nep-mac New Economics Papers
on Macroeconomics
Issue of 2015‒05‒16
forty-five papers chosen by
Soumitra K Mallick
Indian Institute of Social Welfare and Business Management

  1. Optimal Monetary and Fiscal Policy in an Economy with Inflation Persistence By Luk, Paul; Vines, David
  2. Optimal Monetary and Fiscal Policy in an Economy with Endogenous Public Debt By Luk, Paul; Vines, David
  3. Self-Fulfilling Debt Crises: Can Monetary Policy Really Help? By Philippe Bacchetta; Elena Perazzi; Eric van Wincoop
  4. Real effects of sovereign bond market spillovers in the euro area By Gadatsch, Niklas
  5. Banking Concentration, Interest Rates, and Growth in Brazil By Alexis Cavichini
  6. SALARIO MÍNIMO EN COLOMBIA By Diana Yineth Rivera Reyes
  7. Central bank purchases of government bonds By Samuel Huber; Jaehong Kim
  8. Identification and real-time forecasting of Norwegian business cycles By Knut Are Aastveit; Anne Sofie Jore; Francesco Ravazzolo
  9. Austerity, cyclical adjustment and the remaining leeway for expansionary fiscal policies within the current EU fiscal framework By Truger, Achim
  10. Credit expansion and contraction: a simplified model By Krouglov, Alexei
  11. Labor Supply Factors and Economic Fluctuations By Claudia Foroni; Francesco Furlanetto; Antoine Lepetit
  12. Fiscal Adjustment in Slovakia: Findings from a Medium-Scale Econometric Model By Miroslav Klucik
  13. The Dynamics of Business Investment Following Banking Crises and Normal Recessions By Nils Jannsen
  14. Stimulus versus Austerity: The Asymmetric Government Spending Multiplier By Barnichon, Régis; Matthes, Christian
  15. Price-Level Convergence in the Eurozone By Alfredo García Hiernaux; David Esteban Guerrero Burbano
  16. Should the Neoclassical Growth Model Include the Saving Flow in the Utility function? By Khelifi, Atef
  17. A New Monthly Indicator of Global Real Economic Activity By Francesco Ravazzolo; Joaquin L. Vespignani
  19. Wealth Effects on Consumption across the Wealth Distribution: Empirical Evidence. By L. Arrondel; P. Lamarche; F. Savignac
  20. Sovereign Debt and Structural Reforms By Müller, Andreas; Storesletten, Kjetil; Zilibotti, Fabrizio
  21. Efficient Firm Dynamics in a Frictional Labor Market By Leo Kaas; Philipp Kircher
  22. Leading Indicators of the Business Cycle: Dynamic Logit Models for OECD Countries and Russia By Anna Pestova
  23. Uncovered Interest Parity and Monetary Policy Near and Far from the Zero Lower Bound By Menzie D. Chinn; Yi Zhang
  24. Is the Maastricht debt limit safe enough for Slovakia? By Zuzana Mucka
  25. A Tractable Framework for Analyzing a Class of Nonstationary Markov Models By Lilia Maliar; Serguei Maliar; John Taylor; Inna Tsener
  26. Optimal Savings for Retirement: The Role of Individual Accounts By Julia Le Blanc; Almuth Scholl
  27. Predicting Sovereign Fiscal Crises: High-Debt Developed Countries. By Betty Daniel, Christos Shiamptanis
  28. Why Do Cities Matter? Local Growth and Aggregate Growth By Chang-Tai Hsieh; Enrico Moretti
  29. International Reserves for Emerging Economies: A Liquidity Approach. By Jung, Kuk Mo; Pyun, Ju Hyun
  30. Safeguarding the Banking System - a New Perspective on the Consolidation of the Macroprudential Regulation* By Irina-Raluca Badea
  31. Market Structure and Exchange Rate Pass-Through By Auer, Raphael; Schoenle, Raphael
  32. Colonial New Jersey's Provincial Fiscal Structure, 1709-1775: Spending Obligations, Revenue Sources, and Tax Burdens in War and in Peace By Farley Grubb
  33. La política monetaria y la distribución funcional del ingreso: lo que usted quiso saber y no se atrevió a preguntar By Alvaro Martin Moreno Rivas
  34. Did banks and financial markets developments lead to economic growth in MENA region? Evidence from Dynamic panel data estimation By Hamdi, Helmi; Hakimi, Abdelaziz
  35. Was Stalin Necessary for Russia's Economic Development? By Anton Cheremukhin; Anton Golosov; Sergei Guriev; Aleh Tsyvinski
  36. CEE Economies in the New Millennium: Their Strengths, Vulnerabilities and Forthcoming Challenges By Marek Dabrowski
  37. A New Risk Appetite Index and CDS spreads: Evidence from an Emerging Market By Fatih Kiraz; Ozgur Uysal; Yakup Ergincan
  38. The Size and Structure of Government By Michael, Bryane; Popov, Maja
  39. Growth with Endogenous Direction of Technical Change By LI, Defu; Bental, Benjamin
  40. The Facts of Economic Growth By Charles I. Jones
  42. Mean-median compromise method as an innovating voting rule in social choice theory By Ngoie, Ruffin-Benoît M.; Ulungu, Berthold E.-L.
  43. The Employment Gender Gap in Urban China: Why Women Benefited Less from China's Privatization Reforms By Christina Jenq
  44. EL SISTEMA CONTRIBUTIVO DE SALUD Y SUS RECURSOS. Un análisis desde la óptica presupuestaria con un modelo SVAR By Nicolás Castellanos Sánchez
  45. Wage Discrimination in Urban China: How Hukou Status Affects Migrant Pay By Xiaogang Wu; Zhuoni Zhang

  1. By: Luk, Paul; Vines, David
    Abstract: This paper studies a simple New-Keynesian model of fiscal and monetary policy coordination when the policymaker acts under commitment. With a New Keynesian Phillips curve it is optimal to control inflation only through the use of monetary policy. But, when price-setters use a Steinsson (2003) Phillips curve, fiscal policy plays an active role, enabling a greater degree of consumption smoothing.
