A panel data approach to economic forecasting: The bias-corrected average forecast

In this paper, we propose a novel approach to econometric forecasting of stationary and ergodic time series within a panel-data framework. Our key element is to employ the (feasible) bias-corrected average forecast. Using panel-data sequential asymptotics we show that it is potentially superior to other techniques in several contexts. In particular, it is asymptotically equivalent to the conditional expectation, i.e., has an optimal limiting mean-squared error. We also develop a zero-mean test for the average bias and discuss the forecast-combination puzzle in small and large samples. Monte-Carlo simulations are conducted to evaluate the performance of the feasible bias-corrected average forecast in finite samples. An empirical exercise, based upon data from a well known survey is also presented. Overall, these results show promise for the feasible bias-corrected average forecast.     

Tools of Survival: Sovereign Wealth Funds in Singapore and China

The rise of sovereign wealth funds (SWFs) as major investors in the global economy has raised worries that they serve the geopolitical ends of owner countries. However, given the paramount importance of surviving domestic political competitions, SWFs are likely also tools of domestic political survival. In examining the corporate governance and underlying political environment in which SWFs in Singapore and in China operate, this paper further examines the role of political unity in directing SWF behaviour in authoritarian regimes. The main finding is that a highly unified autocracy is more likely to direct SWFs to maximise long-term profit, while a fragmented one like China is more likely to treat its SWF as an arena for domestic political and bureaucratic infighting. SWFs operating in a fragmented regime are unlikely to make long-term profit and foreign policy objectives top priorities, and their behaviour can be highly unpredictable.     

Meta-level Coordination for Solving Distributed Negotiation Chains in Semi-cooperative Multi-agent Systems

A negotiation chain is formed when multiple related negotiations are spread over multiple agents. In order to appropriately order and structure the negotiations occurring in the chain so as to optimize the expected utility, we present an extension to a single-agent concurrent negotiation framework. This work is aimed at semi-cooperative multi-agent systems, where each agent has its own goals and works to maximize its local utility; however, the performance of each individual agent is tightly related to other agents’ cooperation and the system’s overall performance. We introduce a pre-negotiation phase that allows agents to transfer meta-level information. Using this information, the agent can improve the accuracy of its local model about how other agents would react to the negotiations. This more accurate model helps the agent in choosing a better negotiation solution for a distributed negotiation chain problem. The agent can also use this information to allocate appropriate time for each negotiation, hence to find a good ordering of all related negotiations. The experimental data show that these mechanisms improve the agents’ and the system’s overall performance significantly.     

Health benefits of tunneling through the Chinese environmental Kuznets curve (EKC)

In this paper, we first add to what is a growing literature on the existence and nature of the environmental Kuznets curve (EKC) model for developing countries, by testing for the existence of an EKC for China using a panel data set of city-specific, annual ambient levels of SO₂ pollution. We find some support for both the typical inverted-U-shaped relationship and an N-shaped, cubic configuration. More significantly, we then explore the possibility of China's “tunneling” through the EKC, by using newer, cleaner technologies, and thereby avoiding some of the environmental degradation that had often accompanied economic growth. Specifically, we estimate and economically value the health benefits realizable to Chinese cities from successful efforts to “tunnel” under the EKC over the next generation.     

Berger, Dina. The Development of Mexico's Tourism Industry: Pyramids by Day, Martinis by Night

Dina Berger's The Development of Mexico's Tourism Industry:Pyramids by Day, Martinis by Night traces the historical foundationsof the tourism industry in México from 1928 to the earlypost–WW II period. The author argues that during thisperiod tourism became a medium for the modernization and economicdevelopment of México. According to Berger, the "creationof a tourist industry emerged as the cornerstone to state-ledmodernization programs in the late 1920s at the height of revolutionary     

