A national or local phenomenon? A comparison of the US and the Chinese housing markets

This article investigates the common movements of house prices across cities as well as the macroeconomic underpinnings of the comovements in the US and China. Our empirical results indicate more differences than similarities between the US and the Chinese housing markets. The results from a Bayesian dynamic latent factor model indicate that the fluctuations of house prices across cities in the US are more a national phenomenon, while the dynamics of house prices across cities in China are mainly driven by the city-specific component. We further use VAR models to compare the roles of the underlying determinants in these two housing markets. The results show that the roles of monetary policy shocks and aggregate fluctuations in driving the common movements of house prices across cities differ substantially between the US and China at both short and long horizons.     

Is there a “reform fatigue” in the euro area?

The absence of monetary policy within a currency union increases the need for structural reforms that make the participating economies more flexible. However, the absence of exchange rate risk with respect to the other members of the union may reduce the urgency for such reforms. A number of other considerations also suggest that theory is ambiguous about the impact of participating in a currency union on progress in structural reforms. This paper addresses this issue empirically for the euro area. The results suggest that reforms in the euro area seem to have decelerated following the introduction of the euro, but from a fast pace. The paper discusses a number of possible explanations, including “reform fatigue,” the absence of “market punishment,” and “good-times” complacency. Estimates from an empirical growth model suggest that the slowing of reforms may slow down annual output growth by up to 0.2%. However, the results are preliminary and depend on the area of reform considered. Furthermore, the reform dynamics may change with the euro area starting slowing at the end of 2007.     

What leads to official corruption in China? A politico-economic analysis of economic opportunities and government corruption across China’s provinces

This paper investigates the relationship between economic opportunities and official corruption in China. We construct a cross-province sample of corrupted officials to analyse the effects on official corruption of mineral reserve, coal production, real estate and road construction, while including control variables such as population, GDP per capita, economic growth rate, private assets, provincial government capacity, fiscal transparency and distance of the province from Beijing. Spanning from December 2012 to November 2015, our sample contains 526 high-level government officials who worked in various provinces in China. We find through multivariate regression that economic opportunities represented by coal, minerals, real estate and road construction all have a positive and significant effect on official corruption in China at the levels of provincial department director or deputy director; meanwhile, capacity of political extraction, road construction and coal production are better indicators of official corruption at the level of governor or deputy governor.     

Is the Phillips Curve Valid in China?

Is the “non-existence” of the Phillips curve in China a truth or just an illusion due to the deficiency of data? Should policy analysis follow the light of New-Keynesian or New-classical economics? These questions require empirical work on the Phillips curve, which has long been limited in China due to an inaccurate unemployment rate and unreliable estimated output gap. Instead of the insignificant or self-contradicting results in previous work, this paper puts forward a significant estimation, creatively using the vacancy-jobseeker ratio instead of the unemployment rate. It is suggested that a robust Phillips curve cannot be ignored and New-Keynesian economics should be employed in policy analysis in the short run.     

Is the stock market sticker shocked? A study of market response to recent CAFE regulations in the US

In response to increasing environmental concerns, to improve energy security and to conserve energy use, the US government has proposed a new round of Corporate Average Fuel Economy (CAFE) standards. Many studies have focused on how the CAFE standard can be met by various automakers that have sales in the US market, and the costs and benefits of the companies meeting the standard. However, the stock markets’ view on the impact of the standard on automakers’ profitability is largely absent. We study the more recent episode of the CAFE regulation in an effort to try to detect the market response using the standard event study method. Our empirical findings suggest that while the stock market had some responses to the regulation, the large-scale and systematic reaction to the regulation is absent. In addition, the market response pattern to the regulation appears to be tied to the individual company’s compliance condition if there is any significant response at all.     

Is China different? A meta-analysis of export-led growth

We examine whether China has benefited more from exports than other countries. The results show that exports have been more significant for growth in China than in other countries, even when China is compared with other transition economies.     

Is the US Consumer Credit Asymmetric?

We investigate the existence of any asymmetric effects in the US consumer credit. In doing so, we utilize the asymmetric cointegration methods proposed by Breitung (2001, 2002) and Enders and Siklos (2001). Furthermore, we tend to explore two additional dimensions in this literature. First, whether asymmetries (if any) are persistent over‐time in the credit demand model. Second, whether the Great recession contributed to any asymmetric impacts on the credit demand. Our results revealed that the long‐run relationship of consumer credit (credit, income, wealth and interest rate on personal loans) is asymmetric. While it is difficult to identify the direct sources of this asymmetric result, our intuition is that it is linked to the structural breaks in the rate of personal loans encountered in the early 1980s. Moreover, we find no strong evidence that much of the asymmetric impacts in consumer credit were experienced in the Great recession. Neither have we attained evidence that asymmetric impacts on credit demand are persistent over‐time.     

