Financial Factors and the Empirical Behavior of Money Demand: A Case Study of Malaysia

The paper analyses the roles of financial factors in the behavior of M1 and M2 demands for Malaysia. The focus is on the possible changes in the elasticities of the M1 and M2 money demands in the environment of financial innovations and on the influence of real stock prices on the holdings of monetary assets. Our results reinforce existing studies that find the presence of the long-run M1 and M2 money demands and structural instability in the dynamic specification of the M1 demand. However, we are able to identify stable error-correction model for the post-1986 M1 demand and for the M2 demand. Our results also indicate the reduction in the Long run income and exchange rate elasticities of the money demands. Meanwhile, the interest rate sensitivity of the demands becomes more inelastic. Lastly, we document the significance of real stock prices in influencing the demand behavior, indicating the dominance of the wealth effect over the substitution effect. [E41, E44]     

Trade Policy and Productivity Growth in OECD Manufacturing *

Trade liberalization may promote economic growth in a number of ways, including by accelerating the rate of technological change. Firms that face more intense import competition may be spurred to greater rates of innovation; firms which export may absorb new technologies through their contact with international markets. This paper examines evidence on trade policy and productivity growth for a sample of thirteen OECD countries and including eighteen manufacturing sectors, using data primarily from the 1980s. Within individual sectors, there are strong productivity convergence effects within the OECD. After controlling for convergence, we find a positive association between high rates of productivity growth and low tariffs, and between high productivity growth and strong export performance. We found no particular association between high productivity growth and import penetration. The results are consistent with the possibility of positive linkages between trade liberalization and accelerated productivity growth. [F1, O4]     

Foreign Ownership,Equity Arbitrage and Strategic Trade Policy *

This paper investigates whether the cost of environmental regulation influences the international location of polluting industries. Industries that operate production facilities in developing countries are identified through their use of the offshore assembly provisions in the U.S. tariff Code. Pollutions Intensity of industry output is found to significantly reduce the probability of conducting offshore assembly in developing countries. This finding contradicts the arguments that developing countries are becoming pollution havens as a result of offshore assembly independent of their general disregard for the environment. Integrating production across national boundaries might actually enhance worldwide environmental quality. Relatively clean stages of the production process are being transferred to developing countries with lax environmental regulations, while polluting segments remain in the U.S. where strict environmental controls are enforced. [F1, Q2]     

Interest Rates and Wage Indexation

The growth effects of European economic and monetary intergration and the progress of

regional convergence across Europe depend on whether economic in Europe is consistent with a neoclassical or an endogenous growth model. Using annual data from the 1950-1992 period for each of 20 European economies, the paper finds that steady-state real growth rates are generally unaffected by changes in the investment rate, population growth, and government consumption, evidence consistent with neoclassical growth theories. This Strengthens the likelihood of regional (perhaps conditional) convergence, and suggests that the effects of greater monetary and economic unification will be in terms of higher incomes per capita, but not in terms of permanently higher growth rates.[O40,F43]     

Purchasing Power Parity By sectors From Selected European Countries: Cointegration and Structural Breaks

In this paper we study the long-run Purchasing Power Parity (PPP) hypothesis by traded and non-traded sectors using cointegration techniques in the presence of structural breaks, for a set of European countries during the period 1975:1-1995:12. This approach is complementary to many existing approaches to investigate the PPP Hypothesis. We find evidence in favor of long-run PPP hypothesis when commodity prices and used in the presence of structural breaks. This result lends support to the integration process in the European Union. [C22, F30]     

Learning,experience and the dynamics of north–south Trade and technology transfer

This paper examines the dynamics of learning and experience that underlie technology transfer using a North-South trade model with a continuum of goods. Since North is historically more experienced than South, it initially produces the most advanced goods and pays higher wages. Whenever there is a market-driven transfer of technology and production over time, there will be some wage convergence as South gradually gains experience. Nevertheless, wage inequality must persist in the steady state. Product innovation typically increases steady-state wage inequality because new goods are produced in North, and North ultimately learns than South. [F12, O19]     

Birth,Death, and Consumption: Overlapping Generations and the Random Walk Hypothesis

This paper studies the time-series behavior of consumption in a model that incorporates birth, death, and a precautionary motive for saving. Consumption of an individual agent is a random walk. However, aggregate consumption is a random walk if and only if the sum of the death rate and population growth rate is zero. Failure of the random walk hypothesis should not be attributed to finite horizons perse, but rather to inter-generational transfers caused by birth and death. Unlike certainty-equivalent models, the expected growth of consumption depends on financial wealth, rather than wage income or human capital. [D91, E21]     

Development and Pricing of a New Participating Contract

Abstract

This article designs and prices a new type of participating life insurance contract. Participating contracts are popular in the United States and European countries. They present many different covenants and depend on national regulations. In the present article we design a new type of participating contract very similar to the one considered in other studies, but with the guaranteed rate matching the return of a government bond. We prove that this new type of contract can be valued in closed form when interest rates are stochastic and when the company can default.     

Accounting Undergraduates' Perceptions of Cooperative Learning as a Model for Enhancing their Interpersonal and Communication Skills to Interface Successfully with Professional Accountancy Education and Training

To interface effectively with professional accountancy training, accounting educationalists should ensure that they turn out graduates who possess the interpersonal and communication skills required of today's accountant. Attainment of these skills is promoted by group work. However, little empirical evidence exists to help academics make an informed choice about which form of group learning enhances interpersonal and communication skills. This paper addresses this deficiency by comparing perceptions of skills enhancement between accounting students who experienced traditional or simple group learning and those who undertook cooperative learning. The findings reveal that the cooperative learning cohort perceived their learning experience to be significantly more effective at enhancing interpersonal and communication skills than that of the simple group learning cohort. This study provides evidence that cooperative learning is a more effective model for delivering interpersonal and communication skills than simple group learning, thereby creating a more successful interface between academic accounting and professional accountancy training.