Modeling the diffusion of public policy innovations among the U.S. States

This paper describes and validates a general model of state diffusion of public policy innovations. The model can be used to identify whether new policies are likely to become fully adopted into the system of states and the time horizon over which this is likely to occur. Limitations and extensions of the model are also concluded.     

Do Remittances Induce Inflation? Fresh Evidence from Developing Countries

The goal of this article is to examine the determinants of inflation in both the short run and the long run for 54 developing countries using a panel data set covering the 1995–2004 period. Apart from the commonly used economic determinants of inflation, we model the impact of remittances and institutional variables on inflation. Using the Arellano and Bond panel dynamic estimator and the Arellano and Bover and the Blundell and Bond system generalized method of moments estimator, we find evidence that in developing countries remittances generate inflation. The effect of remittances on inflation is more pronounced in the long run. Moreover, we find that openness, debt, current account deficits, the agricultural sector, and the short‐term U.S. interest rate have a positive effect on inflation. We also find that improvements in democracy reduce inflation.     

Role of health expenditure and ICT in a small island economy: a study of Fiji

The economy of Fiji has witnessed a pervasive role of information and communications technology (ICT) on one hand and an increase in lifestyle diseases on the other. The government however has put in policies to exploit the gains from ICT and increased budget allocation to combat some of the burgeoning health problems in their effort to modernize the economy. In this paper, we explore the short-run and long run effects of health expenditure and ICT on per worker output within the augmented Solow framework (Q J Econ 70:65–94, 1956) and the autoregressive distributed lag bounds procedure (Pesaran et al. in J Appl Econ 16:289–326, 2001) over the period 1979–2010. The results show that health expenditure has a positive and significant effect in the short-run only (0.11 %). ICT has positive and significant effect both in the short-run (0.90 %) and the long-run (0.62 %). Further, the Granger-causality tests reveals a strong bi-directional causality between health expenditure and per worker output, a unidirectional strong causation from capital per worker to ICT development, and a weak causation from ICT to per worker output.     

Exploring the nexus between capital inflows and growth in Latin America and the Caribbean: a study of clusters led by Brazil and Mexico

In this paper, we used pooled regression within the ARDL approach and augmented Solow framework to explore the emerging uniformity and polarization in the two clusters led by Brazil and Mexico in Latin America and the Caribbean, adopted from Izquierdo and Talvi http://idbdocs.iadb.org/wsdocs/getdocument.aspx?docnum=35816781, 2011. The results show that effects of capital productivity and official development assistance are predominantly led by Brazil cluster while remittances, foreign direct investment and domestic credit are led Mexico cluster. While ODA is has a negative effect on the region’s growth, capital productivity, remittances, domestic credit and foreign direct investment are promising indicators for short-run and long-run growth in the region.     

Exploring the role of technology,tourism and financial development: an empirical study of Vietnam

Vietnam is one of the emerging and industrializing developing countries in East Asia that has experienced a growth in tourism, information and communications technology (ICT) and financial development over the last three decades largely supported by significant structural reforms to escalate its path towards modernization and industrialization by 2020. In this paper, we explore the short-run and long-run effects of tourism, ICT and financial development over the period 1980–2010. Further, we examine the causation between these contemporary drivers of growth. The results show tourism has a positive and statistically significant effect in the short-run whereas ICT and financial development have a momentous positive and significant effect in the long-run. The causality results show unidirectional causation from capital per worker, ICT and financial development to output per worker; from ICT and financial development to capital per worker; and from capital per worker to tourism. Further, we also note a bi-directional causation between tourism and output per worker indicating their mutually reinforcing effect in the economy.     

