Analysis of World Economic Variables Using Multidimensional Scaling

Waves of globalization reflect the historical technical progress and modern economic growth. The dynamics of this process are here approached using the multidimensional scaling (MDS) methodology to analyze the evolution of GDP per capita, international trade openness, life expectancy, and education tertiary enrollment in 14 countries. MDS provides the appropriate theoretical concepts and the exact mathematical tools to describe the joint evolution of these indicators of economic growth, globalization, welfare and human development of the world economy from 1977 up to 2012. The polarization dance of countries enlightens the convergence paths, potential warfare and present-day rivalries in the global geopolitical scene.

Cape Verde’s foreign policy: an economic perspective

The virtuous cycle between development success and foreign policy in Cape Verde reflects a positive interaction between globalization and governance. Development success under globalization entails positive market perceptions regarding the orientation and predictability of policies as well as the accompanying institutional arrangements, thereby making foreign policy salient beyond the comparator group, or “aspirational”. Even if there is no universally applicable development model, an aspirational foreign policy can be built on positive rankings with respect to comparator groups. In Macedo and Pereira (2010), macrolevel policy and institutional combinations underpinning trade diversification and income convergence in West and Southern Africa are used to establish development success for Cape Verde and Mozambique respectively. Here, the narrative of long-term development helps identify the following drivers: moving towards a market economy; opening up to regional and global trade; increasing economic and political freedom; pursuing macroeconomic stability and financial reputation; ensuring policy continuity (especially in trade and industrial sectors) and focusing on human development (especially poverty reduction and education). Looking at GDP per capita and indicators of financial reputation and good governance of sub-regional peers is not sufficient to conclude that Cape Verde’s convergence will be sustained. Nevertheless, the positive interaction between trade and financial globalization, on the one hand, and democracy and good governance, on the other, have positive implications for the effectiveness of foreign policy across the region as well as in the Portuguese-speaking community.

Fractional state space analysis of economic systems

This paper examines modern economic growth according to the multidimensional scaling (MDS) method and state space portrait (SSP) analysis. Electing GDP per capita as the main indicator for economic growth and prosperity, the long-run perspective from 1870 to 2010 identifies the main similarities among 34 world partners’ modern economic growth and exemplifies the historical waving mechanics of the largest world economy, the USA. MDS reveals two main clusters among the European countries and their old offshore territories, and SSP identifies the Great Depression as a mild challenge to the American global performance, when compared to the Second World War and the 2008 crisis.

Analysis of world economic variables using multidimensional scaling

Waves of globalization reflect the historical technical progress and modern economic growth. The dynamics of this process are here approached using the multidimensional scaling (MDS) methodology to analyze the evolution of GDP per capita, international trade openness, life expectancy, and education tertiary enrollment in 14 countries. MDS provides the appropriate theoretical concepts and the exact mathematical tools to describe the joint evolution of these indicators of economic growth, globalization, welfare and human development of the world economy from 1977 up to 2012. The polarization dance of countries enlightens the convergence paths, potential warfare and present-day rivalries in the global geopolitical scene.

Real convergence in per capita output and growth in Eurozone: A time-series approach

The real convergence hypothesis has spurred a myriad of empirical tests and approaches in the economic literature. This Work Project intends to test for real output and growth convergence in all N(N-1)/2 possible pairs of output and output growth gaps of 14 Eurozone countries. This paper follows a time-series approach, as it tests for the presence of unit roots and persistence changes in the above mentioned pairs of output gaps, as well as for the existence of growth convergence with autoregressive models. Overall, significantly greater evidence has been found to support growth convergence rather than output convergence in our sample.

Entrepreneurship, management services and economic growth

We model the joint production of entrepreneurs and workers where the former provide both entrepreneurial (strategic) and managerial (coordination, motivation) services, and management services are shared with individual workers in an output maximizing way. The static equilibrium of the model determines the endogenous share of entrepreneurs in the economy in a given moment of time. The time dynamics of the solution implies that a given growth rate in quality of entrepreneurial services contributes to productivity growth proportionally to the share of entrepreneurs at the start of the period and improvement in quality of entrepreneurial services is convergence enhancing. Model predictions are tested with data from OECD countries in the period 1970-2002. We find that improvements in quality of entrepreneurial services over time explain up to 100% of observed average productivity growth in these countries.

Interprovincial disparities in China since the reforms: Convergence or divergence?

This paper investigates the extent of disparities amongst the provinces of China since the economic reform in 1978 up to the most recent year for which data is available. After a brief review of theoretical and in particular recent empirical literature on regional inequality in China it investigates whether or not the dynamic economic growth in China has been coupled with increasing disparities amongst the Chinese provinces. The paper utilises a few models of convergence along the lines of those hypothesised by neoclassical economists. It employs per capita income and per capita consumption to identify the possible absolute and conditional convergence since the economic reforms. The coverage and impact of the disparities in terms of the relative size of population affected are then taken into account in the analysis of inequality in income and consumption.

