%. Based on this result, a baseline health status
can be established to help poor countries achieve a targeted economic
growth rate.
Journal: International Economic Journal
Pages: 305-318
Issue: 2
Volume: 25
Year: 2011
Keywords: Health, GDP per capita, neoclassical economic growth model, panel data models,
X-DOI: 10.1080/10168737.2010.504217
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Handle: RePEc:taf:intecj:v:25:y:2011:i:2:p:305-318
Template-Type: ReDIF-Article 1.0
Author-Name: Sofiane Ghali
Author-X-Name-First: Sofiane
Author-X-Name-Last: Ghali
Author-Name: Sami Rezgui
Author-X-Name-First: Sami
Author-X-Name-Last: Rezgui
Title: FDI Contribution to Technical Efficiency in the Tunisian Manufacturing Sector: Evidence from Micro-panel Data
Abstract:
This paper investigates the contribution of FDI to firms' technical
efficiency based on a two-stage empirical method. Using panel data for 674
firms belonging to the Tunisian manufacturing sector and observed over the
period 1997-2001, a bootstrap procedure is applied to correct for serial
correlation affecting DEA technical efficiency scores estimated in a first
stage. Results obtained from second-stage regressions show that FDI
presence at the firm level has a positive effect on its technical
efficiency. However, horizontal FDI spillovers are not evidenced while
sectoral export activity represents a potential source of technology
spillovers for local firms.
Journal: International Economic Journal
Pages: 319-339
Issue: 2
Volume: 25
Year: 2011
Keywords: FDI, technical efficiency, technology spillovers, two-stage estimation, bootstrap,
X-DOI: 10.1080/10168737.2010.504215
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Handle: RePEc:taf:intecj:v:25:y:2011:i:2:p:319-339
Template-Type: ReDIF-Article 1.0
Author-Name: Hiroyuki Taguchi
Author-X-Name-First: Hiroyuki
Author-X-Name-Last: Taguchi
Title: Currency Regime and Monetary Autonomy. Empirical Evidence Using Recent and Global Data from 1990 to 2007
Abstract:
This paper analyzes the exchange rate regimes from the perspective of
monetary independence. To be specific, using recent and global data, we
examine the sensitivity of domestic interest rates to the international
interest rate, by conducting co-integration tests and by estimating the
adjustment speeds through error-correction model, for different de facto
currency regimes and for different types of capital markets. Our
estimation results basically support the traditional views of
‘impossible trinity’, as far as the cases with open capital
markets are concerned. The floating regime shows the less sensitivity of
domestic interest rates to the international interest rate than the fixed
regime does, which implies some capacity for domestic monetary autonomy
under the floating regime. The cases with closed capital markets, on the
other hand, include the cases showing high sensitivity of interest rates
in some emerging market economies, which might imply the ‘fear of
floating’ hypothesis.
Journal: International Economic Journal
Pages: 341-358
Issue: 3
Volume: 25
Year: 2010
Month: 10
X-DOI: 10.1080/10168737.2011.607255
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Handle: RePEc:taf:intecj:v:25:y:2011:i:3:p:341-358
Template-Type: ReDIF-Article 1.0
Author-Name: Ki Young Park
Author-X-Name-First: Ki Young
Author-X-Name-Last: Park
Title: Asymmetric Exchange Rates and Unofficial Exchange Rate Interventions: The Case of South Korea
Abstract:
Applying Milton Friedman's ‘plucking’ model of output
fluctuations, we investigate the behavior of the Korean won/dollar
exchange rate using a state-space model with Markov switching, which
incorporates both symmetric and asymmetric shocks. We find that the Korean
won/US dollar exchange rate rarely falls below its trend, but is plucked
upward from time to time by transitory shocks. This asymmetry suggests
that the monetary authority unofficially intervenes in the foreign
exchange market to support its own target level from below. Further
evidence from changes in reserve assets indirectly supports our finding.
Journal: International Economic Journal
Pages: 359-371
Issue: 3
Volume: 25
Year: 2010
Month: 7
X-DOI: 10.1080/10168737.2011.607259
File-URL: http://hdl.handle.net/10.1080/10168737.2011.607259
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Handle: RePEc:taf:intecj:v:25:y:2011:i:3:p:359-371
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: Developing Countries’ Net-migration: The Impact of Economic Opportunities, Disasters, Conflicts, and Political Instability
Abstract:
We provide regressions for the net immigration flows of developing
countries. We show that (i) savings finance emigration and worker
remittances serve to make staying rather than migrating possible; (ii)
lagged dependent migration flows have a negative sign in the presence of
migration stock variables; (iii) stocks of migrants in six OECD countries
and in the developing countries have non-linear effects. Some of the
non-linear effects of the economic variables vanish if indicators for
disasters, conflicts and political instability are taken into account but
new ones come in for these latter variables.
