Beyond Flying Geese: The Expansion of East Asia's Electronics Trade

The flying geese (FG) hypothesis, which asserts the sequential catching‐up processes of the latecomers, holds well in the past. Yet a simultaneous boom within the electronics industry across East Asia casts doubt on the applicability of the hypothesis. By using the RCA and NET indices, the paper finds that the FG pattern shows in the electronics industry as a whole, but not always so at the disaggregated level. This suggests that the FG formation may not appear in other industries, if they are involved in international production fragmentation or have differentiated products, and if certain latecomers have become new leaders.     

Book Reviews

Books reviewed:
Ian Phimister, Violence and Memory: One Hundred Years in the 'Dark Forests' of Matabeleland
Dagfinn Gatu, Social and Political Change in Revolutionary China: The Taihang Base Area in the War of Resistance to Japan, 1937–1945
Marc Blecher, Sources of Chinese Economic Growth 1978–1996
Louise Fortmann, Modern Forests: Statemaking and Environmental Change in Colonial Eastern India
Frank Dikötter, Revolutionizing the Family: Politics, Love, and Divorce in Urban and Rural China, 1949–1968
Ben Fine, The World Bank: Structure and Policies
Jonathan Pincus, Economic Transition in Vietnam: Trade and Aid in the Demise of Centrally Planned Economy
Vivek Chibber, An Agrarian History of South Asia, The New Cambridge History of India, IV, 4     

INCOME INEQUALITY, RECIPROCITY AND PUBLIC GOOD PROVISION: AN EXPERIMENTAL ANALYSIS

This paper analyses the impact of income inequality on public good provision in an experimental setting. A sample of secondary school students were recruited to participate in a simple linear public goods game where income heterogeneity was introduced by providing participants with unequal token endowments. The results show that endowment heterogeneity does not have any significant impact on contributions to the public good, and that consistent with models of reciprocity, low and high endowment players contribute the same fraction of their endowment to the public pool. Moreover, individuals appear to adjust their contributions in order to maintain a fair share rule.     

Notes on some present day Questions regarding Mortality

Abstract

In the absence of any definite development of actuarial science in Great Britain which would be a suitable subject for this paper I considered that the most useful course would be to discuss some of the problems which are at present exercising my own mind, and no doubt the minds of many of my colleagues. Probably, many of these questions are akin to others which arise in other countries, so that their discussion at a meeting such as this may prove of mutual interest, while even if they are peculiar to ourselves, a disclosure of our doubts and difficulties will indicate the directions in which future developments may be expected. I must, however, emphasize that any views expressed are purely personal, and do not in any way pretend to represent a consensus of British actuarial opinion. Throughout this paper only Ordinary (as opposed to Industrial) business in considered.     

Consumption-leisure nonseparabilities in asset market participants’ preferences

We use panel data to estimate nonlinear Euler equations for preferences that are nonseparable in consumption and leisure. This approach departs from existing panel data studies that investigate linearizations and/or separable preferences. Intuitively plausible estimates are obtained only when excluding nonassetholders from the sample, which indicates the importance of asset market participation. For market participants, estimated parameter values are intuitively appealing, but differ from existing estimates. They also differ from parameter values commonly used in computational experiments. These findings have implications for the extensive literature in macroeconomics and finance that studies models of intertemporal decision-making, and they confirm the importance of market incompleteness.     

Monetary Policy Transmission with Interbank Market Fragmentation

This paper shows how interbank market fragmentation disrupts the transmission of monetary policy. Fragmentation is the fact that banks, depending on their country of location, have different probabilities of default on their interbank borrowings. Once fragmentation is introduced into standard theoretical models of monetary policy implementation, excess liquidity arises endogenously. This leads short-term interest rates to depart from the central bank policy rates. Using data on monetary policy operations, I show that this mechanism has been at work in the euro area since 2008. The model is used to analyze conventional and unconventional monetary policy measures.     

What is the objective of professional licensing? Evidence from the US market for lawyers

According to public interest theory, professional licensing solves the lemon problem generated by asymmetric information. In contrast, the capture theory claims that licensing aims at increasing professional salaries by restricting supply. This paper shows that the two theories can be identified using data from one regulated profession and provides an empirical application to the US market for entry level lawyers. The empirical results support capture theory.     

The State of Charity Accounting – Developments, Improvements and Continuing Problems

This paper is based on a survey of charity accounts undertaken for the Office for National Statistics during the period 1995–1996, and reviews current charity accounting practices of some of these charities in 1994/5 prior to the inception of the new accounting regime from 1996. We look at the accounting practices identified by Bird and provide a comparison between the original Bird analysis in 1981 and current practices in 1994/5. We also consider smaller surveys undertaken in 1989 and 1990. The paper concludes that whilst there has been some progress – particularly among larger charities – since the Bird study there are still major accounting anomalies and examples of poor practice. The paper calls upon auditing firms to be less tolerant of inadequate sets of accounts and points to their pivotal role in improving charity accounting pratices.     

How do very open economies adjust to large immigration flows? Evidence from Spanish regions

We study the labor market effects of the large immigration wave in Spain between 2001 and 2006. In this period the foreign-born share increased from 6% to 13%, with a total inflow exceeding three million immigrants. Our analysis exploits the large variation in the size of immigration flows across Spain's regions. To identify causal effects, we take advantage of the fact that immigrants' location choices were strongly driven by early migrant settlements that arrived during the 1980s. We find that the relatively unskilled migration inflows did not affect the wages or employment rates of unskilled workers in the receiving regions. The growth of the unskilled labor force was absorbed mostly through increases in total employment. This increase did not originate in changes in the composition of regional output, but was instead driven by changes in skill intensity at the industry level. Regions that received a large inflow of unskilled immigrants increased the intensity of use of the now more abundant (unskilled) labor, relative to other regions. The key industries responsible for this absorption were retail, construction, hotels and restaurants and domestic services. These results are inconsistent with standard open economy models but are in line with recent empirical studies for the United States and Germany.