Regional integration and innovation offshoring with occupational choice and endogenous growth

We study the effects of regional integration on patterns of production and offshoring in a two-region model of occupational choice and endogenous growth. The distribution of asset wealth and allocation of heterogenous workers into innovation and production determines relative market size. When trade costs and knowledge dispersion are high (low), the asset wealthy (poor) region has a larger market and greater shares of innovation and manufacturing. For low to intermediate levels of trade costs, innovation and manufacturing offshoring flows toward the larger region, but when trade costs and knowledge dispersion are high, offshoring flows from the larger asset wealthy region to the smaller asset poor region. Economic growth is unaffected by the shifts in innovation and production that coincide with changes in relative market size.     

Fiscal policies,frictional labor market,and endogenous growth

This paper considers the spillover effects from public spending, and studies optimal fiscal policies in frictional labor markets. We obtain that the optimal shares of government spending in production and consumption are the same as those in a frictionless labor market under the Hosios condition. However, as higher capital accumulation increases the cost of job creation and maintenance, the optimal tax rate of capital income is positive. In addition, when the labor market is frictional, the marginal benefit of labor is larger than the marginal utility of leisure. Thus, consumption and labor should not be taxed uniformly any more. Our calibration suggests that all of the three tax rates should be positive. Moreover, in the situation in which the Hosios condition does not hold, the shares of public productive spending and public consumption both increase when the worker’s bargaining power is greater than the elasticity of search in the matching function.     

Capital specificity,imperfect labor mobility and growth in developing economies

Labor markets in developing economies may be afflicted by a multiplicity of interacting distortions. We consider a general equilibrium model of an economy distorted by both sector-specific sticky wages and imperfect mobility of labor. In this framework, we contrast the implications of capital accumulation in the short and long run. We show that, in contrast to both the case in the absence of a sector-specific sticky wage and the case in the absence of imperfect labor mobility, the short and long-run effects of growth on the economic system converge as the degree of labor mobility is limited.     

Optimal time-consistent fiscal policy under endogenous growth with elastic labor supply

We explore the implications of incorporating an elastic labor supply in an endogenous growth economy when characterizing the time-consistent Markov policy. We consider two policy instruments: an income tax rate and the split of government spending between consumption and production services. The Markov-perfect policy implies a higher income tax rate and a larger proportion of government spending allocated to consumption than those chosen under a commitment constraint on the part of the government. As a consequence, economic growth is slightly lower under the Markov-perfect policy than under the Ramsey policy. Under the Markov and Ramsey optimal policies, a higher weight of leisure in households' preferences leads to a lower optimal income tax rate and a lower proportion of public resources devoted to consumption. We also show that the policy bias that would arise when imposing a Markov policy designed ignoring the presence of leisure in the utility function would lead to a significant welfare loss.     

International factor mobility and the labor market: A macroeconometric analysis of the German labor market

This paper deals with some problems of international factor mobility with respect to labor using the case of the German labor market. A quarterly macroeconometric model of the German labor market is developed and estimated. It consists of equations explaining labor supply and demand for men and women. Most equations distinguish between labor measured in persons and hours. After a determination of the variables of this model which are influenced by foreign employment two groups of foreign workers which differ according to their EC-member status are discussed separately. Because of several legal and institutional regulations a different treatment of each group with respect to employment policy is necessary. For foreigners from outside the EC alternative reaction functions of the government are discussed and estimated. As the officially published unemployment rate is not comparable intertemporally because of foreign involuntary remigration during recession a new unemployment series including these persons is constructed and explained. The influence of foreign employment on wages is examined and two wage equations are estimated. Finally, some simulation results of an enforced remigration policy are reported.     

Perpetual youth and endogenous labor supply: A problem and a possible solution

In the “perpetual youth” overlapping-generations model of Blanchard and Yaari, if leisure is a “normal” good then some agents will have negative labor supply. We suggest a solution to this problem by using a modified version of Greenwood, Hercowitz and Huffman’s utility function. The modification incorporates real money balances, so that the model may be used to analyze monetary as well as fiscal policy. In a Walrasian version of the economy, we show that increased government debt and increased government spending raise the interest rate and lower output, while an open-market operation to increase the money supply lowers the interest rate and raises output.     

Preference for redistribution during structural change with labor mobility frictions

Thorough structural change occurs periodically across world economies. In a parsimonious overlapping generation setup with political economy, we present a novel result: structural change not only exacerbates the rise in inequality but also strengthens the preference for redistribution. Labor mobility frictions are instrumental in this mechanism.     

The quest for status and endogenous labor supply: the relative wealth framework

We analyze the implications of relative wealth preferences in a Ramsey model with endogenous labor supply. In contrast to relative consumption preferences, they allow for the possibility that agents work too little in the long run, while under both specifications the steady-state levels of consumption and the stock of physical capital exceed their socially optimal counterparts. Even in the case of excessive leisure agents are worse off in terms of intertemporal utility because initial transitional dynamics are characterized by under-consumption and excessive work effort. “Too much” long-run consumption of goods and leisure is possible due to the excessive capital-labor ratio.      

