How large can debt get before triggering a crisis? Since debt is the expected present value of future primary surpluses, the answer depends on a country’s technical and political ability to raise future primary surpluses. However, countries do not raise the primary surplus to its peak and maintain the peak forever, the assumption implicit in the standard practice of setting maximum debt at the present value of the peak surplus. We estimate fiscal feedback rules for seven high-debt developed countries and find an increase in debt creates a sustained increase in the primary surplus, with the primary surplus reaching a peak in the future. Therefore, our implied debt limit is much lower than the standard measure. We estimate debt limits following the global financial crisis in 2008 and find substantial heterogeneity. We separate countries into risk categories based on fiscal space. Greece and Portugal eroded their fiscal space several years, prior to their fiscal crises, placing them in the highest risk category and predicting the crises that followed. Canada and Belgium maintained large enough fiscal space to achieve safe status. Other countries reduced fiscal space, with France and Spain eroding fiscal space in 2014, warning of future crises.
{"title":"Identifying countries at risk of fiscal crises: High‐debt developed countries","authors":"Betty C. Daniel, Christos Shiamptanis","doi":"10.1111/caje.12600","DOIUrl":"https://doi.org/10.1111/caje.12600","url":null,"abstract":"How large can debt get before triggering a crisis? Since debt is the expected present value of future primary surpluses, the answer depends on a country’s technical and political ability to raise future primary surpluses. However, countries do not raise the primary surplus to its peak and maintain the peak forever, the assumption implicit in the standard practice of setting maximum debt at the present value of the peak surplus. We estimate fiscal feedback rules for seven high-debt developed countries and find an increase in debt creates a sustained increase in the primary surplus, with the primary surplus reaching a peak in the future. Therefore, our implied debt limit is much lower than the standard measure. We estimate debt limits following the global financial crisis in 2008 and find substantial heterogeneity. We separate countries into risk categories based on fiscal space. Greece and Portugal eroded their fiscal space several years, prior to their fiscal crises, placing them in the highest risk category and predicting the crises that followed. Canada and Belgium maintained large enough fiscal space to achieve safe status. Other countries reduced fiscal space, with France and Spain eroding fiscal space in 2014, warning of future crises.","PeriodicalId":141495,"journal":{"name":"Canadian Journal of Economics/Revue canadienne d'économique","volume":"5 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2022-06-14","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"131805371","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
T his paper theoretically investigates the effect of increased longevity on the years of schooling and work . iTe consider a situation in which individuals have opportunities for recur rent education by assuming that the transition from schooling to work is reversible. Ve find that setting aside a period of time for recurrent education is optimal for individuals when the life-span is longer than a certain threshold number of years . As the life-span increases, the total schooling years and t he retirement age increase. However, when the life-span becomes so long that recurrent education takes place . the effect of an increase in the active life by one year on the lifetime income is significantly smaller than in the situation where the life-span is less long . JEL C lassificat ion o.: D15 , 129. J 24, J26 K eywords : Human capital. Life-cycle model, Longevity, Recurrent education. •college of Economics , Ritsumeikan Uninrsity, 1-1-1, Noji Higashi , Kusatsu, Shiga 525-8577, Japan (E-mail: momoakir 123@yahoo.co.jp)
{"title":"Long lifespan and optimal recurrent education","authors":"Akira Momota","doi":"10.1111/caje.12597","DOIUrl":"https://doi.org/10.1111/caje.12597","url":null,"abstract":"T his paper theoretically investigates the effect of increased longevity on the years of schooling and work . iTe consider a situation in which individuals have opportunities for recur rent education by assuming that the transition from schooling to work is reversible. Ve find that setting aside a period of time for recurrent education is optimal for individuals when the life-span is longer than a certain threshold number of years . As the life-span increases, the total schooling years and t he retirement age increase. However, when the life-span becomes so long that recurrent education takes place . the effect of an increase in the active life by one year on the lifetime income is significantly smaller than in the situation where the life-span is less long . JEL C lassificat ion o.: D15 , 129. J 24, J26 K eywords : Human capital. Life-cycle model, Longevity, Recurrent education. •college of Economics , Ritsumeikan Uninrsity, 1-1-1, Noji Higashi , Kusatsu, Shiga 525-8577, Japan (E-mail: momoakir 123@yahoo.co.jp)","PeriodicalId":141495,"journal":{"name":"Canadian Journal of Economics/Revue canadienne d'économique","volume":"9 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2022-06-07","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"124833103","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
{"title":"Optimal taxation in a free‐entry Cournot oligopoly: The average cost function approach","authors":"Kojun Hamada, Takao Ohkawa, M. Okamura","doi":"10.1111/caje.12598","DOIUrl":"https://doi.org/10.1111/caje.12598","url":null,"abstract":"","PeriodicalId":141495,"journal":{"name":"Canadian Journal of Economics/Revue canadienne d'économique","volume":"19 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2022-06-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"127021131","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
This paper examines the relationship between average income of export destinations and skill premium using data of Chinese manufacturing industries from 1995 to 2008. To do so, we construct weighted average GDP per capita across destinations employing within-industry export share to each destination as weight, and then link it with industry-level wages and skill premium. We find that industries that export more to high-income destinations tend to pay a higher skill premium, suggesting that on average, skilled workers benefit more from high-income exports than unskilled workers. Our IV estimates confirm a causal relationship and the results are robust to various specifications. Our paper contributes to the understanding of the influence of export destinations on the uneven distributional effects of globalisation for different types of workers.