Journal: International Economic Journal
Pages: 373-386
Issue: 3
Volume: 25
Year: 2010
Month: 6
X-DOI: 10.1080/10168737.2011.607258
File-URL: http://hdl.handle.net/10.1080/10168737.2011.607258
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Handle: RePEc:taf:intecj:v:25:y:2011:i:3:p:373-386
Template-Type: ReDIF-Article 1.0
Author-Name: Salvador Contreras
Author-X-Name-First: Salvador
Author-X-Name-Last: Contreras
Title: Parental Quality Investment, Child Effort, and Human Capital Accumulation
Abstract:
This paper develops a theoretical model that explores the effects of
child investment on human capital accumulation. Household investment
effects are measured as a function of quality of investment choices, time
allocation, child effort, and spillover effects. The theory dynamics are
derived by employing a two-period OLG model. The model dynamics reveal the
existence of multiple steady states of quality investment and child human
capital accumulation under two stages of development. These dynamics show
why poor households are often unable to escape poverty. Empirically, the
theory and dynamics are tested with United States data. The data suggest
that for poor households, income and parental human capital have no
significant effect on child performance at school. Child effort and
parental quality investment are shown to be significant determinants of
child performance at school across household types.
Journal: International Economic Journal
Pages: 387-417
Issue: 3
Volume: 25
Year: 2010
Month: 6
X-DOI: 10.1080/10168737.2010.505246
File-URL: http://hdl.handle.net/10.1080/10168737.2010.505246
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Handle: RePEc:taf:intecj:v:25:y:2011:i:3:p:387-417
Template-Type: ReDIF-Article 1.0
Author-Name: Jørgen Drud Hansen
Author-X-Name-First: Jørgen Drud
Author-X-Name-Last: Hansen
Author-Name: Jørgen Ulff-Møller Nielsen
Author-X-Name-First: Jørgen Ulff-Møller
Author-X-Name-Last: Nielsen
Title: Price as an Indicator for Quality in International Trade?
Abstract:
This paper examines the relation between price differences and quality
differences in an oligopoly model with intra-industry trade, where goods
are horizontally as well as vertically differentiated. The analysis
demonstrates that the ratio of prices is not linked to the ratio of
qualities in any simple way. The paper therefore questions empirical trade
studies using unit values as an indicator for the quality of the traded
goods. However, we also show that the ratio of prices is a reasonable
proxy for the ratio of qualities if sunk cost is dominating in the cost
structure.
Journal: International Economic Journal
Pages: 419-430
Issue: 3
Volume: 25
Year: 2010
Month: 4
X-DOI: 10.1080/10168737.2011.580580
File-URL: http://hdl.handle.net/10.1080/10168737.2011.580580
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Handle: RePEc:taf:intecj:v:25:y:2011:i:3:p:419-430
Template-Type: ReDIF-Article 1.0
Author-Name: Juan Sol�
Author-X-Name-First: Juan
Author-X-Name-Last: Sol�
Title: Interest Rate Defenses of Currency Pegs
Abstract:
This paper studies a policy often used to defend currency pegs: raising
short-term interest rates to stem demand for foreign reserves. Yet, this
mechanism is absent from most monetary models. This paper develops a model
with asset market frictions where this policy can be effective. The
friction I emphasize is as in Lucas (1990): the need of liquidity for
asset transactions. When the government raises domestic interest rates,
agents increase their domestic currency holdings in order to acquire
interest-bearing domestic assets, instead of increasing their demand for
the central bank's reserves, and thus the peg survives. The model shows
that, while interest rate defenses can be successful, they may impose
great costs for domestic agents; hence governments’ reluctance to
sustain this policy for long periods. Finally, the general equilibrium
nature of the model allows computing the welfare cost of this policy.
Journal: International Economic Journal
Pages: 431-464
Issue: 3
Volume: 25
Year: 2010
Month: 7
X-DOI: 10.1080/10168737.2010.509403
File-URL: http://hdl.handle.net/10.1080/10168737.2010.509403
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Handle: RePEc:taf:intecj:v:25:y:2011:i:3:p:431-464
Template-Type: ReDIF-Article 1.0
Author-Name: Alfredo M. Pereira
Author-X-Name-First: Alfredo M.
