Impact of hurricanes strikes on international reserves in the Caribbean

ABSTRACT

In this study, we investigate the impacts of hurricane shocks on the international reserves of Caribbean countries. To this end, we use a panel VARX (Vector Auto-Regressive, with exogenous variables) with monthly data that allow us to account for external shocks (hurricane strikes). Our results show that for the whole sample, an increase in foreign reserves a month after the strike was followed by a decrease 2 months later. The increase can be explained by remittances and emergency foreign aid granted by the International Monetary Fund. Dividing the sample into middle-income and high-income countries shows that the increase is mainly due to the latter. This outcome may not be surprising given that production in Caribbean high-income countries is mainly due to manufacturing, off-shore banking and natural resources exploitation, which are all non-weather dependent sectors, while the middle-income countries are mostly dependent on weather-prone agriculture and tourism.     

Preschool for all? Enrollment and maternal labour supply implications of a bilingual preschool policy

ABSTRACT

Previous research supports the effectiveness of preschool in various contexts, yet there is limited evidence whether universal-type preschool policies induce changes in enrollment. While certain states have enacted universal preschool policies, some have also considered bilingual preschool mandates, either as a supplementary or stand-alone policy, requiring schools to open up bilingual classrooms for children from non-English speaking families. The question of whether bilingual preschool policies can induce enrollment and close achievement gaps between English learners and English speakers is particularly important today for urban cities and states with large immigrant populations. In this study, I exploit exogenous variation from the first bilingual prekindergarten mandate in Illinois to estimate the causal effects on preschool enrollment and maternal labour supply of recently immigrated and Hispanic families. Utilizing a difference-in-differences strategy, estimates suggest significant effects on preschool enrollment between 18% and 20% and no effects of increasing maternal labour supply in Illinois. Estimates are robust to various specifications, control groups, and timeframes. I use the analysis to further discuss whether universal preschool policies are designed sufficiently for access and inclusion of various student types, and contribute to our understanding on the effectiveness of using childcare subsidies to increase the welfare of low-income families.     

Tariff pass‐through in the middle products model

I use the middle products model of Sanyal and Jones to study the pass‐through of a tariff on the price of non‐traded final goods. I extend their analysis by comparing the short‐run effect of the tariff, when all factors are immobile, with the effects when labor is mobile between all sectors. It is shown that the short‐run pass‐through may vary from zero to a magnified effect on the price of the final product, depending on the elasticities of substitution in consumption and production. The relative magnitude of these elasticities determines whether the pass‐through with labor mobility is greater or less than the short‐run pass‐through.     

The Role of the Real Estate Sector in the Structural Dynamics of the Chinese Economy: An Input–Output Analysis

Market‐oriented housing reforms and the rapid urbanization process have led to spectacular growth in the Chinese real estate sector (RES). However, the changes in the role played by this sector in the structural dynamics of the Chinese economy have not been examined sufficiently. Accordingly, we analyze the intersectoral structural changes to the Chinese RES, its linkages with the rest of the economy, and its growth sources, using four Chinese input–output tables from 2002 to 2017. We depart from existing work on the RES by using the causative matrix approach and structural decomposition analysis, and obtain three main results. First, the RES, which received little non‐RES feedback during the 2002–2007 period, has subsequently received much more substantial feedback. Second, the impact of the RES on China's economic growth stems mainly from its forward linkages. Third, the growth in the RES has been driven mainly by domestic demand expansion. Our results highlight that the Chinese RES, which plays a key role in value chains, is highly dependent on its own final demand and a fall in its demand would impede economic development. An important implication of these results is that developing the national economy by stimulating the RES would not be as effective as developing the RES through stimulating the national economy.     

State corporatism and environmental harm: Tax farming and desertification in northwestern China

Research on environmental governance in China has shown that centre–local relations often influence the implementation and efficacy of environmental regulations. By examining changes in resource allocation and rural development between 1982 and 2005 in the region worst affected by desertification in China—the Minqin oasis in Gansu—we argue that changes in macro‐level fiscal and commodity grain policies contributed to severe regional disparity and a reduction in local state capacity in hinterland China. Intergovernmental competition over fiscal revenue encouraged cash cropping and land reclamation, and the continuous decline of the oasis ecology further reduced legitimacy in rural governance. These institutional and ecological constraints shaped the behaviour of grassroots cadres and formed the conflicting interests of the state in resource distribution and environmental conservation that continued to exist until the implementation of a centralized conservation program in 2006. The data came from 157 interviews and 628 policy documents from local archives in Gansu.     

Health and Employment amongst Older Workers*

Health and employment are strongly correlated. This paper reviews the existing evidence and brings in new evidence on the following issues: (a) the measurement of health; (b) the impact of health on employment rather than just the association between health and employment; (c) the mechanisms by which health impacts employment; and (d) the likely effect of recent retirement and disability policy changes in the UK. Although the magnitude of the estimated effect of health on employment varies greatly from study to study, some of this variation is driven by the health measure used. Given our preferred measure, the evidence suggests that 5–10 per cent of the employment decline between ages 50 and 70 is due to declining health in England, with the largest effects among low-educated men. Most of the effect comes through declining preferences for work and lower productivity when in bad health, although some of the effect is from government-provided incentives to not work when in bad health, such as from disability benefits.     

Multinational Enterprises and New Trade Theory: Evidence for the Convergence Hypothesis

According to the 'convergence hypothesis' multinational companies will tend to displace national firms and trade as total market size increases and as countries converge in relative size, factor endowments, and production costs. Using a recent model developed by Markusen and Venables (1998) as a theoretical framework, we explicitly develop, and address the properties of, empirical measures to proxy displacement of national firms by multinationals. These measures are then used to test the convergence hypothesis for a panel of data of country pairs over the years 1985–1996. Our results based on aggregate country level data provide some empirical support for the convergence hypothesis.     

The North American Industry Classification System and Its Implications for Accounting Research*

Industry classification is an important component of the methodological infrastructure of accounting research. Researchers have generally used the Standard Industrial Classification (SIC) system for assigning firms to industries. In 1999, the major statistical agencies of Canada, Mexico, and the United States began implementing the North American Industry Classification System (NAICS). The new scheme changes industry classification by introducing production as the basis for grouping firms, creating 358 new industries, extensively rearranging SIC categories, and establishing uniformity across all NAFTA nations. We examine the implications of the change for accounting research. We first assess NAICS's effectiveness in forming industry groups. Following Guenther and Rosman 1994, we use financial ratio variances to measure intra‐industry homogeneity and find that NAICS offers some improvement over the SIC system in defining manufacturing, transportation, and service industries. We also evaluate whether NAICS might have an impact on empirical research by reproducing part of Lang and Lundholm's 1996 study of information‐transfer and industry effects. Using SIC delineations, they focus on whether industry conditions or the level of competition is the main source of uncertainty resolved by earnings announcements. Across all levels of aggregation, we find inferences are similar using either SIC or NAICS. How‐ever, we also observe that the regression coefficients in Lang and Lundholm's model show smaller intra‐industry dispersion for NAICS, relative to SIC, definitions. Overall, the results suggest that NAICS definitions lead to more cohesive industries. Because of this, researchers may encounter some differences in using NAICS‐industry definitions, rather than SIC, but these will depend on research design and industry composition of the sample.