|
on Urban and Real Estate Economics |
| By: | Dean Baker; Hye Jin Rho |
| Abstract: | This paper calculates savings from renting compared with owning a house purchased at the peak housing bubble years of 2006 or 2007 in 16 major metropolitan areas. (The appendix includes calculations for 100 cities, including these 16.) The analysis calculates the savings both before- and after-tax, allowing readers to see the impact on ownership costs of the mortgage interest and property tax deductions. Many of the homeowners currently facing foreclosure would likely be able to afford the market rent on their home. If Congress were to temporarily alter the foreclosure laws to allow foreclosed homeowners to remain in their homes as renters, it is likely that many would chose to take advantage of this opportunity. This path would offer savings for former homeowners, as well as help stabilize families and communities that are blighted by foreclosures. In addition, Right to Rent offers the advantage that it could immediately benefit all homeowners facing foreclosure without any bureaucracy and would require no taxpayer dollars. |
| Keywords: | right to rent, foreclosures, housing |
| JEL: | G G2 G21 G28 R R2 R21 |
| Date: | 2009–07 |
| URL: | http://d.repec.org/n?u=RePEc:epo:papers:2009-26&r=ure |
| By: | Gonzalez, Libertad (Universitat Pompeu Fabra); Ortega, Francesc (Universitat Pompeu Fabra) |
| Abstract: | We estimate empirically the effect of immigration on house prices and residential construction activity in Spain over the period 1998-2008. This decade is characterized by both a spectacular housing market boom and a stunning immigration wave. We exploit the variation in immigration across Spanish provinces and construct an instrument based on the historical location patterns of immigrants by country of origin. The evidence points to a sizeable causal effect of immigration on both prices and quantities in the housing market. Between 1998 and 2008, the average Spanish province received an immigrant inflow equal to 17% of the initial working-age population. We estimate that this inflow increased house prices by about 52% and is responsible for 37% of the total construction of new housing units during the period. These figures imply that immigration can account for roughly one third of the housing boom, both in terms of prices and new construction. |
| Keywords: | housing market, immigration, house prices, construction, Spain |
| JEL: | F22 J61 R21 R23 R31 |
| Date: | 2009–07 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp4333&r=ure |
| By: | Paul Hiebert (European Central Bank, Kaiserstrasse 29, D-60311 Frankfurt am Main, Germany.); Matthias Sydow (European Central Bank, Kaiserstrasse 29, D-60311 Frankfurt am Main, Germany.) |
| Abstract: | We apply a dynamic dividend-discount model to analyse unexpected housing returns in a panel of eight euro area countries which together comprise 90% of euro area GDP. The application of this model allows for a decomposition of house price movements into movements in rent (cash-flow) and expected return news components. The empirical application of the model involves the estimation of a panel vector autoregressive model (VAR) for four variables –excess return to housing, rents, the real interest rate and real disposable per capita income– using quarterly data over the period 1985-2007. This empirical investigation yields two main findings. First, the bulk of the variability of house price movements in the panel of countries analysed can be attributed to movements in the rental yield. Indeed, perturbations to rents appear to result in a one-to-one analogous movement in house prices over the long term once controlling for changes in expected returns. Second, evidence from the dynamic profile of shocks along with the negative co-movement between changing rental yield expectations and changing expected returns on housing assets would suggest that euro area house prices overreact to news. JEL Classification: R21, C33, G12. |
| Keywords: | House price, housing rental yield, return decomposition, panel VAR estimation, cash flow news. |
| Date: | 2009–03 |
| URL: | http://d.repec.org/n?u=RePEc:ecb:ecbwps:20091019&r=ure |
| By: | Alessandro Calza (European Central Bank, Kaiserstrasse 29, D-60311 Frankfurt am Main, Germany.); Tommaso Monacelli (IGIER, Università Bocconi, Via Sarfatti, 25 Milano, Italy.); Livio Stracca (European Central Bank, Kaiserstrasse 29, D-60311 Frankfurt am Main, Germany.) |
| Abstract: | We study how the structure of housing finance affects the transmission of monetary policy shocks. We document three main facts: first, the features of residential mortgage markets differ markedly across industrialized countries; second, and according to a wide range of indicators, the transmission of monetary policy shocks to residential investment and house prices is significantly stronger in those countries with larger flexibility/development of mortgage markets; third, the transmission to consumption is stronger only in those countries where mortgage equity release is common and mortgage contracts are predominantly of the variable-rate type. We build a two-sector DSGE model with price stickiness and collateral constraints and analyze how the response of consumption and residential investment to monetary policy shocks is affected by alternative values of two institutional features: (i) down-payment rate; (ii) interest rate mortgage structure (variable vs. fixed rate). In line with our empirical evidence, the sensitivity of both variables to monetary policy shocks increases with lower values of the down-payment rate and is larger under a variable- rate mortgage structure. JEL Classification: E21, E44, E52. |
| Keywords: | Housing finance, mortgage markets, collateral constraint, monetary policy. |
| Date: | 2009–07 |
