Basic Stochastic Dynamic Systems of Growth and Trade

Uncertainties are intrinsic features of dynamic economic systems, and this paper considers the dynamic implications of factor endowment (labor, capital) uncertainties for a small growing trading economy. The stochastic growth models presented extend the open neoclassical two-sector growth model (Deardorff) to a stochastic environment in continuous time, and extend the diffusion dynamics of one-sector growth models (Merton; Bourguignon) to a trading two-sector economy. It is demonstrated that the basic propositions of deterministic steady-state growth and endogenous growth theory, under some specifications and certain parametric restrictions, are preserved within a stochastic framework.     

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."     

Industry and the Family: Two Engines of Growth

We generalize the class of endogenous growth models in which the scale of the economy has level rather than growth effects, and study the implications of different demographic and technological factors when both fertility choice and research effort are endogenous. The model incorporates two dimensions of technological progress: vertical (quality of goods) and horizontal (variety of goods). Both dimensions contribute to productivity growth but are driven by different processes and hence respond differently to changes in fundamentals. Specifically, while unbounded vertical progress is feasible, the scale of the economy limits the variety of goods. Incorporating a linearity in reproduction generates steady-state population growth and variety expansion. We thus have two engines of growth generating dynamics that we compare with observed changes in demographics, market structure, and patterns of growth. Numerical solutions yield the important insight that, while endogenous, fertility responds very little to industrial policies. Demographic shocks, in contrast, have substantial effects on growth.     

Capital structure,asset utilization,profitability and growth in the Greek manufacturing sector

Greece's accession to the European Union (EU) has affected its economy and its manufacturing sector. Large-size enterprises (LSEs) form a small but vital part of Greek manufacturing and constitute a major component of the country's stock market. According to finance theory, the capital structure of a firm affects its capital cost and market value. This paper, by using dynamic panel data techniques, investigates the determinants of capital structure of LSEs in the Greek manufacturing sector. The findings suggest that asset utilization, gross and net profitability and total assets growth have a significant effect on the capital structure of LSEs. This has straightforward policy implications. Following recent economic developments, Greek firms are exposed to a stronger competition in the EU and global markets, but also to new opportunities. In order to improve their capital structure, Greek manufacturing LSEs need to achieve higher asset utilization and profit margins through economies of scale attained mainly by higher exports. Moreover, governmental measures aiming to support LSEs' efforts should focus their impact on alleviating taxation, reducing bureaucratic burdens, minimizing market imperfections and subsidizing applications of new technology.     

人口老龄化、公共人力资本投资与 经济增长*

本文利用内生化老龄化的世代交叠模型,探讨了老龄化社会中为了促进经济增长可选择的公共人力资本投资的最优相对规模和结构。本文研究表明,公共人力资本投资相对规模（即占GDP比例）和公共健康支出占比（即占公共人力资本投资比例）均与经济增长呈倒U型关系,且最优值通过老龄化对经济增长的作用表现出来。即当老龄化对经济增长有促进（抑制）作用时,政府促进经济增长的政策是提高（降低）人力资本投资相对规模和公共健康支出占比。基于中国省级面板数据的实证研究发现,老龄化不利于经济增长,公共人力资本投资相对规模及公共健康支出占比偏大,均处在倒U型曲线的下降阶段,分别通过挤出对经济增长更具促进作用的私人投资、公共物质资本投资和公共教育支出而不利于经济增长。本文的政策含义是,政府需提高公共教育支出占比,引导和鼓励更有效率的社会私人资本进行人力资本投资,以逐步降低公共人力资本投资的相对规模。当前公共物质资本投资则需继续加强。     

Export demand elasticities and productivity as determinants of growth: estimates for Mauritius

In this article, we combine the export led and import led growth hypotheses in a growth model in which the importation of foreign capital goods and the demand elasticities of own export products explain the growth opportunities and the technical progress of developing countries. This model, based on imported capital goods, uses Mauritius’ data on capital investment, employment, export partners’ growth and terms of trade to estimate price and income elasticities of export demand, total factor productivity growth and economies of scale. These elasticities are then used to assess how the growth in export partners’ income is converted into domestic growth. The implications of the presence of low or high export demand elasticities are discussed by relating them to various strands of trade and growth literature. Based on the results of this estimation, we also calculate steady state growth rates, engine and handmaiden effects of growth as well as the dynamic steady state gains from trade for this latecomer export economy. The implications of steady state results are also discussed in the light of the Mauritian employment and growth perspectives.     

