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on South East Asia |
| By: | Carlos E. da Costa; Lucas Maestri |
| Abstract: | In the presence of an optimally designed unemployment bene.t system we show that it is optimal for the government to encourage human capital acquisition. The driving force of this result is the complementarity between human capital and labor-market- oriented behavior. If policy includes inter-temporal transfers, the optimal level of investment in human capital is given at the point where, at the margin, expected return to human capital is identical to the risk free rate even though there is no full insurance at the optimum. |
| JEL: | J65 I28 |
| Date: | 2005 |
| URL: | http://d.repec.org/n?u=RePEc:anp:en2005:089&r=sea |
| By: | Vladimir Kühl Teles; Joaquim P. Andrade |
| Abstract: | Moral concepts affect crime supply. This idea is modelled assuming that illegal activities is habit forming. We introduce habits in a intertemporal general equilibrium framework to illegal activities and compare its outcomes with a model without habit formation. The findings are that habit (i) reduces the crime level; (ii) reduces the marginal effect of illegal activities return on crime; (iii) reduces the efficacy of punishment. |
| JEL: | K42 K14 |
| Date: | 2005 |
| URL: | http://d.repec.org/n?u=RePEc:anp:en2005:090&r=sea |
| By: | Matthew Cole, Robert Elliott and Kenichi Shimamoto |
| Abstract: | Using Japanese firm-level data, we identify and quantify the factors that influence the environmental management of Japanese firms. We measure 14 different aspects of a firm’s environmental management and investigate how firm-level characteristics and external pressures affect the quantity and effectiveness of environmental management systems and structures. Our results show that one consequence of the growth in international trade and FDI is that Japanese firms are increasingly aware of their environmental obligations and that both regulatory and non-regulatory factors play a role in a firm’s decision to quantify and manage the impact their activities have on the environment. |
| Keywords: | Globalization, Environment, Firm Characteristics, Management |
| JEL: | D21 Q20 Q56 |
| Date: | 2005–11 |
| URL: | http://d.repec.org/n?u=RePEc:bir:birmec:05-17&r=sea |
| By: | J. Michael Finger (World Bank); Andrei Zlate (Boston College) |
| Abstract: | Maintaining an economically sensible trade policy is often a matter of managing pressures for exceptions – for protection for a particular industry. Good policy becomes a matter of managing interventions so as to strengthen the politics of openness and liberalization---of avoiding rather than of imposing such restrictions in the future. In the 1990s, antidumping measures emerged as the instrument of choice to accomplish this, despite the fact that they satisfy neither of these criteria. Its economics is ordinary protection; it considers the impact on the domestic interests that will benefit while excluding the domestic interests that will bear the costs. Its unfair trade rhetoric undercuts rather than supports a policy of openness. As to what would be better, the key issue in a domestic policy decision should be the impact on the domestic economy. Antidumping reform depends less on the good will of WTO delegates toward the "public interest" than on those business interests that are currently treated by trade law as bastards insisting that they be given the same standing as the law now recognizes for protection seekers. |
| Keywords: | Doha round; antidumping; countervailing measures; safeguards; non-tariff barriers to trade; WTO/GATT |
| JEL: | F13 K33 N70 O24 |
| Date: | 2005–11–17 |
| URL: | http://d.repec.org/n?u=RePEc:boc:bocoec:632&r=sea |
| By: | Yongfu Huang |
| Abstract: | This paper studies the e¤ect of political liberalisation on financial development in two steps. First, the paper examines whether political liberalisation in terms of institutional improvement promotes financial development, using a panel dataset of 90 developed and developing countries over 1960-99. The empirical evidence reveals a positive effect on financial development at least in the short-run, particularly for lower-income countries, ethnically divided countries and French legal origin countries. In the second part of the paper, a before-after event study approach is used to explore the impact of democratic transitions on financial development. It indicates that a democratic transformation is typically followed by an increase in financial development. |
