The international trade as the sole engine of growth for an economy

Can international trade act as the sole engine of growth for an economy? If yes, what are the mechanisms through which trade operates in transmitting permanent growth? This paper answers these questions with two simple two-country models, in which only one country enjoys sustained growth in autarky. The models differ in the assumptions on technical change, which is either labour- or capital-augmenting. In both cases, the stagnant economy imports growth by trading. In the first model, growth is transmitted because of permanent increases in the trade volume. In the alternative framework, the stagnant economy imports sustained growth because its terms of trade permanently improve.

Are the high-growth recovery periods over?

We present evidence about the loss of the so-called "plucking effect", that is, a high-growth phase of the cycle typically observed at the end of recessions. This result matches the popular belief, presented informally by different authors, that the current recession will have permanent effects, or that the current recession will have an L shape versus the old-time recessions that have always had a V shape. Furthermore, we show that the loss of the "plucking effect" can explain part of the Great Moderation. We postulate that these two phenomena may be due to changes in inventory management brought about by improvements in information and communications technologies.

Asynchronous growth and competition in a two-sex age-structured population model

Asynchronous exponential growth has been extensively studied in population dynamics. In this paper we find out the asymptotic behaviour in a non-linear age-dependent model which takes into account sexual reproduction interactions. The main feature of our model is that the non-linear process converges to a linear one as the solution becomes large, so that the population undergoes asynchronous growth. The steady states analysis and the corresponding stability analysis are completely made and are summarized in a bifurcation diagram according to the parameter R0. Furthermore the effect of intraspecific competition is taken into account, leading to complex dynamics around steady states.

Small firms, growth and financial constraints

This paper analyses the impact of different sources of finance on the growth of firms. Using panel data from Spanish manufacturing firms for the period 2000-2006, we investigate the effects of internal and external finances on firm growth. In particular, we examine three dimensions of these financial sources: a) the performance of the firms’ capital structure in accordance with firm size; b) the effects of internal and external financial sources on growth performance; c) the combined effect of equity, external debt and cash flow on firm growth. We find that low-growth firms are sensitive to cash flow and short-term bank debt, while high-growth firms are more sensitive to long-term debt. Furthermore, equity capital seems to reduce barriers to external finance. Our main conclusion is that during the start-up phase, firms are unable to increase their financial leverage and so their capital structure fails to promote correct investment strategies. However, as their equity capital increases, alternative financial mechanisms, in particular long-term debt, become available, which have a positive impact on firm growth.

Risk Attitude And Wage Growth: Replication And Reconstruction

We replicate Shaw (1996) who found that individual wage growth is higher for individuals with greater preference for risk taking. Expanding her dataset with more American observations and data for Germany, Spain and Italy, we find mixed support for the earlier results. We present and estimate a new model and find that in particular the wage level is sensitive to attitudes towards risk taking. Comments given at the Labour Economics Conference in honour of Niels Westergaard (Nyborg, August 2008) and EALE 2008 (Amsterdam) and at seminars in Maastricht,Reus and Essen (RWI) are gratefully acknowledged. The authors also acknowledge financial support from the Spanish Ministry of Science and Innovation (grant number SEJ2007-66318) and from the Barcelona Economics Program of CREA. JEL code: J24; J30. Key words: wage growth, risk, post-school investment.

Trade liberalization, competition and growth

Increasing evidence support the claim that international trade enhances innovation and productivity growth through an increase in competition. This paper develops a two-country endogenous growth model, with firm specific R&D and a continuum of oligopolistic sectors under Cournot competition to provide a theoretical support to this claim. Since countries are assumed to produce the same set of varieties, trade openness makes markets more competitive, reducing prices and increasing quantities. Under Cournot competition, trade is pro-competitive. Since firms undertake cost reducing innovations, the increase in production induced by a more competitive market push firms to innovate more. Consequently, a reduction on trade barriers enhances growth by reducing domestic firm's market power.