投资规模、投资效率与经济增长的动态关系研究

投资规模扩大和投资效率提高是推动经济增长的重要动力。通过向量自回归模型实证检验中国投资增长、投资效率与经济增长的动态关系,发现投资增长和投资效率提高均能促进中国经济增长,但中国经济发展长期高度依赖投资规模的扩张,投资效率没有得到相应提高,经济增长的可持续性正面临挑战。为实现可持续发展,中国经济需要转变发展方式,实现投资规模驱动型增长方式向投资效率提高驱动型增长方式的转变。     

Which drives abnormal returns,over- or under-reaction? Studies applying longitudinal analysis

This article combined both cross-sectional and time-series longitudinal analysis to identify that factor anomalies are driven by either over-reaction or under-reaction. The basic principle is, first, use a factor to form 10 portfolios in the t quarter, then observe the average prices and returns of the 10 portfolios for the previous four quarters and for the following four quarters as well. Samples in this study contain all stocks listed in the US from 1990 to 2010. The empirical evidence shows that the reason for the abnormal returns of value (book-to-price ratios, earnings-to-price ratios, sales-to-price ratios), scale and liquidity factors is over-reaction. Meanwhile, the reason for the abnormal returns of growth factors (return on equity, return on assets and revenue growth rate) is under-reaction. The results provide significant policy implications. The anomaly returns of the value, scale and liquidity factors last longer and are more appropriate to be employed for long-run investment while the growth factors are better suited for short-run investment. Furthermore, a more profitable stock-selection strategy can be formed by simultaneously considering the above two types of factors to capture both of these two sources of anomaly returns.     

Dynamic productivity growth and its determinants in the Indonesian food and beverages industry

ABSTRACT

This research investigates dynamic productivity growth and its determinants in the Indonesian food and beverages industry decomposing dynamic productivity growth into the contributions of dynamic technical inefficiency change, dynamic technical change, and dynamic scale inefficiency change. The empirical application employs unbalanced panel data of 44 subsectors in the Indonesian food and beverages industry over 1990–2014. To estimate dynamic productivity growth, this research uses a Luenberger indicator accounting for the presence of adjustment costs. The results show that dynamic productivity growth exhibits a decreasing trend. Dynamic technical inefficiency change and dynamic scale inefficiency change contribute positively to dynamic productivity growth, while dynamic technical change contributes negatively. Dynamic productivity growth is affected by the change in industrial concentration, the growth rate of capital intensity, the growth rate of exports, the growth rate of foreign direct investment, and location.     

The real exchange rate and economic development

Recent empirical studies have found a robust correlation between competitive exchange rates and economic growth in developing economies. This paper presents (i) a formal model to help explain these findings and (ii) econometric evidence on the relation between investment and the real exchange rate. The model emphasizes the existence of (hidden) unemployment as a source of endogenous growth, even under constant returns to scale. Growth promoting policies, however, affect the external balance, and two instruments are needed in order to achieve targets for both the growth rate and the trade balance. The real exchange rate can serve as one of those instruments. The implications of the model for the relation between real exchange rates and the rate of capital accumulation find support in our econometric analysis.     

金融发展与全要素生产率增长* ——基于中国省际面板数据的实证分析

本文以2000-2012年中国省际平衡面板数据为样本,从金融规模发展和金融效率发展两个维度衡量金融发展水平,实证检验金融发展与全要素生产率增长的联系以及中间渠道。研究结果发现,2000-2012年中国全要素生产率出现正增长且主要是由技术进步推动的;无论是从金融规模发展角度还是从金融效率发展角度去分析,都证实了金融发展显著地促进了全要素生产率的增长,金融效率发展的全要素生产率增长效应显著地高于金融发展规模的全要素生产率增长效应,且金融发展促进全要素生产率增长的中间渠道是技术进步效应而非技术效率增长效应;通过引入衡量金融发展缺陷程度指标（民间金融发展规模）,证实了中国金融发展体系效率低下。民间金融发展具有TFP增长效应,且民间金融发展TFP增长效应要显著地大于正规金融发展的TFP增长效应。     

Learning innovation policy based on historical experience

Innovation fosters structural change and growth and drives socio-economic change. The generation and diffusion of innovation is a dynamic process, which cannot adequately be guided by static policy conceptions. In this paper we will explore the possibility of devising and implementing a ‘learning’ innovation policy. As organisational and technological change is not completely haphazard, we argue that innovation policy can make use of structural regularities in socio-economic change whilst, at the same time, be open to advances in scientific knowledge. We devise a method that achieves these two aims and apply it to a concrete example (knowledge systems). We conclude with practical implications originating from such a ‘learning’ innovation policy.     

Growing green money? Mapping community currencies for sustainable development

Parallel sustainable monetary systems are being developed by civil society groups and non-governmental organisations (NGOs), informed by ecological economics perspectives on development, value, economic scale and growth, and responding to the unsustainability of current global financial systems. These parallel systems of exchange (or community currencies) are designed to promote sustainable development by localising economic development, building social capital and substituting for material consumption, valuing work which is marginalised in conventional labour markets, and challenging the growth-based monetary system. However, this international movement towards community-based ecological economic practices, is under-researched. This paper presents new empirical evidence from the first international study of the scope and character of community currencies. It identifies the diversity, scale, geography and development trajectory of these initiatives, discusses the implications of these findings for efforts to achieve sustainable development, and identifies future research needs, to help harness the sustainability potential of these initiatives.     