| URL: | http://d.repec.org/n?u=RePEc:ecb:ecbwps:20091069&r=ure |
| By: | Ricardo M. Sousa (Economic Policies Research Unit (NIPE) and Department of Economics, University of Minho, Campus of Gualtar, 4710-057 Braga, Portugal.) |
| Abstract: | This paper estimates the wealth effects on consumption in the euro area as a whole. I show that: (i) financial wealth effects are relatively large and statistically significant; (ii) housing wealth effects are virtually nil and not significant; (iii) consumption growth exhibits strong persistence and responds sluggishly to shocks; and (iv) the immediate response of consumption to wealth is substantially different from the long- run wealth effects. By disaggregating financial wealth into its major components, the estimates suggest that wealth effects are particularly large for currency and deposits, and shares and mutual funds. In addition, consumption seems to be very responsive to financial liabilities and mortgage loans. JEL Classification: E21, E44, D12. |
| Keywords: | consumption, housing wealth, financial wealth. |
| Date: | 2009–05 |
| URL: | http://d.repec.org/n?u=RePEc:ecb:ecbwps:20091050&r=ure |
| By: | Isabel Vansteenkiste (European Central Bank, Kaiserstrasse 29, D-60311 Frankfurt am Main, Germany.); Paul Hiebert (European Central Bank, Kaiserstrasse 29, D-60311 Frankfurt am Main, Germany.) |
| Abstract: | This paper empirically assesses the prospects for house price spillovers in the euro area, where co-movement in house prices across countries may be particularly relevant given a general trend with monetary union toward increasing linkages in trade, financial markets, and general economic conditions. The application involves a Global VAR for three housing demand variables (real house prices, real per capita disposable income, and the real interest rate) on the basis of quarterly data for 10 euro area countries (Belgium, Germany, Ireland, Spain, France, Italy, the Netherlands, Austria, Portugal and Finland) over the period 1989-2007. The results suggest limited house price spillovers in the euro area, with evidence of some overshooting in the first 1-3 years after the shock, followed by a long run aggregate euro area impact of country-specific changes in real house prices related in part to the country's economic weight. This contrasts with the impacts of a shock to domestic long-term interest rates, with the latter causing a permanent shift in house prices after around 3 years. Underlying this aggregate development are rather heterogeneous house price spillovers at the country level, with a strong importance for economic weight in the euro area in governing their general magnitude, while geographic proximity appears to also play a role. JEL Classification: R21, R31, C32. |
| Keywords: | House price, Global VAR (GVAR), International linkages. |
| Date: | 2009–03 |
| URL: | http://d.repec.org/n?u=RePEc:ecb:ecbwps:20091026&r=ure |
| By: | Luca Agnello (University of Palermo, Department of Economics, Business and Finance (SEAF), Corso Re Ruggero, 14, I-90128 Palermo, Italy.); Ludger Schuknecht (European Central Bank, Kaiserstrasse 29, D-60311 Frankfurt am Main, Germany.) |
| Abstract: | This study looks at real estate price booms and busts in industrialised countries. It identifies major and persistent deviations from long term trends for 18 countries and estimates the probabilities of their occurrence using a Random Effects Panel Probit model over the period 1980-2007. It finds that 1) most recent housing booms have been very persistent and of a significant magnitude; 2) there appears to be a strong correlation between the persistence and magnitude of booms and subsequent busts; 3) economic costs (in terms of GDP losses during the post-boom phase) depend significantly on the magnitude and duration of the boom and money and credit developments during that period; 4) a number of policy variables, including short term interest rates, local and global money and credit developments, and the incidence of mortgage market deregulation affect significantly the probability of experiencing booms and busts; and 5) the model is quite successful in identifying booms and busts early on. JEL Classification: E32, R21, R31. |
| Keywords: | house prices, housing market, booms and busts. |
| Date: | 2009–07 |
| URL: | http://d.repec.org/n?u=RePEc:ecb:ecbwps:20091071&r=ure |
| By: | Ingo Fender (Bank for International Settlements (BIS), Monetary and Economic Department, Centralbahnplatz 2, 4002 Basel, Switzerland.); Martin Scheicher (European Central Bank, Kaiserstrasse 29, D-60311 Frankfurt am Main, Germany.) |
| Abstract: | This paper investigates the market pricing of subprime mortgage risk on the basis of data for the ABX.HE family of indices, which have become a key barometer of mortgage market conditions during the recent financial crisis. After an introduction into ABX index mechanics and a discussion of historical pricing patterns, we use regression analysis to establish the relationship between observed index returns and macroeco-nomic news as well as market based proxies of default risk, interest rates, liquidity and risk appetite. The results imply that declining risk appetite and heightened concerns about market illiquidity - likely due in part to significant short positioning activity - have provided a sizeable contribution to the observed collapse in ABX prices since the summer of 2007. In particular, while fundamental factors, such as indicators of housing market activity, have continued to exert an important influence on the subordinated ABX indices, those backed by AA and AAA exposures have tended to react more to the general deterioration of the financial market environment. This provides further support for the inappropriateness of pricing models that do not sufficiently account for factors such as risk appetite and liquidity risk, particularly in periods of heightened market pressure. In addition, as related risk premia can be captured by unconstrained investors, ABX pricing patterns appear to lend support to government measures aimed at taking troubled assets off banks’ balance sheets - such as the US Troubled Asset Relief Program (TARP) in its original form. JEL Classification: E43, G12, G13, G14. |