Effects of increased drought and selective thinning on growth and resprouting of two coexisting Mediterranean oaks with contrasting leaf habit (Quercus ilex and Quercus cerrioides)

According to the IPCC (2007), the Mediterranean basin is expected to suffer important changes in temperature and precipitation in the next few decades, leading the climate warmer and dryer. Therefore, it is necessary to determine the possible effects of increased drought on species with different structural and physiological traits, to be able to predict possible changes in the structure and composition of Mediterranean forests. Moreover, it will be necessary to assess whether traditional management practices can mitigate the effects of climate change on these forests. The main aim of this study has been to analyze the effects of increased drought on the mortality, growth and resprouting patterns of two co-occurring Mediterranean oak species with contrasting leaf habit (the evergreen Quercus ilex and the winter-deciduous Quercus cerrioides), and to assess the effects of selective thinning on their response to increased drought. Our results show a differential effect of increased drought between species: no differences were observed in the growth of Q. ilex while Q. cerrioides reduced its growth under increased drought conditions. Selective thinning reduced the negative effects of increased drought on tree growth, although this beneficial effect tended to decrease during the experiment. Our results show that increasing aridity in Mediterranean areas can be a constraining factor for deciduous oaks, thus potentially causing their decline in mixed forests and favouring their substitution by the evergreen congeneric species. However, as seen in this study, management can strongly encourage growth both for deciduous and evergreen species, thus reversing the effects of increased water stress on Mediterranean coppices.

Implication of Nerve Growth Factor in intestinal mucosal mast cell activity and colonic motor alterations in a model of ovalbumin-induced gut dysfunction in rats

We determined NGF involvement in MMCs and colonic motor alterations in an ovalbumin (OVA)-induced gut dysfunction model in rats. Animals received OVA (6 weeks), with/without simultaneous K252a (TrkA antagonist) treatment. MMCs, rat mast cell protease II (RMCPII) levels and colonic contractility in vitro were assessed. OVA increased MMC density and RMCPII concentration. Spontaneous contractility was similar in both groups and inhibited by K252a. Carbachol responses were increased by OVA in a K252a-independent manner. NO-synthase inhibition increased spontaneous activity in OVA-treated animals in a K252a-dependent manner. These observations support an involvement of NGF in the functional changes observed in this model.

Economic growth and inequality: the role of fiscal policies

This paper analyses the impact of different instruments of fiscal policy on economic growth as well as on income inequality, using an unbalanced panel of 43 upper-middle and high income countries for the period 1972-2006. We consider and estimate two individual equations explaining growth and inequality in order to assess the incidence of different fiscal policies. Firstly, our approach considers imposing orthogonal assumptions between growth and inequality in both equations, and secondly, it allows growth to be included in the inequality equation, and inequality to be included in the growth equation. The empirical results suggest that an increase in the size of government measured through current expenditures and direct taxes diminishes economic growth while reducing inequality, being public investment the only fiscal policy that may break this trade-off between efficiency and equity, since increases in this item reduces inequality without harming output. Therefore, the results reflect that the trade-off between efficiency and equity that governments often confront when designing their fiscal policies may be avoided.

Vintage capital growth theory: three breakthroughs

Vintage capital growth models have been at the heart of growth theory in the 60s. This research line collapsed in the late 60s with the so-called embodiment controversy and the technical sophisitication of the vintage models. This paper analyzes the astonishing revival of this literature in the 90s. In particular, it outlines three methodological breakthroughs explaining this resurgence: a growth accounting revolution, taking advantage of the availability of new time series, an optimal control revolution allowing to safely study vintage capital optimal growth models, and a vintage human capital revolution, along with the rise of economic demography, accounting for the vintage structure of human capital similarly to physical capital age structuring. The related literature is surveyed.

Growth, selection and appropriate contracts

We study a dynamic model where growth requires both long-term investment and the selection of talented managers. When ability is not ex-ante observable and contracts are incomplete, managerial selection imposes a cost, as managers facing the risk of being replaced tend to choose a sub-optimally low level of long-term investment. This generates a trade-off between selection and investment that has implications for the choice of contractual relationships. Our analysis shows that rigid long-term contracts sacrificing managerial selection may be optimal at early stages of economic development and when access to information is limited. As the economy grows, however, knowledge accumulation increases the return to talent and makes it optimal to adopt flexible contractual relationships, where managerial selection is implemented even at the cost of lower investment. Better institutions, in the form of a richer contracting environment and less severe informational frictions, speed up the transition to short-term relationships.

