A differentiated tolls system – an effective transport policy tool for Slovenia?

We provide an econometric model of passenger and freight transportation demand based on panel data for 10 sections of toll roads in Slovenia. Transportation demand on Slovenian motorways is price inelastic. The price elasticity of transportation demand statistically varies among different parts of the toll sections, so it would seem sensible to introduce a differentiated toll system that would allow the simultaneous achievement of multiple objectives, such as increasing the internalization of the external costs of transport, increasing transportation demand management on the basis of price and increasing cost recovery for the maintenance and development of toll roads in Slovenia. Transportation demand is even more responsive to changes in fuel price than changes in tolls, so transportation policy can manage transportation demand using differences in fuel prices. Based on estimates of demand models differentiated according to several geographical groups of road sections, we also find that growth in the price elasticity of transportation demand in Slovenia can be achieved through the expansion of the transport supply by increasing the competitiveness of rail transport and alternative transportation routes.     

Does a stricter enforcement policy protect the environment? A political economy perspective

The conventional wisdom suggests that a stricter enforcement policy can reduce pollution emissions. Nevertheless, this present paper argues that this assertion does not necessarily hold if the stringency of environmental regulation is subject to the influence of lobbying. A stricter enforcement policy increases the polluters’ expected financial burden, and induces them to exert greater political pressure on reducing the stringency of environmental regulation, thereby resulting in a larger amount of pollution emissions. We also show that tightening the enforcement policy can reduce efficiency. We highlight the possibility of policymaking being misguided due to overlooking the political effect of enforcement policy.     

Does real U.K. GDP have a unit root? Evidence from a multi-century perspective

ABSTRACT

We employ linear and nonlinear unit-root tests to examine the stationarity of five multi-century historical U.K. series of real output compiled by the Bank of England. Three series span 1270 to 2016 and two series span 1700 to 2016. These datasets represent the longest span of historical real output data available and, thus, provide the environment for which unit-root tests are most powerful. A key feature of our test is its simultaneous allowance for two types of nonlinearity: time-dependent (structural breaks) nonlinearity and state-dependent (asymmetric adjustment) nonlinearity. The key finding of the test, contrary to what other more popular nonlinear unit-root tests suggest, provides strong evidence that the main structure of the five series is a stationary process characterized by an asymmetric nonlinear adjustment and a permanent break affecting both the intercept and the trend. A major policy implication of this finding is fiscal and/or monetary stabilization policies have only temporary effects on the output levels of the United Kingdom.     

Twin deficits: new evidence from a developing (oil vs. non-oil) countries’ perspective

We test the relationship between the current account and fiscal policy for a group of small open developing economies with fixed exchange rates some of which are oil exporters. Specifically, we test the viewpoint of a Ricardian infinite-horizon representative agent model in which lower public savings are met by equal increases in private savings, and as a result the current account does not respond to the changes in government spending, against a Keynesian’s conventional viewpoint in which a fall in public savings has an adverse effect on the current account balance. Unlike the evidence from flexible exchange rate economies provided by many authors such as Rosensweig and Tallman (Econ Inq 31(4):580–594, 1993), Erceg et al. (Int Finance 8(3):363–397, 2005) and Saleh et al. (South Asia Econ J 6(2):221–239, 2005), the evidence from a panel data analysis and Granger-causality test of these fixed exchange-based countries supports the conventional theory of positive relationship between fiscal and external balances, with causality running from the former to the latter, in oil countries, whereas it supports the Ricardian view for non-oil countries.     

Procedural invariance as a result of commitment costs: evidence from an economic experiment on farmers’ willingness to pay for digestate

We offer a conceptual explanation for some of the procedural invariance witnessed in experimental studies related to the concept of commitment costs, which is confirmed in a field experiment with Sicilian farmers valuing a renewable soil conditioner.     

