A two‐sector Keynesian model of business cycles

In this paper, we examine the effect of sectoral interactions on business cycles in a simple Keynesian model. As a first step for introducing viewpoints of multiple sectors in the context of business cycles, we consider a dual economy in which there are only two kinds of goods: the consumption good and the investment good. By examining a two‐sector Keynesian model, we intend to take a look at some phenomena induced by interactions between the consumption good sector and the investment good sector, which cannot be observed in one‐sector models. We then find that the stability of equilibrium and the possibility of emergence of a periodic orbit depend on whether the Keynesian stability condition holds or not and that along periodic orbits (business cycles), the consumption good sector lags behind the investment good sector and that the volatility (measured by the ratio of the amplitude of cycles to the equilibrium value) of the investment sector is larger than that of the consumption good sector. Also, we supplement the analysis by performing numerical simulations.     

How Do the Trans‐Pacific Economies Affect the USA? An Industrial Sector Approach

This paper studies how the Trans‐Pacific region affects the US economy in terms of business cycle transmission. We use a large data set consisting of disaggregated sectoral industrial production indexes from selected countries in the region and employ a factor‐augmented vector autoregression (FAVAR) approach to analyse the transmission of shocks in different industries. We find that a positive output shock in the entire Trans‐Pacific region has positive effects on the majority of US manufacturing sectors. We also find that sectoral shocks in five sectors of the Trans‐Pacific region have a large impact on the overall US economy. Three of the five sectors displayed strong same‐sector responses relative to the overall response, suggesting that vertical production linkages might play a key role in the transmission of shocks. Our results highlight the importance of examining industrial sectors in studying the transmission of shocks in the Trans‐Pacific region.     

EXTERNAL SHOCKS AND THE URBAN POOR

This paper examines the effect of external shocks on urban poverty in a two‐household (rich and poor), two‐sector intertemporal model of an open economy with segmented labor markets. Skilled and unskilled labor are used in the formal sector, whereas only unskilled labor (which moves freely across sectors) is used in the informal economy. The extent to which a permanent increase in the world risk‐free interest rate affects the incidence and depth of poverty is shown to depend crucially on the wedge between consumption and product wages. The model is also extended to account for endogenous minimum wages and capital accumulation.     

‘BAUMOL'S DISEASE’, PRODUCTION EXTERNALITIES AND PRODUCTIVITY EFFECTS OF INTERSECTORAL TRANSFERS

This paper presents a model that introduces in an unbalanced growth framework à la Baumol the hypothesis of an endogenous productivity growth due to a positive externality of the service sector on manufacturing productivity and a learning‐by‐doing process inside both sectors. The model shows that a policy aimed at keeping the ratio between outputs in the two sectors constant in real terms may improve the aggregate productivity performance of the economy, depending on the parameters' values. Then the model derives the dynamics of the intersectoral transfer which is necessary to keep the ratio between outputs constant, and verifies that the amount of the transfer turns out to be always lower than the output of the manufacturing sector, and only asymptotically approaches it.     

A dynamic analysis of the impacts of export taxes: The case of Argentinean soy and beef markets

Argentina plays an important role in the global soy market as one of the world's leading exporters of soy products. In an effort to shift its agricultural sector's focus to value‐added exports and to raise revenue, Argentina's government has maintained a regime of differential export taxes on soy products. In addition to soy products, Argentina is a major producer, consumer and exporter of beef. However, over the last decade it has relinquished much of its world market share as its beef exports have fallen because the government has periodically imposed a ban on exports of beef along with maintaining an export tax. As the soy and livestock sectors are inextricably linked, owing to both industries’ intensive land use and the utilisation of soymeal as a feed supplement for cattle, trade policies in one sector have pronounced cross‐sectoral impacts. This study develops a theoretical model of these different sectors and trade policies, incorporating the dynamic decisions of cattle stock management. The model is calibrated to real‐world data on the Argentinean economy, and the impacts of trade liberalisation are quantified. Key results show modelling the various intersectoral linkages and the dynamic implications of cattle stock is essential for obtaining accurate estimates.     