    Keywords: fiscal policy; monetary policy; New Keynesian model; Phillips curve
    JEL: E4 E5 E6
    Date: 2015–05
  2. By: Luk, Paul; Vines, David
    Abstract: This paper uses a New Keynesian framework to study the coordination of fiscal and monetary policies, in response to an inflation shock when the policymaker acts with commitment. We first show that, in the simplest New Keynesian model, fiscal policy plays no part in the optimal policy response, because of the comparative advantage which monetary policy has in the control of inflation. We then add endogenous public debt and show that the above result is no longer true. When the initial stock of debt is low, it is optimal for government spending to remain largely inactive, but when the initial stock of debt is high, government spending should play a significant stabilisation role in the first period. This finding is robust to adding endogenous capital accumulation and inflation persistence in the Phillips curve.
    Keywords: fiscal policy; government debt; monetary policy; New Keynesian model
    JEL: E4 E5 E6
    Date: 2015–05
  3. By: Philippe Bacchetta; Elena Perazzi; Eric van Wincoop
    Abstract: This paper examines quantitatively the potential for monetary policy to avoid self-fulfilling sovereign debt crises. We combine a version of the slow-moving debt crisis model proposed by Lorenzoni and Werning (2014) with a standard New Keynesian model. We consider both conventional and unconventional monetary policy. Under conventional policy the central bank can preclude a debt crisis through inflation, lowering the real interest rate and raising output. These reduce the real value of the outstanding debt and the cost of new borrowing, and increase tax revenues and seigniorage. Unconventional policies take the form of liquidity support or debt buyback policies that raise the monetary base beyond the satiation level. We find that generally the central bank cannot credibly avoid a self-fulfilling debt crisis. Conventional policies needed to avert a crisis require excessive inflation for a sustained period of time. Unconventional monetary policy can only be effective when the economy is at a structural ZLB for a sustained length of time.
    JEL: E52 E60 E63
    Date: 2015–05
  4. By: Gadatsch, Niklas
    Abstract: This paper develops a small open economy model to investigate the impact of rising sovereign bond market spreads on the real economy. One key element of the model is a "sovereign risk channel" through which tensions in the sovereign bond market tend to spill over into private credit markets. The model is estimated with Bayesian methods and data for "high-spread" countries in the euro area. It turns out that spread shocks during the Euro crisis had a negative effect on real GDP growth in these countries, up to 0.8 percentage points (PP) Portugal and Ireland, 0.3 PP in Italy and 0.2 PP in Spain.
    Keywords: Small open economy,Business cycles,Sovereign risk premium,DSGE modeling
    JEL: E32 E43 F41
    Date: 2015
  5. By: Alexis Cavichini (Universidade Federal do Rio de Janeiro)
    Abstract: Between 1995 and 2014 Brazil’s financial system total asset increased from US$ 650 billion, to US$ 3.1 trillion. A growth of 377%. In the same period, the five largest banks bounced from an average loss of US$ 1 billion in 1995 to an average profit of US$ 25.5 billion in 2014. High interest, for enterprises and individuals, have been a major obstacle to the growth of the country. In the last twenty years, average GDP growth in Brazil was 2.6% p.a. This result is meaningfully lower than other developing nations. The objective of this paper is to understand this contradiction between Brazil’s financial system and other segments of the economy, and find answers, opportunities, possibilities, and solutions, which allow Banks to operate at a lower cost, leveraging the economic development of the country.
    Keywords: banking concentration, interest rates, brazil, growth, GDP
    JEL: E40 E44 E62
  6. By: Diana Yineth Rivera Reyes
    Abstract: Este trabajo realiza un análisis del comportamiento en el salario mínimo en Colombia a través de los años junto con los cambios que se han presentado respecto a la determinación de éste y los efectos que, según diferentes estudios, se han presentado en la economía en general y principalmente sobre el mercado laboral colombiano.
    Keywords: salario mínimo, empleo, ingreso, pobreza, negociación.
    JEL: J21 J31 E24 E31 I38
    Date: 2014–02–24
  7. By: Samuel Huber; Jaehong Kim
    Abstract: We develop a microfounded model, where agents have the possibility to trade money for government bonds in an over-the-counter market. It allows us to address important open questions about the effects of central bank purchases of government bonds, these being: under what conditions these purchases can be welfare-improving, what incentive problems they mitigate, and how large these effects are. Our main finding is that this policy measure can be welfare-improving, by correcting a pecuniary externality. Concretely, the value of money is increased as central bank's purchases of government bonds induce agents to increase their demand for money, which is welfare-improving.
    Keywords: Monetary theory, over-the-counter markets, quantitative easing, money demand, pecuniary externality
    JEL: E31 E40 E50 G12
    Date: 2015–04
  8. By: Knut Are Aastveit (Norges Bank (Central Bank of Norway)); Anne Sofie Jore (Norges Bank (Central Bank of Norway)); Francesco Ravazzolo (Norges Bank (Central Bank of Norway) and BI Norwegian Business School)
    Abstract: We define and forecast classical business cycle turning points for the Norwegian economy. When defining reference business cycles, we compare a univariate and a multivariate Bry-Boschan approach with univariate Markov-switching models and Markov-switching factor models. On the basis of a receiver operating characteristic curve methodology and a comparison of business cycle turning points with Norway's main trading partners, we find that a Markov-switching factor model provides the most reasonable definition of Norwegian business cycles for the sample 1978Q1-2011Q4. In a real-time out-of-sample forecasting exercise, focusing on the last recession, we show that univariate Markov-switching models applied to surveys and a financial conditions index are timely and accurate in calling the last peak in real time. The models are less accurate and timely in calling the trough in real time.
    Keywords: Business cycle, Dating rules, Turning Points, Real-time data
    JEL: C32 C52 C53 E37 E52
    Date: 2015–05–09
  9. By: Truger, Achim
    Abstract: Fiscal policy in the Euro area is still dominated by austerity measures implemented under the institutional setting of the 'reformed' stability and growth pact, and the even stricter 'fiscal compact'. At the same time, calls for a more expansionary fiscal policy to overcome the economic crisis have recently become more frequent. In his Jackson Hole speech Mario Draghi, the president of the ECB, called for a more expansionary fiscal stance for the Euro area as a whole and a public investment programme on the European level insisting, however, that the existing rules of the Stability and Growth Pact be respected. The European Council at its meeting in June 2014 also saw the need to stimulate growth, but insisted as well that this be realised within the current institutional framework. Recently, the EU-Commission in this spirit has launched the Juncker-Plan to stimulate (public) investment and is using a less strict interpretation of the Stability and Growth Pact in order to provide more fiscal leeway for countries under unfavourable economic circumstances. The paper argues that these steps do not go far enough and that a truly expansionary fiscal policy in the dimension of two to three per cent of Euro area GDP for a few years is possible even within the existing institutional framework. Special emphasis is put on the method of cyclical adjustment employed by the European Commission in order to assess member states' fiscal position and effort as well as on ways to increase public investment. It will be shown that even in the existing framework the leeway for a macro economically and socially more sensible fiscal policy using the interpretational leeway inherent in the rules could be quite substantial.