Cost structure,technological change,and productivity growth in the greek banking sector

This paper first empirically investigates the cost structure of the Greek banking sector. Secondly, it provides measures of economies (diseconomies) of scale and quantifies technical change and its sources. Finally, this paper measures total factor productivity growth and identifies its sources. Bank production is presented with two different approaches (the intermediation and the production approach) which are used to specify a translog cost function. The two different translog cost models are estimated through the full information maximum likelihood method of estimation on pooled time series and cross sectional data. The results obtained are not significantly affected by model specification. Both models indicate significant economies of scale and negative annual rates of growth in technical change and in total factor productivity.     

Innovation Systems in a Global Economy

There is increasing emphasis being put on the need to be 'internationally competitive'. This imperative is being driven, it is argued, by the globalization of economic and corporate life. This 'globalization' is the subject of a burgeoning academic literature. To achieve and maintain the necessary competitive edge requires companies to be innovative, technologically dynamic, and organizationally efficient - in a dynamic, not just static sense. There is a literature on systems of innovation analyzing such requirements, how they have been met in practice in different contexts up until now, and what the implications are for policy. However, these two literatures - on systems of innovation and globalization - have developed quite independently. The purpose of the current paper is to discuss the implications of each for the other. Far from transcending national systems of innovation, current globalization processes are shown to have a symbiotic relation to such systems.     

Journey into the Unknown? Economic Consequences of Factor Market Integration under Increasing Returns to Scale

What are the dynamic consequences of comprehensive integration shocks? The answer to this question appears all but trivial. A dynamic macroeconomic model is set up of a small open economy with capital mobility, migration and increasing returns to scale. The model features multiple equilibria as well as (local and global) indeterminacy. Despite its simplicity, the model creates a rich set of plausible implications. This paper clarifies the mechanics that may lead an integrating economy to the good or to the bad equilibrium by showing how fundamentals and expectations interact in the process of equilibrium selection. The model is applied to replicate two striking empirical characteristics of macroeconomic development in East Germany since 1990.     

Simultaneous estimation of income and price elasticities of export demand,scale economies and total factor productivity growth for Brazil

This article focuses on a growth model in which (unlike other models) low (high) export demand elasticities and the fact that developing countries are importers of capital goods help explaining the slow (high) growth of these countries in the transition and in the steady state. The question arises whether export demand elasticities are low or high. For answering this question, export demand elasticities for the case of Brazil are obtained by estimation of the model. As a by-product of estimating the model, we obtain estimates for total-factor productivity growth and for scale economies. Based on the results from estimation we calculate steady-state growth rates, engine and handmaiden effects of growth as well as dynamic steady-state gains from trade. The model and the results are discussed in regard to several strands of literature.     

Schumpeterian Growth Without Scale Effects

We incorporate population growth into the model of trustified capitalism, with vertical and horizontal product differentiation, developed by Thompson and Waldo (1994) and generate endogenous long-run Schumpeterian growth without scale effects. Our model extends the analysis of Young (1998) and overturns some key policy and welfare implications of his model. The transitional dynamics of the model can account for the presence of scale effects in preindustrial and early industrial eras.     

知识外部性、研究开发与经济可持续增长——理论分析与基于中国数据的实证研究

文章在一个具有Marshall-Arrow-Romer知识外部性的四部门经济中,通过研究代表性家庭的动态最优化问题,考察了人力资本投资、研究开发和经济可持续增长之间的内在关系以及相应的政策含义问题,得出的主要结论是:1.人力资本的积累效率和知识外部性的大小会影响经济稳态增长率的高低;2.主观时间偏好率越大、边际效用弹性参数越小的国家稳态增长率越低;经济中技术创新率的提高和教育部门生产效率的改进会提高一国的稳态增长率,反之则反是;3.知识的外部性越大,最终产品部门的产出和研究开发部门的知识增量越高,稳态的经济增长率越高,反之则越低;4.政府应该建立、健全和完善尊重知识产权、激励创新的政策环境,以引导经济达到可持续的稳定增长状态.文章运用1978-2006年的时间序列数据进行实证研究,命题的主要结论得到了经验证据的支撑;同时,也发现了一些不同于已有命题的现象.     

Energy Consumption,Economic Development and Temperature in China： Evidence from PSTR Model

Since the 1980s, the Chinese economy has developed rapidly, with an av- erage annual growth rate around 10%. Energy consumption in China has greatly in- creased as well. This paper investigates the relationship between energy consumption, economic development and temperature in China by adopting provincial panel data from 1990 to 2011. Different from existing studies, in this paper, we use a panel smooth transition regression （PSTR） model to estimate the non-linearity relationship. Four different threshold variables including two lagged endogenous variables and two important exogenous variables have been considered. We find that energy intensity and the ratio of gross capital formation are suitable for the non-linearity model. The estimated elasticities of time dynamic indicate that energy consumption is income in- elastic and temperature inelastic. Elasticities of real income at first increase and then decrease, however, elasticities of temperature gradually increase after the year 1993. Last of all, we propose some policy implications.