Whence reform? A critique of the stiglitz perspective

This paper discusses the key hypotheses which Joseph Stiglitz proposed, in his wide-ranging critique of the “Washington Consensus”, with regard to transition reforms and economic policies in China and Russia. The primary purpose is to evaluate the Stiglitz perspective in the light of empirical evidence, including the experience of countries outside China and Russia. Although some of the points Stiglitz makes are important for understanding what has happened in the transition, this paper argues that his perspective mis-interprets the key facts of the Chinese transition, mis-describes the facts of the Russian transition and fails to consider the theoretical and policy implications of the success of a “third model”, which is represented by some Central European and Baltic transitions.     

Is economic rebalancing toward consumption “greener”? Evidence from visibility in China, 1984–2006

The Chinese government has adopted a rebalancing strategy since 2011, shifting from an investment- to consumption-oriented growth model. An aim of this reform is for a “greener” development mode, but relevant empirical evidence is slim. In this study, we propose an innovative methodology to shed light on the environmental externalities of economic rebalancing. First, we use air visibility across China to reflect air quality during 1984–2006. Second, with the daily visibility data, we propose a weekend-effect regression model to difference out city-specific unobserved heterogeneity. Third, we approximate local consumption intensity with the portion of the residential electricity usage in the total electricity usage. To our surprise, the estimates suggest that the pollution intensity of consumption activities has not only been significant, but also exceeded that of production since the mid-1990s. Hence, rebalancing toward consumption is not necessarily more environmentally friendly according to the recent development experience of China.     

Is China's Antidumping More Retaliatory than that of the US?

Antidumping (AD) investigations are widespread. China and the US are two big users and targets of AD investigations. They, respectively, represent developing and developed countries on one hand, and new AD users and traditional AD users on the other. In this paper, using AD filing data of these two countries from 1991 to 2005, we explore whether China's AD is more retaliatory than that of the US. Our results obtained from negative binomial models with maximum likelihood techniques show that although both countries have some degree of retaliatory incentives in their AD filings, China is not more (or may even be less) retaliatory than the US. We also compare the two countries' similarities and differences in their AD responses to other factors such as macroeconomic conditions, contagions, and geographical distance.     

Is there a “true” diversity?

Jost [Jost, L., 2006. Entropy and diversity. Oikos, 113: 363-374.] recently discussed Hill's [Hill, M., 1973. Diversity and evenness: a unifying notation and its consequences. Ecology, 54: 427-431.] effective number of species and concluded by naming it the “true” diversity. In this note we comment on parts of Jost's work and argue that the true diversity is not what the name suggests.     

Is Russia really a normal country? A numerical taxonomy of Russia in comparative perspective

Constitutional Political Economy - What sort of country has Russia become since the collapse of the Soviet Union? Scholars have tracked Russia’s political economy closely for almost three...     

Do Trees Grow with the Economy? A Spatial Analysis of the Determinants of Forest Cover Change in Sichuan,China

This paper aims to identify the relationship between economic growth and forest cover change in Sichuan, China. Using a set of panel land use data based on Landsat TM/ETM digital images, we show that during the late 1980s and 1990s, Sichuan’s forest cover initially decreased and then rose. We also note that the rising and falling trends occurred at the same time that Sichuan’s economy was going through a period of rapid and sustained growth. We use multivariate analysis to identify the determinants of forest cover change. In addition to using a first-differenced estimator, we also utilize spatial error and spatial lag models to obtain consistent and efficient estimates of the determinants of forest cover. Our analysis demonstrates the importance of economic growth on the forest cover change; the results show that there is a U-shaped relationship between forest cover and GDP per capita. However, despite the nature of the empirical relationship between forest cover and income, the high turning point of the U-shaped relationship suggests that there is no evidence for the existence of the Environmental Kuznets Curve for forests in Sichuan Province. Hence, policy interventions may be necessary to stop the decrease of forests.     

Is income converging in China?

This study adopts a flexible Fourier unit‐root test proposed by Enders and Lee (2012) to revisit the tendency towards convergence in real per capita income among provinces after economic reform in China. When a data‐generating process is non‐linear, a Fourier series not only allows for the possibility of an unknown number of structural breaks with unknown forms but also allows for the use of a low‐frequency component to capture multiple changes. Contrary to what the linear statistics suggest, our results from a flexible unit‐root test indicate that China's eastern and western regions are converging to their own specific steady states.     

