Trade with Time Zone Differences: Factor Market Implications

The main purpose of this study is to illustrate, with a simple two‐factor (skilled and unskilled labor) model, how a time‐saving improvement in business‐services trade benefitting from differences in time zones can have an impact on national factor markets. In doing so, we intend to capture the situation where the night‐shift work in one country is replaced by the day‐shift work in another country. In other words, we will show that trade with time zone differences will result in shifts of the relative supplies and demands for skilled labor around the globe.     

The effect of household characteristics on living standards in South Africa 1993–1998: a quantile regression analysis with sample attrition

This paper examines whether the dismantling of apartheid has resulted in an improvement in the standard of living for the vast majority of South Africans. The study is based on a panel data set from the Kwazulu‐Natal province. We use weighted quantile regressions to examine the distribution of standards of living, which corrects for the potential bias arising from non‐random sample attrition. Our results show that there has been a significant increase in the spread of the distribution of household expenditure of the non‐white households residing in Kwazulu‐Natal province. Copyright © 2006 John Wiley & Sons, Ltd.     

Dynamics of capital account and current account in Sri Lanka

This paper enquires the dynamics of current account and capital account in Sri Lanka for the period 2001:Q1 to 2016:Q1 and also examines the role of some policy variables such as exchange rate and interest rate in this dynamics. Estimated autoregressive distributed lag (ARDL) bound testing approach to cointegration followed by error correction representation of the ARDL model have found that current account is caused by capital account and exchange rate, where capital account causes to produce a deficit in current account. In the dynamic adjustment of current account due to exchange rate, an evidence of J-curve phenomenon is noticed. Capital account is neither caused by current account nor by exchange rate but interest rate has a positive impact on it. Robustness of these findings is testified by the vector autoregression model, Wald test of Granger causality followed by an impulse response analysis and a variance decomposition analysis. These analyses, in addition, establish a negative impact of interest rate on current account. With the best of knowledge this is the first study that reveals the dynamics of current and capital account of Sri Lanka. Such a dynamics is critical from the policy perspective. Policy makers should caution before capital account liberalization.     

Reform,informal sector,and extortion

Informal economy involving unrecorded, unregistered, extra‐legal activities employs majority of the work force in the developing world. Such extra‐legal existence of informal production is facilitated through extortion by agents of political forces in power. Also, extortion activities themselves constitute an informal segment. Full‐scale general equilibrium consequences of such institutions are rarely discussed in the literature. We develop a well‐specified general equilibrium model to explore the possible consequences of reform. Economic reform may have an expansionary effect on the number of extortionists. Depending on capital mobility and factor intensity assumptions informal output and informal wage may increase.     

The probability,size and uses of remittances from urban to rural areas in India

This paper examines the important determinants of the decision to remit and of the amount remitted by migrants in Delhi to their place of origin. The findings are compared with those obtained for Kenya by Knowles and Anker. The comparative exercise helps us to identify universal patterns of remittance behaviour from those which are time, place and sample specific. The paper also throws light on the validity of infering technological change in agriculture in rural areas from data on uses of remittances.     

Testing for Son Preference in South Africa

Evidence from many developing countries suggests that parentshave a preference for sons over daughters. This has been referredto as son preference. This paper uses individual level unitrecord data to test the son preference hypothesis in South Africa.We use an accelerated hazard model to estimate the durationbetween successive births and our results indicate that sonpreference exists only for the Indian community in South Africa.Indian households are observed to have a higher duration betweenchildren following the birth of a son, irrespective of the numberof children they already have. For the rest of the population,there is very little evidence of son preference. Preferencefor sons could be the result of a combination of factors includingreligious beliefs and social customs such as the dowry system,lineage and familial and kinship ties.     

Determinants and Relationships in Sectoral Trade: A Bilateral Model for Knitwear Clothing

The generalized aggregated trade models do not capture the industry or product‐specific competitive situation and overgeneralize the bilateral cases. As a result, product‐specific trade determinants at the sectoral or bilateral level cannot be sufficiently drawn from such generalized models. This holds true for knitwear clothing products, an important component of international textile trade. To remedy this, we propose a sector‐specific bilateral model in the context of knitwear clothing exports from India to the United States. This pair of countries is chosen due to unilateral trade flows as well as to underline the contrasting features of developed north versus developing south. The vector autoregression (VAR) model was found more appropriate than other available modeling choices. We used monthly frequency data from January 2006 to December 2012. The traditional determinants such as exchange rate and price competitiveness remain relevant. Chinese competition emerges as a significant determinant, which underlines the relevance of a sector‐specific bilateral trade model. The 2009 recession showed a clear impact, albeit for only a few months. Our model is parsimonious but has more explanatory power than generalized models. Policy researchers may further explore the model for more fine‐tuned policy on sector‐specific factors. © 2016 Wiley Periodicals, Inc.     

A Note on How and Why Growth and Unemployment Go Hand in Hand in Developing Economies

This paper develops a simple model to explain the phenomenon of persistent unemployment, even in an economy experiencing high output growth. In the model, unemployment grows at a rate identical with the growth rate of input factors and sectors. The result is primarily triggered by a pre-fixed minimum wage for unskilled workers. To corroborate our claim, we have empirically tested our model hypothesis using data for 12 developing countries and found empirical results consistent with the theory. To mitigate or reduce unemployment, history becomes crucial in deciding on the desired rate of growth in different sectors.