The cultural dimension of development

Development, both in its essential meaning and in its aims, is an inclusive, multidimensional phenomenon whose various aspects cannot be understood in isolation from each other. Economic development affects, and is affected by, culture. Our author discusses the significance of this fact for the countries of the Third World today.     

FINANCIAL OPERATIONS AND MONETARY STATISTICS: IMPROVED CONCORDANCE IN THE FRENCH NATIONAL ACCOUNTS

National accounts are a powerful means of coordinating different statistical systems. The better their classifications are adapted to the basic statistics or the information blocks one wishes to use, the better the national accounts play their part. This statement explains why, taking the opportunity of revising the whole system, French national accountants tried to improve the concordance between financial operation tables and monetary statistics. Other reasons leading to this attempt can be found in the dissatisfaction of users having to face different and inconsistent financial information such as the monetary statistics on one hand and the financial aggregates of the national accounts on the other; and even more reasons appear in the organizational field since those two statistical systems are issued by two neighbour services of the Banque de France, often depending on the same sources. Further, many propitious factors are converging at the same time: the French financial system is undergoing profound transformations originating as much in the behaviour of economic agents as in the law, and the statistical operations have to adapt to these changes. The national accounts will in the near future include balance sheets in which financial asset holdings are directly comparable to the money supply aggregates. In its first part our paper sets forth the detailed reasons for our attempts, the conditions in which it took place and the present results. We have reached a much better degree of consistency between the two systems, even if the final scheme has not yet been adopted in either the monetary field or in the field of national accounts. But an important question remains open about the durability of the harmonization: we think that it could be relatively uncertain because of the differences in the goals pursued by the two systems and the constraints which they face. That is why in the second part of the paper we tried to review the way such a pragmatic undertaking as ours could call into question the way in which financial operations are described in the system of national accounts. If one agrees with the present boundary between the real and the financial sphere, the articulation must remain somewhat elementary. But if one wants to revise the usual so-called dichotomy between financial and non financial phenomena, we think that a complete rebuilding of the conceptual framework of the accounts has to be done; this would necessitate a considerable amount of theoretical and practical work.     

The role of fiscal policy in the St. Louis model: An evaluation and some new evidence

This paper re-examines the role of high employment budget expenditures (fiscal policy) in the St. Louis expenditure equation by using spectral analysis and the spectral estimates of a two-sided distributed lag model. The analysis is undertaken with quarterly U.S. data from 1947:1 to 1984:IV in the rate of change form. A salient conclusion is that fiscal policy has statistically significant partial coherences with (nominal) income, with the latter leading the former over the business cycle. We find that income is jointly related to lead terms of fiscal policy in a two-sided distributed lag model. Some explanations for these results are provided.     

Estimation of physical intensity models for default risk

The estimation of physical intensity processes in the context of default risk is investigated here. Using data from Moody's Corporate Bond Default Database, a term structure of default probabilities for different rating classes is constructed each year from 1970 to 2001. Two specifications used for modeling the dynamics of the (risk‐neutral) intensity process in the bond‐pricing literature are then examined empirically: the Ornstein–Uhlenbeck and square‐root cases. The results reveal that the Ornstein–Uhlenbeck case is not an adequate modeling alternative with a rejection of this specification in five out of seven credit classes and nonsignificant mean reverting behavior for all credit classes. The square‐root case obtains better results with four credit classes out of seven for which this specification cannot be rejected and significant mean reversion parameters in many cases. © 2008 Wiley Periodicals, Inc. Jrl Fut Mark 29:95–113, 2009     

Fertility and female employment dynamics in Europe: the effect of using alternative econometric modeling assumptions

We investigate the direct and long‐run effects of fertility on employment in Europe, estimating dynamic models of labor supply under different assumptions regarding the exogeneity of fertility and modeling assumptions related to initial conditions, unobserved heterogeneity and serial correlation in the error terms. We find overall large direct and long‐run effects of giving birth on employment probabilities, and these effects differ considerably across countries. We find that within countries the results are sensitive to the statistical assumption made on initial conditions, the inclusion of serial correlation and the assumption of strict exogeneity of children. However, the pattern across countries is robust to these assumptions. We show that such patterns are largely consistent with prevailing institutional differences related to the flexibility of the labor markets and family policies. Copyright © 2009 John Wiley & Sons, Ltd.     

An Investigation of Policy Administrative Costs Using Panel Data for the English Environmentally Sensitive Areas

This paper explores transactions costs in the context of agri‐environmental policy schemes based on management agreements. While transactions costs encompass a wide range of organisational costs, the focus here is on the public‐sector administrative costs of policy implementation. Empirical administrative cost functions were estimated to investigate the factors affecting the magnitude of such costs, using panel data spanning five years for the 22 English Environmentally Sensitive Areas. The extent of participation appears to be important in explaining administrative cost variability across areas. The data suggested the existence of size economics with regard to the numbers of agreements made in any one ESA, and a significant effect of scheme experience in exerting downwards‐pressure on administrative costs. Policy budgeting and evaluation should take into account the non‐trivial costs of organisation, particularly if agri‐environmental schemes based on the procurement of conservation goods through management agreements are to be extended in future.     

Dynamic Factor Demands and Technology Measurement under Arbitrary Expectations

We present a dynamic model of factor demands based on expected discounted costs minimization. While making only very mild assumptions on expectations and technology, we are able to establish a duality relationship between contemporary factor demands and the technology, and we provide formula for easily recovering marginal products, returns to scale, and technological change from estimated factor demands. Parametrization and implementation are illustrated in a detailed example.