Effective timing of tourism policy: The case of Singapore

In this paper, we examine the effective timing of economic policies actions in the tourism industry of a small open economy such as Singapore. The effective timing of policy actions is an open challenge issue to researchers and also a much needed rule of thumb to policy makers and private agents. This paper aims to (a) derive the influencing factors of a tourism demand function and (b) identify the time impact of these factors, thus, allowing the formulations of effective policy actions, by both, governmental tourism authorities and private tourism agents in Singapore. Our findings suggest that tourism government authorities and private tourism agents in Singapore should choose the timing of their actions depending upon the anticipated factor changes and their estimated impact. That is, if exchange rate variability is anticipated then policy actions should start at least twelve months prior to the start of the tourist period. If, a keen price competition is expected to prevail then the best timing of policy actions is nine months ahead the tourism period. If income improvements in origin countries could be expected, then a rather shorter timing action of six months would be available to tourism authorities and private agents in Singapore.     

Labour migration in a model of North-South trade

A dynamic general eqilibrium model of the world economy is adopted to examine the benefits and drawbacks of labour migration to each of the participatingregions. It is demonstrated that, especially in the long term, the migration of workers may be mutually beneficial: the region of immigration making production gains, while that of emigration perceives a higher demand for its products. In contrast to previous results, it is shown that no immigration limits would be imposed even if migrants' incomes were taxed and, indeed, differentiated payments to immigrants is suboptimal     

International migration,economic policy and human capital accumulation: a simulation study

"This paper examines the economic policy implications of international migration and human capital accumulation within a dynamic general equilibrium model. Each country produces by means of physical and human capital of two types (skilled and unskilled labour). Along optimal growth paths in a world of diverging population growth rates immigration can only be beneficial when the free rider effect (i.e., not paying for training costs) exceeds the capital dilution effect of an increase in population growth. Under quite general conditions the optimal immigration rate is zero."     

Technology and regional policy: a case study of Northern Ireland

The importance of technical change, through the innovative activity of industry, has received a lot of attention in the regional economic literature. Regional policy has now begun to reflect the changing emphasis in the recent literature, and especially the key role of inventive activity in achieving long-run self-sustaining regional growth. This paper concentrates on research activities in terms of inventive inputs (R&D) and innovative outputs (especially patented innovations). In general the results suggest that there is a low level of technological activity in Northern Ireland, especially in industries that are characterized as being technologically advanced. This is partly because external ownership reduces R & D activity which in turn reduces innovation outputs but there is also a problem in that companies in Northern Ireland are relatively unsuccessful at producing new products and processes of the type and quality required in the market place. The availability of government-sponsored R & D grants since 1977 has begun to redress the imbalance in terms of R & D activities but there is, as yet, little information to show that the level of technological success has increased.     

The economics of New Labour: policy and performance

This paper reviews the foundations of New Labour's economicpolicies and the performance of the economy since 1997. It arguesthat New Labour's policies have evolved from Thatcherism andthat it has largely embraced the tenets of neo-liberalism. NewLabour has rejected most aspects of Keynesianism and its policieshave eschewed the use of active demand management policies.But it has been the high levels of demand—in particularconsumption expenditure—that have driven economic growthin the UK and which have ensured that (as yet) New Labour hasnot faced the problems of dealing with a major economic downturn.     

Labour migration in the enlarged EU: a new economic geography approach

This paper studies the impact of migration policy liberalisation on international labour migration in the enlarged European Union (EU) in a structural economic geography approach. The liberalisation of migration policy would induce an additional 1.80–2.98% of the total EU workforce to change their country of location, with most of migrant workers relocating from the East to the West. The average net migration rate is decreasing in the level of integration, suggesting that from an economic point of view no regulatory policy responses are necessary to labour migration in the enlarged EU.     