Author-X-Name-Last: Pereira
Author-Name: Jorge M. Andraz
Author-X-Name-First: Jorge M.
Author-X-Name-Last: Andraz
Title: On the Economic and Fiscal Effects of Investments in Road Infrastructures in Portugal
Abstract:
The objective of this paper is to investigate the economic and fiscal
impact of road infrastructure investment in Portugal, focusing on the
effects for each administrative region of both local investments and
investments in other regions. We estimate VAR models for the national
economy as well as for each of the five regions, and using the associated
impulse-response functions we find that investment in road infrastructures
has been a powerful instrument to increase private investment, to create
new permanent jobs and to promote long-term growth in all regions. More
importantly, investment in road infrastructure, both at the aggregate
level and for each one of the five regions, generates fiscal effects that
largely exceed the initial investment itself. Accordingly, there is no
trade-off in the long-term between the potentially positive economic
effects and the potentially negative budgetary effects of such
investments, i.e., both economic and budgetary effects are positive. As a
corollary, policies that would reduce current road investment as a
response to the current budgetary concerns will result in lower long-term
growth as well as worse budgetary conditions in the future.
Journal: International Economic Journal
Pages: 465-492
Issue: 3
Volume: 25
Year: 2010
Month: 9
X-DOI: 10.1080/10168737.2011.607256
File-URL: http://hdl.handle.net/10.1080/10168737.2011.607256
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Handle: RePEc:taf:intecj:v:25:y:2011:i:3:p:465-492
Template-Type: ReDIF-Article 1.0
Author-Name: Koichi Kagitani
Author-X-Name-First: Koichi
Author-X-Name-Last: Kagitani
Title: Domestic Unionization and the Political Economy of Strategic Export Policy
Abstract:
This paper examines the effect of lobbying by a labor union and its
parent firm on the argument for strategic export policy in a third
market-unionized duopoly. The lobbying-induced export policy frequently
deteriorates domestic welfare as compared with free trade. It is true that
the politically-determined export policy can improve domestic welfare if
the union's bargaining power is strong and the domestic government's
responsiveness to political contributions is weak. However, even if the
conditions are met, implementing the lobbying-induced export policy will
not enhance domestic welfare more than improving labor--management
relations. Moreover, the improvement of their relations will be hampered
by the opportunity of their lobbying. These results indicate that
strategic export policy toward a unionized duopoly should be restrained in
light of political economy.
Journal: International Economic Journal
Pages: 493-512
Issue: 3
Volume: 25
Year: 2010
Month: 10
X-DOI: 10.1080/10168737.2011.607257
File-URL: http://hdl.handle.net/10.1080/10168737.2011.607257
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Handle: RePEc:taf:intecj:v:25:y:2011:i:3:p:493-512
Template-Type: ReDIF-Article 1.0
Author-Name: Jee-Hyeong Park
Author-X-Name-First: Jee-Hyeong
Author-X-Name-Last: Park
Title: Trade-induced Industrialization and Economic Growth
Abstract:
Based on a modified Heckscher-Ohlin model of Deardorff and Park (2010),
this paper develops a dynamic model of trade-induced industrialization and
economic growth. It shows that a developing country may grow out of its
autarky steady state with no industrialization into a new steady state
with full industrialization by opening to trade with a large
industrialized country, exporting the labor-intensive intermediate input
in exchange for the capital-intensive intermediate input for the modern
good. Even when the developing country is on its path toward complete
industrialization under autarky, free trade may induce it to grow faster
with its return to capital being raised and sustained at a level that is
higher than its autarky level during its industrialization process. Once
it completes its industrialization process by having all of its resources
in the modern sector, then diminishing returns to capital come back to
accompany further capital accumulation, slowing down the growth of the
economy. This trade-induced industrialization and economic growth, having
an expansion of international trade both in its absolute value and in its
ratio to the size of the developing country, correspond well with the
dynamic profiles of East Asian Miracle countries’ economic growth
based on their export-oriented industrialization strategy.
