Calibration of CES functions for real-world multisectoral modeling

We show how to calibrate CES production and utility functions when indirect taxation affecting inputs and consumption is present. These calibrated functions can then be used in computable general equilibrium models. Taxation modifies the standard calibration procedures since any taxed good has two associated prices and a choice of reference value units has to be made. We also provide an example of computer code to solve the calibration of CES utilities under two alternate normalizations. To our knowledge, this paper fills a methodological gap in the CGE literature.

Indirect immunofluorescence test in new world Leishmaniasis: serological and clinical relation-ship

The indirect immunofluorescence test (IF) for anti-Leishmania antibodies (IgC and IgM) was performed with sera form the following groups of individuals: 214 cutaneous leishmaniasis patients, 28 healthy subjects with positive Montenegro's skin test (MST), 29 healthy subjects with negativeMST and 16 visceral leishmaniasis patients. The first four groups came from a suburban area of Rio de Janeiro (Jacarepaguá) where cutaneous leishmaniasis caused by Leishmania braziliensis braziliensis is endemic. It was observed that IF-IgM titers were significantly higher amongst the cutaneous leishmaniasis patients with less than four months of disease as compared to those with longer periods and that IF-IgG titers were significantly higher in patients with multiple lesions as compared to those with single lesions. The visceral leishmaniasis patients had IF-IgG titers significantly higher than those from cutaneous leishmaniasis patients. A group of 28 individuals selected amongst the 214 cutaneous leishmaniasis patients had their IF-titers (IgG and IgM) compared to those of the two control groups of healthy subjects from the endemic area, respectively with positive and negative MST. Significantly higher titers of IF-IgG and IF-IgM were found in the group with active disease. The same group of patients showed IF-IgG titers significantly lower at the end of the antimonial therapy than those observed during this tratment.

Entrepreneurial Orientation, Intangible Assets and Firm Growth: the impact of ‘Spirit and Material’ on the growth of Chinese private firms

This paper has three contributions. First, it shows how field work within small firms in PR Chinese has provided new evidence which enables us to measure and calibrate Entrepreneurial Orientation (EO), as ‘spirit’, and Intangible Assets (IA), as ‘material’, for use in models of small firm growth. Second, it uses inter-item correlation analysis and both exploratory and confirmatory factor analysis to provide new measures of EO and IA, in index and in vector form, for use in econometric models of firm growth. Third, it estimates two new econometric models of small firm employment growth in PR China, under the null hypothesis of Gibrat’s Law, using our two new index-based and vector-based measures of EO and IA. Estimation is by OLS with adjustment for heteroscedasticity, and for sample selectivity. Broadly, it finds that EO attributes have had little significant impact on small firm growth, and indeed innovativeness and pro-activity paradoxically may even dampen growth. However, IA attributes have had a positive and significant impact on growth, with networking, and technological knowledge being of prime importance, and intellectual property and human capital being of lesser but still significant importance. In the light of these results, Gibrat’s Law is generalized, and Jovanovic’s learning theory is extended, to emphasise the importance of IA to growth. These findings cast new empirical light on the oft-quoted national slogan in PR China of “spirit and material”. So far as small firms are concerned, this paper suggests that their contribution to PR China’s remarkable economic growth is not so much attributable to the ‘spirit’ of enterprise (as suggested by propaganda) as, more prosaically, to the pursuit of the ‘material’.

Corruption and the Military in Politics: Theory and Evidence from around the World

Recent theoretical developments and case study evidence suggests a relationship between the military in politics and corruption. This study contributes to this literature by analyzing theoretically and empirically the role of the military in politics and corruption for the first time. By drawing on a cross sectional and panel data set covering a large number of countries, over the period 1984-2007, and using a variety of econometric methods substantial empirical support is found for a positive relationship between the military in politics and corruption. In sum, our results reveal that a one standard deviation increase in the military in politics leads to a 0.22 unit increase in corruption index. This relationship is shown to be robust to a variety of specification changes, different econometric techniques, different sample sizes, alternative corruption indices and the exclusion of outliers. This study suggests that the explanatory power of the military in politics is at least as important as the conventionally accepted causes of corruption, such as economic development.

Mortality from cardiovascular and cerebrovascular diseases in Europe and other areas of the world: an update.

OBJECTIVE: To update trends in mortality from coronary heart diseases (CHD) and cerebrovascular diseases (CVD) over the period 1981-2004 in Europe, the USA, Latin America, Japan and other selected areas of the world. METHODS: Age-standardized mortality rates were derived from the World Health Organization database. Joinpoint analysis was used to identify significant changes in trends. RESULTS: In the European Union (27 countries), CHD mortality in men declined from 139/100,000 in 1985-1989 to 93/100,000 in 2000-2004 (-33%). In women, the fall was from 61/100,000 to 44/100,000 (-27%). In this area, a decline by over 30% was also registered in CVD mortality for both sexes. In the Russian Federation and other countries of the former Soviet Union, CHD rates in 2000-2004 were exceedingly high, around 380/100,000 men and 170/100,000 women in Russia, 430 for men and 240 for women in Ukraine, 420 and 200 in Belarus. For CVD, a similar situation was registered, with mortality rates of 226/100,000 for men and 159/100,000 for women in 2004 in the Russian Federation, and more than 24% increase since the late 1980s for men and 15% for women. CHD and CVD mortality continued to decline in most Latin American countries, Australia and other areas considered, including Asia (even if with marked differences). CONCLUSION: Although mortality from CHD and CVD continues to decline in several areas of the world including most countries of Europe and of the America providing data and Australia, unfavourable trends were still observed in the Russian Federation and other countries of the former Soviet Union, whose recent rates remain exceedingly high.

Factor Proportions and the Growth of World Trade

Most of the expansion of global trade during the last three decades has been of the North-South kind - between capital-abundant developed and labour-abundant developing countries. Based on this observation, I argue that the recent growth of world trade is best understood from a factor-proportions perspective. I present novel evidence documenting that differences in capital-labour ratios across countries have increased in the wake of two shocks to the global economy: i) the opening up of China and ii) financial globalisation and the resulting upstream capital flows towards capital-abundant regions. I analyse their impact on specialisation and the volume of trade in a dynamic model which combines factor-proportions trade in goods with international trade in financial assets. Calibrating this model, I find that it can account for 60% of world trade growth between 1980 and 2007. It is also capable of predicting international investment patterns which are consistent with the data

Exchange Rate Predictability in a Changing World

An expanding literature articulates the view that Taylor rules are helpful in predicting exchange rates. In a changing world however, Taylor rule parameters may be subject to structural instabilities, for example during the Global Financial Crisis. This paper forecasts exchange rates using such Taylor rules with Time Varying Parameters (TVP) estimated by Bayesian methods. In core out-of-sample results, we improve upon a random walk benchmark for at least half, and for as many as eight out of ten, of the currencies considered. This contrasts with a constant parameter Taylor rule model that yields a more limited improvement upon the benchmark. In further results, Purchasing Power Parity and Uncovered Interest Rate Parity TVP models beat a random walk benchmark, implying our methods have some generality in exchange rate prediction.

Education and the local equity bias around the world

Using a panel of 38 economies, over the period 2001 to 2010, we analyse the link between different facets of education and diversification in international portfolios. We find that university education, mathematical numeracy, in addition to financial skill, play an important role in reducing home bias. After separating countries according to their level of financial development, we find that less developed economies with more university graduates, or with higher level of mathematical numeracy, have lower level of local equity bias compared to more developed countries. We also find that the beneficial effect of education is more pronounced during the most recent financial crisis, especially for economies with less developed financial markets.