Unified structural adjustment policy in Europe?

Low growth and high unemployment have induced the European Union (EU) to outline an economic programme in which long-term effective growth and structural policy measures play a central role. Simultaneously, the German government adopted an “action programme aiming at more growth and employment”, in which the efforts on the EU level play hardly any role. Is international coordination of growth and structural adjustment policy legitimated from an economic point of view or is competition between national policies more efficient?     

Institutional conditions,economic policy uncertainty and foreign institutional investment in China

This paper investigates the influence of host and home country institutional conditions on foreign institutional investment. Utilizing longitudinal and multilevel data on foreign institutional investment in Chinese listed firms between 2004 and 2017, we document that foreign institutional investment decreases with increasing economic policy uncertainty in the host nation. We also find that foreign institutional investors respond more strongly to local economic policy uncertainty when their home nations are closer to China, are culturally and administratively similar to China, operate a smaller domestic stock market, and have weaker minority shareholder protection. The impact of economic policy uncertainty on foreign institutional investment is also stronger when the host nation institution is more developed and open.. Moreover, we reveal the mediating role of stock market volatility on this relationship. Overall, we document that foreign institutional investment is not only shaped by institutional conditions in the host country but also influenced by home country characteristics that define geographical and institutional distance between home and host nations.     

Industrial policy,structural transformation and economic growth: Evidence from China

Industrial policy is an important means for governments to promote industrial development and accelerate economic growth. This paper mainly uses the Chinese Law and Regulation Database as the source of the relevant laws and regulations of China’s industrial policies from 2003 to 2015. On this basis, it empirically examines the impact of industrial policies on economic growth. The study finds that China’s industrial policy has significant positive effects on economic growth and that industrial structure rationalization is an important channel of industrial policy to improve economic growth. The findings are also valid under a series of robustness tests and endogenous corrections. The results of heterogeneity tests confirm that there are heterogeneous effects pertaining to industrial policy on economic growth among different subregional areas, administrative levels, industrial development stages, and industrial policy types. Overall, this paper supports the hypothesis that industrial policy has positive effects on economic growth and, accordingly, provides a basis for industrial policy implementation.     

Reservations on the use of event studies to evaluate economic policy

Event studies represent an increasingly popular method to evaluate the welfare effects of economic policy decisions. The basic idea is that stock market reactions to the announcement of policy decisions contain superior information about the welfare effects of these decisions. This paper investigates the degree of reliability of event studies as a policy evaluation method by critically reflecting upon two underlying assumptions. Since both the information superiority of financial markets and the determination of economic welfare effects based on abnormal returns consist of considerable interpretation problems, we issue a note of caution: scientists and policy makers should be very reluctant to rely on stock market reactions as a referee on economic policy decisions. Event studies cannot replace thorough theoretical economic analysis.     

Universal basic income: A viable policy alternative?

Although the need for an efficient Roma integration policy is growing in Europe, surprisingly little robust scientific evidence regarding potential policy costs and expected benefits of alternative policy options has supported the policy design and implementation so far. The present study attempts to narrow this evidence gap and aims to shed light on long‐run economic, budgetary and fiscal effects of selected education and employment policies for the inclusion of the marginalised Roma in the EU. We employ a general equilibrium approach that allows us to assess not only the direct impact of alternative Roma integration policies but also to capture all induced feedback effects. Our simulation results suggest that although Roma integration policies would be costly for the public budget, in the medium‐to‐long run, economic, budgetary and fiscal benefits may significantly outweigh short‐ to medium‐run Roma integration costs. Depending on the integration policy scenario and the analysed country, the full repayment of the integration policy investment (positive net present value) may be achieved after 7 to 9 years. In terms of the GDP, employment and earnings, the universal basic income scenario may have the highest potential impacts, particularly in the medium‐to‐long run.     

