RECIPROCITY IN INTERNATIONAL TRADE

This article is in two parts. First, the theoretical basis underlying the possibility of reciprocity in trade is stated. Secondly, a study has been made of statistics of post war trade between the U.K and its major trading partners in an attempt to see whether any evidence of reciprocity emerges and, if so, the nature of the relationship. Doubt is cast on the supposition that a calculation of net import saving is a reliable short-run estimate of net balance of payments contribution of an expansion of U.K. agriculture. Finally, the results of the analysis are applied to the level of import saving projected by the National Economic Development Committee's Report on “Agriculture's Import Saving Role”.     

Alternative Mortgage Instruments, Qualification Constraints and the Demand for Housing: An Empirical Analysis

Government-guaranteed mortgage loans (GFRMs) and adjustable-rate mortgages (ARMs) were introduced to make payment to income (PTI) and loan-to-value (LTV) qualification conventions less restrictive. This paper analyzes the effect of GFRMs and ARMs on the demand for housing. Using a large national data set for the 1988 to 1989 period, we employ a two-stage procedure to estimate housing demand. In the first stage, a multinomial logit model estimates the probability of choosing an FRM, ARM or GFRM. Predicted values from the logit are used to construct user costs and estimate housing demand. Using the model estimates, we simulate demand under four different mortgage availability regimes: FRM, FRM and GFRM, FRM and ARM and all three. These simulations indicate that GFRMs, by relaxing LTV constraints, increase housing demand by approximately 6.2% relative to the FRM regime; the addition of ARMs, by relaxing both PTI and LTV constraints, raises demand by an additional 6%, for a total of 12.2% with inclusion of all alternatives.     

THE IMPACT OF RURAL OUTMIGRATION ON REGION OF ORIGIN IN KOREA*

To assess the impact of rural outmigration on regions of origin, this paper borrows from international trade theory to develop a model of rural-to-urban migration. Borrowing from theories of nontraded goods and Dutch Disease, a model is developed for application to Korea. The model finds that rural outmigration can be detrimental to the rural sector when outmigration reduces farm profitability and triggers deterioration in the rural service sector. Farm profitability falls because of rising labor costs that cannot be passed on to consumers. The rural service sector falters when outmigration reduces market demand while raising input costs. County (kun) level Korean census data are used to test the model.     

Evaluating Expert Systems in a Financial Domain: A Study Demonstrating Issues in Case Selection,Validation Standards and Evaluator Bias

This article describes and generalizes a validation study of four commercially available personal financial planning expert systems and the rationale for the research methodology used. Our evaluation of these systems adds to the understanding of verification and validation issues related to case selection, validation standards and evaluator bias. The article describes the systems, their domain and the empirical method—field tests using hypothetical cases—and relates that method to the literature. Comparing same-task systems combines multiple system perspectives and multiple models. Our methodology did efficiently and effectively identify conflicting terminology, omissions and system weaknesses but was inadequate for comparing the complex plan recommendations. The results re-emphasize the importance of continual knowledge base updating, formal system testing and the need for external evaluation. The results also show the value of comparing multiple, same-task systems.     

Frequent-user patients: reducing costs while making appropriate discharges

Homeless patients who lack access to the health resources they need to maintain their health on their own pose a challenge for hospitals: Premature discharge of such patients can result in their being readmitted to the hospital in a short time, leading to higher costs for the hospital. Hospitals can address this problem by developing clear, effective homeless discharge policies and by developing ongoing relationships with appropriate medical respite care providers. A hospital also can benefit from spearheading an initiative to develop a medical respite program, enlisting the assistance of other community stakeholders.     

The new ecological paradigm and responses to climate change in China

The purpose of this study was to develop and evaluate a Chinese-Mandarin version of the revised new ecological paradigm (NEP-R) scale. In a sample of 515 Mandarin-speaking Chinese nationals, we first assessed the factor structure and internal consistency of the NEP-R and assessed its validity by examining associations with global warming risk perceptions and mitigation behavior. Respondents completed the NEP-R scale, together with measures of risk perception and mitigation behavior. Exploratory and confirmatory factor analyses indicated that a two-factor solution, reflecting ecocentric and anthropocentric worldviews, best fit the data. Multi-group path analysis revealed that respondents with stronger ecocentric and weaker anthropocentric worldviews perceived more risks associated with global warming. In turn, respondents who perceived more risks reported engaging in more global warming mitigation behaviors. But importantly, the path between risk perceptions and behavior was significantly stronger for highly educated respondents than for less educated respondents, suggesting that education may represent an important strategy for bridging the gap between perceived risks about global warming and action.     

A complete asymptotic series for the autocovariance function of a long memory process

An infinite-order asymptotic expansion is given for the autocovariance function of a general stationary long-memory process with memory parameter d∈(−1/2,1/2)$d\in (-1/2,1/2)$. The class of spectral densities considered includes as a special case the stationary and invertible ARFIMA(p,d,q$p,d,q$) model. The leading term of the expansion is of the order O(1/k^1−2d)$O(1/k^{1-2d})$, where k$k$ is the autocovariance order, consistent with the well known power law decay for such processes, and is shown to be accurate to an error of O(1/k^3−2d)$O(1/k^{3-2d})$. The derivation uses Erdélyi’s [Erdélyi, A., 1956. Asymptotic Expansions. Dover Publications, Inc, New York] expansion for Fourier-type integrals when there are critical points at the boundaries of the range of integration - here the frequencies {0,2π}$\{0,2\pi \}$. Numerical evaluations show that the expansion is accurate even for small k$k$ in cases where the autocovariance sequence decays monotonically, and in other cases for moderate to large k$k$. The approximations are easy to compute across a variety of parameter values and models.     

Regulator performance,regulatory environment and outcomes: An examination of insurance regulator career incentives on state insurance markets

In this paper we test whether the past or future labor market choices of insurance commissioners provide incentives for regulators in states with price regulation to either favor or oppose the industry by allowing prices that differ significantly from what would otherwise be the competitive market outcome. Using biographical data on insurance regulators, economic and state specific market structure and regulatory variables, and state premium and loss data on the personal automobile insurance market, we find no evidence consumers in prior approval states paid significantly different “unit prices” for insurance than consumers in states that allow competitive market forces to determine equilibrium prices during the time period 1985–2002. We do, however, find evidence regulators who obtained the position of insurance commissioner by popular election and those who seek higher elective office following their tenure as insurance commissioner allow higher overall “unit prices” relative to competitive market states. The “unit price” of insurance in regulated states is not statistically different from the competitive market outcome for regulators that make lateral moves back into state government and it is mildly higher for regulators who enter the insurance industry following their tenure. Finally, we find some evidence regulators who describe themselves as consumer advocates are successful reducing the price of insurance in favor of consumers in regulated markets. Overall the results are consistent with the existence of asymmetric information in the regulatory process that agents use to enhance their career aspirations.     

A Primer on Unit Root Testing

The immense literature and diversity of unit root tests can at times be confusing even to the specialist and presents a truly daunting prospect to the uninitiated. In consequence, much empirical work still makes use of the simplest testing procedures because it is unclear from the literature and from recent reviews which tests if any are superior. This paper presents a survey of unit root theory with an emphasis on testing principles and recent developments. The general framework adopted makes it possible to consider tests of stochastic trends against trend stationarity and trend breaks of a general type. The main tests are listed, and asymptotic distributions are given in a simple form that emphasizes commonalities in the theory. Some simulation results are reported, and an extensive list of references and all annotated bibliography are provided.