| Keywords: | ABX index, mortgage-backed securities, pricing, risk premia. |
| Date: | 2009–05 |
| URL: | http://d.repec.org/n?u=RePEc:ecb:ecbwps:20091056&r=ure |
| By: | Frauke Skudelny (European Central Bank, Kaiserstrasse 29, D-60311 Frankfurt am Main, Germany.) |
| Abstract: | This paper adds to the literature on wealth effects on consumption by disentangling financial wealth effects from housing wealth effects for the euro area. We use two macro-datasets for our estimations, one on the aggregate euro area for the period 1980-2006, and one on the individual euro area countries from1995-2006, using panel data techniques. The impact of all wealth variables on euro area consumption is significant and positive in most specifications for both datasets. The marginal propensity to consume (MPC) out of financial wealth is roughly in line with the literature, with 2.4 to 3.6 cents per euro of financial wealth spent on consumption according to the estimations with euro area aggregate data. However, the panel estimation yields somewhat lower results (0.6 to 1.1 cents). The MPC out of nominal housing wealth lies between 0.7 to 0.9 cents per euro for both datasets. When specifying housing wealth in real terms, i.e. when taking out the effect of volatile house prices, we find similar effects in the times series estimation while the MPC is larger in the panel estimation (2.5 cents). JEL Classification: E21 |
| Keywords: | Housing wealth, financial wealth, consumption, euro area. |
| Date: | 2009–05 |
| URL: | http://d.repec.org/n?u=RePEc:ecb:ecbwps:20091057&r=ure |
| By: | Gennadi Kazakevitch; Luc Borrowman |
| Abstract: | The broadly accepted housing affordability indicator is calculated as the housing cost-to income ratio. But this only takes into consideration two averaged variables: household housing costs and household income, both of which are ambiguous and misleading as an across-the- board average. An alternative system of housing affordability measurement is suggested in this paper based on disposable income left after accounting for housing expenses. In contrary to the broadly used conventional indicator, the proposed measurement takes into account different income groups, ages and types of households as well as the level of housing consumption. This indicator, combined with the "after housing poverty line" allows for the singling out of groups of households most in need of housing help, and therefore develop more informed housing polices. Based on the proposed system of measurement, an extensive empirical work is presented using the series of the ABS Income and Housing Surveys. The results demonstrate, from a new angle, the dynamics of housing affordability in Australia during the recent decade which leads to policy implications different to polices currently in use. |
| Keywords: | Housing affordability measurement, income after housing costs. |
| JEL: | H20 R31 R38 |
| Date: | 2009–08 |
| URL: | http://d.repec.org/n?u=RePEc:mos:moswps:2009-08&r=ure |
| By: | Ilenia Epifani; Rosella Nicolini |
| Abstract: | This paper aims at providing a Bayesian parametric framework to tackle the accessibility problem across space in urban theory. Adopting continuous variables in a probabilistic setting we are able to associate with the distribution density to the Kendall's tau index and replicate the general issues related to the role of proximity in a more general context. In addition, by referring to the Beta and Gamma distribution, we are able to introduce a differentiation feature in each spatial unit without incurring in any a-priori definition of territorial units. We are also providing an empirical application of our theoretical setting to study the density distribution of the population across Massachusetts. |
| Keywords: | Agglomerations, Bayesian inference, Distance, Gibbs sampling, Kendall's tau index, Population density. |
| JEL: | C40 R14 |
| Date: | 2009–07–22 |
| URL: | http://d.repec.org/n?u=RePEc:aub:autbar:776.09&r=ure |
| By: | George Shih-Ku Chen |
| Abstract: | We investigate the impact of agglomeration economies on the distribution of Taiwanese investment in China for the period 1996-2005. We find that the uneven distribution of Taiwanese investment can be explained by agglomeration economies related to industrial linkages, labour-market pooling and monitoring costs. Furthermore, we find evidence that the nature of agglomeration forces attracting Taiwanese investment not only differs across regions but also changes over time. Importantly, we find mild evidence that this investment is affected by a `market crowding effect', or that the benefit from agglomeration decreases once the market size exceeds a critical threshold. |
| Keywords: | Agglomeration economies; China; Taiwanese investment |
| Date: | 2009–08 |
| URL: | http://d.repec.org/n?u=RePEc:mos:moswps:2009-01&r=ure |
| By: | Dean Baker |
| Abstract: | This issue brief discusses a plan that would effectively deal with the mounting problem of home foreclosures in this country. The main point of the plan is that those who are facing foreclosure should have the option to remain in their home for a substantial period of time as renters. There are also numerous advantages in enacting Right to Rent legislation: it is simple, it can take effect immediately, it requires no taxpayer dollars, and it creates no new bureaucracy. |
| Keywords: | right to rent, foreclosures, housing |
| JEL: | G G2 G21 G28 R R2 R21 |
| Date: | 2009–07 |