Is there a plausible theory for decision under risk? A dual calibration critique

Can any prominent theory of decision under risk rationalize both small-stakes risk aversion and large-stakes risk aversion? Do some prominent theories fail to rationalize patterns of same-stakes risk aversion? How do reference payoffs enter in the answer to these questions? What would be the characteristics of a theory of decision under risk that would be immune to calibration critique? We offer a theoretical duality analysis that addresses these questions. We report dual propositions and corollaries that calibrate the implications of nonlinear transformation of probabilities or payoffs (or both). We also report several experiments that provide data on the empirical relevance of the two types of calibration patterns.     

Assessing economic convergence in the EU: is there a perspective for the ‘cohesion countries’?

This article analyses the stochastic income convergence within the EU-15. The empirical analysis uses per capita GDP, in PPP and in constant prices of 2005 for the period 1950 to 2010. Apart from the traditional DF type tests we also account for possible structural changes. In this direction, we employ the Zivot-Andrews (1992) and the Lee-Strazicich (1999, 2003) testing procedures, for one and two breaks, endogenously determined. Furthermore, we apply the Carlino and Mills (1993) methodology proposed for the detection of β-convergence. The overall evidence supports the existence of two discrete clubs, the first by the ‘cohesion countries’ (Portugal, Ireland, Greece and Spain) and the second by the remaining members. In particular, there is a clear evidence of convergence within each club, whereas between clubs there is a luck of catching-up effects. Furthermore, investigation of correlation between relative per capita GDP of each country and several factors that are often identified as growth stimulants, namely Total Factor Productivity, FDI, investment and openness confirm, with the exception of Greece, a strong association between these factors and the convergence process. However, progress in the convergence has not been uniform across countries and over time, reflecting the specific interactions between domestic and international factors and their impact on the convergence process of individual countries.     

Are children an incentive or a disincentive for migration? Evidence from Vietnam

This study analyzes the influence of children on household migration decisions using data on current internal movement in Vietnam a country that has experienced significant rural–urban migration in the recent years. Families with children usually have three migration choices: move together, stay together or send only one parent to work afar. Using an instrumental variable approach, we show that having an additional child reduces the probability of household migration by 0.0115, while it increases the likelihood of fathers’ migration by 0.0121. These effects suggest that households with more children may be less mobile but may have a greater economic need for migration.     

When are bonus payments for managers perceived as fair? Results from a quasi-experiment

We investigate under which circumstances bonus payments for managers are accepted as fair, asking workers to judge several hypothetical scenarios. We find that perceptions vary widely with the characteristics of the situation, as well as with the workers’ general attitudes.     

Towards an Austro–German theory of uneven economic development? A plea for theorising by inclusion

Based on Meir Kohn’s distinction between research programmes based on ‘value’ and ‘exchange’ (2004), this paper argues for a ‘production’ paradigm based on the tradition of Menger and Schumpeter. It is suggested that this production-based programme could use, as its starting point, Schumpeter’s (Wesen und Hauptinhalt der theoretischen Nationalökonomie, 1908) attempt to mediate in the Methodenstreit by arguing that different types of economic problems require theories at different levels of abstraction. This opens up for ‘theorising by inclusion’, an approach combining key elements both of traditional German economics and of Austrian economics in the Mengerian tradition.     

Voting for staying. Why didn’t the foreign-owned automotive component suppliers relocate their activity from Hungary to lower-wage countries as a response to the economic crisis?

On the basis of interviews with 10 foreign-owned automobile component suppliers in Hungary and the collection of indirect information, this article explains why the multinationals did not relocate their activity from Hungary to lower-wage countries as a response to the economic crisis. We suggest that the four ‘keep factors of location’ – additional investments of the automobile manufacturers, unchanged labour market regulation, changes in government policy and the existence of few alternative sites of relocation – were more dominant than the two main ‘push factors of relocation’ – relatively low sunk costs and low dependence on the local environment.     

Is Moderate Market Performance in the U.S. a Sufficient Condition for Abnormal Returns on CEFs?

