Immigrants' health in Europe: a cross-classified multilevel approach to examine origin country, destination country, and community effects

In this study, we examined origin, destination, and community effects on first- and second-generation immigrants' health in Europe. We used information from the European Social Surveys (2002–2008) on 19,210 immigrants from 123 countries of origin, living in 31 European countries. Cross-classified multilevel regression analyses reveal that political suppression in the origin country and living in countries with large numbers of immigrant peers have a detrimental influence on immigrants' health. Originating from predominantly Islamic countries and good average health among natives in the destination country appear to be beneficial. Additionally, the results point toward health selection mechanisms into migration.     

The level and uncertainty of inflation: results from OECD forecasts

There is considerable evidence that inflation variability and the level of inflation are positively related across countries. Evidence of a within-country relation is mixed. Evidence for a significant positive relation comes mostly from studies using some survey measure; contrary evidence comes mostly from studies using regression errors. Our measure of uncertainty is the squared forecast-error from Organization for Economic Cooperation and Development inflation forecasts. Most countries do not exhibit a positive and significant relation. The greatest number of positive coefficients is for relative uncertainty regressed on contemporaneous inflation.     

A RESPECIFIED TAX-ADJUSTED FISHER RELATION

How much will a 1% increase in expected inflation increase nominal interest rates? Irving Fisher's famous equation implies that nominal interest rates will rise in proportion to an increase in expected inflation. Darby and Feldstein, correcting the Fisher equation for taxation, predict a nominal interest rate increase of [1/(1 - T)]% where T is the marginal tax rate: i.e., if T =3, then a 1 % increase in expected inflation should cause a 1.4 % rise in interest rates. Empirical evidence, however, suggests that the rise in interest rates is much smaller than the Darby/Feldstein prediction. Estimates are around 9, varying mostly between 5 and 1.15, which is much closer to Fisher's original prediction. It is important to know the size of the interest rate response to inflation expectations in a world in which inflation and interest rates are volatile and in which tax laws are designed to influence savings and investment through interest rates. In this paper we attempt to close the gap between theorized and estimated effects of inflation by incorporating into the Fisher equation two important aspects of the U.S. tax code: historic cost depreciation and the lower tax rate on capital gains. Our model shows that the effect of expected inflation on interest rates is dampened by the lower benefits from depreciation deductions arid the capital gains tax. Our corrected Fisher equation predicts a 1.12 % nominal interest rate increase, rather than the 1.4 % increase implied by the Darby/Feldstein model. The, our model closes about 56 % of the gap between theory and empirical evidence. The remainder could be closed by additional refinements in the model or better empirical modeling.     

INFLATION DYNAMICS AND THE OUTPUT‐INFLATION TRADE‐OFF: INTERNATIONAL PANEL DATA EVIDENCE

We explore the impact of inflation and its variability on the output‐inflation trade‐off using a single‐step approach in a panel data context. Previous empirical approaches focus on either cross‐country or country‐by‐country time‐series analyses. We employ a dynamic heterogeneous panel specification using an all‐encompassing estimation framework accounting for parameter heterogeneity, cross‐sectional dependence, dynamics, and nonstationarity. Our sample covers 60 countries from 1970 to 2010. While inflation variability reduces the trade‐off for specific periods and country groups, an unambiguous and more pronounced negative relation emerges between the inflation rate and the trade‐off. The findings are consistent with the New Keynesian view. (JEL E31, E12, C23)     

STOCK RETURNS, INFLATION, AND REAL OUTPUT

This paper provides empirical evidence on the extent to which the inverse relationship between real stock returns and inflation in recent years is causal or spurious. The results indicate that this relationship is spurious and can be explained by the inverse correlation between unexpected inflation and unexpected real output. The expected and unexpected real output and inflation variables are generated from the ASA/NBER Business Outlook Surveys.     

PRICES,INFLATION, AND SMOKING ONSET: THE CASE OF ARGENTINA

This article examines the effect of tobacco prices on the decision to start smoking in Argentina. Argentina is an interesting case to explore given its high smoking rates, its recent experience with periods of very high and hyperinflation, and the mixed evidence of the effect of prices on smoking onset, particularly in low‐ and middle‐income countries. We used data from four cycles of two large national surveys conducted between 2005 and 2011 and discrete‐time hazard models. We found that tobacco prices had a statistically significant and fairly large impact on the hazard of smoking onset, and these findings were robust to alternative specifications. We also found that prices had little effect on the hazards of smoking onset during periods of hyper‐ and very high inflation, which provide some support for the notion that prices lose their informational role in such periods. Governments need to be cognizant that their most important policy tool to reduce tobacco use—taxes that increase real tobacco prices—is likely no longer effective during these times. (JEL C41, H20, I12, I18)     

Central Bank Autonomy without Monetary Policy

The autonomy of a country’s central bank from political authorities has been advocated both as a remedy against the inflationary bias that would otherwise be present in the conduct of the government’s monetary policy and, more recently, on the basis of empirical evidence. However, both theoretical arguments and empirical findings have associated central bank autonomy with the conduct of monetary policy, while often failing to pay attention to those institutional cases where a central bank is in place but is not responsible for the conduct of monetary policy. These cases are particularly relevant for those countries which do not possess their own currency, or where extreme monetary regimes such as dollarization, currency boards, or monetary unions are present. These institutional settings, where a central bank exists, but there is no monetary policy to be conducted, raise the issue of central bank autonomy in a framework where the inflation bias is no longer pertinent. In other words: Is central bank autonomy still a relevant objective when a country does not run its own monetary policy? The present paper addresses this question, discusses dimensions of autonomy and accountability and maintains that central bank autonomy still does matter, particularly if the central bank is responsible for bank supervision and financial regulation.     