| URL: | http://d.repec.org/n?u=RePEc:epo:papers:2009-25&r=ure |
| By: | Jaakko Simonen; Philip McCann |
| Abstract: | This paper investigates the role played by the sectoral and geographical mobility of labour in the promotion of industrial innovations. Knowledge can be transferred between firms by inter-firm interactions and interfirm cooperation. In addition, knowledge can also be transferred between firms by labour mobility. In order to examine these issues we employ a unique innovation dataset from Finland which combines firm specific information about the innovation performance of the firms along with their individual characteristics, as well as firm specific information regarding the sectoral and geographical origins of their recent labour acquisitions. Analyzing this data allows us to identify the different roles which the geography of knowledge spillovers and exchanges and the geography of labour markets play in the innovation process. |
| Keywords: | innovation; labour; mobility; R&D; cooperation |
| JEL: | O31 J60 R30 |
| Date: | 2009–08 |
| URL: | http://d.repec.org/n?u=RePEc:mos:moswps:2007-29&r=ure |
| By: | Sebastian Hauptmeier (European Central Bank, Kaiserstrasse 29, D-60311 Frankfurt am Main, Germany.); Ferdinand Mittermaier (Ludwig-Maximilians-Universität München, Geschwister-Scholl-Platz 1, D-80539 München, Germany.); Johannes Rincke (Ludwig-Maximilians-Universität München, Geschwister-Scholl-Platz 1, D-80539 München, Germany.) |
| Abstract: | We set up a model to characterize the reaction functions of governments competing for mobile capital by simultaneously setting both the business tax rate as well as the level of provision of a productive public input. Using a rich data set of local jurisdictions, we then test the predictions of the model with respect to the nature of strategic interaction among governments. Our findings from efficient estimation of a system of spatially interrelated equations for both policy instruments support the notion that local governments use both the business tax rate and public inputs to compete for capital. In particular, we find that if neighbors cut their tax rates, governments try to restore competitiveness by lowering their own tax and increasing spending on public inputs. If neighbors provide more infra-structure, governments react by increasing their own spending on public inputs. JEL Classification: H72, H77, C72. |
| Keywords: | Tax competition, public input competition, system estimation. |
| Date: | 2009–03 |
| URL: | http://d.repec.org/n?u=RePEc:ecb:ecbwps:20091033&r=ure |
| By: | Tsujita, Yuko |
| Abstract: | This paper showed the basic educational status of slum children between 5 and 14 years old. The attendance ratio of slum children is much lower than that of children in Delhi as a whole. Parental perception of education and financing education are the major constraints. Even if children are attending schools, the majority of them are over-aged. There are both demand and supply side reasons for discouraging slum children from attending schooling. As opposed to school-based surveys in previous literature, children in slums are more likely to go to government schools rather than low-fee paying private schools. Some policies are suggested. |
| Keywords: | Education, Slum, India, Children, Poverty |
| JEL: | I20 I21 |
| Date: | 2009–03 |
| URL: | http://d.repec.org/n?u=RePEc:jet:dpaper:dpaper199&r=ure |
| By: | Dieter Gerdesmeier (European Central Bank, Kaiserstrasse 29, D-60311 Frankfurt am Main, Germany.); Barbara Roffia (European Central Bank, Kaiserstrasse 29, D-60311 Frankfurt am Main, Germany.); Hans-Eggert Reimers (Hochschule Wismar, Postfach 1210, D-23952 Wismar, Germany.) |
| Abstract: | This paper contributes to the literature on the properties of money and credit indicators for detecting asset price misalignments. After a review of the evidence in the literature on this issue, the paper discusses the approaches that can be considered to detect asset price busts. Considering a sample of 17 OECD industrialised countries and the euro area over the period 1969 Q1 – 2008 Q3, we construct an asset price composite indicator which incorporates developments in both the stock price and house price markets and propose a criterion to identify the periods characterised by asset price busts, which has been applied in the currency crisis literature. The empirical analysis is based on a pooled probit-type approach with several macroeconomic monetary, financial and real variables. According to statistical tests, credit aggregates (either in terms of annual changes or growth gap), changes in nominal long-term interest rates and investment-to-GDP ratio combined with either house prices or stock prices dynamics turn out to be the best indicators which help to forecast asset price busts up to 8 quarters ahead. JEL Classification: E37, E44, E51. |
| Keywords: | Asset prices, house prices, stock prices, financial crisis, asset price busts, probit models, monetary aggregates, credit aggregates. |
| Date: | 2009–07 |
| URL: | http://d.repec.org/n?u=RePEc:ecb:ecbwps:20091068&r=ure |
| By: | Simon Loretz (Oxford University Centre for Business Taxation); Padraig J. Moore (Deutsche Bank London) |
| Abstract: | Firms' tax planning decisions, similar to their other operational decisions, are made in a competitive environment. Various stakeholders observe the tax payments and evaluate these against the relevant peer group, which creates interdependencies in the tax planning activities of firms. Introducing the concept of reputational loss we show the positive interdependence in a theoretical model and test it in a spatial econometric model. Empirical evidence suggests that benchmarking takes place both within countries and within industries, however for the latter it is important to include firms in large non-EU OECD countries. Further, the analysis shows that spatial interdependence is stronger for the largest firms and if they have an average effective tax rate above the statutory tax rate. |