In this project, our topic pertains to examination of market efficiency, employing data from closed-end funds (CEFs) trading in the American stock market. Employing both aggregate and individual data, we examine whether or not moderate market performance is a sufficient condition in order to achieve abnormal returns, in the short-run, through exploitation of discount deviations from its mean value. The main hypothesis tested is that market performance affects the mean-reverting properties of CEFs’ discount. Moderate market performance ensures the mean-reversion of CEFs’ discount and points to cointegration between the share prices of CEFs and their net asset value (NAV). Furthermore, when NAV is identified as the common stochastic trend of the system then, market inefficiency is detected.     

Cost and outcomes associated with rivaroxaban vs enoxaparin for the prevention of postsurgical venous thromboembolism from a US payer’s perspective

Abstract

Objective:

The objective of this analysis was the evaluation of the outcomes and costs associated with rivaroxaban and enoxaparin for the prevention of postsurgical venous thromboembolism (VTE) in patients undergoing total hip replacement (THR) and total knee replacement (TKR) from the US payer perspective.

Methods:

VTE event rates have been reported in three Phase III clinical trials that compared rivaroxaban and enoxaparin for VTE prevention after orthopedic surgery during the prophylaxis (≤35 days for THR patients and 10–14 days for TKR patients) and post-prophylaxis periods (≤90 days following surgery). These data were used in this decision-analytic model to estimate and compare health outcomes and costs associated with rivaroxaban and enoxaparin. The base-case analysis considered the number and costs of symptomatic VTE events during the prophylaxis period only. A 90-day horizon was considered in the sensitivity analysis.

Results:

Following THR, when extended durations of prophylaxis (35 days) were compared, rivaroxaban was associated with lower costs than enoxaparin, with total saving costs of $695/patient. When an extended duration of rivaroxaban prophylaxis (35 days) was compared with a short duration (10–14 days) of enoxaparin prophylaxis, rivaroxaban was estimated to prevent 9.9 additional symptomatic VTE events per 1000 patients, while saving $244/patient (rate/1000 patients). In the TKR population, short duration of rivaroxaban prophylaxis was estimated to prevent 13.1 additional symptomatic VTE events per 1000 patients. It was also less costly than short duration enoxaparin prophylaxis, with a saving of $411/patient (rate/1000 patients).

Limitations:

Only statistically significant differences were captured in the base-case economic analysis, and, therefore, differences in pulmonary embolism (PE) and bleeding events were not captured.

Conclusions:

In this model, rivaroxaban reduced total treatment payer costs vs enoxaparin for the prevention of VTE in THR or TKR patients.     

When does financial integration matter for fiscal policy in a currency union? A welfare-based approach

We use a two-country new open economy macroeconomics model describing a currency union with imperfect financial integration. We assume that household preferences are biased towards the goods produced within the country. We use this setup to show how the degree of financial integration and the home bias affect the welfare efficiency of fiscal policy. This is particularly important for the implications of a fiscal policy launched by a member of the euro zone where the home bias is in a decreasing trend due to higher goods market integration and where there are explicit efforts to enhance financial integration. The results show in particular how the effects of an increasing financial integration on the impact of a fiscal policy can be mitigated or amplified by a decreasing home-product bias. Moreover, under certain conditions, the degree of financial integration has no effect on the welfare efficiency of fiscal policy despite its non-negligible effects on the components of welfare.     

A corporation’s culture as an impetus for spinoffs and a driving force of industry evolution

We offer a theory of spinoffs that explains some salient aspects of these important market entrants. In infant industries, a great share of new market opportunities is depleted by firms that spinoff from incumbents. A model emphasizing the relation between incumbents’ evolving corporate cultures and the generation of spinoffs explains this regularity in industry evolution. By doing so, we capture different patterns in firm development that finally will help explain the evolutionary paths that industries may follow. We show that organizations reach a critical size that entails the collapse of a cooperative culture and triggers the exodus of personnel founding own firms. Thereby, organizations with a cooperative culture active in a dynamic business environment provide ideal training grounds for potential founders. Moreover, we argue that cooperative firm cultures and processes of “entrepreneurial imprinting” are important sources of spinoffs’ superior capabilities concerning their later market performance. We relate our findings to empirical evidence on developmental patterns in industries, such as genealogies and performance of spinoffs.     

