Causes of repressed inflation in the Soviet consumer market, 1965–1989: retail price subsidies,the siphoning effect,and the budget deficit

This article uses material which has recently been made available from Russian archives to analyse the causes of repressed inflation in the Soviet consumer market. It finds that retail price subsidies, which increased as a proportion of state budget expenditure from 4 per cent in 1965 to 20 per cent in the late 1980s, intensified consumer market disequilibrium. The provision of these subsidies had negative effects on the market by maintaining the purchasing power of households for consumer goods and by increasing the budget deficit. The unauthorized purchase of consumer goods by enterprises tended to increase during these years also.     

雪中送炭还是过犹不及：政府补贴对企业研发的影响

基于2013—2018年沪深A股制造业民营企业上市公司的数据，实证探讨了政府补贴与企业研发的关系。研究发现政府补贴与研发强度之间并不是简单的线性关系，而是呈显著的倒U型关系。这意味着，适当的政府补贴能够激励企业进行研发投入，但过高的政府补贴反而对企业研发投入产生了挤出效应，是无效率的政府干预行为。研究结论有助于政府重新考虑对制造业民营企业的研发补贴支持力度，以期更有效地激发企业的创新积极性，加快建设创新型国家的步伐。     

Survey of Recent Developments

Amid global economic uncertainty and tumbling world oil prices, Indonesia's economy faces pressure on its external balance and a continued growth slowdown. The government of President Joko Widodo (widely known as Jokowi) has set an agenda of reform, including simpler, faster investment licensing, historic cuts to fuel subsidies to generate fiscal savings, and increased spending on infrastructure. On the political side, Jokowi has had to deal with several political issues coming not only from parties in opposition but also from parties supporting his government, including during the formation of the new cabinet. We examine the consequences so far of the government's policy initiatives and of the policymaking process. While some initiatives have been implemented with success, some seem to have been launched without enough preparation, consultation, or empirical evidence, and many have been poorly communicated. Although inflation accelerated after the November fuel-price rise, efforts have been made to contain inflationary expectations and to mitigate the effects on poverty through social-assistance programs. The government took steps to cushion the impending impacts of higher fuel prices on vulnerable households by giving cash handouts of Rp 200,000 per month to 15.5 million disadvantaged families who receive the lowest level of welfare, and by promoting publicly funded education and health care. The partial removal of gasoline subsidies and the introduction of a fixed-subsidy policy for diesel in the revised 2015 budget reduce uncertainty about the fiscal position, although increases in government spending in infrastructure development were announced at the same time. The revised budget for 2015 increases spending on infrastructure development by 63% from the 2014 budget, mostly on projects to improve connectivity on land and at sea—such as the development of toll roads, railways, and ports—and to increase the performance of the agricultural sector. However, the recent drop in international oil prices forced the government to increase its target for tax revenue by 30% on last year's target, raising concerns about the effect of falling oil prices on the economy. Trade and investment policy reform is important in unlocking Indonesia's growth potential and improving the country's current external balance. Jokowi's administration, however, has been sending mixed signals about its position towards more open policies. The country has yet to recommence several trade negotiations that were postponed in 2014 and is still struggling to meet its commitments under the ASEAN Economic Community. Although improvement in investment procedures and licensing is currently underway, Indonesia needs to adopt a more positive attitude if it is to attract more investment.     

Survey of Recent Developments

Outgoing Indonesian president Susilo Bambang Yudhoyono's second-term record is creditable, measured against the targets he set himself in 2010, but deficient in key areas: economic reform, infrastructure investment, and anti-corruption. Indonesia's 2009–14 parliament has been active in economic policymaking, and will leave as its legacy a raft of protectionist legislation. Both presidential candidates, Joko ‘Jokowi’ Widodo and Prabowo Subianto, have appealed to nationalism in their campaigns, calling for Indonesia to assert its sovereignty and increase its self-sufficiency, but Jokowi's economic platform is more moderate and economically literate than Prabowo's. The incoming president will inherit an economy that continues to slow. Growth is now not expected to approach 6% until 2015 at the earliest. Having engineered a reduction in the current account deficit, Indonesian policymakers now face the more difficult problem of structural fiscal adjustment. Energy subsidies are the most immediate problem, but fiscal reform more generally will emerge as an overriding and unpleasant imperative for whoever wins the presidential election on 9 July. Unless difficult fiscal policy measures are taken, Indonesia will face major trade-offs between deficit control and investment in social programs and economic infrastructure. The new president will struggle to restrict the deficit to the cap of 3% of GDP: a balanced budget will likely not be feasible for several years. He will need to increase the ratio of revenue to GDP and eliminate fuel subsidies—through a more systematic approach than the infrequent price increases of the past. He will need to choose carefully between competing expenditure priorities, such as infrastructure and defence. The new president would also be well advised to tread cautiously in implementing the legal mandates he will inherit, and to work with parliament to avoid further and unwind current earmarking of public expenditure.     

