Pub Date : 2010-05-20DOI: 10.2174/1874919401003010014
F. Busato, B. Chiarini, Enrico Marchetti
This paper shows that an increase in corporate/labor/income tax rates may push an economy with tax evasion into an expansionary pattern, under increasing returns to scale. These effects would be reversed when the steady state is saddle-path stable. This model does not undertake a full identification. The interesting feature of our results is that fiscal policy in an economy with a significant underground sector may provide inadvisable outcomes. Thus, tax policies can generate counterproductive results in an economy characterized by existence of aggregate increasing returns to scale and underground activities.
{"title":"Tax Shocks, Sunspots and Tax Evasion §","authors":"F. Busato, B. Chiarini, Enrico Marchetti","doi":"10.2174/1874919401003010014","DOIUrl":"https://doi.org/10.2174/1874919401003010014","url":null,"abstract":"This paper shows that an increase in corporate/labor/income tax rates may push an economy with tax evasion into an expansionary pattern, under increasing returns to scale. These effects would be reversed when the steady state is saddle-path stable. This model does not undertake a full identification. The interesting feature of our results is that fiscal policy in an economy with a significant underground sector may provide inadvisable outcomes. Thus, tax policies can generate counterproductive results in an economy characterized by existence of aggregate increasing returns to scale and underground activities.","PeriodicalId":53338,"journal":{"name":"Economics-The Open Access Open-Assessment E-Journal","volume":"36 1","pages":"14-24"},"PeriodicalIF":0.0,"publicationDate":"2010-05-20","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"73318274","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":4,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2010-04-22DOI: 10.2174/1874919401003010001
K. Kepaptsoglou, M. Karlaftis, D. Tsamboulas
The gravity model has been extensively used in international trade research for the last 40 years because of its considerable empirical robustness and explanatory power. Since their introduction in the 1960's, gravity models have been used for assessing trade policy implications and, particularly recently, for analyzing the effects of Free Trade Agreements on international trade. The objective of this paper is to review the recent empirical literature on gravity models, highlight best practices and provide an overview of Free Trade Agreement effects on international trade as reported by relevant gravity model-based studies over the past decade.
{"title":"The Gravity Model Specification for Modeling International Trade Flows and Free Trade Agreement Effects: A 10-Year Review of Empirical Studies","authors":"K. Kepaptsoglou, M. Karlaftis, D. Tsamboulas","doi":"10.2174/1874919401003010001","DOIUrl":"https://doi.org/10.2174/1874919401003010001","url":null,"abstract":"The gravity model has been extensively used in international trade research for the last 40 years because of its considerable empirical robustness and explanatory power. Since their introduction in the 1960's, gravity models have been used for assessing trade policy implications and, particularly recently, for analyzing the effects of Free Trade Agreements on international trade. The objective of this paper is to review the recent empirical literature on gravity models, highlight best practices and provide an overview of Free Trade Agreement effects on international trade as reported by relevant gravity model-based studies over the past decade.","PeriodicalId":53338,"journal":{"name":"Economics-The Open Access Open-Assessment E-Journal","volume":"48 3","pages":"1-13"},"PeriodicalIF":0.0,"publicationDate":"2010-04-22","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"72627521","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":4,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2010-01-01DOI: 10.5018/economics-ejournal.ja.2010-25
K. Aiginger
This paper compares the depth of the Recent Crisis and the Great Depression. We use a new data set to compare the drop in activity in the industrialized countries for seven activity indicators. This is done under the assumption that the Recent Crisis leveled off in mid-2009 for production and will do so for unemployment in 2010. Our data indicate that the Recent Crisis indeed had the potential to be another Great Depression, as shown by the speed and simultaneity of the decline in the first nine months. However, if we assume that a large second dip can be avoided, the drop in all indicators overall will have been smaller than during the Great Depression. This holds true specifically for GDP, employment and priced, and least for manufacturing output. The difference in the depth in the crises concurs with differences in policy reaction. This time monetary policy and fiscal policy were applied courageously, speedily and partly internationally coordinated. During the Great Depression for several years fiscal policy tried to stabilize budgets instead of aggregate demand, and either monetary policy was not applied or was rather ineffective insofar as deflation turned lower nominal interest rates into higher real rates. Only future research will be able to prove the exact impact of economic policy, but the current tentative conclusion is that economic policy prevented the Recent Crisis from developing into a second Great Depression. This is also a partial vindication for economists. The majority of them might not have been able to predict the crisis, but it shows that the science did learn its lesson from the Great Depression and was able to give decent policy advice to at least limit the depth of the Recent Crisis.
