From the transatlantic banking crisis to the euro crisis?

The Transatlantic Banking Crisis has strongly raised debt-GDP ratios in many OECD countries and this is undermining the economic recovery. As regards the euro zone there are special problems which are partly related to lack of fiscal discipline in Greece and to the Irish economic crisis which—largely unknown—basically reflects total failure of prudential supervision to apply EU directives and legislation, respectively. In this context the issue is raised whether or not there are structural problems with the Euro and monetary integration. Moreover, the debt dynamics of governments are analyzed and specifically the issue of whether there is a need for restructuring the debt of Greece. Taking a closer look at the figures for government assets in Greece, it seems possible to strongly reduce the debt-GDP ratio mainly by privatization. As regards Ireland, one may propose that the European Commission or the European Parliament take the country before the European Court of Justice. Finally, a new approach for determining the optimum debt-GDP ratio is presented.     

From boycott to buycott: is activism from the North good for the South?

Review of World Economics - This article provides an original theoretical exploration of the potential effects of northern activism on labor conditions and welfare in the South using a duopoly...     

From financial repression to financial crisis? The case of China

This study explores the connections between financial repression policies and the possibility of financial crisis, a relationship that has been overlooked in previous literature. We focus on China, a country with one of the highest levels of financial repression in the world. China's case shows that when financial repression is maintained at a modest level, as the government did before 2008, the possibility of a financial crisis is low; however, when financial repression policies are pushed to an excessive level, as the government did after 2008, the national asset‐liability structure may be damaged to such an extent that a financial crisis becomes likely. The key to understanding the changing role of China's financial repression policies lies in the survival strategy of the Chinese party‐state, which regards finance as a powerful weapon and is eager to use it to address certain economic, political, or social problems that may endanger its rule.     

From Skills Revolution to Productivity Miracle--Not as easy as it Sounds?

This article surveys the potential impact of skill on productivity.It opens with a review of the utility of productivity as a measureof systemic economic performance, and then goes on to explorethe oft-assumed close and strong relationship between skillsand productivity. The importance of other factors and typesof investment is stressed. These complementary elements maybe at least as important as skill in boosting performance, andtheir absence may negate the impact of public investment ineducation and training. The ability of economic developmentpolicy, particularly as it relates to the Regional DevelopmentAgencies, to address skills and economic development is assessed,and questions are raised about what type and level of skillmight have the largest impact on economic performance. In conclusion,we discuss the demands that new policy approaches are makingupon the machinery and personnel of government. Footnotes ¹ E-mail addresses: keepej{at}cardiff.ac.uk; ken.mayhew{at}pmb.ox.ac.uk;paynej3{at}cardiff.ac.uk     

From boom to gloom: Brazilian labour productivity in manufacturing relative to the United States, 1912–2019

Whereas manufacturing seems to hold the key to modern economic growth, the role of manufacturing in economy-wide convergence across countries is debatable. One strand of scholarship argues that productivity levels in manufacturing tend to remain stable across countries, and that economy-wide convergence takes place through structural transformations. Another strand maintains that productivity levels of less-developed countries tend to approach those of developed countries unconditionally, and that deindustrialization thwarts economy-wide convergence. We examine productivity in Brazilian manufacturing relative to the United States, 1912–2019. The result shows dramatic swings in the Brazilian/US productivity ratio, increasing in the decades following the Second World War, peaking in the late 1970s at impressively high levels, and declining precipitously thereafter. This sluggish performance of Brazilian manufacturing since the peak in the late 1970s has probably hindered income convergence with richer countries.     

China: How to Fight the Antidumping War?

I. IntroductionSince the erection of WTO in 1995, "dumping" has become a major source of trade disputes among its member countries. The number of antidumping cases pending before various legal forums is climbing up rapidly. According to data on antidumping practice of 2002 released by the WTO Secretariat, 21 member countries initiated 330 antidumping investigations against exports from a total of 64 different countries or customs territories. Of the 330 investigations, there were 182 cases initiated by developed countries and therest of 148 were initiated by developing countries. China,     

Who responds to changes to the federal adoption tax credit? Evidence from Florida

The federal adoption tax credit (ATC) can help offset the cost of adoption, yet it is unclear whether it has a positive impact on the number of adoptions or if it merely transfers resources to households who would have adopted anyway. The ATC has primarily been a nonrefundable tax credit, but in 2010 and 2011 the full amount (over $13,000) was available as a refundable tax credit, representing a substantial increase in the benefit to lower- and middle-income families—those with typically low tax liability. Using county-level data from Florida, we estimate an increase of 265 additional public adoptions over what would be expected at the end of 2011. Relative decreases in adoptions in the first months of 2012 suggest that much of this increase is due to retiming rather than new adoptions. The response appears to be concentrated in lower- and middle-income households living in higher-income, more populated areas.     

How China's accession to the WTO affects global welfare?

