Liberalization, FDI, and Growth in Developing Countries: A Panel Cointegration Approach

Using a panel cointegration framework, the article explores the two-way link between FDI and growth for a panel of 23 developing countries. In addition, it investigates the impact of liberalization on the dynamics of the FDI and GDP relationship. A long-run cointegrating relationship is found between FDI and GDP after allowing for heterogeneous country effects. The cointegrating vectors reveal a bidirectional causality between GDP and FDI for more open economies. For relatively closed economies, long-run causality appears unidirectional and runs from GDP to FDI, implying that growth and FDI are not mutually reinforcing under restrictive trade and investment regimes.     

Bargaining with set-valued disagreement

It is arguable that in many-two person bargaining situations disagreement leads to a set of possible payoffs with no probabilities attached to the elements of the set. Axioms are developed for bargaining games of this kind and solution concepts are derived from these axioms. Particular attention is paid to what are here called the max-max and rectangular general solutions. The latter can be applied to an important sub-class of bargaining games where the disagreement set is equal to the feasible set.A part of this work was done while I was a visitor at the University of Stockholm. For valuable discussions and comments I am grateful to T.C.A. Anant, Salvador Barbera, Bhaskar Dutta, Efe Ok, Jorgen Weibull and an anonymous referee of this journal. The paper also benefited from a presentation at the Indian Statistical Institute, New Delhi.     

Effect of Health on Retirement of Older Americans: a Competing Risks Study

Retirement is an important event in the life of an individual. The decision to retire or exit from full-time employment may be motivated by several factors, including health. This paper explores the effect of both subjective and relatively more objective physical and mental health conditions on the probability of exit from full-time employment. Using longitudinal data on older Americans from ten waves of the Health and Retirement Study (1992–2010), eight health indices are created from a wide range of health measures by principal component analysis. The effect of these health indices on the time until exit from full-time employment is empirically examined in a proportional hazard model. Single and competing risk specifications are estimated that allow for multiple spells of full-time employment and control for unobserved heterogeneity. The main results suggest that better self-reported health decreases the likelihood of exit from full- time employment, while poor physical health (functional limitations factor) increases the likelihood of exit from full-time employment via complete retirement and disability. For mental health, I find that depression increases the likelihood of exit via complete retirement, part-time work and unemployment while cognitive disorders lead to an increase in likelihood of exit via the disability exit route. Hence, physical and mental health problems are both impediments to continued work. These results have implications for public policies targeted towards retaining older workers within the labor market.     

Letter to the editor comments on Groparu-Cojocaru and Doray (2013)

Although estimating the five parameters of an unknown Generalized Normal Laplace (GNL) density by minimizing the distance between the empirical and true characteristic functions seems appealing, the approach cannot be advocated in practice. This conclusion is based on extensive numerical simulations in which a fast minimization procedure delivers deceiving estimators with values that are quite far away from the truth. These findings can be predicted by the very large values obtained for the true asymptotic variances of the estimators of the five parameters of the true GNL density.     

Statistical modeling for Bayesian extrapolation of adult clinical trial information in pediatric drug evaluation

Children represent a large underserved population of “therapeutic orphans,” as an estimated 80% of children are treated off‐label. However, pediatric drug development often faces substantial challenges, including economic, logistical, technical, and ethical barriers, among others. Among many efforts trying to remove these barriers, increased recent attention has been paid to extrapolation; that is, the leveraging of available data from adults or older age groups to draw conclusions for the pediatric population. The Bayesian statistical paradigm is natural in this setting, as it permits the combining (or “borrowing”) of information across disparate sources, such as the adult and pediatric data. In this paper, authored by the pediatric subteam of the Drug Information Association Bayesian Scientific Working Group and Adaptive Design Working Group, we develop, illustrate, and provide suggestions on Bayesian statistical methods that could be used to design improved pediatric development programs that use all available information in the most efficient manner. A variety of relevant Bayesian approaches are described, several of which are illustrated through 2 case studies: extrapolating adult efficacy data to expand the labeling for Remicade to include pediatric ulcerative colitis and extrapolating adult exposure‐response information for antiepileptic drugs to pediatrics.     

Conditioning factors for fertility decline in Bengal: history, language identity, and openness to innovations

This article argues that looking solely for the immediate causes of reproductive change may distort our understanding of policy options by failing to take into account the historical and cultural factors that affect not only the impact of policies and programs but their very nature and existence. The article examines the historical origins and spread of “modern” ideas in Bangladesh and the state of West Bengal in India. It concludes that a colonial history in which education and modernization processes took hold very early among the elites in the larger Bengal region was paradoxically accompanied by a strong allegiance to the Bengali language. This strong sense of language identity has facilitated and reinforced the diffusion of modern ideas both within and between the two Bengali‐speaking regions. Thus, to understand the fertility decline in Bangladesh, for example, one needs to look also at cultural boundaries. In this case, the cultural commonality through language facilitates the spread of new ideas across the two Bengals. In turn, the strong sense of language identity has facilitated mass mobilization more easily and intensely within the two Bengals. Shaped by these processes, Bangladesh and West Bengal today are more amenable to social change than many other parts of South Asia and the Middle East.     

Popular perceptions of emerging influences on mortality and longevity in Bangladesh and West Bengal

Relatively little is known about how environmental and pathological threats to human survival and longevity are perceived by the public. In this study in rural Bangladesh and West Bengal, India, which used individual interviews and focus-group discussions to investigate the changing costs of and motivations for reproduction, respondents were questioned about their perceptions of changes in mortality. The findings show that, while child mortality levels are perceived to have fallen dramatically in recent times, the health and survival prospects of the middle aged and the elderly are seen to have been better in the past. The perceived decline in adult health is attributed to environmental deterioration and lifestyle changes accompanying modernization. This paper explores people's reasons for this unexpected worldview. References to pesticides and chemical fertilizers as causes of death abound in their explanations and are seen to be associated with unhealthy agricultural practices and impiety.     

On rates of convergence to infinitely divisible laws for dependent random variables

Large O and small o approximations of the expected value of a class of functions (modified K-functional and Lipschitz class) of the normalized partial sums of dependent random variables by the expectation of the corresponding functions of infinitely divisible random variables have been established. As a special case, we have obtained rates of convergence to the Stable Limit Laws and to the Weak Laws of Large Numbers. The technique used is the conditional version of the operator method of Trotter and the Taylor expansion.     

Locally best invariant and locally minimax test of independence

Let X₁ X₂ … X_N be independent normal p-vectors with common mean vector $$ = ($$) and common nonsingular covariance matrix $$ = Diag ($sG_i) [(1–p) I + pE] Diag ($sG_i), $sG_i> 0, i = 1… p, 1>p>=1/p–1. Write r_ij = sample correlation between the i th and the j th variable i j = 1,… p. It has been proved that for testing the hypothesis H₀ : p = 0 against the alternative H₁ : p>0 where $$ and $sG₁,…, $sG_p are unknown, the test which rejects H₀ for large value of $$ r_ij is locally best invariant for every $aL: 0 > $aL > 1 and locally minimax as p $$ 0 in the sense of Giri and Kiefer, 1964, for every $aL: 0 > $aL $$ $aL₀ > 1 where$aL₀ = P_p=0 $$.