    Keywords: fiscal policy,austerity,cyclical adjustment of public finances,Euro area
    JEL: E61 E62 E65 H62 H63
    Date: 2015
  10. By: Krouglov, Alexei
    Abstract: Presented is a mathematical model of single-product economy where credit expansion is used to increase the demand for product. Explored is the dynamics of affected product’s price, supply and demand. Shown is that expansion of the demand carries a temporal character.
    Keywords: credit expansion; economic fluctuations; modeling
    JEL: C62 E32 E51
    Date: 2015–05–08
  11. By: Claudia Foroni (Norges Bank (Central Bank of Norway)); Francesco Furlanetto (Norges Bank (Central Bank of Norway)); Antoine Lepetit (Paris School of Economics, Université Paris 1 Panthéon-Sorbonne)
    Abstract: We propose a new VAR identfication scheme that enables us to disentangle labor supply shocks from wage bargaining shocks. Identification is achieved by imposing robust signrestrictions that are derived from a New Keynesian model with endogenous labor force participation. According to our analysis on US data over the period 1985-2014, labor supply shocks and wage bargaining shocks are important drivers of output and unemployment both in the short run and in the long run. These results suggest that identification strategies used in estimated New Keynesian models to disentangle labor market shocks may be misguided. We also analyze the behavior of the labor force participation rate through the lenses of our model. We find that labor supply shocks are the main drivers of the participation rate and account for about half of its decline in the aftermath of the Great Recession.
    Keywords: labor supply shocks, wage mark-up shocks, identification, VAR, labor force participation
    JEL: C11 C32 E32
    Date: 2015–04–13
  12. By: Miroslav Klucik (Council for Budget Responsibility)
    Abstract: Alternative fiscal consolidation strategies are examined in the context of a medium-scale econometric model estimated on Slovak data. The multipliers associated with adjustment on the spending side are generally larger than on the revenue side, which is not uncommon for this class of models. In particular, government spending on wages, goods and services, and investment are associated with strong real-economy consequences. On the revenue side, corporate income tax, social security contributions of employees and personal income tax increases are found to be most harmful for growth. Social contributions and personal income tax adjustments also have the most pronounced effect on employment. The policy implication is that a short-run growth-friendly consolidation strategy should avoid placing too much weight on these budgetary items.
    Keywords: error correction model, fiscal rules, fiscal multipliers, neoclassical synthes
    JEL: C54 E37 E62 E63
    Date: 2015–04
  13. By: Nils Jannsen
    Abstract: I empirically analyze the dynamics of business investment following normal recessions (declines in business investment that are not associated with banking crises) and banking crises. Using a panel of 16 advanced economies, I find evidence for significant non-linear trend reversion or bounce-back effects on the level of business investment following normal recessions, i.e., the deeper the previous recession was, the higher the growth rate of business investment will be. The trend reversion effect is absent when a decline in business investment is associated with a banking crisis. As a consequence, normal recessions do not have significant permanent effects on the level of business investment, whereas banking crises have large and significant permanent effects. The results are in line with important theories and other empirical results on business cycle dynamics
    Keywords: Business investment, business cycle, recovery, banking crises, asymmetries
    JEL: E32 C33
    Date: 2015–04
  14. By: Barnichon, Régis; Matthes, Christian
    Abstract: Despite intense scrutiny estimates of the government spending multiplier remain highly uncertain with values ranging from 0.5 to 2. While a fiscal consolidation is generally assumed to have the same (mirror-image) effect as a fiscal expansion, we show that relaxing this assumption is crucial to understanding the effects of fiscal policy. The government spending multiplier is substantially below 1 for fiscal expansions, but the multiplier is substantially above 1 for fiscal consolidations.
    Keywords: fiscal policy; Gaussian Mixture Approximation
    JEL: C32 E62
    Date: 2015–05
  15. By: Alfredo García Hiernaux (Departamento de Fundamentos del Análisis Económico II (Economía Cuantitativa). Universidad Complutense de Madrid.); David Esteban Guerrero Burbano (CUNEF. Colegio Universitario de Estudios Financieros.)
    Abstract: This paper shows that price level trends in many of the EMU countries evolve with different patterns and that these patterns will not converge in the long-run. We propose that the hypothesis of price convergence should be evaluated and tested employing the relative prices. To this aim, we: (i) define the asymptotic price level convergence in mean and variance, (ii) provide a model for relative price levels that includes a transition path, and (iii) show how to properly test the definitions stated. Our results show that only French and German price levels converge in mean to a zero gap in the EMU while some others, not many, converge to a nonzero significant gap. This should be a matter of concern for the European monetary policy makers as it implies that the monetary policy does not affect all the EMU members equally.
    Keywords: Price convergence; Price levels; Relative price; Inflation; EMU.
    JEL: E30 E31 E52 C22 F15
    Date: 2015–05
  16. By: Khelifi, Atef
    Abstract: Despite ‘joy of giving models’ have been extensively examined in the literature, the Ramsey growth model has never been explored under the assumption of a direct preference for bequeathing savings that are reinvested. This assumption implies a Utility function depending on both consumption and savings, which may also be motivated as one that captures a direct preference for thriftiness or wealth accumulation arguably involved. The resulting growth model generalizes those accounting for the capitalist spirit as Zou (1994), and shows that the restrictive standard one is perhaps not the actual optimized version of the Solow model. (JEL O41, E21, D91).
