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on Investment |
| By: | Gindling, T.H.; Ronconi, Lucas |
| Abstract: | In this chapter we review the literature and inform policy debates about the effects of minimum wages (MW) on income inequality in Latin America and the Caribbean (LAC). Earnings are the primary source of income among families, especially in the lower part of the earnings and household income distribution. It is reasonable, therefore, to expect increases in the minimum wage to have a significant impact on earnings and income inequality. |
| JEL: | N0 J1 R14 J01 |
| Date: | 2023–07–01 |
| URL: | http://d.repec.org/n?u=RePEc:ehl:lserod:119635&r=inv |
| By: | Patrinos, Harry Anthony; Rivera-Olvera, Angelica |
| Abstract: | Countries across Eastern Europe and Central Asia are in their third decade of independence. What impact does this have on the skills premium and does accession to the European Union have an impact on the returns to education? The returns to education in 28 transition and 20 non-transition countries in Europe and Central Asia are analyzed using panel data analysis and difference-in-difference methods to estimate the impact of transition and EU accession. It is found that the transition from a centrally planned economy to a market economy increases the returns to schooling in post-socialist countries positively and significantly, especially through the EU accession channel. |
| Keywords: | returns to education, transition, technological change |
| JEL: | I26 J31 |
| Date: | 2023 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:glodps:1312&r=inv |
| By: | Dutta, Sourish |
| Abstract: | The development of research studies concerning the emergence of intra-industry trade is fruitful interaction between theoretical explanations and empirical methods to measure this phenomenon. The foundation of indicators to measure the intensity of intra-industry trading caused the rise of theoretical models explaining the determinants of these trade flows. It also contributed to the debate on the need to distinguish, in empirical analyses, intra-industry trade in horizontal differentiation from that in vertical differentiation. From the beginning of the 1980s, the first theoretical analysis of intra-industry trade showed that the determinants and consequences of this type of trade are different, depending on whether the traded products differ in quality. When the products are subject to intra-industry trade between two countries with distinct qualities, this trade is vertically differentiated. Otherwise, it is called horizontal differentiation. There is a method for distinguishing intra-industry trade between two countries in vertical differentiation from those in horizontal differentiation. This method compares exports' unit value to imports for each industry's intra-industry trade. It considers the intra-industry trading carried out in this industry as vertical differentiation when the unit value of exports differs significantly from that of imports. This approach has limitations. This discussion will lead us to think about an alternative method for separating and measuring intra-industry trade into horizontal and vertical differentiation. |
| Date: | 2023–07–21 |
| URL: | http://d.repec.org/n?u=RePEc:osf:socarx:zqb9n&r=inv |
| By: | João Alcobia; Ricardo Barradas |
| Abstract: | The majority of policymakers in the more developed countries have engaged in Reaganomics and Thatcherism in the last four decades by privileging the adoption of wage restraint policies to sustain economic growth. During that time, the wage share has registered a sustained fall, and economic growth has been rather dismal, which seems to support the theoretical claims of post-Keynesian economics that wage restraint policies are detrimental to economic growth because their disruptive effects on private consumption do not counterbalance their supportive effects on private investment and net exports. We analyse the relationship between the wage share and economic growth by performing a panel data econometric analysis of all European Union countries from 1981 to 2021. Results confirm that wage share positively influences economic growth in the European Union countries, which in reality is a wage-led growth model. Results also show that the decline of the wage share has represented one of the main constrainers of growth in all European Union countries in the last four decades, particularly in the euro area countries. These results suggest that policymakers in the European Union countries should adopt pro-labour policies in order to revert the decreasing (increasing) trend of the wage (profit) share and avoid the consolidation of a secular stagnation in Europe. |
| Keywords: | Post-Keynesian Economics, Functional Income Distribution, Economic Growth Drivers, European Union, Panel Autoregressive Distributed Lag, Pooled Mean-Group Estimator. |
| JEL: | C23 D33 E12 O47 |
| Date: | 2023–07 |
| URL: | http://d.repec.org/n?u=RePEc:ise:remwps:wp02832023&r=inv |
| By: | Beqiraj, Elton (University of Rome I); Cao, Qingqing (Michigan State University, Department of Economics); Minetti, Raoul (Michigan State University, Department of Economics); Tarquini, Giulio (University of Rome I) |
