The Demand for Bank Reserves and Other Monetary Aggregates

The article starts with Haslag's (1998) model of the bank's demand for reserves and reformulates it with a cash-in-advance approach for both financial intermediary and consumer. This gives a demand for a base of cash plus reserves that is not sensitive to who gets the inflation tax transfer. It extends the model to formulate a demand for demand deposits, yielding an M 1-type demand, and then includes exchange credit, yielding an M 2-type demand. Based on the comparative statics of the model, it provides an interpretation of the evidence on monetary aggregates. This explanation relies on the nominal interest as well as technology factors of the banking sector.     

上海旅游装备制造业发展对策研究

一直以来,旅游业都被界定为服务业,以提供旅游服务为主,但是随着需求和产业的不断升级,旅游业与制造业融合的趋势日益凸显,特别是对旅游装备的需求不断增长。国务院《关于加快发展旅游业的意见》中明确提出要积极发展旅游装备制造业,从而使得这一新兴产业的地位得到肯定。上海具有装备制造业的良好基础,又具有大量潜在的旅游市场需求,因此,应将旅游装备制造业作为促进装备制造业转型升级、旅游业提升发展的突破口之一。     

Promoting behavioral change towards lower energy consumption in the building sector

Climate change and environmental issues have been increasingly in the forefront of the media and government agendas. However, despite much discussion and fanfare, little has been done in the way of serious commitment and clear course of actions since the adoption of the UN Framework Convention on Climate Change in 1992 to bring carbon emissions to sustainable levels. To tackle the immensity of the climate change challenge, a paradigm shift in understanding is necessary to balance the course of global human development with energy demand and consumption patterns. Accounting for over 40% of global energy demand and more than 30% of greenhouse gas emissions, the building sector offers the greatest mitigation potential for reducing carbon emissions in both the short and long term, with positive implications for a range of associated sectors and industries. Promoting behavioral change among end-users for reduced energy consumption as well as encouraging the building industry to embrace sustainable design, low-carbon construction practices and materials, and renewable technologies, is fundamental to mitigating the impact of the built environment on planetary biospheres and preserving quality of life for generations to come. This paper starts by drawing attention to the building sector and related EU policy, outlining the challenges and opportunities for reducing energy consumption and carbon emission levels. Such policy provides the essential framework to engage stakeholders and allow supporting factors to foster progress in the sector. The paper contends that information on climate change has not led to significant improvements in meeting global targets and that what is needed is behavioral change among individuals and society as a whole. On the basis of research project experiences and literature review, it puts forth and explores five key elements contributing to behavioral change for reduced energy consumption and lower carbon emissions in the building sector, focused on: information and education; financial incentives and energy services; modern technologies and sustainable design; social and community norms; and biophilia (contact with the natural environment). The paper suggests opportunities for further research and concludes with recommendations for policy-makers and related stakeholders.     

Financial intermediation in a model of directed technological change

In this paper, the financial sector is introduced into a directed technological change economic model. The paper shows that, although financial development reduces the incidence of the researcher’s moral hazard, it will not necessarily promote growth. In addition, financial development may have a positive, negative or non-existent effect on wage inequality. One possible implication of this paper is that financial development decreases the growth rate while it increases skill premia. The impact of taxes on economic growth and wage inequality is also investigated in this paper.     

HEALTH CARE INFLATION AND ITS IMPLICATIONS FOR MONETARY POLICY

Motivated by recent findings on the cyclical movement of both health and health spending, we construct a general equilibrium model that distinguishes health care demand from the demand for other goods. Using this model, we are able to generate inflation dynamics and cyclicality of health that match the US data. When the model is subjected to an expansionary monetary policy shock, it yields different output and inflation responses compared with a two‐sector model with homogeneous demand. We show that the trade‐off between leisure and health spending plays an important role in model dynamics. The model further predicts different degrees of inflation stabilization across sectors when a shift in the monetary policy occurs. (JEL E52, E31, E32, I10)     

