China’s Labor Market on Crossroad

I.IntroductionSincethelate1990s,China’slabor market has comeundergreat pressure,asreflected by anincreasing unemployment rate,and adeclining labor force participation rate.The causesofthe severe unemployment are threefold.First,due to the macro-economic downturn andrapid industrial structural change in the late1990s,state-owned enterprises(SOEs),whichlost their comparative advantage and competitiveness,have been unable to fully utilizetheir production capacity,and have become loss-makers.Se…     

China’s exports in a protectionist world

Tariffs, currency wars, and protectionism pose risks for Chinese firms. In theory tariff increases and exchange rate appreciations exert equivalent effects on export volumes. This paper estimates tariff and exchange rate elasticities for China’s exports. The results indicate that, while exchange rates matter, tariffs increases deter exports almost three times as much as equivalent exchange rate appreciations do. The results also indicate that China’s flagship industries such as electronics and machinery are exposed to tariff increases and exchange rate appreciations. The paper then considers how China can promote freer trade to mitigate risks and reduce uncertainty.     

Lending Through the Cycle: The Federal Housing Administration’s Evolving Risk in the Primary Market

Utilizing a sample of loan originations, the distribution of the market served by the Federal Housing Administration (FHA) and conventional lenders is modeled through this current cycle. Results indicate that FHA market shares in the early years of the observation period (2003 through 2006) are concentrated in zip codes with higher economic risk characteristics and obtained by high risk borrowers. FHA is forced to accept lower quality loans as competition from more nimble private lenders with lower access hurdles and more rapid processing expanded into markets traditionally served by FHA. Unexpectedly, the analysis also reveals that the distribution of FHA loans fails to exhibit a targeted racial bias toward neighborhoods with African American Concentration.     

Trump’s Effect on the Chinese Stock Market

U.S. President Donald J. Trump tweets frequently to communicate his thoughts to the public. We quantitatively evaluate the impact of Trump's China-related tweets on the Chinese stock market. We find that following Trump’s inauguration, his tweets with a positive sentiment significantly increase abnormal returns for the manufacturing industry in the Chinese stock market. Furthermore, an increase in the absolute value of his positive sentiment increases both the trading volume and volatility of the market. The positive effect is more pronounced for those subindustries with high exposure to international trade and stronger business relations with the United States than for other subindustries. The results are robust for various sensitivity tests.     

Review of the EU’s Preliminary Assessment of China’s Market Economy Status

I. Introduction In late June 2004, the EUmade a decision on its Preliminary Assessment of the People’s Republic of China’s Request for Graduation to Market Economy Statusin Trade DefenseInvestigations. This preliminary result came out after China lodged the request in June2003. The EU assessment report holdsthatbefore it can be granted thestatus, China needsto make substantialprogress in fourfields:government intervention, corporate governance,property and bankruptcy laws, and the f…     

Changes in women’s empowerment in the household,women’s diet diversity,and their relationship against the background of COVID-19 in southern Bangladesh

The COVID-19 pandemic in Bangladesh, associated public health measures, and people’s reactions were projected to have caused job losses among women, a decline in women’s empowerment and reduced women’s diet diversity. Using a November 2020 telephone survey to re-interview adult female respondents of a November 2019 in-person survey, contrary to expectations we find that more women found than lost jobs, and women’s diet diversity increased over the year partly marked by the COVID-19 pandemic. We did not find evidence of a decline in women’s involvement in food purchase decisions, nor women’s autonomy over use of household income. The change in women’s outside employment is neither statistically related to changes in women’s involvement in food purchase decisions, changes women’s autonomy over use of household income, nor changes in women’s diet diversity. Change in women’s involvement in food purchase decisions is positively related with change in women’s diet diversity and change in women’s autonomy over income use is negatively related with change in women’s diet diversity.     

Japan’s GDP estimates: a critical review

The depressed state of the Japanese economy, especially in the late 1990s, makes the GDP gap of practical interest. Surprisingly, the official estimates of the GDP gap assert that it was no less than −4% in 1998. This seems to be too optimistic a view. Dissatisfied, Niwa 2000, Shishido 2000 presented strikingly different estimates for the GDP gap, according to which the gap was as large as −35% at 1998. Why such a large difference? This paper reviews how they arrived at such different results from the same set of basic data and the same production function approach. We show that, in the final analysis, the difference is in how to treat the technology input in the production function. The optimistic view changes the rate of technical change so that the potential growth path never deviates away from the actual growth path. By contrast, the pessimistic view keeps the rate of technical change constant so that the potential growth path can deviate away from the actual growth path. Hence, the GDP gap in the late 1990s is kept small in the optimistic estimate and very large in the pessimistic estimate. Each obtains what it wants from its own assumption. The true GDP gap lies between these two extremes.     

