Productive activities and the wealth of nations: some reasons for Quesnay's failure and Smith's success

The opposition between productive activity (agriculture) and unproductive ones (the others) underlies the Tableau économique. Smith borrows Quesnay's theory of production but deeply transforms it into a distinction between productive and unproductive labour. In any case, it seems quite natural to relate the increase of the wealth of a nation to the relative importance of productive activities vis-à-vis unproductive ones. Quesnay and Smith both share this view. However, if Smith is perfectly right in doing so, Quesnay has failed to prove a definite relation between the fraction of the revenue spent with respect to the productive sector, on the one hand, and the level or growth of the revenue, on the other. Differences in political philosophy may account for this unequal analytical performance.     

The tale of two international phenomena: Migration and global imbalances

Following the dynamics of globalization, international migration has increased dramatically since the 1990s. Since migration patterns affect a country’s demographic structure—which is known to have an impact on the current account—migration is likely to explain a significant part of world imbalances. This paper tackles this issue by investigating the role played by international migration in the dynamics of global imbalances. To this end, we rely on an overlapping generations model to derive the theoretical link between international migration and the current account position. Through a series of robust estimates, we empirically investigate this relationship by relying on a large panel of developed and developing countries. Our results point to substantial effects of international migration. Specifically, we show that an increase in migration augments national savings and tends to restore the current account balance in the destination country, while it has opposite impacts in the origin country. These effects are particularly pronounced in developing economies and are attenuated by migrants’ remittances.     

On measuring the wealth of nations: the US economy, 1964-2001

This paper examines the methodology of Shaikh and Tonak (Measuringthe Wealth of Nations, 1994) underlying their calculation ofestimates of productive labour in the US economy from 1964 to2001. The focus is not on the results but on the methods thatgenerate them. The paper finds that the compromises made byShaikh and Tonak because of data unavailability are unreliable,and that better approximations are possible. On this latterbasis, the Shaikh and Tonak methodology can be used to providethe labour and wage estimates needed for empirical investigationsin the surplus-based tradition.     

Some empirics of the bivariate relationship between average subjective well-being and the sustainable wealth of nations

The World Bank's Millennium Capital Assessment (MCA) has provided per capita estimates of total wealth and its major subcategories for a large number of countries. In this article, these macro-level estimates are used to explore bivariate cross-country ‘wealth–happiness’ relationships, focussing on issues of appropriate functional form, parameter stability and outliers. For comparative purposes, ‘income–happiness’ relationships are also explored. Total wealth turns out to be strongly related to Gross National Income (GNI) per capita, due to the importance of produced and intangible capital, but not to natural capital. In contrast, when the most natural capital intensive countries are excluded as outliers, a strong relationship emerges between Subjective Well-Being (SWB) and natural capital, especially amongst high income countries. In these countries, natural capital seems to be an important wealth correlate of SWB, despite accounting for only a very small proportion of total wealth.     

The euro: Major policy implications for Europe and the global economy

The paper examines the potential of the euro as an international currency. Owing to a large home base the long‐run potential is substantial. Much depends on whether the European Central Bank will be able to gain the reputation of a tough authority that issues a stable currency. Based on a comparison with the concepts of monetary targeting and inflation targeting, it is argued that the ECB's policy strategy is inferior as regards providing guidance to inflation expectations. The paper also discusses exchange rate policy and concludes that it is unlikely that Europe will join a new international exchange rate system.     

Current global imbalances and the Keynes Plan: A Keynesian approach for reforming the international monetary system

This paper proposes a “logical experiment”, illustrating how alternative international monetary systems may produce opposite results in the global economy. In the current organisation, “key currencies” work as international money. Keynes, by contrast, proposed that this role should be assigned to a supranational, “credit” money. While the world currently lives in an asymmetric regime, which lead to what has been defined as a “balance of financial terror”, Keynes tried to achieve a more peaceful type of “international balance”. I argue that the structural reform and the technical provisions proposed by the “Keynes Plan” may still – at least in principle – provide useful remedies for international disequilibria, by remedying the asymmetries of the current international payments architecture and helping to curb both inflationary and deflationary pressures on the world economy.     

The impact of real exchange rates adjustments on global imbalances: A multilateral approach

An extensive literature stresses that currency misalignments are costly in terms of growth performance. However, these studies do not consider the direct and indirect effects of currency misalignments on other countries. In this paper, we analyze how misalignments of the dollar, the euro, and the renminbi affect their respective economies and those of their trading partners using a multi-country dataset GVAR model. Our model includes 15 advanced and emerging countries and uses quarterly data spanning the period 1980–2010. We find that misalignments significantly influence the world economy. We show that overvaluation and undervaluation shocks do not produce the same effects.     