| Abstract: | What are the long-run aggregate effects of monetary shocks displaying through the credit channel of monetary policy? We address this question by investigating the transmission mechanism and estimating the dynamic behaviour of variables related to credit and innovation. Then, we develop a DSGE model featuring endogenous growth, in which credit frictions constrain the financing of innovation. Under this paradigm, recessionary shocks develop into persistent stagnation. The deterioration of the R&D process, i.e. creation and adoption of new technologies, is at the core of hysteresis effects. We show the ability of our theoretical framework to reconcile with empirical evidence, quantifying the contribution of this channel to productivity and output hysteresis observed after the Global Financial Crisis. |
| Keywords: | Endogenous Growth; R&D; Stagnation; Credit Frictions; Monetary Policy |
| JEL: | E22 E24 E32 E44 E52 G01 |
| Date: | 2023–07–25 |
| URL: | http://d.repec.org/n?u=RePEc:ris:msuecw:2023_003&r=inv |
| By: | Sean Wang; Samuel Young |
| Abstract: | We study the effect of private-sector unionization on establishment employment and survival. Specifically, we analyze National Labor Relations Board union elections from 1981–2005 using administrative Census data. Our empirical strategy extends standard difference-in-differences techniques with regression discontinuity extrapolation methods. This allows us to avoid biases from only comparing close elections and to estimate treatment effects that include larger marginof- victory elections. Using this strategy, we show that unionization decreases an establishment’s employment and likelihood of survival, particularly in manufacturing and other blue-collar and industrial sectors. We hypothesize that two reasons for these effects are firms’ ability to avoid working with new unions and employers’ opposition to unions. We find that the negative effects are significantly larger for elections at multi-establishment firms. Additionally, after a successful union election at one establishment, employment increases at the firms’ other establishments. Both pieces of evidence are consistent with firms avoiding new unions by shifting production from unionized establishments to other establishments. Finally, we find larger declines in employment and survival following elections where managers or owners were likely more opposed to the union. This evidence supports new reasons for the negative effects of unionization we document. |
| JEL: | J23 J31 J38 J50 J53 J58 J83 |
| Date: | 2023–07 |
| URL: | http://d.repec.org/n?u=RePEc:cen:wpaper:23-35&r=inv |
| By: | Anne-Gaëlle Maltese; Sara Gil-Gallen; Patrick Llerena |
| Abstract: | Our societies are based on the principle of heterogeneity of individuals who possess diverse multidimensional characteristics. Social interactions among those profiles significantly impact collective activities, including creative outcomes. There exists a growing literature studying the variables influencing both individual and collective creative performance, but due to the complexity of the phenomenon, the literature does not find a consensus on their impact. The novelty introduced by this paper is first to capture and disentangle the role of surface and deeplevel diversity variables in individual and collective creative performance. Secondly, we run a collective experiment involving real social interactions, which is a dimension rarely captured in the experimental economics literature, to measure groups’ creative performance and the creative process behind it. Finally, to the best of our knowledge, we are the first experimental paper disentangling the role of such variables within individual creative performance, considering both convergent and divergent thinking by introducing three different types of tasks: open, open with constraints, and closed. The results of our analysis concluded that exists a mixed pattern of the impact of surface and deep-level variables on the individual creative performance, knowing that it will differ according to the degree of openness and the criteria of creativity. The only factor that arose persistently across degrees of openness was the self-evaluation of the performance in the task, which positively relates to creative performance (open and closed), while open with constraints is detrimental for subjects who self-evaluate their performance better than others. At the collective level, we observe different types of results depending on the evaluation criteria by means of feasibility fostered by homogeneous female groups and instead originality by half male and half female. Moreover, we also observe the implications of individual training, driven by subjects’ from programs with the formation in creativity being detrimental for feasibility but instead increasing originality in collective creative performance. To be noted, further improvements in this work have to be expected, and we invite the reader to refer to the last section of this paper for more information. |
| Keywords: | sCreativity, Diversity, Collective, Experiment. |
