Fisher Ideal Indexes in the National Income and Product Accounts

The mastery of the spreadsheet technique has become almost universal in economics departments. The authors explain, step-by-step, how the spreadsheet can be used as an instructional aid to teach basic microeconomic concepts.     

Economic globalization and the change of electoral rules

This paper takes up an argument from Ronald Rogowski about the “natural affinity” between trade and an electoral system with proportional representation. We draw on literature on the historical determinants of electoral system choice to advance the general argument that trade integration and PR are related because the adoption of PR helps to secure gains from trade. Our specific model of electoral rule changes in the age of globalization predicts that the likelihood of electoral rule change towards more proportionality increases with levels of trade integration in the world economy. The theoretical model draws on a micro model of the distributive effects of increased economic integration. Because more proportional systems are more credibly able to commit to compensate the losers of globalization processes, there will be increased demand to change the electoral system towards more proportionality under economic circumstances that increase the costs of maintaining a closed economy. In accordance with our model, our empirical tests find a positive association between (a) trade integration and the proportionality of the electoral system, (b) proportionality and social spending, and (c) global integration levels and the probability of electoral rules changes that render voting rules more proportional.     

THE MEASUREMENT OF REAL INCOME

This paper is about the theory of the measurement of real income. By "theory of measurement" I mean the characterization of statistical terms as variables in a model, just as real consumption is characterized as an indicator of utility and the consumer price index is characterized as the cost of attaining a given level of utility in the economic theory of index numbers developed by Konus, Frisch and others half a century ago. I identify five logically distinct and internally-consistent concepts of real income: maximum sustainable consumption, consumption plus the output of new capital goods, consumption plus the increase in the capital stock where capital can be measured in two quite separate ways, and the sum of actual consumption and consumption forgone in the investment process. The last of these concepts is the most appropriate as a guide to producing long time series of real income for measuring a country's rate of economic growth.     

Bayesian time series analysis of periodic behaviour and spectral structure

Analysis, model selection and forecasting in univariate time series models can be routinely carried out for models in which the model order is relatively small. Under an ARMA assumption, classical estimation, model selection and forecasting can be routinely implemented with the Box–Jenkins time domain representation. However, this approach becomes at best prohibitive and at worst impossible when the model order is high. In particular, the standard assumption of stationarity imposes constraints on the parameter space that are increasingly complex. One solution within the pure AR domain is the latent root factorization in which the characteristic polynomial of the AR model is factorized in the complex domain, and where inference questions of interest and their solution are expressed in terms of the implied (reciprocal) complex roots; by allowing for unit roots, this factorization can identify any sustained periodic components. In this paper, as an alternative to identifying periodic behaviour, we concentrate on frequency domain inference and parameterize the spectrum in terms of the reciprocal roots, and, in addition, incorporate Gegenbauer components. We discuss a Bayesian solution to the various inference problems associated with model selection involving a Markov chain Monte Carlo (MCMC) analysis. One key development presented is a new approach to forecasting that utilizes a Metropolis step to obtain predictions in the time domain even though inference is being carried out in the frequency domain. This approach provides a more complete Bayesian solution to forecasting for ARMA models than the traditional approach that truncates the infinite AR representation, and extends naturally to Gegenbauer ARMA and fractionally differenced models.     

Determinants of consumer demand for circular economy products. A case for reuse and remanufacturing for sustainable development

We investigate determinants of consumer demand for circular (reused and remanufactured) products. Based on exploratory choice-based conjoint experiments with a sample of 800 adults in the United Kingdom, we examine two types of premium segment electronic appliances: a mobile phone and a robot vacuum cleaner. We find that consumers prefer partly circulated products over fully or not at all circulated products and that circular products can likely successfully enter the existing market at the retail price of a new product. Interestingly, circular products compete for market share primarily with new products, leaving the market share of second-hand options less affected. The results show a promising path for firms considering a transition to circular business models.     

1-4月份福建经济形势分析

4月份,福建省经济继续保持高位运行,主要经济指标增幅均高于3月份。1-4月,全省累计实现地区生产总值3232．01亿元,同比增长15．5％,增幅高于2005年以来的平均水平（12．4％）3．1个百分点。4月份当月,全省地区生产总值同比增长16％,增幅高于2005年以来的平均水平（13．2％）2．8个百分点。从环比看,4月份全省地区生产总值增长13．1％,     

What moves housing markets: A variance decomposition of the rent–price ratio

We apply the dynamic Gordon growth model to the housing market in 23 US metropolitan areas, the four Census regions, and the nation from 1975 to 2007. The model allows the rent–price ratio at each date to be split into the expected present discounted values of rent growth, real interest rates, and a housing premium over real rates. We show that housing premia are variable and forecastable and account for a significant fraction of rent–price ratio volatility at the national and local levels, and that covariances among the three components damp fluctuations in rent–price ratios. Thus, explanations of house-price dynamics that focus only on interest rate movements and ignore these covariances can be misleading. These results are similar to those found for stocks and bonds.