THE LONG-RUN LINK BETWEEN MONEY GROWTH AND INFLATION

Is inflation always a monetary phenomenon? Many economists believe that the link between money growth and inflation in the U.S. has weakened over the last two decades due in part to the Federal Reserve's policy experiment in 1979–1982 and innovations in the financial sector of the economy. I find that the long-run relationship between money growth and inflation is strong in a statistical sense and important economically. The key result is that the trend or growth component in CPI inflation is entirely due to the trend component of monetary base growth. (JEL C32, E31, E51)     

Female labour force integration and the alleviation of urban poverty: a case study of Kingston,Jamaica

The author posits that female labor force integration in Jamaica accomplishes little in alleviating poverty and making maximum use of human resources. Women are forced into employment in a labor market that limits their productivity. Women have greater needs to increase their economic activity due to price inflation and cuts in government spending. During the 1980s and early 1990s the country experienced stabilization and structural adjustment resulting in raised interest rates, reduced public sector employment, and deflated public expenditures. Urban population is particularly sensitive to monetary shifts due to dependency on social welfare benefits and lack of assets. Current strategies favor low wage creation in a supply-side export-oriented economy. These strategies were a by-product of import-substitution industrialization policies during the post-war period and greater control by multilateral financial institutions in Washington, D.C. The World Bank and US President Reagan's Caribbean Basin Initiative stressed export-oriented development. During the 1980s, Jamaican government failed to control fiscal policy, built up a huge external debt, and limited the ability of private businessmen to obtain money for investment in export-based production. Over the decade, uncompetitive production declined and light manufacturing increased. Although under 10% of new investment was in textile and apparel manufacturing, almost 50% of job creation occurred in this sector and 80% of all apparel workers were low-paid women. Devaluation occurred both in the exchange rate and in workers' job security, fringe benefits, union representation, and returns on skills. During 1977-89 women increased employment in the informal sector, which could not remain competitive under devaluation. Women's stratification in the labor market, high dependency burdens, and declining urban infrastructure create conditions of vulnerability for women in Jamaica.     

MEASURING THE NOMINAL VALUE OF FINANCIAL SERVICES IN THE NATIONAL INCOME ACCOUNTS

The recent growth in the U. S. financial service sector has resurrected the controversy over the treatment of financial services in the national income accounts. The main points of contention are the treatment of interest payments and the valuation of "free" financial services provided by banks. To examine different treatments of financial services, we employ a financial firm model that links financial service prices to the user cost of money. We show that our approach subsumes both the Department of Commerce and the U. N. Statistical Office approaches and thereby provides a heretofore absent economic foundation for their methods.     

Exclusive representation in public employment: A public choice perspective

Public sector unionization has grown rapidly in recent years, and research has suggested that among the reasons for such growth is legislation granting special privileges to public employee unions. This paper examines one form of legislative privilege, exclusive representation, from a public choice perspective. It is shown that exclusivity reduces employees’ freedom of choice, increases the welfare of union leaders at the expense of union members, limits employment opportunities to “outsiders,” entrenches the monopoly provision of public services, and generates conflict and instability in labor relations.     

Hyper-Segmentation and Exclusion in Financial Services in the U.S.

Abstract

The last twenty years has been a period of major structural change for the financial services sector in the United States. Some of this restructuring has been prompted by technological change, but public policy has actively facilitated the increased mobility of capital to places where it brings the highest short-term private return but not necessarily the greatest long-term social return. While deregulation and technology have combined to provide a wider choice of services and increased price pressure in the lucrative segments of different financial markets, the pursuit of affluent customers has left lower-income consumers and very small firms at a disadvantage. The sector overall has moved toward a hyper-segmentation of customer bases by income and race, leaving many communities served primarily by higher-cost and sometimes abusive financial services firms.     