Growth, unemployment and wage inertia

We introduce wage setting via efficiency wages in the neoclassical one-sector growth model to study the growth effects of wage inertia. We compare the dynamic equilibrium of an economy with wage inertia with the equilibrium of an economy without wage inertia. We show that wage inertia affects the long run employment rate and that the transitional dynamics of the main economic variables will be different because wages are a state variable when wage inertia is introduced. In particular, we show non-monotonic transitions in the economy with wage inertia that do not arise in the economy with flexible wages. We also study the growth effects of permanent technological and fiscal policy shocks in these two economies. During the transition, the growth effects of technological shocks obtained when wages exhibit inertia may be the opposite from the ones obtained when wages are flexible. In the long run, these technological shocks may have long run effects if there is wage inertia. We also show that the growth effects of fiscal policies will be delayed when there is wage inertia.

The effects of uncertainty about countries' compliance with the Stability and Growth Pact

The Stability and Growth Pact (SGP) was established to govern discretionary fiscal policy in the European Monetary Union. This article studies the effects created when there is uncertainty about the members’ commitment to respecting the established deficit limits in the SGP. We will show that, even if countries respect the SGP deficit ceiling, the presence of uncertainty about their compliance will bring about higher volatility in key economic variables, which could, in turn, affect unemployment and growth negatively. This finding shows that it is important to reduce uncertainty about the members’ commitment towards the SGP. Keywords: fiscal policy rules, monetary union, Stability and Growth Pact, uncertainty, commitment. JEL No.: E63, F55, H62, H87

Survival, development and growth of larvae of the blue swimmer crab, Portunus pelagicus, cultured under different photoperiod conditions

The blue swimmer crab is a commercially important species of the tropical Indo-Pacific regions that shows substantial potential as a candidate species for aquaculture. Optimization of larval rearing conditions, including photoperiod, is therefore important to establish a method for the intensive hatchery culture of this species. Newly hatched larvae of Portunuspelagicus in first zoeal stage (ZI) were reared under five photoperiod regimes 0L: 24D, 6L: 18D, 12L: 12D, 18L: 6D, and 24L: 0D (5 replicates per treatment) till they metamorphosed to megalopae (ranged from 8.5 ± 0.3 days (18L: 6D) to 10.8 ± 1.8 days (0L: 24D) at 29 ± 1 °C). Daily, larvae of each treatment were fed an identical diet of mixed rotifer and Artemia nauplii, and the survival and molt to successive stages was monitored. Newly hatched ZI larvae of P. pelagicus could successfully develop to the megalopal stage under all tested photoperiod conditions, but we detected significant differences in survival among treatments (p & 0.05). The constant darkness treatment (0L: 24D) had the lowest (19.2 ± 7.2%, mean ± S.E.) cumulative survival from ZI to the megalopal stage, while the 18L: 6D treatment achieved the highest survival (51.2 ± 23.6%). Similarly, the photoperiod significantly affected zoeal development. Constant darkness led to the longest cumulative zoeal duration (10.8 ± 1.8 days), whereas the 18L: 6D treatment rendered the shortest larval development (8.5 ± 0.3 days). In addition, larvae reared under constant darkness resulted in the smallest megalopae (carapace length = 1.44 ± 0.09 mm) and the lowest dry weight (0.536 ± 0.188 mg). In conclusion, photoperiod significantly affected the survival, development, and growth of P. pelagicus zoeal larvae. Constant darkness led to the lowest larval survival and developmental rate, while a photoperiod regime of 18L: 6D appeared to be the most suitable condition for the rearing of zoeal larvae of P. pelagicus.

Development and growth of the early juveniles of the spider crab Maja squinado (Brachyura: Majoidea) in an individual culture system

The spider crab Maja squinado is an endangered Mediterranean species; therefore, culturing it successfully is essential for developing restocking programs. The survival, growth and development of post-larval stages (juvenile crabs, C1-C8) were studied using larvae obtained from adult individuals collected in the Catalan Sea. The juvenile crab stages were cultured individually from a megalopal stage using a semi-open recirculation system to obtain the precise growth data of each juvenile crab stage until C8. Development up to C8 at 20ºC lasted 154±10 days. Survival from C1 to C8 was 5.8 %. Moult increment values in cephothoracic length were similar in all the crab stages (21-35 %). Intermoult duration (9±1 in C1-C2 to 51±8 days in C7-C8) increased sharply from juvenile stage 5. Males and females can be distinguished from C4 based on sexual dimorphism in the pleopods and the presence of gonopores. The allometric growth of the pleon is sex-dependent from C4, with females showing positive allometry and males isometric growth. The juvenile growth rate was lower compared with that of the previously studied Atlantic species Maja brachydactyla.