Currency Undervaluation and Economic Rebalancing towards Services： Is China an Exception？

The present study investigates the main determinants of the employment share of the service sector using a panel of 66 countries over the period 1983–2007. Based on alternative measures of currency misalignment, the study extends the literature by investigating the impact of an undervalued currency on services. The empirical findings show that together with productivity and income per capita, currency undervaluation significantly determines the total employment share of services. Another key finding is that conventional crosscountry determinants and the exchange rate undervaluation can only partially explain the underdevelopment of services activity in China and in other South‐East Asian countries. In these countries, policies that aim at rebalancing the economy towards services should include elements to reform the domestic financial market, and the social security and healthcare systems.     

Assessing Consumer Gains from a Drug Price Control Policy in the United States

We use national data from 1960 to 2000 to estimate the demand for pharmaceuticals in the United States. We then simulate consumer surplus gains from a hypothetical drug price control policy that would have limited drug price increases to the rate of inflation from 1981 to 2000. Using a range of values for the real interest rate, coinsurance rate, and own-price elasticity of demand, we find that the consumer surplus gains from this policy equal $472 billion by the end of 2000. According to a recent study, that same policy would have led to 198 fewer new drugs being brought to the U.S. market. Therefore, the average social opportunity cost per drug developed during this period was approximately $2.4 billion. Research on the value of pharmaceuticals suggests that the social benefits of a new drug are far greater than this estimate. Hence, drug price controls could do more harm than good.     

Who has benefited from the health services system for the elderly in Japan?

This paper examines the demand and supply of medical services for the elderly in the health services system characterized by per-month fixed copayment and selective capitation fee scheme for outpatients with chronic diseases. The results indicate that the beneficiary, in particular the household dependent, visits a physician more frequently because the actual copayment decreases for the household dependent, but is nearly the same for the head of the household. Physicians, however, provide more services to the beneficiary partly because of the lowered copayment and partly because of the capitation fee scheme, which they will select instead of the fee-for-service scheme only when capitation is more profitable than Fee-for-Service. As a result, physicians as well as the insured benefit from the health services system.     

THE DETERMINANTS OF EMPLOYMENT: A SECTORAL ANALYSIS FOR TURKEY

This paper analyzes the effects of wages, openness, and demand on employment in the private manufacturing industry in Turkey based on panel data for the period of 1973–2001. The wage elasticity of employment increases after trade liberalization. Nevertheless, output elasticity of labor demand is higher than wage elasticity in the total manufacturing sector for the whole estimation period, and in the high- and medium-skilled sectors in the post-1980 period. Trade effects, after controlling for output, seem to have a low economic significance. The positive effects of exports on the labor intensity of production are low or are offset by labor saving effects of foreign trade, particularly in the high- and medium-skilled sectors. On the other hand, there is some evidence of a negative import effect in the low-skilled sectors, whereas in the high- and medium-skilled group a complementary relation between domestic labor and imported inputs dominates the effects.     

Health-Specific Moral Hazard Effects

In this paper I examine the effect of insurance on the demand for health care among consumers of similar health, which I call the health-specific moral hazard effect. Using the 2000 Medical Expenditure Panel Survey, I analyze the variation in the moral hazard effect across health subpopulations in the demand for inpatient and outpatient services. The endogeneity of insurance, the change of insurance regime, and the discreteness and the nonnegativity of the use of health care motivate the use of an endogenous switching model for count data. The econometric results indicate that the moral hazard effect for physician visits is higher at relatively higher levels of health, whereas the effect for both hospital nights and hospital admissions is lower at relatively higher levels of health. The evidence suggests that both efficient and inefficient moral hazard may exist, and this may depend on the type of health care service used.     

The Buffer Stock Model Redux? An Analysis of the Dynamics of Foreign Reserve Accumulation

Cointegration analysis suggests that the buffer stock precautionary model accounts for the optimal reserve demand in nine developing countries located in Asia and Latin America. The corresponding VECMs are further interpolated, using the permanent and transitory innovation decomposition procedure, in order to assess the relative impact of the time series on the convergence to equilibrium after a shock. Finally the (asymmetric) effect on the speed of convergence of positive/negative changes in signal variables—such as the excess reserves of the previous period, relative competitiveness and US monetary stance—is found to be significant, in line with mercantilistic and fear of floating motives for hoarding reserves.     

BANKING SECTOR CONTROLS AND FINANCIAL DEEPENING: A STRUCTURAL ERROR CORRECTION MODEL FOR TUNISIA

The aim of this paper is to investigate empirically the effects of several types of banking sector controls on financial deepening in Tunisia. The hypotheses addressed in this study are discussed within the general framework of the McKinnon/Shaw approach and the monopoly bank model. A structural error correction model in Ericsson's (1995) sense has been specified and used to estimate the effects of financial repression in Tunisia over the period 1961–2000. The main empirical finding suggests that, in the long and short terms, financial repression has had significant and negative effects on financial development, independently of its well‐known influence via the level of the real interest rate. This finding shows a contrast with the prevalence of financial market imperfections, but it is consistent with traditional literature on financial liberalization. In addition, this paper shows that financial deepening and per capita income are jointly determined since they both appear not to be weakly exogenous with each other.     