Corporate governance and investment sensitivity to policy uncertainty in Brazil

In this study, I investigate the role of corporate governance on the relationship between investment and economic policy uncertainty (EPU). Exploring the Brazilian context of poor investor protection, high private benefits of control and premium listing segments, I provide evidence that the negative impact of EPU on investment is stronger for well-governed firms. The moderating effect of corporate governance on investment-EPU sensitivity is present in companies with different levels of financial constraints and investment irreversibility. My findings support the view that controlling owners prefer riskier investments when expropriating minority shareholders and stricter governance practices may mitigate such an opportunistic behavior.     

中国经济增长与就业之间的关系分析及政策启示

经济增长与就业率之间的关系,一直是学者们争论的焦点.本文根据协整理论,对我国经济增长与就业关系进行了实证分析,得出了它们之间的长期非一致性的关系,最后提出相关政策建议.     

On the neutrality of fiscal policy

This article investigates empirically for the United Kingdom the validity of the macro rational expectations (MRE) hypothesis that anticipated fiscal policy does not matter for real economic activity. An atheoretical statistical technique is employed for decomposing the British fiscal-policy innovations into anticipated and unanticipated elements. The empirical results do not reject the MRE hypothesis that only unanticipated changes in fiscal policy can have significant expansionary impact upon real output. This article, therefore, casts doubt on the appropriateness of systematic fiscal policy as a stabilization tool in the case of the United Kingdom.     

The necessity for a strategic approach to monetary policy

The Fed has a spotty track record, and its discretionary approach to conducting monetary policy will lead to the same mistakes it made in the past. I emphasize the importance of adopting a strategic framework for conducting monetary policy. The Fed has constantly changed the course of monetary policy in response to high-frequency data and other temporary factors. The Fed’s excessive monetary ease has distorted economic and financial behavior. The Fed should base its policy on longer-run objectives rather than short-run economic and financial fluctuations, and communicate these objectives to the public and to financial markets. Under the Financial Choice Act, the Fed would have to establish a strategic guideline, and explain to Congress why monetary policy may be deviating from the guideline. I respect the Fed and see the need for change to maintain its credibility. The Fed must acknowledge its shortfalls and modify its focus.     

Effects of local fiscal policy on firm profitability

For decades, scholars and policy-makers have been interested in how fiscal policy influences entrepreneurship. Until now, research has focused on fiscal policy at the federal or regional level and used macro-economic outcome measures. Considerably less attention was given to how municipal governments can influence economic outcomes at the micro level. The present study examines the effect of municipal taxes, spending and tax compliance costs on firm profitability within the Flemish hospitality industry. This is an interesting research setting, since Flemish municipalities have far-ranging fiscal autonomy which has resulted in a proliferation of local taxes, many of which are specific to the hospitality industry. The findings reveal that local taxes have a negative impact on firm profitability, while aggregate public spending has a positive influence. The tax effect is economically relevant and exceeds the public spending impact. Finally, we find no impact of compliance costs from local taxes.     

Economic policy uncertainty,non-financial enterprises' shadow banking activities and stock price crash risk

At present, the structural contradiction between Economic Financialization and the real economy's long-term weakness has become increasingly prominent. As China enters a “new normal” stage of economic growth, the real investment rate drops, non-financial enterprises continuously allocate resources to the shadow banking system. The financial economy becomes increasingly divorced from reality. This leads us to the questions: will the shadow banking behavior of non-financial companies exacerbate the risk of stock price crash risk? How does the increase in economic policy uncertainty affect the relationship between non-financial companies' shadow banking activities and stock price crash risk?This article uses non-financial listed companies' data from 2007 to 2017 and conducts empirical analysis to answer this question. The study finds that companies engaged in high-leverage, high-risk shadow banking business exacerbate stock crash risk. This effect is only pronounced in non-state-owned enterprises and low social trust regions. The increase in the degree of economic policy uncertainty positively impacts the relationship between non-financial companies' shadow banking business and stock price crash risk. The theoretical mechanism is as follows: the rise in economic policy uncertainty amplifies the positive relationship between shadow banking activities of non-financial companies and stock price crashes by increasing bank loans, investors' sensitivity to external information, risk cross-contagion, and inefficient investment mechanisms. Various robustness tests do not change the research conclusion. This paper has important theoretical and policy guidance significance for reviewing the existing diversified shadow banking system and preventing systemic risks.     

