Cross-Country Evidence on Output Growth Volatility: Nonstationary Variance and GARCH Models

This paper revisits the issue of conditional volatility in real GDP growth rates for Canada, Japan, the United Kingdom, and the United States. Previous studies find high persistence in the volatility. This paper shows that this finding largely reflects a nonstationary variance. Output growth in the four countries became noticeably less volatile over the past few decades. In this paper, we employ the modified ICSS algorithm to detect structural change in the unconditional variance of output growth. One structural break exists in each of the four countries. We then use generalized autoregressive conditional heteroskedasticity (GARCH) specifications modeling output growth and its volatility with and without the break in volatility. The evidence shows that the time-varying variance falls sharply in Canada, Japan, and the U.K. and disappears in the U.S., excess kurtosis vanishes in Canada, Japan, and the U.S. and drops substantially in the U.K., once we incorporate the break in the variance equation of output for the four countries. That is, the integrated GARCH (IGARCH) effect proves spurious and the GARCH model demonstrates misspecification, if researchers neglect a nonstationary unconditional variance.

Did Impending War in Europe Help Destroy the Gold Bloc in 1936? An Internal Inconsistency Hypothesis

This paper investigates the gold bloc operated between France, the Netherlands, Switzerland and Belgium, especially over the period after the USA left the gold standard in March 1933 to its end in September 1936. It enquires into the effect of military-political developments in Germany and Italy on the sustainability of the gold bloc between its members. Juxtaposed is the view of leading political scientists, such as Henry Kissinger, who see impending war in Europe as deeply and adversely affecting psychology in Europe, and what may be called the standard "economists' view" that sees the demise of the gold bloc as being caused almost exclusively by economic factors. Developing concepts of external and internal inconsistency of the gold bloc, this investigation concludes that both economic and military-political developments played important roles in destroying the last vestiges of the gold standard.

On the Existence and Characterization of Markovian Equilibrium in Models with Simple Non-Paternalistic Altruism

This paper provides sufficient conditions for existence of Markovian equilibrium in models with non-paternalistic altruism extending to one generation ahead. When utility is non-separable, we show that each equilibrium savings policy correspondence is increasing everywhere and single-valued, except perhaps on a countable number of points. It is also upper hemi-continuous where it is single valued. When utility is separable, we show that the equilibrium is unique, increasing, and continuous, and we provide an algorithm converging uniformly to the equilibrium.

A comparison of worker risk of injury while working on fully automated side loaders and other residential collection trucks at a large solid waste collection company

The study aim was to determine whether using automated side loader (ASL) trucks in higher proportions compared to other types of trucks for residential waste collection results in lower injury rates (from all causes). The primary hypothesis was that the risk of injury to workers was lower for those who work with ASL trucks than for workers who work with other types of trucks used in residential waste collection. To test this hypothesis, data were collected from one of the nation’s largest companies in the solid waste management industry. Different local operating units (i.e. facilities) in the company used different types of trucks to varying degrees, which created a special opportunity to examine refuse collection injuries and illnesses and the risk reduction potential of ASL trucks.^ The study design was ecological and analyzed end-of-year data provided by the company for calendar year 2007. During 2007, there were a total of 345 facilities which provided residential services. Each facility represented one observation.^ The dependent variable – injury and illness rate, was defined as a facility’s total case incidence rate (TCIR) recorded in accordance with federal OSHA requirements for the year 2007. The TCIR is the rate of total recordable injury and illness cases per 100 full-time workers. The independent variable, percent of ASL trucks, was calculated by dividing the number of ASL trucks by the total number of residential trucks at each facility.^ Multiple linear regression models were estimated for the impact of the percent of ASL trucks on TCIR per facility. Adjusted analyses included three covariates: median number of hours worked per week for residential workers; median number of months of work experience for residential workers; and median age of residential workers. All analyses were performed with the statistical software, Stata IC (version 11.0).^ The analyses included three approaches to classifying exposure, percent of ASL trucks. The first approach included two levels of exposure: (1) 0% and (2) >0 - <100%. The second approach included three levels of exposure: (1) 0%, (2) ≥ 1 - < 100%, and (3) 100%. The third approach included six levels of exposure to improve detection of a dose-response relationship: (1) 0%, (2) 1 to <25%, (3) 25 to <50%, (4) 50 to <75%, (5) 75 to <100%, and (6) 100%. None of the relationships between injury and illness rate and percent ASL trucks exposure levels was statistically significant (i.e., p<0.05), even after adjustment for all three covariates.^ In summary, the present study shows that there is some risk reduction impact of ASL trucks but not statistically significant. The covariates demonstrated a varied yet more modest impact on the injury and illness rate but again, none of the relationships between injury and illness rate and the covariates were statistically significant (i.e., p<0.05). However, as an ecological study, the present study also has the limitations inherent in such designs and warrants replication in an individual level cohort design. Any stronger conclusions are not suggested.^

Theoretical Models Based on a Flowchart Approach to Industrial Cluster Policy

This article examined the issue of whether or not the currency exchange rate, country risk, and cooperate tax rate affect decisions of multinational firms to invest in industrial clusters. First, if the exchange rate between a multinational company in an industry of diminishing returns to scale and a developing country is appreciated, then production in the developing country should increase. Second, if the investment period becomes longer, the currency exchange rate of a multinational company's country should be revalued more in order for it to further invest in the developing country. Third, if the investment period becomes longer, the developing country's risk should become less. Fourth, compensation for the developing country's high risk can be made by lowering its corporate tax rate.