{"title":"The Great Recession Versus the Great Depression: Stylized Facts on Siblings that Were Given Different Foster Parents","authors":"K. Aiginger","doi":"10.5018/economics-ejournal.ja.2010-25","DOIUrl":"https://doi.org/10.5018/economics-ejournal.ja.2010-25","url":null,"abstract":"This paper compares the depth of the Recent Crisis and the Great Depression. We use a new data set to compare the drop in activity in the industrialized countries for seven activity indicators. This is done under the assumption that the Recent Crisis leveled off in mid-2009 for production and will do so for unemployment in 2010. Our data indicate that the Recent Crisis indeed had the potential to be another Great Depression, as shown by the speed and simultaneity of the decline in the first nine months. However, if we assume that a large second dip can be avoided, the drop in all indicators overall will have been smaller than during the Great Depression. This holds true specifically for GDP, employment and priced, and least for manufacturing output. The difference in the depth in the crises concurs with differences in policy reaction. This time monetary policy and fiscal policy were applied courageously, speedily and partly internationally coordinated. During the Great Depression for several years fiscal policy tried to stabilize budgets instead of aggregate demand, and either monetary policy was not applied or was rather ineffective insofar as deflation turned lower nominal interest rates into higher real rates. Only future research will be able to prove the exact impact of economic policy, but the current tentative conclusion is that economic policy prevented the Recent Crisis from developing into a second Great Depression. This is also a partial vindication for economists. The majority of them might not have been able to predict the crisis, but it shows that the science did learn its lesson from the Great Depression and was able to give decent policy advice to at least limit the depth of the Recent Crisis.","PeriodicalId":53338,"journal":{"name":"Economics-The Open Access Open-Assessment E-Journal","volume":"1 1","pages":""},"PeriodicalIF":0.0,"publicationDate":"2010-01-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"https://sci-hub-pdf.com/10.5018/economics-ejournal.ja.2010-25","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"70659608","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":4,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2009-11-05DOI: 10.2174/1874919400902010080
N. Apergis
This paper assesses whether the linkages between R&D, human capital and productivity growth in a panel of EU manufacturing industries over the period 1980-2002 are affected by a critical level of human capital. To employ our data in an efficient manner, the study makes use of a dynamic threshold-based analysis, which determines endogenously the sample splitting procedure. The estimates indicate the presence of a threshold level based on the size-level of human capital. Countries with human capital levels above the threshold receive higher productivity growth benefits from higher R&D.
{"title":"Technology, Human Capital and Growth: Further Evidence from Threshold Cointegration","authors":"N. Apergis","doi":"10.2174/1874919400902010080","DOIUrl":"https://doi.org/10.2174/1874919400902010080","url":null,"abstract":"This paper assesses whether the linkages between R&D, human capital and productivity growth in a panel of EU manufacturing industries over the period 1980-2002 are affected by a critical level of human capital. To employ our data in an efficient manner, the study makes use of a dynamic threshold-based analysis, which determines endogenously the sample splitting procedure. The estimates indicate the presence of a threshold level based on the size-level of human capital. Countries with human capital levels above the threshold receive higher productivity growth benefits from higher R&D.","PeriodicalId":53338,"journal":{"name":"Economics-The Open Access Open-Assessment E-Journal","volume":"27 1","pages":"80-86"},"PeriodicalIF":0.0,"publicationDate":"2009-11-05","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"78450478","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":4,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2009-11-05DOI: 10.2174/1874919400902010071
Francis W. Ahking
Abstract Some researchers, for example, Koop (1992), and Sims (1988), advocated forBayesian alternatives to unit-root testing over the classical approach using theaugmented Dickey-Fuller test (ADF). This paper studies the power of what Koop(1992) has called the ”Objective” Bayesian approach to unit-root testing. Koop’s”objective” Bayesian test is interesting in light of the call by Phillips (1991a,1991b) for more objective Bayesian analysis of time series. We apply the ”ob-jective” Bayesian unit-root test to a study of long-run purchasing power parity(PPP) in the post-Bretton Woods era and also Monte Carlo simulations. Overall,our results suggest that the ”objective” Bayesian test is biased in favor of trend-stationarity. We conclude that, at least for the ”objective” Bayesian test, it is notbetter than the classical ADF approach in unit-root tests, and because of its bias,the ”objective” priors suggested by Koop is not appropriate.Journal of Economic Literature Classification: C11, C22, F31I wish to thank Professor Stephen M. Miller, participants at the Southern Eco-nomic Association Annual Meetings, and Department of Economics, Universityof Connecticut, brown-bag seminar for comments on an earlier draft of this paper.Remaining errors are my sole responsibilities.