{"title":"Export destination and the skill premium: Evidence from Chinese manufacturing industries","authors":"Feicheng Wang, C. Milner, Juliane Scheffel","doi":"10.1111/caje.12587","DOIUrl":"https://doi.org/10.1111/caje.12587","url":null,"abstract":"This paper examines the relationship between average income of export destinations and skill premium using data of Chinese manufacturing industries from 1995 to 2008. To do so, we construct weighted average GDP per capita across destinations employing within-industry export share to each destination as weight, and then link it with industry-level wages and skill premium. We find that industries that export more to high-income destinations tend to pay a higher skill premium, suggesting that on average, skilled workers benefit more from high-income exports than unskilled workers. Our IV estimates confirm a causal relationship and the results are robust to various specifications. Our paper contributes to the understanding of the influence of export destinations on the uneven distributional effects of globalisation for different types of workers.","PeriodicalId":141495,"journal":{"name":"Canadian Journal of Economics/Revue canadienne d'économique","volume":"150 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2022-04-03","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"127275133","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
. This study integrates development aid into a theoretically founded structural gravity model that considers primary and secondary effects of aid as an income transfer and as a bilateral trade cost determinant. We identify the parameters of our model using a two-stage approach that includes a state-of-the-art Poisson pseudo-maximum likelihood gravity estimation for a sample of 132 countries over the period 1995 to 2012. The main findings indicate that bilateral aid only increases bilateral trade for countries that do not have a common language, a past colonial relationship or an RTA. On average, 1 USD of additional foreign aid from all donors increases recipients’ net imports by around 0.36 USD. Our comparative statics indicate that donors experience a reduction in real consumption due to aid and recipients an increase. We also analyze the effect on third countries. The modelling framework also applies to the study of other transfers such as remittances. Résumé.
{"title":"Transfers in the gravity equation","authors":"Hendrik W. Kruse, I. Martínez‐Zarzoso","doi":"10.1111/CAJE.12500","DOIUrl":"https://doi.org/10.1111/CAJE.12500","url":null,"abstract":". This study integrates development aid into a theoretically founded structural gravity model that considers primary and secondary effects of aid as an income transfer and as a bilateral trade cost determinant. We identify the parameters of our model using a two-stage approach that includes a state-of-the-art Poisson pseudo-maximum likelihood gravity estimation for a sample of 132 countries over the period 1995 to 2012. The main findings indicate that bilateral aid only increases bilateral trade for countries that do not have a common language, a past colonial relationship or an RTA. On average, 1 USD of additional foreign aid from all donors increases recipients’ net imports by around 0.36 USD. Our comparative statics indicate that donors experience a reduction in real consumption due to aid and recipients an increase. We also analyze the effect on third countries. The modelling framework also applies to the study of other transfers such as remittances. Résumé.","PeriodicalId":141495,"journal":{"name":"Canadian Journal of Economics/Revue canadienne d'économique","volume":"86 5 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2021-02-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"125925022","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
. Several recent papers employ regression discontinuity (RD) designs to estimate the causal effect of a diploma or similar credentials on wages. I build a model of knowledge acquisition, test-taking and labour market careers that mimics the settings studied in these papers. I show that a positive RD estimate is evidence for information frictions in the labour market, but caution that the relative importance of acquired knowledge and innate talent in the production function cannot be separately identified. While a positive RD estimate does not reveal whether students study too much or too little compared to the social optimum, the rate at which RD estimates decline with labour market experience indicates the speed of employer learning, a parameter that is critical for the extent of inefficiency in study choices. Résumé. Interprétation des effets salariaux d’un diplôme : évaluations par modèles de régression sur discontinuité . Plusieurs articles récents utilisent des modèles de régression sur discontinuité (RD) afin d’évaluer l’incidence salariale d’un diplôme ou de toute autre qualification similaire. Ici, j’ai élaboré un modèle relatif à l’acquisition des connaissances, au passage des examens et aux carrières professionnelles dont les paramètres sont calqués sur ceux des RD étudiés dans cet article. Je montre lorsqu’un modèle RD établit positive,
。最近的几篇论文采用回归不连续(RD)设计来估计文凭或类似证书对工资的因果影响。我建立了一个知识获取、考试和劳动力市场职业的模型，模拟了这些论文中研究的环境。我表明，积极的RD估计是劳动力市场中信息摩擦的证据，但警告说，在生产函数中，获得的知识和天生才能的相对重要性不能单独确定。与社会最优水平相比，积极的RD估计并不能揭示学生的学习是过多还是过少，但RD估计随着劳动力市场经验的下降而下降的速度表明了雇主的学习速度，这是一个对学习选择效率低下程度至关重要的参数。的简历。汇算对薪金的影响diplôme:汇算与汇算与不连续性汇算。几个文章最近utilisent des模型de回归discontinuite (RD) afin d 'evaluer l 'incidence salariale用品diplome欧德吹捧另一个资格similaire。第1条，与“获得和获得”有关的“交换和交换”，与“交换和交换”有关的“交换和交换”，与“交换和交换”有关的“交换和交换”，与“交换和交换”有关的“交换和交换”有关的“交换和交换”。我的montre lorsqun模块RD是阳性的;