Conventional wisdom suggests that, if a large nation reduces tariffs, the Rest of the World (RoW) as a whole should immediately experience gains from trade. However, little simulation evidence has been provided to evaluate the welfare effects of China's tariff reduction upon its WTO accession on each of its trade partners. This paper addresses the above issue under both the perfectly competitive model and the monopolistic competition framework à la Eaton and Kortum (2002) and Melitz (2003). Armed by the method of Dekle, Eaton, and Kortum (2007, 2008) to quantify the individual countries' responses to the “China (trade liberalization) shock” at equilibrium, we could check the extent to which global welfare benefit from the import tariff reduction after China's entry into the WTO. The quantitative results show that, both China and the RoW benefit from Chinese participation into the WTO, with estimated welfare gains falling in a range of [1.4697%, 3.8743%] and [0.0743%, 0.1015%], respectively. That is to say, about 58.24% of total benefits extracted from China's accession into the WTO worldwide flow to countries other than China under perfect competition; while under monopolistic competition, the whole world enjoys a 0.1571% welfare increases if firms' entry is restricted, of which 42.64% are injected into the RoW, an equivalent amount of 23.3903 billion US dollars. Since allowing for firms' entry and exit would lead to adjustments in both aggregate price indices and government tariff revenues, welfare gains of the world significantly increase (0.2474%), but these adjustments would slightly distort the welfare changes for other countries in the sense that only 36.50%, which is equivalent to 32.1008 billion US dollars, overflow to the RoW. As a result, some countries gain more, while some less.     

Whatever happened to the Kuznets curve? Is it really upside down?

Kuznets (1955) embarked on a research program whose goal was to find the determinants of the long run levels and trends in income inequality and the relationship between income inequality and economic growth. Recently a small body of theoretical work has developed which tries to obtain the inverted U hypothesis as an equilibrium outcome in dynamic general equilibrium model. One of the types of general equilibrium models which can deliver a Kuznets curve is a model which allows for persistent migration out of one sector, e.g. agriculture, into another—e.g., manufacturing. Most industrialized countries have not only experienced shifts from agriculture to manufacturing, but also into services, especially associated with information technologies. This is responsible for the rise in inequality. If such a model of the arrival of new opportunities is correct, we would not expect to find a Kuznets curve, right side up or up-side down. Here we review the empirical evidence regarding the Kuzuets curve.     

Does Accounting Conservatism Discipline Qualitative Disclosure? Evidence From Tone Management in the MD&A*

We investigate whether accounting conservatism, which has been found to be effective in constraining management opportunism in other settings, constrains upward tone management (UTM) in the Management's Discussion and Analysis (MD&A) portion of the 10-K filing. We hypothesize that conservatism makes it harder for managers to opportunistically downplay bad news and magnify good news when discussing current performance. Consistent with this hypothesis, we find that UTM is negatively associated with several accounting conservatism proxies. Additionally, we hypothesize and find that this association is stronger for firms where managers have higher incentives to manipulate tone. In supplemental analyses, we find evidence to suggest that our results are not due to an endogenous relationship between conservatism and UTM. We also find that conservatism neither encourages downward tone management (DTM) nor constrains managers from conveying real information about future good news. Together, our results suggest that accounting conservatism improves disclosure narratives.     

Did the communists contribute to China’s rural growth?

The communist revolution brought unprecedented changes to China. Yet there is no consensus on its role in the history of China’s modern economic growth. We investigate whether local communist party membership affected developmental outcomes from 1957–78 (the Maoist period) and 1978–85 (the reform period). Focusing on Sichuan, China’s most populous province, we use the Long March as an instrument to tease out causal effects. We find that counties with more communist members made larger strides in educational attainment, road construction, and agricultural mechanization during the Maoist period. However, these counties recorded faster output growth only after 1978. Our findings provide empirical support to field studies conducted by sociologists and historians who argue that the communists improved the organizational infrastructure in China’s countryside. Furthermore, we highlight the futility of solving collective action problems without heeding private incentives.     

If Seebohm Rowntree had studied Sweden - how poverty changed in the city of Göteborg from 1925 to 2003

This paper investigates the development of poverty in Sweden using micro data derived from tax files for the city of G?teborg for the years 1925, 1936, 1947 and 1958, as well as more recent (1983, 1994 and 2003) information. We define poverty as living in a household with a disposable income lower than a poverty line that represents a constant purchasing power all years, as well as poverty lines defined as 60% of contemporary median income. Clear reductions of poverty from 1925 to 1947, as well as from 1958 to 1983, are found. We argue that an important poverty-reducing mechanism during both periods was narrowing earnings disparities. Further, we claim that the poverty reduction from the end of the 1950s to the first half of the 1980s was the outcome of improved transfer systems as well as the establishment of pronounced characteristics of present-day Sweden: the dual earner system.     

Why Is the Farmers'''' Propensity to Consume Lower Than That of the Urban Residents?

I. IntroductionIts a generally accepted observation, which is supported by Keysians theory of absoluteincome, that Chinas low-income regions have a higher rate of consumption out of incomethan do the high-income regions, and in urban areas, low-income households have a higherrate of consumption than that of the high-income ones. However, for more than 20 yearssince the initiation of economic reforms and opening up, the consumption rate of thefarmers, who are in the low-income group, has been …