一些研究人员，例如Koop(1992)和Sims(1988)，主张使用贝叶斯替代单位根检验，而不是使用增强的Dickey-Fuller检验(ADF)的经典方法。本文研究了Koop(1992)所称的单位根检验的“客观”贝叶斯方法的力量。Koop的“客观”贝叶斯检验很有趣，因为Phillips (1991a,1991b)呼吁对时间序列进行更客观的贝叶斯分析。我们将“客观的”贝叶斯单位根检验应用于后布雷顿森林时代的长期购买力平价(PPP)研究和蒙特卡罗模拟。总的来说，我们的结果表明，“客观”贝叶斯检验偏向于趋势平稳性。我们的结论是，至少对于“客观”贝叶斯检验，它并不比经典的ADF方法在单位根检验中更好，并且由于其偏差，Koop建议的“客观”先验是不合适的。我要感谢Stephen M. Miller教授，南方经济协会年会的与会者，以及康涅狄格大学经济系的“棕色袋子”研讨会对本文早期草稿的评论。剩下的错误由我负责。
{"title":"The Power of the \"Objective\" Bayesian Unit-Root Test","authors":"Francis W. Ahking","doi":"10.2174/1874919400902010071","DOIUrl":"https://doi.org/10.2174/1874919400902010071","url":null,"abstract":"Abstract Some researchers, for example, Koop (1992), and Sims (1988), advocated forBayesian alternatives to unit-root testing over the classical approach using theaugmented Dickey-Fuller test (ADF). This paper studies the power of what Koop(1992) has called the ”Objective” Bayesian approach to unit-root testing. Koop’s”objective” Bayesian test is interesting in light of the call by Phillips (1991a,1991b) for more objective Bayesian analysis of time series. We apply the ”ob-jective” Bayesian unit-root test to a study of long-run purchasing power parity(PPP) in the post-Bretton Woods era and also Monte Carlo simulations. Overall,our results suggest that the ”objective” Bayesian test is biased in favor of trend-stationarity. We conclude that, at least for the ”objective” Bayesian test, it is notbetter than the classical ADF approach in unit-root tests, and because of its bias,the ”objective” priors suggested by Koop is not appropriate.Journal of Economic Literature Classification: C11, C22, F31I wish to thank Professor Stephen M. Miller, participants at the Southern Eco-nomic Association Annual Meetings, and Department of Economics, Universityof Connecticut, brown-bag seminar for comments on an earlier draft of this paper.Remaining errors are my sole responsibilities.","PeriodicalId":53338,"journal":{"name":"Economics-The Open Access Open-Assessment E-Journal","volume":"50 1","pages":"71-79"},"PeriodicalIF":0.0,"publicationDate":"2009-11-05","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"78185428","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":4,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2009-10-07DOI: 10.5018/economics-ejournal.ja.2009-38
Alfonso Mendoza Velázquez
Abstract The fiscal and financial reforms carried out in Mexico in 2000 have encouraged a widespread presence of rating agencies and have allowed several States and Municipalities to raise funds through bond offerings in the capital market. Any local government in Mexico intending to access credit and capital markets must count with at least one credit rating from one of the three main agencies: FitchRatings, Moody’s and Standard & Poor’s. This paper investigates the impact of rating changes to State and Municipal governments on bond returns in Mexico. By employing a Capital Asset Pricing Model (CAPM) structure for the mean equation that allows conditional volatility, we find strong support for the Information Content Signaling Hypothesis (ICSH), i.e., rating upgrades (downgrades) are followed by greater (lower) bond returns. We also find some support for the Wealth Redistribution Hypothesis (WRH) indicating that rating upgrades (downgrades) are followed by lower (greater) bond returns. In addition to this, we find high volatility persistence, significant asymmetric responses of volatility to bad and good news, a negative association between market volatility and the level of bond returns and significant effects of volatility in response to rating changes. Finally, the estimations show the market anticipates and responds to rating changes within five-day momentum windows. There is a comparatively stronger reaction of returns on the event day favoring the hypothesis of market inefficiency.
