Saving in Developing Countries: An Overview

This article reviews the current state of knowledge on the determinantsof saving rates, presenting the main findings and contributionsof the recently completed World Bank research project, ‘SavingAcross the World.’ The article discusses the basic designof the research project and its core database, the World SavingDatabase. It then summarizes the main project results and placesthem in the context of the literature on saving, identifyingthe key policy and nonpolicy determinants of private savingrates. Special attention is paid to the relationship betweengrowth and saving and the impact of specific policies on savingrates. The article concludes by introducing the studies includedin this special issue.     

Measuring persistence in Croatian tourism: evidence from the Adriatic region

This study examines the degree of persistence in foreign tourist arrivals and overnight stays for seven Croatian coastal counties over the period January 1998 to December 2013 using fractional integration techniques. Our findings reveal that the respective regional tourism indicators exhibit seasonal unit roots which require seasonal first differences to render the respective time series stationary. With respect to the long-run evolution of the respective time series, both the parametric and semi-parametric fractional integration approaches show the degree of persistence is greater than zero, but significantly less than one for the majority of the coastal counties. Impulse response analysis reveals indeed shocks to the deseasonalized time series, either foreign tourist arrivals or foreign tourist overnight stays, appear short-lived with the exception of Istria and Primorje-Gorski kotar counties. Policy implications of the results are also discussed.     

Targeting fertility and female participation through the income tax

We evaluate the effect of a 2003 reform in the Spanish income tax on fertility and the employment of mothers with small children. The reform introduced a tax credit for working mothers with children under the age of three, while also increasing child deductions for all households with children. Theoretically, given the interplay of these two components, the expected effect of the reform is ambiguous on both outcomes. We find that the combined reforms significantly increased both fertility (by almost 5%) and the employment rate of mothers with children under three (by 2%). These effects were more pronounced among less-educated women. In addition, to disentangle the impact of the two reform components, we use an earlier reform that increased child deductions in 1999. We find that the child deductions affect mothers' employment negatively, which implies that the 2003 tax credit would have increased employment even more (up to 5%) in the absence of the change in child deductions.     

The ECB's New Multi-Country Model for the euro area: NMCM — Simulated with rational expectations

The model presented here is an estimated medium-scale New Multi-Country Model (NMCM) which covers the five largest euro area countries and is used for forecasting and scenario analysis at the European Central Bank. The model has a tight theoretical structure which allows for non-unitary elasticity of substitution, non-constant augmenting technical progress and heterogeneous sectors with differentiated price and income elasticities of demand across sectors. Furthermore, it has the explicit inclusion of expectations on the basis of three optimising private sector decision making units: i.e. firms, trade unions and households, where output is in the short run demand-determined and monopolistically competing firms set prices and factor demands. Labour is indivisible and monopoly-unions set wages and households make consumption/saving decisions.We assume that agents optimise under limited information where each agent knows only the parameters related to his/her optimisation problem. Therefore we estimate with GMM, which implicitly assumes limited information boundedly rational expectations. In this paper we provide some simulation results under the assumption of model-consistent rational expectations, we show that there is some heterogeneity across countries and that the reactions of the economies to shocks depend strongly on whether the shocks are pre-announced, announced and credible or unannounced and uncredible.     

The Creation of Value Through Corporate Reputation

The relationship between social and financial performance (CSP – FP) has been a main objective in the literature on business management, as it would provide an economic justification for the social investment insofar as it contributes to the creation of value. This relationship has been empirically tested by several authors though without using a theoretical model that sustains this relationship. The aim of this article is to propose a theoretical model of the process of the creation of value from the reputation generated by companies, integrating the factors that have been shown to be more relevant in this process from previous research, in such a way that hypotheses are put forward regarding the existence of this relationship and the factors that determine it. Finally, an empirical test is performed using the 100 most prestigious companies operating in Spain during 2004.     

A structuralist North–South model on structural change,economic growth and catching-up

This paper presents a structuralist North–South model on structural change, industrialization and economic convergence. In a balance-of-payments-constrained macro-setting, we assume a cumulative process between industrialization and growth. Differently from the traditional post-Keynesian models, we endogenize the productive structure of developing countries. We enquire how industrialization affects uneven development and convergence processes. Multiple growth paths and a long-run path-dependent equilibrium emerge. Industrialization proves to be a necessary but not sufficient condition for catching-up. Good management by the domestic institutions of domestic industrialization is a complementary requirement.     

Liquidity, Trading Size, and the Co-existence of Dealership and Auction Markets

This paper analyses the co-existence of two markets for the same shares, a quote-driven market and an order-driven market, as observed for example for the trading of continental shares on the London SEAQ International. The focus is on the trade-off between the uncertain execution price faced by investors on an auction market and the implicit transaction cost represented by the spread in a dealer market. We obtain that those investors who desire to make large trades will prefer to trade with the dealer, while trades of smaller size will be carried out on the auction market. Moreover, we explicitly investigate the interrelations between the two markets showing that the pricing policy followed by a dealer depends on the conditions prevailing on the auction market.
(J.E.L: G10, D40)