The convertibility of the rouble

Conclusion After a relatively long period of discussion, characterised by an uncertain approach towards transition, the Soviet authorities are now moving with decision towards the market. This statement applies to the reform as a whole and in particular to convertibility.The convertibility process in the Soviet Union started from a relatively unfavourable position: not only because of the complete (internal and external) inconvertibility of the Rouble, but also because the country's past displays a sort of structural propensity towards inconvertibility.It took the Soviet authorities some years to dismiss the doctrine of a parallel currency and the idea that convertibility is the final step of the transition. Recent legislative production in the Soviet Union (in particular the Banking law and the Currency law) are a good sign that they are proceeding in the right direction and practical experience seems to confirm this statement.In 1991 the process has accelerated and more important progress was made towards unification of the exchange rates and the creation of a currency market: these are two steps which are fundamental for achieving partial external convertibility (current account operations made by non-residents), which in its turn is the first step towards broader convertibility. Probably within the end of the year external partial convertibility will be reached. This at last will increase the foreign contribution to the Soviet economy, thus improving domestic conditions. The events of August 1991 will most likely further accelerate the pace of the process, which is now without doubt irreversible.Even if qualitatively positive results are achieved in the reform process however, great effort must still be made not only to complete and consolidate these results, but also to proceed further towards internal and financial convertibility.     

Will the (German) NAIRU Please Stand Up?

Abstract. This paper deals with a critical assessment of the ‘non‐accelerating inflation rate of unemployment’ (NAIRU) for Germany. There are quite a few obstacles to perceiving the NAIRU as an easy‐to‐use analytical instrument: the possibility of a non‐vertical Phillips curve, the occurrence of shocks and hysteresis effects, and the (mis‐)measurement of important variables, cointegration issues and a time variability of the NAIRU. A new attempt is made to estimate a NAIRU for Germany using direct measures of inflationary expectations. However, by any method, the NAIRU is very hard to determine and subject to considerable arbitrariness.     

Financial development and economic growth: long‐run equilibrium and transitional dynamics

We analyze the impact of financial development on economic growth. Differently from previous studies that focus mainly on balanced growth path outcomes, we also analyze the transitional dynamics of our model economy by using a finance‐extended Uzawa–Lucas framework where financial intermediation affects both human and physical capital accumulation. We show that, under certain rather general conditions, economic growth may turn out to be non‐monotonically related to financial development (as suggested by the most recent empirical evidence) and that too much finance may be detrimental to growth. We also show that the degree of financial development may affect the speed of convergence, which suggests that finance may play a crucial role in determining the length of the recovery process associated with exogenous shocks. Moreover, in a special case of the model, we observe that, under a realistic set of parameters, social welfare decreases with financial development, meaning that even when finance positively affects economic growth the short‐term costs associated with financial activities more than compensate their long‐run benefits.     

Specialisation,localisation, and trade value in the wake of cross-border production sharing. The Central Eastern European Countries' case

We focus on five among the sectors in which most of the CEECs’ trade in middle products with EU-15 is concentrated. Over the second half of the 1990s, we observe remarkable changes in both production and trade specialization as well as a significant relocation of industries within CEECs. Using jointly trade and production data we outline co-movements in the adjustment of specialisation patterns. We also show that the redistribution of activities at the regional level reflects the relocation of industries at the global level. Finally, we try to detect the scope of fragmentation of production characterizing each industry and the ways in which CEECs are moving along the “internationally sliced-up value chain”. (JEL: F10, F14, F15)     

Improving the estimation of total factor productivity growth: capital operating time in a latent variable approach

Measuring labor and capital services accurately is essential to obtaining reliable estimates of production functions and total factor productivity (TFP) growth. Using data on the operating time of capital, a series that exists for the French business sector, greatly improves the measurement of effective capital services in production. The ensuing estimation results are consistent with Cobb–Douglas technology under constant returns to scale, with the factor elasticities not statistically different from their income shares. In the same framework, TFP growth is estimated as a latent variable and found to be less volatile than accounting residuals, negatively correlated with employment, and free of cyclicality. It is statistically best estimated as a first-order autoregressive process, with an autoregressive coefficient of 0.95. Total factor productivity growth was estimated to have declined steadily between the mid-1970s and mid-1990s, but the rate of decline has diminished since then.     

Some new characterization of rational expectation equilibria in economies with asymmetric information

We compare the family of rational expectation equilibria with the ex-post Aubin core allocations in the framework of an economy with uncertainty and asymmetric information. We do it in a very general setting: an arbitrary space of agents and an infinite dimensional commodity space. We also present a characterization of the ex–post Aubin core by allocations belonging to the core of the associated complete information economies, and we use a suitable definition of Edgeworth equilibria to characterize the family of rational expectation equilibria. Moreover, we study some generalizations of the ex-post Aubin core obtained by making some restriction on the families of blocking coalitions.     

Opinion convergence in location: A spatial version of the Delphi method

This paper proposes a modified version of the Delphi method, starting from the assumption that in many situations the convergence of opinions can be considered in a spatial context. The Spatial Delphi we suggest is based, like the classical Delphi, on the judgments of experts, and it is useful in the consultations for decision and/or forecast purposes, provided that they concern matters of spatial location. The basis for the questionnaire is a map, on which each expert provides, as answer(s), one or more opinion-points, i.e., locations that, according to their opinion, are best for a specific purpose. We propose a method for narrowing the area of convergence along a multi-step procedure so that the final result of the consultation is a small portion of the initial territory with respect to the initial area considered. Besides a simulation study, we report also a prototype application with a panel of twelve experts.     

The impacts of international tourism demand on economic growth of small economies dependent on tourism

This paper studies the impacts on economic growth of a small tourism-driven economy caused by an increase in the growth rate of international tourism demand. We present a formal model and empirical evidence. The ingredients of the dynamic model are a large population of intertemporally optimizing agents and an AK technology representing tourism production. The model shows that an increase in the growth of tourism demand leads to transitional dynamics with gradually increasing economic growth and increasing terms of trade. In our empirical application, an econometric methodology is applied to annual data of Antigua and Barbuda from 1970 to 2008. We perform a cointegration analysis to look for the existence of a long-run relationship among variables of economic growth, international tourism earnings and the real exchange rate. The exercise confirms the theoretical findings.     

The Effect of Employment while in High School on Educational Attainment: A Conditional Difference‐in‐Differences Approach*

Using American panel data from the National Education Longitudinal Study of 1988, this article investigates the effect of working during grade 12 on attainment. We employ, for the first time in the related literature, a semiparametric propensity score matching approach combined with difference‐in‐differences. We address selection on both observables and unobservables associated with part‐time work decisions, without the need for instrumental variable. Once such factors are controlled for, little to no effects on reading and math scores are found. Overall, our results therefore suggest a negligible academic cost from part‐time working by the end of high school.