Search results

1 – 10 of 11
To view the access options for this content please click here
Article
Publication date: 1 February 1983

STEPHEN S. SMITH

The past two decades of economic activity in the U.S. have been characterized by both high inflation and interest rates in comparison to previous periods of stability. The…

Abstract

The past two decades of economic activity in the U.S. have been characterized by both high inflation and interest rates in comparison to previous periods of stability. The importance of these two variables to our economic welfare and to the effectiveness of economic policy have led to renewed interest in the Fisher Effect. This is the hypothesis put forth by Irving Fisher describing the relationship between these two variables. It usually takes the form R = re + pe + repe (1) in which R is the nominal rate of interest, re is the expected real rate of interest, and pe is the expected rate of change of prices. The term repe is usually considered insignificant and is dropped, giving R = re + pe. (2) Although this equation can be readily quantified on an ex post basis using actual rather than expected values, the fact that expectation of r and p are not directly observable have always made it difficult to derive an ex ante measure of the real rate.

Details

Studies in Economics and Finance, vol. 7 no. 2
Type: Research Article
ISSN: 1086-7376

To view the access options for this content please click here
Article
Publication date: 18 April 2008

Goncalo Monteiro and Stephen J. Turnovsky

Recent research supports the role of productive government spending as an important determinant of economic growth. Previous analyses have focused on the separate effects…

Downloads
1848

Abstract

Purpose

Recent research supports the role of productive government spending as an important determinant of economic growth. Previous analyses have focused on the separate effects of public investment in infrastructure and on investment in education. This paper aims to introduce both types of public investment simultaneously, enabling the authors to address the trade‐offs that resource constraints may impose on their choice.

Design/methodology/approach

The authors employ a two‐sector endogenous growth model, with physical and human capital. Physical capital is produced in the final output sector, using human capital, physical capital, and government spending on infrastructure. Human capital is produced in the education sector using human capital, physical capital, and government spending on public education. The introduction of productive government spending in both sectors yields an important structural difference from the traditional two‐sector growth models in that the relative price of human to physical capital dynamics does not evolve independently of the quantity dynamics.

Findings

The model yields both a long‐run growth‐maximizing and welfare‐maximizing expenditure rate and allocation of expenditure on productive capital. The welfare‐maximizing rate of expenditure is less than the growth‐maximizing rate, with the opposite being the case with regard to their allocation. Moreover, the growth‐maximizing value of the expenditure rate is independent of the composition of government spending, and vice versa. Because of the complexity of the model, the analysis of its dynamics requires the use of numerical simulations the specific shocks analyzed being productivity increases. During the transition, the growth rates of the two forms of capital approach their common equilibrium from opposite directions, this depending upon both the sector in which the shock occurs and the relative sectoral capital intensities.

Research limitations/implications

These findings confirm that the form in which the government carries out its productive expenditures is important. The authors have retained the simpler, but widely employed, assumption that government expenditure influences private productivity as a flow. But given the importance of public investment suggests that extending this analysis to focus on public capital would be useful.

Originality/value

Two‐sector models of economic growth have proven to be a powerful tool for analyzing a wide range of issues in economic growth. The originality of this paper is to consider the relative impact of government spending on infrastructure and government spending on human capital and the trade‐offs that they entail, both in the long run and over time.

Details

Indian Growth and Development Review, vol. 1 no. 1
Type: Research Article
ISSN: 1753-8254

Keywords

To view the access options for this content please click here
Article
Publication date: 1 February 1997

Stanley C.W. Salvaiy

Several tests have been conducted to determine which valuation model best fits stock price data. Given very little success, those studies suggest the need for a clear…

Abstract

Several tests have been conducted to determine which valuation model best fits stock price data. Given very little success, those studies suggest the need for a clear understanding of the market process of stock price determination. This paper advances the concepts of product costing and product pricing, which pertain to financial accounting valuation and the stock market price determination, respectively. This research effort presents a workable hypothesis of stock price determination.

Details

Studies in Economics and Finance, vol. 18 no. 1
Type: Research Article
ISSN: 1086-7376

To view the access options for this content please click here
Article
Publication date: 31 August 2012

Romar Correa

The purpose of this paper is to make a case for an international clearing house.

Downloads
335

Abstract

Purpose

The purpose of this paper is to make a case for an international clearing house.

Design/methodology/approach

The systems postulate is used: the whole is greater than the sum of the parts. Specifically, the 2007 Godley‐Lavoie model is exploited.

Findings

Domestic banking arrangements are institutionally fragile; they import stability from their central banks. In like manner, relations between central banks must be conducted under a common metric, a world money.

Originality/value

The paper shows that a technical argument for a multilateral clearing house will not be found. The author teases “implicit dynamics” (Stephen Turnovsky) out of national income identities.