AN ANALYSIS OF THE INCIDENCE OF SPECIFIC TARIFFS ON DEVELOPING COUNTRY EXPORTS

Employing a sample of approximately 200 products, this study tests the hypothesis that specific tariffs exert a differential regressive effect on developing country exports. The analysis reveals that U.S. specific duties impose ad valorem equivalents on LDCs which are roughly double those on industrial countries. Further, an examination of the tariff structures of other developed nations shows that specific duties are used in a manner and frequency to pose significant trade barriers against LDC exports. While inflation is eroding the protective effect of these charges, they still pose a significant barrier to LDC products and will continue to do so for the foreseeable future.     

DETERMINING OUTPUT AND INFLATION VARIABILITY: ARE THE PHILLIPS CURVE AND THE MONETARY POLICY REACTION FUNCTION RESPONSIBLE?

This study analyzes the policy parameters in a Taylor monetary policy reaction function and a Phillips curve equation to determine the variability of inflation and output. The theoretical and empirical investigations yield two key results. First, countries with large parameters in the monetary policy reaction function have low and stable inflation. Second, countries with flatter Phillips curves (i.e., those with a higher degree of price stickiness) have larger output variability. This article also examines the determinants of inflation and output variability as well as determinants of the slope of the Phillips curve.(JEL E32 , E52 )     

Income inequality,redistribution and the position of the decisive voter

A large literature explaining patterns of redistribution makes use of the median voter theorem. Using a novel approach, this contribution shows that in OECD countries the decisive voter, determined by the earner who sees her preferred tax rate being implemented, on average sits around the 50^th percentile in the income distribution, although significant within and between country differences exist. Under the assumption of a lognormal distribution of gross income, we derive the required tax rate to align the observed gross and net Gini coefficients in OECD countries. This estimated tax rate is compared to the tax rate preferred by the median income earner, which gives a new index capturing a nation’s deviation from the median voter position, measured as the difference between the estimated percentile position of the decisive voter and the 50^th percentile position of the median voter. We provide a comparative overview of this index over time and between countries. We also locate the positions of alternative versions of the decisive voter, among which following the ‘one dollar, one vote’ rule, in a Lorenz curve diagram.     

Economic convergence and life satisfaction in the European Union

The issue of convergence or divergence in the European Union (EU) is usually viewed from a macroeconomic perspective, using indicators such as the income per head, the unemployment rate and the inflation rate. Little attention has been paid to the possibility of an associated convergence in ‘well-being’ across countries. Since recent literature has shown that subjective well-being (life satisfaction, ‘happiness’) is significantly affected by macroeconomic variables, it is natural to ask not only whether or not subjective well-being converges, but also, whether, how and to what extent this process is linked to macroeconomic convergence. In this paper we use self-rated life satisfaction elicited in large scale surveys to address these questions. We find evidence of convergence of life satisfaction across the member states of the EU, which can be attributed to a considerable extent to the convergence in macroeconomic conditions. Among the various macroeconomic indicators, the convergence in inflation rates has played a major role for the convergence in life satisfaction.     

CROSS-COUNTRY EVIDENCE ON LONG-RUN GROWTH AND INFLATION

While inflation is generally inversely related to growth, I show that estimates of the relationship seer two robustness problems which plague a variety of model specifications. First, growth-inflation results are highly sensitive to modifications to the country sample, limited from the start to low- and moderate-inflation countries. Second, results are also sensitive to modifications in the time period of analysis. In conjunction with the regression specification sensitivity documented by Levine and Renelt [1992], these results should further discourage the practice cf quantifying inflation's effects with cross-county growth regressions.     

POLITICAL INSTABILITY AND DEBT MATURITY

Political instability has been blamed for many poor macroeconomic outcomes such as high inflation, unemployment and low growth. I propose yet another negative consequence of political instability: political instability and polarization generate inflation uncertainty which causes the term structure to steepen, consequently political instability and polarization reduce the average maturity and increase the expected cost of debt. A model is derived which illustrates these relationships. Political instability and polarization are then proxied and shown to be inversely related to debt maturity for a sample of OECD countries.     

Disability-policy models in European welfare regimes: comparing the distribution of social protection,labour-market integration and civil rights

This paper examines different models of disability policy in European welfare regimes on the basis of secondary data. OECD data measuring social protection and labour-market integration is complemented with an index which measures the outcomes of disability civil rights. Eurobarometer data is used to construct the index. The country modelling by cluster analysis indicates that an encompassing model of disability policy is mainly prevalent in Nordic countries. An activating and rehabilitating disability-policy model is predominant mainly in Central European countries, and there is evidence for a distinct Eastern European model characterized by relatively few guaranteed civil rights for disabled people. Furthermore, the Southern European model, which indicates a preference for social protection rather than activation and rehabilitation, includes countries which normally have diverse welfare traditions.     

