Maintenance expenditures and indeterminacy under increasing returns to scale

This paper develops a one-sector real business cycle model in which competitive firms allocate resources for the production of goods, investment in new capital and maintenance of existing capital. Firms also choose the utilization rate of existing capital. A higher utilization rate leads to faster capital depreciation, and an increase in maintenance activity has the opposite effect. We show that as the equilibrium ratio of maintenance expenditures to GDP rises, the required degree of increasing returns for local indeterminacy declines over a wide range of parameter combinations. When the model is calibrated to match empirical evidence on the relative size of maintenance and repair activity, we find that local indeterminacy (and belief-driven fluctuations) can occur with a mild and empirically-plausible degree of increasing returns: approximately 1.08.     

如何正确认识收入差距

为什么人们容忍不了收入差距 在现实社会经济生活中,我们经常可以看到这样一种情况:人们对于平均主义"大锅饭"的批评程度,要远远比对于收入差距的批评程度小得多.也就是说,人们对于平均主义"大锅饭"往往可以容忍,但是对于收入差距则有着强烈的反抗心理.     

Using disaster planning to optimize expenditures on financial safety nets

Using a multiperiod model, this paper offers a benchmark standard for efficient safety net management. This standard embodies a market-mimicking strategy for identifying, preventing, and resolving bank insolvencies. Around the world, governmental reluctance to acknowledge weaknesses in their crisis prevention efforts supports an underinvestment in contingent plans for handling financial disaster. The model features the hypothesis that this underinvestment misserves taxpayers by increasing the ability of stakeholders in insolvent banks to extract implicit and explicit subsidies when and as the threat of an actual crisis intensifies.The William S. Vickrey Distinguished Address presented at the Fiftieth International Atlantic Economic Conference, October 15–18, 2000, Charleston, SC.     

The scope and extent of home-based business income relative to employment earnings in financing household expenditures: a study undertaken in a subeconomic housing area within the Cape Metropole

This study was undertaken to examine the scope of home-based businesses in poor neighbourhoods and the extent to which household income is derived from them. The aim was to determine the ratio of home-based business income to wage earnings, in order to understand its relative importance in augmenting primary employment (wage-based) income. The size, necessity and importance of self-generated (business-derived) income in augmenting primary income was measured in a selected subeconomic housing area within the Cape Metropole. The significance of this analytical research is the determination of income data and the levels of poverty. This paper provides the primary data (base information) for policy formulation relating to social and economic development in this subeconomic area. The findings add to the debate for the provision of a Basic Income Allowance (grant) for those people experiencing poverty. The results correlate with findings of national longitudinal studies. The level of job creation through businesses is minimal and the extent of unemployment is much greater than anticipated.     

遵从市场经济规律推动"长三角"发展

经过20多年的改革开放,长江三角洲城市的后发优势日益明显.在上海的带动和辐射下,"长三角"已成为今日中国经济最发达、发展最迅速的区域,并已排名世界城市群第六."长三角"的政府和企业也参与和组织了四个区域性的合作组织:长江沿岸中心城市经济协调会、"长三角"城市经济协调会、长江流域发展研究院、长江开发沪港促进会;同时还建立了"长三角"三省市高层沟通机制,并对"长三角"的发展前景达成共识.但是,区域经济长期以来仍呈悬而未决的态势,竞争多于合作,产业结构趋同,市场壁垒不少.诸如外资引进时优惠政策搞N+1,同类产品出口时价格搞N-1,最终大大增加了外商商业利益,而使国家的利益受到损害,区域发展也出现了不平衡.如何探索长江三角洲地区联动发展的新路子,已成为一项亟待解决的发展战略课题,即以城市群这个更大的能级,来带动全国的经济发展.由于"长三角"不同于"珠三角"处在一个行政区域内,在现行的体制下,地方利益又不可能被完全排除,因此联动发展的新路子是否可以从以下几方面着手:     

公积金“限贷一次”限住了谁

由于房地产商的话语权处在上风,购房者公积金贷款遭拒,只能哑巴吃黄连,有苦难言     

Unequal access to education and income distribution

Summary This paper attempts a new specification of the education variable in accounting for differences in income distribution in a cross-sectional analysis of 49 countries. The specification refers to the steepness of the educational pyramid, as measured by the coefficient of variation of enrolments within a given country. This variable alone explains 23 per cent of income inequality across countries (as measured by the Gini coefficient), while in the presence of it the traditional (catch-all) per capita income variable becomes insignificant.This finding indicates the importance of the supply side in relative income determination. It is also suggestive that a policy aiming at equalisation of access to the different levels of education might help in reducing income inequality.I would like to thank Arnold Anderson, Mary Jean Bowman, Jan Tinbergen and Peter Wiles for commenting on an earlier draft of this paper.     

