Command-and-control revisited: Environmental compliance and technological change in Swedish industry 1970–1990

This paper addresses the issue of environmental policy instrument choice for achieving deep emission reductions in the industrial sector. Specifically, it provides: (a) a theoretical and empirical review of the conditions under which performance standards can provide efficient incentives for deep emission reductions and technology adoption; and (b) an analysis of the design and the outcomes of the standards-based regulation of industrial pollutants in Sweden during the period 1970–1990. Our empirical findings suggest that the Swedish regulatory approach comprised many key elements of an efficient policy-induced transition towards radically lower emissions in the metal smelting and pulp and paper industries. The regulation relied solely on performance standards, thus granting flexibility to firms in terms of selecting the appropriate compliance measures. These standards were implemented in combination with extended compliance periods. R&D projects and the new knowledge that was advanced incrementally in interaction between the company, the environmental authorities and research institutions provided a direct catalyst to the regulatory process. In these ways the Swedish regulatory approach provided scope for creative solutions, environmental innovation, and permitted the affected companies to coordinate pollution abatement measures with productive investments.     

The effect of city size on the urban income distribution through time: 1950–70

In the literature on the urban income distribution two important questions have been ignored. First is the question of the appropriateness of hypotheses testing on samples of SMSAs with broad ranges of populations sizes. The second question is the stability of the effects of city size and other determinants on the urban income distribution through time. This stability is crucial to the propriety of drawing policy implications from previous studies which have employed data from only a single point in time. This study finds that hypotheses tests are sensitive to the size classes of cities being examined, and hence the results of hypotheses tested for SMSAs with broad ranges of population may be misleading. The present analysis also reveals that significant structural changes have taken place in the standard linear model over time, and therefore inferences regarding the future from past studies should be viewed with caution.     

Change in income distribution and aggregate spending: constraints on full-employment?

During the 1980s, rising income inequality in the UK resulted partly from market conditions, and partly from supply-side policies that reduced social security benefits and income supports for low-wage earners. Greater Inequality, plus low levels of investment spending (relative to consumption)hinder the ability of demand management to raise the level of output and employment in the UK economy. Higher income earners have higher import propensities. Consequently, at any stage of the economic cycle, the trade dificit is now larger than it was before 1980. Increases in demand leak into a demand for imports, further reducing the incentive to invest. The paper argues for lower interest rates to encourage investment, and a fiscal policy that redistributes income towards those with lower incomes to solve these problems.     

Cyclical and political influences on the size distribution of income in the US (1959–1989)

This study addresses the question of whether exchange rate pass-through into the import price is symmetric between appreciation and depreciation of the home currency. The dramatic increase of the dollar in the early 1980s and the subsequent decline provided a necessary setting for testing whether there was a structural change in the exchange rate pass-through. Examining import price data for 98 disaggregated SIC industries in the US manufacturing sector and the US import price for all commodities, mixed evidence is found regarding the stability of exchange rate pass-through.     

The distribution of income in Sri Lanka in 1969–1970 and 1980–1981: A decomposition analysis

In 1977 the Sri Lankan government implemented a comprehensive policy of economic liberalization, removing many government controls on the economy and providing incentives for both foreign and domestic investment. The previous policies were often justified as necessary to maintain an equitable distribution of income. Income data from 1969–1970 and 1980–1981 surveys indicate that inequality has increased, but these data are shown to be unreliable for drawing conclusions on changes in the distribution of income. Expenditure data from the same surveys indicate that inequality has declined in the 1970's, both in the economy as a whole and within all sectors and ethnic groups.     

Empirical analysis on TFP change in Chinese logistics industry： A nonparametric Malmquist index approach

Through a nonparametric Malmquist index approach, this paper analyzes the total factor productivity change in China＇s logistics industry with panel data of logistics listed corporation from 1999 to 2006, which decomposed into technical efficiency and technical progress. The result shows： （1） The average growth rate of Chinese logistics corporations from 1999 to 2006 is 0.4%, which is mainly due to the improvement of technical efficiency; （2） Technical progress which took the negative effect of the decline could not be neglected; （3） The role of technical efficiency and technical progress are different with time varying.     

Does the microsimulation approach used in macro–micro modelling matter? An application to the distributional effects of capital outflows during Argentina's Currency Board regime

We provide a novel comparison between the behavioural and the non-parametric microsimulation approach. Coupled with a CGE model, we consider the distributional effects of the significant capital outflows faced by the Argentinean economy at the end of its Currency Board, in a context with significant macroeconomic similarities to the present crisis in Greece. Both the relatively straightforward ‘non-parametric’ approach and the more complex behavioural approach lead to distributional results that are consistent with the data, suggesting that both are viable alternatives. Looking forward, it would be desirable for researchers to look for additional evidence regarding the distributional effects that these microsimulation models can illuminate for given macroeconomic shocks.     

