Please select from the titles below:
- On the Welfare Effect of an Equivalent Tariff and Quota
- Fiscal Policy and Growth: The Case of the Spanish Regions
- A Monetary Model of Exchange Rate and Balance of Payments Adjustment
- Stock Market Growth: An analysis of cointegration and causality
- In Memoriam: Robert L Heilbrone- the continuing relevance of the Worldly Philosophy
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On the Welfare Effect of an Equivalent Tariff and Quota (p.1)
by L-S Fan and C-M Fan Over many years, the comparison of tariffs and quotas has retained an important place in the study of trade restrictions. This note shows that there are substantial differences in the welfare effects of an equivalent tariff and quota designed to achieve identical import restrictions. When there is an increase in demand, the deadweight loss from an import quota will be greater than that of a tariff. Geometric presentations are executed by way of comparative static analyses for a small open economy. Moreover, measurements of welfare effects in terms of the demand elasticity and the supply elasticity are explicitly derived algebraically. A case involving monopoly is also explored to highlight the relative merit of a tariff as a means of import restriction.
Fiscal Policy and Growth: The Case of the Spanish Regions (p.9)
by D Martínez-López
This paper studies the effects of several fiscal variables on the regional growth of labour productivity in Spain over the period 1965-1997. Panel estimates are reported for this sample. The results show that public consumption affects growth negatively whereas public investment exerts a positive (but not always significant) effect on the productivity growth rate. Public investment in education has a positive impact on the dependent variable, while the opposite is true for public investment in health. Our findings also detect that taxes and social benefits are growth-impeding. Estimates dealing with specification problems are considered.
A Monetary Model of Exchange Rate and Balance of Payments Adjustment (p.25)
A J MakinThis article proposes an alternative monetary model for examining the effects of domestic monetary shocks on the exchange rate and the balance of payments. Using an output-expenditure framework, it shows that domestic monetary shocks can drive a wedge between national expenditure and production and generate incipient current account imbalances with exchange rate and balance of payments implications. Contrary to previous monetary approaches, the model suggests a new chain of causality that runs from domestic money to the exchange rate to the price level, rather than from money to the price level to the exchange rate. It also shows that under fixed rates external adjustment is consistent with money market equilibrium and price level stability.
Stock Market Growth: An analysis of cointegration and causality (p.37)
by K A El-WassalThis paper examines the relationship between stock market growth and economic growth, privatization; stock returns in 12 emerging economies from 1988 to 2000. Using monthly data, both the Johansen Cointegration and Granger Causality tests are employed. Results from cointegration tests suggest a long run relationship between stock market liquidity and size and real activity, privatization, and stock returns in five countries, India, Korea, Malaysia, the Philippines and Zimbabwe. The results of Granger causality tests indicate that there is a bi-directional relationship between stock market growth indicators and real economic activity, privatization, and stock returns for most of these countries. These results seem to validate the co-existence of both the supply-leading and demand-following hypotheses in the intermediate stages of the economic development i.e., the existence of a bi-directional relationship between finance (stock markets) and economic growth.
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