MOVEMENTS IN THE AVERAGE AGE OF THE CAPITAL STOCK

ADOPTING an approach suggested by Richard Nelson (1964), thepaper reports a model which both identifies the (proximate)determinants of the average age of the capital stock and whichmay be used to obtain an index number series for the averageage from readily available data. The method is illustrated byapplying it to data for the Net Capital Stock in the U.K. overthe period 1948–1981. Oxford Econ. Pap., March 1985, 37(1), pp. 64–70.     

THE COMPETITIVENESS OF UK MANUFACTURING: EVIDENCE FROM IMPORTS

The paper presents an empirical analysis of the behaviour ofUK imports of manufactures, intended to develop understandingof non-price competitiveness by evaluating the impact of capacityconstraints, international specialisation, and industrial standards.Two data sets are employed: aggregate data for the period 1970–93,and a panel of 81 industries for 1985–90. Structural stabilityin a model of the former suggests that no competitiveness improvementhas occurred in domestic UK manufacturing which matches thatfound elsewhere for exports The panel model shows the importantimpact of standards on imports, while confirming that skilledlabour shortages are a key source of volatility.     

THE EMPIRICAL FAILURE OF THE LIFE CYCLE MODEL WITH PERFECT CAPITAL MARKETS

The paper calibrates a life cycle model which incorporates standardassumptions, similar to those in Modighani's (1986) ‘strippeddown’ version, including perfect capital markets. Theresulting model generates strongly counter-factual predictions,planned wealth is negative for all or most of life, followinga W-shaped rather than a hump-shaped profile. (Equivalently,the debt profile is M-shaped.) The paper argues that introducingcapital market imperfections can resolve many of the problems,though some issues remain, and further research is warranted ‘The hypothesis of utility maximisation (and perfect markets)has, all by itself, one very powerful implication—theresources that a representative consumer allocates to consumptionat any age, t, will depend only on his life resources (the presentvalue of labour income plus bequests received, if any) whencombined with the self-evident proposition that the representativeconsumer will choose to consume at a reasonably stable rate,close to his anticipated average life consumption the size ofsaving over short periods of time, like a year, will be swayedby the extent to which current income departs from average liferesources the main parameter that controls the wealth-incomeratio and the saving rate for given growth is the prevailinglength of retirement’ (Modigliani, 1986, pp 299 and 301)     

THE ROLE OF PRIVATE CAPITAL INFLOWS AND THE EXCHANGE MARKET PRESSURE ON REAL EXCHANGE RATE APPRECIATION: THE CASE OF TURKEY

The aim of this paper is to investigate the role of different private capital inflows and the exchange market pressure (EMP) on the real effective exchange rate (REER) appreciation of the currency in Turkey. To that end, the paper first investigates the long‐run equilibrium relationship and then employs Granger causality analysis. Results of the bounds test for cointegration within the autoregressive distributed lag (ARDL) modelling approach of Pesaran et al. (2001 ) reveal level relationship between the diverse private capital inflows, EMP and REER. Granger causality analysis suggests that there is a unidirectional causality running from all the concerned private capital inflows and EMP to REER. The ARDL model shows first that the impact of bank liabilities and portfolio investment liabilities are almost equal, high and positive. Second, foreign direct investment and workers' remittances have a negative but statistically insignificant effect. Third, EMP mitigates REER appreciation of the currency in Turkey. The empirical results suggest that speculative portfolio investment liabilities but particularly bank liabilities with short maturities should be better managed; more flexibility should be introduced to the floating exchange rate regime to avoid loss of competitiveness related with capital inflows; whereas foreign direct investments and remittances should be encouraged.     

Dependence structures and risk spillover in China’s credit bond market: A copula and CoVaR approach

This study uses a dynamic copula model of dependence to investigate risk spillovers in China’s credit bond market between the bank and corporate sectors for a range of maturities from one week to 30 years. Using daily data on credit spreads for the period December 28, 2009 to June 2, 2017, the empirical results show that credit risk spillover is low and relatively stable for medium-term bonds, but higher and more variable for short- and long-term bonds. The results also show that credit risk spillover increased after 2014 with financial market reforms that involved interest rate liberalization and a loosening of government guarantees on corporate debt.     

LABOUR SKILLS AND HUMAN CAPITAL IN THE EXPLANATION OF TRADE PATTERNS

In the discussion of the qualitative inferences to be drawnfrom the signs of _s and c₃ [OEP 43.2 p. 448], possibilities(ii), (iii) and (iv) and the beginning of the immediately followingparagraph should read:

1. if both _s and c₃ are positive and ß₃₁> ß₃₂
2. if _s is positive and c₃ is negative theneither ß₃₁and ß₃₂ are both positive andß₃₁ > ß₃₂,or they are both negativeand |ß₃₂|>|ß₃₁|,or ß₃₁ ispositive and ß₃₂ is negative.
3. if _sis negative andc₃ is positive then either ß₃₁and ß₃₂ areboth positive and ß₃₂ < ß₃₁,or theyare both negative and |ß₃₁| > |ß₃₂|,or ß₃₁ is negative and ß₃₂ is positive.

