Is the Person-Affecting Intuition Paradoxical?

This article critically examines some of the inconsistency objections that have been put forward by John Broome, Larry Temkin and others against the so-called "person-affecting," or "person-based," restriction in normative ethics, including "extra people" problems and a version of the nonidentity problem from Kavka and Parfit. Certain Pareto principles and a version of the "mere addition paradox" are discussed along the way. The inconsistencies at issue can be avoided, it is argued, by situating the person-affecting intuition within a non-additive form of maximizing consequentialism – a theory which then competes with such additive, or aggregative, forms of maximizing consequentialism as "totalism" and "averagism."     

Explaining a productive decade

This paper analyzes the sources of U.S. productivity growth in recent years using both aggregate and industry-level data. We confirm the central role for information technology (IT) in the productivity revival during 1995–2000 and show that IT played a significant, though smaller, role after 2000. Productivity growth after 2000 appears to have been boosted by industry restructuring and cost cutting in response to profit pressures, an unlikely source of future strength. In addition, the incorporation of intangible capital into the growth accounting framework takes some of the luster off the performance of labor productivity since 2000 and makes the gain during 1995–2000 look larger than in the official data. Finally, we examine the outlook for trend growth in labor productivity; our estimate, though subject to much uncertainty, is centered at a year, faster than the lackluster pace that prevailed before 1995 but somewhat slower than the 1995–2006 average.     

Electricity consumption and economic growth in Nigeria: Evidence from cointegration and co-feature analysis

The paper investigates the causality relationship between energy consumption and economic growth for Nigeria during the period 1980–2006. The results of our estimation show that real gross domestic product (rGDP) and electricity consumption (ele) are cointegrated and there is only unidirectional Granger causality running from electricity consumption (ele) to (rGDP). Then we applied Hodrick–Prescott (HP) filter to decompose the trend and the fluctuation components of the rGDP and electricity consumption (ele) series. The estimation results show that there is cointegration between the trend and the cyclical components of the two series, which seems to suggest that the Granger causality is possibly related with the business cycle. The paper suggests that investing more and reducing inefficiency in the supply and use of electricity can further stimulate economic growth in Nigeria. The results should, however, be interpreted with caution because of the possibility of loss in power associated with the small sample size and the danger of omitted variable bias that could result from the use of bi-variate analysis.     

Does financial development cause economic growth? Implication for policy in Korea

The causal relationship between financial development and economic growth is examined, utilizing the superexogeneity methodology. We use annual data for Korea during 1971–2002, during which Korea has experienced both phenomenal economic growth and a variety of financial liberalization and reforms. In our tests for superexogeneity, we find that financial development control causes economic growth, but the reverse is not true. Our empirical results provide evidence in favor of the ‘finance causes growth’ view for the case of Korea while rejecting the ‘growth causes finance’ view. The policy implication is that Korea should give policy priority to financial reform rather than economic growth, because only a decisive and accelerated pace of financial restructuring can ensure a sustainable growth in the medium or long term.     

Economic growth, poverty, and the international agencies

During the past few years, the international agencies have been playing down economic growth as the main road to the elimination of poverty and emphasizing the role of asset and income redistribution. The latest reflection of this attitude is the so-called “basic needs” approach. This essay attempts to demonstrate that where economic growth has been sufficiently high and sustained, it has been a powerful means of alleviating poverty. Growth has not “failed”; there is simply not enough International agencies should be cautious in advocating redistribution, for the results .     

BARGAINING AND DELAY: THE ROLE OF EXTERNAL INFORMATION

This paper examines the notion that delay in reaching agreement in bargaining may be caused by learning that is independent of the bargaining procedure. In particular, learning is not due to inference from the observed offers and responses of the opponent, but derives from observation of an exogenous, costly signal – we call this 'investigation'. First we observe that even if learning is costless and perfectly informative, investigation may not occur in equilibrium. Under more general conditions, however, uninformed agents typically have an incentive to try to manipulate their prior beliefs through investigation. The main result is that investigation by an uninformed agent may result in significant delay occurring before agreement is reached. We show that this delay may be sustained in the limit as the length of time period vanishes, and that this result depends crucially on the properties of the information production technology underlying investigation. Also, the delay we observe is shown to be robust to changes in the bargaining procedure.     