Doing business in Poland: What U.S. managers need to know

Poland has been and continues to be the leader of the transition economies of Eastern Europe. This study provides an in‐depth look at the ongoing economic, legal, and administrative policies of the Polish government in laying the ground‐work for a free‐market society. With the smaller business in mind, we first examine how the government of Poland moved decisively to lay the cornerstone for a private‐sector economy. Next, we demonstrate how Poland redirected its political and legal processes for long‐term global business. Finally, we describe what the U.S. government is doing to help Poland become a better trading partner and what this means to interested American firms. While there are many deep‐seated positive changes throughout Poland as it becomes a more significant global business player, there also are many challenges that must be understood by interested U.S. businesses if their investments in Poland are to be successful. © 2004 Wiley Periodicals, Inc.     

The Effects of Globalisation on the US Labour Mark'et: Service Sectors Considered

How has globalisation affected employment and wages in the United States? Existing studies largely ignore the intersector labour movement between the manufacturing and service sectors by focusing only on the intrasector movement within the manufacturing sector. However, by decomposing the aggregate labour demand in the United States, we find that the intersector movement is more substantial than intrasector movement. Motivated by the decomposition results, this study presents a three‐sector model that includes a manufacturing sector and two service sectors at varying skill intensities. The model shows that offshoring might translate into smaller‐than‐expected wage changes because of the intersector labour movement. In line with the theoretical predictions, two notable empirical results are presented. First, an occupation's exposure to offshoring has non‐significant, albeit negative, effects on wages. Second, the more an occupation is exposed to offshoring, the lower its employment in the manufacturing sector as a share of its total employment. Furthermore, these effects are larger for more routine occupations or those requiring less education.     

Exposure to the new wave of offshoring: An unemployment perspective

This paper examines the impact of increasing service offshoring in a two‐sector economy. We find that it leads to lower domestic unemployment if the marginal task‐specific offshoring cost in the service sector is sufficiently large. Under this condition, the jobs created due to enhanced productivity outweigh the jobs that are destroyed. The reduction in unemployment increases the cost of hiring domestic workers, thus encouraging firms in the manufacturing sector to increase their offshoring scale and productivity. This, in turn, increases their cost savings and may lead to a further decrease in unemployment. Hence, complementarity between two sectors’ offshoring activities may emerge. We calibrate the model using economic parameters from Belgium, and the calibration results predict varied unemployment trends and impacts on manufacturing‐sector offshoring activities with different task‐specific offshoring cost schedules.     

长三角城市间第三产业的分工定位与协作

随着中国经济的发展,整个长三角地区逐渐成为了世界又一大制造中心,但是就长三角地区生产性服务业的发展来看各城市却参差不齐。长三角服务业和制造业的发展是一个息息相关的整体,制造业需要服务业的支撑,服务业靠制造业"养活"。长三角各城市之间的服务业有着千丝万缕的联系:上海服务业的发展水平最高,但却离不开周边地区服务业的支撑,而周边地区服务业的发展也对上海有一定的依赖。两省一市之间的分工协作会有效地促进地区经济的发展。     

A two‐sector neo‐Kaleckian model of growth and distribution: Investment allocation and evolutionary dynamics

This paper focuses on the two‐sector neo‐Kaleckian model of growth and distribution that was developed by Dutt (1990) and challenged by Park (1995). We develop a variant of this model, focusing on the supply‐side to solve the overdetermination problem that was raised by Park. Finally, we introduce evolutionary dynamics to model the investment flows between the capital and consumer goods sectors. In this setup, the sectoral profit rates and the size of capital stocks wield an essential role upon the entrepreneur’s decision on which sector to invest in. This model is perfectly determined and it generates a stable evolutionary equilibrium over the long term.     