Religious involvement, religious context, and self-assessed health in Europe

In the present study, the authors examine the extent to which effects of individual religious involvement on self-assessed health are influenced by the religious context (i.e., religious involvement at the country level). The authors test their expectations using individual level data (N = 127,257) on 28 countries from the European Social Surveys (2002-2008). Results of multilevel analyses show that individual religious attendance is positively related to self-assessed health in Europe. Protestants appear to feel healthier than Catholics. Moreover, modeling cross-level interactions demonstrates that religious denominations at the national level are influential: The health advantage of Protestants as compared to Catholics is greater as the percentage of Protestants in a country is higher, yet smaller as countries have a higher percentage of Catholics. The association between religious attendance and self-assessed health does not depend on the national level of religious attendance.     

WHO QUITS NEXT? FIRM GROWTH IN GROWING ECONOMIES

We document novel facts about the relationship between aggregate growth and firm dynamics using a large set of countries. We argue that firm employment patterns are not necessarily informative about cross‐country differences in aggregate growth because they are induced by changes in the productivity of a firm relative to others. In contrast, aggregate growth is linked to average firm‐level productivity growth and firm age. We formalize this intuition through a tractable model of endogenous aggregate growth and firm dynamics where firms realize positive returns to investment with some probability. We find that cross‐country disparities in this probability can account for two‐thirds of the variation in aggregate growth. (JEL D21, D22, E23, O4)     

Global poverty estimates based on 2011 purchasing power parity: where should the new poverty line be drawn?

This paper aims to present a new global poverty line based on the 2011 Purchasing Power Parity (PPP). To calculate a new global poverty threshold based on 2011 PPP, this paper moves away from the World Bank’s method of anchoring a single global poverty line on the national poverty lines of the 15 poorest countries. It instead proposes an alternative method of using equivalent poverty lines. Each country is shown to have a different equivalent poverty line. This paper finds that there is no single international poverty line in 2011 PPP that is equivalent to $1.25 in 2005 PPP. Single poverty lines vary for each region because countries have experienced different inflation rates and have different PPP conversion rates between 2005 and 2011. To calculate a single poverty line in 2011 PPP, this paper measures the weighted average of equivalent poverty lines of 101 countries around the globe with weights proportional to their populations. Based on the new method, the corresponding poverty line is estimated at $1.93 in 2011 PPP. The World Bank has officially adopted the poverty line of $1.90 in 2011 PPP. This paper demonstrates that our proposed poverty line performs better than the World Bank’s in terms of preserving the real purchasing power of the previous line of $1.25 in 2005 PPP. Given the new poverty threshold of $1.93, the number of poor worldwide is reduced by 6.42 million, with the reduction largely occurring in South Asia and Sub-Saharan Africa.     

WHAT DETERMINES CORRUPTION? INTERNATIONAL EVIDENCE FROM MICRODATA

This paper uses a microlevel data set from 49 countries to create a direct measure of corruption, which portrays the extent of bribery as revealed by individuals who live in those countries. In addition, it investigates the determinants of being asked for a bribe at the individual level. The results show that both personal and country characteristics determine the risk of exposure to bribery. Examples are gender, income, education, marital status, the city size, the country’s unemployment rate, average education, and the strength of the institutions in the country. (JEL K4, D73 P16)     

The ties that bind: the role of migrants in the uneven geography of international telephone traffic

Recent work suggests that migrants have been a major driving force in the dramatic growth of international telephony over recent decades, accounting for large rises in telephone calls between countries with strong immigrant/emigrant connections. Yet, the existing literature has done a poor job of evaluating the substantive importance of migrants in explaining large disparities in levels of bilateral voice traffic observed between different countries. It has also failed to go very far in examining how domestic and relational factors moderate (namely amplify or attenuate) the influence of migrant stocks on international calling. Our contribution addresses these gaps in the literature. For a sample, which includes a far larger number of countries than previous studies, we show that, together with shorter‐term visitors, bilateral migrant stocks emerge as the relational variable with one of the substantively largest influences over cross‐national patterns of telephone calls. We also find that the effect of bilateral migrant stocks on inter‐country telephone traffic is greater where the country pairs are richer and more spatially distant from one another.     

INTRACOUNTRY EVIDENCE ON THE LUCAS VARIANCE HYPOTHESIS

Intracountry time-series evidence for a sample of thirty-nine countries fails to provide strong support for the basic implications of the Lucas aggregate supply model, namely: there exists a negative relationship between the output-inflation tradeoff and the variability of both nominal aggregate demand and the rate of inflation, and a positive relationship exists between the variabilities of the inflation rate and aggregate demand. The findings differ from those of most of the previous cross-sectional studies, which found support for the Lucas variance hypotheses, but are consistent with Froyen and Waud's [1980; 1984].