| Keywords: | Political liberalisation; Financial development. |
| JEL: | G20 O16 O17 |
| Date: | 2005–11 |
| URL: | http://d.repec.org/n?u=RePEc:bri:uobdis:05/578&r=sea |
| By: | Nick Bloom; Mark Schankerman; John Van Reenen |
| Abstract: | Government policies to support R&D are predicated on empirical evidence of R&D"spillovers" between firms. But there are two countervailing R&D spillovers: positive effectsfrom technology spillovers and negative effects from business stealing by product marketrivals. We develop a general framework showing that technology and product marketspillovers have testable implications for a range of performance indicators, and exploit theseusing distinct measures of a firm's position in technology space and product market space.We show using panel data on U.S. firms between 1981 and 2001 that both technology andproduct market spillovers operate, but that net social returns are several times larger thanprivate returns. The spillover effects are also revealed when we analyze three high-techsectors in detail - pharmaceuticals, computer hardware and telecommunication equipment.Using the model we evaluate three R&D subsidy policies and show that the typical focus ofsupport for small and medium firms may be misplaced. |
| Keywords: | Spillovers, R&D, market value, patents |
| JEL: | O31 O32 O33 F23 |
| Date: | 2005–02 |
| URL: | http://d.repec.org/n?u=RePEc:cep:cepdps:dp0675&r=sea |
| By: | Henry G. Overman; Anthony J. Venables |
| Abstract: | Rapid urbanisation is a major feature of developing countries. Some 2 billion more people arelikely to become city residents in the next 30 years, yet urbanisation has received littleattention in the modern development economics literature. This paper reviews theoretical andempirical work on the determinants and effects of urbanisation. This suggests that there aresubstantial productivity benefits from cities, although unregulated outcomes may well lead toexcessive primacy as externalities and coordination failures inhibit decentralisation ofeconomic activity. Policy should operate both by identifying and addressing these marketfailures, and by seeking to remove institutional obstacles to decentralisation. |
| Keywords: | Urbanisation, economic development |
| JEL: | O18 R0 |
| Date: | 2005–07 |
| URL: | http://d.repec.org/n?u=RePEc:cep:cepdps:dp0695&r=sea |
| By: | Sean D. Campbell |
| Abstract: | Using data on corporate profits forecasts from the Survey of Professional Forecasters, I decompose real stock returns into a fundamental news component and a return news component and analyze the effects of the Great Moderation on each. Empirically, the response of each component of real stock returns to the Great Moderation has been quite different. The volatility of fundamental news shocks has declined by 50% since the onset of the Great Moderation, suggesting a strong link between underlying fundamentals and the broader macroeconomy. Alternatively, the volatility of return news shocks has remained stable over the Great Moderation period. Since the bulk of stock market volatility is attributable to return shocks, the Great Moderation has not had a significant effect on stock return volatility. These empirical findings are shown to be consistent with Campbell and Cochrane's (1999) habit formation asset pricing model. In the face of a large decline in consumption volatility, the volatility of fundamental news shocks declines while the volatility of return shocks stagnate. Ultimately, the effect of a Great Moderation in consumption volatility on overall stock return volatility in the habit formation model is slight. |
| Date: | 2005 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fedgfe:2005-47&r=sea |
| By: | Don H. Kim; Athanasios Orphanides |
| Abstract: | The estimation of dynamic no-arbitrage term structure models with a flexible specification of the market price of risk is beset by a severe small-sample problem arising from the highly persistent nature of interest rates. We propose using survey forecasts of a short-term interest rate as additional input to the estimation to overcome the problem. The three-factor pure-Gaussian model thus estimated with the U.S. Treasury term structure for the 1990-2003 period generates a stable estimate of the expected path of the short rate, reproduces the well-known stylized patterns in the expectations hypothesis tests, and captures some of the short-run variations in the survey forecast of the changes in longer-term interest rates. |