The political economy of tourism in North Africa: Comparative perspectives

Tourism has become a salient sector in the economic‐development strategies of North Africa, despite the fact that the states of the region have met with varying degrees of success in their attempts to expand and develop their tourism sectors. This article adopts a political‐economy approach to the analysis of tourism in North Africa. Its aims are to highlight the main aspects of the region's political economy that have influenced outcomes in the tourism sector of each country, and then to explain the political dynamics that underlie the tourism sectors of the region. This article asserts that all North African states now have embraced tourism—albeit with varying amounts of enthusiasm—as a key economic industry. It examines the relationship between tourism and economic reform in the region, followed by the political dynamics of the sector, arguing that tourism is a very political affair, but for reasons different than in other sectors of the economy. It concludes with some observations on the strategic and developmental challenges that confront the development of tourism in North Africa. © 2000 John Wiley & Sons, Inc.     

Uncovering Unobserved Economy: A General Equilibrium Characterization

This paper builds a three‐sector DSGE (Dynamic Stochastic General Equilibrium) model, considering explicitly the interactions among regular, underground and criminal sectors. We generated quarterly data for unobserved variables for Italian economy over the sample 1974:01–2011:02, through Monte Carlo simulations, and we found that underground economy is about 20 per cent of GDP, whereas criminal economy is 11 per cent. The dynamic behavior of the model shows that (1) regular production has a greater relative volatility with respect to unobserved production, (2) an efficient law enforcement activity is able to weaken unobserved activities and (3) unobserved sectors' variables exhibit a negative correlation with the corresponding ones of regular economy.     

Job profile research for the purchasing profession

The study reported in this article is based on theories about job and competence analysis and a project in which job profiles were developed that were aimed at providing a framework of reference for evaluating in‐service training programmes for purchasing professionals (professional buyers of goods and services in various sectors of the economy) provided by a training institution of an association for purchasing management. This project was commissioned as part of the permanent maintenance policy of the training institution, but also based on experience with an earlier comparable project, and concerns about test development using job profiles and related attainment targets. The study is part of a research programme on course development for professional training. Ideas about course content validation were explored and tested. The article addresses the issue of trustworthiness and uncertainty reduction in the job profile research process. It specifically looks at the methods used in job profile development and perennial research problems that are related to that, such as stratification of a professional sector, sector‐specificity of job information, formatting job profiles, and the value added of small‐scale in‐depth analyses of work processes versus large‐scale job surveys. It concludes that small‐scale, context‐related analyses of jobs adds most value, but that this is not sufficient for ensuring faith in the study results. Large‐scale surveys complement the in‐depth analyses in this respect. So using a mix of in‐depth and large‐scale methods is recommended in conducting job profile research.     

The New Industrial Organization and Small Business

The small business sector is an important part of the American economic landscape, in both absolute and relative terms. Despite its absolute growth, however, the sector accounts for a diminishing share of private sector activity. But its importance, and changes in importance, vary across industrial sectors of the economy.Drawing on the theoretical and empirical insights developed in recent books by John Sutton, we suggest that the presence or absence of endogenous strategic behaviors of the larger firms with respect to advertising, promotion, research and development, and other sunk cost expenditures may well play an important role in explaining the differing levels of small business importance, both cross-sectionally and over time. We conclude the paper with suggestions for research directions that could shed further light on these ideas.     

The Linkage between Tertiary and Industrial Sectors in the Italian Economy

The aim of this article is twofold: to describe the cyclical evolution of the linkage between the industrial and the tertiary sector of the Italian economy from 1951 to 1988 and to assess the analytical meaning of this evolving linkage. This study is performed taking into account the main macro-economic indicators: investments, employment, value-added, of the agricultural, industrial and service sectors. This kind of research allows us to give a somewhat different interpretation of the growth of the Italian economy, stressing the importance of the .service sector, since mainstream economic interpretations usually play down its role.     

