THE WEALTH OF NATIONS: GROWTH, IDEAS, AND TECHNOLOGY

In the following articles Freedman and Jordan examine institutional arrangements that promote high and rising incomes. The quality of institutions may be as important as human capital, investment, and population growth in determining which nations are most prosperous.     

Crash-related factors associated with the severity of road traffic injuries in Iran

Although the impact of traffic crashes is very high in Iran, there are few works on the association of crash-related factors with injury severity. This study was conducted on 145 drivers injured on the Qazvin-Loshan road in order to assess this association. The New Injury Severity Score (NISS), based on the conditions of the injured drivers during their first visit to regional hospitals, was used as the main outcome measure. Multiple linear regression analysis was performed by considering logarithmic scale for NISS as response variable and adjusting for the confounding effects, including the transfer to hospital variables. The results showed that high-vehicle damage (i.e. damage with repair cost more than 25% of the pre-crash value of the driver's vehicle) and being trapped inside the motor vehicle raised the NISS by 5.25 (95% confidence interval (CI) 2.51-10.71) and 2.34 (95% CI 1.20-4.67), respectively.     

Savings behaviour in low-income countries

The empirical literature on savings in low-income countrieshas exploited some remarkable data sets to shed new light onsavings behaviour in the poor agricultural households that makeup the majority of the population in such countries. A numberof conclusions have emerged: (i) the degree of consumption smoothingover seasons within the year and across years, in response tovery large income fluctuations, is higher than was supposed;(ii) the lack of complete insurance and credit markets, however,is manifested in asset stocks and asset compositions among farmers,especially small farmers, that are inefficient; (iii) the combinationof low and volatile incomes is an important cause of inefficiencyand income inequality; (iv) the proximity of formal financialinstitutions increases financial savings and crowds out informalinsurance arrangements, thus, in principle, better facilitatingfinancial intermediation; and (iv) simple life-cycle modelsof savings do not appear to explain long-term savings in low-incomesettings.     

A test of the Cox, Ingersoll, and Ross model of the term structure

We test the theory of the term structure of indexed bond pricesdue to Cox, Ingersoll, and Ross (CIR). The econometric methoduses Hansen.'s generalized method of moments and exploits theprobability distribution of the single-state variable in CIR.'smodel, thus avoiding the use of aggregate consumption data.It enables us to estimate a continuous-time model based on discretelysampled data. The tests indicate that CIR's model for indexbonds perform reasonably well when confronted with short-termTreasury-bill returns. The estimates indicate that term premiumsare positive and that yield curves can take several shapes.However, the fitted model does poorly in explaining the serialcorrelation in real Treasury-bill returns.