The balance-of-payments constraint on economic growth in a long-term perspective: Spain, 1850–2000

The balance of payments can act as a constraint on the rate of growth of output, since it puts a limit on the growth in the level of demand to which supply can adapt. In this paper, we examine this issue for the case of Spain, using time series data extending over the period 1850–2000. Overall, the external deficit does not seem to have worked as a constraint on the growth of the Spanish economy over the long run, unless some shorter and specific subperiods, such as 1940–1959 and 1959–1974. The Spanish economy seems to have used external deficits to smooth her level of aggregate consumption, which would be supported by the finding of sustainability of current account deficits along the period of analysis.     

THE MEASUREMENT OF INCOME SEGREGATION

We examine the problem of measuring the extent to which students with different income levels attend separate schools. Unless rich and poor attend the same schools in the same proportions, some segregation will exist. Since income is a continuous cardinal variable, however, the rich–poor dichotomy is necessarily arbitrary and renders any application of a binary segregation measure artificial. This article provides an axiomatic characterization of a measure of income segregation that takes into account the cardinal nature of income. This measure satisfies an empirically useful decomposition by subdistricts.     

Fiscal flows in Europe: The redistributive effects of the EU budget

Fiscal Flows in Europe: The Redistributive Effects of the EU Budget. — In this paper we analyze the redistributive effects of the EU budget among European countries, exploring the relationship between income and fiscal flows, both in per capita terms. Using a new data set on EU budgets from 1986 to 1998, we find that the EU budget has a redistributive effect, though only on its expenditure side. The most redistributive expenditure category is the Regional Fund, followed by the Social Fund and by the guarantee section of the EAGGF. All of them have become increasingly redistributive in time. Total budgetary revenues show only proportionality with income. As regards the net financial balance, three groups of countries are identified, given the treatment they get from the EU budget that cannot be explained by their per capita income levels.     

Price‐cost Margins and Economic Integration: How Important is the Pro‐competitive Effect?

In this paper, we examine whether the so‐called pro‐competitive effect holds when two countries integrate by forming a common market. We propose a general framework of reference, where the price‐cost margin of domestic firms depends on a set of variables in addition to trade costs with the partner country, which might eventually offset the conventional result.     

On the employment effects of outward FDI: the case of Spain, 1995–2011

In this article, we analyse the impact on domestic employment resulting from outward FDI performed by Spanish firms, using industry data for the period 1995–2011. Together with the effects on the total employment, we differentiate the effects according to the particular groups of countries and activities to which those FDI outflows are addressed. In addition, the impact of outward FDI on the demand for labour is also analysed separately for high and low skill levels of the labour force.     

Deficit sustainability and inflation in EMU: An analysis from the Fiscal Theory of the Price Level

Price determination theory typically focuses on the role of monetary policy, while the role of fiscal policy is usually neglected. From a different point of view, the Fiscal Theory of the Price Level takes into account monetary and fiscal policy interactions and assumes that fiscal policy may determine the price level, even if monetary authorities pursue an inflation targeting strategy. In this paper we try to test empirically whether the time path of the government budget in EMU countries would have affected price level determination. Our results point to the sustainability of fiscal policy in all the EMU countries but Finland, although no firm conclusions can be drawn about the prevalence of either monetary or fiscal dominance.     

Mixed oligopoly and spatial agglomeration: a comment

Abstract.  This paper extends Matsushima and Matsumura (2003) by incorporating a large production cost difference between public and private firms in a quantity setting spatial mixed oligopoly. The public and private firms first choose their locations in a linear market and then compete in quantities. It is shown that for a significant inefficiency of the public firm, all firms (including both public and private firms) agglomerate at the market centre.     

Learning-by-doing,technology-adoption costs and wage inequality

In the dominant literature, the technological-knowledge bias that drives wage inequality is determined by the market-size channel. We develop an endogenous growth model with two technologies in which: a specific quality of labour, low or high-skilled, is combined with a specific set of quality-adjusted intermediate goods; the market-size channel is practically removed; adoption costs and learning-by-doing are linked with labour endowments. By solving transitional dynamics numerically, we show that changes in the supply of labour affect learning-by-doing and technology-adoption costs, which, in turn, influence the technological-knowledge bias and thus wage inequality. The proposed mechanisms can accommodate facts not explained by the previous literature.