Profit-sharing versus interest-taking in the Kaldor–Pasinetti theory of income and profit distribution

Abstract

This paper reformulates the Kaldor–Pasinetti model of income and profit distribution by introducing the interest rate from the very outset of the model but maintaining other Kaldor–Pasinetti assumptions intact. It is shown that the profit rate and the share of profits in national income are not independent from either the capitalists' or workers' propensity to save. Many contributors to the theory of income and profit distribution have erred in attributing a potentially positive impact of the interest rate upon profits. The interest rate is always and everywhere a tax on functional and personal incomes together. This result explains Schumpeter's observation that ‘Interest acts as a tax upon profit.’ In an alternative model, workers receive a share of profits instead of fixed contractual interest. It is shown that the profit rate and share are not independent from either propensity to save. Furthermore, the workers' share of profits has a positive impact on the rate and share of profits. This implies that a profit sharing regime could be more conducive to capital accumulation and job creation. It is found that Pasinetti's Cambridge Equation is more akin to a profit sharing regime.     

Integrating bank profit and risk-avoidance decisions for selected European countries: A micro–macro analysis

A two-equation integrated model is developed to capture bank profit and risk-avoidance decisions. Output is limited to customer loans. The profit function is based on output and selected inputs. Risk-avoidance (using the capitalization ratio) depends on micro and micro 1 macro interactive variables. The SUR method is used to test the hypothesis that the two functions are interdependent. Also, a single reduced-form equation is derived from the SUR model to analyze the volatility of the capitalization ratio. Five European countries and their banks for the period 1991–2001 are used to run the regressions and to test the hypothesis. The individual statistical results were generally consistent with similar results found in the literature. The Breusch–Pagan test of independence was rejected. A key finding from the volatility analysis suggests that bank profit rates are inversely related to the volatility of the banks' capitalization ratios as measured by their variances.     

The opening of the North–South divide: Cumulative causation,household income disparity and the regional bonus in Taiwan 1976–2005

During the last decades regional income divergence seems to have reappeared in both developed and developing countries. In Taiwan – a renowned case of growth with equity – regional per capita income was converging until the early 1990s after which it began to diverge. With the help of modeled annual household survey data from 1976 to 2005 we indicate the magnitude of a regional bonus and discuss reasons behind the re-opening of the North–South income divide in Taiwan. Our analysis suggests that this process is a consequence of cumulative causation connected to the advent of the rise of ICT industry in conjunction with changes in Taiwan's political economy which provided relatively more advantageous economic opportunities for the industrial structure of the leading region.     

Short-term trends in China’s income inequality and poverty: evidence from a longitudinal household survey

In the past three decades, income inequality in China has increased rapidly relative to both China’s own past and other countries at similar levels of economic development. Using recent longitudinal data from the China Family Panel Studies (CFPS), this article examines changes in income inequality and poverty prevalence between 2010 and 2012. Surprisingly, we find a modest decline in income inequality as measured by the Gini coefficients in the CFPS data. The urban–rural gap narrowed, with rural families enjoying faster income growth than urban families enjoyed. Income growth was greater for middle-income families than for families with either high or low incomes in 2010. By all measures, poverty was greatly reduced between 2010 and 2012. Two-thirds of families that had been poor in 2010 escaped poverty by 2012.     

Structural change in the United States: Social accounting estimates for 1982–1988

During the 1980's, extensive structural adjustments took place in the U.S. economy. This paper uses estimates of sectorally detailed social accounting matrices to evaluate the changes in receipt and expenditure patterns, including interindustry linkages, over the 1982–1988 period. Among other effects, our results reveal increasing service orientation, shifts in energy use, and increased import and foreign investment dependence. Detailed evidence on direct and indirect demand linkages indicates large shifts in the composition of government expenditure and private investment, the latter being intensified by declines in the rate of domestic capital formation.We would like to thank Greg Alward for the 1982 IMPLAN input-output data, Norman Bakka for the National Income and Product Account Data, Ken Hanson for helpful suggestions, Mark Planting for 1985 BEA input-output data, Valerie Personick for the activity output data, and two anonymous referees for helpful comments.     

Bankruptcy in the pulp and paper industry: market’s reaction and prediction

This paper examines North American pulp and paper company bankruptcies that occurred between 1990 and 2009. We demonstrate that shareholders suffer substantial losses (37 %) during the month a bankruptcy occurs. Encouragingly, we show that financial ratios are useful in predicting firm failure and that failed firms are less profitable, more liquidity constrained and higher in debt leverage. Using a binary logit model in the spirit of Ohlson (J Acc Res, 19, 109–131, 1980), we predict financial distress for pulp and paper firms 1 to 2 years ahead of the bankruptcy. We also adapt and re-estimate the empirical model on a sample of pulp and paper firms and perform in-sample and out-of-sample forecasts. For the out-of-sample analysis, our re-estimated Ohlson models correctly predict 93 % of bankruptcy and non-bankruptcy outcomes.     

