Partial Horizontal Inequity Orderings: A Non‐parametric Approach*

We provide a partial ordering view of horizontal inequity (HI), based on the Lorenz criterion, associated with different post‐tax income distributions and a (bistochastic) non‐parametric estimated benchmark distribution. As a consequence, several measures consistent with the Lorenz criterion can be rationalized. In addition, we establish the so‐called HI transfer principle, which imposes a normative minimum requirement that any HI measure must satisfy. Our proposed HI ordering is consistent with this principle. Moreover, we adopt a cardinal view to decompose the total effect of a tax system into a welfare gain caused by HI‐free income redistribution and a welfare loss caused by HI, without any additive decomposable restriction on the indices. Hence, more robust tests can be applied. Other decompositions in the literature are seen as particular cases.     

THE MEASUREMENT OF GROSS NATIONAL PRODUCT IN KOREA

South Korea began its measurement of Gross National Product during the turbulent 1950's, a period of postwar rebuilding and of political and social changes. With only a small and largely inexperienced staff, and with little support from other statistical agencies whose data were essential to adequate GNP measurement, the Bank of Korea began this task in the early 1950's. Early estimates were extremely rough; over the years, the statistical staff was trained and other statistical agencies were upgraded. Measurements of output in the large agricultural sector and in manufacturing have gradually but consistently been strengthened as recent input-output data has been developed. Gaps still persist, particularly in the wholesale and retail sectors, but certain strengths are present: an outstanding job has been done in product pricing. The author describes the evolution of Korea's improving GNP program, presents its sources of data and its methodologies, and gives an assessment of problems of the past and prospects for the future.     

What circumstances lead a government to promote brain drain?

This paper aims to complement the existing theoretical brain drain literature, focusing on the interaction between education, skilled emigration and government intervention in a small open economy. This article first characterises different emigration patterns that may arise in equilibrium, then seeks the conditions that lead a government to promote brain-drain. The model shows that the government may promote skilled emigration among workers with intermediate skills even though the resulting brain drain decreases per capita income. Emigrants remittances outweigh the income they would produce if they did not emigrate. Therefore, the government makes less severe the fall in per capita income that follows the brain drain by encouraging emigration among those skilled workers who are more productive abroad.     

Labour‐market institutions and their impact on trade partners: A quantitative analysis

Recent theoretical literature studies how labour market reforms in one country can affect labour market outcomes in other countries, thereby rationalizing widely held policy beliefs and empirical evidence. But what is the quantitative relevance of such spillover effects? This paper combines two recent workhorse models: the canonical search‐and‐matching framework and the heterogeneous firms international trade model. Qualitatively, the framework confirms that labour market reforms in one country benefit its trading partners, replicating the stylized facts. However, when wages are bargained flexibly, the model quantitatively underestimates the correlation of structural unemployment rates across countries. Introducing some degree of real wage rigidity remedies this problem.     

A Note on Building a Counterfactual for Mercosur

ABSTRACT

Heterogeneity among trade agreements across Latin American countries is important for comparing different experiences and for evaluating the success of existing trade agreements. This note evaluates the Mercosur agreement in a counterfactual framework. Member countries’ experiences are compared to the Mexican experience in several dimensions other than trade. In particular, the effect of trade agreements is evaluated in terms of its effect on the labor market (inequality and informality) and on other measures of integration. This new analysis puts Mercosur in a more positive balance with respect to the pure trade theory analysis.     

Do U.S. citizens support government intervention in agriculture? Implications for the political economy of agricultural protection

The persistence of agricultural protectionism throughout the world is intriguing given the widely recognized benefits of free trade. The political economy literature over the last decades has considered groups’ interest, politicians’ preferences, and their interactions within domestic politics as the primary forces driving agricultural protection. Yet, a growing body of studies suggests that it would be judicious to weigh in consumers’ or taxpayers’ perspectives in deciphering the nature of agricultural protection. This study examines U.S. citizens’ preferences about government intervention in agriculture and trade. Results show that they are in strong support of agricultural protection and their perceptions of national food security, family farms, environmental sustainability, and multifunctionality of agriculture play a significant role in shaping their support/opposition toward government intervention. The conventional political economy literature theorizes that consumers or taxpayers would oppose public policies that increase their tax burden; however, in the case of the farm sector, they have little incentive to voice their objections given the costs of farm programs are spread across a large number of consumers and taxpayers. U.S. citizens’ support for government involvement in agriculture as reported in this and other prior studies does not lend support for such political economy explanation.     

Peer effects in the diffusion of water‐saving agricultural technologies

We investigate the role of peer effects in the diffusion of an important water‐saving irrigation technology: low energy precise application (LEPA). Using detailed irrigation behavior data for growers in the High Plains Aquifer region of Kansas covering 1990–2014, we find clear evidence of peer influence in adoption of LEPA, net of environmental factors. Specifically, an additional neighboring LEPA installation within 1 km increases the probability of adoption by about 0.3 percentage points, on average, and this effect diminishes with distance. Our empirical estimates indicate that in the absence of peer effects, LEPA adoption would have been about 10% lower (1,000–1,600 fewer installations) per year. In addition, we find that growers install LEPA in response to higher energy prices.     

Nonparametric search

We analyze the search problem of a consumer who derives information only from the sequential search process. This paper considers the case of a consumer who uses a nonparametric procedure to estimate the probability distribution. It is shown that a solution to the consumer's problem is a very simple strategy which depends only on the order statistics, on the discounting factor, and on the duration of the search. It leads to a finite search almost surely. This optimal strategy is a myopic rule which is computable and which is characterized by a sequence of strictly increasing reservation prices.     

Missionaries,Mercenaries Or Car Salesmen? MBA Teaching In Malaysia*

Increasing academic attention is being given to the role of management gurus, consultants, managers and academic researchers in the international diffusion of Western management ideas. This is part of wider debates on knowledge, power and globalization. Relatively little attention has been paid to the mechanisms through which diffusion takes place and, in particular, the role of academics as lecturers and business schools as disseminators of management knowledge at home and abroad. This paper draws on the authors' personal experiences and perceptions of teaching on an Executive MBA programme in Malaysia and those of their students.
Management education is growing rapidly in many regions of the world and has become highly commodified and commercialized, with Western universities competing in emerging markets for potentially lucrative local opportunities and foreign students or 'consumers'. Accordingly, the process of diffusion of Western management ideas is examined through a consumption perspective which treats the foreign MBA as a standardized commodity (much like the foreign car) with particular use, symbolic and exchange values. However, the limits of the consumption perspective in terms of both consumer sovereignty and subordination are also established in revealing deeper and more dynamic relations of power. Moreover, it is argued that while there are parallels with domestic consumption of MBAs, the teaching of MBAs in Malaysia generates added ambivalence among learners founded on global–local and development–imperialism dynamics and tensions.     

Markov-switching dynamic factor models in real time

We extend the Markov-switching dynamic factor model to account for some of the specificities of the day-to-day monitoring of economic developments from macroeconomic indicators, such as mixed sampling frequencies and ragged-edge data. First, we evaluate the theoretical gains of using data that are available promptly for computing probabilities of recession in real time. Second, we show how to estimate the model that deals with unbalanced panels of data and mixed frequencies, and examine the benefits of this extension through several Monte Carlo simulations. Finally, we assess its empirical reliability for the computation of real-time inferences of the US business cycle, and compare it with the alternative method of forecasting the probabilities of recession from balanced panels.