EXAMINING THE RELATIONSHIP BETWEEN QUALITY OF LIFE AMENITIES AND ECONOMIC DEVELOPMENT IN THE SOUTHEAST USA

This paper contributes to the ongoing discussion about amenity-driven rural development strategies by examining the relationship between quality of life amenities and rural economic development in the Southeast USA. The premise is that what is true at a national level may provide a partial or misleading picture when we look at particular areas. Additionally, data available at the county level can often provide richer and more precise information than what is found at the national level. The paper estimates spatial regression models using county-level data. For the most part, the results suggest that the differences in quality of life and amenities factors can explain a large portion of the trend in per capita income, employment and population change across counties in the Southeast USA.     

THE ROLE OF SUPPLY CONSTRAINTS IN MULTIPLIER ANALYSIS

Multiplier analysis based upon the information contained in Leontief's inverse is undoubtedly part of the core of the input–output methodology and numerous applications and extensions have been developed that exploit its informational content, both at the national and regional levels. Nonetheless there are some implicit theoretical assumptions whose policy implications need to be assessed. This is the case for the ‘excess capacity’ assumption, which implies that resources are available as needed to adjust production to new equilibrium states. In an actual economy, however, new resources are often scarce and always costly. When supply constraints intervene, the assessment of the effects of government demand policies may be substantially different from that of the standard Leontief multiplier matrix. Using a closed general equilibrium model that incorporates supply constraints, we perform some simple numerical exercises and proceed to derive two ‘constrained’ multiplier matrices, based upon the implicit Jacobian matrix, that can be compared with the standard ‘unconstrained’ Leontief matrix.     

THE ROLE OF CENTRAL BANKS IN FINANCIAL SUPERVISION AND REGULATION

This article describes thinking on the institutions of financial supervision and regulation prior to the current crisis and goes on to examine what lessons have been learnt subsequently. It concludes that the problem is not so much that central banks needed to be more closely involved in supervision at the outset but that many countries did not have satisfactory schemes in place for resolving problems in large institutions. Central banks and governments were then forced into ad hoc measures that could have unfortunate implications for moral hazard in the future unless fundamental problems are addressed.     

THE ROLE OF PATENTS IN INFORMATION AND COMMUNICATION TECHNOLOGIES: A SURVEY OF THE LITERATURE

During the last few decades, the number of patents in information and communication technologies has increased considerably. An increasing number of patents and the associated fragmentation of IP rights have generated a series of potentially problematic consequences. Patent thickets, royalty stacking, the emergence of patent assertion entities, increased patent litigation – particularly around standard essential patents – and the difficulties with defining fair, reasonable, and nondiscriminatory licensing terms are some of the most debated issues in the literature that we review in this paper. We devote a specific section of our survey to patent quality, currently one of the most debated issues surrounding the patent system. In our analysis, we mix theoretical and empirical arguments with a more policy‐oriented reasoning. This allows us to better position the different issues in the relevant political and economic context.     

THE ROLE OF LAW IN ECONOMIC GROWTH: A LITERATURE REVIEW

Abstract Compared with other explanatory variables, such as capital accumulation, technological innovations, geographical endowments, economic openness, and cultural factors, institutions, especially legal institutions have been regarded as a crucial condition for economic growth in recent years. The importance of legal rules is systematically revealed by a series of cross‐country econometric studies conducted by La Porta et al., who claim that legal origins are central to understanding the divergence in living standards across the regions and countries of the world and, compared with civil law countries, especially those countries with French civil law tradition, common law countries have enjoyed superior economic outcomes. The controversies set off by La Porta et al.'s proposition indicate that there are a number of questions that are difficult to explain by La Porta et al.'s theory, and hence call for more work on comparative analysis of different legal families before a consensus can be reached.     

THE ROLE OF FEES IN PATENT SYSTEMS: THEORY AND EVIDENCE

This paper reviews the economic literature on the role of fees in patent systems. Two main research questions are usually addressed: the impact of patent fees on the behavior of applicants and the question of optimal fees. Studies in the former group confirm that a range of fees affect the behavior of applicants and suggest that a patent is an inelastic good. Studies in the latter group provide grounds for both low and high application (or pre‐grant) fees and renewal (or post‐grant) fees, depending on the structural context and policy objectives. The paper also presents new stylized facts on patent fees of 30 patent offices worldwide. It is shown that application fees are generally lower than renewal fees, and renewal fees increase more than proportionally with patent age.     