{"title":"On the interpretation of diploma wage effects estimated by regression discontinuity designs","authors":"Georg Graetz","doi":"10.1111/CAJE.12489","DOIUrl":"https://doi.org/10.1111/CAJE.12489","url":null,"abstract":". Several recent papers employ regression discontinuity (RD) designs to estimate the causal effect of a diploma or similar credentials on wages. I build a model of knowledge acquisition, test-taking and labour market careers that mimics the settings studied in these papers. I show that a positive RD estimate is evidence for information frictions in the labour market, but caution that the relative importance of acquired knowledge and innate talent in the production function cannot be separately identified. While a positive RD estimate does not reveal whether students study too much or too little compared to the social optimum, the rate at which RD estimates decline with labour market experience indicates the speed of employer learning, a parameter that is critical for the extent of inefficiency in study choices. Résumé. Interprétation des effets salariaux d’un diplôme : évaluations par modèles de régression sur discontinuité . Plusieurs articles récents utilisent des modèles de régression sur discontinuité (RD) afin d’évaluer l’incidence salariale d’un diplôme ou de toute autre qualification similaire. Ici, j’ai élaboré un modèle relatif à l’acquisition des connaissances, au passage des examens et aux carrières professionnelles dont les paramètres sont calqués sur ceux des RD étudiés dans cet article. Je montre lorsqu’un modèle RD établit positive,","PeriodicalId":141495,"journal":{"name":"Canadian Journal of Economics/Revue canadienne d'économique","volume":"1 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2021-02-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"130137737","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
We study the effects of Canadian Indian residential schooling on two anthropometric measures of health during childhood: adult height and body weight. We use repeated cross sectional data from the 1991 and 2001 Aboriginal Peoples Survey and leverage detailed historical data on school closures and location to make causal inferences. We ?nd evidence that, on average, residential schooling increases adult height and the likelihood of a healthy adult body weight for those who attended. These effects are concentrated after the 1950s when the schools were subject to tighter health regulations and students were selected to attend residential school based partly on their need for medical care that was otherwise unavailable. Residential schooling is only one policy in Canada that impacted status First Nations peoples? health, so our results must be understood in the broader social context. Taken in context, our results suggest that health interventions in later childhood can have signi?cant impacts on adult health. We also document signi?cant increases in height and body weight for status people born after the 1960s, suggesting substantial changes in diet and living conditions during this time period.
{"title":"Indian residential schools: Height and body mass post‐1930","authors":"C. Auld, D. Feir","doi":"10.1111/CAJE.12495","DOIUrl":"https://doi.org/10.1111/CAJE.12495","url":null,"abstract":"We study the effects of Canadian Indian residential schooling on two anthropometric measures of health during childhood: adult height and body weight. We use repeated cross sectional data from the 1991 and 2001 Aboriginal Peoples Survey and leverage detailed historical data on school closures and location to make causal inferences. We ?nd evidence that, on average, residential schooling increases adult height and the likelihood of a healthy adult body weight for those who attended. These effects are concentrated after the 1950s when the schools were subject to tighter health regulations and students were selected to attend residential school based partly on their need for medical care that was otherwise unavailable. Residential schooling is only one policy in Canada that impacted status First Nations peoples? health, so our results must be understood in the broader social context. Taken in context, our results suggest that health interventions in later childhood can have signi?cant impacts on adult health. We also document signi?cant increases in height and body weight for status people born after the 1960s, suggesting substantial changes in diet and living conditions during this time period.","PeriodicalId":141495,"journal":{"name":"Canadian Journal of Economics/Revue canadienne d'économique","volume":"717 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2021-02-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"116352950","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
{"title":"Editor's note to the November 2020 issue","authors":"","doi":"10.1111/caje.12483","DOIUrl":"https://doi.org/10.1111/caje.12483","url":null,"abstract":"","PeriodicalId":141495,"journal":{"name":"Canadian Journal of Economics/Revue canadienne d'économique","volume":"101 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2020-11-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"123200309","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
{"title":"Foreword to the special issue","authors":"Hillel Rapoport, Arthur Sweetman","doi":"10.1111/caje.12481","DOIUrl":"https://doi.org/10.1111/caje.12481","url":null,"abstract":"","PeriodicalId":141495,"journal":{"name":"Canadian Journal of Economics/Revue canadienne d'économique","volume":"107 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2020-11-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"124123563","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
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