Short-Run and Long-Run Effects of Copper Mining on Peru’s Recent Economic Growth

Peru is the second-largest producer and exporter of copper in the world. This paper proposes a novel approach to assess short-run and long-run effects of copper on Peru’s recent economic growth. Annual data over the 2014–2018 period were used to calculate a Mining Contribution Index (MCI). An institutional quality indicator of the World Competitiveness Index of the World Economic Forum measured the dependence of Peruvian economic growth on mining and the quality of its institutions, respectively. Then, monthly data during the period 2005–2018 were used to run vector autoregressive (VAR) and vector error correction (VEC) models to measure copper’s effects on the country’s economy over time. VAR-VEC models included copper production, exports, international price, investment, taxes paid by producing companies, and Peru’s gross domestic product (GDP). Stationarity and causality of variables were verified with the Augmented Dickey-Fuller and Granger tests, respectively. Due to the presence of non-stationary variables, a VEC model was implemented to forecast short- and long-run effects. The main results show that real GDP responds to copper output and other related explanatory variables differently, depending upon the instrument applied. Peruvian GDP has increased dependence on copper mining. The quality of its institutions could explain the presence of Dutch Disease or resource curse theory. Short- and long-run effects of copper output on GDP were generally statistically non-significant. GDP was statistically significant in relation to other mining variables, such as copper exports and the international price of copper.

     

The Impact of Entrepreneurship Education on Entrepreneurial Attitudes and Intention: Hysteresis and Persistence

Do entrepreneurship education programs (EEPs) really influence participants’ attitudes and intention toward entrepreneurship? How is this influence related to past experience and how does it persist? Researchers and entrepreneurship education stakeholders alike have been looking into this question for quite a while, with a view to validating the efficacy of such programs. The authors of this paper propose to operationalize the concept of entrepreneurial intention and its antecedents in an attempt to address those issues. In particular, we propose an original research design where (1) we measure the initial state and persistence of the impact and not only short‐term effects; (2) we deal with a compulsory program, allowing to avoid self‐selection biases; and (3) we deal with an homogeneous “compact” program rather than programs combining multiple teaching components whose effects cannot be disentangled. Our main research results show that the positive effects of an EEP are all the more marked when previous entrepreneurial exposure has been weak or inexistent. Conversely, for those students who had previously significantly been exposed to entrepreneurship, the results highlight significant countereffects of the EEP on those participants.     

Complementarities between firm-sponsored training and information technology use

In this article, we investigate the presence of possible complementarities between investments in information technology (IT) and firm-sponsored training using economy-wide longitudinal representative workplace-level data. Since information on the firm’s capital stock is often missing in such representative data, we match our workplace records to tax data to construct measures of the firm’s capital stock. We find some evidence of positive complementarities between investments in human capital and IT, suggesting that on-the-job training can also have a positive impact on productivity when complemented with investments in CAD or other technologies.     

Implementing the Mortensen rule in a frictional labor market

We show that, in settings where meetings can be multilateral, the allocation rule proposed by Mortensen (1982) can be relatively straightforward to implement: as a local auction conducted by sellers. The implications of using this mechanism in a simple model of the labor market are then explored. We characterize the equilibrium properties of this model, which include wage dispersion, and examine its implied Beveridge curve. A dynamic version of the model is calibrated to the US labor market, and we show that the model can account for observed vacancy rates, given parameters that are chosen to match the average wages and the natural rate of unemployment, although the implied wage dispersion is quite small. Finally, in the limit, as the time between offer rounds in the model approaches zero, the equilibrium approaches the Walrasian competitive equilibrium.     

Do Higher Costs Spur Process Innovations and Managerial Incentives? Evidence from a Natural Experiment

This paper asks whether firms respond to cost shocks by introducing process innovations and increasing the use of managerial incentives. Using a large panel data set of workplaces in Canada, our identification strategy relies on exogenous variation in costs arising from increased border security along the 49^th parallel following 9/11. Our longitudinal difference‐in‐differences estimates indicate that firms responded to the cost shock by introducing new or improved processes, but did not change their use of managerial incentives. These results suggest that the threat of bankruptcy may provide impetus for improving efficiency.     

Testing evolutionary theory of household consumption behavior in the case of novelty - a product characteristics approach

This article tests and extends the evolutionary theory of household consumption behavior, which is an alternative to neoclassical theory. Evolutionary economists offer novel approaches to the analysis of consumption behavior that emphasize the major role of learning in the evolution of consumer preferences and wants. As a possible inspiration for further progress in evolutionary thought, this paper examines the idea of consumer learning by studying the nature of what consumers should learn in the context of ‘novelty’. Our empirical results regarding novelty during the learning process show that consumers learn the ‘new characteristics’ of consumer goods, contrary to the Lancasterian approach, which suggests that the characteristics space of goods is fixed. We show that during the process of consumption, ‘consumer learning’ extends the characteristics space of consumer goods; this phenomenon is far from negligible and differs across product types. Moreover, our results show that the emergence of new characteristics cannot be modeled as a Poisson process because these new characteristics exhibit clear interdependence over time.     

Health Insurance, Liquidity and Growth

Within the context of an endogenous growth model, it is shown that in the presence of health risks which influence household income, the introduction of a private insurance company increases the long-term economic growth rate. The introduction of such an institution has two effects on savings: a level effect and a composition effect. Although the presence of this risk-reducing institution induces a decrease in the level of total savings, as suggested in earlier papers, the rate of illiquid savings, which contribute to growth, increases.
JEL Classification E 1; G 2; O 1; O 4     

RESIDUAL WAGE DISPARITY AND COORDINATION UNEMPLOYMENT*

How much of residual wage dispersion can be explained by an absence of coordination among firms? To answer, we construct a dynamic directed search model with identical workers where firms can create high‐ or low‐productivity jobs and are uncoordinated in their offers to workers, calibrated to the U.S. economy. Workers can exploit ex post opportunities once approached by firms, and can conduct on‐the‐job search. The stationary equilibrium wage distribution is hump‐shaped, skewed significantly to the right, and, with baseline parameters, generates residual dispersion statistics 75–90% of those found empirically. However, the model underestimates the average duration of unemployment.     

Aggregation of Directional Distance Functions and Industrial Efficiency

Three main objectives are pursued in this paper. First, we intend to analyze the aggregation problem of directional distance functions from a constructive viewpoint. We provide necessary and sufficient conditions concerning the structural properties of the production technology and of the nature of groups of firms. Indeed, exact additive aggregation holds for a linear technology and for a direction solely defined in the output space. Second, since these conditions are somewhat restrictive, we are interested in providing a measure for the aggregation bias through the relationship between industrial and structural technical efficiency. Finally, we show that this aggregation bias is a lower bound for industrial allocative efficiency.