Appropriate Institutions and Economic Growth - one size fits no-one

Modern-day economics is increasingly biased towards believing that institutions matter for growth, an argument that has been further enforced by the recent economic crisis. There is also a wide consensus on what these growth-promoting institutions should look like, and countries are periodically ranked depending on how their institutional structure compares with the best-practice institutions, mostly in place in the developing world. In this paper, it is argued that ”non-desirable” or “second-best” institutions can be beneficial for fostering investment and thus providing a starting point for sustained growth, and that what matters is the appropriateness of institutions to the economy’s distance to the frontier or current phase of development. Anecdotal evidence from Japan and South-Korea is used as a motivation for studying the subject and a model is presented to describe this phenomenon. In the model, the rigidity or non-rigidity of the institutions is described by entrepreneurial selection. It is assumed that entrepreneurs are the ones taking part in the imitation and innovation of technologies, and that decisions on whether or not their projects are refinanced comes from capitalists. The capitalists in turn have no entrepreneurial skills and act merely as financers of projects. The model has two periods, and two kinds of entrepreneurs: those with high skills and those with low skills. The society’s choice of whether an imitation or innovation – based strategy is chosen is modeled as the trade-off between refinancing a low-skill entrepreneur or investing in the selection of the entrepreneurs resulting in a larger fraction of high-skill entrepreneurs with the ability to innovate but less total investment. Finally, a real-world example from India is presented as an initial attempt to test the theory. The data from the example is not included in this paper. It is noted that the model may be lacking explanatory power due to difficulties in testing the predictions, but that this should not be seen as a reason to disregard the theory – the solution might lie in developing better tools, not better just better theories. The conclusion presented is that institutions do matter. There is no one-size-fits-all-solution when it comes to institutional arrangements in different countries, and developing countries should be given space to develop their own institutional structures that cater to their specific needs.

On the Informational Role of Term Structure in the U.S. Monetary Policy Rule

This paper uses a structural approach based on the indirect inference principle to estimate a standard version of the new Keynesian monetary (NKM) model augmented with term structure using both revised and real-time data. The estimation results show that the term spread and policy inertia are both important determinants of the U.S. estimated monetary policy rule whereas the persistence of shocks plays a small but significant role when revised and real-time data of output and inflation are both considered. More importantly, the relative importance of term spread and persistent shocks in the policy rule and the shock transmission mechanism drastically change when it is taken into account that real-time data are not well behaved.

Term Structure and the Estimated Monetary Policy Rule in the Eurozone

Published as an article in: Spanish Economic Review, 2008, vol. 10, issue 4, pages 251-277.

The effect of firm-level contracts on the structure of wages: evidence from matched employer-employee data

Revised: 2006-11

A Non-Parametric Dimension Test of the Term Structure

Published as an article in: Studies in Nonlinear Dynamics & Econometrics, 2004, vol. 8, issue 3, article 6.

Markov Switching Risk Premium and the term structure of interest rates. Empirical evidence from US post-war interest rates

This paper considers the basic present value model of interest rates under rational expectations with two additional features. First, following McCallum (1994), the model assumes a policy reaction function where changes in the short-term interest rate are determined by the long-short spread. Second, the short-term interest rate and the risk premium processes are characterized by a Markov regime-switching model. Using US post-war interest rate data, this paper finds evidence that a two-regime switching model fits the data better than the basic model. The estimation results also show the presence of two alternative states displaying quite different features.

The changing behaviour of the term structure of post-war US

Using U.S. interest rate data covering the period 1950:1-1992:7, this paper tests the rational expectations model of the term structure of interest rates. We show evidence that the rational expectations model of the term structure is supported by the data during the seventies and a period lasting from the mid-eighties to the end of the sample. However, during the …fties, sixties and a period that covers most of the Volcker’s office term (from September 1979 to April 1986) the term structure model is rejected by the data. Moreover, wefind evidence of regime changes in the short-term rate process and the term structure of interest rates. These regime switches roughly coincide with changes in the Federal Reserve chairman. The switches in monetary policy taking place when the chairmanship of the Federal Reserve changes therefore seem to play an important role in characterizing the term structure of interest rates.

Population age structure and private consumption in Spain

In this paper we study the effect of population age distribution upon private consumption expenditure in Spain from 1964 to 1997 using aggregate data. We obtain four main results. First, changes in the population pyramid have substantial effects upon the behaviour of private consumption. Second, the pattern of the coefficients of the demographic variables is not consistent with the simplest version of the life cycle hypothesis. Third, we estimate the impact of the demographic transition upon consumption and find positive values associated with episodes in which the shares of groups of individuals with expenditure levels higher (lower) than the mean increased (decreased). Fourth, the results are robust to alternative specifications for the population age distribution.

Switching Regimes in the Term Structure of Interest Rates During U.S. Post-War: A case for the Lucas proof equilibrium?

Published as an article in: Studies in Nonlinear Dynamics & Econometrics, 2004, vol. 8, issue 1, pages 5.

