An approximation algorithm for optimal consumption/investment problems

This article develops a simple approach to solving continuous-time portfolio choice problems. Portfolio problems for which no closed-form solutions are available may be handled by this technique, which substitutes the numerical solution of partial differential equations with a non-linear numerical algorithm approximating the solution. This paper complements the wide literature in economics on the solution of dynamic problems in discrete time using projection methods. Our approach extends the approximation function to power forms, which are shown to fit finance type problems well. The algorithm is parsimonious, and is first illustrated by solving two basic examples, first, the standard Merton problem, and second, a jump-diffusion problem. Then, we demonstrate that the model is easy to implement on a larger scale, by optimizing a portfolio of six stock indexes, and stochastic volatility driven by two correlated state variables. Copyright © 2002 John Wiley & Sons, Ltd.     

Child Labour: a survey of selected Asian countries

While the African continent has the highest child labour force participation rates, Asia contains the largest pool of child workers. The nature, magnitude and decline in child labour vary sharply between Asian countries. East Asia now has little child labour; however, child labour continues to have a significant presence in South Asia and in parts of Southeast Asia. This paper surveys the literature on child labour in selected Asian countries, paying special attention to its causes and consequences. The evidence presented shows that Asian child labour, especially in South and Southeast Asia, has some common features. For example, the bulk of child labour is in the 10–14 years age group. The phenomenon is largely rural, and child domestic labour constitutes a significant share. The participation rate of Asian children in the 15–17 years age group in economic activities, 48.4 per cent, is the highest in the world. There is a significant gender element in Asian child labour with boys outnumbering girls in economically active work, while the reverse is the case with domestic child labour. A focus of the survey is the empirical findings that provide insights into the policy instruments that may be needed in combating this phenomenon. The survey also discusses some of the important international and national initiatives that have been taken to reduce child labour.     

A dynamic analysis of expenditure patterns in rural India

Recent generalisations of the Linear Expenditure System have concentrated on its restrictive assumption of separable preferences but underplayed its equally restrictive assumption of linearity in income, i.e., constant marginal budget shares. This reflects the data base which has usually been long time series of disaggregated consumer expenditure data. Such generalisations are inappropriated for developing countries which rely on highly aggregated commodity expenditure data from budget surveys with more variation in income responses is introduced, variation in prices. A general procedure for non-linearising income but rather limited applied to some recent LES generalisations to generate still further geenralisations and then used to analyse rural India's expenditure behaviour. The results decisively support the suggested generalisation and, also, provide evidence in favour of dynamic behaviour and habit persistence on budget data.     

Duty-free zone,unemployment, and welfare a note

We consider a small open Harris-Todaro economy with the urban sector consisting of a duty-free zone and a non-duty free zone. There is no capital mobility between the urban sector and the rural sector, but capital is perfectly shiftable between the two sub-sectors of the urban sector. A policy of expanding the duty-free zone through the reduction in import-duty on intermediate goods in that sector ultimately lowers the level of output of that sector. This policy also raises the level of unemployment, lowers national income (social welfare), and increases economic inequality. If, however, the tariff on the final product is reduced in that sector, we get the opposite result.     

International trade and unemployment: Theory and cross-national evidence

We present a model of trade and search-induced unemployment, where trade results from Heckscher-Ohlin (H-O) and/or Ricardian comparative advantage. Using cross-country data on trade policy, unemployment, and various controls, and controlling for endogeneity and measurement-error problems, we find fairly strong and robust evidence for the Ricardian prediction that unemployment and trade openness are negatively related. This effect dominates the positive H-O effect of trade openness on unemployment for capital-abundant countries, which turns negative for labor-abundant countries. Using panel data, we find an unemployment-increasing short-run impact of trade liberalization, followed by an unemployment-reducing effect leading to the new steady state.     