Technological convergence: a strategic perspective

The information and communication technologies (ICT) sectors are in a process of technological convergence. Determinant factors in this process are the liberalisation of the telecommunications markets and technological change. Many firms are engaged in a process of mergers and alliances to position themselves in this new framework. Technological and demand uncertainties are very important. Our objective in this paper is to study the economic determinants of the strategies of the firms. With this aim, we review some key technological and demand aspects. We shed some light on the strategic motivations of the firms by establishing a parallel with the evolution of the retailing sector

Testing for convergence clubs in income per-capita: A predictive density approach

The paper proposes a technique to jointly test for groupings of unknown size in the cross sectional dimension of a panel and estimates the parameters of each group, and applies it to identifying convergence clubs in income per-capita. The approach uses the predictive density of the data, conditional on the parameters of the model. The steady state distribution of European regional data clusters around four poles of attraction with different economic features. The distribution of incomeper-capita of OECD countries has two poles of attraction and each grouphas clearly identifiable economic characteristics.

Tracking the invisible hand: Convergence of double auctions to competitive equilibrium

Economics is the science of want and scarcity. We show that want andscarcity, operating within a simple exchange institution (double auction),are sufficient for an economy consisting of multiple inter--related marketsto attain competitive equilibrium (CE). We generalize Gode and Sunder's(1993a, 1993b) single--market finding to multi--market economies, andexplore the role of the scarcity constraint in convergence of economies to CE.When the scarcity constraint is relaxed by allowing arbitrageurs in multiple markets to enter speculative trades, prices still converge to CE,but allocative efficiency of the economy drops. \\Optimization by individual agents, often used to derive competitive equilibria,are unnecessary for an actual economy to approximately attain such equilibria.From the failure of humans to optimize in complex tasks, one need not concludethat the equilibria derived from the competitive model are descriptivelyirrelevant. We show that even in complex economic systems, such equilibriacan be attained under a range of surprisingly weak assumptions about agentbehavior.

The EU strategy of policy convergence with its neighbours in the area of trade

The objective of this paper is to ascertain whether the EU is seeking policy convergence with its neighbours in the area of trade by means of EU regulations. For each trade- related topic, we carried out a content analysis of the available official documents to identify the model of relations that has been established between the EU and four neighbouring countries (Morocco, Algeria, Ukraine and Georgia). The findings indicate that Europeanization is the EU strategy in most cases. However, adaptation to European regulations is only a long-term aim. When international regulations exist in a specific area, the EU usually demands the internationalization of a country¿s regulations as a first step. When there are no international regulations, the convergence process is established on the basis of bilaterally developed norms. EU strategy also varies depending on the country. Its relations with Algeria are the most particular. We conclude that the EU is promoting policy convergence with its neighbours in the area of trade mainly on the basis of international and bilaterally-developed regulations.

Growth, convergence and public investment : a bayesian model averaging approach

The aim of this paper is twofold. First, we study the determinants of economic growth among a wide set of potential variables for the Spanish provinces (NUTS3). Among others, we include various types of private, public and human capital in the group of growth factors. Also,we analyse whether Spanish provinces have converged in economic terms in recent decades. Thesecond objective is to obtain cross-section and panel data parameter estimates that are robustto model speci¯cation. For this purpose, we use a Bayesian Model Averaging (BMA) approach.Bayesian methodology constructs parameter estimates as a weighted average of linear regression estimates for every possible combination of included variables. The weight of each regression estimate is given by the posterior probability of each model.

The EU strategy of policy convergence with its neighbours in the area of trade

The objective of this paper is to ascertain whether the EU is seeking policy convergence with its neighbours in the area of trade by means of EU regulations. For each trade- related topic, we carried out a content analysis of the available official documents to identify the model of relations that has been established between the EU and four neighbouring countries (Morocco, Algeria, Ukraine and Georgia). The findings indicate that Europeanization is the EU strategy in most cases. However, adaptation to European regulations is only a long-term aim. When international regulations exist in a specific area, the EU usually demands the internationalization of a country¿s regulations as a first step. When there are no international regulations, the convergence process is established on the basis of bilaterally developed norms. EU strategy also varies depending on the country. Its relations with Algeria are the most particular. We conclude that the EU is promoting policy convergence with its neighbours in the area of trade mainly on the basis of international and bilaterally-developed regulations.

Growth, convergence and public investment : a bayesian model averaging approach

The aim of this paper is twofold. First, we study the determinants of economic growth among a wide set of potential variables for the Spanish provinces (NUTS3). Among others, we include various types of private, public and human capital in the group of growth factors. Also,we analyse whether Spanish provinces have converged in economic terms in recent decades. Thesecond objective is to obtain cross-section and panel data parameter estimates that are robustto model speci¯cation. For this purpose, we use a Bayesian Model Averaging (BMA) approach.Bayesian methodology constructs parameter estimates as a weighted average of linear regression estimates for every possible combination of included variables. The weight of each regression estimate is given by the posterior probability of each model.