Market Opening and Transformation of China’s Car Industry

I.IntroductionThere are two different points of view on the protection of infant industries in developing countries.One,represented by neo-classicaleconomists,arguesthatgovernmentprotectionwould contributelittleto thegrowthof indigenousenterprises,and maylead to lowefficiencyand waste in resources.Enterprises need to fully realize tradeand investment liberalization(Grossman and Horn,1988;Krueger and Tuncer,1982).Theotherviewpoint,which comesfrom structuralism(or evolutionary economics),ho…     

There’s Much Ruin in a Nation: An Analysis of Modern Monetary Theory

Atlantic Economic Journal - This paper analyzes the first macroeconomic textbook based on modern monetary theory (MMT) written by Mitchell, Watts and Wray. MMT is a heterodox theory that a...     

Indonesian Politics in 2014: Democracy’s Close Call

Indonesian democracy experienced a near miss in 2014, when Jakarta governor Joko Widodo (Jokowi) defeated former general Prabowo Subianto by a margin of 6.3% in the presidential election. Both candidates were populists who rose to prominence in the context of public disillusionment with incumbent president Yudhoyono; Prabowo, however, condemned Indonesia's democratic system and promised to take Indonesia in a more authoritarian direction. We trace democracy's close call through five phases: the dying months of Yudhoyono's presidency, the rise of populist alternatives, the parliamentary elections of April 2014, the July presidential campaign, and the aftermath. We attribute the strength of Prabowo's campaign to superior organisational and financial support, while Jokowi's victory rested upon strong identification with him among poor and rural voters. Also determining the outcome was the fact that public satisfaction with democracy remained strong, undermining the effectiveness of Prabowo's authoritarian-populist message. Nevertheless, democracy's future remains uncertain, given that Prabowo and his supporters now control a sufficiently large number of parliamentary seats to continue promoting a rollback of democratic reforms.     

Revisiting Sweden’s response to the Great Depression of the 1930s: economic policy in a regional context

This intra-Scandinavian comparison provides a corrective to existing comparative literature on Sweden's response to the Great Depression at three levels: policy conception, case selection and mode of explanation. The paper's holistic view of economic policy shows that the Swedish response was not just about fiscal policy. A broadly defined Swedish response becomes even less distinctive when compared with its Danish and Norwegian counterparts. The paper makes three points to explain the intra-Scandinavian variation (convergence and divergence). First, the regional-metropolitan context matters. Facing similar international challenges, the three small states developed a defensive reflex by striking domestic compromises, abandoning the gold standard, devaluing their currencies and effecting monetary expansion. Second, the political-economic development experience matters. On one hand, proportional representation entrenched Scandinavian farmers as a critical political force, thus ensuring agricultural protectionism across the region. On the other hand, the cross-national divergence in industrialisation largely shaped industrial policy: Sweden’s relative trade and domestic liberalism sharply contrasted with Denmark’s exchange controls and Norway’s import substitution. Third, ideology matters. Whereas the Danish Social Democrats’ traditional liberalism and their Norwegian counterparts’ radicalism buttressed fiscal orthodoxy, the Swedish Social Democrats’ ideational and programmatic renewal paved the way for the fiscal experiment of the crisis years.     

What Drives Ireland’s Housing Market? A Bayesian DSGE Approach

We study the drivers of fluctuations in the Irish housing market by developing and estimating a dynamic stochastic general equilibrium (DSGE) model of Ireland as a member of the European Economic Monetary Union (EMU). We estimate the model with Bayesian methods using time series for both Ireland and the rest of the EMU for the period from 1997:Q1 to 2008:Q2. We find that housing preference and technology shocks are the main drivers of fluctuations in house prices and residential investment. A standard regression analysis shows that a good part of the variation of housing preference shocks can be explained by unmodeled demand factors that have been considered in the empirical literature as important determinants of Irish house prices.