The Poverty of Politics: How Income Redistribution Hurts the Poor

In spite of the significant research literature identifying a tradeoff between income redistribution and economic growth, massive public programs have been implemented to help the poor by transferring income to them. Since Lyndon Johnson's war on poverty began in 1964, over 3.5 trillion dollars have been transferred. However, the possibility that everyone, including the poor, may in fact be made worse off by the transfer has largely been ignored. With a simple algebraic model, the authors demonstrate that, over time, both high and low-income groups are harmed by redistribution. In addition, social mobility, as well as political concerns with relative poverty and international income redistribution increases the damage to all income groups produced by redistribution.     

Industrial Policy and Technology Diffusion: Evidence from Paper Making Machinery in Indonesia

In this paper, we analyze the diffusion and adoption of paper making machinery in the Indonesian pulp and paper industry, from 1923 till 2000. We develop a machine level index of technological sophistication (mach), which measures the technological distance of each paper machine to the world technological frontier. The data reveal a pattern of rapid technological catch up. But catch up was not an industrywide phenomenon. Some modern firms installed state-of-the-art machinery, while others installed older vintages. The paper argues that industrial policy has played an important role in the speed and nature of diffusion of paper making machinery.     

Fixed-Term Contracts and Labor Market Duality in France

The French labor market is segmented between permanent and temporary workers. The second category has difficulty in getting an open-ended contract. This paper aims at depicting workers on short-term contracts and shows the consequences on their professional career are negative and significant. A large part of the wage gap between permanent and temporary workers remains unexplained by observable characteristics. They receive less on-the-job training and their likelihood of obtaining a stable job is lower than 30% after 1 year and a half. They have also a higher probability of being the adjustment variable in case of an economic negative shock. These different findings show the importance of using public policies to encourage transitions from fixed-term to permanent employment and reducing labor-market duality.     

The Surge in Short-Duration Contracts in Spain

Until the outbreak of the recent economic and financial crisis, Spain was leading the ranking of countries with the largest share of temporary employees. During the crisis this share has fallen to its lowest level in decades, but this does not mean that working conditions in Spain have improved. The flow of new temporary contracts is larger than ever before. A particularly striking feature is the steep growth in the volume of fixed-duration contracts lasting less than a week or a month. We document these trends and analyse how this phenomenon has affected the transition from temporary to permanent employment.     

The Diffusion of Local Differentiated Waste Disposal Taxes in the Netherlands

The diffusion of a novel taxing scheme (among Dutch municipalities over the period 1998–2005) is studied in which the waste disposal tax is increasing in the amount of waste a household produces. Inspection of the rise and spread of this tax shows that it is contagious: the probability of introduction is increasing in the number of neighboring municipalities that have already introduced this taxing scheme. A possible rationale is that the tax encourages the dumping of waste in neighboring municipalities. These municipalities may then introduce a similar tax to prevent dumping (spillover effect). Using panel data and a recently developed spatial probit approach (Elhorst et al. in J Appl Econom 32:422–439, 2017), it is possible to distinguish this spillover effect from time-specific effects. The results indicate the presence of strong spillovers.     

Oil Price Shocks and the Credit Default Swap Market

We investigate the impact of supply and demand shocks in the global crude oil market on the CDX spread, in the context of a structural VAR model based on monthly data, over the period from November 2003 to October 2015. We find that the reaction of the CDX spread to changes in the real price of crude oil differs considerably depending on the sources of shocks. In the long run, crude oil supply shocks, aggregate demand shocks, and oil-specific demand shocks together account for nearly 90% of the variation of the CDX spread.     

Currency Misalignments in the BRIICS Countries: Fixed Vs. Floating Exchange Rates

In the present paper we attempt to investigate whether the real effective exchange rates of the BRIICS countries, namely Brazil, Russia, India, Indonesia, China and South Africa, converge or not to their equilibrium levels. Our analysis is based on the use of an external balance model as well as the implementation of recent panel cointegration techniques. Our evidence indicates the existence of a valid long-run relationship between the real effective exchange rate, the net foreign assets, the GDP differential and the real interest rate differential for each of the six countries of our sample. Furthermore, our empirical results imply that after the adoption of a free floating exchange rate regime by Brazil, Russia, India, Indonesia and South Africa and the liberalisation of the Chinese exchange rate policy that took place during the last decade, currency misalignments have been gradually reduced, leading the real effective exchange rates of the respective currencies very close to their equilibrium levels.