A structural analysis of external debt and economic growth: some evidence from selected countries in Asia and the Pacific

In an attempt to resolve the existing controversy about the cause and effect relationship between external dept and economic slowdown, Granger causality tests are conducted with data on indebted developing countries of Asia and Pacific. The results of these tests indicate that the Bulow–Rogoff proposition that the external debts of developing countries are a symptom rather than a cause of economic slowdown is rejected. They also indicate that the Dornbush–Krugman proposition that external dept leads to economic slowdown is also rejected. Moreover, a feedback-type relationship is not rejected for two countries. In view of the mixed results, this paper also estimates the nexus of inter-relationship between public and private external dept accumulation, capital accumulation and production within a simultaneous equation system. The estimation results indicate that the full effects of the public and private external depts on GNP are small and of an opposite sign, whereas an increase in the GNP level raises substantially the public and private external depts. These findings support Bulow–Rogoff's proposition that the external debts of developing countries are not a primary cause of economic slowdown.     

What to Get and What to Give Up: How Different Decision Tasks and Product Types Affect the Persuasiveness of Promotion‐ versus Prevention‐Focused Messages

Prior research has distinguished between ad message frames that are promotion‐focused (i.e., eager‐sounding and achievement‐oriented) and those that are prevention‐focused (i.e., vigilance‐hued and safety‐themed). In three studies, the authors investigate the relative persuasiveness of promotion‐ versus prevention‐focused messages in the context of different decision tasks (i.e., acquisition vs. forfeiture) and different types of featured products/attributes (i.e., hedonic vs. utilitarian). Studies 1 and 2 focus on message structures conducive to imagery‐based processing. The results show that promotion‐focused messages are relatively more persuasive than prevention‐focused messages in acquisition tasks than in forfeiture tasks in the case of hedonic products (and products with salient hedonic attributes). Relative persuasiveness of the two message frames is not affected by decision task in the case of utilitarian products (or products with salient utilitarian attributes). Study 3 uses message structures suited for analytical processing. In this study, interestingly, the relative persuasiveness of prevention‐focused (vs. promotion‐focused) messages is greater in forfeiture tasks than in acquisition tasks in the case of utilitarian products. Relative persuasiveness of the two message frames is not affected by decision task in the case of hedonic products. Theoretical and managerial implications of the findings are discussed.     

Asymmetry dynamics in real exchange rates: New results on East Asian currencies

This paper provides new evidence on the purchasing power parity (PPP) hypothesis in six East Asian countries. Based on nonlinear unit root tests, we discovered that the results are broadly consistent with the fact that real exchange rates (RERs) follow a nonlinear mean reversion process. We presented new evidence that the adjustment towards the PPP parity is asymmetric (LSTAR process) above and below the equilibrium value in all but one case — the Malaysian ringgit (MYR). The empirical results suggest that it is important that the conventional tests of PPP be amended to take account of asymmetries in the adjustment process in RERs.     

Social preference function and policy prioritisation for Bangladesh: An experiment with analytical hierarchy process

The difficulty in assigning priority weights in the multiple objective optimisation exercise of the planning process often leads to arbitrariness in the determination of priority weights. However, Frish (1957) has demonstrated that despite Arrow's famous impossibility theorem, a social preference function can be numerically established by systematically interviewing the decision makers or responsible politicians. In the light of the above, this paper attempts to achieve two goals: (a) that it is, indeed, possible to find intuitively plausible numerical priority weights and (b) the analytical hierarchy process (AHP) can be used to translate the interview responses into cardinal ordering. The close correspondence between the investment allocations of the Planning Commission and those derived from the priority weights of our exercise with AHP implies that AHP can be used to by-pass detailed planning exercises and thereby make planning more flexible.     