A simple endogenous growth model with endogenous fertility and environmental concern

We analyze the implications of endogenous fertility choices on both economic and environmental performances in a stylized AK‐type growth model. Differently from what traditionally assumed in the growth and environment literature, we allow pollution to be not only a by‐product of productive activities by firms but also a result of households’ behavior, as suggested by the celebrated IPAT equation. We show that along the balanced growth path equilibrium, economic growth may be non‐monotonically related to the population growth rate as agents care for the environment; moreover, demographic policies can be used both to achieve win‐win outcomes (simultaneously fostering economic growth and improving environmental quality) and to stabilize the otherwise non‐monotonic economic and population growth relationship.     

Awareness and growth: information externalities in endogenous growth

This paper develops a general version of an endogenous growth model due to Barro. The focus is on the level of awareness of the private sector of the fiscal constraints that bind government policies. It is proved that, except in very special cases, optimal tax regimes are not constant and require detailed knowledge by government of technology, tastes and level of awareness; this casts doubts on the robustness of the model and its validity for policy recommendation.     

Consumption taxation, social status and indeterminacy in models of endogenous growth with elastic labor supply

In this paper, we examine the effects of consumption taxation on long-run growth in an infinitely lived representative-agent model of endogenous growth with endogenous labor supply in which the desire for social status induces private agents to care about others’ wealth or consumption levels. This analysis shows that the increase in consumption taxation raises (reduces) the long-run growth rate when the equilibrium path is locally indeterminate (determinate), provided the desire for social status is not too strong in the relative wealth model. By contrast, in the consumption externalities model, the same result holds, if the Frisch labor supply and labor demand curves have the ‘normal’ slopes at their intersection point, while the result is reversed if these two curves have the ‘wrong’ slopes.     

Effect of goods market segmentation on labor mobility: Evidence from China

This study empirically investigates the effects of goods market segmentation on interregional labor mobility using data from National Population Surveys in China. The findings reveal that a one-standard deviation increase in the goods market segmentation index reduces interprovincial migration by 4.0%. Restraining interregional trade and improving industrial specialization are the two mechanisms at work. Further analysis indicates that the restrictive effect of goods market segmentation is greater on highly educated laborers and the labor flows from poorer to richer regions. The heterogeneous analysis also implies that migrants are more concerned about educational resources and consumption diversity.     

A Schumpeterian model of endogenous innovation and growth

A disequilibrium model of endogenous innovation and growth is presented. The behaviour of the agents is supposed to be governed by routines, not by maximization. The entrepreneurs are assumed to invest a fraction of their operating profits in real capital accumulation, and another fraction in R&D. The latter leads to an increase in labour productivity via a R&D production function. In this Schumpeterian model, not only the R&D processes of innovations are considered, but the diffusion processes as well. As in Schumpeter's theory of economic development the economic impact of technical change is considered a disequilibrium phenomenon. Thus, in a capitalist economy characterized by ongoing diffusion processes of innovations, time averages are more important than steady state values even in a long run perspective.     

A note on endogenous growth and scale effects

This paper reconciles the recent vs. very long-run evidence on scale effects in endogenous growth models by extending Howitt's (1999) model to include a subsistence constraint in consumption. Scale effects will be present only when this constraint is binding.     

A new test for fiscal sustainability with endogenous sovereign bond yields: Evidence for EU economies

In this paper we develop a new test for fiscal sustainability and propose a synthetic fiscal sustainability indicator. Conventional tests based on fiscal reaction functions assume a constant real interest rate. However, many empirical studies find evidence on a positive response of long-term rates to sovereign debt levels. We take this evidence into account and endogenize the long-term real interest rate in testing fiscal sustainability. We apply the new test for the European economies. We find that considering the response of interest rate to debt may change the assessment of fiscal sustainability. More specifically, our results indicate that fiscal sustainability is at risk in a number of European Union economies, even if the results of traditional approaches suggest sustainable fiscal policy.     

股票期权激励:人力资源管理新机制

作为对传统年薪制的改进,股票期权激励方案把金融市场上规避风险的衍生金融工具——期权与公司治理相结合,产生了委托——代理关系中人力资源管理的最新激励机制。同时,它把期望理论的努力——绩效——奖励关系中的“绩效”变为长期经营绩效,约束了企业经营中的短期行为。在社会主义市场经济中,有必要和可能因地制宜地引进并构造出中国式的股票期权激励方案,以使企业在经营管理,特别是人力资源的管理方面走出一条新路。股票期权激励——现代企业管理中的创新随着现代企业制度的建立和完善,我国企业的所有权和经营权将进一步分离,从…     

What role for human capital in the growth process: new evidence from endogenous latent factor panel quantile regressions

The estimates for the human capital effect in cross‐country growth regressions have been subject of considerable controversy. We argue that human capital is intrinsically a multidimensional construct. We construct human capital measure by combining available alternative proxies via confirmatory factor analysis. Using panel data endogenous quantile regression methods we analyse the whole conditional growth distribution by simultaneously accounting for the potential endogeneity of human capital and country‐specific effects. Our results conform to theoretical expectations and we are able to demonstrate the beneficial effect of both the measurement approach and the endogeneity correction on the derivation of theoretically consistent estimates.