Playing the synthesizer with Canadian data: Adding polls to a structural forecasting model

Election forecasting has become a fixture of election campaigns in a number of democracies. Structural modeling, the major approach to forecasting election results, relies on ‘fundamental’ economic and political variables to predict the incumbent’s vote share usually a few months in advance. Some political scientists contend that adding vote intention polls to these models—i.e., synthesizing ‘fundamental’ variables and polling information—can lead to important accuracy gains. In this paper, we look at the efficiency of different model specifications in predicting the Canadian federal elections from 1953 to 2015. We find that vote intention polls only allow modest accuracy gains late in the campaign. With this backdrop in mind, we then use different model specifications to make ex ante forecasts of the 2019 federal election. Our findings have a number of important implications for the forecasting discipline in Canada as they address the benefits of combining polls and ‘fundamental’ variables to predict election results; the efficiency of varying lag structures; and the issue of translating votes into seats.     

Public pricing of final and intermediate goods in the presence of externalities

The purpose of this paper is to investigate the impact of externalities on pricing decisions by a public or a private regulated firm selling both final and intermediate goods. The externalities generate feedbacks in demand that affect both consumers and producers. The model is very general in that it does not impose constant returns to scale on private production, allows for distributional effects of both the publicly determined prices and private sector profits, and captures the general equilibrium effects of public pricing. Socially optimal pricing rules are derived, and the relation of the results with previous models of pricing in the presence of externalities is investigated.     

Optimal production of transplant care services

Most organ transplants are from dead donors. National transplant organizations exhibit considerable differences in terms of their donor population rates. Spain's organization is by far the most efficient in this respect. We argue that much of the productivity advantage of Spain's transplant organization proceeds from an efficient organization of the production chain, from organ procurement to transplantation. Transplants from dead donors are analogous to a common resource for the transplant community. Their circulation through the national transplant organization creates public good externalities between the care units in charge of organ retrieval and those in charge of transplantation. A socially efficient production of transplant care services obtains through an optimal control, by the national transplant agency, of both the circulation and the production of transplants. In particular, transplant shortage makes the rotten kid theorem fail in this context. The analysis also produces a natural measure of public good externalities, evaluated from the standpoint of care units.     

Glück — Die Sicht der Ökonomie

Glück führte lange Zeit ein Schattendasein in der ?konomischen Forschung. Das hat sich seit einigen Jahren ge?ndert. Aus den neuen Erkenntnissen zu den wirtschaftlichen und au?erwirtschaftlichen Bestimmungsgründen des Glücks werden auch Empfehlungen für eine Wirtschaftspolitik abgeleitet, die das pers?nliche und gesellschaftliche Glück der Menschen berücksichtigt. Bruno S. Frey und Claudia Frey Marti fassen in diesem Beitrag ihr Buch¹ zu dem Thema zusammen.     

Smuggling and Bhagwati's Nonequivalence Between Tariffs and Quotas

The authors extend Professor Bhagwati's analysis about the nonequivalence between trade policy instruments when domestic production is monopolized and the terms of trade are endogenous, by allowing for smuggling. They show that the dominance of the ad valorem tariff over the quota is not robust. Tariffication can lower welfare even when the level of illegal imports is quite small. However, tariffication with a specific tariff is always beneficial because the specific tariff dominates the ad valorem tariff and the quota with or without smuggling. Smuggling (or the threat) also tends to lower the second–best tariff/quota, and increases welfare when imports are restricted by a quota, but lowers it under a tariff.     

Income distribution and the neoclassical paradigm: Introduction to a symposium

A simple graphical analysis is presented, for dissection of the growth and distributional responses of a one-sector neoclassical model. How the one-sector model fits in with the somewhat more elaborate models discussed in the subsequent symposium is also pointed out, to shed light on their properties.     

Stock Returns,Productivity, and Corruption in Eight European Fast-Emerging Markets

This article addresses the impact of productivity, corruption, and trade openness on the stock returns of 265 industrial companies listed in eight Eastern European fast-emerging markets, over the 2004-2013 period. Through a three-factor model that includes both measures at firm level and macro-level control variables, our findings suggest that country corruption index is negatively correlated with the total annual return of the stocks of the listed industrial companies of our sample. Moreover, the most productive firms are featured by higher stock returns, while leverage seems not to be a key predictor of stock returns. In addition, the article uncovers innovative evidence about trade openness that is negatively correlated with stock returns due to its connection with the recent financial crisis. That is, firms operating in markets that are more open to trade show a higher degree of interconnection with other economies and are more likely to undergo the effects of negative fluctuations from foreign markets during the economic crisis. © 2015 Wiley Periodicals, Inc.