Market efficiency and cointegration: Some evidence in Pacific-Basin black exchange markets

This paper investigates the efficiency of the black exchange markets in Indonesia, Malaysia, the Philippines, South Korea, Taiwan, and Thailand. The study applies unit root and cointegration tests to examine black exchange market efficiency of Pacific-Basin countries. The generating process of black exchange rates appears to be a random walk. This is consistent with Gupta (1981) and other foreign exchange rate unit root test studies. Johansen cointegration tests are performed for these black exchange markets together with Japan and Singapore. The results suggest that there is at least one unit root among the black market exchange rates. Hence, black exchange markets are not collectively efficient.     

Economic Growth,Productivity Gains and Foreign Capital: A Comment

Journal of Quantitative Economics -     

The effects of monetary policy in a small open economy: the case of Portugal

In this article, I analyse the macroeconomic effects of monetary policy on the Portuguese economy. I show that a positive interest rate shock leads to: (i) a contraction of real GDP and a substantial increase of the unemployment rate; (ii) a quick fall in the commodity price and a gradual decrease of the price level and (iii) a downward correction of the stock price index. It also produces a ‘short-lived liquidity effect’ and helps explain the negative comovement between bonds and stocks. In addition, I find evidence suggesting the existence of a money demand function characterized by small output and interest rate elasticities. By its turn, the central bank’s policy rule follows closely the dynamics of the money markets. Finally, both the real GDP and the price level in Portugal would have been higher during almost the entire sample period if there were no monetary policy surprises.     

Public trust and corruption perception: disaster relief

Public trust in government and nongovernment organizations is essential to the public’s willingness to donate and to support those organizations. We measure public trust in disaster aid using people’s perception of these organizations’ effectiveness in delivering aid relief to the victims of two recent major earthquakes in China. Based on the survey data collected in 2013 from about 2100 residents in Hong Kong, we document the vulnerability of these residents’ trust perceptions in aid delivery. We find that the sharp decline in trust perception is highly negatively correlated with their perception of corruption of local governments in China.     

Downtown parking meter demand in a border metropolitan economy

Prior research establishes that the price of parking in the city centre often impacts the decision to travel downtown and the mode of transportation utilized. Other factors that influence the decision to drive and park downtown have received less attention. This study uses time series data to analyse the demand for metered parking spaces in El Paso, Texas, USA. In addition to meter rates, the determinants of demand include personal income, gasoline prices and the price of a substitute good, parking garage spaces. Because international bridges connect downtown El Paso to neighbouring Ciudad Juárez, Chihuahua, Mexico, the impacts of trans-boundary traffic flows, bridge tolls and other cross-border economic variables are also included as potential determinants of metered parking demand. Results indicate that parking meter rates, other transportation-related costs, and economic conditions in both countries affect meter use.     

Birth,Death, and Consumption: Overlapping Generations and the Random Walk Hypothesis

This paper studies the time-series behavior of consumption in a model that incorporates birth, death, and a precautionary motive for saving. Consumption of an individual agent is a random walk. However, aggregate consumption is a random walk if and only if the sum of the death rate and population growth rate is zero. Failure of the random walk hypothesis should not be attributed to finite horizons perse, but rather to inter-generational transfers caused by birth and death. Unlike certainty-equivalent models, the expected growth of consumption depends on financial wealth, rather than wage income or human capital. [D91, E21]     

Tax Incidence in a Model with Efficiency Wages and Unemployment

Abstract

The purpose of the present paper is to examine the effects of taxation on income distribution in a model with efficiency wages and involuntary unemployment. Central to our efficiency-wage model is the hypothesis that firms set wages above market-clearing levels, whenever the productivity of labor depends on the real wage paid by the firm, and unemployment. Within a two sector general equilibrium model we study the incidence of factor and commodity taxes on income distribution, and unemployment. Our findings differ substantially from those derived by the traditional neoclassical analysis, originally developed by Harberger, and as it has been extended by several authors.     

Technological Progress,Income Distribution,and The Explanation of Some Stylized Facts of Economic Growth

This paper examines the effects of technological progress in the framework of a specific-factor variant of the “dependent economy” model. We analyse, first, the effects of technological progress on income distribution, and secondly, its effects on commodity prices, and the structure of production. Our model predicts that, services must be more expensive in the country with higher per capita GDP, and that labor productivity in manufactures is positives associated with the per capita income, etc. The model can also explain several other stylized facts of economic growth. [O33, F11]