Policy simulations with a macroeconometric model of the Indian economy

In this paper, the results of various dynamic policy simulations are analyzed within the context of a macroeconometric model of the Indian economy. The model contains 35 equations and offers a consistent framework for policy analysis. It is considerably expanded on the side of the fiscal sector and usefully incorporates the interdependence between monetary and fiscal sectors and gives due attention to supply side considerations. Magnitudes of effects of sustained policy changes are analyzed for the period 1964–1965 to 1974–1975. Impact multipliers and elasticities are also analyzed. Government expenditures variables and deficit financing are shown to have substantial impact on the system whereas changes in tax-rates, discount-rates, and liquidity ratios for commercial banks are shown to have only a marginal impact. The model is used for exploring the growth potential of the economy in a forecast period of five years under alternative assumptions regarding policy options.     

A Plea For Greater Attention on the Data in Policy Analysis

The technical difficulties associated with building and solving applied general equilibrium (GE) models seem to have distracted our attention from the data. In this article, we forcefully stress that whatever the sophistication of the GE analysis, it is only worth the quality of the supporting data it utilizes. We first highlight an example of a flagrant flaw in officially published input–output data (factor–income shares) by an LDC (Turkey), which many researchers use without question. We then make use of an applied GE model to evaluate the dynamic gains for Turkey from currently debated trade policy options and compare the predictions using conservatively adjusted, rather than official, data on factor shares. We show that the predicted welfare gains are not only of a different order of magnitude, but in some cases, of a different sign; hence, suggesting contradictory policy recommendations.     

Government size and economic growth in Taiwan: A threshold regression approach

The Armey curve developed by [Armey, R. (1995). The freedom revolution. Washington, DC: Rognery Publishing Co.] and [Vedder, R. K., & Gallaway, L. E. (1998). Government size and economic growth. Joint Economic Committee] demonstrates that there is a non-linear relationship between government size and economic growth. In order to search for the threshold effects, this paper employs [Hansen, B. E. (2000). Sample splitting and threshold estimation. Econometrica, 68(3), 575–603] threshold regression model to test whether the Armey curve exists in Taiwan, allowing for endogenous government size thresholds. We apply the two-sector production function developed by [Ram, R. (1986). Government size and economic growth: A new framework and some evidence from cross-section and time-series data. American Economic Review, 76(1), 191–203] to construct the threshold regression model. Three classifications of government size are tested in sequence as threshold variables. The result indicates that all three classifications of government size have a threshold effect and that a non-linear relationship of the Armey curve exists in Taiwan.     

Does biomass energy consumption reduce total energy CO2 emissions in the US?

This study investigates the causal relationship between total biomass energy consumption, total energy CO₂ emissions, and GDP in the United States for the period January 1973–December 2016 by employing a directed acyclic graph (DAG) techniques and the Autoregressive Distributed Lag (ARDL) model. Additionally, this paper examines the existence of the environmental Kuznets curve (EKC) hypothesis. The result of the DAG reveals that total biomass energy consumption and GDP have a unidirectional contemporaneous causal relationship with total energy CO₂ emissions. Based on the results of the ARDL, we find that a 1% increase in per capita total biomass energy consumption causes a 0.65% reduction in per capita total energy CO₂ emissions in the long-run. This finding implies that expanding the usage of biomass is one way to reduce and control greenhouse gases in the US. Moreover, we find that the inverted U-shaped EKC hypothesis is satisfied for the US case. Findings from this study suggest that energy policies should stimulate an increase of biomass production for reducing total energy CO₂.     

