Old Wine in a New Bottle: Growth Convergence Dynamics in the EU

In this paper, we explore convergence of real per capita output across the European Union (EU) countries, as well as the transitional behavior of possible underlying factors that are responsible for any convergence or divergence pattern. The new panel convergence methodology developed by Phillips and Sul (2007) is employed in a production function growth accounting approach and data from the Total Economy Database and the Total Economy Growth Accounting Database. The empirical findings suggest that the EU countries form two distinct convergent clubs, exhibiting considerable heterogeneity in the underlying growth factors. These findings should help policy makers in designing appropriate growth-oriented programs as well as in setting priorities in their implementation.     

Differencing of random walks and near random walks

The traditional rationale for differencing time series data is to attain stationarity. For a nearly non-stationary first-order autoregressive process—AR (1) with positive slope parameter near unity—we were led to a complementary rationale. If one suspects near non-stationarity of the AR (1) process, if the sample size is ‘small’ or ‘moderate’, and if good one-step-ahead prediction performance is the goal, then it is wise to difference the data and treat the differences as observations on a stationary AR (1) process. Estimation by Ordinary Least Squares then appears to be at least as satisfactory as nonlinear least squares. Use of differencing for an already stationary process can be motivated by Bayesian concepts: differencing can be viewed as an easy way to incorporate non-diffuse prior judgement—that the process is nearly non-stationary—into one's analysis. Random walks and near random walks are often encountered in economics. Unless one's sample size is large, the same statistical analyses apply to either.     

Employment,labor supply and real wages in market disequilibrium

The purpose of this paper is to provide estimates of a disequilibrium labor market model which has been fitted to the US private non-farm sector and to the manufacturing sector. After examining the rationale of the ‘minimum’-type disequilibrium model, we reject it in favor of a formulation suggested by Chow. The latter provides not only a wage adjustment mechanism, but also a quantity adjustment mechanism and treats wages and quantities symmetrically. The empirical findings for both sectors support the disequilibrium formulation employed and reject the equilibrium hypothesis for the labor market.     

Why are African commodity exchanges languishing? A case study of the Zambian Agricultural Commodity Exchange

Food price volatility and high transactions costs remain major problems in African food markets. These persistent problems provide a strong theoretical justification for the development of commodity exchanges. However, the majority of African commodity exchanges remain underdeveloped. Through a case study of the Zambian Agricultural Commodity Exchange (ZAMACE), this article explores why agricultural commodity exchanges in the region have thus far failed to develop into sustainable trading platforms and identifies the most important changes needed to enhance their performance.