Anticipated and unanticipated money: a case study of Malaysia

The paper tests the LSW proposition that unanticipated policy changes affect real economic variables by using Malaysian data over the period 1970:1–1990:4. The empirical evidence changes in fiscal policy and balance of payments do not affect real output, thus lending support to the proposition. On the other hand, anticipated monetary policy and inflation influence output in the short-run, lending support to Mishkin's views of the economy and rejecting the LSW proposition. In addition, the long-run neutrality proposition is not supported by the data. Moreover, unanticipated changes in inflation do influence real output in the short-run lending support to the LSW proposition. However, unanticipated changes in monetary policy, balance of payments and fiscal policy do not influence real output, lending support to the classical view of the economy and rejecting the LSW proposition. Furthermore, the Monetarist's view that inflation is a monetary phenomenon is rejected. The findings also show that unanticipated movements of money supply contribute significantly to the inflation rate. The Chow test shows that the coefficients remain stable over the period of study.     

Consumer expectation and output growth: The case of China

This study shows that China’s Consumer Expectation Index contains useful information about pure expectation shocks, which are unrelated to economic fundamentals. It turns out that such shocks are likely to be an important independent driver of industrial output growth.     

Unanticipated money,output, employment and prices in a develoing economy: the korean case

This paper examines the effect of unanticipated money on output, unemployment and prices in Korea. The empirical results tend to reject the policy ineffectiveness proposition (PIP) in most cases. They show that both anticipated and unantipated money affect output and prices, in contract with the PIP. Mixed results are obtained for the effect of monetary variables on unemployment. The statistical results show that the regular OLS two step estimates yield t values which are upward biases by 0–27% as compared with the consistent estimates of the variance-covariance matrix that are obtained in this study. [E 51]     

The effects of public deficits on money growth in the European Union

The impact of government debt on the money supply has been studied for different countries, with an emphasis on developing countries and the U.S. This topic becomes especially interesting in European Union countries that have high public deficits and low inflation rates. It is also very relevant in the monetary union, with a European central bank controlling monetary policy and introducing monetary measures for all the member countries. The main goal of this paper is to analyze if there is any relationship between public deficits and monetary growth in the European Union. The conclusions presented in the previous literature are ambiguous. Some studies concluded that there is little evidence that government debt influences money in some of the member countries.     

The effect of output growth volatility on output growth: empirical evidence from Turkey

This article assesses the effect of output growth volatility on output growth within a stochastic-volatility-in-mean model with a time-varying framework for an open small economy: Turkey. Until now, the empirical evidence on industrial production mainly reveals that this relationship is negative. However, in further examining different sectors and sub-sectors of industrial production, we find the sign of the relationship changes depending on the sector. Moreover, there is limited evidence that the sign of the relationship changes over time. Thus, the evidence reveals that the nature of the output growth volatility–output growth relationship is not uniform across sectors.     

Morphology of growth : The effects of country size, structural characteristics and linkages

This paper investigates the extent to which tests concerning the influence of various kinds of structural imbalance indexes on the overall rate of economic growth may be sensitive to (1) differences in the extent to which various country characteristics are reflected in the normal growth path and hence in the imbalance indexes, (2) differences in the level of disaggregation or part of the economy at which imbalance is measured, and (3) the type of countries to which the analysis is applied. The results based on imbalance indexes and growth rates for a sample of 42 countries 1960–1970 and 1970–1978 are shown to be sensitive to all three of these considerations.     

Governmental interventions and household behavior in a developing country: Anticipating the unanticipated consequences of social programs

Estimates of the joint effects of governmental health, education and family planning programs as well as sources of water on fertility, child mortality and schooling are obtained from combined district-level and household-level data from rural India. The estimates are used both to test the implications of a model of household decision-making and to assess the effectiveness of the joint, public provision of such services in shifting resources from increasing family size to augmenting human capital per person. The results appear consistent with household optimizing behavior and suggest that reductions in the costs of medical services, contraceptives and schooling and the improvement of water sources are mutually reinforcing alternatives for implementing the joint policy goals of reduced population growth and increased human capital formation.     

The causal nexus of money,output and prices in Malaysia

Using Geweke's approach to Wiener–Granger causality,bidirectional causation between money supply and nominal output were detected. Inflation in Malaysia is essentially a monetary phenomenon. The empirical findings suggest that by controlling money supply, the central bank might be able to successfully maintain price stability at producer's level but not at consumer's level unless narrow money stock is bring targeted. Serious attempts by the central bank to tighten money supply could have a strong feedback on real output and even instaneous impact on nominal output     

The effects of learning and signaling on money demand: With an application to heterodox inflation stabilization programs