    Keywords: Ramsey model; Optimal Growth; Optimal control; Savings decision; bequest; joy-of-giving
    JEL: D5 D91 E1 E2 O41
    Date: 2014–01
  17. By: Francesco Ravazzolo (Norges Bank (Central Bank of Norway) and BI Norwegian Business School); Joaquin L. Vespignani (University of Tasmania, Tasmanian School of Business and Economics and Centre for Applied Macroeconomic Analysis, Australia)
    Abstract: In modelling macroeconomic time series, often a monthly indicator of global real economic activity is used. We propose a new indicator, named World steel production, and compare it to other existing indicators, precisely the Kilian's index of global real economic activity and the index of OECD World industrial production. We develop an econometric approach based on desirable econometric properties in relation to the quarterly measure of World or global gross domestic product to evaluate and to choose across different alternatives. The method is designed to evaluate short-term, long-term and predictability properties of the indicators. World steel production is proven to be the best monthly indicator of global economic activity in terms of our econometric properties. Kilian's index of global real economic activity also accurately predicts World GDP growth rates. When extending the analysis to an out-of-sample exercise, both Kilian's index of global real economic activity and the World steel production produce accurate forecasts for World GDP, confirming evidence provided by the econometric properties. Specifically, a forecast combination of the three indices produces statistically significant gains up to 40% at nowcast and more than 10% at longer horizons relative to an autoregressive benchmark.
    Keywords: Global real economic activity, World steel production, Forecasting
    JEL: E1 E3 C1 C5 C8
    Date: 2015–04–13
  18. By: Oscar Andrés Espinosa Acuña; Paola Andrea Vaca González
    Abstract: El presente estudio busca comprobar si la autonomía de la Banca Central en Colombia, adquirida a partir de la Carta Política de 1991, logró controlar de manera adecuada los márgenes de inflación a través de la no monetización de los déficits del Gobierno; o si por el contrario, esto no influyó en la determinación del nivel de precios. Para ello se estiman dos modelos de corrección de errores (VEC) entre el déficit fiscal operativo del Gobierno Nacional Central como porcentaje del PIB y la inflación anual (ambas series integradas de orden 1 [ ( )]), con información anual: el primero de 1963 a 1990, y el segundo, de 1991 a 2010. Mediante el test de Granger se concluye que sí existió una relación de causalidad del déficit fiscal a la inflación antes de la independencia del Banco de la República, pero que después de ésta, no existe correspondencia alguna.
    Keywords: Banco de la República, Inflación, Déficit Fiscal, Modelo VEC, Causalidad de Granger.
    JEL: C32 E50 E62
    Date: 2013–07–01
  19. By: L. Arrondel; P. Lamarche; F. Savignac
    Abstract: This paper studies the heterogeneity of the marginal propensity to consume out of wealth using French household surveys. We find decreasing marginal propensity to consume out of wealth across the wealth distribution for all net wealth components. The marginal propensity to consume out of financial assets tend to be higher compared with the effect of housing assets, excepted in the top of the wealth distribution. Consumption is less sensitive to the value of the main residence than to other housing assets. We also investigate the heterogeneity arising from indebtedness and from the role of housing assets as collateral.
    Keywords: Consumption, Marginal propensity to consume out of wealth, Policy distributive effects, Households survey.
    JEL: D12 E21 C21
    Date: 2015
  20. By: Müller, Andreas; Storesletten, Kjetil; Zilibotti, Fabrizio
    Abstract: Motivated the European debt crisis, we construct a tractable theory of sovereign debt and structural reforms under limited commitment. The government of a sovereign country which has fallen into a recession of an uncertain duration issues one-period debt and can renege on its obligations by suffering a stochastic default cost. When faced with a credible default threat, creditors can make a take-it-or-leave-it debt haircut offer to the sovereign. The risk of renegotiation is reflected in the price at which debt is sold. The sovereign government can also do structural policy reforms that speed up recovery from the recession. We characterize the competitive equilibrium and compare it with the constrained efficient allocation. The equilibrium features increasing debt, falling consumption, and a non-monotone reform effort during the recession. In contrast, the constrained optimum yields step-wise increasing consumption and step-wise decreasing reform effort. Markets for state-contingent debt alone do not restore efficiency. The constrained optimum can be implemented by a flexible assistance program enforced by an international institution that monitors the reform effort. The terms of the program are improved every time the country poses a credible threat to leave the program unilaterally without repaying the outstanding loans.
    Keywords: austerity programs; debt overhang; default; European debt crisis; fiscal policy; Great Recession; Greece; International Monetary Fund; limited commitment; moral hazard; renegotiation; risk premia; sovereign debt; structural reforms
    JEL: E62 F33 F34 F53 H12 H63
    Date: 2015–05
  21. By: Leo Kaas (Department of Economics, University of Konstanz, Germany); Philipp Kircher (Department of Economics, University of Edinburgh, United Kingdom)
    Abstract: We develop and analyze a labor market model in which heterogeneous firms operate under decreasing returns and compete for labor by posting long-term contracts. Firms achieve faster growth by offering higher lifetime wages, which allows them to fill vacancies with higher probability, consistent with recent empirical findings. The model also captures several other regularities about firm size, job flows and pay, and generates sluggish aggregate dynamics of labor market variables. In contrast to existing bargaining models with large firms, efficiency obtains and the model allows a tractable characterization over the business cycle
    Keywords: Labor market search, multi-worker firms, job creation and job destruction
    JEL: E24 J64 L11
    Date: 2015–04–21
  22. By: Anna Pestova (National Research University Higher School of Economics)
    Abstract: In this paper, I develop the leading indicators of the business cycle turning points exploiting the quarterly panel dataset comprising OECD countries and Russia over the 1980-2013 period. Contrasting to the previous studies, I combine data on OECD countries and Russia into a single dataset and develop universal models suitable for the entire sample with a quality of predictions comparable to the analogues of single-country models. On the basis of conventional dynamic discrete dependent variable framework I estimate the business cycle leading indicator models at different forecasting horizons (from one to four quarters). The results demonstrate that there is a trade-off between forecasting accuracy and the earliness of the recession signal. Best predictions are achieved for the model with one quarter lag (approximately 94% of the observations were correctly classified with a noise-to-signal ratio of 7%). However, even the model with the four quarter lags correctly predicts more than 80% of recessions with the noise-to-signal ratio of 25% can be useful for the policy analysis. I also reveal significant gains of accounting for the credit market variables when forecasting recessions at the long horizons (four quarter lag) as their use leads to a significant reduction of the noise-to-signal ratio of the model. I propose using the “optimal” cut-off threshold of the binary models based on the minimization of regulator loss function arising from different types of wrong classification. I show that this optimal threshold improves model forecasts as compared to other exogenous thresholds.
    Keywords: business cycles, leading indicators, turning points, dynamic logit models, recession forecast.
