Reviews

Book reviewed in this article:
Macroeconomics , by Ian M. McDonald
Economic Dynamics , by Giancarlo Gandolfo
Scientific Word Version 2.5 , by TCI Software Research
Surveys In Econometrics , edited by L. Oxley, D.A.R. George, C.J. Roberts, and S. Sayer
The World Economy in Transition: What Leading Economists Think , edited by R. Hinshaw
The Uneasy Case for Equalisation Payments , by Dan Usher
The Economics of Gender , by Joyce Jacobsen
Estimating Economic Values for Nature , by V. Kerry Smith
The Tobin Tax: Coping with Financial Volatility , edited by Mahbub ul Haq, Inge Kaul, and Isabelle Grunberg
Poverty, Inequality and Social Welfare in Australia , by David Thomas Johnson     

Reviews

Book reviewed in this article:
Technological Diffusion and Industrialisation Before 1914 . by A. G. Kenwood and A. L. Lougheed
Interest Rates , edited by D. J. Juttner
Share Markets and Portfolio Theory: Readings and Australian Evidence , edited by Ray Ball, Philip Brown, Frank J. Finn and R. R. Officer
Rationalising Rustic Regulation , by E. Sieper
Gōshū Keizai Handobukku (Handbook of the Australian Economy), edited by Kojima Kiyoshi/Nichi-Gō Ghōsa Iinkai
Income inequality and Poverty: Methods of Estimation and Policy Applications . by Nanak C. Kakwani
The Accuracy and Reliability of the Quarterly National Accounts , by A. G. Johnson
Democracy in Trade Unions: Studies in Membership Participation and Control , by M. Dickenson     

Reviews

Book reviewed in this article: The Cambridge Revolution: Success or Failure?: A Critical Analysis of Cambridge Theories of Value and Distribution. By M. Blaug. Intergovernmental Relations in Australia.Edited by R. L. Mathews. Poverty, Inequality and Class Structure. Edited by D. Wedderburn. British Immigrants and Australia: A Psycho-social Inquiry. By A. Richardson. The Australian Capital Market. Edited by R. R. Hirst and R. H. Wallace. Australian Urban and Regional Development. By F. J. B. Stilwell. The Image of Australia. By C. D. W. Goodwin.     

中国城镇贫困的变化趋势和模式:1988—2002

本文利用中国家庭收入项目(CHIP)调查数据,估计了1988—2002年中国城镇绝对贫困的变化趋势。根据CHIP调查数据所绘制的贫困发生曲线表明,不论把绝对贫困线确定在哪里,在该时期内中国城镇贫困都在显著减少。1988—1995年,收入分配不平等加剧,但此后基本保持稳定。分析收入和贫困决定因素的多元回归模型显示,教育、性别和中共党员等特征扩大了收入差异。来自政府反贫困措施的生活困难救助对减少城镇贫困影响很小。城镇贫困的缓解几乎完全归因于经济增长而非收入再分配。     

Child Poverty in Wealthy Countries

Review of Child Well-Being, Child Poverty and Child Policy in Modern Nations by Koen Vleminckx and Timothy M. Smeeding and The Dynamics of Child Poverty in Industrialized Countries by Bruce Bradbury, Stephen P. Jenkins, and John Micklewright     

Reviews

Book reviewed in this article:
Economics of Markets:An Introduction to Economic Analysis. By C. A. Tisdell.
Migrants and the Legal System. By A. Jakubowicz and B. Buckley. Australian Government Commission of Inquiry into Poverty:Law and Poverty Series.
Welfare of Migrants. By D. Cox and J. I. Martin.
The Indian Economy:Performance and Prospects. Edited by J. C. Sandesara.
India's Development Experience. By T. Singh.
Direct Taxation and Economic Growth in India. By H. N. P. S. Suman.
Exports of Manufactures from India. An Appraisal of the Emerging Pattern. By R. Banerji.
Industrial Development Policies for Indonesia. By J. B. Donges, B. Stecher and F. Wolter.
The Economics of Inequality. By A. B. Atkinson.
Technical Change, Relative Prices, and Environmental Resource Evaluation. By V. K. Smith.     

