Public and private inputs in aggregate production and growth: a cross-country efficiency approach

In a cross section of OECD countries, we replace the macroeconomic production function by a production possibility frontier, total factor productivity being the composite effect of efficiency scores and possibility frontier changes. We consider, for the periods 1970, 1980, 1990 and 2000 one output – GDP per worker – and three inputs – human capital, public physical capital per worker and private physical capital per worker. We use a semi-parametric analysis, computing Malmquist productivity indexes, and we also resort to stochastic frontier analysis. Results show that private capital is important for growth, although public and human capital also contribute positively. A governance indicator, a nondiscretionary input, explains inefficiency. Better governance helps countries to achieve a better performance. Nonparametric and parametric results coincide rather closely on the movements of the countries vis-à-vis the possibility frontier and on their relative distances to the frontier.     

Morally ruled behaviour: The neglected contribution of Scholasticism *

Abstract

In the analysis of ‘justice’ in market exchanges, the scholastic doctors made some contributions to the theories of prices and money. But probably the most important (and neglected) contribution lies in the domain of anthropology, i.e. in the explanation of human nature and human behaviour. In this paper the authors are going to work out two scholastic ideas that provide an alternative to the individualist and utilitarian approach of neoclassical economics. (1) Persons are morally ruled beings; a sense of ‘duty’ is a key element in their behaviour; (2) Persons are social beings competing and cooperating to achieve certain goals. Dominant positions and privileged information grant them special powers that should not be abused.     

The elusive character of fiscal sustainability

We assess the sustainability of public finances in OECD countries using unit root and cointegration analysis, controlling for endogenous breaks. Results deem fiscal sustainability as rather elusive since we find lack of cointegration – absence of sustainability – between government revenues and expenditures (except for Austria, Canada, France, Germany, Japan, Netherlands, Sweden and UK); improvements of the primary balance after worsening debt ratios only for Australia, Belgium, Germany, Ireland, Netherlands and the UK; and Granger causality from government debt to primary balances for 12 countries (suggesting Ricardian regimes).     

Foreign Aid in the Aftermath of Large Natural Disasters

This paper examines Official Development Assistance (ODA) in the aftermath of large natural disasters between 1970 and 2008. Using an event‐study approach, the paper finds that while the median increase in ODA is 18% compared with pre‐disaster flows, the typical surge is small in relation to the size of the affected economies. Moreover, aid surges typically cover only 3% of the total estimated economic damages caused by the disasters. The main determinants of post‐disaster aid surges are found to be the intensity of the event itself and the recipient country's characteristics such as the level of development, country size and the stock of foreign reserves. The paper does not find evidence that political considerations or strategic behavior on the part of donors determine the size of post‐disaster aid surges.     

The mediating role of happiness on the effect of locomotion and effort on salesperson’s performance and cross-selling: the case of financial insurance

In this study, the authors propose a theoretical framework and show how salespeople’s locomotion orientation and effort increase financial sales outcomes (e.g., performance and cross-selling). We propose that a salesperson’s happiness plays a mediating mechanism in these main effects. The authors collected data from two samples. In Study 1, the authors collected data from financial insurance brokers, which worked as a link between insurance companies and customers. In Study 2, the authors analyzed answers from salespeople working on home improvement and construction products and services. First, the results demonstrate that the salespersons’ locomotion (an orientation toward a behavior), effort, and happiness increased sales performance (main effects). Second, salespersons’ locomotion and effort have an indirect effect through individuals’ happiness on our dependent variables, such as sales performance, product performance and cross-selling. Firms can improve individuals’ locomotion and effort by developing goal setting and goal striving.

     

Exploring modern bank penetration: Evidence from early twentieth-century Netherlands

We analyse the estate composition of the richest 30 per cent of people who died in the Netherlands in 1921 to find that households used a broad range of institutions to meet their financial demands. Goods and services were either paid in cash or settled periodically with suppliers. Despite the strong growth of commercial banking in the previous decades, households still made extensive use of peer-to-peer loans, with or without the added security of notarial contracts. Banks only possessed a competitive edge in savings accounts for small surpluses and current accounts, the latter used most frequently by business owners born after 1870. Distance to the nearest bank office did not matter for these people, but wealthy urbanites were more inclined to use banks than their counterparts in the countryside.     

Effects of future pension benefits on pre-retirement labor supply: Evidence from Chile

In this paper, I estimate the effect of future pension benefits on pre-retirement labor supply for a representative sample of Chilean workers. Using nonlinear patterns in pension benefit formulas and a reform that permanently changed non-contributory pensions, I estimate the effect of pension accrual and expected pension wealth on labor force and contributory-sector participation, labor earnings, and hours worked. I find that the effect is concentrated on the impact of pension accrual on the probability to contribute to the pension system. The effect is heterogeneous and is concentrated among middle-aged workers, low-skilled workers, and workers with higher financial literacy.     

Inter- and intracountry effects of the Covid-19 pandemic on wages and economic growth

This paper aims to investigate the impact of the Covid-19 pandemic on technological knowledge, wage inequality, and economic growth, by proposing a Direct-Technical-Change model with two economies, an Innovative and other Follower. Six hypotheses are considered: (i) decrease in the unskilled-labor supply, (ii) decrease in the absolute advantage of unskilled labor, (iii) decrease in the intensity of the unskilled sector, (iv) hypothesis (i) combined with a lower decrease in the skilled-labor supply, (v) hypothesis (ii) combined with a lower decrease in the absolute advantage of skilled labor, (vi) all the variations previously considered. By comparing the steady states before and after the shock, we find an increase in the technological-knowledge bias that favors the skill-intensive sector, which positively affects the skill premium. However, in hypotheses (i) and (iv), the decrease in the relative supply of unskilled labor dominates the effect on the skill premium, which thus decreases. The economic growth rate is always penalized except for hypothesis (iii). Hypotheses (ii) and (iv) are undesirable because they increase wage inequality and penalize economic growth. Governments should support innovative activity, the engine of technological-knowledge progress, and thus economic growth, but with caution not to exacerbate the skill premium.     

Tourism Demand Forecasting with Neural Network Models: Different Ways of Treating Information

This paper aims to compare the performance of three different artificial neural network techniques for tourist demand forecasting: a multi‐layer perceptron, a radial basis function and an Elman network. We find that multi‐layer perceptron and radial basis function models outperform Elman networks. We repeated the experiment assuming different topologies regarding the number of lags used for concatenation so as to evaluate the effect of the memory on the forecasting results. We find that for higher memories, the forecasting performance obtained for longer horizons improves, suggesting the importance of increasing the dimensionality for long‐term forecasting. Copyright © 2014 John Wiley & Sons, Ltd.