Notice that without first confirming that _s = 0 when c³ 0 nothingmuch can be said about the factor content of trade by lookingat c₃ alone; for, in terms of signs of ß₃₁ and ß₃₂,c₃ < 0 precludes only the combination (ß₃₁ <0 & ß₃₂ > 0); and c₃ > 0 precludes onlythe combination (ß₃₁ > 0 & ß₃₂ <0). Similarly...     

Market Share and Price in Dutch Home Care: Market Power or Quality?

The paper uses unique data on contracts concluded by providers of home care to evaluate the effect of provider market power on prices of home care services in the Netherlands. Since, at least in some regions, one or two providers dominate the market, there are concerns about the effect of providers’ market power on the pricing of home care services. Using data on contracted prices and quantities for 2004–2006, we find that providers with a larger market share are able to contract at a higher price. The effect remains after controlling for quality.     

Price Anomalies in the Used Car Market

Summary Using two different samples – one based on newspaper advertisements, the other Internet-based – we identify some price anomalies in the used car market in the Netherlands. First, prices of used cars depend on their age in calendar years rather than months. Second, there is some evidence that crossing 100,000 km induces a sudden additional price reduction. Third, a new license plate format, something with no intrinsic value whatsoever, increases a car’s price by about 4%. We discuss possible explanations for these results.     

Are Older Workers Harmful for Firm Productivity?

This paper investigates the effects of the workforce age structure on the productivity of large Belgian firms. More precisely, it examines different scenarios of changes in the proportion of young (16–29 years), middle-aged (30–49 years) and older (more than 49 years) workers and their expected effects on firm productivity. Using detailed matched employer–employee data, we find that young workers are significantly more productive than older workers. Yet, results also show that age structure effects on productivity: (i) have substantially decreased over time and (ii) are much stronger in ICT than in non-ICT firms.     

The term structure of Japanese interest rates:: The equilibrium spread with asymmetric dynamics

This paper examines the dynamic adjustment to long-run relationship between Japanese interest rates of different maturities. We employ a new estimation methodology that permits threshold and the momentum-threshold adjustment towards equilibrium. The results support the expectations hypothesis of the term structure of interest rate using Japanese interest rates. As in the case of the United States, it shown that the error-correction process is best estimated as asymmetric. J. Japanese Int. Economies 18 (1) (2004) 84–98.     

Foreign direct investment and productivity spillovers: Evidence from the Spanish experience

Foreign Direct Investment and Productivity Spillovers: Evidence from the Spanish Experience. — The aim of this paper is to analyse the impact of foreign direct investment (FDI) on firms’ productivity using a panel of Spanish manufacturing firms for the period 1990–1998. Firstly, we show that for countries, like Spain, that are undergoing significant structural changes over the period in question it is important to control for both time-invariant as well as time-variant sectoral characteristics. Secondly, we confirm previous findings that one needs to take into account the “absorptive capacity” of firms when considering whether they are able to avail of externalities associated with FDI presence. For the Spanish case we find that only firms with sufficient levels of such capacity experience positive spillovers.     

A note on the apparent constancy of the racial wage gap in New Jersey manufacturing, 1902 to 1979

Conclusion This discussion around the black-white wage gap will continue. Inadequate data alone will make it difficult to distinguish recent fluctuations and once-only changes from long-term trends. For those who believe the racial wage gap is narrowing, the 1902 New Jersey survey of blacks in manufacturing presents a puzzle. Why at the outset of black entry into this sector of the economy do we find a racial wage gap as narrow as the one observed for New Jersey manufacturing in 1969, a year at the top of the post-World War II business cycle? Michael Reich argues that “in every region but the South the relative income of non-white males shows substantial cyclical fluctuations… but shows no upward trend over time.” The baseline established by the 1902 New Jersey survey is compatible with Reich’s conclusion.     

Intellectual property rights and licensing: An econometric investigation

Intellectual Property Rights and Licensing: An Econometric Investigation. — Licensing has been virtually ignored in the econometric literature on intellectual property rights (IPRs). We discuss theoretical effects of IPRs on decisions to license technology internationally. Based on a theoretical model we specify a reduced-form econometric equation relating the volume of U.S. licensing to measures of technology protection and other variables in licensee nations. The model is applied to data for 23 countries in a panel covering 1985, 1990, and 1995. The results indicate that countries with stronger patent rights attract larger arm’ s-length volumes of licensed technology, though we are unable to distinguish between licensing quantities and values.     