| Date: | 2005 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fedgfe:2005-48&r=sea |
| By: | Raven E. Saks |
| Abstract: | Differences in the supply of housing generate substantial variation in housing prices across the United States. Because housing prices influence migration, the elasticity of housing supply also has an important impact on local labor markets. Specifically, an increase in labor demand will translate into less employment growth and higher wages in places where it is relatively difficult to build new houses. To identify metropolitan areas where the supply of housing is constrained, I assemble evidence on housing supply regulations from a variety of sources. In places with relatively few barriers to construction, an increase in housing demand leads to a large number of new housing units and only a moderate increase in housing prices. In contrast, for an equal demand shock, places with more regulation experience a 17 percent smaller expansion of the housing stock and almost double the increase in housing prices. Furthermore, I find that housing supply regulations have a significant effect on local labor market dynamics. Whereas a 1 percent increase in labor demand generally leads to a 1 percent increase in the long-run level of employment, the employment response is less than 0.8 percent in places where the housing supply is highly constrained. |
| Date: | 2005 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fedgfe:2005-49&r=sea |
| By: | Alan G. Ahearne; John Ammer; Brian M. Doyle; Linda S. Kole; Robert F. Martin |
| Abstract: | This paper examines periods of pronounced rises and falls of real house prices since 1970 in eighteen major industrial countries, with particular focus on the lessons for monetary policy. We find that real house prices are pro-cyclical—co-moving with real GDP, consumption, investment, CPI inflation, budget and current account balances, and output gaps. House price booms are typically preceded by a period of easing monetary policy, but then diminishing slack and rising inflation lead monetary authorities to begin tightening policy before house prices peak. In a careful reading of official reports, speeches, and minutes, we find little evidence that foreign central banks have reacted to past episodes of rising real house prices beyond taking into account their implications for inflation and output growth. However, central bankers have expressed a range of opinions in the more recent policy debate with some willing in certain cases to raise policy rates to try to stem current and future surges in asset prices while others favor moral suasion or a hands-off approach. Finally, we characterize the risks associated with house-price reversals. Although mortgage lenders in some countries have significant exposure to house prices, the balance of evidence suggests that this exposure does not, in and of itself, pose a significant risk to financial stability. Nevertheless, the co-movement of both property prices and default rates with the business cycle means that losses on mortgage lending are likely to be higher when banks’ other lines of business are also performing poorly. |
| Keywords: | Monetary policy ; Housing - Prices |
| Date: | 2005 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fedgif:841&r=sea |
| By: | Xiaosong Zeng; Charles Goodhart |
| Date: | 2005–11 |
| URL: | http://d.repec.org/n?u=RePEc:fmg:fmgsps:sp163&r=sea |
| By: | Zhong Zhao (IZA Bonn and CCER, Peking University) |
| Abstract: | This paper identifies health determinants in urban China applying Grossman model. Using wave of China Health and Nutrition Survey in 2000, we find that education has important positive effect on health, and cost of health care services has significantly negative impact. However, effects of wage rate and household income are insignificant. We also find that region is an important determinant of health. The body weight is also important, but unlike finding in developed countries, under-weight instead of over-weight is a better predictor for poor health. Our results suggest that male has better health than female does, and married couple has better health in urban China. |