Living Healthy and Living Long: Valuing the Nonpecuniary Loss from Disability and Death

This analysis uses three valuation approaches—risk–risk tradeoff, paired risk–dollar comparison, and utility function estimation—to estimate the nonpecuniary cost associated with disability in late life. In addition, we obtain an estimate of the value of life using a paired risk–dollar comparison. The data were obtained from interviews with 548 persons using an iterative computerized questionnaire. Respondents reported a median value of life of $12 million. They were willing-to-pay .7–1.4 million to avoid disability in late life or approximately $47–$95 thousand for each year of disability over age 62. The results were robust to the valuation technique employed.     

The macroeconomics of Italy: a regional perspective

In this contribution we show that the dualistic nature of the Italian economy has been, and still is, crucial for the design of short- and long-run macroeconomic policies, concerning unemployment, income growth and public finance.We establish the seriousness of the dualistic process of Italian regional development using several approaches. We then considered the regional nature of the Italian unemployment and show that it has profound implications for short- and long-run policies. In particular, we find that an aggregate price–unemployment relationship must be rejected. Different values of equilibrium unemployment rates for the main macro-regions of Italy are found and short-run policy implications discussed. We then consider how this heterogeneity relates to the design of growth-promoting policies.Lastly, we present evidence in favor of the importance of the missing growth of the Italian southern regions for the evolution of the Italian public finance.     

Legal families and environmental protection: Is there a causal relationship?

In this paper we build on the analysis of La Porta et al. [La Porta, R., Lopez-de-Silanes, F., Shleifer, A., & Vishny, R. W. (1998). Law and finance. Journal of Political Economy, 106(6), 1113–1155], to investigate the importance of legal families in explaining the dissimilar levels of environmental quality indicators among countries with different legal systems. The main intuition behind our analysis is that the nations in which the rights of shareholders are more protected promote real and financial investment; this increases the speed at which the per capita income corresponding to the declining branch of the Environmental Kutznets Curve (EKC) is achieved. In econometrics different regressions analyses were performed, using as dependent variables three different kinds of pollutants (CO₂, fine suspended particulates and waste), and including as an explanation some financial variables never before considered in this kind of study.     

Unemployment, Wage Pressure and Sectoral Shifts: Permanent and Temporary Consequences of Intersectoral Shocks

The main purpose of this study is to examine the effect of allocative disturbances using Italian labour market data and a VECM (vector error correction model). In order to measure sectoral shifts in labour demand, we use Neumann-Topel's [Neumann, G.R., & Topel, R.H. (1991). Employment risk, diversification, and unemployment. Quarterly Journal of Economics 106:1341–1365] employment-based dispersion index. In searching for a restricted cointegration space, we set down, and identify a stylized version of the battle of the mark-ups model. Lilien [Lilien, D. (1982). Sectoral shifts and cyclical unemployment. Journal of Political Economy 90:777–793] argued that an important part of cyclical unemployment comes from permanent shifts in the composition of labour demand. Our findings emphasize that an important source of the persistence of unemployment comes from sectoral shifts.     

Economic globalization and violent civil conflict: Is openness a pathway to peace?

There has been little systematic assessment of the impact of globalization on armed conflict within states. Drawing from bargaining theories of conflict, we posit that the global marketplace functions as an “audience” that rewards or punishes the policy choices of states. Globalization, which connotes an increased exposure to this marketplace, increases the relevance of the “costs” that this “audience” may impose. These prospective costs thus encourage peace and stability, as states that are integrated into the global economy have more to lose by instigating and sustaining violent conflict within their borders. Employing a two-stage Heckman Model, we assess the impact of various facets of globalization, including access to information, trade, foreign investment and aid flows, on intrastate conflict within the developing countries for 1990–1996.     