The Annual Economic Survey of Federal Gulf Shrimp Permit Holders: Report on the Design, Implementation, and Descriptive Results for 2006

This technical memorandum documents the design, implementation, data preparation, and descriptive results for the 2006 Annual Economic Survey of Federal Gulf Shrimp Permit Holders. The data collection was designed by the NOAA Fisheries Southeast Fisheries Science Center Social Science Research Group to track the financial and economic status and performance by vessels holding a federal moratorium permit for harvesting shrimp in the Gulf of Mexico. A two page, self-administered mail survey collected total annual costs broken out into seven categories and auxiliary economic data. In May 2007, 580 vessels were randomly selected, stratified by state, from a preliminary population of 1,709 vessels with federal permits to shrimp in offshore waters of the Gulf of Mexico. The survey was implemented during the rest of 2007. After many reminder and verification phone calls, 509 surveys were deemed complete, for an ineligibility-adjusted response rate of 90.7%. The linking of each individual vessel’s cost data to its revenue data from a different data collection was imperfect, and hence the final number of observations used in the analyses is 484. Based on various measures and tests of validity throughout the technical memorandum, the quality of the data is high. The results are presented in a standardized table format, linking vessel characteristics and operations to simple balance sheet, cash flow, and income statements. In the text, results are discussed for the total fleet, the Gulf shrimp fleet, the active Gulf shrimp fleet, and the inactive Gulf shrimp fleet. Additional results for shrimp vessels grouped by state, by vessel characteristics, by landings volume, and by ownership structure are available in the appendices. The general conclusion of this report is that the financial and economic situation is bleak for the average vessels in most of the categories that were evaluated. With few exceptions, cash flow for the average vessel is positive while the net revenue from operations and the “profit” are negative. With negative net revenue from operations, the economic return for average shrimp vessels is less than zero. Only with the help of government payments does the average owner just about break even. In the short-term, this will discourage any new investments in the industry. The financial situation in 2006, especially if it endures over multiple years, also is economically unsustainable for the average established business. Vessels in the active and inactive Gulf shrimp fleet are, on average, 69 feet long, weigh 105 gross tons, are powered by 505 hp motor(s), and are 23 years old. Three-quarters of the vessels have steel hulls and 59% use a freezer for refrigeration. The average market value of these vessels was $175,149 in 2006, about a hundred-thousand dollars less than the average original purchase price. The outstanding loans averaged $91,955, leading to an average owner equity of $83,194. Based on the sample, 85% of the federally permitted Gulf shrimp fleet was actively shrimping in 2006. Of these 386 active Gulf shrimp vessels, just under half (46%) were owner-operated. On average, these vessels burned 52,931 gallons of fuel, landed 101,268 pounds of shrimp, and received $2.47 per pound of shrimp. Non-shrimp landings added less than 1% to cash flow, indicating that the federal Gulf shrimp fishery is very specialized. The average total cash outflow was $243,415 of which $108,775 was due to fuel expenses alone. The expenses for hired crew and captains were on average $54,866 which indicates the importance of the industry as a source of wage income. The resulting average net cash flow is $16,225 but has a large standard deviation. For the population of active Gulf shrimp vessels we can state with 95% certainty that the average net cash flow was between $9,500 and $23,000 in 2006. The median net cash flow was $11,843. Based on the income statement for active Gulf shrimp vessels, the average fixed costs accounted for just under a quarter of operating expenses (23.1%), labor costs for just over a quarter (25.3%), and the non-labor variable costs for just over half (51.6%). The fuel costs alone accounted for 42.9% of total operating expenses in 2006. It should be noted that the labor cost category in the income statement includes both the actual cash payments to hired labor and an estimate of the opportunity cost of owner-operators’ time spent as captain. The average labor contribution (as captain) of an owner-operator is estimated at about $19,800. The average net revenue from operations is negative $7,429, and is statistically different and less than zero in spite of a large standard deviation. The economic return to Gulf shrimping is negative 4%. Including non-operating activities, foremost an average government payment of $13,662, leads to an average loss before taxes of $907 for the vessel owners. The confidence interval of this value straddles zero, so we cannot reject, with 95% certainty, that the population average is zero. The average inactive Gulf shrimp vessel is generally of a smaller scale than the average active vessel. Inactive vessels are physically smaller, are valued much lower, and are less dependent on loans. Fixed costs account for nearly three quarters of the total operating expenses of $11,926, and only 6% of these vessels have hull insurance. With an average net cash flow of negative $7,537, the inactive Gulf shrimp fleet has a major liquidity problem. On average, net revenue from operations is negative $11,396, which amounts to a negative 15% economic return, and owners lose $9,381 on their vessels before taxes. To sustain such losses and especially to survive the negative cash flow, many of the owners must be subsidizing their shrimp vessels with the help of other income or wealth sources or are drawing down their equity. Active Gulf shrimp vessels in all states but Texas exhibited negative returns. The Alabama and Mississippi fleets have the highest assets (vessel values), on average, yet they generate zero cash flow and negative $32,224 net revenue from operations. Due to their high (loan) leverage ratio the negative 11% economic return is amplified into a negative 21% return on equity. In contrast, for Texas vessels, which actually have the highest leverage ratio among the states, a 1% economic return is amplified into a 13% return on equity. From a financial perspective, the average Florida and Louisiana vessels conform roughly to the overall average of the active Gulf shrimp fleet. It should be noted that these results are averages and hence hide the variation that clearly exists within all fleets and all categories. Although the financial situation for the average vessel is bleak, some vessels are profitable. (PDF contains 101 pages)