Immigrants in a Restructuring Economy: A Partial Test of Theories

The article addresses the occupational integration of immigrants from the former USSR into the economy of the city of Tel Aviv. This process is examined from a structural perspective, which focuses on the location of immigrants as a group in the restructuring economy of Israel's main business centre.
Data from labour force surveys and income surveys conducted in 1992 and 1994 by Israel's Central Bureau of Statistics are used to analyse the distribution of veteran Israelis and recent immigrants among economic sectors and occupations.
Despite their superior academic and professional qualifications, immigrants were underrepresented in the business and financial services sector, the leading sector in post-industrial economies. They were most strongly represented in the personal services sector, where they replaced Palestinian workers. The findings lend support to both the restructuring and replacement hypotheses.     

Inclusive Financial Markets: Is Transformation Under Way in Kenya?

Policy emphasis on financial‐sector development has shifted away from microfinance and towards the development of ‘inclusive financial markets’. But, for inclusion to take place, policy must address barriers to access. This article analyses the socio‐economic, demographic and geographical factors associated with financial‐service use across formal, semi‐formal and informal financial services in Kenya between 2006 and 2009, including the new and rapidly growing mobile‐phone‐based payments service – M‐PESA. It finds that, despite an expansion of services, evidence of access barriers is now clearer than it was in 2006. However, there is some evidence that M‐PESA is reversing age as a barrier to inclusion, but, as yet, it is more of a complement than a substitute for formal services.     

OUTPUT EFFECTS OF INFLATION WITH FIXED PRICE– AND QUANTITY–ADJUSTMENT COSTS

This article examines how the aggregate production varies with inflation when there are fixed price– and quantity–adjustment costs. It shows that such variation is determined by the elasticity of the firms’ marginal real revenue with respect to demand. The aggregate production decreases with inflation if this elasticity always exceeds minus unity, whereas the aggregate production increases with inflation if the elasticity is always less than minus unity. The aggregate production is independent of inflation in the special case that the elasticity always equals minus unity. The latter occurs if demand is derived from a log‐quadratic utility function. (JEL E31)     

TURNS IN CONSUMER CONFIDENCE: AN INFORMATION ADVANTAGE LINKED TO MANUFACTURING

This research shows that the manufacturing sector contains private information advantages for consumer confidence. It examines the consumer confidence–manufacturing link by comparing the U.S. national-level Index of Consumer Sentiment with identically constructed confidence indices from a key manufacturing state and a nonmanufacturing state. Granger causality analysis shows that the manufacturing state's confidence index leads the national index, whereas the nonmanufacturing state's confidence index lags it. Factors influencing confidence include percentage manufacturing employment, equity markets indicators, and disposable income. Fitting a consumption function to confidence measures for the three confidence indices shows the strongest relationship to be in the manufacturing state. (JEL D12 )     

POPULATION GROWTH AND INDUSTRIALIZATION

The role of population growth in the process of industrialization is studied in a general equilibrium model. It provides a formal presentation of Rostow's insight of the role of a leading sector in industrialization. Population growth may lead to a shortage of food and a breakdown of the industrialization process. However, population growth may benefit the manufacturing sector in the adoption of increasing returns to scale technologies. Elasticity of demand for agricultural goods plays an important role in determining whether an improvement of agricultural technology or an increase of population is beneficial to the manufacturing sector. A comparison of China and Britain before the Industrial Revolution shows that research and development are necessary for sustained growth. Achieving industrialization independently requires a combination of a sufficiently large market size from the demand side and a sufficiently large supply of technologies from the supply side . ( JEL O14, E10, N10, Q01)     

INFLATION AND ASYMMETRIC OUTPUT ADJUSTMENTS BY FIRMS

Using ordered probit analyses of a unique micro data set, we find evidence of output asymmetry that is systematically related to inflation and to price asymmetry. As predicted by theory, firms are more likely at higher rates of inflation to raise prices in response to positive cost and demand shocks and less likely to lower prices in response to negative cost and demand shocks. The expected effects of higher inflation on output asymmetry, however, come primarily from cost and demand increases and to a lesser (and statistically insignificant) extent from cost and demand decreases. (JEL E3, D4)     

