Manchester School最新文献

This paper uses the Penn World Table dataset to examine capacity utilization response to changes in the wage share in six developed countries from 1960 to 2019. Our vector autoregression model allows regression coefficients and volatilities to be time-varying in nature. A rolling window shows that capacity utilization response to the wage share is unstable. We find that a 1-standard deviation shock to the wage share generates a significant negative capacity utilization response in the U.S. and U.K. However, a rise in the wage share decreases capacity utilization of the remaining sample countries only conditional on exogenous wage share changes.

We study the dynamics of U.S. inflation persistence and the sources resulting to it over the “Great Inflation” and “Great Moderation” periods. It is different from most of the current studies in that we consider a Bayesian VAR model with the DSGE prior, the so-called DSGE-VAR approach, in which the prior economic information is coming from a small-scale New Keynesian DSGE model. In the recursive estimation of the model, we find a decline in the inflation persistence, measured by the “half-life” response of inflation to the monetary policy shock, in the early 1980s. The stance of monetary policy, particularly the aggressive attitude toward the monetary policy implementation, plays an important role in explaining the structural change of the inflation persistence.

With the UK-Korea-EU Free Trade Agreement (FTA) and the UK-Japan-EU FTA, the gross domestic products of the UK, Korea, Japan, and the EU will increase. The UK's exports to Korea and Japan, and Korea's exports to the UK, Japan, and the EU will increase in some manufacturing sectors, particularly the automotive sector. Likewise, Japan's manufacturing exports to the UK and the EU will grow. However, UK and Japanese exports to the EU and Korea, respectively, will decline in this sector. There will be positive welfare effects on the UK, Korea, and Japan, but negative welfare effects on the EU, China, and the rest of the world (ROW). While UK imports from Korea and Japan and Korean imports from the UK and the EU will both increase and have mixed trade creation and diversion effects, UK imports from the EU will decrease in the manufacturing sectors. Korea's imports from Japan will decline, but Japan's imports from the UK, Korea, and the EU will increase due to trade creation and diversion effects. China's imports from Korea and Japan will decline, whereas China's imports from the UK and the EU will increase. EU imports from Korea and Japan will increase due to trade creation and diversion effects, but EU imports from the UK, China, and the ROW will decline in most manufacturing sectors.

Focusing on the multiple exportable goods between intrabrand and interbrand competition in the export rivalry market, we analyze foreign firms' endogenous choice of organizational form in the face of tariffs. It is shown that if the degree of intrabrand competition is sufficiently high, firms provide corporate incentives (i.e., U-form) when goods are substitutes and divisional incentives (i.e., M-form) when goods are complements, and vice versa. This result relating to the prisoner's dilemma situation depends on which effect between the tariff level and incentive terms dominates. In the case of a low degree of intrabrand competition, choosing the M-form (U-form) brings about Pareto efficiency for foreign firms' profits and social welfare in the importing country when goods are substitutes (complements). In contrast to previous studies, when comparing the case of no delegation with the M-form or U-form, the Pareto optimum can also be achieved for both foreign firms choosing the M-form or U-form endogenously and the importing country, without a prisoner's dilemma involving no delegation.

We investigate the relationship between currency excess returns and Gross Domestic Product (GDP) in a Consumption Capital Asset Pricing Model. GDPs are observable systematic risk factors in our asset pricing equations. The correlation between the unobservable systematic factors is explored by Seemingly Unrelated Regressions estimations. The sample comprises the period from 1999:M01 to 2019:M12 and 48 countries. Results show that GDP growth risk is significant for most currency pairs and portfolios. We also find that they are priced in the cross-section of excess returns. Furthermore, currency returns are directly affected by regional business cycles (Europe, America, and Asia).

I explain why many charities, especially religious ones, spend significantly to improve poor community members' living standards. Conventional theoretical philanthropy models with altruism or impure altruism/warm glow cannot explain poverty-alleviating private transfers in the type and size of communities where this occurs—for example, congregations. However, if preferences reflect religious precepts (you are your brothers' keeper; treat neighbours like yourself), charitable poverty alleviation can be optimal even in large communities. Income and price elasticities for giving prove important. Surprisingly, charitable private transfers are less likely when donors care for recipients' living standard instead of the aggregate amount all recipients get.

A large literature has documented an inverse relationship between financial development and the size of the informal economy, with some evidence that the link is non-monotonic and depends on the institutional environment. The direction of causality, however, remains a matter of debate, making it hard to identify the right policy interventions for better economic outcomes. This paper reviews this literature. Drawing on the theoretical literature, it sketches out the various channels through which financial development can influence firms' choice to operate informally at all or the degree to which they operate informally, or vice versa. In addition, this paper summarizes the empirical evidence that, at the moment, suggests causality running in either direction.

Migration is key to economic development, with varying implications and uneven impacts on origin and destination regions. This paper examines the variation in the major drivers of migration within and across continental blocs and the OECD in a gravity framework. The empirical model uses bilateral migration flow data for 182 countries over a 25 year period (1990–2015) while controlling for push and pull drivers of migration. The novelty of the study rests in the added dimension of the variation in the impact of migration drivers that is based on the direction of migration flow. The results suggest that migration drivers vary significantly across several economic blocs based in different regions and OECD countries. We find that the weight and significance of the impact of migration drivers vary significantly based on the direction of flow across continental blocs and the OECD, although some similarities exist in some regions regardless of the direction of migration flow. The results specifically show that economic and socio-cultural drivers of migration are strongest when migration originates in continents dominated by developing countries and terminates in other continents, compared to migration that originates and terminates within the continents. This raises some anomalies and several issues of potential policy intervention.

While the pattern of composition of sectoral output and consumption are well stylised during growth and structural transformation of an economy, the evidence on the movement of inter-sectoral relative price is mixed across countries. This paper investigates how demand and supply side forces simultaneously shape structural transformation and the path of relative price in a two-sector economy comprising an agricultural and a non-agricultural sector. The model incorporates non-homothetic preference, heterogeneous sectoral production functions with heterogeneous and exogenous total factor productivity growth. We further investigate how the equilibrium path of relative price contributes to inflation measured by proportionate changes in the aggregate price level which is an index of sectoral prices. We find that the equilibrium rate of inflation is always positive during structural transformation. The rate of inflation increases with increase in growth rate of the non-agricultural sector and with a higher preference for agricultural goods, and reduces with an increase in the growth of the agricultural sector.

The underrepresentation of women in Science, Technology, Engineering and Maths (STEM) occupations is a world-wide phenomenon. The UK is simultaneously encountering a shortage of STEM skills. While gender imbalances in STEM study in higher education and A-level study are widely documented, gender imbalances are apparent in vocational post-16 education, though the existence and causes of these imbalances have received little attention. This paper uses administrative data to explore the extent of gender imbalances in STEM qualifications attempted and achieved in vocational post-16 education routes. Gender differentials in the uptake of vocational STEM qualifications are much starker than they are in A-levels and the roles of ability, socio-economic status and school characteristics in explaining gender differentials differ with the education route taken, though their power in explaining these gaps is limited.