Estimating potential output in developing countries

This paper describes a parsimonious methodology employed by the World Bank for estimating potential output using the production function method. Despite the necessity of strong assumptions, sensitivity analysis suggests the reported estimates for 159 countries are robust to alternative specifications. Moreover, for the majority of countries estimated output gaps are positively correlated with inflation acceleration and negatively correlated with current account balances. An examination of estimated output gaps and post-crisis economic developments in several middle-income countries suggest that the methods can play a useful role in guiding macroeconomic policy.     

Control of type 1 error in a hybrid complete two‐period vaccine efficacy trial

A complete two‐period experimental design has been defined as one in which subjects are randomized to treatment, observed for the occurrence of an event of interest, re‐randomized, and observed again for the event in a second period. A 4‐year vaccine efficacy trial was planned to compare a high‐dose vaccine with a standard dose vaccine. Subjects would be randomized each year, and subjects who had participated in a previous year would be allowed to re‐enroll in a subsequent year and would be re‐randomized. A question of interest is whether positive correlation between observations on subjects who re‐enrolled would inflate the variance of test statistics. The effect of re‐enrollment and correlation on type 1 error in a 4‐year trial is investigated by simulation. As conducted, the trial met its power requirements after two years. Subjects therefore included some who participated for a single year and others who participated in both years. Those who participated in both years constituted a complete two‐period design. An algebraic expression for the variance of the treatment difference in a complete two‐period design is derived. It is shown that under a ‘no difference’ null, correlation does not result in variance inflation in this design. When there is a treatment difference, there is variance inflation but it is small. In the vaccine efficacy trial, the effect of correlation on the statistical inference was negligible. Copyright © 2014 John Wiley & Sons, Ltd.     

Some Simple Method of Estimation for the Parameters of the Discrete Stable Distribution with the Probability Generating Function

In this article, we develop a method to estimate the two parameters of the discrete stable distribution. By minimizing the quadratic distance between transforms of the empirical and theoretical probability generating functions, we obtain estimators simple to calculate, asymptotically unbiased, and normally distributed. We also derive the expression for their variance–covariance matrix. We simulate several samples of discrete stable distributed datasets with different parameters, to analyze the effect of tuncation on the right tail of the distribution.     

Five Debates on International Development: The US Perspective

Andrew S. Natsios was Administrator of the United States Agency for International Development until January 2006. The US has the largest aid programme in the world but labours under certain constraints, notably a proliferation of Congressionally‐imposed budget earmarks. Mr Natsios has been an articulate advocate as well as an outspoken reformer of the US approach to aid. It was appropriate, then, for the All‐Party Parliamentary Group on Overseas Development of the Westminster parliament, together with ODI, to invite him to speak in Parliament on 12 October 2005. ¹ 1 The audio of Andrew Natsios' speech, and the subsequent discussion, are available on the ODI website at http://www.odi.org.uk/speeches/apgood_oct05/apgood_oct12/index.html .
The present article, a version of that APGOOD speech revised by Mr Natsios since his November resignation, has been judged by DPR Editors to be an important development policy statement worthy of publication. Adrian Hewitt     

Hepatitis C knowledge among staff in U.S. drug treatment programs

Staff in drug treatment programs are in an optimal position to support the hepatitis C related needs of their patients. To do so effectively, however, staff need to have accurate information about the hepatitis C virus (HCV). This article examines the HCV knowledge of staff (N= 104) in two drug-free and two methadone maintenance treatment programs (MMTPs) in the New York metropolitan area. Five of 20 items on an HCV Knowledge Assessment were not answered correctly by the majority of the participating staff, and total scores on the Assessment averaged 70%, 71%, and 45% among the medically credentialed staff, non-medically credentialed staff in the MMTPs, and non-medically credentialed staff in the drug-free programs, respectively. The majority of those in the latter group had never participated in a training specifically devoted to HCV. Results suggest the need for effective HCV-related training for all staff in drug treatment programs.     

Instrumental Variable Models for Discrete Outcomes

Single equation instrumental variable models for discrete outcomes are shown to be set identifying, not point identifying, for the structural functions that deliver the values of the discrete outcome. Bounds on identified sets are derived for a general nonparametric model and sharp set identification is demonstrated in the binary outcome case. Point identification is typically not achieved by imposing parametric restrictions. The extent of an identified set varies with the strength and support of instruments, and typically shrinks as the support of a discrete outcome grows. The paper extends the analysis of structural quantile functions with endogenous arguments to cases in which there are discrete outcomes.