nep-dev New Economics Papers
on Development
Issue of 2009‒05‒09
five papers chosen by
Jeong-Joon Lee
Towson University

  1. Stability under Learning: the Neo-Classical Growth Problem By Orlando Gomes
  2. Early vs. Late in Aid Partnerships and Implications for Tackling Aid Fragmentation By Frot, Emmanuel
  3. Older or wealthier? The impact of age adjustments on the wealth inequality ranking of countries By Ingvild Almås; Magne Mogstady
  4. Collinearity in growth regressions: The example of worker remittances By Ziesemer, Thomas
  5. Poverty, Undernutrition and Vulnerability in Rural India: Public Works versus Food Subsidy By Raghbendra Jha

  1. By: Orlando Gomes (Instituto Politécnico de Lisboa - Escola Superior de Comunicação Social and UNIDE-ERC)
    Abstract: A local stability condition for the standard neo-classical Ramsey growth model is derived. The proposed setting is deterministic, defined in discrete time and expectations are formed through adaptive learning.
    Keywords: Neo-classical Growth, Adaptive Learning, Stability Analysis, Monetary Policy.
    JEL: O41 C62 D83
    Date: 2008–05
  2. By: Frot, Emmanuel (Stockholm Institute of Transition Economics)
    Abstract: Development aid donors disburse aid to many developing countries. This paper shows that whether a partnership is established early or late matters significantly for aid quantities. Donor countries allocate larger shares of their aid budgets to recipients that entered early in their portfolios. This effect is large compared to variations due to recipients' income differences, and matters even in the long run. Entry dates are weakly related to GDP per capita, but are influenced strongly by colonial past. On the other hand, colonial relationships explain only a small part of the observed variation in entry dates. These findings imply that donors, while continuously increasing their number of recipients, have allocated smaller aid quantities to new partnerships. This has direct consequences for aid fragmentation, with many donors disbursing small amounts to a recipient. I study a simple reform that eliminates ``small'' partnerships, but leaves unaffected donor aid budgets and developing countries receipts. The reform reshuffles only about 20 percent of all the aid disbursed in a year but drastically reduces fragmentation.
    Keywords: Aid; Fragmentation.
    JEL: F35 O19
    Date: 2009–04–30
  3. By: Ingvild Almås (Norwegian School of Economics and Business Administration); Magne Mogstady (Statistics Norway)
    Abstract: Differences in individual wealth holdings are widely viewed as a driving force of economic inequality. However, as this finding relies on cross-section data, we may confuse older with wealthier. We propose a new method to adjust for age effects in cross-sections, which eliminates transitory wealth inequality due to age, yet preserves inequality arising from other factors. This new method is superior to existing methods, like the much used Paglin-Gini, which is shown to have several problems. A new cross-country comparable database reveals that the choice of method is empirically important: Existing methods yield erroneous wealth inequality rankings of countries.
    Keywords: Wealth inequality, Life cycle, Age adjustments, Gini coeffcient.
    JEL: D31 D63 D91 E21
    Date: 2009
  4. By: Ziesemer, Thomas (UNU-MERIT, Maastricht University)
    Abstract: The sign of worker remittances in growth regressions is heavily disputed in the literature. Comparing two growth regressions with different signs for the remittance variable we show that collinearity with the lagged dependent variable might indicate that collinearity should be investigated comprehensively and might lead to a change in specifications which differ in the variance inflation factors (VIF). In our case the variance inflation factor for remittances depends on the use of a five or one-year lag of the lagged dependent. In the regression with a VIF below ten, the standard critical value, the sign of remittances is positive.
    Keywords: Growth, Remittances
    JEL: F24 O11 O15 O40
    Date: 2009
  5. By: Raghbendra Jha
    Abstract: This paper analyses the effects of access to Rural Public Works (RPW) and the Public Distribution System (PDS), a public food subsidy programme, on consumption poverty, vulnerability and undernutrition in India drawing, on the large household datasets constructed with National Sample Survey (NSS) data, 50th round in 1993-1994 and 61st round in 2004-2005. The treatment effects model and propensity score matching (PSM) model are used to take account of the sample selection bias in evaluating the effects of RPW or PDS on poverty.
    Keywords: NSS, national sample survey, poverty, undernutrition, vulnerability, Rural Public Works (RPW), Public Distribution System (PDS), poverty reduction policy, treatment effects model, Propensity Score Matching (PSM) model, India
    Date: 2009

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