Journal: International Economic Journal
Pages: 513-545
Issue: 3
Volume: 25
Year: 2010
Month: 7
X-DOI: 10.1080/10168737.2011.607251
File-URL: http://hdl.handle.net/10.1080/10168737.2011.607251
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Handle: RePEc:taf:intecj:v:25:y:2011:i:3:p:513-545
Template-Type: ReDIF-Article 1.0
Author-Name: Jong-Wha Lee
Author-X-Name-First: Jong-Wha
Author-X-Name-Last: Lee
Author-Name: Kwanho Shin
Author-X-Name-First: Kwanho
Author-X-Name-Last: Shin
Title: Introduction
Journal: International Economic Journal
Pages: 547-551
Issue: 4
Volume: 25
Year: 2011
Month: 12
X-DOI: 10.1080/10168737.2011.633808
File-URL: http://hdl.handle.net/10.1080/10168737.2011.633808
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Handle: RePEc:taf:intecj:v:25:y:2011:i:4:p:547-551
Template-Type: ReDIF-Article 1.0
Author-Name: Takatoshi Ito
Author-X-Name-First: Takatoshi
Author-X-Name-Last: Ito
Title: Reform of Financial Supervisory and Regulatory Regimes: What has Been Achieved and What is Still Missing
Abstract:
Weak financial supervision was partly responsible for the Global
Financial Crisis (GFC) of 2007--2009. The liquidity risk in the special
purpose subsidiaries was not well recognized in regulation; there were
large financial institutions that escaped rigorous supervision; and the
concept of ‘too-big-to-fail’ caused moral hazard in
management. This paper examines whether these shortcomings were adequately
addressed in the post-crisis reform of the global financial architecture.
The United States overhauled the supervision framework, which includes
shifting supervision authorities of systemically important financial
institutions (SIFIs) to the Federal Reserve and increasing capital
requirement on those SIFIs. Similar reforms of supervision frameworks have
been implemented in European countries. The Bank of International
Settlements (BIS) also proposed Basle III, significantly increasing
capital requirements, and modifying risk weights. Despite all these
efforts, one key component on the reform agenda is not adequately
addressed, namely the procedure to have an orderly resolution mechanism
for a large financial institution. Without the procedure, the
too-big-to-fail problem will continue to cast a shadow over the global
financial architecture.
Journal: International Economic Journal
Pages: 553-569
Issue: 4
Volume: 25
Year: 2011
Month: 12
X-DOI: 10.1080/10168737.2011.636620
File-URL: http://hdl.handle.net/10.1080/10168737.2011.636620
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Handle: RePEc:taf:intecj:v:25:y:2011:i:4:p:553-569
Template-Type: ReDIF-Article 1.0
Author-Name: Cheolbeom Park
Author-X-Name-First: Cheolbeom
Author-X-Name-Last: Park
Title: Comments on ‘Reform of Financial Supervisory and Regulatory Regimes: What has Been Achieved and What is Still Missing’ by Takatoshi Ito
Journal: International Economic Journal
Pages: 571-572
Issue: 4
Volume: 25
Year: 2011
Month: 12
X-DOI: 10.1080/10168737.2011.636621
File-URL: http://hdl.handle.net/10.1080/10168737.2011.636621
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Handle: RePEc:taf:intecj:v:25:y:2011:i:4:p:571-572
Template-Type: ReDIF-Article 1.0
Author-Name: Soyoung Kim
Author-X-Name-First: Soyoung
Author-X-Name-Last: Kim
Author-Name: Doo Yong Yang
Author-X-Name-First: Doo
Author-X-Name-Last: Yong Yang
Title: Financial and Monetary Cooperation in Asia: Challenges after the Global Financial Crisis
Abstract:
This paper reviews recent developments in regional financial and monetary
cooperation in East Asia, and suggests some issues that could contribute
to more constructive development in the future. The regional monetary and
financial cooperation was originally motivated by the Asian financial
crisis, but it has faced new challenges due to some recent events, such as
the global financial crisis and global imbalances. We review recent
developments of regional financial and monetary cooperation in East Asia,
such as CMIM, ABMI and ABF, and regional surveillance mechanisms. We argue
that there are several issues to be discussed in developing more effective
regional financial and monetary cooperation: including developing CMIM to
be effective in preventing future crisis, linking regional cooperation
with global financial architecture properly, constructing effective
surveillance mechanism, and strengthening regional policy dialogue.
