Measuring lifetime poverty

This paper presents an axiomatic framework for measuring lifetime poverty over multiple periods. For an individual, we argue that lifetime poverty is influenced by both the “snapshot” poverty of each period and the poverty level of the “permanent” lifetime consumption; it is also influenced by how poverty spells are distributed over the lifetime. We axiomatically characterize classes of lifetime poverty indices and derive dominance conditions of poverty orderings for both individual and societal lifetime poverty measurements.     

Foreign direct investment and business cycle co-movements: The panel data evidence

The previous literature has largely overlooked the possible channels through which foreign direct investment (FDI) might influence business cycle synchronization. In this study we analyze the linkages that exist among FDI, trade and industrial dissimilarity in relation to business cycle co-movements using a panel data set taken from 77 pairs of developed countries. The error component three-stage least squares (EC3SLS) estimates from a simultaneous equations model with panel data are shown to be superior to the estimates obtained from single equation models or simultaneous equations models with cross-sectional data. Our results indicate that FDI serves as a channel of international business cycle transmission that is equally important as the channels of trade and monetary policy. On the contrary, industrial dissimilarity is identified as having an indirect impact on the business cycle correlation through trade and FDI. Furthermore, our findings suggest that in our sample FDI is of the horizontal type and tends to substitute for trade.     

Uncertain spatial demand and price flexibility: A state space approach to duopoly

Sufficient conditions for a unique price equilibrium, in terms of the uncertainty distribution and the state contingent consumer distributions, are given for spatial duopoly. Also considered are efficiency and endogenous locations for the symmetric case and comparative statics on price flexibility.     

Direct evidence of risk aversion as a source of advantageous selection in health insurance

Using the self-stated degree of risk aversion regarding health from the GSOEP we find some evidence for risk aversion being a source of advantageous selection. Risk averse men more often procure supplementary insurance for hospital visits despite needing the additional coverage less.     

Effective property rights, conflict and growth

This paper shows how the interaction between conflict and growth can give rise to a nonmonotone relationship between property rights and social welfare. This interaction is illustrated in a model of endogenous growth in which equilibrium diversion of resources is the cost of securing effective property rights. A symmetric equilibrium allocation associated with more secure property rights and faster growth can be Pareto dominated by one associated with poorer property rights and slower growth. Faster growth can exacerbate the problem of diversion whenever property rights are sufficiently poor. These results call for caution before a society decides to pursue economic growth independently of the institutional structure of property rights. Furthermore, if this structure is inappropriate piecemeal reform might not be in the interest of society, and a substantial reform might be necessary if it is to be welfare-improving.     

The Bertrand Paradox,the Useless Auctioneer and the Launhardt Model

We revisit the Cournot–Bertrand debate in the light of Cournot, Edgeworth and Launhardt, tracing back to Launhardt the origin of price competition in duopoly models with constant returns to scale. Then, we discuss the formalisation of consumer utility function for differentiated products, first appearing in Launhardt and then in Bowley. This allows us to point out that assuming that firms know the demand function(s) is equivalent to assuming that they know the structure of consumer preferences. Therefore, we argue that there is no role for the auctioneer, either in Cournot or in Walras.     

Entry,reputation and intellectual property rights enforcement

We examine how reputation concerns induce a multinational to partly withhold its entry into a developing country under weak intellectual property rights (IPR) enforcement. Equilibrium IPR violations are shown to arise only in the presence of such concerns. Holding constant a multinational's incentive to innovate, better IPR enforcement encourages entry but reduces social welfare. The multinational's incentive to innovate may be inversely U‐shaped in the strength of IPR enforcement. If timed properly, however, stronger IPR enforcement can foster innovation without compromising social welfare. Testable implications concerning observable IPR violations are derived.     

Remittances and the human capital of children: New evidence from Kyrgyzstan during revolution and financial crisis, 2005–2009

We analyze the effect of the receipt of remittances on the education and health of children in Kyrgyzstan during a volatile period of their recent history, 2005–2009. The country experienced revolution in 2005 and the global financial crisis beginning in 2008. Both events impact human capital investment, and the changes vary by region of the country. We use fixed effects estimation and fixed effects, instrumental variables estimation to isolate the effects of remittances and other events on human capital. We find that boys aged 14–18 in remittances’ receiving households are less likely to be enrolled in school than other children. We also find that girls in remittances’ receiving households are more likely to be malnourished (thin). Both effects are relatively small. Remittances do not improve the human capital of children left behind. However, we do find an overall positive improvement in school enrollment among young children between 2005 and 2009 but a negative trend in enrollment among older boys and girls. Nutrition improves over time. Regional differences are apparent in these trends in nutrition and education.     

REVISITING GLOBALIZATION CHALLENGES AND OPPORTUNITIES IN THE DEVELOPMENT OF COOPERATIVES

Cooperatives have gained prominent attention in recent years as strategic elements to achieve sustainable economic development and greater social cohesion in the context of neoliberal globalization. This article explores, theoretically, the current challenges and opportunities for cooperatives to develop successfully in the globalizing economy. To this end, we provide an analytical, critical review of the key bibliography concerning some fundamental aspects that shape the relationship between economic globalization and cooperatives, an issue that has been generally neglected by previous literature. Three key fields are addressed: 1) the viability of cooperatives, based on their strengths and possible weaknesses, under current globalization; 2) the role of these organizations in promoting the local development and stability of local communities; and 3) the tensions and potentialities that internationalization entails for cooperatives. Based on the analytical review and the organization of the literature, we propose an agenda for further research. This includes some hypotheses and strategies for testing them that would be essential to assess the role of cooperatives in economic globalization, and sheds light on key areas for future research that could provide a better understanding of the complexity surrounding the relationship between globalization and cooperatives.     

Measuring and Accounting for the Deprivation Gap of Portuguese Immigrants in Luxembourg

This paper examines the relative well‐being of Portuguese immigrants in Luxembourg by looking at indicators of material deprivation. We document material deprivation differences between immigrants and nationals—the “deprivation gap”—and measure the extent to which income differentials (and other sociodemographic differences) explain this gap using a combination of non‐parametric methods and a versatile graphical device. We find a large and significant deprivation gap against Portuguese immigrants, whatever the indicator considered. The extent to which the gap is merely a reflection of differences in income, however, depends on what deprivation items are taken into consideration. Income differences almost fully account for material deprivation differences when the latter is measured using the items included in the official EU social indicator of material deprivation. Inclusion of housing condition indicators mitigates this relationship and we then find compelling evidence that the deprivation gap is not entirely accounted for by income differentials.