Controlling health care costs: An evaluation of strategies

There has been much discussion about the factors underlying inflation in the health care sector and the means to moderate increases in health expenditures. This paper identifies various costcontainment strategies and synthesizes research findings that may be helpful in evaluating their effectiveness. The review demonstrates the complexity of the issues and relationships that must be confronted and understood in cost containment. The delivery system is shown to be not well-suited to improving efficiency and restraining health care expenditure. Any single strategy, whether it involves restructuring the market or more direct regulation, cannot in itself accomplish the combination of expenditure control and adequacy of services that is socially desirable. A number of mutually reinforcing strategies are required. Finally, more empirical and analytical information on incentives, provider and regulatory decisionmaking, costs of regulation, and the dynamics of negotiation, is essential for the design of an effective costcontainment program.     

COSTLY INTERMEDIATION AND CONSUMPTION SMOOTHING

This paper studies quantitatively how intermediation costs affect household consumption loans and welfare. Agents face uninsurable idiosyncratic shocks to labor productivity in a production economy with costly financial intermediation and a borrowing limit. Reducing intermediation costs has two effects: (1) For a given decrease in the interest rate on borrowing, agents' ability to smooth consumption over time improves. (2) The demand for loans increases, which increases the interest rate. The net welfare gain of reducing intermediation costs from 3.927% (U.S. level) to 1% is about 1.14% of equivalent consumption in the baseline economy for an endogenous interest rate and 1.90% for an exogenous interest rate. The gains are distributed unevenly: households at the bottom wealth decile improve welfare by 3.96% and 5.86% of equivalent consumption, while those at the top decile have welfare gains of 0.35% and 0.2%, respectively. Sufficiently high intermediation costs eliminate borrowing and hence the welfare gain of reducing costs is not substantial. The welfare analysis includes transitional dynamics between steady states. (JEL D91, E60, G38)     

Foreign trade barriers and jobs in global supply chains

This article uses ILO global supply chain job estimates to study the impact on domestic jobs of foreign barriers to trade in goods and services. Empirical analysis largely confirms predictions derived from a theoretical model calibrated to WIOD data for 2000 and 2011. Barriers to trade in manufacturing and services are both found to have a cross‐border impact on jobs in their own sector and spill‐over effects in other sectors, the latter becoming stronger over time. This article shows the labour market consequences of the increased interconnectedness of countries and sectors through global supply chains, which suggests that trade policy can have significant external effects on foreign labour markets.     

Factors influencing the success of PPP at feasibility stage – A tripartite comparison study in Hong Kong

Public Private Partnerships (PPP) have been used extensively in both developing and developed countries in delivering various types of projects, ranging from road construction, railway transport systems to health care facilities and schools. Critical success factors of PPP schemes at the implementation stage were identified. It is however more important for decision-makers to identify the factors for feasibility evaluation of adopting the PPP at the outset. This study aims to explore the key successful ingredients to be assessed at the initial stage of PPP projects as perceived public sector, private consortium and general community so as to attain a “triple win” scenario, via a questionnaire survey and a series of expert interviews conducted in Hong Kong. Survey results indicate that the most critical factor for evaluating the feasibility of PPP projects, especially to the general community, is an acceptable level of tariff. Cost effectiveness and financial attractiveness are the most important evaluation factors as ranked by the public sector and private consortium respectively. In addition, the existence of a long-term demand for the proposed services, availability of strong private consortium, alignment with government’s strategic objectives, as well as reliable service delivery are also rated as highly important to the success of PPP schemes. Addressing the tripartite expectations is indispensable to ensure the feasibility and successful delivery of public services and infrastructure projects via PPP schemes.