Non-economic voting and incumbent strength in Turkey

Evidence suggests that incumbent parties find it harder to be re-elected in emerging than in advanced democracies because of more serious economic problems in the former. Yet the pro-Islamic Justice and Development Party (AKP) has ruled Turkey since 2002. Does economic performance sufficiently account for the electoral strength of the AKP government? Reliance on economic performance alone to gain public support makes a government vulnerable to economic fluctuations. This study includes time-series regressions for the period 1950-2011 in Turkey and demonstrates that even among Turkey's long-lasting governments, the AKP has particular electoral strength that cannot be adequately explained by economic performance.

Parameterization of applied general equilibrium models with flexible trade specifications based on the Armington, Krugman, and Melitz models

This paper explains how the Armington-Krugman-Melitz supermodel developed by Dixon and Rimmer can be parameterized, and demonstrates that only two kinds of additional information are required in order to extend a standard trade model to include Melitz-type monopolistic competition and heterogeneous firms. Further, it is shown how specifying too much additional information leads to violations of the model constraints, necessitating adjustment and reconciliation of the data. Once a Melitz-type model is parameterized, a Krugman-type model can also be parameterized using the calibrated values in the Melitz-type model without any additional data. Sample code for the General Algebraic Modeling System (GAMS) has also been prepared to promote the innovative supermodel in the AGE community.

Exploring the sources of China's challenge to Japan : models of industrial organisation in the motorcycle industry

In view of the recent rise of China, this paper looks into one of the most important yet relatively overlooked ingredients of the Chinese success: industrial organisation. It will examine the case of the motorcycle industry, in which the rise of Chinese manufacturers even disrupted the established dominance of Japanese industry leaders. Adopting the modified version of the global value chain governance framework, this paper shows that the rise of China has been driven by a distinctive arm’s-length model of industrial organisation, which is in sharp contrast to the conventional captive model that has sustained the Japanese leadership.

The Japanese and Chinese models of industrial organisation : fighting for supremacy in the Vietnamese motorcycle industry

This paper explores the consequences of the emerging rivalry between Japanese and Chinese manufacturers. It focuses specifically on industrial organisation, one of the key factors that underlie the competitiveness of manufacturing industries. The question to be asked is what happens when distinctive models of industrial organisation, coming from Japan and China, clash in a developing country. An in-depth longitudinal analysis of the Vietnamese motorcycle industry adopting a modified version of the global value chain governance theory shows that a decade-long industrial transformation resulted in organisational diversity. The implications of the analysis for the literature on industrial organisation are discussed.

Neutrality in the choice of number of firms or level of fixed costs in calibrating an Armington-Krugman-Melitz encompassing module for applied general equilibrium models

This paper shows how an Armington-Krugman-Melitz encompassing module based on Dixon and Rimmer (2012) can be calibrated, and clarifies the choice of initial levels for two kinds of number of firms, or parameter values for two kinds of fixed costs, that enter a Melitz-type specification can be set freely to any preferred value, just as the cases we derive quantities from given value data assuming some of the initial prices to be unity. In consequence, only one kind of additional information, which is on the shape parameter related to productivity, just is required in order to incorporate Melitz-type monopolistic competition and heterogeneous firms into a standard applied general equilibrium model. To be a Krugman-type, nothing is needed. This enables model builders in applied economics to fully enjoy the featured properties of the theoretical models invented by Krugman (1980) and Melitz (2003) in practical policy simulations at low cost.

Behavioral characteristics of applied general equilibrium models with an Armington-Krugman-Melitz encompassing module

This paper explore how simulation results change with different choice of trade specification, and the strength of preference for traded variety by economic agent differs, utilizing two types of three-region, three-sector AGE model that includes the Armington-Krugman-Melitz Encompassing module based on Dixon and Rimmer (2012). Simulation experiments reveal that: (1) the Melitz-type specification does not always enhance effectiveness of a certain policy change more than the one obtained with the Krugman-type, especially when economic agents' preference for traded variety is not so strong; (2) there are likely to be points where the volumes of effects obtained with the Melitz-type exceed the ones with the Krugman-type; and (3) the preference of the producers, those who are in the sectors that exhibit increasing returns to scale, for traded variety might be the engine of explosive effects as suggested by Fujita, et al. (2000).

