The demand for small cars in the United States: Implications for energy conservation strategies

The purpose of this paper was to investigate the impact of household characteristics and preferences for Japanese cars on the demand for small cars in the United States. Two stage probit analysis was used to examine the impact of various explanatory variables on the purchase decision. The results indicated that preferences for Japanese cars, income, price and several household characteristics had a significant impact on the probability of purchasing a small car. The results of this study provide support for freer trade in automobiles and higher gasoline taxes as energy conservation strategies.

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Zusammenfassung Die Nachfrage nach Kleinwagen in USA: Implikationen für Strategien zur Energieeinsparung. Diese Untersuchung wollte herausfinden, wie sich Haushaltseigenschaften und Präferenzen für japanische Autos auf die Nachfrage nach Kleinwagen in den Vereinigten Staaten auswirken. Die Stichprobe umfa\te 367 Haushalte, die im Jahr 1986 ein neues Auto kauften. Davon kauften 141 Haushalte amerikanische Kleinwagen, 84 japanische Kleinwagen und 142 Haushalte kauften gro\e amerikanische Wagen. Eine zweistufige Probit-Analyse prüfte den Einflu\ der verschiedenen Erklärungsvariablen auf die Kaufentscheidung. Die Ergebnisse besagen im wesentlichen, da\ es die Präferenzen für japanische Autos, das Einkommen, der Preis und einige Haushaltseigenschaften sind, die einen signifikanten Einflu\ auf die Wahrscheinlichkeit eines Kleinwagenkaufs haben. Die Autoren sehen in den Ergebnissen eine Unterstützung für die Forderung nach Freihandel im Automobilsektor und nach höherer Besteuerung von Kraftstoffen als Strategien zur Energieeinsparung.

     

Direct and Spillover Effects of Unconventional Monetary and Exchange Rate Policies

This paper explores the direct effects and spillovers of unconventional monetary and exchange rate policies. We find that official purchases of foreign assets have a large positive effect on a country’s current account that diminishes considerably as capital mobility rises. There is an important additional effect through the lagged stock of official assets. Official purchases of domestic assets, or quantitative easing (QE), appear to have no significant effect on a country’s current account when capital mobility is high, but there is a modest positive impact when capital mobility is low. The effects of purchases of foreign assets spill over to other countries in proportion to their degree of international financial integration. We also find that increases in US bond yields are associated with increases in foreign bond yields and in stock prices, as well as with depreciations of foreign currencies, but that all of these effects are smaller on days of US unconventional monetary policy announcements. We develop a theoretical model that is broadly consistent with our empirical results and that highlights the potential usefulness of domestic unconventional policies as responses to the effects of foreign policies of a similar type.     

Income and Wealth Inequality in OECD Countries

This paper summarises some of the key findings and policy recommendations of the latest OECD report on income inequality - “In It Together: Why Less Inequality Benefits All”. In particular, the paper presents new findings regarding the trade-off between inequality and growth, as well as with regard to the impact of the economic crisis and of female employment on the distribution of income and the distribution of wealth. Key policy recommendations derived from these findings are the need to promote employment and good quality jobs, to further improve female participation, to invest in education and skills, and to foster well-designed redistribution policies.     

Quantitative properties of sovereign default models: Solution methods matter

We study the sovereign default model that has been used to account for the cyclical behavior of interest rates in emerging market economies. This model is often solved using the discrete state space technique with evenly spaced grid points. We show that this method necessitates a large number of grid points to avoid generating spurious interest rate movements. This makes the discrete state technique significantly more inefficient than using Chebyshev polynomials or cubic spline interpolation to approximate the value functions. We show that the inefficiency of the discrete state space technique is more severe for parameterizations that feature a high sensitivity of the bond price to the borrowing level for the borrowing levels that are observed more frequently in the simulations. In addition, we find that the efficiency of the discrete state space technique can be greatly improved by (i) finding the equilibrium as the limit of the equilibrium of the finite-horizon version of the model, instead of iterating separately on the value and bond price functions and (ii) concentrating grid points in asset levels at which the bond price is more sensitive to the borrowing level and in levels that are observed more often in the model simulations. Our analysis is also relevant for the study of other credit markets.     