Unemployment hysteresis in Australia: evidence using nonlinear and stationarity tests with breaks

This study is an attempt to test the hysteresis versus the natural rate hypothesis in unemployment rate using time series data of the Australia covering the period 1978: 2–2010:12. For the analysis, we employed nonlinear as well as different linear tests (with incorporation of endogenously determined structural breaks) of unit root. We found that the Australian unemployment rate is nonlinear process, has a partial unit root and trend reverting. Therefore, we provide support for the structuralist hypothesis. This finding provides the importance of accounting for exogenous shocks in the series and gives support to the shifting natural-rate hypothesis of the Australian unemployment rate.     

Evidence on Hedging Effectiveness in Indian Derivatives Market

The hedging effectiveness for bank futures and CNX nifty are evaluated in this study. The study is based on 9,569 observations of the daily data for these index futures. For evaluation ordinary least square, co-integrated ordinary least square, generalized auto-regressive conditional heteroscedasticity (1, 1), and constant correlation generalized auto-regressive conditional heteroscedasticity (1, 1) hedging methods are estimated and compared. Result shows that constant correlation generalized auto-regressive conditional heteroscedasticity (1, 1) is an efficient hedging method that maximizes investors’ utility function considering transaction costs. Therefore, investors can rely on this constant correlation generalized auto-regressive conditional heteroscedasticity (1, 1) hedging method.     

Trade Reforms and the Efficiency of Firms in India

In this paper, we analyse the impact of reforms on manufacturing efficiency in India. The sector chosen--the cotton textile industry in India--is a very large employer and exporter and also has considerable historical significance. Its response to the reforms therefore is being watched with some concern. The paper concludes that while there was considerable dispersion in efficiency levels before the reforms, this dispersion has decreased since the reforms. To analyse this, we estimate a best practice frontier for the industry and then measure efficiency as the distance from this frontier. We find that efficiency has increased because the reforms have influenced other factors such as market shares, exports and imports and capital-labour ratios. Our results also indicate that geography--the location of the firm within a state and its proximity to a major urban centre--influences the efficiency levels of firms within it.     

As You Sow So Shall You Reap: From Capabilities to Opportunities

Long-run growth is about the structural transformation (diversification and upgrading) of the economy, itself a function of the accumulation of capabilities that allows a country to produce new and more unique products. In this paper, we develop an “Index of Opportunities” for 96 non-high-income countries. This Index summarises countries' capabilities to undergo structural transformation, as captured by their export baskets. It has four dimensions—sophistication, diversification, “standardness” and possibilities for exporting new products with revealed comparative advantage. We find that China, India, Poland, Thailand, Mexico and Brazil rank high in the index. This means that these countries have accumulated significant capabilities (as reflected in their export baskets) and hence are well positioned for further economic transformation. At the other extreme, Guinea, Malawi, Benin, Mauritania and Haiti score very poorly. While both groups of countries need to focus policy on the development of capabilities that facilitate structural transformation, the nature and degree of policy support required are very different.     

Assessing the potential of SRI management principles and the FFS approach in Northeast Thailand for sustainable rice intensification in the context of climate change

The paper describes the facilitated learning process of farmers, its results and implications in addressing the low productivity of Jasmine rice in northeast Thailand using the SRI-FFS approach in a collaborative action research. Other involved included rice traders, millers, researchers, government and non-governmental organizations. Working through an inclusive process of dialogue, observation, diagnosis, experimentation and exposure to different types of innovative agronomic crop management (IACM) practices resulting from the SRI–FFS approach, participants made a thorough analysis of the current management practices and evaluated various IACM practices for their productivity and profitability. The results confirmed the potential of IACM in enhancing crop and water productivity along with soil fertility with relatively low input-use (seed, water and fertilizers) and higher net farm-income compared to existing crop management practices. However, factors such as (i) the age of the farmers and (ii) off-farm employment opportunity are key drivers that affect the crop management decision-making process. Therefore, exploration of value-added production alternatives and favourable policies is required to sustain IACM that can benefit farmers, consumers and the environment. The participation of policy-makers at the action research continuum is essential for effective follow up, scaling up and sustainability of such environmentally sound practices.