    JEL: E32 E37
    Date: 2015
  23. By: Menzie D. Chinn; Yi Zhang
    Abstract: Relying upon a standard New Keynesian DSGE, we propose an explanation for two empirical findings in the international finance literature. First, the unbiasedness hypothesis – the proposition that expost exchange rate depreciation matches interest differentials – is rejected much more strongly at short horizons than at long. Second, even at long horizons, the unbiasedness hypothesis tends to be rejected when one of the currencies has experienced a long period of low interest rates, such as in Japan and Switzerland. Using a calibrated New Keynesian dynamic stochastic general equilibrium model, we show how a monetary policy rule can induce the negative (positive) correlation between depreciation and interest differentials at short (long) horizons. The tendency to reject unbiasedness for Japan and Switzerland even at long horizons we attribute to the interaction of the monetary reaction function and the zero lower bound.
    JEL: E12 F21 F31 F41 F47
    Date: 2015–05
  24. By: Zuzana Mucka (Council for Budget Responsibility)
    Abstract: We study the interactions among fiscal policy, fiscal limits and sovereign risk premia. The fiscal limit, which measures the government’s ability to service its debt, arises endogenously from dynamic Laffer curves and is a random variable. A nonlinear relationship between sovereign risk premia and the level of government debt then emerges in equilibrium. The model is calibrated to Slovak data and we study the impact of various model parameters on the distribution of the fiscal limit. Fiscal limit distributions obtained via Markov–Chain–Monte–Carlo regime switching algorithm depend on the rate of growth of government transfers, the degree of countercyclicality of policy, and the distribution of the underlying economic conditions. We find that it is considerably more heavy–tailed compared with the one usually obtained in the literature for advanced economies, and is very sensitive to the size and rate of growth of transfers. The main policy message is that the Maastricht debt limit is not safe enough for Slovakia: although in the equilibrium the chance of country default is 10 percent when the debt is 60 percent of GDP, it increases dramatically to approximately 40 percent in bad times (when productivity falls by almost 8 percent). A well-designed fiscal policy involving a deceleration in the growth of transfers can reduce the chance of default significantly.
    Keywords: Simulation Methods and Modelling, Fiscal Policy, Government Expenditures, Debt Management and Sovereign Debt
    JEL: C15 C63 E62 H5 H63
    Date: 2015–02
  25. By: Lilia Maliar; Serguei Maliar; John Taylor; Inna Tsener
    Abstract: We study a class of infinite-horizon nonlinear dynamic economic models in which preferences, technology and laws of motion for exogenous variables can change over time either deterministically or stochastically, according to a Markov process with time-varying transition probabilities, or both. The studied models are nonstationary in the sense that the decision and value functions are time-dependent, and they cannot be generally solved by conventional solution methods. We introduce a quantitative framework, called extended function path (EFP), for calibrating, solving, simulating and estimating such models. We apply EFP to analyze a collection of challenging applications that do not admit stationary Markov equilibria, including growth models with anticipated parameters shifts and drifts, unbalanced growth under capital augmenting technological progress, anticipated regime switches, deterministically time-varying volatility and seasonal fluctuations. Also, we show an example of estimation and calibration of parameters in an unbalanced growth model using data on the U.S. economy. Examples of MATLAB code are provided.
    JEL: C61 C63 C68 E31 E52
    Date: 2015–05
  26. By: Julia Le Blanc (Deutsche Bundesbank, Frankfurt a. Main, Germany); Almuth Scholl (Department of Economics, University of Konstanz, Germany)
    Abstract: We employ a life-cycle model with income risk to analyze how tax-deferred individual accounts affect households’ savings for retirement. We consider voluntary accounts as opposed to mandatory accounts with minimum contribution rates. We contrast add-on accounts with carve-out accounts that partly replace social security contributions. Quantitative results suggest that making add-on accounts mandatory has adverse welfare effects across income groups. Carve-out accounts generate positive welfare across all income groups but gains are lower for low income earners. Default investment rules in individual accounts have a modest impact on welfare.
    Keywords: individual retirement accounts, household portfolio choice, consumption and saving over the life-cycle
    JEL: E21 H55 G11
  27. By: Betty Daniel, Christos Shiamptanis (Wilfrid Laurier University)
    Abstract: Every country has a fiscal limit on debt, where that limit represents a debt level so high that the country's economic and political systems cannot raise taxes or reduce spending sufficiently to maintain solvency. At the limit, creditors flee, and the government faces a fiscal crisis. If we knew the limit, then we could estimate the probability of a fiscal crisis as the probability of reaching the limit. Governments do not announce their fiscal limits. In this paper, we estimate fiscal feedback rules for six-high-debt developed countries to investigate the extent to which the systematic response of the primary surplus to debt reveals information on the fiscal limit. In general, estimation of a fiscal feedback rule does not reveal an explicit fiscal limit for a country that has not experienced a crisis. However, estimates of long-run debt, together with debt history, can be combined to yield an estimate of a lower bound on the fiscal limit. We use estimates of the fiscal rule for six high-debt developed countries to project debt forward from dates, following the beginning of the financial crisis, and compare the projections with our estimates of the lower bound on debt. We label countries, whose debt projections exceed the lower bound as high-risk. Both Greece and Portugal enter the high-risk category about one year prior to their financial crises. Italy is at high risk in 2012 and others are at low risk through 2012.
    Keywords: Fiscal Limits, Fiscal Rules, Fiscal Solvency, Fiscal Sustainability, Sovereign Default
    JEL: E6 F5
    Date: 2015–05–05
  28. By: Chang-Tai Hsieh; Enrico Moretti
    Abstract: We study how growth of cities determines the growth of nations. Using a spatial equilibrium model and data on 220 US metropolitan areas from 1964 to 2009, we first estimate the contribution of each U.S. city to national GDP growth. We show that the contribution of a city to aggregate growth can differ significantly from what one might naively infer from the growth of the city’s GDP. Despite some of the strongest rate of local growth, New York, San Francisco and San Jose were only responsible for a small fraction of U.S. growth in this period. By contrast, almost half of aggregate US growth was driven by growth of cities in the South. We then provide a normative analysis of potential growth. We show that the dispersion of the conditional average nominal wage across US cities doubled, indicating that worker productivity is increasingly different across cities. We calculate that this increased wage dispersion lowered aggregate U.S. GDP by 13.5%. Most of the loss was likely caused by increased constraints to housing supply in high productivity cities like New York, San Francisco and San Jose. Lowering regulatory constraints in these cities to the level of the median city would expand their work force and increase U.S. GDP by 9.5%. We conclude that the aggregate gains in output and welfare from spatial reallocation of labor are likely to be substantial in the U.S., and that a major impediment to a more efficient spatial allocation of labor are housing supply constraints. These constraints limit the number of US workers who have access to the most productive of American cities. In general equilibrium, this lowers income and welfare of all US workers.