| Keywords: | Corporate Taxation; Benchmarking; Tax Competition; Spatial Econometrics |
| JEL: | H25 M40 |
| Date: | 2009 |
| URL: | http://d.repec.org/n?u=RePEc:btx:wpaper:0912&r=ure |
| By: | Tuomas A. Peltonen (Corresponding author: European Central Bank, Kaiserstrasse 29, 60311 Frankfurt am Main, Germany.); Ricardo M. Sousa (University of Minho, Department of Economics and Economic Policies Research Unit (NIPE), Campus of Gualtar, 4710-057 - Braga, Portugal; London School of Economics, Department of Economics and Financial Markets Group (FMG), Houghton Street, London WC2 2AE, United Kingdom; European Central Bank, Kaiserstrasse 29, D-60311 Frankfurt am Main, Germany.); Isabel S. Vansteenkiste (European Central Bank, Kaiserstrasse 29, 60311 Frankfurt am Main, Germany.) |
| Abstract: | We build a panel of 14 emerging economies to estimate the magnitude of housing, stock market, and money wealth effects on consumption. Using modern panel data econometric techniques and quarterly data for the period 1990/1-2008/2, we show that; (i) wealth effects are statistically significant and relatively large in magnitude; (ii) housing wealth effects tend to be smaller for Asian emerging markets while stock market wealth effects are, in general, smaller for Latin American countries; (iii) housing wealth effects have increased for Asian coutries in recent years; and (iv) consumption reacts stronger to negative than to positive shocks in housing and financial wealth. JEL Classification: E21, E44, D12. |
| Keywords: | Wealth effects, consumption, emerging markets. |
| Date: | 2009–01 |
| URL: | http://d.repec.org/n?u=RePEc:ecb:ecbwps:20091000&r=ure |
| By: | Ando, Asao; Meng, Bo; Chao, Qu |
| Abstract: | The Armington Assumption in the context of multi-regional CGE models is commonly interpreted as follows: Same commodities with different origins are imperfect substitutes for each other. In this paper, a static spatial CGE model that is compatible with this assumption and explicitly considers the transport sector and regional price differentials is formulated. Trade coefficients, which are derived endogenously from the optimization behaviors of firms and households, are shown to take the form of a potential function. To investigate how the elasticity of substitutions affects equilibrium solutions, a simpler version of the model that incorporates three regions and two sectors (besides the transport sector) is introduced. Results indicate: (1) if commodities produced in different regions are perfect substitutes, regional economies will be either autarkic or completely symmetric and (2) if they are imperfect substitutes, the impact of elasticity on the price equilibrium system as well as trade coefficients will be nonlinear and sometimes very sensitive. |
| Keywords: | Armington Assumption, Spatial CGE, Elasticity of substitution, Trade coefficient, Econometric model |
| JEL: | C68 R13 R15 |
| Date: | 2009 |
| URL: | http://d.repec.org/n?u=RePEc:jet:dpaper:dpaper204&r=ure |
| By: | Cullmann, Astrid (DIW Berlin (German Institute for Economic Research), Germany); Farsi, Mehdi (Centre for Energy Policy and Economics (CEPE), Department of Management, Technology, and Economics, ETH Zürich, Switzerland); Filippini Massimo (Istituto Mecop, Facoltà di Scienze economiche, Università della Svizzera italiana, Svizzera) |
| Abstract: | We analyze the technical efficiency of German and Swiss urban public transport companies by means of SFA. In transport networks we might face different network structures or complexities, not observed, but influencing the production process. The unobserved factors are typically modeled as separable factors. However, we argue that the entire production process is organized around different network structures. Therefore, they are inevitably non-separable from the observed inputs and outputs. The adopted econometric model is a random coefficient stochastic frontier model. We estimate an input distance function for the years 1991 to 2006. The results underline the presence of unobserved non-separable factors. |
| Keywords: | distance function, unobserved heterogeneity, technical efficiency, bus industry, panel data |
| JEL: | D24 L43 L92 |
| Date: | 2009–07 |
| URL: | http://d.repec.org/n?u=RePEc:lug:wpaper:0904&r=ure |
| By: | Tanaka, H.; Hidaka, M. |
| Abstract: | We here expand the static tax competition models in symmetric small regions, which were indicated by Zodrow and Mieszkowski (1986) and Wilson (1986), to a dynamic tax competition model in large regions, taking consideration of the regional asymmetry of productivity of public capital and the existence of capital accumulation. The aim of this paper is to verify how the taxation policy affects asymmetric equilibrium based on a simulation analysis using an overlapping generations model in two regions. It is assumed that the public capital as a public input is formed on the basis of the capital tax of local governments and the lump-sum tax of the central government. As demonstrated in related literature, the optimal capital tax rate should become zero when the lump-sum tax is imposed only on older generations, however, the optimal tax rate may become positive when it is imposed proportionally on younger and older generations. In the asymmetric equilibrium, several cooperative solutions can possibly exist which can achieve a higher welfare standard than the actualized cooperative solution either in Region1 or 2.. |
| Keywords: | Tax competition, Capital taxation, Capital accumulation, Public inputs, Infrastructure |
| JEL: | H21 H42 H71 H77 R13 R53 |
| Date: | 2009–07–30 |
| URL: | http://d.repec.org/n?u=RePEc:cam:camdae:0929&r=ure |
| By: | Lionel Frost |