International immigration and economic welfare in an efficiency wage model: The co-existence case of both legal and illegal foreign workers

Abstract. In the developed countries some native workers are unemployed while there exist illegal unskilled (legal skilled) foreign workers who are complementary to (substitutable for) natives and their wages are usually lower than (equal to) that of natives. Reflecting this situation, we introduce two types of immigrant in an efficiency wage model. It is shown that domestic government should exclude illegal foreign workers but welcome legal ones if the total number of illegal immigrants is small enough and well controlled. On the other hand, legal immigration should be restricted if the flood of illegal immigration is out of control.     

Financing of innovation: national development banks in newly industrialized countries of East Asia

Abstract

Contemporary literature on innovation tends to overlook the issue of financing, whereas financial history suggests that banks have been essential to financing of new industries. Emerging literature ondevelopment banking, although inspiring, remains focused on financing policies. The article aims to rearticulate a coevolutionary nature of industrial and financial interests, following the works of Schumpeter and Minsky, by looking at the 4 cases of national development banks, tasked with long-term financing of industries, from newly industrialized countries of East Asia—South Korea, Taiwan, Singapore, and Malaysia. The study suggests that innovation in finance, as well as organizational innovation in financial institutions, represent essential elements of financing of innovative activities. Further, organizational innovation in financial institutions, such as development banks, might signify a disposition to face uncertainty, which characterizes economic and technological unknowns inherent in financing of innovation.     

Adapting a global cost-effectiveness model to local country requirements: posaconazole case study

Abstract

Background:

Many countries have various requirements for local economic analyses to assess the value of a new health technology and/or to secure reimbursement. This study presents a case study of an economic model developed to assess the cost-effectiveness of posaconazole vs standard azole therapy (fluconazole/itraconazole) to prevent invasive fungal infections (IFIs), which was adapted by at least 11 countries.

Methods:

Modeling techniques were used to assess the cost-effectiveness of posaconazole vs fluconazole/itraconazole as IFI prophylaxis in patients with acute myelogenous leukemia or myelodysplastic syndromes and chemotherapy-induced neutropenia. For the core model, the probabilities of experiencing an IFI, IFI-related death, and death from other causes were estimated from clinical trial data. Long-term mortality, drug costs, and IFI treatment costs were obtained from secondary sources. Locally changed parameters were probabilities of long-term death and survival, currency, drug costs, health utility, IFI treatment costs, and discount rate.

Results:

Locally adapted cost-effective modeling studies indicate that prophylaxis with posaconazole, compared with fluconazole/itraconazole, prolongs survival, and, in most countries, is cost-saving. In all countries, the model predicted that prophylaxis with posaconazole would be associated with an increase in life-years, with increases ranging from 0.016–0.1 life-year saved. In all countries, use of the model led to posaconazole being approved by the appropriate reimbursement authority.

Limitations:

The study did not have power to detect differences between posaconazole and fluconazole or itraconazole separately. The risk of death after 100 days was assumed to be equal for those who did and did not develop an IFI, and equal probabilities of IFI-related and other death during the trial period were used for both groups.

Conclusions:

A core economic model was successfully adapted locally by several countries. The model showed that posaconazole was cost-saving or cost-effective vs fluconazole/itraconazole and led to positive reimbursement listings.     

Size-corrected inference in fiscal policy reaction functions: a three country assessment

As a reflection of both strong persistence of debt-to-GDP ratios and correlation of respective innovations with governments’ primary surpluses, standard t-tests in policy reaction functions show actual significance levels that are up to five times larger than their nominal reference. Adopting size-controlled inference by means of Monte Carlo-based and asymptotic Bonferroni critical values, we diagnose fiscal policies in the US and the UK to be sustainable in samples covering more than 100 years. Conditioning on post-WWII subsamples and 5% nominal significance, conventional t-tests signal fiscal sustainability for these countries. In contrast, size-corrected inference hints at a lack of fiscal sustainability and, thus is recommended for the ‘real-time’ monitoring of public debt. The fiscal policy of Portugal is found to lack sustainability irrespective of the considered sample period.     