    JEL: E24 J01 R0
    Date: 2015–05
  29. By: Jung, Kuk Mo; Pyun, Ju Hyun
    Abstract: The massive stocks of foreign exchange reserves, mostly held in the form of U.S. T-Bonds by emerging economies, are still an important puzzle. Why do emerging economies continue to willingly loan to the United States despite the low rates of return? We propose that a dynamic general equilibrium model incorporating international capital markets, characterized by a non-centralized trading mechanism and U.S. T-Bonds as facilitators of trade, can provide an answer to this question. Declining financial frictions in these over-the-counter (OTC) markets would generate rising liquidity premiums on U.S. T-Bonds. Meanwhile, the higher liquidity properties of the U.S. T-Bonds would induce recipients of foreign investments, namely emerging economies, to hold more liquidity, that is U.S. T-Bonds, in equilibrium. The prediction of our model is confirmed by an empirical simultaneous equations approach considering an endogenous relationship between OTC capital inflows and reserves holdings.
    Keywords: international reserves, over-the-counter markets, liquidity, simultaneous equations
    JEL: E44 E58 F21 F31 F36 F41
    Date: 2015–05
  30. By: Irina-Raluca Badea (University of Craiova, Faculty of Economics and Business Administration)
    Abstract: The aftermath of the global financial crisis revealed the weaknesses of the financial system and the monetary incentives to be taken into consideration by the policy-makers. Whether it is exposed to specific risks or to systemic risk, the banking system has to be heavily regulated in order to prevent it from collapsing. The macroprudential regulation promotes the stability of the financial system as a whole, and also treats systemic risk as a trigger of a chain reaction caused by the interlinkages in the financial system. Therefore, this paper outlines the role of the macroprudential regulation for achieving the financial stability goal in the context of systemic turbulences. The safeguarding of financial stability should not be understood as a zero tolerance of bank failures or of an avoidance of market volatility but it should avoid financial disruptions that lead to real economic costs.On the one hand, an overlook on the progress of the prudential regulation points out the procyclical aspects of the regulatory requirements so far, such as capital requirements, risk assessment, provisioning; on the other hand, the present paper identifies the improvements of the most recent recommendations on banking regulations, embodied in the Basel III Accord. Hence, the Basel III requirements in terms of capital adequacy, liquidity, the capital and conservation buffers against procyclicality represent unquestionable improvements for the macroprudential regulation. Given the fact that Basel III has established phase-in arrangements from 2013 to 2019, it is important to analyze the progress of its implementation and its impact on the banking system resilience. *This work was cofinanced from the European Social Fund through Sectoral Operational Programme for Human Resources Development 2007-2013, under the project number POSDRU/159/1.5/S/140863 with the title „ Competitive Researchers in Europe in the Field of Humanities and Socio –Economic Sciences. A Multi-regional Research Network”.
    Keywords: financial stability, systemic risk, banking system, Basel III requirements, regulation
    JEL: E52 E58 G01
  31. By: Auer, Raphael; Schoenle, Raphael
    Abstract: We study firm-level pricing behavior through the lens of exchange rate pass-through and provide new evidence on how firm-level market shares and price complementarities affect pass-through decisions. Using micro-data from U.S. import prices, we identify two facts: First, exactly the firms that react the most with their prices to changes in their own costs are also the ones that react the least to changing competitor prices. Second, the response of import Prices to exchange rate changes is U-shaped in market share while it is hump-shaped in response to competitor prices. We show that both facts are consistent with a model based on Dornbusch (1987) that generates variable markups through a nested-CES demand system. Finally, based on the model, we find that direct cost pass-through and price complementarities play approximately equally important roles in determining pass-through but also partly offset each other. This suggests that equilibrium feedback effects in pricing are large. Omission of either channel in an empirical analysis results in a failure to explain how market structure affects price-setting in industry equilibrium.
    Keywords: exchange rate pass-through; price complementarities; price setting; U.S. import prices
    JEL: E3 E31 F41
    Date: 2015–05
  32. By: Farley Grubb
    Abstract: The spending obligations and revenue sources of colonial New Jersey’s provincial government for the years 1704 through 1775 are reconstituted using forensic accounting techniques from primary sources. Such has not been done previously for any British North American colony. These data are used to assess colonial New Jersey’s provincial fiscal structure. The methods for raising revenue to meet normal peacetime and emergency wartime expenses are identified and analyzed. The provincial tax burdens imposed on New Jersey’s subjects are calculated. How the British interfered with New Jersey’s provincial fiscal structure is identified. What revenues and tax burdens would have been without this interference are estimated.
    JEL: E42 E60 H20 H60 N11 N21 N41
    Date: 2015–05
  33. By: Alvaro Martin Moreno Rivas
    Abstract: El objetivo de este trabajo es presentar un análisis alternativo de la manera como opera la política monetaria y sus efectos sobre la distribución funcional del ingreso en Colombia. El punto de partida son los presupuestos de la teoría endógena de la moneda. En este documento se considera que la inflación es el resultado del conflicto distributivo entre los poseedores de riqueza real o financiera y los trabajadores. Cuando el Banco Central actúa para regular el conflicto inflacionario (o mejor distributivo) puede adoptar una política de neutralidad frente al status quo o seguir el camino de una política sesgada contra alguno de los perceptores del ingreso. En otras palabras, puede ser el "tercero excluido" o hacer parte de la contienda inflacionaria entre salarios, beneficios, intereses y rentas. Ese es el verdadero dilema de la política monetaria. Las políticas monetarias no son neutrales ni en el corto y ni en el largo periodo. La inflación es un indicador de la tensión distributiva entre los intereses de las diferentes clases sociales en cualquier economía monetaria de producción. De allí que el arreglo institucional de la política monetaria determina el papel del banco central a favor o en contra de alguno de los agentes en conflicto. En Colombia, las decisiones de la Junta del Banco de la República se han alejado de la regla justa de la tasa de interés, es decir, sus efectos no han sido neutrales, por el contrario, promovieron claramente un patrón regresivo de la distribución del ingreso a favor de los poseedores de riqueza.
    Keywords: Política Monetaria, Inflación, Distribución funcional del Ingreso, Regla de tasa de interés, Inflación Objetivo, Moneda Endógena, Economía Monetaria de Producción.
