On labour market dualism in the Lewis model: A comment

In a special issue of this journal commemorating the 50th anniversary of W. Arthur Lewis's (The Manchester School, Vol. 28 (1954), No. 2, pp. 139-191) seminal paper, the Lewis model is treated as a model of labour market dualism (Fields, The Manchester School, Vol. 72 (2004), No. 6, pp. 724-735). This interpretation is flawed for a number of reasons. First, it overemphasizes the role ascribed by Lewis to intersectoral earnings differentials in his original model. Second, it fails to acknowledge that a major shortcoming of the model was its inability to account for the widening intersectoral earnings differential observed across a wide range of developing economies. For Lewis himself this was one of the 'major theoretical puzzles of the period' (1979, p. 150). Third, it ignores Lewis's subsequent revision of the model (Lewis, The Manchester School, Vol. 47 (1979), No. 3, pp. 211-229) that, ironically, incorporates a dual labour market to resolve this puzzle. However, for Lewis the critical issue was dualism within the modern sector, not, as Fields understands it, labour market dualism between the modern and traditional sectors. Fields's appreciation of the contribution of the Lewis model to understanding the process of wage determination in developing economies is therefore misplaced.

Correlations, integration and Hansen-Jagannathan Bounds

Recent studies have documented the growing economic and financial integration between countries. Among other things, this has led to the argument that greater integration results in higher bilateral correlations between returns on national stock markets. This study endeavours to link the two issues by utilizing the assumption that if countries are integrated, they would have to display a minimum level of correlation. This is achieved by constructing a bound on the level of the bilateral correlation, as originally developed by Kasa (1995). In contrast to Kasa, the present studies demonstrate that the correlation bound may not be downward sloping in all cases and careful interpretation of the results is required.

Sustainable Native Floriculture?

The Centre for Native Floriculture (CNF) commenced in May 2003 at The University of Queensland, Gatton. The CNF is a joint initiative with the Queensland State Government, with funding for an initial 3-year period. The phase-out of bush-picking under the South East Queensland Forests Agreement was a catalyst for the Centres establishment. The CNF vision is: ‘to help create an internationally competitive and environmentally sustainable native floriculture industry that provides significant employment opportunities in Queensland’. The Centre is comprised of three research, development and extension programs. The Value Chain Program assists native floriculture industry groups in developing efficient consumer-orientated production, handling and marketing systems for select high potential species. These value chain systems will serve as models for realizing the market potential of and regional fiscal returns on other native ornamental species identified as crop ideotypes that are sought after by end-users (e.g. florists). The Floriculture Program supports the value chain by working to enhance germplasm for the native floriculture industry through selection and breeding, optimize cultivation protocols and overcome any technical barriers that arise. Such barriers include propagation constraints, disease problems and post-harvest limitations. The Capacity Building Program operates to transfer technology and other skills (e.g. value chain management principles) to industry members, train operatives for the industry and promote native floriculture. Conservation of native flora is encouraged through cultivation and community engagement. Protection of biodiversity is advocated via regional production systems that spare natural areas and educate the public as to the biological, floricultural and aesthetic values of native flora. Eco-agricultural tourism focused on wildflowers both in nature and in cultivation is also advocated by the CNF.

Outbound Travel Depends on Business Returns: Australian Evidence

In an earlier note, Collins and Tisdell (2002b) explored the possibility of a long-run relationship between Australian business returns and international business travel. Using annual data they found that such a relationship exists. The purpose of this study is to further examine this relationship using quarterly data for the time frame 1974:1 to 1999:4. In addition, previous studies on international business travel have offered some but not strong evidence for the existence of a positive relationship between the level of international business travel and real GDP of the origin country. This study suggests that the aggregate return on business investments is a better predictor of international business travel than GDP. The Engle-Granger and Johansen's maximum-likelihood cointegration procedures are used to show a long-term relationship exists between Australian outbound business travel and Australian business returns, but not with Real Australian GDP. Reasons for this relationship are discussed.