ADAM SMITH AND THE ROLE OF THE METAPHOR OF AN INVISIBLE HAND

Daniel Klein and Brandon Lucas's ‘In a Word or Two, Placed in the Middle: The Invisible Hand in Smith's Tomes’, following a vague hint by Peter Minowitz (2004) , offers original physical evidence that Smith ‘deliberately placed the phrase “led by an invisible hand”– at the physical centre of both his masterworks’. Further, it suggests that the invisible‐hand paragraphs are a response to Rousseau (1755 ); and that in ‘numerous and rich ways’, centrality holds ‘special and positive significance in Smith's thought’. This paper acknowledges the physical centrality of the invisible‐hand metaphor, but questions whether centrality alone gives weight to wider claims that the ‘invisible hand’ was Smith's ‘central idea’. It draws upon Smith's Rhetoric Lectures (1763), and argues that the invisible‐hand paragraphs in The Theory of Moral Sentiments and Wealth of Nations identify the actual objects of the invisible‐hand metaphor. This paper insists that Adam Smith is the most reliable source for revealing what he meant. In contrast, most modern attributions of special meaning to Adam Smith's use of the metaphor ignore Smith's teaching on the use of metaphors and, instead, make numerous, and often mutually exclusive, claims that Smith had a ‘doctrine’ of ‘an invisible‐hand’.     

SIR ALAN WALTERS' ROLE IN THE REVIVAL OF CURRENCY BOARDS1

In a speech given in 2004, at a meeting held at the Institute of Economic Affairs in honour of Sir Alan Walters who died in 2009, John Greenwood explains Sir Alan's critical role in the creation of a currency board in Hong Kong in 1983.     

THE TREASURY SELECT COMMITTEE: ITS REACH AND ITS ROLE IN THE FINANCIAL CRISIS

The Treasury Select Committee's role has evolved in recent years. Since the banking crisis it has undertaken important work in holding government bodies to account and in helping to influence the policy agenda.     

CHINESE EXPERIENCE IN THE INTRODUCTION OF A MARKET MECHANISM INTO A PLANNED ECONOMY: THE ROLE OF PRICING

Abstract. A brief review is first presented of the changes in pricing institutions in China since 1949, with particular emphasis on the shift from an equilibrium price system to a distorted price system. The authors argue that distorted prices are harmful to economic growth even in a planned economy, since even an experienced economic planner can never escape from the full implications of a distorted price system. Examples are given showing the detrimental results of such a system. The central point of China's economic reform is the extension of decision-making power to enterprises and the introduction of a market mechanism so as to improve microeconomic efficiency. But such a goal cannot easily be achieved due to the false information provided by the distorted price system. So price adjustment becomes an issue of primary importance, and the authors discuss the difficulties for price adjustment posed by various interest groups.     

THE CREATION AND DIFFUSION OF INNOVATION IN DEVELOPING COUNTRIES: A SYSTEMATIC LITERATURE REVIEW

In this study, we review the literature on the creation and diffusion of innovation in the private sectors (industry and services) in developing countries. In particular, we collect evidence on what are the barriers to innovation creation and diffusion and the channels of innovation diffusion to and within developing countries. We find that innovation in developing countries is about creation or adoption of new ideas and technologies; but the capacity for innovation is embedded in and constituted by dynamics between geographical, socio‐economic, political and legal subsystems. We contextualize the findings from the review in the current theoretical framework of diffusion of innovations, and we emphasize how the institutional context typical of developing countries impacts the diffusion itself.     

GRADING JOURNALS IN ECONOMICS: THE ABCS OF THE ABDC

Many institutions and governments grade academic journals for the evaluation of research. In this paper, we implement a multi-bibliometric methodology for the evaluation of such a list of journal grades. We examine the grades assigned by the Australian Business Deans Council (ABDC) for over 750 journals in the fields of economics and statistics. Firstly, we generate up to 48 bibliometric-based grades for each journal based on the grade distribution implied by the ABDC. Secondly, we categorize the bibliometrics employing a cluster analysis of an interrater agreement statistic. Thirdly, we present a visualization of the consistency of the grading by journal. Finally, we list those journals where the majority of the matched bibliometrics indicate a higher or lower grade than their ABDC grade.     