入世给消费信贷发展带来新推动

根据新统计数据,国内各金融机构截至20 01年末提供的各种消费信贷余额达到6990亿元,比2000年增加2755亿元,增长幅度超过65%.尽管消费信贷在中国国内各金融机构高达112315亿元的贷款总额中所占比重尚小(仅为6.2%),但这项业务在中国的发展前景十分宽广.预计消费信贷在未来若干年中将继续保持高速增长势头.     

Rates of return to education and income distribution

Summary This paper examines the relationship between rate of return to education and income distribution with the help of cross-nation data on 30 developing and developed countries. The results indicate that the higher income groups in the society benefit the higher the rate of return to any level of education, and the bottom 40 percent and the middle 40 percent income groups lose; and the disadvantage for the poor income groups is the least at the primary level of education. As higher rates of return to education suggest higher levels of income inequalities, rapid expansion of the education system may reduce income inequalities through decline in rates of return to education. Secondly, it is also argued here that since high income groups benefit from all levels of education, education investments targeted specifically towards the poor may be preferred to overall investment in education.The author is Consultant, the World Bank, Washington D.C., 20433 (USA), while on leave from the National Institute of Educational Planning and Administration, New Delhi. The incisive comments of George Psacharopoulos, Rati Ram, and the Editor(s) of this Journal on earlier versions of this study are gratefully acknowledged. However, the views expressed here and the errors that remain are the responsibility of the author alone and should not necessarily be attributed to anyone else, including the World Bank.     

Introduction to income inequalities and redistribution in china

This special section presents the main findings about long-run trends in inequality in China and its driving factors as they emerge from a country case study carried out under a UNU-WIDER supported project.¹ Special focus in the umbrella project were on three issues: (i) the role of earnings inequality and its determinants; (ii) the role of top incomes when administrative records or other sources can be combined with household surveys; and (iii) the redistributive impact of public policies. Main findings of the project including those for China results were presented in a special panel during the UNU-WIDER Think Development – Think WIDER development conference held in Helsinki in September 2018.²

1. Motivation

Inequality has once again emerged as a major issue in economic development across the developed and developing world, and addressing this challenge is key in the UN Sustainable Development Agenda. The UNU-WIDER conference on Mapping the Future of Development Economics held in Helsinki in September 2016³ led to the formulation of a project to study inequality in five major developing countries accounting for more than 40 per cent of the world’s population. UNU-WIDER implemented these studies under its Inequality in the Giants project,⁴ designed as part of a broader international effort to shed light on a set of new questions on between-country and within-country inequalities, by generating integrated datasets and applying a consistent methodology to investigate the determinants of inequality dynamics in some of the world’s largest economies. China was included among the five case countries, and the effort included both a series of papers on China, produced under the coordination of Professor Shi Li and various workshops and meetings. Coming to grips with inequality in China is an obvious priority for anyone interested in trends in global inequality; and the present special section contains five key papers produced in the context of the UNU-WIDER project and subsequently accepted for publication by the China Economic Review.

2. Content of the special section

The five papers on inequality in China presented in this special section cover different topics and jointly illustrate a key set of important themes in the recent evolution of China’s income distribution.The opening study by Luo, Li, and Sicular (LLS) provides an overview and analysis of the long-term evolution of inequality in China, while the next three papers — on urban wage inequality, public transfers, and top incomes — each illustrates and delves more deeply into important aspects of the broader trends in inequality.What are the main findings of these papers? The core finding is that inequality in China rose markedly from the 1980s through the early 2000s; only since 2008 has the upward trend stopped or reversed. LLS report and examine the underpinnings of this core finding, using the five waves of the China Household Income Project surveys conducted during 1988-2013. This paper also finds a considerable, ongoing reduction in rural poverty, and a poverty decomposition analysis indicates that this poverty reduction was mostly due to income growth rather than redistribution in rural areas.The second paper by Gustafsson and Wan (GW) is on urban wage inequality from 1988 to 2013 and it sheds further light on the changes in the distribution of wage earnings. The authors highlight that average wages have grown rapidly and that wage inequality increased until 2007. Moreover, age has become weaker and education stronger related with wage. Importantly, the gender wage gap once small widened rapidly between 1995 and 2007, and workers in foreign owned firm and the state sector enjoy a wage premium.While wages are the most important component of income, it is only part of the inequality story. One important additional question is the role of government taxes and transfers. Since the early 2000s, China has embarked on a major effort to put in place a universal social safety net. The study by Cai and Yue (CY), which is the third paper, assess the consequences of these efforts. Their key conclusions include that the same public policy may produce different redistributive implications. Moreover, if the government keeps increasing the social security transfer scale without changing its distribution, then inequality will increase in China. In addition, formal-sector pension takes up the biggest share and is the most un-equalizing sub-item of all social security transfers; and related to the first paper in the special section they argue that the government should spend more on Dibao and rural residents pension to reduce inequality.Arguably, income inequality measured using household survey data understates actual inequality because surveys have difficulty in capturing top incomes. In the Chinese case, concerns about such bias have increased in the past ten years due to the expansion of private wealth and growing numbers of super-rich. The fourth paper by Li, Li, and Wan (LLW) is on top incomes in China and it attempts to correct for this bias using income information for the Chinese super-rich from various sources. They conclude that the Gini coefficient of income inequality increases substantially when samples of top incomes are incorporated.Finally, Gradín and Wu (GW) analyse in the fifth and final study the distribution of income and expenditure in China in a telling comparative perspective with India. Both countries represent two extreme cases in the relationship of inequality using both wellbeing indicators. It emerges that the joint distribution of income and expenditure differs between China and India because there is a higher prevalence of people with a large mismatch between their ranks in income and consumption in India, especially in rural areas, and particularly amongst those reporting low income and high expenditure. The main compositional effects identified are the different demographic and geographical composition of the countries’ populations, mostly the smaller households (especially in rural areas) and the higher level of urbanization in China than in India. The lack of consistency of cross-country comparisons based on income or expenditure calls for the use of hybrid inequality measures combining data on both provided they are available in the same survey.