South African competition policy on excessive pricing and its relation to price gouging during the COVID-19 disaster period

The declaration of a state of national disaster in South Africa, due to the COVID-19 pandemic, was followed by excessive-pricing regulations pertaining to certain consumer and medical products and services. The regulations and their application suggest an intertemporal benchmark to judge excessive pricing, deviating from previous practice. Intertemporal comparisons assume a structural shift during COVID-19 that changes competitive conditions, related to changes in consumer behaviour. Such comparisons must also account for demand and cost changes. While the COVID-19 regulations allow for cost-based price increases, demand-based increases are not explicitly accounted for, suggesting that the regulations are framed more generally as price-gouging regulations. The differences between price-gouging and excessive-pricing benchmarks depends on the type of disaster-period demand shock. They are similar following a transitory demand spike, provided sufficient time is allowed for dynamic price behaviour, but differ markedly when demand is elevated for the duration of the disaster period. Applying simple cost-based comparisons in recently concluded cases against smaller retailers are consistent with excessive pricing, given the presence of a demand spike. To the extent that these involve persistently higher demand, cases against wholesalers and larger retailers will be more complicated, as such demand must be reflected in competitive prices.     

China＇s Share of US Imports and Exchange Rate Pass-through to US Import Prices

The present paper investigates the effect of China's share of US imports on the aggregate‐level exchange rate pass‐through to US import prices over the period from January 1999 to December 2008. The paper also focuses on the post‐reform period, after 2005, allowing greater flexibility of the RMB to explore the change in the role of the Chinese import share in determining the trend in the US exchange rate pass‐through. Evidence reveals that China's share of US imports has a negative effect on the exchange rate pass‐through. However, this negative effect has been moderated to a negligible level since China's exchange rate reform. An important implication is that the exchange rate flexibility of the RMB has been raised to a significant level may no longer cause distortion in the US competitive environment and prevent the USA from adjusting current accounts.     

Baumol,Engel, and beyond: accounting for a century of structural transformation in Japan, 1885–1985†

This article examines the drivers of the long‐run structural transformation in Japan. It uses a dynamic input–output framework that decomposes the reallocation of the total output across sectors into two components: the demand side and the supply side, or technological change. To perform this task, we employ 13 seven‐sector input–output tables spanning 100 years (1885 to 1985). The results show that the demand‐side factors, as a combination of the Baumol and Engel effects, were the key explanatory factors in more than 60 per cent of the sector‐period cases in the pre‐Second World War period, while the supply‐side effect drove structural transformation in more than 75 per cent of such cases in the post‐Second World War period. Detailed decomposition results suggest that in most of the sectors, changes in private consumption were the dominant force behind the demand‐side explanations. The demand effect was found to be strongest in the commerce and services sector, which contributed to the rapid growth of GDP in Japan throughout the twentieth century.     

Firm-level effects of offshoring of materials and services on relative labor demand

Based on firm-level data over the period 1997–2002 for the Swedish manufacturing sector the objective of this paper is to analyze relative labor demand effects due to offshoring, separating between materials and services offshoring and also geographical location of trade partner. Overall, our results give no support to the fears that offshoring of materials or services lead to out-location of high-skilled activity in Swedish firms. Rather, this paper finds evidence that the aggregate effects from offshoring lead to increasing relative demand of high-skilled labor, mainly due to services offshoring to middle income countries.     

Spillovers from foreign direct investment in services: Evidence at sub-sectoral level for the Asia-Pacific

We take a sectoral level approach to analyzing the effects of foreign direct investment (FDI) inflows. We disaggregate FDI first by manufacturing versus services, then within services by financial services, trade services, and business services. We consider the effects of FDI inflows on growth of GDP per capita, then distinguish between growth in manufacturing and services value added per capita. Our data sample comprises 14 Asia Pacific economies for the period 1985–2012 to which we apply a dynamic panel generalized method of moments estimation technique. Services FDI as a whole is found to have a significantly positive impact on GDP growth while manufacturing FDI is found to have no effect. The impetus for growth from services FDI traces to financial services in particular, acting not only directly on service sector output but through manufacturing sector output as well. By contrast, trade services FDI is found to have a significantly negative effect on manufacturing output with no significant effect on services output. Foreign participation in trade services may act to expose domestic manufacturers to international competition and may also lead to domestic consolidation to take advantage of economies of scale.     