Going up and down: rethinking the empirics of growth in the developing and newly industrialized world

Growth dynamics are remarkably heterogeneous, in particular when one focuses on developing countries. Economic miracles and failures are embedded within extended phases of either growth or decline. In this paper, we analyze the growth patterns of developing and newly industrialized countries on the basis of structural breaks and growth regimes experienced. Emphasizing the presence of broken trends, we focus on the difference between expansionary and recessionary regimes of medium length, and we show that models of takeoffs and exponential growth are inadequate to characterize the majority of observed growth dynamics. Then, we move to a systematic classification of different patterns and we isolate an additional stylized fact characterizing the process of growth and development. In particular, our results show that expansionary regimes are associated with convergence and positive correlation between growth and (short run) volatility. By contrast, in recessionary regimes, poorer countries face deeper failures and a negative correlation between growth and volatility is found, indicating that output fluctuates less around the trend during strong rather than mild recessions. Catching-up phenomena are infrequent but more likely to occur across categories of growth patterns rather than within. Finally, we discover that regimes of growth and recession show similar average length (about 16 years). Although recessions are, on average, remarkably pronounced (14% loss of GDP per capita), the magnitude of growth is much larger during expansions. In sum, our results underline that stable positive growth is hardly achieved in developing countries, which rather alternate long phases of expansions with equally long phases of recession. Moreover, cross-sectional empirical regularities are found to differ between regimes of positive and negative growth.     

Bio-economic modelling of soil erosion externalities and policy options: a Tunisian case study

Soil erosion is one of the most important of today’s environmental externalities and a major threat to sustainability of agricultural system. It constitutes the most widespread forms of land degradation throughout the world. The aim of this paper is to estimate the amount of soil erosion generated by the current cropping systems in Tunisia and to assess the economic and ecological impacts of policy instruments designed to handle this problem. The analysed policy options are based on soil conservation practices and direct incentive farming anti-erosive measures. The selected measures are the reduction of tillage, the avoidance of bare fallow and the use of legume-based crop rotation. A bio-economic modelling framework coupling the biophysical model EPIC to a non-linear dynamic programming farm model was used for this impact analysis. It was performed in a set of representative farms belonging to a region in North-Eastern Tunisia (Zaghouan) strongly affected by this phenomenon. The main finding of this research is the non-convexity of the crop yield—soil erosion space. That is, the use of more intensive techniques to increase productivity (i.e. crop yield) may be accompanied by rough changes in soil erosion (damage) curves, manifested either by non-monotony or non-convexity. In term of policy options and because of giving up convexity assumptions, incentive anti-erosive measures appear more efficient than conventional environmental policies such as Pigouvian taxes or quota systems. The implementation of soil conservation practices would leads to a net decrease in soil erosion and an increase in farm income. However, with the current interest rate of 7% the possible rise in income is not enough to stimulate farmers to invest on these practices. A maximum rate of 4% would be necessary to make this policy option more effective.     

Government policy under price uncertainty: A source of volatility in illegal immigration

This paper provides an alternative explanation for why illegal immigration can exhibit substantial volatility. We develop a model economy where migrants make decisions in the face of uncertain border enforcement and transfers from the host country. The uncertainty is extrinsic, a sunspot, and arises due to ambiguity regarding government policy; the sunspot manifests itself as uncertainty in the commodity price of money. Immigration volatility stems from both the trade‐off between the marginal benefits and costs (transfers and enforcement) to migrating and the existence of a sunspot. Finally, we examine the impact of changes in government policies on migration levels.     

Modelling regional policy scenarios in the agri-food sector: a case study of a Spanish region

The agri-food industry has several features of great importance for sustainable economic growth in rural areas. The objective of this work is to evaluate the effects associated with different scenarios of growth, and changes in the regional agri-food industry. These scenarios simulate changes in exports and imports, changes in technology and changes in the level of industrial integration. We develop a computable general equilibrium model calibrated for the region. Our results indicate that policies trying to improve the competitiveness and dynamism of strategic sectors as the agro-industrial complex in this regional economy exert positive effects on its growth and income, having notable impacts on local job markets but also in other sectors and activities linked through the whole production chain.     

