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Economic Review (economic + review)
Kinds of Economic Review Selected AbstractsINTRODUCTION TO THE SPECIAL ISSUE OF PACIFIC ECONOMIC REVIEW ON CONTAGIONPACIFIC ECONOMIC REVIEW, Issue 3 2010Bertrand Candelon First page of article [source] THE GRAVITY MODEL: AN ILLUSTRATION OF STRUCTURAL ESTIMATION AS CALIBRATIONECONOMIC INQUIRY, Issue 4 2008EDWARD J. BALISTRERI Dawkins, Srinivasan, and Whalley ("Calibration,"Handbook of Econometrics, 2001) propose that estimation is calibration. We illustrate their point by examining a leading econometric application in the study of international and interregional trade by Anderson and van Wincoop ("Gravity with Gravitas: A Solution to the Border Puzzle,"American Economic Review, 2003). We replicate the econometric process and show it to be a calibration of a general equilibrium model. Our approach offers unique insights into structural estimation, and we highlight the importance of traditional calibration considerations when one uses econometric techniques to calibrate a model for comparative policy analysis. (JEL F10, C13, C60) [source] THE IMPORTANCE OF PRIVATE PROPERTY RIGHTS FOR ECONOMIC GROWTH: THE CASE OF RURAL CHINA, 1979,1987ECONOMIC PAPERS: A JOURNAL OF APPLIED ECONOMICS AND POLICY, Issue 2 2006IAN WILLS This is an extended and slightly revised version of an article by Wills and Yang published in Policy, Vol. 9, No. J, Autumn 1993. The article was derived from a paper by Yang, Wang and Wills published in the China Economic Review in 1992. The idea for the empirical study, the analytical model and the procedure for quantifying changes in property rights came from Xiaokai Yang. The study illustrates his ability to apply inframarginal concepts to real problems. [source] A Note on Viable Proposals,INTERNATIONAL ECONOMIC REVIEW, Issue 4 2002Luc Lauwers Sengupta and Sengupta ("Viable Proposals,"International Economic Review 35 (1994), 347,59.) consider a payoff vector of a TU-game as a viable proposal if it challenges each legitimate contender. They show that for each game the set of viable proposals is nonempty. Their proof, however, has a flaw. I present a proof based upon a result by Kalai and Schmeidler ("An Admissible Set Occurring in Various Bargaining Situations,"Journal of Economic Theory 14 (1977), 402,11). [source] FREE CASH FLOW AND PUBLIC GOVERNANCE: THE CASE OF ALASKAJOURNAL OF APPLIED CORPORATE FINANCE, Issue 3 2000Dwight R. Lee In a widely cited 1986 article in the American Economic Review, Michael Jensen gave the concept of free cash flow (FCF) a new twist by redefining it as cash flow in excess of that required to fund all projects with positive net present values. Put another way, FCF represents funds available in the firm that managers may choose to hold as idle cash, return to shareholders, or invest in projects with returns below the firm's cost of capital. In redefining FCF in this way, Jensen converted FCF from a measure of economic income and value into a measure of corporate assets available for discretionary, and potentially value-destroying, use by firm managers. And, as he argued in his important article, managers in mature businesses with substantial free cash flow have a tendency to destroy value by plowing too much capital back into those businesses or, often worse, making ill-advised acquisitions in unrelated businesses. Several methods have been developed in financial markets and internal corporate governance systems to discourage managers from wasting FCF. Better monitoring by boards of directors, large ownership blocks, and properly aligned management compensation contracts are all parts of the solution. And the extraordinary increase in stock repurchases in recent years, invariably applauded by investors, is another illustration of the market's success in encouraging companies to address their free cash flow problems. But if the "FCF problem" of the private sector has attracted considerable attention from finance scholars, the problem is even more acute in the public sector, where FCF can be thought of as tax revenue in excess of what is required to finance well-defined and generally accepted levels of public services. Unlike the private sector, in the public sector there are neither measures nor mechanisms by which to monitor and constrain wasteful spending by elected officials. In this article, the authors attempt to measure the costs to taxpayers of government FCF using the case of Alaska, which since 1969 has received a huge windfall of tax revenue from North Slope oil leases. After examining the state's public finances from 1968 through 1993, the authors offer $25 billion as a conservative estimate of the social losses from Alaska's waste of free cash flow during that 25-year period. [source] The Role of Feelings in Investor Decision-MakingJOURNAL OF ECONOMIC SURVEYS, Issue 2 2005Brian M. Lucey Abstract., This paper surveys the research on the influence of investor feelings on equity pricing and also develops a theoretical basis with which to understand the emerging findings of this area. The theoretical basis is developed with reference to research in the fields of economic psychology and decision-making. Recent advancements in understanding how feelings affect the general decision-making of individuals, especially under conditions of risk and uncertainty [e.g. Loewenstein et al. (2001). Psychological Bulletin 127: 267,286], are covered by the review. The theoretical basis is applied to analyze the existing research on investor feelings [e.g. Kamstra et al. (2000). American Economic Review (forthcoming); Hirshleifer and Shumway (2003). Journal of Finance 58 (3): 1009,1032]. This research can be broadly described as investigating whether variations in feelings that are widely experienced by people influence investor decision-making and, consequently, lead to predictable patterns in equity pricing. The paper concludes by suggesting a number of directions for future empirical and theoretical research. [source] PUBLIC DEBT AS PRIVATE WEALTH: SOME EQUILIBRIUM CONSIDERATIONSMETROECONOMICA, Issue 4 2006Article first published online: 13 NOV 200, Ekkehart Schlicht ABSTRACT Government bonds are interest-bearing assets. Increasing