Remittances and the Dutch Disease: Evidence from Panel Data for 18 Developing Countries

In this paper, using the GMM technique we attempt to empirically investigate the Dutch disease effect of remittances. The analyses are based on an annual balanced panel data set for 18 developing countries, which have remittances to GDP ratio of 5 percent and above, over the years 1999–2015. It is found that an inflow of remittances has a positive effect on economic growth, whereas it leads to a depreciation of the real effective exchange rate.     

Pareto-improving social optimal pricing schemes based on bottleneck permits for managing congestion at a merging section

Akamatsu, Sato, and Nguyen (2006 Akamatsu, T., Sato, S., &; Nguyen, X. L. (2006). Tradable time-of-day bottleneck permits for morning commuters (in Japanese). JSCE Journal of Infrastructure Planning 62(4), 605–620.[Crossref] , [Google Scholar]) proposed a first-best pricing scheme based on the concept of bottleneck permits. The scheme allows permit holders to pass a bottleneck at specified times and is shown to be able to minimize social cost. However, the scheme is not always Pareto-improving in that it may harm some drivers. The objective of this study is to design Pareto-improving pricing scheme with bottleneck permits for a V-shaped two-to-one merge bottleneck. First, the paper formulates the morning commute model in the network and describes the arrival time choice equilibrium in the network with merging bottleneck. Secondly, we show that the first-best pricing scheme with bottleneck permits for this V-shaped network does not always achieve a Pareto improvement, with the cost of one group of drivers is increased by the permit pricing, a phenomena akin to the bottleneck paradox of Arnott, de Palma, and Lindsey (1993 Arnott, R., de Palma, A., &; Lindsey, R. (1993). Properties of dynamic traffic equilibrium involving bottlenecks, including a paradox and metering. Transportation Science 27(2), 148–160.[Crossref], [Web of Science ®] , [Google Scholar]). We propose three implementations of bottleneck permits for Pareto-improving: (1) merging priority rule is included in the bottleneck permits scheme by creating different market for each origin; (2) the permit revenues are refunded as monetary compensation to drivers whose cost is increased; and (3) the permit revenues are used to expand bottleneck capacity. For each implementation, we derive their equilibrium solutions and demonstrate that the Pareto improvement is achieved and social cost is decreased by using the permit revenues for expanding the bottleneck capacity.     

Individual Characteristics,Behavioral Biases,and Trade Policy Preferences: Evidence from a Survey in Japan

Import liberalization is one of the most actively debated issues in trade policy. This paper examines how trade policy preferences are related to individual characteristics based on a survey in Japan. Among 10,000 surveyed individuals, people working in non‐agricultural sectors, those working in managerial occupations, or those above retirement age tend to favor freer imports. This paper also finds that people who are influenced by the status quo bias are likely to oppose import liberalization even after controlling for each individual's various characteristics, suggesting that neither income compensation nor insurance schemes are sufficient for expanding support for free trade.     

Changing International Financial Architecture: Growing Chinese Influence?

It is often said that the 21st century will be the Asian century. Based on population and gross domestic product projections, it certainly looks as if this will be so. Will the existing international financial institutions give more voices, votes, and top positions to Asia? Or will Asia create its own institutions that would rival the old architecture? This present paper argues, first, that China, and possibly India, will be in a position to be so influential that the international financial architecture may have to go through significant changes. Second, the three large crises in the last 20 years have made Asian countries more confident that they can manage capital flows by accumulating large foreign reserves and by adopting sound macrofinancial policies. After 2009, China started to push various initiatives that will amount to creating its own sphere of influence with new regional institutions in the future.     

Global Current Account Imbalances: American Fiscal Policy versus East Asian Savings*

We consider the origins of global current account imbalances. We first discuss how the expansion of the US current account deficit and the decrease in global real interest rates can be reconciled with the widespread view that American expansionary fiscal policy is partly the source of current trends. We then investigate empirically the medium‐term determinants of the current account using a model that controls for factors related to institutional development. In addition to the conventional macroeconomic factors, we examine a series of environmental factors, including the degree of financial openness and the extent of legal development. We find that for industrial countries, the government budget balance is an important determinant of the current account balance; the budget balance coefficient is 0.10 to 0.49 depending on model specifications. These varying estimates lead us to conclude that fiscal factors might be as important as excess savings arising from East Asia.