Consequences of Hodrick–Prescott filtering for parameter estimation in a structural model of inventory behaviour

Much work in macroeconomics relies on detrending a time series prior to analysis. A popular method of detrending has been the Hodrick–Prescott (HP) filter. This filter has been widely applied in the Real Business Cycle literature to isolate the behaviour of economic variables at business cycle frequencies and to look at comovements between series over the business cycle. Prior work has shown that the use of this filter can have serious consequences for such analysis, such as inducing spurious correlations, and that a researcher should proceed with caution when applying the filter. Another use of HP filtering has been to achieve stationarity prior to estimation of structural econometric models. Little work has been done concerning the possible effects this method of detrending may have on parameter estimation from such models. Given the problems with the filter noted in the literature, it is likely these effects may be of some consequence to estimation results. Using a common model of inventory behaviour, a simulation study is conducted to assess the impact of using the HP filter for detrending prior to estimation. A comparison will be made to other methods of handling trend to gauge relative performance.     

Cost–consequence analysis of a hemostatic matrix alone or in combination for spine surgery patients

Background: A five-year retrospective database analysis comparing the use of Floseal¹ flowable topical hemostat alone (F) and in combination with gelatin/thrombin (F?+?G/T) to achieve hemostasis and control surgical bleeding showed higher resource utilization for F?+?G/T cases relative to F matched pairs during spinal surgery. Lower resource use in the F group was characterized by shorter hospital length of stay and surgical time as well as fewer blood transfusions and less hemostat agent used per surgery.

Objective: To evaluate the cost–consequence of using F compared to F?+?G/T in minor, major and severe spinal surgery from the US hospital perspective.

Methods: A cost–consequence model was developed using the US hospital perspective. Model inputs include clinical inputs from the literature, cost inputs (hemostatic matrices, blood product transfusion, hospital stay and operating room time) from the literature, and an analysis of annual spine surgery volume (minor, major and severe) using the 2012 National Inpatient Sample (NIS) database. Costs are reported in 2017?US dollars. One-way and probabilistic sensitivity analyses address sources of variability in the results.

Results: A medium-volume hospital (130 spine surgeries per year) using F versus F?+?G/T for spine surgeries is expected to require 85 less hours of surgical time, 58 fewer hospital days and 7 fewer blood transfusions in addition to hemostat volume savings (F: 1?mL, thrombin: 1994?mL). The cost savings associated with the hospital resources for a medium-volume hospital are expected to be $317,959 (surgical hours?=?$154,746, hospital days?=?$125,237, blood transfusions?=?$19,023, hemostatic agents?=?$18,953) or $2445 per spine surgery.

Conclusions: The use of F versus F?+?G/T could lead to annual cost savings for US hospitals performing a low to high volume of spinal surgeries per year.     

The Income–Temperature Relationship in a Cross-Section of Countries and its Implications for Predicting the Effects of Global Warming

Hotter countries are poorer on average. This paper attempts to separate the historical and contemporaneous components of this income–temperature relationship. Following ideas by Acemoglu et al. (Am Econ Rev 91(5):1369–1401, 2001), we use colonial mortality data to account for the historical role of temperature since colonial mortality was highly correlated with countries’ average temperatures. The remaining income–temperature gradient, after colonial mortality is accounted for, is most likely contemporaneous. This contemporaneous effect can be used to estimate the consequences of global warming. We predict that a 1°C temperature increase across all countries will cause a decrease of 3.8% in world GDP. This prediction is robust across functional forms and an alternative method for separating historical effects.     

The determinants of internal migration in a developing country: quantitative evidence for Indonesia, 1930–2000

This study specifies and estimates a gravity model for interprovincial migration in Indonesia. Analysing five cross-sections for Indonesia's 26 provinces for five survey years between 1930 and 2000 we show that throughout the twentieth century economic factors were more important in the explanation of interprovincial migration patterns in Indonesia than planned migration policy aimed at the redistribution of the population. In addition, our regression analysis demonstrates that the urban primacy of Jakarta, Indonesia's capital, had a strong effect on the direction and size of migration flows. Our findings thus suggest that the costly government-supported migration is not very successful and that a strongly centralized government induces migration flows to the capital. These findings have policy implications for other developing countries.     