public debt increases wealth, income and consumption demand. The smaller government expenditure is, the larger consumption demand must be in equilibrium, and the larger must be public debt. Conversely, lower public debt implies higher government spending and taxation. Public debt plays, thus, an important role in establishing equilibrium. It distributes output between consumers and government. In case of insufficient demand, a larger public debt entails higher private consumption and less public spending. If upper bounds on public debt are introduced (as in the Maastricht treaty), such constraints place lower bounds on taxation and public spending and may rule out macroeconomic equilibrium. As an aside, a minor flaw in Domar's (American Economic Review, 34 (4), pp. 798,827) classical analysis is corrected. [source] Technological Change and Transition: Relative Contributions to Worldwide Growth During the 1990s,OXFORD BULLETIN OF ECONOMICS & STATISTICS, Issue 4 2008Oleg Badunenko Abstract In this paper we use the Kumar and Russell [American Economic Review (2002) Vol. 92, pp. 527,548] growth-accounting procedure to examine cross-country growth during the 1990s. Using a data set comprising developed, newly industrialized, developing and transitional economies, we decompose the growth of output per worker into components attributable to technological catch-up, technological change and capital accumulation. In contrast to the study by Kumar and Russell, which concludes that capital deepening is the major force of growth and change in the world income per worker distribution over the 1965,90 period, our analysis shows that, during the 1990s, the major force in the further divergence of the rich and the poor is due to technological change, whereas capital accumulation plays a lesser and opposite role. Finally, although on average we find that transitional economies perform similar to the rest of the world, the procedure is able to discover some interesting patterns within the set of transitional countries. [source] We Ran One Regression,OXFORD BULLETIN OF ECONOMICS & STATISTICS, Issue 5 2004David F. Hendry The controversy over the selection of ,growth regressions' was precipitated by some remarkably numerous ,estimation' strategies, including two million regressions by Sala-i-Martin [American Economic Review (1997b) Vol. 87, pp. 178,183]. Only one regression is really needed, namely the general unrestricted model, appropriately reduced to a parsimonious encompassing, congruent representation. We corroborate the findings of Hoover and Perez [Oxford Bulletin of Economics and Statistics (2004) Vol. 66], who also adopt an automatic general-to-simple approach, despite the complications of data imputation. Such an outcome was also achieved in just one run of PcGets, within a few minutes of receiving the data set in Fernández, Ley and Steel [Journal of Applied Econometrics (2001) Vol. 16, pp. 563,576] from Professor Ley. [source] Strategic Bidding By Potential Competitors: Will Monopoly Persist?THE JOURNAL OF INDUSTRIAL ECONOMICS, Issue 2 2000Yongmin Chen Who will win the bidding to become the sole producer of a new product: the monopolist of a related product or a new entrant? When there exists potential entry to the monopolist's existing business, the standard result that monopoly persists (Gilbert and Newbery, ,Preemptive Patenting and the Persistence of Monopoly', American Economic Review, 72, pp. 514,526, 1982) may or may not hold, depending crucially on how the new product relates to the existing product of the monopolist. The monopolist tends to win the bidding and to dominate both products if the two products are strategic complements; and the entrant tends to win the bidding if the two products are strategic substitutes. [source] Income Distribution, Price Elasticity and the ,Robinson Effect'THE MANCHESTER SCHOOL, Issue 5 2004Corrado Benassi In The Economics of Imperfect Competition, Joan Robinson argued that an increase of the consumers' incomes should make demand less elastic,which, although reasonable about individual demand as an assumption on preferences, suggests a role for income distribution as far as market demand is concerned. We use Esteban's (International Economic Review, Vol. 27 (1986), No. 2, pp. 439,444) income share elasticity to provide sufficient conditions on income distribution that support the ,Robinson effect',i.e. such that a negative (positive) relationship between individual income and price elasticity translates into a negative (positive) relationship between mean income and market demand elasticity. The paper also provides a framework to study the effects of distributive shocks on the price elasticity of market demand. [source] TIME-VARYING UNCERTAINTY AND THE CREDIT CHANNELBULLETIN OF ECONOMIC RESEARCH, Issue 4 2008Victor Dorofeenko E4; E5; E2 ABSTRACT We extend the Carlstrom and Fuerst (American Economic Review, 1997, 87, pp. 893,910) agency cost model of business cycles by including time-varying uncertainty in the technology shocks that affect capital production. We first demonstrate that standard linearization methods can be used to solve the model yet second moments enter the economy's equilibrium policy functions. We then demonstrate that an increase in uncertainty causes, ceteris paribus, a fall in investment supply. We also show that persistence of uncertainty affects both quantitatively and qualitatively the behaviour of the economy. [source] A methodological framework of preparing economic evidence for selection of medicines in the Chinese settingJOURNAL OF EVIDENCE BASED MEDICINE, Issue 3 2010Xin Sun Medicines are becoming a major component of health expenditure in China. Selection of effective and cost-effective medicines represents an important effort to improve medicines use. A guideline on cost-effectiveness studies has been available in China. This guideline, however, fails to be a practical tool to prepare and critically appraise economic evidence. This article discusses, in the Chinese context, the approach to integrating economic component into the medicines selection, and elaborates the methods of producing economic evidence, including conducing economic reviews and primary economic studies. [source] | ||||||||||