Dynamics of the energy intensity of the Russian economy in 2006–2007 and projections of the energy consumption

This paper is devoted to the analysis of the energy intensity in the sequential chain of hierarchically interconnected levels of the Russian Federation’s economy in 2006–2007, i.e., GDP segments of the economy’s technological processes sectors. In terms of the energy consumption projection, 2006 and 2007 present an extremely interesting example of the changing impulsive character of the growth of the demand for electric energy under intensively growing domestic and foreign demand for products of energy intensive sectors of the Russian Federation. The year of 2006 demonstrated a high growth of the per unit GDP and a very high growth of energy consumption under fast growing internal and external demand for energy intensive products; the year of 2007 showed a still higher growth of the GDP at a sharply curtailed growth of the energy consumption, and the rate of decline of the GDP energy intensity almost doubled. The comparative analysis of 2006 and 2007 can help one to understand what can underlie the changed energy consumption in the country in the period of the world crisis and after its end.     

环境不确定性对渐进式创新和突破式创新的影响研究

文章探讨了环境不确定的三个维度(需求不确定性、技术不确定性和竞争强度),分别对企业渐进式创新和突破式创新的影响。并通过对404家中国企业的实证研究发现:环境不确定性的三个维度对渐进式创新和突破式创新影响不尽相同,其中需求不确定性对渐进式创新和突破式创新的影响不显著;技术不确定性与渐进式创新负相关,与突破式创新正相关;竞争强度对渐进式创新的影响不显著,与突破式创新负相关。     

A Dual-Price Demand Theory for Economies under Transition

China adopted a dual-price system shortly after the economic reform started in 1978 to liberalise its price control. This led to the coexistence of both plan and market prices for an identical good in the economy. The conventional demand theory developed based on the pure market economies is not useful in explaining consumers' behaviour in the transitional economies such as China in which both plan and market prices are prevalent. This study develops an alternative demand theory for a dual-price (or dual-track) economy and derives the dual-price Slusky equation that identifies a replacement effect of price liberalisation. This demand theory distinguishes itself from the conventional demand theory and explains the ways in which consumers respond to the price liberalisation during the reform period. The new demand theory shows that the gradual approach to reform is superior to the ‘Big Bang’ approach in terms of reducing the ‘corrected inflation’ during the transition period. The new theory also suggests that the price elasticity of demand is higher in the dual-track system than that in a full market economy, implying that the price elasticity diminishes over the process of price liberalisation. This theory is tested using the Chinese aggregate consumption data.     

Financial repression, money growth, and seignorage: The Polish experience

Financial Repression, Money Growth and Seignorage: The Polish Experience. — A small analytical framework is developed to analyze the relation between reserve requirements, base money growth and seignorage revenues. From the analysis, the authors can derive of steady-state seignorage revenues as a function of the rate of money growth and the intensity of financial repression. The framework is applied to the case of Poland that has undertaken a rapid transition to a market economy and implemented a substantial financial sector reform. The process of financial sector reform in Poland is discussed and estimates of the currency demand and deposit demand functions are undertaken to derive the seignorage Laffer curve.     

Economic integration and the foreign exchange

This paper demonstrates effects of economic convergence processes on the foreign exchange behaviour in a monetary modelling approach. Since the exchange rate represents the relative price of two currencies, commonness of stochastic trends between the fundamental determinants of supply and demand of the underlying monies restricts exchange rate movements to transitory fluctuations. In the spirit of optimal currency areas, this has the potential to serve as a criterion for an all-round integration of two economies. Empirically, such a constellation is found between Australia and New Zealand, whereas diverging trends in money and interest rates characterise the relation of Australia towards the US.     

Dry bulk shipping and the evolution of maritime transport costs, 1850–2020

We provide evidence on the dynamic effects of fuel price shocks, shipping demand shocks and shipping supply shocks on real dry bulk freight rates in the long run. We first analyse a new dataset on dry bulk freight rates for the period from 1850 to 2020, finding that they followed a downward but undulating path with a cumulative decline of 79%. Next, we turn to understanding the drivers of booms and busts in the dry bulk shipping industry, finding that shipping demand shocks strongly dominate all others as drivers of real dry bulk freight rates in the long run. Furthermore, while shipping demand shocks have increased in importance over time, shipping supply shocks in particular have become less relevant.     

推进城乡劳动保障基本公共服务均等化 共享改革发展成果

经过近30年的改革开放和发展,我国社会开始由生存型社会向发展型社会过渡,正步入公共需求快速增长和深刻变化时期,我国城乡居民对就业、社会保障等方面的公共需求也开始全面快速增长。但是,长期以来,在我国"二元经济结构"下,农村与城市之间实行两套不同的劳动保障公共服务供给体制,劳动和保障公共资源对农村地区投入不足,劳动保障公共服务城乡非均等化问题突出,这也是造成目前城乡收入差距过大的一个重要因素。因此,实现劳动保障公共服务城乡均等化亦是构建和谐社会,全体社会成员共享改革和发展成果的关键所在。