Collective Action and the Sustainability of Co-Production

Abstract

This article addresses the sustainability of citizen/user participation in the provision of public services, often referred to as co-production. Co-producing public services not only promises to limit cost, but it also requires a change in the relations and behaviour of public servants and citizens/users, in order for the latter to make a long-term commitment to co-production. The article notes that Olsen proposes two logics of collective action, not just one. Focusing on small group interaction can provide an important strategy for achieving sustainable co-production, particularly of enduring welfare services. However, Ostrom criticizes too simplistic approaches based on size alone for promoting social cooperation in collective action situations. She proposes seven structural variables of importance in resolving social dilemmas. Several of them can also be perceived as factors that facilitate sustainable citizen participation in co-production. Some additional factors are also considered important for sustainable co-production, like the nature of the service itself, organizational diversity, a dialogue between the staff and clients, and facilitating small group interactions in large organizations. This article concludes that governments should develop more flexible, service-specific and organization-specific approaches for promoting co-production, rather than looking for simple ‘one size fits all’ solutions to the challenges facing public service delivery, particularly of enduring welfare services. It also proposes a research agenda on sustainable co-production.     

Performance management effectiveness: practices or context?

Although much research has focused on the technical or measurement issues involved in employee performance management, this study investigates the mutual influence of practices and context on performance management effectiveness. From a sample of 312 private and public sector organizations with 200 or more employees, the results indicate positive associations between practices – training and employee recognition – and performance management effectiveness. They further underscore the relevance of three contextual variables – culture, climate and the strategic integration of human resource management – as they are also related to more positive performance management outcomes. Implications for research and practice are discussed.     

Volatility spill-overs in commodity spot prices: New empirical results

The classical rational expectations model of commodity markets implies that expected spot price risk is an explanatory variable in spot price regressions; and also that inventory carryover, which is reduced by a larger price variance, creates autoregressive conditional heteroscedastic processes in spot prices. In order to falsify/verify this theory, it has typically been assumed that the square root of the conditional variance of spot prices, a proxy for spot price risk, enters the conditional mean function of spot prices. Based on this simple representation, a typical but counter intuitive outcome has been that spot price risk has an insignificant impact on spot prices, see, e.g., Beck (Beck, S., 1993. A Rational Expectations Model of Time Varying Risk Premia in Commodities Futures Markets: Theory and Evidence. International Economic Review 34, 149–168, Beck, S., 2001. Autoregressive Conditional Heteroskedasticity in Commodity Spot Prices. Journal of Applied Econometrics 16, 115–132). In this paper, we propose an alternative functional relationship (from GARCH(1,1) to GARCH(1,1)-AR(m)) between spot price risk and spot prices that is fully supported by the classical rational expectations model, and based on this new representation we are able to provide stronger empirical support for Muth's rational expectation theory.     

Direct and Multiplicative Effects of Ethical Dispositions and Ethical Climates on Personal Justice Norms: A Virtue Ethics Perspective

From virtue ethics and interactionist perspectives, we hypothesized that personal justice norms (distributive and procedural justice norms) were shaped directly and multiplicatively by ethical dispositions (equity sensitivity and need for structure) and ethical climates (egoistic, benevolent, and principle climates). We collected multisource data from 123 companies in Hong Kong, with personal factors assessed by participants’ self-reports and contextual factors by aggregations of their peers. In general, LISREL analyses with latent product variables supported the direct and multiplicative relationships. Our findings could lay the groundwork for justice research from a morality perspective in future.     

The Food Stamp Program and Food Insufficiency

Food stamp participants have higher food insufficiency rates than eligible nonparticipants, even after controlling for other factors. Given the Food Stamp Program's prominent role in the alleviation of hunger, this is a counterintuitive result. We conjecture that these higher rates are due to adverse selection insofar as households more likely to be food insufficient are also more likely to receive food stamps. We establish a theoretical framework to address this adverse selection. Using a simultaneous equation model with two probits, we show that once one controls for this adverse selection, food stamp recipients have the same probability of food insufficiency as nonrecipients.