Journal: International Economic Journal
Pages: 573-587
Issue: 4
Volume: 25
Year: 2011
Month: 12
X-DOI: 10.1080/10168737.2011.636622
File-URL: http://hdl.handle.net/10.1080/10168737.2011.636622
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Handle: RePEc:taf:intecj:v:25:y:2011:i:4:p:573-587
Template-Type: ReDIF-Article 1.0
Author-Name: David Cook
Author-X-Name-First: David
Author-X-Name-Last: Cook
Title: Comments on ‘Financial and Monetary Cooperation in Asia: Challenges after the Global Financial Crisis’ by Soyoung Kim and Doo Yong Yang
Journal: International Economic Journal
Pages: 589-591
Issue: 4
Volume: 25
Year: 2011
Month: 12
X-DOI: 10.1080/10168737.2011.636623
File-URL: http://hdl.handle.net/10.1080/10168737.2011.636623
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Handle: RePEc:taf:intecj:v:25:y:2011:i:4:p:589-591
Template-Type: ReDIF-Article 1.0
Author-Name: Giovanni Capannelli
Author-X-Name-First: Giovanni
Author-X-Name-Last: Capannelli
Title: Shaping Asia's Institutional Architecture for Economic and Financial Integration: Opinion Leaders’ Views
Abstract:
Asian economic regionalism has emerged from a bottom-up process, driven
by market forces in the absence of a grand plan for regional integration.
While the financial crisis of 1997/98 triggered new regional cooperation
initiatives, more recently several Asian political leaders have formulated
proposals for the creation of a regional economic community, suggesting
the possible start of a top-down approach. Based on the results of a
survey of Asia's opinion leaders conducted by the Asian Development Bank
(ADB) in 2010, this paper discusses how Asia's institutional architecture
for economic and financial integration is taking shape, suggesting the
need to strengthen existing institutions that promote Asian regionalism
and to create new ones. While the focus of the paper is on monetary and
financial integration, the analysis also covers other integration pillars
such as trade and investment, connectivity and infrastructure, and
regional public goods. It suggests the need to create new institutions in
support of Asian regionalism and to use a broad perspective in moving
towards the formation of a region-wide economic community based on strong
political commitment and grassroots participation.
Journal: International Economic Journal
Pages: 593-616
Issue: 4
Volume: 25
Year: 2011
Month: 12
X-DOI: 10.1080/10168737.2011.636624
File-URL: http://hdl.handle.net/10.1080/10168737.2011.636624
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Handle: RePEc:taf:intecj:v:25:y:2011:i:4:p:593-616
Template-Type: ReDIF-Article 1.0
Author-Name: Doo Yong Yang
Author-X-Name-First: Doo Yong
Author-X-Name-Last: Yang
Title: Comments on ‘Shaping Asia's Institutional Architecture for Economic and Financial Integration: Opinion Leaders’ Views’ by Giovanni Capannelli
Journal: International Economic Journal
Pages: 617-618
Issue: 4
Volume: 25
Year: 2011
Month: 12
X-DOI: 10.1080/10168737.2011.636625
File-URL: http://hdl.handle.net/10.1080/10168737.2011.636625
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Handle: RePEc:taf:intecj:v:25:y:2011:i:4:p:617-618
Template-Type: ReDIF-Article 1.0
Author-Name: Juthathip Jongwanich
Author-X-Name-First: Juthathip
Author-X-Name-Last: Jongwanich
Author-Name: Maria Socorro Gochoco-Bautista
Author-X-Name-First: Maria Socorro
Author-X-Name-Last: Gochoco-Bautista
Author-Name: Jong-Wha Lee
Author-X-Name-First: Jong-Wha
Author-X-Name-Last: Lee
Title: When are Capital Controls Effective? Evidence from Malaysia and Thailand
Abstract:
This study examines the impact of capital controls using monthly
information to construct higher-frequency, quarterly indexes for Malaysia
and Thailand over the period 2000--2010 in a Vector Auto-Regression (VAR)
model. The results show that effectiveness of a capital control policy is
not identical between Malaysia and Thailand. This could result from
country-specific factors, the form of capital controls as well as degree
of efficacy, which vary greatly between these two countries. Restrictions
in Thailand have no significant effect on inflows but are especially
effective for outflows, particularly foreign direct investment. In
Malaysia, capital relaxation tends to have a significant impact on inward
foreign direct investment and portfolio inflows. However, the results show
that changes in capital account policies do not have a significant impact
on the real exchange rate in both Malaysia and Thailand.
Journal: International Economic Journal
Pages: 619-651
Issue: 4
Volume: 25
Year: 2011
Month: 12
X-DOI: 10.1080/10168737.2011.636626
File-URL: http://hdl.handle.net/10.1080/10168737.2011.636626
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Handle: RePEc:taf:intecj:v:25:y:2011:i:4:p:619-651
Template-Type: ReDIF-Article 1.0
Author-Name: Kiseok Hong
Author-X-Name-First: Kiseok
Author-X-Name-Last: Hong
Title: Comments on `When Are Capital Controls Effective? Evidence from Malaysia and Thailand' by Juthathip Jongwanich