Manchester School最新文献

Financial innovation plays a critical role in advancing the United Nations' Sustainable Development Goal 8 (SDG 8), which aims to promote sustained, inclusive, and sustainable economic growth, along with decent work opportunities. This study examines the dynamic relationship between financial innovation and economic development, motivated by ongoing theoretical and empirical debates regarding whether financial innovation serves as a driver of long-term economic growth. The primary objective is to assess the impact of financial innovation on real GDP per capita and growth volatility over both the short and long term, with particular emphasis on variations across countries at different stages of financial development and the influence of financial crises. Using panel data from 39 countries spanning the period 1972–2016, the study employs the Pooled Mean Group (PMG) estimator to capture dynamic effects, both before and after financial crises. The empirical findings indicate that financial innovation contributes to long-term economic development; however, in highly developed financial systems, it also amplifies growth volatility, particularly in the period preceding financial crises. In economies with less developed financial systems, financial innovation stimulates economic expansion but simultaneously heightens volatility, both pre- and post-crisis. These findings underscore the need for policymakers to implement regulatory frameworks that balance the benefits of financial innovation with the risks of financial instability. Most importantly, the study highlights the role of financial innovation in advancing SDG 8 by demonstrating its potential to foster sustained economic growth when appropriately managed.

This paper examines the reasons behind the long-run depreciation of the Sterling against the US Dollar. Using data that range from January 1971 to July 2023 and a Vector Error Correction model, the results show that higher UK inflation in the 1970s and early 1980s, as well as the relative overperformance of US markets since 2010 are the main reasons behind the depreciation from 2.41 to 1.29 over the course of 54 years. Other than these two factors, interest rates also appear to have played a role, especially in the 1970s–80s, since the relatively higher bond yields in the UK appear to have prevented the exchange rate from further depreciating. When extending the model to include economic policy uncertainty and geopolitical risk, the above results remain the same, with policy uncertainty having a negative impact on the exchange rate since 2015.

This paper studies a monopolist's innovation decision and product pricing when selling a durable good to long-lived consumers. In the two-period model, a monopolist is concerned with whether to attempt a risky product innovation at the intermediate date. When consumers can wait for the better product, three equilibria exist, only one of which allows the firm to innovate. In two other equilibria, consumers either all run to buy early or all run to buy late, both preventing the firm from innovation. The result implies that innovation and welfare improvement can be at risk even in a market with rational players.

This paper empirically investigates the effects of robot adoption on labor income share and labor productivity. To this end, I use two distinct datasets: country-industry panel data and Korean firm-level panel data. The results using two different datasets consistently reveal that robot adoption negatively affects labor income share but positively affects labor productivity. The results can be explained by Acemogulu and Restrepo (2017)'s theoretical framework.

During the development process inter alia convergence or divergence among the people vis-à-vis convergence or divergence of well-defined groups in the dimensions of well-being is rather common in any society. The relative strength of improvement or deterioration of the members across the groups from one to the next generation de facto determines this convergence or divergence of the groups in some specific dimension. To put it another way, we may explain the convergence or divergence of the groups in some specific dimension by examining the relative strength of upward and downward mobility of the members of these groups from one to the next generations in the respective dimension. From this point of view, one previous study proposes two summary measures of the persistence of between-group inequality. We employ these summary measures on Indian data to investigate the persistence of occupational inequality across social groups non-parametrically. However, before using these summary measures we examine the structural properties of these measures by using a set of axiomatic properties.

In this paper, we investigate the impact of partial vertical cross-ownership on optimal R&D knowledge disclosure in a vertically mixed market with an upstream firm supplying competing downstream public and private firms. The results show that under vertical separation and forward cross-ownership, the downstream public firm fully discloses its R&D knowledge, whereas the downstream private firm does not disclose its R&D knowledge. Under backward cross-ownership, both downstream public and private firms fully disclose their information. Furthermore, we find that the upstream firm and the downstream private firm favor backward cross-ownership. Finally, we find that privatization policies lead to higher social welfare, but their impact on R&D knowledge disclosure varies among different downstream firms.

This study develops a dynamic stochastic general equilibrium model calibrated to the US economy to investigate the effects of government investment on macroeconomic variables and social welfare. The analysis focuses on the role of the gap between the announced size and actual implementation. In general, government investment shocks bring positive results for output in the short- and long-run, although they may cause consumption crowding out in the short-run. However, anticipated government investment lowers the consumption crowding-out effect. Higher levels of implementation relative to the announced investment positively impact output and consumption in the medium- and long-run. The benefits to the economy are greater when the productivity of public capital is higher. Moreover, the study uncovers a trade-off between social welfare and the government multiplier: Full or over-implementation of public investment results in significant social welfare gains without compromising the benefits in terms of the government multiplier.

This study examines a vertical structure model where an integrated firm sells intermediate goods to downstream firms and produces final goods while a rival firm holds partial passive ownership (PPO) of the integrated firm. We investigate the effects of vertical separation with a split-off under a downstream PPO when the integrated firm competes with both the rival firm and downstream firms in the final goods market. We find that separation decreases input price and final goods production by the split-offed firm while increases consumer surplus and domestic welfare if the downstream firms are competitive, or when the degree of PPO is not sufficiently low. We also demonstrate that a split-off under downstream PPO is more profitable but socially undesirable than the other separation types, including split-off under upstream PPO and spin-off. Finally, we provide some discussions on the variant scenarios and show that our main findings are robust.