{"title":"The Information Content and Redistribution Effects of State and Municipal Rating Changes in Mexico","authors":"Alfonso Mendoza Velázquez","doi":"10.5018/economics-ejournal.ja.2009-38","DOIUrl":"https://doi.org/10.5018/economics-ejournal.ja.2009-38","url":null,"abstract":"Abstract The fiscal and financial reforms carried out in Mexico in 2000 have encouraged a widespread presence of rating agencies and have allowed several States and Municipalities to raise funds through bond offerings in the capital market. Any local government in Mexico intending to access credit and capital markets must count with at least one credit rating from one of the three main agencies: FitchRatings, Moody’s and Standard & Poor’s. This paper investigates the impact of rating changes to State and Municipal governments on bond returns in Mexico. By employing a Capital Asset Pricing Model (CAPM) structure for the mean equation that allows conditional volatility, we find strong support for the Information Content Signaling Hypothesis (ICSH), i.e., rating upgrades (downgrades) are followed by greater (lower) bond returns. We also find some support for the Wealth Redistribution Hypothesis (WRH) indicating that rating upgrades (downgrades) are followed by lower (greater) bond returns. In addition to this, we find high volatility persistence, significant asymmetric responses of volatility to bad and good news, a negative association between market volatility and the level of bond returns and significant effects of volatility in response to rating changes. Finally, the estimations show the market anticipates and responds to rating changes within five-day momentum windows. There is a comparatively stronger reaction of returns on the event day favoring the hypothesis of market inefficiency.","PeriodicalId":53338,"journal":{"name":"Economics-The Open Access Open-Assessment E-Journal","volume":"3 1","pages":""},"PeriodicalIF":0.0,"publicationDate":"2009-10-07","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"https://sci-hub-pdf.com/10.5018/economics-ejournal.ja.2009-38","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"70659589","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":4,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2009-08-27DOI: 10.2174/1874919400902010061
Tetsuji Yamada, Chia-Ching Chen, Tadashi Yamada, H. Noguchi, Matthew R. Miller
We empirically examine how the decision to purchase private health insurance and hospitalization are made based on labor income, socio-demographic factors, and private health insurance. The increase in household labor income and wealth has a positive effect on purchasing private health insurance. This suggests a supplementary effect for public health insurance under the strict control of a two-tier healthcare coverage system. Our results support the hypothesis that moral hazard presents for the costs paid to private health insurance by households. A strong positive association with the risk of hospitalization causes individuals to change their health behavior after purchasing private health insurance leading to lower costs in the ill health status and acquire less preventive measures. Thus, moral hazard exists in Japanese health insurance market. Unlike the previous study, adverse selection based on our results is not negligible in the case of hospitalization in Japan. The positive effect indicates that the higher the risk of illness with households, the more insurance policies a household possesses. The results support our hypotheses that the decision to purchase health insurance in case of death in an insured household in a hospital is attributed to the initial health stock of the household. This means that households purchase private health insurance when there is a high probability of hospitalization with claimed insurance on death. The benefits from private health insurance policies for hospitalization provide incentives for individuals to purchase health insurance that are a reflection of adverse selection against private health insurance.
{"title":"Private Health Insurance and Hospitalization Under Japanese National Health Insurance","authors":"Tetsuji Yamada, Chia-Ching Chen, Tadashi Yamada, H. Noguchi, Matthew R. Miller","doi":"10.2174/1874919400902010061","DOIUrl":"https://doi.org/10.2174/1874919400902010061","url":null,"abstract":"We empirically examine how the decision to purchase private health insurance and hospitalization are made based on labor income, socio-demographic factors, and private health insurance. The increase in household labor income and wealth has a positive effect on purchasing private health insurance. This suggests a supplementary effect for public health insurance under the strict control of a two-tier healthcare coverage system. Our results support the hypothesis that moral hazard presents for the costs paid to private health insurance by households. A strong positive association with the risk of hospitalization causes individuals to change their health behavior after purchasing private health insurance leading to lower costs in the ill health status and acquire less preventive measures. Thus, moral hazard exists in Japanese health insurance market. Unlike the previous study, adverse selection based on our results is not negligible in the case of hospitalization in Japan. The positive effect indicates that the higher the risk of illness with households, the more insurance policies a household possesses. The results support our hypotheses that the decision to purchase health insurance in case of death in an insured household in a hospital is attributed to the initial health stock of the household. This means that households purchase private health insurance when there is a high probability of hospitalization with claimed insurance on death. The benefits from private health insurance policies for hospitalization provide incentives for individuals to purchase health insurance that are a reflection of adverse selection against private health insurance.","PeriodicalId":53338,"journal":{"name":"Economics-The Open Access Open-Assessment E-Journal","volume":"45 1","pages":"61-70"},"PeriodicalIF":0.0,"publicationDate":"2009-08-27","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"86283487","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":4,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2009-08-19DOI: 10.2174/1874919400902010045
