Does migration arbitrage regional labor market differentials?

"This paper examines the determinants of regional migration [in the United States] in the 1980s using a place-to-place migration model in which migration flows depend upon the relative economic opportunities in the origin and destination regions. Using the results of the model, we then examine the potential role for migration in diffusing the economic pressures associated with disparate regional economic growth. Although the results reinforce the notion that divergent regional growth was an impetus to migration in the 1980s, estimates of the employment status of movers suggest that the true effects of migration on unemployment differentials may be quite small."     

Oblivious equilibrium for concentrated industries

This article explores the application of oblivious equilibrium (OE) to highly concentrated markets. We define a natural extended notion of OE, called partially oblivious equilibrium (POE), that allows for there to be a set of strategically important firms (the “dominant” firms), whose firm states are always monitored by every other firm in the market. We perform computational experiments that explore the characteristics of POE, OE, and Markov perfect equilibrium (MPE), and find that POE generally performs well in highly concentrated markets. We also derive error bounds for evaluating the performance of POE for cases where MPE cannot be computed.     

The Incidence of Public Spending on Healthcare: Comparative Evidence from Asia

The article compares the incidence of public healthcare across11 Asian countries and provinces, testing the dominance of healthcareconcentration curves against an equal distribution and Lorenzcurves and across countries. The analysis reveals that the distributionof public healthcare is prorich in most developing countries.That distribution is avoidable, but a propoor incidence is easierto realize at higher national incomes. The experiences of Malaysia,Sri Lanka, and Thailand suggest that increasing the incidenceof propoor healthcare requires limiting the use of user fees,or protecting the poor effectively from them, and building awide network of health facilities. Economic growth may not onlyrelax the government budget constraint on propoor policies butalso increase propoor incidence indirectly by raising richerindividuals' demand for private sector alternatives.     

Assessing fiscal sustainability subject to policy changes: a Markov switching cointegration approach

We propose a Markov switching cointegration approach to assess long run fiscal sustainability. This method allows us to simultaneously: (1) test for cointegration in the presence of significant fiscal policy changes; (2) assess the type of fiscal regime that a country experienced at a given period and (3) analyse the timing of the transition between the estimated regime types. Given its flexibility, our approach enable us to uncover a richer and more complex dynamics in the analysis of fiscal sustainability, which standard linear cointegration methods fail to capture.     

Industry dynamics: Foundations for models with an infinite number of firms

This paper explores the connection between three important threads of economic research offering different approaches to studying the dynamics of an industry with heterogeneous firms. Finite models of the form pioneered by Ericson and Pakes (1995) capture the dynamics of a finite number of heterogeneous firms as they compete in an industry, and are typically analyzed using the concept of Markov perfect equilibrium (MPE). Infinite models of the form pioneered by Hopenhayn (1992), on the other hand, consider an infinite number of infinitesimal firms, and are typically analyzed using the concept of stationary equilibrium (SE). A third approach uses oblivious equilibrium (OE), which maintains the simplifying benefits of an infinite model but within the more realistic setting of a finite model. The paper relates these three approaches. The main result of the paper provides conditions under which SE of infinite models approximate MPE of finite models arbitrarily well in asymptotically large markets. Our conditions require that the distribution of firm states in SE obeys a certain “light-tail” condition. In a second set of results, we show that the set of OE of a finite model approaches the set of SE of the infinite model in large markets under a similar light-tail condition.     

Impact of copula choice on the modeling of crop yield basis risk

A number of problems in agricultural economics involve modeling joint distributions for which the assumption of multivariate normality may not be warranted. Yet, very little work has been conducted evaluating competing methods for modeling joint dependence. We develop a simulation framework to evaluate the bias and efficiency impacts of copula choice in the context of evaluating county‐to‐farm basis risk. The results suggest significant differences in performance across various copulas and approaches. The findings have important implications for risk analysis, insurance, and policy modeling problems in agriculture regarding the selection of method to model dependence among random variables.     

Do U.S. citizens support government intervention in agriculture? Implications for the political economy of agricultural protection

The persistence of agricultural protectionism throughout the world is intriguing given the widely recognized benefits of free trade. The political economy literature over the last decades has considered groups’ interest, politicians’ preferences, and their interactions within domestic politics as the primary forces driving agricultural protection. Yet, a growing body of studies suggests that it would be judicious to weigh in consumers’ or taxpayers’ perspectives in deciphering the nature of agricultural protection. This study examines U.S. citizens’ preferences about government intervention in agriculture and trade. Results show that they are in strong support of agricultural protection and their perceptions of national food security, family farms, environmental sustainability, and multifunctionality of agriculture play a significant role in shaping their support/opposition toward government intervention. The conventional political economy literature theorizes that consumers or taxpayers would oppose public policies that increase their tax burden; however, in the case of the farm sector, they have little incentive to voice their objections given the costs of farm programs are spread across a large number of consumers and taxpayers. U.S. citizens’ support for government involvement in agriculture as reported in this and other prior studies does not lend support for such political economy explanation.     

Embedding multinational firms in regional business systems: neoliberal and social‐democratic models in Spain

The paper analyses how regional actors have mobilised to attract and retain foreign direct investment in two Spanish regions with different political approaches to the management of economic issues, including industrial relations. These regions are Madrid, the main pole of attraction of foreign direct investment in Spain, and Asturias, with a large tradition of heavy industry and a greater dependence on a small number of large employers. It finds the regions have adapted to international competition in substantially different manners and considers the alternative reasons why this might be the case, highlighting the role of organised labour both in the inward investment regimes themselves, and in shaping the nature of the different compromises they involve.     

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.     

Export channel dynamics: an empirical investigation

We investigate the dynamics of export channel arrangements by modelling foreign operation method decisions as the interplay between factors that motivate switches and factors that deter them. Our model extends previous analyses by looking simultaneously at (1) no change of channel arrangement, (2) replacements of foreign intermediaries (within‐mode shifts), and (3) integration of the sales function abroad (between‐mode shifts). We use a multinomial logit model on longitudinal data from a sample of Danish exporters that had entered foreign markets through intermediaries. The results suggest that the decision to carry out within‐mode shifts (i.e. to replace an existing intermediary) is driven by a different set of factors than the decision to switch to another foreign operation mode (i.e. to in‐house operations). Copyright © 2005 John Wiley & Sons, Ltd.