Productivity,R&D Spillovers and Educational Attainment*

Economists have long agreed that the local availability of a more qualified workforce generates significant spillovers. This study suggests that these externalities may arise because plants by having access to a more qualified workforce at a regional level, can benefit more from R&D spillovers than those located in areas with less qualified workforce. This hypothesis is tested on a sample of British establishments drawn from the Annual Business Inquiry over the period 1997–2002. The main results are consistent with our expectations that the regional differences in the industry‐level educational attainment of the workforce available to a plant will condition its capability of absorbing R&D spillovers.     

INTERNATIONAL LABOUR FORCE PARTICIPATION RATES BY GENDER: UNIT ROOT OR STRUCTURAL BREAKS?

This paper examines the possibility of unit roots in the presence of endogenously determined multiple structural breaks in the total, female and male labour force participation rates (LFPR) for Australia, Canada and the USA. We extend the procedure of Gil‐Alana for a single structural break to the case of multiple structural breaks at endogenously determined dates using the principles suggested by Bai and Perron. We use the Robinson LM test to determine the fractional order of integration. We find that endogenously determined structural breaks render the total, female and male LFPR series stationary or at best mean‐reverting.     

The Feldstein-Horioka puzzle in the presence of structural shifts: The case of Japan versus the USA

This paper tests the Feldstein-Horioka “puzzle” for the two richest countries of the world: Japan and the USA. For this purpose it employs three different cointegration tests that are applied to the Feldstein-Horioka long-run investment-saving equation in conjunction with the Lumsdaine and Papell (1997) unit root test considering two structural shifts. A novel aspect of the paper is that it determines the number of breaks solely from a scrutiny of the data and that in constructing the dummy variables for the breaks it uses the endogenously determined break dates. It shows that allowing for structural shifts eliminates the “puzzle” both for Japan and the USA.     

Asymmetric and Time‐Varying Causality between Inflation and Inflation Uncertainty in G‐7 Countries

We use Granger causality tests within a conditional Gaussian Markov switching vector autoregressive (MS‐VAR) model using monthly data for G‐7 countries covering the period 1959:12–2008:10 to examine the relationship between inflation and inflation‐uncertainty. The MS‐VAR model allows us to model parameter time‐variation so as to reflect changes in Granger causality, assuming that these changes are stochastic and governed by an unobservable Markov chain. Inflation uncertainty is measured as the conditional variance generated by a Fractionally Integrated Smooth Transition Autoregressive Moving Average‐Asymmetric Power ARCH (FISTARMA‐APARCH) model. The distinguishing feature of our approach from the previous studies is the determination of the sign of the Granger causality relationship between inflation and its uncertainty over time. First, using a rolling VAR model, we show that the relationship between inflation and inflation uncertainty is time varying with frequent breaks. Second, using the MS‐VAR model, we obtain strong evidence in favour of the Holland's ‘stabilizing Fed hypothesis’ for Canada, France, Germany, Japan, United Kingdom, and the United States. We also find evidence in favour of the Friedman hypothesis for Canada and the United States.     

TRADE‐OFFS BETWEEN CIVIL LIBERTIES AND NATIONAL SECURITY: A DISCRETE CHOICE EXPERIMENT

We explore differences in perception of national security policies between self‐identified liberals, moderates, and conservatives from a national sample of U.S. adults. Using a discrete choice experiment, we also quantify each group's willingness to trade off select policies in exchange for reduced risk of a 9/11‐style terrorist attack. Relative to other groups, liberals are more likely to view such policies as ineffective and susceptible to government abuse. They also perceive a lower threat of terrorism. All groups are willing to make trade‐offs between civil liberties and risk of a terrorist attack. However, loss of civil liberties affects liberals more than conservatives. (JEL D61, H41, H56)     

Does multilateral trade liberalization help reduce poverty in developing countries?

ABSTRACT

This article investigates the impact of multilateral trade liberalization on poverty in developing countries from a macroeconomic perspective. The empirical analysis suggests that multilateral trade liberalization is conducive to poverty reduction in developing countries. This outcome therefore suggests that greater multilateral cooperation on trade matters among countries, in particular the Members of the World Trade Organization, would allow further trade liberalization at the multilateral level to the benefit of poor people in developing countries.