政府补贴下考虑零售商竞争的供应链决策研究

为研究政府补贴制造商生产成本下零售商竞争对供应链决策的影响,考虑政府补贴率和零售商竞争强度两个因素,建立3种供应链决策模型,分析政府补贴系数和零售商竞争强度对供应链决策的影响。结果表明,零售商竞争会使零售价格提高,而不影响制造商的批发价,竞争越激烈,供应链各成员的定价和利润越低。在3种供应链决策模型下,竞争强度和政府补贴对制造商利润的影响程度最高。     

Asymmetric Learning from Prices and Post‐Earnings‐Announcement Drift

Motivated by research in psychology and experimental economics, we assume that investors update their beliefs about an asset's value upon observing the price, but only when the price clearly reveals that others obtained private information that differs from their own private information. Specifically, we assume that investors learn from the price of an asset in an asymmetric manner—they learn from the price if they observe good (bad) private information and the price is worse (better) than what is justified based on public information alone. We show that asymmetric learning from an asset's price leads to post‐earnings‐announcement drift (PEAD), and that it generates arbitrage opportunities that are less attractive than alternative explanations of PEAD. In addition, our model predicts that PEAD will be concentrated in earnings surprises that are not dominated by accruals, and it also predicts that earnings response coefficients will decline in the magnitude of the earnings surprises.     

Managing a scarce resource in a growing Asian economy: Water usage in Hong Kong

An econometric analysis of Hong Kong's monthly per capita water usage for the 25-year period of April 1985 through March 2010 reveals that per capita usage is insensitive to price but dependent upon past usage, per capita income, weather, and seasonal factors, with rising income countering what would otherwise be a downward trend. Given Hong Kong's current inflationary environment and large government budget surplus, these findings affirm the Hong Kong Water Supplies Department's adopted strategy of total water management towards sustainable use of water resources, in lieu of either periodic service interruption or price increases as policy instruments.     

The Cuban revolution and infant mortality: A synthetic control approach

The Cuban government often boasts that the country’s infant mortality rate has been low and falling since Fidel Castro’s revolution in 1959. However, because many Latin American countries have experienced similar decreases, and because Cuba historically enjoyed lower infant mortality rates than the rest of Latin America, it is unclear whether the government should get credit. We use the fact that Cuba underwent momentous and unique political changes to consider the effect of Castro’s regime on infant mortality. We employ a synthetic control method to ascertain how much of the reduction, if any, can be attributed to the regime. We find that in the first decade of the regime, infant mortality increased relative to the counterfactual, but that—after the introduction of Soviet subsidies—infant mortality partially reverted to trend. To measure the effect of the subsidies, we run a second synthetic control test concerning the collapse of the Soviet Union and the accompanying end of the subsidies. This control suggests that the subsidies played no important role.     

美国生猪价格保险对中国生猪保险的启示

为了解决中国生猪价格保险存在的保单设置、保险公司的赔付指标和政府补贴的不合理性以及保险公司存在巨大的赔付风险等问题,对美国生猪的价格保险进行研究.运用Eview s8.0分别对生猪价格与玉米价格和饲料价格进行回归分析.结果表明"猪料比"作为赔付指标更加合理.制定免赔额和投保上限能够有效解决养殖户道德风险及政府补贴不合理等问题,同时政府提高对保险公司的风险保障将为中国生猪价格保险的发展创造良好的环境.     