Combinations of technology in US patents, 1926–2009: a weakening base for future innovation?

In combinatorial models of innovations, new technologies are built from combinations of pre-existing technological components. Researchers learn which components work well together by observing previously successful combinations and the pool of ideas can be ‘fished out’, i.e. exhausted, if it is not ‘restocked’ by the discovery of novel connections. We first show US patents have made increasingly less novel connections among technological constituents since the 1950s, and that the number of technological fields to which these connections are applicable has stopped growing since the 1980s. We then estimate the parameters of an ideas production function, and find parameter estimates consistent with technology fields being fished out if not continually restocked by the discovery of novel connections between technological components. We use the ideas production function to estimate the number of new patent applications induced by each patent granted between 1926 and 2001, and show this number has trended downward since the 1940s.     

Urban–rural income disparities and development in a panel data set of China for the period from 1978 to 2006

We examine the relationship between urban–rural income disparities and development in a panel data set of 30 provinces and regional subsets of China during the period of 1978 to 2006. There is an inverted-U relationship between the urban–rural income gap and per capita Gross Domestic Product (GDP). Financial development by scale widens the urban–rural income gap in all regional samples, while financial sector efficiency and rural bank loans may reduce it in some regions. Government spending raises the urban–rural income gap as well. We also examine the effects of urbanization, openness and education.     

The Next Five Years (2022–2027) Will Be Crucial for Building a Modern Socialist Country in All Respects: Implications from the Report to the 20th National Congress of the CPC

As pointed out in the Report to the 20th National Congress of the Communist Party of China (CPC), the next five years (2022–2027) will be crucial for beginning to build a modern socialist country in all respects. Firstly, the next five years will be a period of historical transition in the central task of the CPC. The central task of the CPC will be to realize the Second Centenary Goal of building China into a great modern socialist country in all respects. At this crucial stage for getting our efforts off to a good start, China should understand and pursue the Five-Sphere Integrated Plan to advance the rejuvenation of the Chinese nation on all fronts through a Chinese path to modernization. Secondly, the next five years will be a period of deep reform in which strategic opportunities, risks and challenges are concurrent. Alongside a new round of scientific and technological revolution and industrial transformation well underway, the new principal contradiction facing Chinese society, a historical transition in the central task of the CPC, and a shift in the international balance of power, profound and complex changes are taking place in China’s internal and external environment for development. Uncertainties and unforeseen factors are rising and must be dealt with appropriately. Thirdly, the next five years will be a key period of achieving China’s overall development objectives for 2035. It is a paramount stage of meeting the 14th Five-Year Plan goals, formulating the 15th Five-Year Plan goals, and realizing Chinese modernization by 2035. China should uphold the CPC’s overall leadership, follow the path of socialism with Chinese characteristics, apply a people-centered development philosophy, remain committed to deepening reform and opening up, and carry forward our fighting spirit. Fourthly, the next five years will be a crucial period of accelerating the creation of a new pattern of development and pursuing high-quality development. Chinese modernization should be advanced through a series of strategic initiatives, such as building a high-standard socialist market economy, modernizing the industrial system, propelling rural revitalization across the board, promoting coordinated regional development, and boosting high-standard opening up. Fifthly, the next five years will be an impact period of unprecedented downward pressure on the national economy under various factors and risks beating expectations. In order to achieve the 14th Five-Year Plan goals and the overall development objectives by 2035, it is necessary to defuse the threefold pressure composed of increasing demand shrinkage, supply shocks and flagging market expectations, as well as intensifying potential risks. To accomplish the main objectives and tasks for the next five years, it is necessary to observe objective laws, apply the new development philosophy, continue to pursue economic development as central task, adopt system-based thinking, take steady steps to sustain progress, and promote high-quality development in a scientific and effective manner.