Does the impact of financial liberalization on income inequality depend on financial development? Some new evidence

Instead of empirically finding that higher levels of financial development reduce the positive impact of financial liberalization on inequality, as others do, we come up with the opposite result: financial development strengthens the inequality-raising impact of financial liberalization. We suggest that by, e.g., allowing financial liberalization to lead to more volatility and uncertainty, the model of Bumann and Lensink (2016 “Capital Account Liberalization and Income Inequality.“ Journal of International Money and Finance 61: 143–162.) can be extended as such that also an amplifying instead of reducing effect of financial depth on the impact of financial liberalization on income inequality can be theoretically justified.     

Reviews

Book reviewed in this article:
American Investment in Australian Industry. By D. T. B rash
The Theory of National Income and Employment. By B. C ameron
Impact of Western Man. By W. W oodruff
Communist China's Economic Growth and Foreign Trade. By A. E ckstein
Growth, Productivity and Relative Prices. By A. O lgaard
Programming the Optimal Development of the Greek Economy. By J. B. N ugent
On the Theory and Measurement of Technological Change. By M. B rown
Higgledy Piggledy Growth Again. By I. M. D. L ittle and A. C. R ayner
Effects of Corporation Income Tax. Edited by M. K rzyzaniak
International Monetary Economics. Collected Essays. By F. M achlup
Basic Statistics with Business Applications. By E. C. C lelland , J. S. D ecani , F. E. B rown , J. P. B ursk and D. S. M urray     

Reviews

Book reviewed in this article:
Economic Fluctuations in Australia, 1948 to 1964. By A. M. C. W aterman .
The State as Entrepreneur. Edited by S. H olland .
New Zealand Manufacturing Production and Trade with Australia. By P. J. L loyd .
The Economy of Papua New Guinea: Projections and Policy Issues. By R. T. S hand and M. L. T readgold
Alternative Strategies for Papua New Guinea. Edited by A. C lunies Ross and J. L angmore .
Australia, New Guinea and the International Economy: Trade and Development. By D. G adiel .
The National Income of Western Samoa. By I. J. F airbairn .
Econometric Studies of Macro and Monetary Relations. Edited by A. A. P owell and R. A. W illiams .
Economic Growth in History: Survey and Analysis. By J. D. G ould .
International Economics and Development: Essays in Honor of Raul Prebisch. Edited by L. E. di M arco .     

A framework for the decomposition of poverty differences with an application to poverty differences between countries

We propose an Oaxaca-Blinder-like decomposition of poverty differences. The decomposition is based on a parametric model of the income distribution and can be used to decompose differences in poverty rates across countries or years. Poverty differences are decomposed into differences in the underlying distribution of poverty-relevant characteristics and differences in the incidence of poverty conditional on these characteristics. We illustrate our method by comparing levels and patterns of relative poverty in the USA, Great Britain and Germany during the 1990s. Our results suggest that the higher aggregate poverty rates in the USA and in Britain relative to Germany were mostly accounted for by higher poverty rates conditional on characteristics, which were partly offset by a more favourable distribution of poverty-relevant characteristics, in particular higher employment rates.This paper is part of the research programme of the TMR Network ‘Living Standards, Inequality and Taxation’. Financial support from the European Union (Contract #ERBFMRXCT980248), the UK Economic and Social Research Council, the University of Essex, and the Deutsche Forschungsgesellschaft (DFG) is gratefully acknowledged. The data used in this study were made available by Cornell University (Cross-National Equivalent File), the University of Michigan (Panel Study of Income Dynamics), the UK Data Archive (British Household Panel Survey), and the German Institute for Economic Research (German Socio-Economic Panel). Martin Biewen would like to thank the Institute for European Studies and the Department for Policy and Management at Cornell University, in particular Jonas Pontusson, Richard Burkhauser and Dean Lillard, for their hospitality and support. We are also grateful for comments by Bernd Fitzenberger, Joachim Winter, Christoph M. Schmidt, an anonymous referee and seminar participants in Essex, Heidelberg and Mannheim. Last but not least, we thank Nick Cox for providing us with updated versions of his Stata programs for drawing quantile plots.First version received: May 2003/Final version received: December: 2003     