Hypergrowth in an East Asian NIC: Public policy and capital accumulation in Singapore

Singapore has produced the world's highest investment ratios, known to account for growth more rapid than in any other less-developed country over the past three decades, but such high investment needs explanation. We trace Singapore's public policy of increasing tax concessions and infrastructural spending—in effect subsidies to private firms—and use an open-economy, neoclassical model to show how, by attracting “footloose” foreign capital and raising investment levels, these policy measures can drive growth. The consequent transformation of living standards in Singapore suggests, in accordance with theory but contrary to most practice, that for some less-developed countries effectively zero tax on foreign direct investment may be a beneficial strategy. Yet for both Singapore and other would-be late industrializers, major issues of development strategy arise from the kind of input-driven growth analyzed in this article.     

The regional effects of Indonesia's oil and gas policy: options for reform

This paper analyses the effects on the regions of Indonesia's fuel policy. It discusses how the sharing of oil and gas revenue and taxes between the centre and the regions affects the sub-national fiscal position, and examines the distribution of fuel subsidies across regions. The paper also examines the recent proposals to discontinue subsidising gasoline for private vehicles or to eliminate fuel subsidies altogether, and shows how the regions would be affected if these suggestions were adopted. We argue that the proposals would increase efficiency and equity and should therefore be implemented.     

The New Growth Theory and Coasean economics: Institutions to capture externalities

The New Growth Theory and Coasean Economics: Institutions to Capture Externalities. — This paper presents the main theoretical arguments which lead many adherents of the New Growth Theory to the conclusion that externalities in research and development are important for economic growth and warrant government subsidies. In contrast, the authors point to private institutions like associations, company structures and industry clusters which can capture such externalities. An international comparison of private R&;D investment and special features of institutions in Switzerland and Japan are in line with this hypothesis. Thus, the argument for R&;D subsidies made by the New Growth Theory is considerably reduced.     

控股股东股权质押、政府补助与创新投入 ——基于战略性新兴产业的实证分析

以2009—2017年沪深两市制造业战略性新兴产业上市公司为研究对象,基于信号传递理论,研究上市公司控股股东股权质押对企业创新投入的影响,并探讨了政府补助的调节作用。结果表明：制造业战略性新兴产业企业控股股东股权质押对企业创新投入存在负面影响,但这种负面影响在国有企业与传统制造业企业中不显著;政府补助可以缓解控股股东股权质押与企业创新投入之间的负面影响,这种缓解作用在制造业战略性新兴产业企业中更为显著。进一步分组检验发现,在股权质押率高组中,政府补助反而加大了控股股东股权质押对企业创新投入的负面影响,表明股权质押率高的企业可能存在着控股股东自利行为。在股权质押行为普遍存在的条件下,研究结论对相关产业扶持政策制定有一定的借鉴意义。     

内部资源不确定性与民营企业创新力研究

鉴于中国民营企业创新主要依靠自有资金的特征现实,文章以企业内部资金为例,将内部资源不确定性纳入到现有的外部环境不确定性与企业创新研究框架中,探讨企业在不同内外部不确定性组合状况下的创新行为反应。理论矩阵模型揭示,内部资金资源不确定性对企业创新决策的影响超过外部环境不确定性,在企业创新行为选择过程中起主导作用,而且内部资金不确定性与企业创新之间存在着负相关关系。这一理论推论得到了企业微观调研数据的实证支持,并且相比国有企业,民营企业创新对内部资金资源的不稳定性更敏感。研究表明,政府激励民营企业创新的政策,当以稳定企业内部资源、提高企业收入帮助企业拥有稳定资金流为主要着力点,在具体政策工具上,税收减免比研发资助补贴等措施在激励企业研发、改变民营企业创新能力低动力不足方面更有效。     

Overcoming the zero bound on nominal interest rates: Gesell’s currency carry tax vs. Eisler’s parallel virtual currency

Despite the zero lower bound on the short nominal interest rate in Japan having become a binding constraint, conventional monetary policy in Japan, in the form of generalised open market purchases of government securities of all maturities, has never been pushed to the limit where all outstanding government debt and all current and anticipated future government deficits are (or are confidently expected to be) monetised. Open market purchases of private securities can create serious governance problems. Two ways of overcoming the zero lower bound constraint have been proposed. The first is Gesell’s carry tax on currency. The second is Eisler’s proposal for the unbundling of the medium of exchange/means of payment function and the numéraire function of money through the creation of a parallel virtual currency. This raises the fundamental issue of who chooses or what determines the numéraire used in private wage and price contracts—an issue that is either not addressed in the literature or addressed incorrectly. On balance, Gesell’s proposal appears to be the more robust of the two.     