    JEL: E4 E5 D3 J3 O1
    Date: 2014–01–30
  34. By: Hamdi, Helmi; Hakimi, Abdelaziz
    Abstract: This study examines the consequences of banks and stock markets developments on economic growth for eleven Middle Eastern and North African (MENA) countries for the period from 1995 to 2010. We perform dynamic panel data estimation and we use GMM estimator as suggested by Arellano and Bond (1991). The overall results suggest a positive relationship between banking and financial developments and economic growth. The results reveal that stock markets in MENA countries are still at an early stage of development and the sector needs the implementation of deep policy reforms to attract investors and to promote the contribution of the financial market in economic development.
    Keywords: Financial development, Economic growth, MENA, Dynamic Panel Data
    JEL: E44 G20 O16
    Date: 2015–05–12
  35. By: Anton Cheremukhin (Federal Reserve Bank of Dallas); Anton Golosov (Princeton University); Sergei Guriev; Aleh Tsyvinski (Yale University)
    Abstract: This paper studies structural transformation of Soviet Russia in 1928-1940 from an agrarian to an industrial economy through the lens of a two-sector neoclassical growth model. We construct a large dataset that covers Soviet Russia during 1928-1940 and Tsarist Russia during 1885-1913. We use a two-sector growth model to compute sectoral TFPs as well as distortions and wedges in the capital, labor and product markets. We find that most wedges substantially increased in 1928-1935 and then fell in 1936-1940 relative to their 1885-1913 levels, while TFP remained generally below pre-WWI trends. Under the neoclassical growth model, projections of these estimated wedges imply that Stalin's economic policies led to welfare loss of -24 percent of consumption in 1928-1940, but a +16 percent welfare gain after 1941. A representative consumer born at the start of Stalin's policies in 1928 experiences a reduction in welfare of -1 percent of consumption, a number that does not take into account additional costs of political repression during this time period. We provide three additional counterfactuals: comparison with Japan, comparison with the New Economic Policy (NEP), and assuming alternative post-1940 growth scenarios.
    JEL: E6 N23 N24 O4 O41
    Date: 2013–09
  36. By: Marek Dabrowski (Bruegel, Brussels)
    Abstract: After completing the painful transition of the 1990s, former communist countries enjoyed a period of rapid economic growth which was underpinned by three groups of factors: (i) benefits of market reforms and transition-related restructuring in the 1990s; (ii) increasing participation in the Single European Market (SEM) and other mechanisms of EU integration; (iii) global economic and financial boom of 2003–2007. However, the period of prosperity did not last long. Since 2008 the entire region has become hit by the global and European financial crises, the negative consequences of which have not yet been overcome. While the size of negative shock and resulting macroeconomic performance differed between individual countries, the crisis revealed common vulnerabilities such as high dependence on economic developments in advanced economies of Western and Northern Europe, and changes in global capital flows determined, in turn, by changes in monetary policies of major central banks, limited room for manoeuvre in national macroeconomic policies, unfinished domestic economic reform agenda and others. The after-crisis macroeconomic prospects look uncertain and challenging. The pace of economic growth is unlikely to come back to the high levels of the early and mid–2000s soon. That means CEE countries will have to live and conduct their macroeconomic policies in the environment of slower growth, which will have a considerable impact on their fiscal accounts. Another challenge is related to population aging, which will have serious consequences for sustainability of public pension systems (already in deep deficit), public healthcare systems, labour market, migration flows, etc. Rapid development of non-EU emerging-market economies and their closer trade relations with the EU will put increasing competitive pressure on several sectors and industries of CEE economies, including those which were considered to be their comparative advantage in the previous decade. Countries most heavily hit by the crisis made some adjustment, but more concerted reform effort in the entire region is needed to increase growth potential. The future reform agenda should decrease implicit public pension and health liabilities, make domestic labour markets more flexible, improve business climate, and adjust education to the needs of contemporary labour markets. Countries which stay outside the Eurozone should join it soon. Completing the Single European Market mechanism (especially in services), simplifying acquis wherever it is possible (pan-European deregulation), going ahead with the Banking Union project, strengthening fiscal surveillance rules, and more open migration policies, can contribute to improving future growth potential of all EU economies.
    Keywords: CEE countries, economic transition, former communist countries, European Union
    JEL: E63 F15 F21 F32 F34 F36 F43 G01 G21 H53 P33
  37. By: Fatih Kiraz (MKK (Central Securities Depository of Turkey)); Ozgur Uysal (MKK (Central Securities Depository of Turkey)); Yakup Ergincan (MKK (Central Securities Depository of Turkey))
    Abstract: The aim of this study is introducing a new risk appetite index (RISE) methodology and then elaborating especially on its benefits while dealing with sovereign default probabilities. More specifically, providing two types of risk appetite indices, both calculated at individual investor level before aggregation, we present the relationships of these indices with 5y CDS spreads and then discuss the possibility of some new financial instruments which could well be used for hedging or speculating. The core weekly data include all investors’ individual holdings of all securities on the stock exchange (BIST) of Turkey, closing prices of largest 100 firms’ index (BIST100), and 5y CDS spreads of Turkey since 2008. Because of data limitations, the evidence comes from only one developing country but generalization of the main finding seems to be quite possible and testable since the new methodology introduced is flexible enough to be applied in different settings and / or countries.
    Keywords: Risk appetite, CDS, Sovereign, Emerging markets, Turkey
    JEL: E44 G00 G01
  38. By: Michael, Bryane; Popov, Maja
    Abstract: Does government size and structure adapt to changes in government’s organisational environment (particularly to uncertainty and complexity) as predicted by organisational theory? We find – using a range of statistical analyses – support for each of the major theories of organisation adaptation (the contingency-based view, resource-based view, and rational choice view). We find that both government size and structure change – holding other factors constant – for changes in the uncertainty and complexity of governments’ organisational environments. We find seven clusters of governments which adapt their organisational sizes differently in response to changes in the uncertainty and complexity of their organisational environments – and four clusters of governments with differing preferences for the way they adapt governmental structures. We also use the available data to divide governments according to the extent to which they adapt their organisational size and structure reactively (after changes occur in their organisational environment), contemporaneously or strategically (before these changes in their organisational environment occur).