Linked Data at the Spanish National Library and the application of IFLA RDFS models

The Spanish National Library (Biblioteca Nacional de España1. BNE) and the Ontology Engineering Group2 of Universidad Politécnica de Madrid are working on the joint project ?Preliminary Study of Linked Data?, whose aim is to enrich the Web of Data with the BNE authority and bibliographic records. To this end, they are transforming the BNE information to RDF following the Linked Data principles3 proposed by Tim Berners Lee.

Flexibility in Airline Business Models with Core Competence as an Indicator.

The airline industry is often unstable and unpredictable forcing airlines to restructure and create flexible strategies that can respond to external operating environmental changes. In turbulent and competitive environments, firms with higher flexibility perform better and the value of these flexibilities depends on factors of uncertainty in the competitive environment. A model is sought for and arrived at, that shows how an airline business model will function in an uncertain environment with the least reduction in business performance over time. An analysis of the business model flexibility of 17 Airlines from Asia, Europe and Oceania, that is done with core competence as the indicator reveals a picture of inconsistencies in the core competence strategy of certain airlines and the corresponding reduction in business performance. The performance variations are explained from a service oriented core competence strategy employed by airlines that ultimately enables them in having a flexible business model that not only increases business performance but also helps in reducing the uncertainties in the internal and external operating environments.

Remote Effects of Hippocampal Sclerosis on Effective Connectivity during Working Memory Encoding: A Case of Connectional Diaschisis?

Accumulating evidence suggests a role for the medial temporal lobe (MTL) in working memory (WM). However, little is known concerning its functional interactions with other cortical regions in the distributed neural network subserving WM. To reveal these, we availed of subjects with MTL damage and characterized changes in effective connectivity while subjects engaged in WM task. Specifically, we compared dynamic causal models, extracted from magnetoencephalographic recordings during verbal WM encoding, in temporal lobe epilepsy patients (with left hippocampal sclerosis) and controls. Bayesian model comparison indicated that the best model (across subjects) evidenced bilateral, forward, and backward connections, coupling inferior temporal cortex (ITC), inferior frontal cortex (IFC), and MTL. MTL damage weakened backward connections from left MTL to left ITC, a decrease accompanied by strengthening of (bidirectional) connections between IFC and MTL in the contralesional hemisphere. These findings provide novel evidence concerning functional interactions between nodes of this fundamental cognitive network and sheds light on how these interactions are modified as a result of focal damage to MTL. The findings highlight that a reduced (top-down) influence of the MTL on ipsilateral language regions is accompanied by enhanced reciprocal coupling in the undamaged hemisphere providing a first demonstration of “connectional diaschisis.”

Virtual Excursions: a new way to explore science in class

The educational platform Virtual Science Hub (ViSH) has been developed as part of the GLOBAL excursion European project. ViSH (http://vishub.org/) is a portal where teachers and scientist interact to create virtual excursions to science infrastructures. The main motivation behind the project was to connect teachers - and in consequence their students - to scientific institutions and their wide amount of infrastructures and resources they are working with. Thus the idea of a hub was born that would allow the two worlds of scientists and teachers to connect and to innovate science teaching. The core of the ViSH?s concept design is based on virtual excursions, which allow for a number of pedagogical models to be applied. According to our internal definition a virtual excursion is a tour through some digital context by teachers and pupils on a given topic that is attractive and has an educational purpose. Inquiry-based learning, project-based and problem-based learning are the most prominent approaches that a virtual excursion may serve. The domain specific resources and scientific infrastructures currently available on the ViSH are focusing on life sciences, nano-technology, biotechnology, grid and volunteer computing. The virtual excursion approach allows an easy combination of these resources into interdisciplinary teaching scenarios. In addition, social networking features support the users in collaborating and communicating in relation to these excursions and thus create a community of interest for innovative science teaching. The design and development phases were performed following a participatory design approach. An important aspect in this process was to create design partnerships amongst all actors involved, researchers, developers, infrastructure providers, teachers, social scientists, and pedagogical experts early in the project. A joint sense of ownership was created and important changes during the conceptual phase were implemented in the ViSH due to early user feedback. Technology-wise the ViSH is based on the latest web technologies in order to make it cross-platform compatible so that it works on several operative systems such as Windows, Mac or Linux and multi-device accessible, such as desktop, tablet and mobile devices. The platform has been developed in HTML5, the latest standard for web development, assuring that it can run on any modern browser. In addition to social networking features a core element on the ViSH is the virtual excursions editor. It is a web tool that allows teachers and scientists to create rich mash-ups of learning resources provided by the e-Infrastructures (i.e. remote laboratories and live webcams). These rich mash-ups can be presented in either slides or flashcards format. Taking advantage of the web architecture supported, additional powerful components have been integrated like a recommendation engine to provide personalized suggestions about educational content or interesting users and a videoconference tool to enhance real-time collaboration like MashMeTV (http://www.mashme.tv/).