G. Cette, Yusuf Kocoglu, J. Mairesse
The present study contributes to the analysis of economic growth by comparing labour ant total factor productivity (TFP) in France, Japan, the United Kingdom and the United States in the very long run (since 1890) and in the medium run (since 1980). During the past century, the United States has overtaken the United Kingdom and became the leading world economy. During the last 25 years, productivity growth has also known contrasted developments in the four countries, in particular as a result of an unequal growth of information and communication technology (ICT) investments. The past 120 years have been characterised by: (i) rapid economic growth and large productivity gains in the four countries; (ii) a decline in productivity in the United Kingdom relative to the United States, and to a lesser extent also relative to France and Japan until the second world war (WW2), and its subsequent come-back; (iii) the remarkable catching-up of the United States by France and Japan after WW2, which was however interrupted in the case of Japan during the 1990s. The contribution of capital deepening -as it can be measured- accounts for a large share of these different performances, with an increasing share of ICT capital in the last 25 years. This contribution varies considerably over time and across the four countries, and it is always less important, except in Japan, than that of the unmeasured factors underlying TFP, such as labour skills, technical and organisational changes and knowledge spillovers. Most recently (in 2006), before the current world crisis, hourly labour productivity levels are slightly higher in France than in the United States, and significantly lower in the United Kingdom (by roughly 10%) and even more in Japan (30%), while TFP levels are very close in France, the United Kingdom and the United States, but much lower (40%) in Japan.
{"title":"Comparing Labour and Total Factor Productivity Growth and Level in France, Japan, the United Kingdom and the United States over the Past Century and in Recent Years §","authors":"G. Cette, Yusuf Kocoglu, J. Mairesse","doi":"10.2174/1874919400902010045","DOIUrl":"https://doi.org/10.2174/1874919400902010045","url":null,"abstract":"The present study contributes to the analysis of economic growth by comparing labour ant total factor productivity (TFP) in France, Japan, the United Kingdom and the United States in the very long run (since 1890) and in the medium run (since 1980). During the past century, the United States has overtaken the United Kingdom and became the leading world economy. During the last 25 years, productivity growth has also known contrasted developments in the four countries, in particular as a result of an unequal growth of information and communication technology (ICT) investments. The past 120 years have been characterised by: (i) rapid economic growth and large productivity gains in the four countries; (ii) a decline in productivity in the United Kingdom relative to the United States, and to a lesser extent also relative to France and Japan until the second world war (WW2), and its subsequent come-back; (iii) the remarkable catching-up of the United States by France and Japan after WW2, which was however interrupted in the case of Japan during the 1990s. The contribution of capital deepening -as it can be measured- accounts for a large share of these different performances, with an increasing share of ICT capital in the last 25 years. This contribution varies considerably over time and across the four countries, and it is always less important, except in Japan, than that of the unmeasured factors underlying TFP, such as labour skills, technical and organisational changes and knowledge spillovers. Most recently (in 2006), before the current world crisis, hourly labour productivity levels are slightly higher in France than in the United States, and significantly lower in the United Kingdom (by roughly 10%) and even more in Japan (30%), while TFP levels are very close in France, the United Kingdom and the United States, but much lower (40%) in Japan.","PeriodicalId":53338,"journal":{"name":"Economics-The Open Access Open-Assessment E-Journal","volume":"5 1","pages":"45-60"},"PeriodicalIF":0.0,"publicationDate":"2009-08-19","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"87263168","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":4,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2009-05-08DOI: 10.2174/1874919400902010039
Andreas Irmen
In economies where the price of labour is determined outside of competitive markets the question arises as to whether the observed evolution of wages is likely to contribute to a decline in unemployment. I develop and discuss a benchmark, the neutral wage policy, to which the actual evolution of wages can be compared. Here, neutrality refers to the unemployment rate and not to the level of employment. If the actual wage growth falls short of this benchmark then the evolution of wages is said to have contributed to a decline in the unemployment rate. This benchmark is based on fairly general assumptions on the aggregate production technology, incorporates changes in the supply of labour, and accounts for changes in the competitive environment of firms. Finally, I discuss the relation to the benchmark of the German Council of Economic Experts (1). In many economies the price of labour is determined outside of competitive markets. Negotiations between unions and employers' associations are a case in point. In these economies the question