Developments in and prospects for external debt position and burden of developing countries: The case of Korea

The delay of strong economic recovery by industrialized nations, slowed world export growth, and higher interest rates have worsened the financial situation of a number of developing countries which have relied on external borrowings to sustain current account deficits and protect economic development. Recently, well-publicized concerns over the ability to these countries to repay their considerable debt burden have been raised. To shed light on these concerns, the paper focuses on Korea—one of the heavier debt-holding countries. It describes the process through which Korea has acquired its external debt over the past decade, assesses the trends in its debt burden, and presents prospects for the period 1982–1986. Using the Korean experience, the paper shows that the most common indicators used for evaluating foreign debt burden, such as the long-term service ratio, need to be supplemented by other measurements. In a world economy characterized by short-term debts with variable interest rates, the paper suggests that an important tool in analyzing the external debt burden should be the short-term debt burden.     

The Bicameral Postulates and Indices of a Priori Voting Power

If K is an index of relative voting power for simple voting games, the bicameral postulate requires that the distribution of K -power within a voting assembly, as measured by the ratios of the powers of the voters, be independent of whether the assembly is viewed as a separate legislature or as one chamber of a bicameral system, provided that there are no voters common to both chambers. We argue that a reasonable index – if it is to be used as a tool for analysing abstract, uninhabited decision rules – should satisfy this postulate. We show that, among known indices, only the Banzhaf measure does so. Moreover, the Shapley–Shubik, Deegan–Packel and Johnston indices sometimes witness a reversal under these circumstances, with voter x less powerful than y when measured in the simple voting game G₁ , but more powerful than y when G₁ is bicamerally joined with a second chamber G₂ . Thus these three indices violate a weaker, and correspondingly more compelling, form of the bicameral postulate. It is also shown that these indices are not always co-monotonic with the Banzhaf index and that as a result they infringe another intuitively plausible condition – the price monotonicity condition. We discuss implications of these findings, in light of recent work showing that only the Shapley–Shubik index, among known measures, satisfies another compelling principle known as the bloc postulate. We also propose a distinction between two separate aspects of voting power: power as share in a fixed purse (P-power) and power as influence (I-power).     

Assimilation and discriminatory perceptions and experiences: The case of Hispanics in the United States

This paper examines the relationship between assimilation and discriminatory practices encountered by Hispanic-Americans. Theories of intergroup relations have typically assumed that as members of minority ethnic groups assimilate to a dominant group, they perceive and experience lower degrees of discrimination directed against them. In reviewing theories of majority–minority relations, we have called this the “assimilationist” model. This view has been opposed by some scholars who argue that as minority ethnics assimilate and become more knowledgeable of the larger society, they perceive and experience higher levels of discrimination against them and their group. We have termed this the “conflict model” of interethnic relations. Using data from the 2002 National Survey of Latinos, conducted by the Pew Hispanic Center, we test opposing hypotheses based on these two models. Our findings, while exploratory, largely support the assimilationist model, with a few contradictory results. We discuss these findings and their implications for understanding the current situation of Hispanics in the United States.     

Savings and economic growth in South Africa: A multivariate causality test

This study takes a fresh look at the direction of causality between savings and economic growth in South Africa during the period 1950–2005. The study was motivated by the low and declining savings rate currently prevailing in South Africa, on the one hand, and the dwindling level of economic growth experienced in the country during the 1990s, on the other. Given the weakness associated with the bivariate causality framework, the current study incorporates foreign capital inflow as an intermittent variable in the bivariate model between savings and economic growth—thereby creating a simple trivariate causality framework. Using the cointegration-based error–correction mechanism, the study finds a bi-directional causality between savings and economic growth to prevail in the short run and a distinct unidirectional causal flow from economic growth to savings to dominate in the long run. On balance, the study finds growth-led savings to predominate in South Africa. The results also show that foreign capital inflow and savings Granger-cause each other, while economic growth Granger causes foreign capital inflow. The study, therefore, recommends that in the short run, South African policies should be geared towards achieving both higher savings and economic growth in order to boost investors’ confidence and to attract foreign capital inflow. However, in the long run, the country should shift its focus towards achieving higher economic growth, in order to boost the domestic savings and to sustain a steady flow of foreign capital investment.