Details

Journal of Economic Studies, vol. 39 no. 4
Type: Research Article
ISSN: 0144-3585

Keywords

To view the access options for this content please click here

Abstract

Details

The Theory of Monetary Aggregation
Type: Book
ISBN: 978-0-44450-119-6

To view the access options for this content please click here
Article
Publication date: 1 April 1992

Ching‐chong Lai and Wen‐ya Chang

Analyses how the status of balance of payments follows se\ill\fulfilling expectations of currency devaluation. It is found that beforea currency devaluation, whether the…

Abstract

Analyses how the status of balance of payments follows se\ill\ fulfilling expectations of currency devaluation. It is found that before a currency devaluation, whether the economy w\ill\ experience a balance‐of‐payments surplus or deficit crucial depends on the degree of capital mobility.

Details

Journal of Economic Studies, vol. 19 no. 4
Type: Research Article
ISSN: 0144-3585

Keywords

To view the access options for this content please click here
Book part
Publication date: 4 February 2011

Abstract

Details

Contributions to Economic Analysis
Type: Book
ISBN: 978-0-85724-721-6

To view the access options for this content please click here
Book part
Publication date: 26 August 2019

Howard Bodenhorn, Timothy W. Guinnane and Thomas A. Mroz

Long-run changes in living standards occupy an important place in development and growth economics, as well as in economic history. An extensive literature uses heights to…

Abstract

Long-run changes in living standards occupy an important place in development and growth economics, as well as in economic history. An extensive literature uses heights to study historical living standards. Most historical heights data, however, come from selected subpopulations such as volunteer soldiers, raising concerns about the role of selection bias in these results. Variations in sample mean heights can reflect selection rather than changes in population heights. A Roy-style model of the decision to join the military formalizes the selection problem. Simulations show that even modest differential rewards to the civilian sector produce a military heights sample that is significantly shorter than the cohort from which it is drawn. Monte Carlos show that diagnostics based on departure from the normal distribution have little power to detect selection. To detect height-related selection, we develop a simple, robust diagnostic based on differential selection by age at recruitment. A companion paper (H. Bodenhorn, T. Guinnane, and T. Mroz, 2017) uses this diagnostic to show that the selection problems affect important results in the historical heights literature.

To view the access options for this content please click here
Article
Publication date: 6 July 2010

Muhammad Shahbaz

The purpose of this paper is to investigate the relationship between income inequality and economic growth, both in linear and non‐linear specifications.

Downloads
3802

Abstract

Purpose

The purpose of this paper is to investigate the relationship between income inequality and economic growth, both in linear and non‐linear specifications.

Design/methodology/approach

The paper has employed annual time series data over the period of 1971 up to 2005. Autoregressive distributed lag model (ARDL) bounds testing approach has been used for cointegration and error correction model for short run behavior. Unit root problem is handled by the use of augmented Dickey‐Fuller unit root test.

Findings

The analysis findings are sharply contrasted to the significant association between income inequality and economic growth found in 1994 by Alesina and Roderick and by Persson and Tabellini. The empirical evidence provides support for the existence of Kuznets inverted‐U as well as inverted S‐shaped curve in Pakistan.

Practical implications

This paper opens up new directions for policy‐making authorities to equalize income distribution in the case of a small transition economy like Pakistan.

Originality/value

This paper convincingly argues that there is a need for case‐by‐case study on such a project in view of each country's unique characteristics. This paper makes a unique contribution to the literature with reference to Pakistan, being a pioneering attempt that employs ARDL cointegration approach.

Details

International Journal of Social Economics, vol. 37 no. 8
Type: Research Article
ISSN: 0306-8293

Keywords

To view the access options for this content please click here
Article
Publication date: 28 August 2009

Romar Correa

The purpose of this paper is to appraise the transition from bank‐based systems to universal banking.

Downloads
834

Abstract

Purpose

The purpose of this paper is to appraise the transition from bank‐based systems to universal banking.

Design/methodology/approach

The Wynne Godley and Francis Cripps macroeconomic framework is used to structure the argument.

Findings

It is shown that the activity of oligopolistic firms leads, through their build‐up of inventories, to an unstable system. However, the industrial structure of an economy might be embedded in a network of inter‐bank linkages. The coupling of real and credit activities delivers a weak stability.

Research limitations/implications

The paper is an attempt to marry a structural cycle model with the institutional transformations. The cyclical model could be made more complex and the institutional analysis richer, thereby generating a thicker set of connections between the two.

Practical implications

The conclusion is that firewalls should be reconstructed between the traditional functions of banks as a conduit in the production of goods and services, and other financial entities involved in financial innovations.

Originality/value

Schools of political economy that theorise the transformation of the regime of accumulation of yesteryear are synthesised into financialisation and potential instability.

Details

International Journal of Social Economics, vol. 36 no. 10
Type: Research Article
ISSN: 0306-8293

Keywords

1 – 10 of 11