Are OECD policy recommendations for public sector reform biased against welfare states? Evidence from a new database

Policy advice by the OECD has long been at the heart of academic debates on welfare state reform, with frequent claims questioning the ideological orientation of recommendations. This paper constructs an indicator of perceived reform need for 24 countries, quantifying the policy advice contained in the OECD Economic Surveys around 1985, 1995, and 2005. These recommendations describe a policy consensus that is based on competition, work incentives, monetary reform, fiscal discipline, and labor market reform. Empirically, perceived need for reform is well explained by preceding levels of economic freedom. In particular, countries with more government intervention, lower property rights protection, and more regulation are perceived to have a bigger reform need. In turn, perceived reform need has no explanatory power for subsequent changes in social expenditure and welfare state entitlements. Only in countries with right wing governments, perceived reform need might be followed by marginal reductions in welfare state entitlements, but definitely not in social expenditure.     

Can M&A activities act as a predictor of the performance of economic growth or stock prices?

One of the important issues with regard to the relationship between M&As (mergers and acquisitions) and economic growth or stock prices is whether such activities can act as a predictor of these two variables' performance, or whether these variables have resulted in significant impacts on M&A activities. The aim of this paper is to use the method proposed in Kónya (2006) to carry out a causality test among M&A activities, economic growth and stock prices, because the causal relationships that may be uncovered by this would be meaningful for both policymakers and stockholders. This paper uses quarterly data from six OECD countries for the period from April 1980 to March 2010. The bootstrap panel Granger causality test that this work applies also considers cross-sectional dependency and slope heterogeneity simultaneously. The findings of the paper are as follows. There is significant, one-way causality from stock prices to M&A activities, and thus changes in stock prices lead M&A activities. With real GDP as the control variable, for all the countries surveyed, except Australia, stock prices lead M&A activities. As for the impact that economic growth has on M&A activities, we conclude that, when using stock prices as the control variable, there is almost no lead-lag relationship between economic growth and M&A activities, except for in Japan.     

Should a central bank react to food inflation? Evidence from an estimated model for Chile

We examine whether food price shocks are a major source of macroeconomic fluctuations. We estimate a small open economy DSGE model using an alternative Taylor rule applied to Chilean data. The empirical evidence suggests that food inflation played a non-trivial role in shaping Chile's de facto monetary policy actions. Consistent with its commitment to price stability, the central bank increases the policy rate in reaction to food inflation. Despite an immediate monetary policy reaction to a food price shock, the policy rate gradually tapers off. This is due to a second-round effect on non-food inflation propagated by the food price shock. A main finding is that monetary policy that targets headline inflation is welfare improving.     

Does economic growth and energy consumption drive environmental degradation in China’s 31 provinces? New evidence from a spatial econometric perspective

The panel data analysis points to economic and social factors contributing to NO_x, PM_2.5, PM₁₀, SO₂, and VOCs in China’s 31 provinces. The spatial correlation analysis using Global and Local Moran’s I values indicates the existence of a significant and positive spatial autocorrelation with respect to environment, economy and energy, and the high spatial correlation is evident in the eastern region, covering the northern part of Yangtze River Delta, Huaihai Economic Zone, and the lower reaches of the Yellow River Economic Belt. The empirical estimation is performed through spatial lag and spatial Durbin models. All emitted air pollutants in 31 provinces have significant spatial dependence and strong spillover effects. There is an inverted U-shaped relationship between emitted air pollutants (NO_x, PM₁₀, VOCs, and PM_2.5) and per capita GDP, which follows the EKC hypothesis. The relationship between SO₂ and per capita GDP does not follow the EKC hypothesis. There is a positive relationship between pollutant emissions and coal consumption, which is consistent with current studies for various countries like Canada, Denmark, UK and US and regions like New York State. However, the effects of science and technology investment on air pollutants are mostly positive, which is not as policy expected.