arises as to how an assessment of the results of such negotiations should be made. The present paper develops a measuring rod against which the observed evolution of real wages can be assessed in view of its implications for the evolution of the level of employment and the unemployment rate. There are at least two related observations as to why assessments of the kind presented here matter. First, in order to legitimate their stances both negotiating parties pretend to act in the public interest. Workers' purchasing power and the cost-of-labor argument put forward by unions and employers do not only benefit their respective interest groups. They are also meant to be in the public interest since they raise the level of employment. The difficult challenge is then to ask who is right. Second, the institutional framework for wage negotiations affects the bargaining power of both parties and has, therefore, an important impact on the resulting wage. If an appropriate benchmark indicated that the negotiated wage failed to be in the public interest then the political system is likely to intervene and to change this framework. For instance, if wages were considered to be too high it is likely that changes in the institutional framework would strengthen the employers' position. I refer to the benchmark developed here as the neutral wage policy, i.e., if the actual evolution of the real wage coincides with the evolution prescribed by this benchmark, then the unemployment rate remains constant; if it falls short of it, the unemployment rate declines. This concept incorporates the following features of the aggregate demand
{"title":"On wage policies and unemployment","authors":"Andreas Irmen","doi":"10.2174/1874919400902010039","DOIUrl":"https://doi.org/10.2174/1874919400902010039","url":null,"abstract":"In economies where the price of labour is determined outside of competitive markets the question arises as to whether the observed evolution of wages is likely to contribute to a decline in unemployment. I develop and discuss a benchmark, the neutral wage policy, to which the actual evolution of wages can be compared. Here, neutrality refers to the unemployment rate and not to the level of employment. If the actual wage growth falls short of this benchmark then the evolution of wages is said to have contributed to a decline in the unemployment rate. This benchmark is based on fairly general assumptions on the aggregate production technology, incorporates changes in the supply of labour, and accounts for changes in the competitive environment of firms. Finally, I discuss the relation to the benchmark of the German Council of Economic Experts (1). In many economies the price of labour is determined outside of competitive markets. Negotiations between unions and employers' associations are a case in point. In these economies the question arises as to how an assessment of the results of such negotiations should be made. The present paper develops a measuring rod against which the observed evolution of real wages can be assessed in view of its implications for the evolution of the level of employment and the unemployment rate. There are at least two related observations as to why assessments of the kind presented here matter. First, in order to legitimate their stances both negotiating parties pretend to act in the public interest. Workers' purchasing power and the cost-of-labor argument put forward by unions and employers do not only benefit their respective interest groups. They are also meant to be in the public interest since they raise the level of employment. The difficult challenge is then to ask who is right. Second, the institutional framework for wage negotiations affects the bargaining power of both parties and has, therefore, an important impact on the resulting wage. If an appropriate benchmark indicated that the negotiated wage failed to be in the public interest then the political system is likely to intervene and to change this framework. For instance, if wages were considered to be too high it is likely that changes in the institutional framework would strengthen the employers' position. I refer to the benchmark developed here as the neutral wage policy, i.e., if the actual evolution of the real wage coincides with the evolution prescribed by this benchmark, then the unemployment rate remains constant; if it falls short of it, the unemployment rate declines. This concept incorporates the following features of the aggregate demand","PeriodicalId":53338,"journal":{"name":"Economics-The Open Access Open-Assessment E-Journal","volume":"1 1","pages":"39-44"},"PeriodicalIF":0.0,"publicationDate":"2009-05-08","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"73488659","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":4,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2009-04-09DOI: 10.2174/1874919400902010031
J. Bukenya
The temporal interdependence between health expenditure and economic growth has been the focus in a num- ber of recent empirical studies. While some insights have been gained from these studies, the focus has been on national economies, either in developed or developing countries. This paper explores this relationship at the U.S. state-level. The paper contributes to the literature by investigating possible dynamic relations between health care expenditure and eco- nomic growth, measured by gross state product, in the southeast United States. By employing time series approach, the empirical results confirm the presence of a weak, but positive relationship. After detecting unit roots in the data, co- integration in general, was not detected, as a long-run relationship seemed to exist only for Georgia. The results of the VAR analysis are correspondingly limited. However the shapes of the impulse functions do confirm the proper positive relationship between positive personal health care expenditure changes and economic growth.
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