On the Differential Behaviour of National and Multinational Firms: A Within‐ and Across‐sectors Approach

This paper looks for different patterns of behaviour of national firms and multinational enterprises (MNEs). Its main contribution is the use of a computable general equilibrium perspective to analyse firms’ performance. The model is calibrated for the case of the Czech Republic, which has been a very attractive foreign direct investment location in the last three decades. We replicate the arrival of MNEs to different sectors of this country in turn and analyse the responses of both types of firms across the 20 different sectors in which the Czech economy has been split. Our results grasp the short‐run impact. The higher labour intensity of national firms leads them to different patterns of production and labour demand, compared with MNEs operating within the same sector. The demand side of the model (particularly, exports and private consumption) drives the evolution of production and labour demand across sectors. Regarding prices, we also find a differential pattern between both types of firms within and across sectors. Our analysis offers detailed evidence on how the impact of MNEs will differ depending on the sector to which they arrive. Finally, the aggregate results suggest that a completely different microeconomic panorama may underlie rather similar macroeconomic outcomes.     

Value co‐creation between foreign firms and indigenous small‐ and medium‐sized enterprises (SMEs) in Kazakhstan's oil and gas industry: The role of information technology spillovers

Study related to the extractive sector still plays a limited role in the mainstream international business (IB) and management literature, with even less focus on ongoing liberalization and digitalization in the industry. This article was motivated by the question of how collaboration between foreign and indigenous oil and gas (O&G) companies can support small‐sized and medium‐sized indigenous technological development. The main contribution of this article is the development of a model that explains how different actors can cocreate value in the ecosystem of the O&G industry through digital technologies. A three‐stage qualitative–interpretive method based on interviews with industry experts was adopted to build three vignette case studies. This article proposes what companies and the government could do to increase the competitiveness of the local economy, diversify from O&G into high technological industries, and support industrial development through information and communication technologies (ICT).     

Some disequilibrium dynamics of exchange-rate changes

The aim of this paper is to suggest a formal dynamic model of the adjustment path of an economy during the time interval between an exchange-rate change and the attainment of a new equilibrium. It is a ‘first-pass’ model insofar as its structure and dynamics are very simple (a labor market and a commodity market are specified, with wage, price, and employment adjustment as functions of excess demand). The two principal conclusions are: exchange-rate changes may produce short-run effects qualitatively opposite to their long-run effects, not only in the current account, but also in employment and output; and knowledge of disequilibrium adjustment speeds for each sector of the economy taken in isolation appears to yield a misleadingly optimistic forecast of the disequilibrium adjustment speeds when all sectors adjust simultaneously to an exchange-rate change.     

WAGE POLICY IN AN OPEN‐ECONOMY KALECKI–KALDOR MODEL: A SIMULATION STUDY

This paper discusses a Post‐Keynesian model of income, production and trade. The one‐country, one‐sector model features Kaleckian investment demand, Kaldorian productivity and a labor market module based on a wage–price spiral. The model is first presented for a closed economy with exogenous real wages; second, for a closed economy with endogenous real wages; third, for an economy open to trade with endogenous real wages. Simulations with different calibrations show key characteristics of the model. Monte Carlo simulations over reasonable parameter ranges shed some light on the effectiveness of wage policies in open economies.     

Sectoral Differences in Plant Start-up Size in the Finnish Economy

New knowledge on the factors behind the choice of plant entry scale is important for understanding the entry process and the recruitment decisions of new plants in different sectors of the economy. The purpose of this paper is to evaluate the effect of various industry attributes on plant start-up size, measured with employment, using data on the entire Finnish business sector. The paper extends previous research by examining the differences between manufacturing and services and by using a richer set of explanatory variables. The relative importance of the covariates for different-sized entrants is taken into account by using a quantile regression approach. The results for manufacturing and services are remarkably similar. However, the findings imply that in the future analysis it is also important to consider the effect of the regional availability of educated and experienced work force on plant start-up size in these two sectors. The findings on the importance of scale economies and industry turbulence in determining start-up size correspond to the earlier studies. The results also show that single plant and multiplant entrants face a rather different entry environment. In addition, the employment share of foreign-owned entrants in the industry has to be taken into account.