Structural change and macroeconomic policy: the case of Greece (1981–85)

This article examines one aspect of ‘alternative economic strategies’ which seek to introduce planning and other interventionist economic policies in order to promote structural change. Experience has shown, most recently in France and Greece in the 1980s, that such strategies are often abandoned because of macro-economic imbalances, such as current account crises. Thus it seems that a crucial aspect of such strategies should be the co-ordination of short-term, or macro-economic, policies with longer-term supply-side policies. The interest in the Greek experiment (1981–85) lies in the fact that the Greek socialists were aware of the need for such co-ordination and their strategy for ‘stabilization through development’ and ‘gradual adjustment’ was formulated for this purpose. This article looks at the economic theory underlying this approach and the implementation of the strategy. However it is argued that the degree of control necessary for the successful implementation of the strategy was lacking. The failure of macroeconomic policy once more contributed to the abandonment of an alternative economic strategy. I investigate the reasons behind this failure and draw some lessons of more general relevance for the successful co-ordination of macroeconomic and supply-side policies.

Accumulation involves a process of continual structural transformation, a qualitative change, in which the scale, content and location of economic activity are progressively transformed. There is no automatic mechanism ensuring that this takes place in a desirable manner or at a desirable pace (Eatwell and Green, 1984: 202).     

Economic class and the distribution of income: a time-series analysis of the UK economy, 1955–2010

This paper contributes to our understanding of the determinants and dynamics of surplus-value using quarterly UK data, 1955–2010, and the Johansen (1988 Johansen, S. 1988. Statistical analysis of cointegrated vectors. Journal of Economic Dynamic and Control, 12: 231–54. [Crossref], [Web of Science ®] , [Google Scholar], 1991 Johansen, S. 1991. Estimation and hypothesis of cointegration vectors in Gaussian vector autoregressive models. Econometrica, 59: 1551–80. [Crossref], [Web of Science ®] , [Google Scholar]) cointegration and vector error correction model (VECM). A model is introduced to define this Marxian concept, before we explain distribution, paying attention to three forces that are traditionally seen as drivers of power in this struggle: (i) working class militancy; (ii) the size of the ‘reserve army’ of the unemployed; and (iii) political party. Our results demonstrate the ongoing relevance of Marxian economics in providing an alternative, robust and significant explanation of distribution in the post-war UK economy.     

Comment on ‘Cyclical and secular influences on the size distribution of personal income in the UK: some econometric tests’ by G. Weil

The issue of the relationship between domestic and eurocurrency interest rates is reexamined using the Granger causality test. It is concluded that while earlier results suggesting causality runs from the eurocurrency market to the domestic money market remains valid for the US dollar market, this result cannot be generalized to behaviour in the money markets denominated in sterling deutschemarks.     

Modeling input–output impacts with substitutions in the household sector: A numerical example

Although there have been many elaborations of the basic input–output approach, including multi-regional models, dynamic models, models with variable coefficients, supply-side models, etc., these approaches all have the same limitation. The fixed-coefficients production function assumptions ignore substitutions in response to price changes that can be expected to accompany most shocks— skipping over the heart and soul of market economics. This research note suggests a simple approach to estimating new technical coefficients matrices after a shock so that the consequences of short-term substitution effects can be studied. Given a reduction in income (as reflected in the value added row), households are likely to make substitutions, reducing their final demand by less than the application of base-year I–O coefficients would indicate. But if ex post changed income and consumption can be observed, the application of RAS procedures can generate an appropriately modified A matrix. The resulting set of interdependent substitutions that occurred can be identified. Due to some well known limits in applying the traditional RAS approach, we reformatted it and suggest a new economic model that can link coefficient adjustments to degrees of a priori substitutability and complementarity. Based on this resolution, we look forward to detailed studies of specific coefficients and how they evolve over the short term.     

The changing pattern of industrial technology linkage structure of Korea: Did the ICT industry play a role in the 1980s and 1990s?

The notion of the knowledge-based economy highlights the strategic importance of inter-industrial knowledge flows. Among others, the crucial role of information and communications technology (ICT) industry is emphasized. The pattern whereby technological knowledge is created, accumulated and disseminated through the interactive learning among industries can be portrayed as a network. Based on the network theory, this empirical study analyses, from the dynamic perspective, inter-industrial technological knowledge structure of Korean industries during the reference period of early 1980s to mid-1990s. Overall, the density of the network increased over time, implying that the knowledge network has expanded and intensified. The role of the ICT industry in the global network has also increased but needs to be further strengthened, especially informatization of non-ICT industries by the outflow of ICT industrial knowledge in the future. The findings in turn render some important policy implications that should be addressed in developing technology policy.