Brain drain,illegal migration and capital exports from less developed economies: a neoclassical approach

This model shows that LDC's brain drain triggers emigration of unskilled labor and capital exports, skilled workers and agricultural capitalists gain, unskilled workers and industrial capitalists lose, and demodernization of the economy results. Demodernization of the economy occurs when labor force and output of the industrial sector decrease, and employment and production in agriculture increase. The problem analyzed in this model is what happens to the incomes of those who are left behind when some of the skilled workers migrate abroad. The results show that with the exodus of both skilled labor and capital, the marginal productivity of unskilled workers in industry also falls below the unskilled wage. Although one would expect a brain drain to result in gains for those skilled workers who remain in the source country, and for the capital owners who receive unskilled workers as a result of emigration, the losers are the unskilled workers and the capitalists in the sector where the migrants worked.     

Inflation Adjustment and Labour Market Structures: Evidence from a Multi‐country Study*

The impact of labour market structures on the response of inflation to macroeconomic shocks is analysed empirically. Results based on a 20‐country panel show that if labour market coordination is high, the effect on inflation of movements in unemployment, import prices, tax rates and productivity is dampened, both on impact and dynamically. In contrast, monopoly power in labour supply, measured by the percentage unionisation of the workforce, appears to amplify the response of inflation to its reduced‐form determinants. These findings are attributed to the behaviour of wages following movements in demand‐ and supply‐side conditions.     

Corporate tax policy and heterogeneous firm innovation: Evidence from a developing country

This paper adds to the literature by identifying the causality of corporate tax policy on firm innovation in a developing country. We exploit the China’s 2006 corporate income tax base reform to integrate the tax system between foreign-invested and state/collective-controlled firms as a natural experiment. The difference-in-differences strategy documents a positive effect of corporate tax deduction on firm patenting. The effect is particularly significant if a firm is of larger size or locates in eastern provinces. We also examine possible channels behind the findings, including changes in R&D and capital investment, intangible assets, financial constraints, and new product sales.     

Capital-labor substitution in a developing country: The case of Greece

The present paper reports an attempt to estimate the elasticity of capital-labor substitution, and the rate of technical change in the manufacturing sector of the Greek economy. It is found that the elasticity of substitution exceeds unity, and the annual rate of neutral technical change is e^0.05 = 1.05. It is concluded that because of the case of capital-labor substitution the existing labor shortages should not impair the further development of the economy.     

International migration,non-traded goods and economic welfare in the source country: a comment

"Labor emigration redistributes income in a two factor, two good economy where one good is internationally non-traded. Labor's nominal wage rises as nominal capital payments fall. Recent research has shown that the prices of non-traded goods rise, causing society's welfare to decline. Here the induced change in the real income of each factor is considered separately. There is an ambiguity with regard to the real income of non-emigrating labor. If labor spends a relatively small fraction of income on the non-traded goods, its real income may rise, even though society suffers the loss of welfare."     

Two types of pattern of specialization of the economic environment of a highly industrialized country in Western Europe

Conclusions The specific pattern of specialization of highly industrialized countries is closely linked to factor endowments, although the correlation coefficients are probably positively biased, because the products have not been weighted with their market shares. The correlation between this pattern and market growth is much weaker. Because of the balance of payments constraint, all countries show products with net exports and with net imports. The shape of the country specific frequency distribution, determined by the specialization coefficients of the products (here called general pattern of specialization), can largely be explained by the country's size, prosperity, and possible EC membership. This general pattern can be regarded as a country specific constraint to its specific pattern. The statistical results of all sections lead to conclusions concerning economic policy.This paper is a summary which focuses on the main conclusions. The complete report, including all empirical results, the comments by the discussant E. Dalgaard (Denmark), references and most data, can be obtained from the Central Planning Bureau. Jeannette Verbruggen carried out the computations. Comments by C. A. Burk, J. G. van Beeck, E. Dalgaard, H. den Hartog, and A. Kusters have been incorporated.