Reviews

Book reviewed in this article:
Economic Survey. Australia. By O rganisation for E conomic C ooperation and D evelopment .
The Australian Economy: A Manual of Applied Economics. Edited by R. I. D owning .
The Australian Motor Industry. By P. S tubbs .
Company Mergers and Takeovers: How the Game is Played in Australia. By M. D octoroff .
Federal Finance: Intergovernmental Financial Relations in Australia since Federation. By R. L. M athews and W. R. C. J ay .
Government Influence and the Location of Economic Activity. Edited by G. J. R. L inge and P. J. R immer .
Introduction to Quantitative Methods in Economics. By D. E. J ames and C. D. T hrosby .
National Income, Expenditure and Output of the United Kingdom 1855–1965. By C. H. F einstein .     

Reviews

Book reviewed in this article:
Medical Care in Australia:An Economic Diagnosis. By R. B. Scotton.
Economic Surveys. Australia. By Organization for Economic Co-operation and Development.
Long Term Unemployed People under Conditions of Full Employment. By A. Jordan.
Survey of Young Workers. By A.C.T.U.
Rural Poverty in Northern New South Wales. By Department of Sociology, University of New England.
Financial Aspects of Rural Poverty. By W. F. Musgrave, P. A. Rickards, I. F. Wan, D. P. Vincent, A. S. Watson and L. M. Barton.
Population and Australia:A Demographic Analysis and Projection.
Urbanization in Australia:The Post-war Experience. Edited by I. H. Burnley.
Models and Projections of Demand in Post-war Britain. By A. Deaton.
A Rehabilitation of Say's Law. By W. H. Hutt.
The Optimal International Division of Labour. By B. Herman.
Trade and Employment. By H. F. Lydall.
The Economic Mechanism. By B. Philpott.     

Parametric Lorenz Curves and the Modality of the Income Density Function

Similar looking Lorenz curves can imply very different income density functions and potentially lead to wrong policy implications regarding inequality. This paper derives a relation between a Lorenz curve and the modality of its underlying income density: given a parametric Lorenz curve, it is the sign of its third derivative which indicates whether the density is unimodal or zeromodal (i.e., downward‐sloping). The density modality of several important Lorenz curves such as the Pareto, Weibull, Singh–Maddala parametrizations and hierarchical families of Lorenz curves are discussed. A Lorenz curve performance comparison with Monte Carlo simulations and data from the UNU–WIDER World Income Inequality Database underlines the relevance of the theoretical result: curve‐fitting based on criteria such as mean squared error or the Gini difference might lead to a Lorenz curve implying an incorrectly‐shaped density function. It is therefore important to take into account the modality when selecting a parametric Lorenz curve.     