This paper develops a nonlinear vector autoregression of inflation and money growth subject to changes in regime. The regimes are fully characterized by the mean and variance of inflation and are conjectured to be the result of alternative government policies. Agents are unable to observe directly whether government actions are indeed consistent with the inflation rate targeted as part of a stabilization program. However, as part of their money demand decision, agents construct probability inferences regarding the regime. Government announcements are assumed to provide agents with additional, possibly truthful information regarding the regime.  This specification is estimated using data from the Israeli and Argentine high-inflation periods. Results indicate that the successful stabilization program implemented in Israel in July 1985 was more credible than either the earlier Israeli attempt in November 1984 or the Argentine programs. Government's signaling might simplify the agents' inference problem and increase the speed of their learning but, under certain conditions, it might also increase inflation volatility. Welfare gains from a temporary increase in real balances might be high enough to induce agents to raise their money demand in the short-term even if they are uncertain about the nature of government policy and the eventual outcome of the stabilization attempt. Statistically, the model restrictions cannot be rejected at the 1% significance level. First version received: August 1998/Final version received: January 1999     

The influence of remittances on education and health outcomes: a cross country study

We study the effect of international remittances on aggregate educational and health outcomes using a sample of 69 low- and middle-income countries. We find that remittances play an important role in improving primary and secondary school attainment, increasing life expectancy and reducing infant mortality. Our results suggest that as migration laws continue to support greater emigration and remittances, policies should be enacted to facilitate the flow of remittances as they represent a significant source for economic development.     

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.     

Income tax incidence in a developing country: The case of Greece

The objective of this study is to throw some light on the question of direct tax incidence in a developing country like Greece. A two-sector model is built up which emphasises a number of duality aspects. In that respect the model deviates from the standard Harberger type models. Appropriate shifting formulas are then constructed. Making use of a set of plausible parameter values our findings suggest that the taxed input may avoid some portion of the tax burden even under a perfectly competitive environment.     

Testing for short-run money neutrality in a small open economy: The case of Canada

This paper adopts an econometric methodology which is based on standard nested-hypotheses testing in order to test the policy ineffectiveness proposition in the context of the Canadian economy. It thus avoids some problems associated with the non-nested hypotheses framework used by Barro and numerous other writers. The substantial openness of the Canadian economy is taken into account through the use of a Mundell-Flemming aggregate demand side. The supply response of the economy is carefully modelled, in the same context, and the familiar Sargent-Wallace aggregate supply function is derived as a special case of a more general Keynesian function — by assuming instantaneous adjustment of prices to costs. Empirical tests based on a data sample spanning the period of Canada's recent experience with flexible exchange rates are unfavorable to the policy ineffectiveness proposition.     

The hypostasis of money: an economic point of view

The purpose of this article is to show that money is not anentity but hic et nunc a genuine mode of circulation associatedwith a genuine social organisation. Criticising money hypostasismay help to to: (i) elucidate the ambivalence of monetary relationsin our modern society (equivalence and subordination); (ii)criticise the idea that ‘primitive monies’ are nothingbut imperfect forms of our modern money and show that exoticsocieties are worth studying for themselves; and (iii) relativisethe knowledge we have about our societies and to develop comparativeanalysis. A sketchy comparison between wodani society and ourssuggests that an abduction relation exists between money andsociety.     

Re-assessing the impact of academic performance on salary level and growth: a case study

This study examines the relationship between GPA and salary level and growth using a unique data set of Bryant University graduates in different stages of their careers. This study adds to a divided literature plagued with issues of heterogeneity and omitted variable biases. Results of the empirical analysis suggest that male graduates with higher GPA at graduation have experienced higher salary level and faster salary growth, while GPA has had no significant impact on women’s salary or salary growth.     

Purchasing Power Parity and aggregation bias for a developing country: The case of Mexico

This paper investigates long-run Purchasing Power Parity (PPP) between the US and Mexico. We use a panel of disaggregated price data between the US and Mexico with a long time series to look at two types of aggregation bias. The first is examined in Imbs et al. — which we refer to as estimator aggregation bias — and the second is put forth by Broda and Weinstein — hereafter, data aggregation bias. The findings indicate substantial estimator aggregation bias and data aggregation bias. Although estimates using aggregate data and imposing homogeneous coefficients provide little evidence of PPP, findings with disaggregated data and heterogeneous coefficient estimators offer strong support. The results also suggest the presence of small-sample bias as examined in Chen and Engel, but with little effect on the qualitative results. Tradable goods and non-tradable goods show little distinction in convergence rates. Estimated half-lives are lower under flexible than fixed exchange rates and indicate rapid convergence during the Mexican peso crisis.     

Price stickiness, trend inflation, and output dynamics: a cross‐country analysis

Abstract.  Sticky price models based on menu costs predict that countries with high trend inflation should have (i) smaller impact effects of demand shocks on output and (ii) less persistent output fluctuations, relative to low‐trend inflation countries. These predictions are tested, controlling for changes in trend inflation, using a country‐specific approach. The results do not support the second prediction. That prediction is also not robust to a modified measure of trend inflation that excludes episodes of hyperinflation. These findings suggest that while price stickiness is important for understanding short‐run impact effects, real propagation mechanisms may drive persistence in output fluctuations.