| Abstract: | In current debates about regional Australia, many observers point to a gap in incomes and access to services between Australia’s capital cities and the rest of the nation. Supporters of this view tend to see government intervention as necessary to reverse the declining fortunes of regions and encourage industries to relocate away from congested capital cities. An alternative view is that regional Australia has become differentiated, which suggests that more flexible government intervention, targeting regions that are capable of driving growth in local economies, is warranted. This paper considers the ways in which a historical perspective might shed light on this debate. An overview of the economic history of the Inland Corridor in the 19th and 20th centuries reveals complex patterns of conditions that varied across space and over time. A dense network of small towns, established when transport and manufacturing technologies were simple, provided a connection between primary producers and external markets. After World War I, technological and global forces weakened the traditional link between farm output and economic activity and left country towns vulnerable to decline. None of these trends is explained adequately by the ‘divide’ that contemporary observers perceived between politically powerful, parasitic capital cities and their resource-starved hinterlands. This suggests that it is more appropriate to see the regional Australia of today as an evolving system of conditions, with some regions diversifying and responding to new economic opportunities more effectively than others, rather than a sector that is in general decline. |
| Date: | 2009–08 |
| URL: | http://d.repec.org/n?u=RePEc:mos:moswps:2007-14&r=ure |
| By: | Uwe Cantner (Friedrich-Schiller-University, School of Economics and Business Administration, Jena); Andreas Meder (Thuringian Ministry of Economic Affairs, Erfurt) |
| Abstract: | The literature on "Innovation Systems" is divided into several directories. Dif- ferences occur through the definition of the system's borders. This paper intro- duces a methodology how to differentiate between regional and technological effects of cooperative innovation activities and analyzes furthermore how dif- ferent dimensions of regional knowledge affect the regional effects on coopera- tive innovation activities. We find evidence that the related variety of knowl- edge available within a region and its combination with a proxy of the amount of knowledge foster regional effects of cooperative innovation activities. Addi- tionally, we find that the development of German regions fits with the sugges- tions of the Regional Innovation System (RIS) approach. |
| Keywords: | regional development, regional effects of cooperative behavior, knowledge, related variety of knowledge |
| JEL: | C30 L14 O32 |
| Date: | 2009–08–06 |
| URL: | http://d.repec.org/n?u=RePEc:jrp:jrpwrp:2009-064&r=ure |
| By: | Niebuhr, Annekatrin (Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany]); Granato, Nadia (Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany]); Haas, Anette (Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany]); Hamann, Silke (Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany]) |
| Abstract: | "Differences in regional labour market conditions are still pronounced in Germany, especially between the Eastern and the Western part. Traditional neoclassical models imply that labour mobility should reduce disparities. In contrast, models that include externalities or selective migration suggest that regional differences might well increase due to interregional migration of workers. We investigate the impact of labour mobility on regional disparities in Germany between 1995 and 2005. Considering the impact of migration as well as commuting, effects on regional wages and unemployment are estimated. Our results suggest that labour mobility tends to reduce disparities; however, we find significant effects only on unemployment dispari-ties." (Autorenreferat, IAB-Doku) |
| JEL: | C23 J61 R23 |
| Date: | 2009–07–30 |
| URL: | http://d.repec.org/n?u=RePEc:iab:iabdpa:200915&r=ure |
| By: | Erik Stam |
| Abstract: | Entrepreneurship is a fundamental driver of economic evolution. It is also a distinctly spatially uneven process, and thus an important explanation of the uneven economic development of regions and nations. Not surprisingly, entrepreneurship is a key element of evolutionary economics (Schumpeter 1934; Witt 1998; Grebel et al. 2003; Metcalfe 2004; Grebel 2007) and has been recognized as an important element in explaining (regional) economic development (Acs and Armington 2004; Audretsch et al. 2006; Fritsch 2008). This means that the explanation of regional variations in entrepreneurship has also become an important issue. Even more so because there are pronounced differences within and between nations in rates of entrepreneurship and in their determinants (Bosma and Schutjens 2008), and these differences tend to be persistent over time, reflecting path dependence in industry structure (Brenner and Fornahl 2008), institutions (Casper 2007) and culture (Saxenian 1994) that vary widely across regions and countries, but are relatively inert over time. Introducing entrepreneurship into evolutionary economic geography means that the traditional focus on firms is complemented with a focus on individuals. This paper is an inquiry into the role of entrepreneurship in evolutionary economic geography. The focus is on how and why entrepreneurship is a distinctly spatially uneven process. We will start with a discussion on the role of entrepreneurship in the theory of economic evolution. Next, we will review the empirical literature on the geography of entrepreneurship. The paper concludes with a discussion of a future agenda for the study of entrepreneurship within evolutionary economic geography. |