Human capital, inequality, endogenous growth and educational subsidy: A theoretical analysis

This paper develops an endogenous growth model with dualism in human capital accumulation of two types of individuals. The government imposes a proportional income tax on rich individuals and uses the tax revenue to finance the educational subsidy given to poor individuals. We find out the properties of the optimal tax financed educational subsidy policy in the semi-stationary equilibrium of the model using the technique of Stackelberg differential game.     

Adoption of Ubiquitous Customer Relationship Management (uCRM) in Enterprise: Leadership Support and Technological Competence as Moderators

Abstract

Ubiquitous Customer Relationship Management (uCRM) signifies the realization of special characteristics, including proactiveness, context awareness, and mobility. This uCRM helps to enhance promptness and timeliness of the traditional system, thereby creating an environment associated with a state of being everywhere in no time and covering any device and any network. uCRM provides high personalization of service. The uCRM system has opened a new area of satisfaction for customers. Context awareness computing, a uCRM characteristic, is presumed to have enhanced benefits for a firm adopting uCRM in India. In this context, this study has taken a holistic attempt to analyze how technological competence and leadership support can enhance the business performance of a firm adopting uCRM. With input from literature studies, a hypothesis and a conceptual model have been formulated. Statistically, those have been validated with survey work considering 165 usable respondents from 22 different firms situated in three metropolitan cities in India. Results show that the effect of technological competence and leadership support positively help a uCRM-dependent firm towards achieving better business benefits. The study ends with a comprehensive conclusion.     

Is public investment complementary to private investment in Indian agriculture? Evidence from NARDL approach

The issue of complementarity between public farm investment and private farm investment in Indian agriculture is an unsettled empirical question in the literature, which has not been studied adequately. Few studies analyzing the trends of both types of investments have produced contradictory results. Thus, this study attempts to bridge that gap, by examining the hypothesis of crowding‐in/crowding‐out effect of public sector investment on private investment. Time series data for a period of 45 years from 1971 to 2015 has been used. Adopting a ‘nonlinear auto‐regressive distributive lag’ (NARDL) model the study confirms a strong crowding‐in effect of public investment on private investment in short run, but relatively a weak complementarity between the two over long‐run. Moreover, the public canal intensity as a major component of public investment has been observed to have much stronger effect on private investment than the public investment itself. It is also found that private investment is constrained by its own lagged values, institutional credit and terms of trade during both short‐run and long‐run. The policy suggestion of this study calls for an immediate arrest of declining trend of public investment.     

Inspiring employees' ecological behaviors: The roles of corporate environmental strategy,biospheric values,and eco-centric leadership

The consequences of environmental degradation have steered organizations to promote pro-ecological behaviors among their employees, and achieving this effectively is paramount for business and environmental sustainability. Applying a multilevel integrated approach, this study investigates the impact of corporate environmental strategy, biospheric values, and eco-centric leadership on employees' ecological behaviors. A self-administered questionnaire was used to collect data from 289 employees from a cross section of industries in Bangladesh. The findings reveal the significant influences of environmental strategy and biospheric values on employees' ecological behaviors as well as the moderating role of eco-centric leadership. The study also provides some significant insights for formulating environmental strategy and inspiring employees' ecological behaviors in organizational contexts. Theoretical and managerial implications as well as future research directions have also been provided.     

Are short‐term effects of pollution important for growth and optimal fiscal policy?

We study optimal fiscal policy in a stock‐flow model of the environment within an endogenous growth framework, where some pollutants have a lasting impact on environmental quality which is restored through abatement expenditure, while others dissipate and hence, have a short‐term effect on the environment. All pollutants, however, affect the productivity of a public good negatively. Given that short‐term pollution, although it dissipates, is irreversible in this sense, a government cannot ignore its negative effects since this type of pollution lowers the productivity of all inputs. We find that a larger negative effect of short‐term pollutants as well as a higher congestion effect of private capital leads to corrective fiscal policies with higher optimal income tax and abatement expenditure rates, which have favorable growth consequences. Interestingly, we find that the rate of short‐term pollution does not affect optimal fiscal policy while that of the long‐term pollution does.