Privatisation policy in Russia

Since Russia’s process of privatisation got under way in 1992 a large proportion of the country’s state-owned enterprises have been turned into private legal entities and have been transferred into private property. However, the desired economic success has so far largely remained elusive. What deficiencies in the privatisation policy have caused this? What can be done to solve the problems?     

The transition process in Eastern Europe: European security policy redefined

Traditional views of security policy have focused almost exclusively on defence and military topics. The process of transition in eastern Europe makes it necessary to take a much broader approach in which, for example, areas such as economic and social policy, or world trade and monetary relations, are included.     

How much inevitable US-Euro Area interdependence is there in monetary policy?

Against the backdrop of the present international financial and economic crisis this article looks into the issue of the interdependence of US monetary policy and monetary policy in the euro area. Is there a significant interdependence? If so, what is the nature and intensity of this interdependence? Has the ECB been infl uenced by the Fed or vice versa and to what degree? Has the relationship changed in recent years, and if so, in what direction?     

New aspects of US economic policy towards LDCs

President Carter assumed power in Washington in January, 1977. Since that time, many aspects of US foreign economic policy, especially those involving the less developed countries (LDCs), have been reviewed and some new approaches have been introduced. Foreign and concepts have been adjusted and the US has actively participated in the North-South Dialogue; it has also become increasingly involved in international economic including UN conferences.     

The internationalization of competition policy: implications for international business

In the post–Uruguay Round World Trading System and with the creation of the World Trade Organization (WTO), a new set of agendas on the governance of the world economy has emerged. Among them are the relationship between trade and social policy, trade and the environment, and trade and competition policy. These issues are new in the sense that policymakers have, until now, avoided drawing direct‐policy linkages between them. The main reason for this is that traditionally social and competition policies have been domestic policy domains that international policymakers were prevented from influencing. While environmental policy has been subject to several international negotiations, the link between trade and the environment has been relatively under‐discussed in the GATT. Moreover, there have been few international agreements that have drawn a direct link between trade and the environment.¹ The focus of this paper is the relationship between trade and competition policy. In particular, this paper seeks to address the issues related to international competition policy and the concerns and problems faced by international business in this context. ¹ An exception being the agreement on trade in endangered species (CITES). © 2000 John Wiley & Sons, Inc.     

Eastward enlargement of the EU: Will agricultural policy be an obstacle?

The political preparations for enlarging the European Union to include the Central European countries are in full swing, but economic policy preparations have not yet begun. There is a need for adjustment primarily in the Central European countries, but also in sensitive areas in the EU itself, particularly the Common Agricultural Policy. Will agricultural policy be an obstacle to eastward enlargement?     

A conceptual framework for entrepreneurship education policy: Meeting government and economic purposes

There is an increasing tendency for government policy to promote entrepreneurship for its apparent economic benefit. Accordingly, governments seek to employ entrepreneurship education as a means to stimulate increased levels of economic activity. However, the economic benefit of entrepreneurship education has proven difficult to substantiate. It is perceived that the problem is partly due to the multi-definitional perspectives of entrepreneurship. What stems from this is a lack of a theoretically sound conceptual grounding that will assist policy-makers and educators to locate a program within specific objectives. This article sets out an argument, extending from economic theory, to provide purpose for entrepreneurship education and proposes a policy framework supported by analysis of the Australian government policy context.     

New aspects of US economic policy towards LDCs

President Carter assumed power in Washington in January, 1977. Since that time, many aspects of US foreign economic policy, especially those involving the less developed countries (LDCs), have been reviewed and some new approaches have been introduced. Foreign and concepts have been adjusted and the US has actively participated in the North-South Dialogue; it has also become increasingly involved in international economic including UN conferences.

     

Competition policy and global competitiveness in South Africa

This article discusses proposals for competition policy reform in South Africa as an issue facing all developing countries. The South African environment is described and government philosophy summarized. Policy proposals are critiqued within the context of their impact on competitiveness. The consequences of competition policy on economic growth are considered in terms of their relative standing with respect to key trading and FDI competitors. © 1998 John Wiley & Sons, Inc.