Overview and bibliography of the literature of socio-economic relevance to the fisheries of Lake Victoria

An overview is provided of the literature of socio-economic relevance to the fisheries of Lake Victoria. It covers the following areas: marketing studies; management; changes to the structure of the fishery; and, base-line studies. The bibliography provides a guide to the more important documents on Lake Victoria's socio-economy and includes a total of 177 references

Financial and Economic Report of a Specific Business Group

As a result of the natural evolution of the economy, ever-changing, unpredictable and cyclical, companies must adapt as far as possible to the changes that have taken place in order to continue with their normal operating activities. Likewise, they should also try to maintain a structure for long-term growth, trying at all times to generate the maximum value. The main objective of this project is to provide financial advisory services to a business group, trying to forward solutions and measures that according to the author can be effective. For this end, the situation of the group in question is analysed from early 2008 to the present day, examining its evolution, what steps have been taken together with their corresponding results and the economic-financial situation of the company at the end of last year. Contact with the company was kept throughout the process of analysis and assessment trying to take advantage of the feedback generated so that the appropriate measures can be adopted if the management considers it to be adequate.

Report of the socio-economic baseline assessment dissemination meeting, Yangon, Myanmar, 28 January, 2015

The Data Dissemination Stakeholder Meeting was was a means of disseminating data from a socio-economic baseline study undertaken in 2014 (Schneider at al 2014). Implications included: the importance of heterogeneity of communities; population structure and migration trends; livelihoods diversity and vulnerability; and stakeholder mobilisation.

Investigation on biodiversity and population structure of Penaeus sernisulcatus [sic] in northern waters of Persian Gulf

Green tiger prawn, Penaeus sentisulcatus is one of the commercial species of Persian Gulf, which is distributed from north to Strait of I Iormoze. Concerning its role in fisheries economic, various research projects on stock assessment, biology and aquaculture has been conducted. This research is targeted the identification of various populations of green tiger prawn in northern waters of Persian Gulf. The area has been divided to five regions from north to south named; Bahrakan, Boushehr, Tangestan, Motaaf and Strait of Hormoz. In each region, numbers of sampling stations trawled, and live shrimp species carried in containers equipped with air pump, to coastal laboratories in Boushehr and Bandar Abbass Fisheries Research Centers. Biometeric, morphometeric and merestic measures for 45 factars done, and peices of muscles, eye and ovary tissues dissected, and stored in liquid nitrogen. Protein extraction, and polyacrylamid gel electrophoresis by SDS-PAGE technique for tissues samples conducted. Data of 45 morphometeric and merestic characteristics analyzed by principal component analysis (PCA), and clustering analysis methods. The results of analysis showed that, the populations of Bahrakan and Mota.af regions are differentiated, while population of Boushehr and Tangestan regions were mixed, and named as a single population. The analysis of electrophoretic data also confirmed this result, and showed a distinct population in Strait of Hormoz. Therefore, this research illustrated four distinct populations for P. semisulcatus in northern area of Persian Gulf, named Bahrakan (north of Boushehr), Boushehr and Tangesta.n (adjacent), Motaaf and it's south, and Strait of Hormoz. Study of morphometeric characteristics of carapace factors, genital organs, antenna and life cycle of samples of different regions resulting identification of a subspecies, which is named Penaeus seinisuleatus persicus.

HYDROGRAPHIC VARIATIONS IN SIZE STRUCTURE OF PLANKTON BIOMASS IN A CHANGJIANG FLOODPLAIN LAKE

The size structure of the planktonic community in a Changjiang floodplain lake (Lake Chenhu, Hubei, P. R. China) was described for the inundation period of May through September 1983. The modality of the Sheldon-type size distributions changed hydrographically with the spectral profiles being bimodal during low, rising, mid-high and falling water phases, and trimodal soon after filling and shortly before falling. The modal peaks corresponded respectively to the dominant organisms of chlorophytes and nauplii, while the troughs centered on the bacteria and macrocrustacean size classes in the lake. The slope of the normalized biomass spectrum (an index of plankton size distribution) was less than -1.0 for the filling and falling phases or close to -1.0 for the high water period, indicating that the planktonic biomass tended to decrease or evenly distributes across logarithmically ordered size classes, respectively. This observed variation in the size distribution of the plankton community mainly resulted from changes in water levels and contents of particulate inorganic matter (PIM) in the lake.