小议我国股市“财富效应”及其传导机制

本文阐明了财富效应对经济增长的作用机制，并针对财富效应传导机制，从股市规模、投资者结构及收益分配结构、股市持续变动趋势、“挤出效应”等方面分析我国股市财富效应尚很微弱的原因，由此对我国股市的健康发展给出了政策建议。     

论当代全球劳动力的分化对中国的含义

当代全球劳动力日益分化为核心与边缘两个群体,劳动力市场的双元结构特征由于跨国资本的弹性生产措施而深化。中国在融入生产全球化的过程中也形成了劳动力双元结构。虽然中国通过承接劳动力密集型产业的转移,实现了农村劳动力的有效配置,全球劳动力分化的逻辑在中国被复制具有一定的合理性,但是边缘劳动力群体的不断膨胀将给中国的长期稳定发展带来诸多隐患。由于劳动力的分化只不过是全球生产体系重组的面向之一,因此只有在更广泛的全球资本主义生产体系变迁的背景下去寻求一种涵盖宏观制度层面、中观产业层面和微观企业层面的综合应对之道,才能扭转中国劳动力进一步分化的趋势。     

Global imbalances and asymmetric returns to US foreign assets: fitting the missing pieces of the US balance of payments puzzle

The issue of whether the US earns a persistently higher return on its foreign direct investment (relative to returns to foreign-owned direct investment in the US) has received considerable attention but little closure in the ‘global imbalances’ debate. Measuring the rate of returns to US direct investment abroad and foreign direct investment in the US we find higher returns to US foreign direct investment relative to its foreign counterparts in the US. Given the evidence indicating higher returns to US direct investment overseas, we link the irresolution in the contemporary literature regarding the existence of these returns to the unsettled debate over the origin of global imbalances. Reviewing the macro-financial literature on global imbalances, we find a failure to acknowledge that the US current account deficit is, in part, the outcome of transnational production networks in a global economy under-pinned by dollar hegemony. Given the growth in US multinational supply chains, we argue that the US trade deficit is consistent with asymmetric returns to US direct investment and that the sustainability of these return differentials rests on the stability of the status quo.     

The trajectory of wealth in retirement

In this paper, we develop a measure of household resources that converts total financial and non-financial assets, plus annuity-like assets (mainly, Social Security and defined-benefit pensions) into an expected annual amount of wealth per person in retirement. We use this measure, which we call “annualized comprehensive wealth,” to investigate spend-down behavior among a panel of older households in the Health and Retirement Study (HRS) from 1998 to 2006. Our analysis indicates that for most retired households, comprehensive wealth balances decline much more slowly than their remaining life expectancies, so that the predominate trend is for real annualized wealth to rise significantly with age over the course of retirement. Comparing the estimated age profiles for annualized wealth with profiles simulated from several different life-cycle models, we find that a model that takes into account uncertain longevity, random medical expenses, and intended bequests lines up best with the broad patterns of rising annualized wealth in the HRS.     

The curse of wealth and power

We study a model in which being more powerful does not necessarily imply being wealthier.     

The growth of relative wealth and the Kelly criterion

We propose an evolutionary framework for optimal portfolio growth theory in which investors subject to environmental pressures allocate their wealth between two assets. By considering both absolute wealth and relative wealth between investors, we show that different investor behaviors survive in different environments. When investors maximize their relative wealth, the Kelly criterion is optimal only under certain conditions, which are identified. The initial relative wealth plays a critical role in determining the deviation of optimal behavior from the Kelly criterion regardless of whether the investor is myopic across a single time period or maximizing wealth over an infinite horizon. We relate these results to population genetics, and discuss testable consequences of these findings using experimental evolution.     

The regionalization of indian politics and its implications for economic reform

Is political decentralization an impetus for economic liberalism, or are state and local governments impediments to a rigorous reform process? This article describes India's federal system, the growth of regional parties and governments, the changing balance of power between India's state and central governments, and the deterioration of state administrations, then assesses the economic reform and human resource policies of the states. The factors which slow the pace of reforms (politically unstable governments, fiscal populism, organized local interests, patronage and rents for party and government officials) and those that push for reforms (fiscal deficits, the need for investments in infrastructures, and inter-state competition for private investment) are analyzed.     

The Dahrendorf hypothesis and its implications for (the theory of) economic policy-making

The sociologist R. Dahrendorf has recently suggested that thereis no and there ought to be no convergence of economic policiestowards some common ideal model. On the contrary, he statesthat ‘diversity is [...] at the very heart of a worldthat has abandoned the need for closed, encompassing systems’.It is shown in this paper that the Dahrendorf hypothesis isdifficult to reconcile with orthodox economic approaches toeconomic policy-making. A perspective on policy-making thatintroduces either fundamental uncertainty or endogenous policypreferences or both is, however, shown to be consistent withthe Dahrendorf hypothesis.     

Structural transformation and its implications for the Chinese economy

This study examines China's structural transformation under the assumption that its employment structure converges to that in major developed economies in one and a half decades. The required annual output differentials between tradable and nontradable sectors, productivity increment in the nontradable sector, and government expenditure increment are estimated with the goal of employment stability conditional on population ageing. It appears that labour transfer from the tradable sector to the nontradable sector would be accompanied by relatively large aggregate output changes due to population ageing and efficiency changes in the tradable sector. Consumer price and real exchange rates are less affected during structural transformation. Although fiscal deficit would increase, government expenditure as a tool to stabilize employment is welfare improving as long as job switching is not cost prohibitive.