DOES INDONESIA HAVE A 'LOW PAY' CIVIL SERVICE?

Government officials and policy analysts maintain that Indonesia's civil servants are poorly paid, and have been for decades, a conclusion that is supported by anecdotal evidence and casual empiricism. In this paper, the relationship between government and private compensation levels is systematically analysed using evidence from two large household data sets, the 1998 Sakernas and the 1999 Susenas. The results suggest that government workers with a high school education or less, representing three-quarters of the civil service, earn a pay premium over their private sector counterparts. Civil servants with more than a high school education earn less than they would in the private sector but, on average, the premium is far smaller than is commonly alleged, and is in keeping with public/private differentials in other countries. The results prove robust to varying econometric specifications and cast doubt on the proposition that low pay is an explanation for government corruption.     

Does the Granary County Subsidy Program Lead to manipulation of grain production data in China?

Manipulation of food production data could lead to catastrophic social and economic consequences. The accuracy of official agricultural statistics has long been questioned in China. This paper studies the linkage between agricultural production data manipulation and the Granary County Subsidy Program (GCSP). Since 2005, Chinese government gave subsidies to those counties with five-year average grain production between 1998 and 2002 more than 200 thousand tons to encourage these local governments to give priority to grain production. The prospective counties with grain production slightly below the threshold may have incentives to over-report their grain production. Based on the McCrary (2008)'s density test, this paper provides suggestive evidence of over-reporting grain production caused by the GCSP in 2005, 2006 and 2008, though the over-reporting rates are only 3%, 2%, and 1.7% respectively. The policy implication would be that fiscal distribution rules of a central government should avoid data manipulation incentives in local governments, particularly should cut the linkage to the data which are self-reported by the local governments.     

Impacts of Food and Energy Price Hikes and Proposed Coping Strategies

Based on sample survey data for the years 2006 and 2007, we find that inflation of food and energy prices in China is moving at a slower pace than in the international market; however, the livelihood of low income groups has been significantly impacted. Urban sample households in low income groups have been shifting from consumption of high value food to lower value substitutes; and all of the rural sample households are reducing their total consumption expenditure in real terms. The Engel＇ s coefficient of the rural household enlarged while their proportion of spending on clothing and energy declined. Farmers＇ households are moving toward more imbalanced diets, and the nutritional status of the poor is apparently deteriorating. The emergency-response measures that the government should implement include stopping subsidies to biofuel producers, who use foodstuffs as inputs, and providing food aid to the poor. The mid-term strategies should include anti-monopoly tactics, improving the market environment for the right competition, and eliminating price distortion. Midterm and long-term socioeconomic policy reform must be undertaken to adjust the social structure, to correct the mechanism of factor price formation, and to transform the pattern of economic growth.     

Reforming Hungarian agricultural trade policy: A quantitative evaluation

Reforming Hungarian Agricultural Trade Policy: A Quantitative Evaluation. — In this paper, the authors quantitatively assess the consequences for Hungary of: (i) removing its quantitative import restraints in agriculture, (ii) removing the export subsidy program in agriculture, and (iii) adopting an EU-type “CAP” system in Hungary. The consequences are estimated through the use of a small open economy computable general equilibrium model for Hungary, calibrated to the year 1990. The tariff equivalent of the import licenses was estimated through a detailed price comparisons study, the first of its kind for Hungary. Import protection, export subsidies and a potential CAP system would contribute significantly to the Government's fiscal problems.     

INDUSTRY RESPONSES TO THE TOBACCO EXCISE TAX INCREASES IN SOUTH AFRICA

The cigarette manufacturing market in South Africa is highly concentrated, with one company controlling more than 90 per cent of the market. In this paper the retail price of cigarettes is divided into three components: excise tax, sales tax and industry price. After decreasing during the 1970s and 1980s, the real industry price increased substantially during the 1990s. This coincided with sharp increases in the excise tax. The amplified increase in the real retail price of cigarettes decreased aggregate cigarette consumption by about a third. Despite this sharp decline, the cigarette industry substantially enhanced its revenues during the 1990s. However, since 2000 real industry price increases have been comparatively modest.