A critique of mises’s theory of monopoly prices

Conclusion Built on Rothbardian insights, our attempt to show the peculiarities of Misesian monopoly theory results in a few conclusions. First of all, in Mises’s theory of monopoly two of the three conditions for the emergence of monopoly prices belong to different realms of scientific inquiry. On the one hand, Mises points out the idea of a counterfactual comparison between competitive price and monopoly price; on the other hand, he stresses the importance of an empirical method to discover monopoly prices. The latter, even if it describes a true statement about market conditions, i.e., the entrepreneurs do not know (beforehand) the market demand curve, does not help us to identify the monopoly price on market. Second, Mises erroneously founds his welfare arguments on value theory. His utilitarian endeavor to show that “consumers’ sovereignty” is infringed by monopolistic restriction of production does not succeed. He based his arguments on nonscientific interpersonal and intertemporal comparisons of utility. Third, Mises is not consistent in the use of a standard of comparison for “monopoly prices”: on the one hand, the market prices are not distinguishable from “monopoly prices”; on the other hand, the transfer of the discussion to the equilibrium framework does not help us either, as we try to explain real market phenomena. Thus, Mises’s attempts to incorporate the neoclassical concept of monopoly price into the framework of the market process, as depicted by Austrians, do not succeed. Our inquiry supports the largely shared opinion among Austrian economists that monopoly price (at least in its present definition) does not exist on the free market; it appears only, and is logically identifiable, as a result of a privilege given by the State.     

THE WELFARE ECONOMICS OF POPULATION

Intuition suggests there is no value in adding people to thepopulation if it brings no benefits to people already living:creating people is morally neutral in itself. This paper examinesthe difficulties of incorporating this intuition into a coherenttheory of the value of population. It takes three existing theorieswithin welfare economics—average utilitarianism, relativistutilitarianism, and critical-level utilitarianism—andconsiders whether they can satisfactorily accommodate the intuitionthat creating people is neutral.     

International Financial Aggregation and Index Number Theory: A Chronological Half-century Empirical Overview

This paper comprises a survey of a half century of research on international monetary aggregate data. We argue that since monetary assets began yielding interest, the simple sum monetary aggregates have had no foundations in economic theory and have sequentially produced one source of misunderstanding after another. The bad data produced by simple sum aggregation have contaminated research in monetary economics, have resulted in needless “paradoxes,” and have produced decades of misunderstandings in international monetary economics research and policy. While better data, based correctly on index number theory and aggregation theory, now exist, the official central bank data most commonly used have not improved in most parts of the world. While aggregation theoretic monetary aggregates exist for internal use at the European Central Bank, the Bank of Japan, and many other central banks throughout the world, the only central banks that currently make aggregation theoretic monetary aggregates available to the public are the Bank of England and the St. Louis Federal Reserve Bank. No other area of economics has been so seriously damaged by data unrelated to valid index number and aggregation theory. In this paper we chronologically review the past research in this area and connect the data errors with the resulting policy and inference errors. Future research on monetary aggregation and policy can most advantageously focus on extensions to exchange rate risk and its implications for multilateral aggregation over monetary asset portfolios containing assets denominated in more than one currency. The relevant theory for multilateral aggregation with exchange rate risk has been derived by Barnett (J Econom 136(2):457–482, 2007) and Barnett and Wu (Ann Finance 1:35–50, 2005).

Rhonda M. Williams: Competition, race, agency, and community

As the United States approaches the twenty-first century… in an information-based, transnational and managerial economy, it is becoming increasingly apparent that if we do not better negotiate race and ethnicity in our society, we will not adequately solve the problems of economic inequality and discrimination. Racial and/or ethnic divisions and competition shape our efforts to understand and challenge hierarchy and inequity. As long as we ignore those issues, we cannot solve the problems of poverty, unemployment, and crime, nor effect productive job creation and economic justice. Absent a cultural and economic reckoning with racism’s legacies, we will fail to revitalize our cities and to recover from the socioeconomic costs of “ending welfare as we knew it.” Although masked behind pronouncements of a “color-blind” society, unfinished racial business weakens our national will to provide one another the portfolio of social and economic rights essential to the sustenance of humane community in the post-industrial global economy. (Nembhard and Williams 1998).     

Are “new” and “old” EU members becoming more financially integrated? A threshold cointegration analysis

We assess the degree of financial integration for a selected number of “new” EU member states with Germany. The analysis is performed using a threshold vector error-correction (TVECM) model with fixed rolling window. By employing this methodology we are able to evaluate the degree and dynamics of transaction costs resulting from various market imperfections. TVECM model is applied on interest rate data from different segments of financial markets covering the 1994–2006 period. The hypothesis we test is to what extent European integration tendencies resulted in a more efficient and integrated financial markets. Our findings support the gradual integration hypothesis.