The current account, fiscal policy, and medium-run income determination

This article presents a new framework for analyzing the simultaneous determination of current account imbalances and the path of national income. Using standard macroeconomic behavioral relationships, it first examines how and why current account deficits matter by investigating links between domestic consumption, government spending, output, saving, investment, interest rates, and capital flows. Central to the model is the distinction between aggregate output and expenditure that enables dissection of the effects of discretionary fiscal change on the current account and national income. The framework yields results relevant to the twin deficits hypothesis that are contrary to those of standard models.

Rethinking the "diseases of affluence" paradigm: Global patterns of nutritional risks in relation to economic development

Background Cardiovascular diseases and their nutritional risk factors-including overweight and obesity, elevated blood pressure, and cholesterol-are among the leading causes of global mortality and morbidity, and have been predicted to rise with economic development. Methods and Findings We examined age-standardized mean population levels of body mass index (BMI), systolic blood pressure, and total cholesterol in relation to national income, food share of household expenditure, and urbanization in a cross-country analysis. Data were from a total of over 100 countries and were obtained from systematic reviews of published literature, and from national and international health agencies. BMI and cholesterol increased rapidly in relation to national income, then flattened, and eventually declined. BMI increased most rapidly until an income of about I$5,000 (international dollars) and peaked at about I$12,500 for females and I$17,000 for males. Cholesterol's point of inflection and peak were at higher income levels than those of BMI (about I$8,000 and I$18,000, respectively). There was an inverse relationship between BMI/cholesterol and the food share of household expenditure, and a positive relationship with proportion of population in urban areas. Mean population blood pressure was not correlated or only weakly correlated with the economic factors considered, or with cholesterol and BMI. Conclusions When considered together with evidence on shifts in income-risk relationships within developed countries, the results indicate that cardiovascular disease risks are expected to systematically shift to low-income and middle-income countries and, together with the persistent burden of infectious diseases, further increase global health inequalities. Preventing obesity should be a priority from early stages of economic development, accompanied by population-level and personal interventions for blood pressure and cholesterol.

Constructing internationally comparable real income aggregates by combining sparse benchmark data with annual national accounts data: A state-space approach

The importance of availability of comparable real income aggregates and their components to applied economic research is highlighted by the popularity of the Penn World Tables. Any methodology designed to achieve such a task requires the combination of data from several sources. The first is purchasing power parities (PPP) data available from the International Comparisons Project roughly every five years since the 1970s. The second is national level data on a range of variables that explain the behaviour of the ratio of PPP to market exchange rates. The final source of data is the national accounts publications of different countries which include estimates of gross domestic product and various price deflators. In this paper we present a method to construct a consistent panel of comparable real incomes by specifying the problem in state-space form. We present our completed work as well as briefly indicate our work in progress.

Social inequalities in male mortality, and in male mortality from smoking: indirect estimation from national death rates in England and Wales, Poland, and North America

Background There are substantial social inequalities in adult male mortality in many countries. Smoking is often more prevalent among men of lower social class, education, or income. The contribution of smoking to these social inequalities in mortality remains uncertain. Methods The contribution of smoking to adult mortality in a population can be estimated indirectly from disease-specific death rates in that population (using absolute lung cancer rates to indicate proportions due to smoking of mortality from certain other diseases). We applied these methods to 1996 death rates at ages 35-69 years in men in three different social strata in four countries, based on a total of 0.6 million deaths. The highest and lowest social strata were based on social class (professional vs unskilled manual) in England and Wales, neighbourhood income (top vs bottom quintile) in urban Canada, and completed years of education (more than vs less than 12 years) in the USA and Poland. Results In each country, there was about a two-fold difference between the highest and the lowest social strata in overall risks of dying among men aged 35-69 years (England and Wales 21% vs 43%, USA 20% vs 37%, Canada 21% vs 34%, Poland 26% vs 50%: four-country mean 22% vs 41%, four-country mean absolute difference 19%). More than half of this difference in mortality between the top and bottom social strata involved differences in risks of being killed at age 35-69 years by smoking (England and Wales 4% vs 19%, USA 4% vs 15%, Canada 6% vs 13%, Poland 5% vs 22%: four-country mean 5% vs 17%, four-country mean absolute difference 12%). Smoking-attributed mortality accounted for nearly half of total male mortality in the lowest social stratum of each country. Conclusion In these populations, most, but not all, of the substantial social inequalities in adult male mortality during the 1990s were due to the effects of smoking. Widespread cessation of smoking could eventually halve the absolute differences between these social strata in the risk of premature death.