3. Concluding remarks

The studies brought together in this special section provide telling insights about the trends in inequality in China from which scholars and policy makers can learn a great deal. In a global perspective, further increases in China’s mean income and wealth, both now above the global means, will begin to raise global between-country inequality. This is important in and of itself. Moreover, while we cannot expect that all the world’s poorest countries will follow the same path as China considering that the initial conditions and the international context they face will be very different, the experiences from China do reinforce the observation that much can be done by policy to influence inequality outcomes. In particular, and as argued by Gradin, Leibbrandt, & Tarp, 2020 (forthcoming):“well-functioning labour markets that promote job-creation, decent pay and social inclusion, removing any legal or de facto discrimination based on gender, race, ethnicity or place of origin, providing equal access to human and physical capital, and empowering the most disadvantaged population groups, are a key driver of increased equality”.These insights also emerge clearly from the five China studies in this special section.     

分配不公对我国经济增长的危害

本文认为,收入分配绝不仅仅是对经济增长结果的反映,更是影响经济增长的重要因素.随着我国转型发展过程中分配不公矛盾的日益突出,其对经济增长的负面影响也越来越严重.     

An estimate of black gross job losses due to reduced defense expenditures

The reduction in defense expenditures, due to the end of the cold war, is estimated to have a disproportionately heavy impact on black gross job losses. Several solutions are discussed with the hope that if they are successful, the negative social behavior that is often associated with increased joblessness can be ameliorated.     

论消费升级的品牌效应

消费升级是近年来人们关注较多的一个话题,消费升级是经济增长、社会发展的主要表现,是人们所追求的人生及社会发展的重要目标,是推动经济发展及社会进步永不衰竭的动力。随着消费升级的深入,品牌在其中发挥的作用越来越大,消费升级的主体便是品牌消费。     

Applied welfare analysis for consumers with commodity income

Summary The paper analyzes the relevance and validity of the economic surplus concept for consumers receiving their income in commodities. For these consumers, such as farmers in developing countries, it is shown that the measure of welfare gains or losses via the area under the Marshallian demand and supply curves may lead to a considerable error. The paper provides boundaries for the error of approximation as a function of the share of the product in the consumer's budget and the income elasticity of demand.     

On optimal income taxation with heterogeneous work preferences

This paper considers the problem of optimal income taxation when individuals are assumed to differ with respect to their earnings potential and work preferences. A numerical method for solving this two-dimensional problem has been developed. We assume an additive utility function, and utilitarian social objectives. Rather than solve the first order conditions associated with the problem, we directly compute the best tax function, which can be written in terms of a second order B-spline function. Our findings show that marginal tax rates are higher than might be anticipated, and that very little bunching occurs at the optimum. Our simulation results show that the correlation between taste for work and productivity has a crucial role in determining the extent of redistribution in our model.     

A machine learning approach to improving occupational income scores

Historical studies of labor markets frequently lack data on individual income. The occupational income score (OCCSCORE) is often used as an alternative measure of labor market outcomes. We consider the consequences of using OCCSCORE when researchers are interested in earnings regressions. We estimate race and gender earnings gaps in modern decennial Censuses as well as the 1915 Iowa State Census. Using OCCSCORE biases results towards zero and can result in estimated gaps of the wrong sign. We use a machine learning approach to construct a new adjusted score based on industry, occupation, and demographics. The new income score provides estimates closer to earnings regressions. Lastly, we consider the consequences for estimates of intergenerational mobility elasticities.     

A Different approach to the measurement of income inequality

This article presents Atkinson indices of racial income inequality for 1954-1989. This approach permits the study of racial inequality and inequality in the overall distribution of income in a consistent framework. The Atkinson index shows that progress towards racial equality stopped much earlier than observation of mean income ratios would suggest and that most of the gains have been eroded.