Please select from the titles below:
- The Appearance of Knowledge in Growth Theory
- English Language Fluency and the Ethnic Wage Gap for Men in England and Wales
- In Search of a Nominal Anchor
- A Reassessment of the Long-run Validity of the Flexible Price Monetary Exchange Rate Model
- Testing for Unit Roots: Threshold Autoregression and Asymmetric Trend Stationarity
- The Problem of Front-end Loading and Disorder in the Housing Market
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The Appearance of Knowledge in Growth Theory (p.1)
by O Olsson The paper analyzes the appearance of knowledge in growth theory in relation to some fundamental notions in epistemology and the philosophy of science. Based on a brief account of epistemological theory, I discuss the treatment of knowledge in growth models starting from Solow (1956). My results suggest that although some important insights have been made - for instance the distinction between propositional and procedural knowledge and between knowledge gained by experience and by education - there are still confusions in the literature regarding the vital difference between the known and the knowing. Growth theorists have also largely overlooked that knowledge tends to be uncertain and evolves in a discontinuous fashion. Future growth modeling might benefit from empirical patent research at the micro level.
English Language Fluency and the Ethnic Wage Gap for Men in England and Wales
(p.21)
by NC O’Leary, PD Murphy, SJ Drinkwater and DH BlackabyUsing data from the Fourth National Survey of Ethnic Minorities, English language fluency is shown to have an important influence over the level of earnings that ethnic minorities are able to command within the employee labour market. There is also evidence to suggest that language fluency has some role to play in describing the difference in average weekly earnings between white and ethnic minority workers, but it does not emerge as a major determinant. Indeed, it would appear that the concentration of ethnic minorities in local enclaves with their high levels of unemployment has a greater influence over the level of ethnic earnings disadvantage.
In Search of a Nominal Anchor (p.33)
by M J OliverSince the break-up of the Bretton Woods fixed exchange rate system in the early-1970s, there has been a protracted search for a credible nominal anchor. This article examines the experiences of several industrial countries who have experimented with monetary targets, exchange rate targets and more recently, inflation targets. While it is acknowledged that the results of inflation targeting have been very encouraging so far, the article concludes by arguing that for the UK at least, inflation targets need to be combined with targets for the monetary base to prevent the central bank from acting dynamically inconsistently.
A Reassessment of the Long-Run Validity of the Flexible Price Monetary Exchange Rate Model
(p.47)
by A Abbott and G de VitaIn this article we employ the Pesaran and Shin (1999) structural cointegrating VAR methodology to reassess the monetary approach to exchange rate determination. This recently developed technique allows us to test directly the over-identifying restrictions of the long-run structural relations underlying the flexible price monetary model of the exchange rate. Using data for the German Mark-U.S. dollar and the Japanese Yen-U.S. dollar, we find for both exchange rates, that structural identification is rejected by the data, results that raise further doubts about the long-run validity of the monetary model.
Testing for Unit Roots: Threshold Autoregression and Asymmetric Trend Stationarity
(p.59)
by S Cook In recent research Enders and Granger (1998) have extended the Augmented Dickey-Fuller statistic to allow the unit root hypothesis to be tested against an alternative of stationarity with asymmetric adjustment. In this paper the threshold autoregressive (TAR) and momentum-threshold autoregressive (MTAR) unit root tests proposed by Enders and Granger are applied to data on UK investment. It is found that the TAR, MTAR and standard Augmented Dickey-Fuller tests fail to reject the unit root hypothesis. In contrast, an alternative modified TAR unit root test is proposed which rejects non-stationarity using specifically derived Monte Carlo critical values. Further testing rejects the null hypothesis of symmetric adjustment, with the form of asymmetry detected supporting recent theoretical predictions for investment behaviour presented by Gale (1996). The results obtained show the form of asymmetry incorporated within the Enders-Granger test to critically influence the resulting inferences drawn.
The Problem of Front-end Loading and Disorder in the Housing Market
(p.67)
by D Leslie In recent research Enders and Granger (1998) have extended the Augmented Dickey-Fuller statistic to allow the unit root hypothesis to be tested against an alternative of stationarity with asymmetric adjustment. In this paper the threshold autoregressive (TAR) and momentum-threshold autoregressive (MTAR) unit root tests proposed by Enders and Granger are applied to data on UK investment. It is found that the TAR, MTAR and standard Augmented Dickey-Fuller tests fail to reject the unit root hypothesis. In contrast, an alternative modified TAR unit root test is proposed which rejects non-stationarity using specifically derived Monte Carlo critical values. Further testing rejects the null hypothesis of symmetric adjustment, with the form of asymmetry detected supporting recent theoretical predictions for investment behaviour presented by Gale (1996). The results obtained show the form of asymmetry incorporated within the Enders-Granger test to critically influence the resulting inferences drawn.
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