| Keywords: | self-reported health status, Grossman model, ordered probit, China |
| JEL: | I12 J24 D12 |
| Date: | 2005–11 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp1835&r=sea |
| By: | Roberto Chang |
| Abstract: | This paper is an analysis of the simultaneous determination of financial default and political crises and its consequences. It focuses on a small open economy that faces a debt default decision. Crucially, this decision is made by a government that has superior information than the public about the social costs of default. Citizens can dismiss the government, and overrule its default decision, at the cost of a political crisis. If there is a divergence between the objectives of the government and its people, a political crisis may emerge in equilibrium. For this to be the case, the foreign debt must be large enough, and international reserves low. When this political equilibrium is seen as a part of a larger investment problem, there are equilibria in which crises are "only financial," and equilibria in which both default and political crises occur. In some cases, these two kinds of equilibria coexist and, in this sense, a loss of confidence by foreign lenders can exacerbate the likelihood of a political crisis. If so, international intervention in financial markets may ensure financial and political stability at little cost. |
| JEL: | F34 D72 |
| Date: | 2005–11 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:11779&r=sea |
| By: | Amartya Lahiri; Carlos A. Vegh |
| Abstract: | Central banks typically raise short-term interest rates to defend currency pegs. Higher interest rates, however, often lead to a credit crunch and an output contraction. We model this trade-off in an optimizing, first-generation model in which the crisis may be delayed but is ultimately inevitable. We show that higher interest rates may delay the crisis, but raising interest rates beyond a certain point may actually bring forward the crisis due to the large negative output effect. The optimal interest rate defense involves setting high interest rates (relative to the no defense case) both before and at the moment of the crisis. Furthermore, while the crisis could be delayed even further, it is not optimal to do so. |
| JEL: | F41 E52 |
| Date: | 2005–11 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:11791&r=sea |
| By: | Dale W. Jorgenson; Koji Nomura |
| Abstract: | This paper presents new data on the sources of growth for the Japanese economy over the period 1960- 2000. The principal innovation is the incorporation of detailed information for individual industries, including those involved in the production of computers, communications equipment, and electronic components as information technology equipment. We show that economic growth is dominated by investments and productivity growth in information technology, both for individual industries and the economy as a whole. We also show that the revival of total factor productivity growth accounts for the modest resurgence of the Japanese economy since 1995. |
| JEL: | C82 D24 E23 |
| Date: | 2005–11 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:11800&r=sea |
| By: | Dale W. Jorgenson; Kazuyuki Motohashi |
| Abstract: | In this paper we compare sources of economic growth in Japan and the United States from 1975 through 2003, focusing on the role of information technology (IT). We have adjusted Japanese data to conform to U.S. definitions in order to provide a rigorous comparison between the two economies. The adjusted data show that the share of the Japanese gross domestic product devoted to investment in computers, telecommunications equipment, and software rose sharply after 1995. The contribution of total factor productivity growth from the IT sector in Japan also increased, while the contributions of labor input and productivity growth from the Non-IT sector lagged far behind the United States. Our projection of potential economic growth in Japan from for the next decade is substantially below that in the United States, mainly due to slower growth of labor input. Our projections of labor productivity growth in the two economies are much more similar. |
| JEL: | D24 D30 O57 |
| Date: | 2005–11 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:11801&r=sea |
| By: | Hyeon-Seung Huh; Raghbendra Jha; Chung Mo Koo |