Interfuel substitution in Australia: a way forward to achieve environmental sustainability

This paper examines the possibilities for interfuel substitution in Australia in view of the need to shift towards a cleaner mix of fuels and technologies to meet future energy demand and environmental goals. The translog cost function is estimated for the aggregate economy, the manufacturing sector and its subsectors, and the electricity generation subsector. The advantages of this work over previous literature relating to the Australian case are that it uses relatively recent data, focuses on energy‐intensive subsectors and estimates the Morishima elasticities of substitution. The empirical evidence shown herein indicates weak‐form substitutability between different energy types, and higher possibilities for substitution at lower levels of aggregation, compared with the aggregate economy. For the electricity generation subsector, which is at the centre of the CO₂ emissions problem in Australia, significant but weak substitutability exists between coal and gas when the price of coal changes. A higher substitution possibility exists between coal and oil in this subsector. The evidence for the own‐ and cross‐price elasticities, together with the results for fuel efficiencies, indicates that a large increase in relative prices could be justified to further stimulate the market for low‐emission technologies.     

Limitations of the Theories of Nonprofits and Benchmarking Services Delivery Dimensions of Poverty-Reduction Programs in Rural Bangladesh

Even though both contract failure and consumer control theories of nonprofits stress the need for monitoring the performance of the firms, these models fail to offer any guidelines on how to do so. In general, the performance of poverty-reduction projects are assessed on amounts of loan disbursement, repayment rates, area of coverage, and financial sustainability. However, performance assessment based on the efficiency of service delivery has in the past been ignored even though the importance of efficient service delivery in poverty-reduction programs is well recognized in the literature and in the theories of nonprofits. Due to this specific lacuna, benchmarking in the aspects of efficient service delivery has never been applied. Based on primary data collected from 78 villages in Bangladesh from September to December 2009, this article develops a two-dimensional multi-item service delivery index to compare the efficiency of participating organizations in the stated programs in order to set industry benchmark values for each item of the index.     

Workers' remittances and Dutch Disease in Bangladesh

Workers' remittance is one of the major sources of foreign exchange earnings for Bangladesh in recent years. It accounted for 12% of GDP in 2009 and has colossal socio-economic implications for the country. However, the inflows of foreign exchange earnings can exert adverse effects on the international competitiveness of an economy as postulated by the Dutch Disease theory. Using Johansen Cointegration and Vector Error Correction Model and annual data from 1971 to 2008, this paper investigates the effects of remittances on the external trade competitiveness as measured by the movements of real exchange rate of the country. The results of the study suggest that the influx of workers' remittances significantly appreciates the real exchange rate and deteriorates the external trade competitiveness of Bangladesh. While increased terms of trade indicates similar adverse effects, openness in goods and capital markets and nominal devaluation improve the trade competitiveness of the country. Therefore, greater trade openness and channelling remittances to the priority investment projects can be powerful policy devices to improve the external competitiveness and avert ‘Dutch Disease' in Bangladesh.     

Demand for money in the selected OECD countries: a time series panel data approach and structural breaks

Time series panel data estimation methods are used to estimate the cointegrating equations for the demand for money (M1) for a panel of 11 Organization for Economic Cooperation and Development (OECD) countries for which consistent quarterly data are available. The effects of financial reforms are analysed with structural break tests and estimates for alternative sub-samples. Our results for the post-reform sub-samples show that the income elasticity of the demand for money has decreased and response to interest rate changes has increased.     

Inflation and economic growth: a multi-country empirical analysis

The world eocnomy is currently adjusting to a low inflation regime which has implicastions for the cross-country distribution of world growth opportunities. In contrast to previous related work which assumes unidirectional causality, this paper uses the Granger methodology to examine both the direction and pattern of causality between inflation and economic growth in 70 countries using annual data over the period 1960–89. Among the conclusions are that first, the relationship between inflation and growth is non-uniform across countries: 40% of countries studied reveal no causality, one-third exhibit unidirectional causality and about one-fifth of countries show bidirectional causality, second, a vast majority of countries which show either uni- or bi-directional causality beong to the industrial group, and third, the low world inflation regime will on balance redistribute real growth opportunities benefit away from the developing countries towards the industrialized countries.