Can integrated infrastructure investment plans contribute to more effective public spending? The case of Mozambique

All countries, especially developing countries with limited financial resources, face difficult decisions in prioritising public funds for investment projects in the face of multiple demands in order to achieve strategic public goals. Effective investment often requires coordination between different institutions and the management of political pressure to divert investment in support of private interests. It also requires the identification of appropriate sources of funds for different purposes. The preparation of an integrated infrastructure investment plan (IIIP) that uses structured approaches to review investment proposals has been suggested, and adopted in some cases, as an instrument to address these challenges and bridge the gap between national planning and sectoral budgeting. This article considers the experience of Mozambique in deploying an IIIP as well as some recent events and concludes that the instrument may be helpful as part of a system of investment planning and allocation but that it has significant limitations.     

Sustainability: The matter of time horizon and semantic closure

It is argued that the time horizon of consideration in our present efforts at sustainability is not the correct time horizon. Implementation of the correct time horizon is revealed to require a bi-level control mode that has been termed semantic closure in theoretical biology. Daly's institutions for a steady-state economy are disclosed to afford the necessary semantic closure. However, it is required that those institutions be switched from a steady-state mode of operation to a peculiar pulsing mode of operation according to seminal calculations by Dyson if true sustainability is to be attained.     

Has the Program 3×1 for Migrants Contributed to Community Development in Mexico? Evidence from Panel Data of 2000 and 2005

This paper examines how collective remittances contribute to regional development by using the community‐level two‐year panel data for the states of Jalisco and Zacatecas in Mexico, which have received the higher amounts of the budget of the Program 3×1 for Migrants. The results from empirical analyses show that the communities that received this program became better‐off between 2000 and 2005, according to the marginalization level. Further analyses suggest that specifically investment in roads, water supply, and non‐agricultural productive projects by the 3×1 program improved community welfare. The regression results on access to the program show, however, that neither the marginalization level nor the migration level determined the access to the program. This suggests that the 3×1 program was not necessarily targeted at the communities with higher marginalization and migration levels.     

Well‐off small‐scale tobacco growers and farm workers in the Mexican agrarian reform (1972–1990)

In this article, I study small‐scale growers of blonde tobacco varieties from the state of Nayarit in Mexico who had contract farming arrangements with the state‐owned company Tabamex (1972–1990). I refer to them as “well‐off small‐scale tobacco growers” given that in the 1960s, 1970s, and the 1980s, they became one of the subaltern social groups that benefited the most from the Mexican Agrarian Reform. I want to set this research apart from the ones carried out on tobacco growers in Nayarit, which have almost exclusively understood this group as agricultural producers and have perceived as secondary, and even as anecdotal, the impact of the high levels of wage labour hired in the region. I argue that in order to have a better understanding of the social relations at play, it is important to take into account that Nayarit tobacco growers have also been employers of farm workers. Hence in my analysis, I have also included the seasonal farm workers hired by these small‐scale tobacco growers because of their importance in the labour force. More specifically, I have looked into the vulnerability and invisibility of these workers both within this branch of agricultural activity and state institutions.     

Erroneous detection of nonuniform DIF using the Breslow-Day test in a short test

This paper studies the Type I error rate obtained using the Breslow-Day (BD) test to detect Nonuniform Differential Item Functioning (NUDIF) in a short test when the average ability of one group is significantly higher than that of the other. The performance is compared with the logistic regression (LR) and the standard Mantel-Haenszel procedure (MH). Responses to a 20-item test were simulated without Differential Item Functioning (DIF) according to the three-parameter logistic model. The manipulated factors were sample size and item parameters. The design yielded 40 conditions that were replicated 50 times and the false positive rate at a 5% significance level obtained with the three methods was recorded for each condition. In most cases, BD performed better than LR and MH in terms of proneness to Type I error. With the BD test, the Type I error rate was similar to the nominal one when the item with the highest discrimination and difficulty parameters in the case of equally sized groups was excluded from the goodness-of-fit to the binomial distribution (number of false positives among the fifty replications of a Bernoulli variable with parameter equal to 0.05).