| Abstract: | For the East Asian countries, the total amount of government debt has risen sharply over the following several years in the wake of the Asian financial crisis. The purpose of this paper is to assess whether the current levels of government debt are sustainable for those severely attacked countries, namely Korea, Malaysia, Indonesia, the Philippines, and Thailand. Under the intertemporal budget constraint model, we test for fiscal sustainability and examine whether there was any discernible change in the behaviour of government debt following the East Asian crisis. Empirical analysis indicates that the levels of government debts are not sustainable in all counties under study. It also shows that the crisis contributes significantly to push the government debt in excess of its sustainable level. This urges policy attention for fiscal consolidation. |
| JEL: | E6 H5 H6 |
| Date: | 2005–11 |
| URL: | http://d.repec.org/n?u=RePEc:pas:camaaa:2005-23&r=sea |
| By: | Christian Hellwig (Department of Economics University of California Los Angeles); Arijit Mukherji |
| Date: | 2005 |
| URL: | http://d.repec.org/n?u=RePEc:red:sed005:172&r=sea |
| By: | Jeromin Zettelmeyer; Federico Sturzenegger |
| Keywords: | Sovereign Debt, Debt Crises, Debt Restructuring, Investor Losses |
| JEL: | F |
| Date: | 2005 |
| URL: | http://d.repec.org/n?u=RePEc:red:sed005:18&r=sea |
| By: | Andrea Prat; Amil Dasgupta (Accounting and Finance London School of Economics) |
| Date: | 2005 |
| URL: | http://d.repec.org/n?u=RePEc:red:sed005:222&r=sea |
| By: | Cyril Monnet; Erwan Quintin |
| Date: | 2005 |
| URL: | http://d.repec.org/n?u=RePEc:red:sed005:275&r=sea |
| By: | Cedric Tille (International Research Function Federal Reserve Bank of New York) |
| Keywords: | foreign assets, valuation effect, exchange rate |
| JEL: | F31 F41 F42 |
| Date: | 2005 |
| URL: | http://d.repec.org/n?u=RePEc:red:sed005:282&r=sea |
| By: | Craig Burnside; Martin Eichenbaum |
| Keywords: | Currency crisis, banking crisis, speculative attacks, seigniorage, fiscal reform, bailouts |
| JEL: | F31 |
| Date: | 2005 |
| URL: | http://d.repec.org/n?u=RePEc:red:sed005:429&r=sea |
| By: | Emine Boz (Economics University of Maryland) |
| Keywords: | financial crises, emerging markets, informational frictions, signal extraction |
| JEL: | F41 D82 G15 |
| Date: | 2005 |
| URL: | http://d.repec.org/n?u=RePEc:red:sed005:496&r=sea |
| By: | Paul Beaudry; Franck Portier (Economics Universite de Toulouse) |
| Keywords: | Stock Prices - Total Factor Productivity |
| JEL: | E3 |
| Date: | 2005 |
| URL: | http://d.repec.org/n?u=RePEc:red:sed005:515&r=sea |
| By: | Qing Liu; Shouyong Shi |
| Keywords: | Currency Area; Monetary Coordination |
| JEL: | F31 C78 |
| Date: | 2005 |
| URL: | http://d.repec.org/n?u=RePEc:red:sed005:575&r=sea |
| By: | R. Anton Braun (Faculty of Economics University of Tokyo); Daisuke Ikeda |
| Keywords: | Saving, Heterogeneity, general equilibrium |
| JEL: | E21 |
| Date: | 2005 |
| URL: | http://d.repec.org/n?u=RePEc:red:sed005:625&r=sea |
| By: | Selo Imrohoroglu; Kaiji Chen; Ayse Imrohoroglu (finance and business economics usc) |
| Keywords: | Growth Model, Total Factor Productivity, Saving Behavior |
| JEL: | E13 E22 |
| Date: | 2005 |
| URL: | http://d.repec.org/n?u=RePEc:red:sed005:747&r=sea |
| By: | Juha Seppala; Federico Ravenna |
| Keywords: | Term Structure of Interest Rates, Monetary Policy, Sticky Prices, Habit Formation, Expectations Hypothesis |
| JEL: | E43 E5 G12 |
| Date: | 2005 |
| URL: | http://d.repec.org/n?u=RePEc:red:sed005:804&r=sea |
| By: | Yong Kim; Hyeok Jeong (Economics University of Southern California) |
| Keywords: | Modern Transition, Sector-Specific Complementarity, TFP and Inequality Dynamics |
| JEL: | O11 O47 J31 |
| Date: | 2005 |
| URL: | http://d.repec.org/n?u=RePEc:red:sed005:831&r=sea |
| By: | Wen-Chi Liao |
| Keywords: | Outsourcing; Inequality; Segregation; |
| JEL: | F0 R12 R13 R23 |
| Date: | 2005 |
| URL: | http://d.repec.org/n?u=RePEc:red:sed005:904&r=sea |
| By: | Jean-Claude Maswana (Kyoto University) |