Capital–skill complementarity and inequality: A sensitivity analysis

Krusell et al. in [Krusell, P., Ohanian, L., Ríos-Rull, J.V., Violante, G.L., 2000. Capital–skill complementarity and inequality: A macroeconomic analysis. Econometrica 68 (5), 1029–1053] analyzed the capital–skill complementarity hypothesis as an explanation for the behavior of the US skill premium. We refit Krusell et al.'s [Krusell, P., Ohanian, L., Ríos-Rull, J.V., Violante, G.L., 2000. Capital–skill complementarity and inequality: A macroeconomic analysis. Econometrica 68 (5), 1029–1053] model with two alternative capital equipment price series: One proposed by Greenwood et al. [Greenwood, J., Hercowitz, Z., Krusell, P., 1997. Long-run implications of investment-specific technological change. Amer. Econ. Rev. 87 (3), 342–362] and the official, revised National Income and Product Accounts (NIPA) data. We find that capital–skill complementarity is preserved, but other results were sensitive to the data used. Specifically, the fit of the model was similar to Krusell et al.'s [Krusell, P., Ohanian, L., Ríos-Rull, J.V., Violante, G.L., 2000. Capital–skill complementarity and inequality: A macroeconomic analysis. Econometrica 68 (5), 1029–1053] using the NIPA data, but not the Greenwood et al. [Greenwood, J., Hercowitz, Z., Krusell, P., 1997. Long-run implications of investment-specific technological change. Amer. Econ. Rev. 87 (3), 342–362] data. Also, both series produce estimates of the elasticity of substitution between unskilled labor and equipment that are substantially larger than Krusell et al.'s [Krusell, P., Ohanian, L., Ríos-Rull, J.V., Violante, G.L., 2000. Capital–skill complementarity and inequality: A macroeconomic analysis. Econometrica 68 (5), 1029–1053] estimates.     

The Relationship between Personal Income and Net Worth in Australia

This article uses data from the Household, Income and Labour Dynamics in Australia (HILDA) Survey to examine the changing distribution of net worth with age. Even after controlling for age, the relationship between income and net worth is positive, except for the older age groups. Inequality falls as age increases. The income poor save in different forms compared with high income individuals of the same age cohort. Holdings of financial assets, especially equity investments and superannuation, are heavily concentrated in the hands of high income earners, while fixed income investments are favoured by the elderly for all income groups.     

Do liberalization and globalization increase income inequality?

Using the Standardized World Income Inequality Database, we examine if the KOF Index of Globalization and the Economic Freedom Index of the Fraser institute are related to within-country income inequality using panel data covering around 80 countries 1970–2005. Freedom to trade internationally is robustly related to inequality, also when adding several control variables and controlling for potential endogeneity using GMM. Social globalization and deregulation is also linked to inequality. Reforms towards economic freedom seem to increase inequality mainly in rich countries, and social globalization is more important in less developed countries. Monetary reforms, legal reforms and political globalization do not increase inequality.     

Is Poverty and Inequality Actually Good for Growth?

This paper aims to provide some evidence on the not necessarily positive impact of poverty and inequality on growth. It follows the line of argument that these features of society, while actually creating pressure for efficiency and enabling more savings, may impede sustainable growth. The recent financial crisis and the following period of austerity have made these arguments highly relevant. The findings of the empirical analysis of this paper are that inequality in the context of consumerism and easy credit may lead to over-borrowing and excessive consumption, which is ultimately detrimental to its sustainability. Poverty also causes deterioration in general trust, disabling smooth cooperation with lower transaction costs. Inequality existing in a given society deepens this effect.     

STUDYING INEQUALITY IN INCOME DISTRIBUTION OF SINGLE-PERSON HOUSEHOLDS IN FOUR DEVELOPED COUNTRIES

The increasing frequency of single-person households has become a major economic phenomenon, and is likely to become an important political force. This paper focuses on differences related to inequality of income distribution among single-person households in Europe's four largest economies, i.e. France, Germany, Italy and the U.K. Income distribution was modeled in terms of individual characteristics using a parametric model with heterogeneous model parameters. Poverty differences were also broken down using the results of Biewen and Jenkins (2005 ) in order to understand the relationship between poverty and individual characteristics among countries.     

The poor outside the lamplight: on the prevalence of poverty among population groups not included in household surveys

Poverty rate calculations are often based on household surveys that exclude some of the groups most vulnerable to poverty such as the homeless. This paper documents the nature of the excluded groups and the quantitative importance of their omission for the Czech Republic. Our study combines European Union Statistics on Income and Living Conditions data for 2011 with information from the 2011 Population Census. Our preferred estimate indicates an increase in the poverty rate by almost one percentage point. The paper contributes to accurately identifying the most vulnerable members of the society, which is essential for setting effective social policies.