| JEL: | C91 C92 O31 |
| Date: | 2023 |
| URL: | http://d.repec.org/n?u=RePEc:ulp:sbbeta:2023-19&r=inv |
| By: | Chung, Chul (KOREA INSTITUTE FOR INTERNATIONAL ECONOMIC POLICY (KIEP)); Kim, Bonggeun (Seoul National University); Chung, Minchirl (KOREA INSTITUTE FOR INTERNATIONAL ECONOMIC POLICY (KIEP)) |
| Abstract: | 우리나라가 체결한 많은 자유무역협정(FTA)이 과연 우리 삶의 질을 어떻게 변화시켰는지에 대해 체계적으로 분석한 연구가 흔치 않다. 본 연구는 무역자유화에 따른 수입품목의 다양성 확대와 가격하락에 따른 소비자들의 품질 선택의 폭이 넓어지는 점에 착안하여, 품질 다양성과 소비자의 질적 대응을 중심으로 실증분석을 수행하고 정책시사점을 제시한다. This study investigates the impact of domestic price changes due to external shocks such as trade liberalization or global inflation on quality diversity and consumer welfare. Free trade agreements (FTAs) can reduce the prices of imported goods through tariff elimination or reduction, making it crucial to evaluate academically and in terms of policy how this price reduction affects consumer welfare. In contrast to prior literature on trade liberalization, this study emphasizes the role of quality diversity in explaining its impact on consumer welfare. We focus on how consumers’ qualitative responses to price changes, such as selecting high-quality products when prices decrease due to tariff reductions or responding to price increases due to tobacco taxes by adjusting the quality of their purchases, can influence consumer welfare. This study also provides policy implications regarding the impact of trade liberalization on consumer welfare. Using time-series data on wine and cigarettes in South Korea, this research estimated price elasticities and separated them into consumers’ quantitative and qualitative responses to price changes. The results indicate that the qualitative margin accounts for as much as 40% of the total, demonstrating that consumers’ qualitative responses to price changes are quite significant. We also found a statistically significant consumer behavior mechanism of quality shading in response to price increases for both wine and cigarette consumption, suggesting that consumers’ qualitative responses are as important as their quantitative responses. Moreover, we found that price reductions not only increase the consumption quantity of the same product but also lead to a shift to higher quality products, further enhancing consumers’ welfare. For the first time in the literature, we analyzed qualitative margins by income level and found that the price elasticity is higher for lower-income consumers, and most of it can be attributed to qualitative responses. These empirical findings suggest that consumers can adjust their spending on a particular good through qualitative adjustments while maintaining their overall consumption, particularly in response to rapid inflation. This response mechanism is particularly more effective for low-income households.(the rest omitted) |
| Keywords: | Free trade; trade policy; trade liberalization; consumer welfare; consumer response; product diversity; quality selection |
| Date: | 2023–05–25 |
| URL: | http://d.repec.org/n?u=RePEc:ris:kiepre:2022_015&r=inv |
| By: | International Monetary Fund |
| Abstract: | The German economy has demonstrated resilience following the shut-off of Russian gas supply last year, with highly adverse scenarios of widespread energy scarcity being avoided. This success reflects impressive efforts to conserve energy and secure future energy supplies, as well as the lack of severe winter weather. Nonetheless, adverse effects from the energy shock and tighter financial conditions have been sufficient to tilt the economy into recession in recent months. Inflation also spiked as the energy price shock added to existing pandemic-related supply bottlenecks, though inflation is now falling as these effects start to ease. Germany’s financial system remains well capitalized and liquid overall, but banking turmoil in other advanced economies earlier this year has nonetheless heightened the focus on potential financial stability risks associated with rising interest rates. |
| Date: | 2023–07–17 |
| URL: | http://d.repec.org/n?u=RePEc:imf:imfscr:2023/258&r=inv |
| By: | L. GALIANA (Insee); L. WILNER (Insee, Crest) |
| Abstract: | This paper embeds a structural model of private wealth accumulation over the life-cycle within a dynamic microsimulation model (Destinie 2) designed for long-run projections of pensions. In such an environment, the optimal savings path results from consumption smoothing and bequests motives, on top of the mortality risk. Preferences are estimated based on a longitudinal wealth survey through a method of simulated moments. Simulations issued from these estimations replicate quite well a private wealth that is more concentrated than labor income. They enable us to compute “augmented” standards of living including capital income, hence to quantify both the countervailing role played by private wealth to earnings dropout after retirement and the impact of the mortality risk in this regard. |
| Keywords: | Microsimulation; Intertemporal Consumer Choice; Life-cycle; Inequality |
| JEL: | C63 C88 D15 |
| Date: | 2023 |
| URL: | http://d.repec.org/n?u=RePEc:nse:doctra:2023-04&r=inv |