THE INTERNALISATION OF ENVIRONMENTAL EXTERNALITIES AFFECTING DWELLINGS: A REVIEW OF COURT CASES IN HONG KONG

In 1960, Ronald Coase suggested that there are many methods to solve the problem of externalities apart from imposing Pigovian taxes. Internalisation is one of those noted in his classic paper, ‘The Problem of Social Cost’. This paper studies the possibility of residents receiving compensation from pollutant generators. Data collected from Hong Kong law reports over the past 20 years show that there is forty‐fold increase in number of water seepage court cases since the first case in 1994. The total amount of compensation has also increased greatly. There are, however, far fewer court cases where residents seek compensation from generators of noise and air pollution. This may reflect a combination of high transaction costs and low expected benefits from such cases.     

THE ECONOMICS OF THE GREENHOUSE EFFECT

Abstract. The recognition that economic activity is contributing to climatic change, with attendant costs that may be of large magnitudes, has set in motion a substantial research effort. This paper seeks to review the contribution of economics to analysis of the greenhouse effect and to the policies and instruments suggested as means of mitgiating its damage.
A brief overview of the causes and consequences of global warming is given, and a number of energy-economy forecasting models are examined. As the costs of global warming depend upon the extent to which preventative and adaptive measures are undertaken, the techniques available to evaluate these costs are surveyed.
We examine extant targets for greenhouse gas emissions reduction, and explore the frameworks within which optimal policy targets can be designed. The paper also considers the narrower question of (minimized) abatement costs, and surveys the types of models used to estimate them.
The merits of alternative policy instruments are examined, paying particular attention to the role that risk and uncertainty, and the costs of monitoring and implementation of policy under conditions of imperfect information, may play in the choice of instruments. Problems of international co-operation in the development of abatement policy are examined, and we consider the compensations (across both nations and generations) that are likely to be necessary conditions for effective action.     

EVIDENCE ON THE IMPACT OF TARIFF REDUCTIONS ON EMPLOYMENT IN DEVELOPING COUNTRIES: A SYSTEMATIC REVIEW

This paper analyses the evidence on the impact of tariff reductions on employment in developing countries. We carry out a systematic review of the existing empirical literature, and include both, ex post econometric evidence and ex ante Computable General Equilibrium (CGE) simulation studies. The synthesis of results suggests that the effects of tariff reductions on employment are country and trade policy specific. When looking across higher quality econometric studies that control for the endogeneity of tariffs, only a couple of studies have statistically significant results, and these suggest that employment is likely to decrease slightly in the short run following trade liberalization. This is consistent with the notion that there are winners and losers from trade policy reform. These results are in contrast with the CGE findings, which by design incorporate projections of the medium‐run economy‐wide knock‐on effects suggested by economic theory. The synthesis of CGE studies suggests non‐negative effects of trade liberalization on aggregate employment and moderate inter‐sectoral labour reallocation effects.     

FINANCIAL EDUCATION AND BEHAVIORAL FINANCE: NEW INSIGHTS INTO THE ROLE OF INFORMATION IN FINANCIAL DECISIONS

Recent empirical evidence based on surveys and experimental activities within the fields of behavioral finance and financial education has offered economists new empirically based insights into how individuals use information in making financial decisions. Specifically, the importance of information in financial decisions may be reduced or eliminated by psychological aspects of the individual, such as a state of overconfidence that is individual or shared with a group, or by the individual's limited ability to process complex and abundant information. This paper aims to complement this emerging body of literature by studying how individuals perceive and process information when making financial decisions. We review these contributions and suggest a number of broad guidelines that can provide a framework for future discussion of this topic within financial decision theory.     

THE DISTRIBUTION OF GENERAL QUADRATIC FORMS IN NORMA

For a general quadratic form in normal variables a representation in terms of independently distributed standard normal variables is derived. The necessary and sufficient conditions for such a quadratic form to have a non–central chi–squared distribution can be found easily using this representation.     

THE CHOICE OF CELLS IN CHI–SQUARE TESTS

The choice of cells in chi–square goodness of fit tests is a classical problem. Some recent results in this area are discussed. It is shown that the likelihood ratio of alternatives w.r.t. null distributions plays a key role when judging different procedures. The discussion centers on the case of a simple hypothesis, but location–scale models and tests of independence in contingency tables are also considered.