| Keywords: | Length 23 pages |
| Date: | 2009–07 |
| URL: | http://d.repec.org/n?u=RePEc:esi:evopap:2009-07&r=ure |
| By: | Huynh Truong Huy (Center for Migration and Intercultural Studies, Antwerpen University, Belgium) |
| Abstract: | <p>This paper reports the results of a survey from 148 households in the Mekong Delta regarding the household's decision of migration. Recent studies of migration indicated that a decision of migration for a certain person is not made individually by himself, but it is often made with impacts from other members in family. The logistic regression model is applied in this paper to examine the determinants of decision of migration to both migration and non-migration households.</p><p>According to the descriptive measure, it is found that the decision of migration for a typical household is significantly associated with the factors, namely "push" and "pull" factors. Among those are lack of job and low wages in home village, landless, job opportunities, higher wages and links to relatives from urban areas. Furthermore, the result of the estimated model displays the household's migration decision is strongly positively associated with household size, housing status, landless, but negative to number of dependants, plot size and income from non-farming activity.</p> |
| Keywords: | Vietnam, Rural, Urban, Migration, Mekong Delta, household |
| Date: | 2009 |
| URL: | http://d.repec.org/n?u=RePEc:dpc:wpaper:1709&r=ure |
| By: | Robert Rice |
| Abstract: | There is a very real danger that the transition from the Construction Boom in 2009 to a rapidly growing sustainable normal economy in Aceh will not happen unless both preventive and effective constructive measures are implemented during the coming two years. Instead what could easily happen is a collapse into a deep recession caused by the economy of Aceh being uncompetitive relative to the rest of Indonesia because of its high costs and because in anticipation of this high cost economy situation insufficient investments were made by the private sector in 2006 and the coming two years. |
| Date: | 2009–08 |
| URL: | http://d.repec.org/n?u=RePEc:mos:moswps:2007-07&r=ure |
| By: | Mark Mink; Jochen Mierau |
| Abstract: | We present a new method to examine financial contagion, defined as a sudden strengthening of shock transmission between financial markets. In particular, we develop a correlation-like measure of synchronicity between markets that is straightforward to implement while being insensitive to heteroskedasticity of market returns. In fact, synchronicity would perfectly coincide with the dynamic conditional correlation (DCC) coefficient if the latter could be calculated using the `true' models for the variance and covariance of the market returns. When analysing the 1997 East Asian crisis and the current sub-prime mortgage crisis, we find no evidence that stock market returns are more contagious during periods of turmoil than during tranquil times. |
| Keywords: | Contagion; Heteroskedasticity; Dynamic Conditional Correlation; Sub-prime Crisis; East Asian Crisis. |
| JEL: | C14 F36 G15 |
| Date: | 2009–07 |
| URL: | http://d.repec.org/n?u=RePEc:dnb:dnbwpp:217&r=ure |
| By: | Yu, Li; Artz, Georgeanne M. |
| Abstract: | This paper investigates entrepreneurship of migrants and their location choice in attempt to draw connections between migration and economic development, especially the role of business formation in rural development. Rural entrepreneurship is firstly attempted to be better understood form perspectives of individual people’s migration, human capital, social capital and family background. The study uses a recent survey on alumni of Iowa State University. We find that social capital and social networks established in one’s home region are shown to be a strong factor in location choice of entrepreneurs. Entrepreneurs from rural origins tend to choose to start their businesses in rural areas in general and half of entrepreneurs migrate back to their home in particular to take local comparative advantages. Rural entrepreneurs are also more likely to obtain financial support from family members, friends and local banks to start a business. |
| Date: | 2009–07–27 |
| URL: | http://d.repec.org/n?u=RePEc:isu:genres:13095&r=ure |
| By: | Vittorio , Daniele |
| Abstract: | This paper offers a review of the effects of organized crime on regional economic development, with particular reference to the case of Italy. After reviewing the empirical studies that analyse the relationship between crime and economic development, the paper examines the regional distribution and the social costs of some crimes (in particular extortion) that can be linked to mafia type criminality. |
| Keywords: | Organized crime; Italy; economic development; costs of crime |
| JEL: | K49 K42 R59 |
| Date: | 2009–04 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:16547&r=ure |
| By: | Matthew Sherman |
| Abstract: | This paper looks at the trends in activity at the Federal Reserve’s newly-created special lending facilities, hoping to provide a better understanding of their operation and significance within financial markets. These facilities were created in response to the financial crisis and have expanded the Fed's balance sheet by over $1 trillion in terms of total assets. This sum is larger than the total price tag of the recent federal stimulus as well as the bank bailout authorized by the TARP. Yet both of these government responses have received enormously more public scrutiny than any of the actions taken by the Federal Reserve. |
| Keywords: | Federal Reserve, special lending facilities |
| JEL: | G G2 G21 G24 G28 H H2 H25 E E5 E58 |
| Date: | 2009–07 |
| URL: | http://d.repec.org/n?u=RePEc:epo:papers:2009-24&r=ure |
| By: | Nattavudh Powdthavee; ; |
