Research in Economics最新文献

The purpose of this paper is to test Minsky's financial instability hypothesis for the Eurozone by focusing on his main conclusion: corporate debt ratios rise during the ascendant phase of the business cycle. Depending on how debt ratios are measured, our results are divided between (i) robust and (ii) imperfect empirical evidence of procyclical debt ratios. Moreover, we suggest that rising interest rates may not be the best policy to avoid a Minskyan process and that alternative measures deserve some attention. We believe these results call for future research.

The present study uses fixed effect models, random effect models, and the System Generalized Method of Moments technique for the period 2002–2021 to analyze the drivers of economic misery in six distinct regions around the world with a total of 198 nations. The objective of this study is to analyze the factors contributing to economic misery, specifically, the impact of political stability, broad money growth, imports relative to exports, foreign direct investment, and gross national expenditure. The estimated result demonstrates that the causes of economic misery vary in nature across different regions of the world. Political stability lessened economic misery across all six regions. In four regions, broad money growth has decreased economic misery. The imports relative to exports had decreased economic misery in five regions. In all six regions, the level of economic misery grew with gross national expenditure. FDI inflow decreased economic misery in four regions, although the relationship between FDI and economic misery is found to be nonlinear. Policymakers need to take into account the particular connection between economic misery and FDI because this relationship can have a different nature depending on the particular region. Moreover, they should understand the main factors contributing to economic misery in their particular region so that they can make an effective policy mechanism.

Consumer sentiment is a relevant tool for experts when it comes to determining the economic situation in a country, making it possible to analyze the spending trend in advance; for this reason, this paper analyzes links between monetary policy and the inflation rate in the behavior of consumer sentiment in the United States. We use methodologies based on fractional integration and fractional cointegration to obtain the stochastic properties of the monthly time series, from December 2019 to August 2022. The results using fractional integration methodologies exhibit a high degree of persistence and the consumer price index (CPI) and consumer sentiment index present a non-mean reversion I(1) behavior. Focusing on the cointegrating part, we conclude from the results that: 1) an increase in the variable “Total Monetary Base” produces an increase in the CPI, 2) the “variation in the total monetary base” in the United States does not affect consumer sentiment, and 3) a positive variation in the consumer sentiment indicator affects the increase in the inflation rate in the United States.

Under the threat of a rapid expanding virus like the 2020 COVID-19, policy-makers need to decide relatively fast whether and under which conditions to invest in a vaccine, and eventually adopt other protective measures like social distancing or lockdowns, or to wait for natural herd immunity. Taking into account that vaccines take time to be fully developed and effective, this paper considers a unified framework at the crossroad between economics and epidemiology to study optimal public spending in medical research to obtain a vaccine against an infectious disease evolving according to a SIR dynamics. We prove that developed economies always invest in the search of a vaccine. The more individuals care about consumption, the more they actually reduce their current consumption and the more they invest in the vaccine research program to recover their consumption potential at the earliest. Our model would only recommend economies with very poor technology to restrain from investment and wait for herd immunity.

Following the fall of the Berlin Wall and the end of the Cold War, multiple European countries abolished compulsive military service to opt for a professional military. These reforms may have positive or negative effects on young men's educational attainment. On one hand, these individuals may have more time to pursue their education without the interruption caused by compulsive military service. On the other, if young men were using their education as a way to delay or prevent compulsive military service, then they may pursue less education in the absence of such an incentive. In this study, we ask how the 2001 reform to abolish compulsive military service in Spain affected educational attainment of young men. Using a difference-in-differences approach along time and gender, we find that there was a significant increase in university education and a significant decrease in secondary education after the reform. Next, we use a triple difference model along time, gender and a binary variable indicating whether both of the young man's parents were low educated in order to analyze the potential heterogenous effects of the reform depending on the education level of an individual. We find that an average young man born after 1982 was 7.6% more likely to obtain university education and 9.7% less likely to obtain secondary education after the reform. Finally, we control for time, year, and province of birth fixed effects to mitigate omitted variable bias. Our results remain similar except that the positive effect of the reform on university education becomes marginally significant.