Do different time horizons in the volatility of the US stock market significantly affect the China ETF market?

This article investigates the linear, nonlinear and time-varying Granger causality between different time horizons in the volatility of US stock market and the China Exchange-Traded Fund (ETF) market. We find evidence of linear causality from the US stock market to the China ETF market, with a bilateral nonlinear causal relationship in the longer term. Bootstrap rolling causality analysis indicates high rejection rates of a noncausal relationship running from the US stock market to the China EFT market. The causality linkage from the China ETF market to the US stock market was determined to be time-horizon-dependent, and the null hypothesis rejection rate of non-Granger causality increased in the longer term.     

How does historical trauma affect political participation? Evidence from the send‐down movement in China

Taking advantage of China's send‐down movement as a natural experiment, we investigate how experiencing a political movement during adolescence affects political participation decades later. Using data from the China Family Panel Survey and the regression discontinuity design, we find that the send‐down experience significantly reduces individuals’ political participation, measured by their participation in community committee elections, time spent on community service activities and how much they care about public news. Further analysis suggests that the send‐down experience negatively affects political participation through poorer mental health and less trust in local government.     

Is urbanization improving real estate investment? A cross‐regional study of China

This paper applies bootstrap panel Granger causality to test the relationship between urbanization and real estate investment from 1990 to 2014 for 29 provinces in China. We argue that the patterns of interaction between urbanization and investment in real estate vary across regions. The results show that urbanization does Granger‐cause investment in real estate, primarily in the central and northeastern regions of China, while urbanization does not Granger‐cause investment in real estate in the eastern and western regions, except for four provinces. Most regions do not have a Granger‐causality relationship from real estate investment to urbanization; the exceptions are Henan and Hei Longjiang provinces. Our results only support one theory on the relationship between urbanization and the real estate market for one‐third of the provinces. Thus, urbanization can improve real estate investment by increasing the demand for housing as a result of population agglomeration, but urbanization does not depend on real estate investment in China.     

Is Racial Exclusion Gendered? The Role of Residential Segregation in the Employment Status of Black Women and Men in the US

This paper explores one angle of the race/gender/class intersection by examining the effect of residential segregation on black women and men's employment status in the US. Do the exclusionary mechanisms embedded in racially-based residential segregation affect black women and men's economic outcomes similarly, or are their employment outcomes differentiated by their different gender statuses? This paper lays out a theoretical framework for understanding the role residential segregation may play in shaping black men and women's labor market outcomes, outlining key mechanisms that link residential segregation to labor market inequality, highlighting the ways in which many of these mechanisms are gendered as well as racialized. This paper also offers an analytic design to test the hypotheses developed in this exploration.     

Is small really beautiful? A review of the concept of niches in innovation

This article reviews the concept of innovation niches through three categories: strategic niche management (SNM), specialised markets and niches formed as a technology declines. In the literature, innovation niches generate interest from both innovation and marketing perspectives. This review focuses predominately on the former from which the niche types have been adopted and analysed. Mostly, contributions since 1980 have been included, representing the period of academic interest in innovative small firms, while both temporal and locational filters were applied to the study. It is noted that SNM has been proposed as a means to protect potentially useful innovations from full market competition, while specialist niches supply technologies to few customers in more stable environments. Incumbent technologies at the stage of decline may also retreat to niches where they can still remain competitive. Finally, it is suggested that further research on innovation niches would extend our understanding of technology dynamics.     

Is ‘oil and gas’ industry of ASEAN5 countries integrated with the US counterpart?

ABSTRACT

This paper employs the VARMA-MGARCH-ABEKK model and Granger causality on 15 years’ daily time series data to examine investment opportunities in the oil and gas industries for ASEAN5 countries relative to the US counterpart. It shows that the latter leads the former in decomposing integration into cross-country effects on returns and conditional return volatilities. The empirical results show that investors can gain an international intra-industry diversification benefit in Malaysia, the Philippines, Singapore and Vietnam by holding US oil and gas assets in their portfolios whereas Asian oil and gas assets may result in negative shocks due to the increase in return volatilities for Malaysia, Singapore and Vietnam. However, Thailand are insensitive to the cross-country intra-industry diversification. While making trading decisions, investors should be aware of the impulse responses of ASEAN oil and gas markets from the shocks in the US and the Asian markets and their asymmetric spill over effects.