| Abstract: | This paper is the first of its kind to estimate the exogenous effect of schooling on reduced blood pressure and the incidence of hypertension. Using the changes of the minimum school-leaving age in the United Kingdom from age 14 to 15 in 1947, and from age 15 to 16 in 1973, as instruments, the IV-probit estimates imply that completing an extra year of schooling reduces the probability of developing subsequent hypertension by approximately 5%-11% points. The correct estimates of the LATE for schooling indicate the presence of a large and negative bias in the least square/probit estimates of schooling-health relationship. |
| Keywords: | blood pressure; compulsory schooling; biomarker; IV; hypertension; health |
| JEL: | H1 I1 I2 |
| URL: | http://d.repec.org/n?u=RePEc:yor:yorken:09/14&r=ure |
| By: | William R. Kerr (Harvard Business School, Entrepreneurial Management Unit); Ramana Nanda (Harvard Business School, Entrepreneurial Management Unit) |
| Abstract: | We examine the effect of US branch banking deregulations on the entry size of new firms using micro-data from the US Census Bureau. We find that the average entry size for startups did not change following the deregulations. However, this result masks the differences in entry size among startups that failed within three years of entry and those that survived for four years or more. Long-term entrants started at a 2% larger size relative to their size in their fourth year, while churning entrants were no larger. Our results suggest that the banking deregulations had two distinct effects on the product market. On the one hand, they allowed entrants to compete more effectively against incumbents by reducing financing constraints and facilitating their entry at larger firm sizes. On the other hand, the process of lowering financing constraints democratized entry and created a lot more churning among entrants, particularly at the low end of the size distribution. Our results highlight that this large-scale entry at the extensive margin can obscure the more subtle intensive margin effects of changes in financing constraints. |
| Keywords: | entrepreneurship, entry size, financial constraints, banking. |
| JEL: | E44 G21 L26 L43 M13 |
| Date: | 2009–08 |
| URL: | http://d.repec.org/n?u=RePEc:hbs:wpaper:10-010&r=ure |
| By: | Cristina Checherita (George Mason University, School of Public Policy, 3401 Fairfax Drive, MS 3B1, Arlington, VA 22201, USA.); Christiane Nickel (European Central Bank, Kaiserstrasse 29, D-60311 Frankfurt am Main, Germany.); Philipp Rother (European Central Bank, Kaiserstrasse 29, D-60311 Frankfurt am Main, Germany.) |
| Abstract: | This paper provides evidence on the role of net fiscal transfers to households and EU structural funds for per-capita output convergence across a large sample of European regions during the period 1995-2005. We find that net fiscal transfers, while achieving regional redistribution, seem to impede output growth and promote an "immiserising convergence" - output growth rates in poor receiving regions decline by less than in rich paying regions. EU structural and cohesion funds spent during 1994-1999 had a positive, but slight, impact on future economic growth, mainly through the human development component. JEL Classification: E62, R11, R23. |
| Keywords: | Fiscal policy, convergence, regional economic growth, regional migration. |
| Date: | 2009–03 |
| URL: | http://d.repec.org/n?u=RePEc:ecb:ecbwps:20091029&r=ure |
| By: | Hensen Maud M.; Vries M. Robert de; Cörvers Frank (ROA rm) |
| Abstract: | In this article we investigate the relationship between geographic mobility andeducation-job mismatch in the Netherlands. We focus on the role of geographicmobility in reducing the probability of graduates working (i) jobs below theireducation level; (ii) jobs outside their study fi eld; (iii) part-time jobs; (iv) fl exiblejobs; or (v) jobs paid below the wage expected at the beginning of the career. For thispurpose we use data on secondary and higher vocational education graduates in theperiod 1996–2001. We show that graduates who are mobile have higher probabilityof fi nding jobs at the acquired education level than those who are not. Moreover,mobile graduates have higher probability of fi nding full-time or permanent jobs.Th is suggests that mobility is sought to prevent not only having to take a job belowthe acquired education level, but also other education-job mismatches; graduates arespatially fl exible particularly to ensure full-time jobs. |
| Keywords: | education, training and the labour market; |
| Date: | 2009 |
| URL: | http://d.repec.org/n?u=RePEc:dgr:umaror:2009012&r=ure |
| By: | Lev Freinkman; Konstantin A. Kholodilin; Ulrich Thießen |
| Abstract: | The effects of inter-government fiscal arrangements on variation in regional economic growth are analyzed for Russia, a country with large cross-regional differences and considerable fiscal redistribution. Moreover, fiscal reforms implemented in the first half of 2000s, which followed to some extent scientific advice, make analysis of this case particularly interesting. We observe that post-reform fiscal redistribution became more rational and this resulted in fewer incentive distortions. We found no negative association between federal transfers and regional growth. Furthermore, there are no major differences between donor and recipient regions in the way how inter-governmental fiscal arrangements influence regional growth. Overall, fiscal policy variables have become less important growth determinants than it was the case in the 1990s. Still further reforms in federalism arrangements would be desirable. |
| Keywords: | Fiscal equalization, inter-governmental finance reform, Russian regions, extreme bounds analysis |
| JEL: | C21 E62 H77 R11 |
| Date: | 2009 |
| URL: | http://d.repec.org/n?u=RePEc:diw:diwwpp:dp912&r=ure |