‘The Navigator Network’: a New Zealand futurewatch case study

New Zealand's ‘Navigator Network’ is a national scanning network of scientists and policy analysts providing ‘early alert’ advice about emerging areas of science and technology. It was established by the Ministry of Research, Science and Technology (MoRST) to enhance the government's readiness to respond to the opportunities and risks around new technologies, particularly in biotechnology and nanotechnology. The Navigator Network has been tailored to the New Zealand context, which is characterised by a small, well-connected government sector and a strong focus on agricultural biotechnology and food. The network builds on these features, and is ‘people-centric’ rather than ‘information-centric’, using dialogic approaches to generate new knowledge between diverse stakeholder groups. It also focuses on building futures capability in the government and science sectors. Representatives from government agencies are integrated into the process as scanners to facilitate uptake. It also has an adaptive development process via an action learning component.     

Poverty Mapping with Aggregate Census Data: What is the Loss in Precision?

Spatially disaggregated maps of the incidence of poverty can be constructed by combining household survey data and census data. In some countries (notably China and India), national statistics agencies are reluctant, for reasons of confidentiality, to release household‐level census data, but they are generally more willing to release aggregated census data, such as village‐ or district‐level means. This paper examines the loss in precision associated with using aggregated census data instead of household‐level data to generate poverty estimates. The authors show analytically that using aggregated census data will result in poverty rates that are biased downward (upward) if the rate is below (above) 50%, and that the bias approaches zero as the poverty rate approaches zero, 50%, and 100%. Using data from Vietnam, it is found that the mean absolute error in estimating district‐level poverty rates is 2.5 percentage points if the census data are aggregated to the enumeration‐area level means, and 3–4 percentage points if the data are aggregated to commune or district level. Finally, the authors propose a method for reducing the error using variances calculated from the census. When this approach is applied to the Vietnam data, this method can cut the size of the aggregation errors by around 75%.     

Unobserved components in an error-correction model of consumption for Southern European countries

In this paper we show how the potential misspecification of the consumption function can be ameliorated by approximating any unmodelled long run variation with an unobserved component in the form of a time-varying trend. This methodology is applied to Greek, Portuguese and Spanish consumption functions during the post-second World war period. The empirical evidence suggests that there are many determinants of long-run consumption in these countries, in addition to income and inflation, and these unobserved long-run effects are captured by a nonstationary stochastic component. The long-run elasticity of consumption with regards to the unobserved component is greater than unity in all countries. First version received: January 1999/Final version received: June 2000     

Value-added tax options for India

The pressures of aggregate revenue, the requirement of a reduced role for customs duties for the liberalization of the economy, and the complexity and strains of the current system together point clearly toward the desirability of tax reform in India. Since domestic indirect taxes provide the major source of revenue, they deserve special attention. This paper argues that India would benefit from moving toward a system of value-added taxation (VAT) and focuses on the way in which a VAT (or VATs) can be best introduced into India given the country's federal structure. Three different options are distinguished: a central VAT, dual VAT, and states' VAT. We argue that the first is politically infeasible, that the second represents the best way forward in the short term, and that the third deserves consideration as a long-run option. Special attention is paid to the problems that would arise under either a states' or a dual VAT with regard to taxing interstate trade.     

Share repurchases on trial: Large-sample evidence on share price performance,executive compensation,and corporate investment

Using a large sample of US stocks covering more than three decades, we empirically examine common criticisms of and rationales for stock repurchases. Repurchases account for a tiny fraction of the trading volume in a typical stock, making their price impact too small to generate short-term price manipulation. Price appreciation following repurchases is modest and does not reverse on average, suggesting the small price increases following repurchases signal firms’ good prospects. Also, we find no evidence that CEOs of repurchasing firms are paid excessively or that repurchases crowd out valuable investment opportunities. Because repurchases do not appear to be systematically abusive, enforcement action should be sufficient to deal with any bad actors, and significant regulation seems unwarranted.     

The Internationalisation of UK R&D

Policies to promote research and development (R&D) are high on the government's agenda. R&D and innovation are seen as key drivers of economic growth and important for raising UK productivity. This paper considers recent trends in UK R&D performance. We show that UK R&D is more internationalised than that of other G5 countries and is becoming increasingly so at a faster rate. A rising share of UK R&D is funded from abroad and UK firms are undertaking more of their R&D overseas. Using an international panel of countries, we show that R&D in one country responds to a change in the price in another ‘competitor’ country. This suggests that UK innovation policies could play an important role in determining whether increasingly footloose R&D locates in the UK or moves overseas.     

Foreign Exchange Risk,Equity Risk Factors and Economic Growth

This paper examines the information content of the equity risk factors that explain cross variation of stock returns and predicting future macroeconomic growth. For the first time we incorporate a new foreign exchange risk factor, providing important insights into the relationship between risk factors and the business cycle. The methodology involves the performance of a stepwise regression analysis of future macroeconomic growth against the lagged returns of five risk factors (market risk premium, size, value, momentum and foreign exchange risk). The results are validated with Granger causality tests and out-of-sample dynamic forecasting. They show that the foreign exchange risk factor contains strong, stable and statistically significant incremental information concerning future macroeconomic growth. Firms that are sensitive to the foreign exchange risk thrive when an economic upturn is anticipated and firms that are insensitive to the foreign exchange risk will have larger returns when an economic downturn is anticipated.     

Manufacturing output and extreme temperature: Evidence from Canada

This paper analyzes the effects of extreme temperature on manufacturing output using a data set covering the universe of manufacturing establishments in Canada from 2004 to 2012. Extreme temperature can affect manufacturing activity directly through its impact on labour productivity and indirectly through a change in demand for products. Using a panel fixed effects method, our results suggest a non-linear relationship between outdoor extreme temperature and manufacturing output. Each day where outdoor mean temperatures are below $-18$ °C or above 24 °C reduces annual manufacturing output by 0.18% and 0.11%, respectively, relative to a day with mean temperature between 12 ° and 18 °C. In a typical year, extreme temperatures, as measured by the number of days below $-18$ °C or above 24 °C, reduce annual manufacturing output by 2.2%, with extreme hot temperatures contributing the most to this impact. Given the predicted change in climate for the mid- and end of century, we predict annual manufacturing output losses due to extreme temperature to range between 2.8% and 3.7% in mid-century and 3.7% and 7.2% in end of century.