    Keywords: government structure,size of government
    JEL: E6 H1
    Date: 2015
  39. By: LI, Defu; Bental, Benjamin
    Abstract: By extending the range of admissible factor accumulation and innovation investment elasticities, this paper expands the Acemoglu (2003) model and obtains several results. First, it identifies conditions for the existence of a steady-state equilibrium and shows that Uzawa’s theorem is obtained as a special case of these conditions. Second, it demonstrates that along a steady-state equilibrium path, technological progress can include both labor-augmenting and capital-augmenting elements. Third, it shows that the direction of technological progress is determined by the relative size of price elasticities of material factors, and is biased towards the factor with the relatively smaller price elasticity. Finally, the paper finds that technical change has two effects on factor income shares. On one hand, factor shares change when the direction of technical progress changes. On the other hand, when the direction of technical change remains unchanged, in general the speed of technical progress also affects factor shares, unless technical progress is Hicks neutral.
    Keywords: steady-state, technical change, Uzawa’s theorem, investment elasticities, price elasiticities, factor income shares
    JEL: E13 O11 O33 Q01
    Date: 2015–01–29
  40. By: Charles I. Jones
    Abstract: Why are people in the richest countries of the world so much richer today than 100 years ago? And why are some countries so much richer than others? Questions such as these define the field of economic growth. This paper documents the facts that underlie these questions. How much richer are we today than 100 years ago, and how large are the income gaps between countries? The purpose of the paper is to provide an encyclopedia of the fundamental facts of economic growth upon which our theories are built, gathering them together in one place and updating the facts with the latest available data.
    JEL: E0 O4
    Date: 2015–05
  41. By: Arlind Lagji (European University of Tirana); Engjellushe Zenelaj (Bashkia e Ballshit)
    Abstract: During all the economic problems unemployment is a major worldwide concern. Albania as it is often characterized as a country with an unstable economic situation, it is faced with serious issues as unemployment rate increase. Employment rate increase for a country is stated as the region’s indicator of prosperity and development. The region of Vlora is one of the biggest in Albania and as such has given its share on natural and human resources contributing to constant evolution and growth in the employment market, but unfortunately not all is done to utilize what’s necessary. The aim of this article is to highlight the extent of unemployment as a growing occurrence, based its statistical analysis. A thorough analysis of the unemployment by age, gender and professional structure will be outlined. The purpose of this study will be accomplished following the statistical methods, analysis, and synthesis of the labour market for the region of Vlora.
    Keywords: labour force, unemployment, age structure, sex structure, professional structure
    JEL: E24 A11
  42. By: Ngoie, Ruffin-Benoît M.; Ulungu, Berthold E.-L.
    Abstract: This paper aims at presenting a new voting function which is obtained in Balinski-Laraki's framework and benefits mean and median advantages. The so-called Mean-Median Comprise Method (MMCM) has fulfilled criteria such as unanimity, neutrality, anonymity, monotonicity, and Arrow's independence of irrelevant alternatives. It also generalizes approval voting system.
    Keywords: Aggregation, Approval Voting, Borda Majority Count, Majority Judgment, Social Choice Function.
    JEL: B16 C10 C65 C70 C73 D71 D72
    Date: 2014–12–19
  43. By: Christina Jenq (Institute for Emerging Market Studies, Hong Kong University of Science and Technology)
    Abstract: Dr. Christina Jenq, a post-doctoral researcher with HKUST IEMS, inspects the role of 1990's era reforms to urban Chinese state-owned enterprises (SOEs) on the widening gender imbalance in urban employment, with males accounting for a significantly larger share of urban employment than females. Based on rigorous econometric analysis, Dr. Jenq postulates that 30-50% of the gender imbalance amongst the urban employed can be assigned to gender-asymmetric industry-level privatization, with the remaining 50-70% attributable to gender differences in labor supply, both on a qualitative and qualitative level. Dr. Jenq cautions against quota-based employment policies aimed at reducing the employment gender gap (as there was scant evidence of gender discrimination found in her analysis), and instead recommends increases in both skill training programs as well as childcare and education benefits to allow more urban women the opportunity to enter the labor force.
    Keywords: Chinese state-owned enterprises, Chinese SOEs, Chinese privatization, privatization, SOE reform, gender imbalance, employment gender gap, ownership-specific human capital, China
    JEL: J24 E24 J41
    Date: 2015–05
  44. By: Nicolás Castellanos Sánchez
    Abstract: En este documento se analiza el posible impacto de la reforma tributaria (Ley 1607 de 2012) sobre los recursos recaudados por aportes parafiscales al Sistema General de Seguridad Social en Salud (SGSSS) sujetos a sustitución del Impuesto Sobre la Renta para la Equidad CREE. Mediante un modelo estructural de vectores auto regresivos (SVAR) se calcula el mínimo de financiación estipulado en dicha reforma y se concluye que en un escenario promedio, en el que la reforma tributaria no tenga el impacto esperado sobre el empleo formal, para el año 2014 el sistema podría estar desfinanciado en casi 0,131% del PIB; por otra parte, bajo un escenario de escaso crecimiento económico esta desfinanciación estaría alrededor de 0.122% del PIB. Por último, si la reforma tributaria tiene el impacto esperado y se incrementa el empleo formal en más de 400.000 empleos, el desfinanciamiento podría llegar a ser de 0,136% del PIB.
    Keywords: empleo, impuestos, salud, sistema.
    JEL: H75 H68 J38 E27
    Date: 2014–05–06
  45. By: Xiaogang Wu (Division of Social Science, Hong Kong University of Science and Technology; Institute for Emerging Market Studies, Hong Kong University of Science and Technology); Zhuoni Zhang (Department of Applied Social Sciences, City University of Hong Kong)
    Abstract: Prof. Xiaogang Wu, an HKUST Faculty Associate and Professor of Social Science at HKUST, investigates the earnings disadvantages faced by rural Chinese migrants in urban cities as compared to their local urban counterparts, and uses empirical evidence to conclude that such disadvantages are largely attributable to occupational segregation based on workers' hukou (residency) status. Prof. Wu's findings carry important implications for hukou-related reform policies aimed at better assimilating rural migrants into urban Chinese cities. These findings are particularly important now, as both the Chinese central government as well as local urban governments throughout the country scramble to fix the socioeconomic difficulties faced by the ever-growing influx of rural migrants to urban areas.
    Keywords: Hukou, China, Chinese employment, Chinese rural migrants, Chinese residency status, Chinese socioeconomics, Hukou reform
    JEL: E24 J31 J41
    Date: 2015–03

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