| Abstract: | Focused on the case of China’s financial development, the present discursive essay sets out to argue that if the Chinese financial system distorted the allocation of funds then economic growth could not be sustained and financial depth would remain deficient. The essay puts forward selected financial facts and policies, discusses their relevance in the particular context of China’s economic development goals and concludes that although the Chinese financial system is not developed according to the standards of industrialized countries, financial intermediation has nevertheless been efficient in terms of promoting savings and credit to the extent that might have been good enough to facilitate economic growth. Furthermore, in order to reconcile China’s financial efficiency-growth apparent paradox, the essay supports the view that analyzing China’s financial system using market-based standards may not be valid. |
| Keywords: | China, financial development, growth-finance nexus |
| JEL: | O P |
| Date: | 2005–11–22 |
| URL: | http://d.repec.org/n?u=RePEc:wpa:wuwpdc:0511024&r=sea |
| By: | Rummaya (Faculty of Economics, Airlangga University); Wirya Wardaya (Faculty of Economics, Airlangga University); Erlangga Agustino Landiyanto (Faculty of Economics, Airlangga University) |
| Abstract: | This study try to identify the â-convergence process among regions in East Java using panel data of 37 regencies & municipalities between 1983-2002, taking into account the presence of spatial heterogeneity and spillover effects. Detection of spatial regimes using G-I* statistics (Getis & Ord, 1995) on regional per capita GDP values in 1983 found cluster of high income regions (group of “rich”) in central & eastern part of East Java, and cluster of low income regions (group of “poor”) in western part. The result of OLS & GLS regression on absolute convergence model found the existence of â-divergence process of East Java in overall period (1983-2003), consistent with the ó convergence which showing upward trend (divergence). Meanwhile, the same divergence process is also found in absolute convergence equation estimated for each club, even though in slower rate than East Java divergence rate. Using the methodology proposed by Burn, Combes, & Renard (2002) this study founds the existence of negative spillover effects between regions in “rich” clubs and from “rich” clubs to the “poor” one, where the magnitude is greater in the latter case. The club of “poor” regions is diverging faster than the “rich”. This finding is robust in every convergence equation (with or without the spillover effects). The lack of diversity on East Java’s manufacturing industries (Santosa & Michael, 2005 and Landiyanto, 2005) seems contribute to its divergence process by engaging a competitive mode between regions. |
| Keywords: | â-convergence, divergence, spatial regimes, spillover effects |
| JEL: | C6 D5 D9 |
| Date: | 2005–11–20 |
| URL: | http://d.repec.org/n?u=RePEc:wpa:wuwpge:0511008&r=sea |
| By: | Pablo Bustelo (Elcano Royal Institute for International & Strategic Studies & Complutense University of Madrid) |
| Abstract: | China’s growing demand for oil is significantly changing the international geopolitics of energy, especially in the Asian Pacific region. The recent growth in oil consumption, combined with forecasts of increased oil imports (especially from the Middle East), have led to deep concern among Chinese leaders regarding their country’s energy security. They are responding in a number of different ways. In particular, they are determined to increase the security and reliability of oil imports by searching for new sources of supply, and to control purchases and transport lanes, while boosting national production at any cost. This is already causing tension and could lead to further disputes with the US and other big oil consumers, such as Japan and India, as well as with other Asian Pacific countries. However, enhanced cooperation among the big East Asian economies (China, Japan and South Korea) is also a possibility. This document first of all presents an overview of China’s energy sector, emphasising the strong growth in its energy demand to date and its potential for future growth. Secondly, we look at the oil sector, highlighting China’s growing dependence on imports. The third part deals with the Chinese perception of energy security in the oil sector. Finally, the fourth part focuses on the geopolitical implications for the Asian Pacific region of China’s search for oil. |
| Keywords: | China, energy consumption, energy production, oil consumption, oil production, oil imports, East Asia |
| JEL: | O13 Q41 Q43 |
| Date: | 2005–11–20 |
| URL: | http://d.repec.org/n?u=RePEc:wpa:wuwpot:0511005&r=sea |