Upgradation of export product quality and product diversification are two crucial determinants of the economic growth of developing countries. Both depend heavily on the endowment and quality of the skilled labor. However, one of the challenges developing countries face is the emigration of skilled labor. In this paper, we intend to explore the effect of skilled labor emigration on the export product quality, the number of varieties produced (extensive margin), and the amount of production (intensive margin). To do so, we provide a theoretical framework followed by empirical evidence. Results suggest that export product quality deteriorates with an outflow of skilled labor. Moreover, the number of varieties produced by the domestically specialized manufacturing or domestic service sectors falls but the total amount of production increases. This product diversification at the domestic level has a similar impact on export diversification when we have skilled emigration. The theoretical results have been examined empirically in this paper.

This paper surveys the nascent literature on the causes and consequences of official diplomatic visits that are undertaken by country's leaders, heads of states, chiefs of the executive, foreign ministers, and international notable figures and prominent personnel. The paper discusses the need for such a literature survey, the nature and sources of data used in the pertinent studies, and the determinants and factors behind official diplomatic visits. The paper also covers the political, economic, social, and cultural consequences of official visits. The paper concludes with some recommendations for future research.

This study investigates the critical role of fiscal uncertainty in driving economic growth in South Korea and explores the potential implications for the nation's long-standing low fertility challenge. Utilizing country-year data and advanced measures disaggregating economic policy uncertainty into dimensions like fiscal, monetary, and trade uncertainty, the analysis reveals a strong negative association between fiscal uncertainty and GDP growth rates over the past three decades. Periods of heightened fiscal volatility, characterized by unpredictable government spending, tax policies, and overall economic instability, consistently preceded declines in economic growth. Moreover, the findings indicate that fiscal uncertainty moderates the relationship between economic expansion and fertility rates. While GDP growth generally improves conditions favorable for childbearing by raising living standards, the positive impact on fertility diminishes as fiscal uncertainty increases. Strikingly, at sufficiently high levels of uncertainty, economic growth fails to boost fertility rates, underscoring the crucial role of fiscal stability in reaping the full benefits of growth. These insights highlight the importance of reducing fiscal uncertainty through strategies like implementing tax and spending "calendarization" systems and adopting long-term policy planning horizons. By promoting fiscal predictability and fostering an environment conducive to sustained economic expansion, policymakers can indirectly create conditions that support higher fertility rates by alleviating household aversion to uncertainty. While focused on economic factors, this research acknowledges the multifaceted nature of fertility decisions and calls for a holistic policy approach combined with further causal investigations using micro-level data and experimental designs. Ultimately, prioritizing fiscal stability and addressing fiscal uncertainty present a critical pathway towards stimulating economic growth and potentially revitalizing fertility rates in South Korea and similar developed nations confronting demographic challenges.

The standard overlapping generations model assumes the ability to borrow against bequests. If this assumption is not met, it may happen that not all generations smooth their consumption over time. We prove that by allowing for inter vivos transfers in this latter situation, all generations smooth consumption, i.e. the first best solution is restored. Next, using a combination of Dutch survey and administrative data, we provide empirical support for the model's implication that parents transfer wealth when their children need to borrow out of future resources. Our findings suggest an instrumental role for inter vivos transfers as a device that generations can resort to for smoothing their consumption over time.

We show that “equal tax and equal compensation” (T&C) is fair as justified by the two fairness principles. It differs from any Pigouvian tax with fixed lump-sum payments and can motivate every country to maximize world welfare. It benefits countries with current per capita emissions lower than the world average and would benefit every country when compared with a fair benchmark where emissions are duly penalized and compensated. Subsidizing emission reduction by poll tax is Pareto efficient and Pareto improving over status quo, but unfair. An imperfect T&C with a sub-optimal tax or pyramid taxes can still benefit the world.