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B Global Economic Review b B SPECIAL ISSUE ON "POST-PANDEMIC ECONOMIC ENVIRONMENT: ECONOMICS OF COVID-19" b I Global Economic Review i , an SSCI-listed international journal, solicits papers for a special issue on "POST-PANDEMIC ECONOMIC ENVIRONMENT: ECONOMICS of COVID-19" due to being published in March 2021. In addition to a few invited papers, we accept a wide range of papers, including those analyzing the changing economic structures during and after the unprecedented COVID-19 pandemic. To be included in the review process, contributing author candidates should submit their paper to the ScholarOne manuscript submission system of I Global Economic Review i (https://mc.manuscriptcentral.com/rger) by 1 November 2020. [Extracted from the article]

How emerging economies could improve their self-resilience is our focus. This paper employs the hypothetical extraction method, PageRank algorithm and the 2005–2019 Comtrade database to analyse the impacts of domestic market scale on the economy's resilience in the value chains and conditions under which it is affected. The empirical results show that expanding the scale of the domestic market would significantly improve the economy's resilience in both the RCEP and G7 value chains. Our conclusions support the enrichment of pathways for economies with relatively backward technologies to cope with unexpected shocks and gradually restore economic vitality. [ABSTRACT FROM AUTHOR]

Financial analysts may have strategic incentives to herd or to anti-herd when issuing forecasts of firms' earnings. This paper develops and implements a new test to examine whether such incentives exist and to identify the form of strategic behaviour. We use the equilibrium property of the finite-player forecasting game of Kim and Shim [2019. "Forecast Dispersion in Finite-Player Forecasting Games." The B.E. Journal of Theoretical Economics 19 (1).] that forecast dispersion decreases (resp. increases) as the number of forecasters increases if and only if there is strategic complementarity (resp. substitutability) in their forecasts. Using the I/B/E/S database, we find strong evidence that supports strategic herding incentive of financial analysts through a plausible natural experiment setting of brokerage house mergers. We show further that this finding is robust to different forecast horizons and is more pronounced for firms with low initial coverage. [ABSTRACT FROM AUTHOR]

This paper empirically investigates whether the productivity of a public (government-funded) R&D project improves when the aggregate R&D investment in the same technology field increases. Based on the unique project level data that cover almost entire public R&D projects in Korea, this paper shows that aggregate investment in other public R&D projects in the same technology field increases a public R&D project's outputs both independent of its project expenditure (additive spillover effects) and interactive with its project expenditure (multiplicative spillover effects). The spillover effects from the aggregate private R&D investment in the same technology field also exist, but to a much lesser extent. [ABSTRACT FROM AUTHOR]

This paper studies the relationship between the local chairperson of the board and the cash dividend distribution level by using annual data from A-share listed firms in China. Firstly, the empirical results show a firm's cash dividend distribution level will increase when the firm has a local chairperson. The analysis of mediating effect concludes that the local chairperson can improve corporate performance by alleviating the first type of principal-agent problems, and this ultimately increases its cash dividend distribution level. Secondly, the cross-sectional tests show this consistency has a greater effect on the cash dividend distribution levels of state-owned enterprises and those that embraced high-quality external audits. Finally, this relationship will be weakened in firms that have the more serious second type of principal-agent problems. [ABSTRACT FROM AUTHOR]

The article calls for papers for a special issue on global imbalances and financial stability.

An introduction to the special issue on finance and economic development in China which will be published in June 2011 is presented.

This paper has examined rural-urban Chinese student's non-cognitive abilities using the China Education Panel Survey (CEPS) by employing include Two-Sample t-Test, Regression analysis, and Oaxaca–Blinder Decomposition analysis. The results reveal a significant gap in the non-cognitive abilities of rural and urban students in which that of the urban students is higher. Furthermore, irrespective of whether rural or urban, male students have higher non-cognitive ability than female students. Moreover, it discovered that about 52% of the rural-urban non-cognitive abilities gap accounted by the following factors, namely region, gender, whether the student is the only child, school grade, and ethnic minority. [ABSTRACT FROM AUTHOR]

This paper studies the trade promotion effects of state visits paid by Chinese political leaders by analyzing China's trade flow with 184 countries between 1998 and 2014. International events are used to instrument state visits. The results find that trade promotion effects come two years after the visits. Moreover, the promotion effects are biased towards the industries and firms with connections to the government. Trade barriers offset the promotion effects of state visits. [ABSTRACT FROM AUTHOR]

This paper analyses the financial assets of institutional investors and pension funds to estimate how the change in portfolio affects returns and whether the realisation of returns can improve macroeconomic prudence. From the analysis, this paper offers several findings. First, the increase in the weighted return rates of institutional investors and pension funds lowers GDP volatility and improves macroeconomic prudence. Second, the portfolio composition effect of institutional investors and pension funds can also affect improving macroeconomic prudence. And the effect of composition effect in macroeconomic prudence improvement is greater in countries with high financial openness, for both institutional investors and pension funds. [ABSTRACT FROM AUTHOR]

An introduction is presented in which the editor discusses various reports within the issue on topics including international trade, economic relation between European Union countries and China, and foreign investments.

This paper considers social contracts (or mechanisms) in negotiations with incomplete information in which an outside option is a probabilistic conflict and a peaceful agreement is ex ante efficient. I compute the set of interim incentive efficient mechanisms, the ex ante incentive efficient mechanism, as well as the neutral bargaining solution. I numerically illustrate that the focus on the ex ante incentive efficient mechanism as the most reasonable prediction is not robust. This paper justifies the neutral bargaining solution as the unique, robust solution among all interim incentive efficient mechanisms. [ABSTRACT FROM AUTHOR]

This paper empirically examines the role of USD, EUR, and CNY as international payment currencies in Korea, China, and Japan. Our survey of business people in those countries finds that higher convertibility and stability of these currencies in the SDR enhance their acceptability and usability for international payments. However, even during times of instability, USD remains highly accepted and usable as a trade payment currency unlike the cases of EUR and CNY. Therefore, maintaining exchange rate stability is essential for improving the acceptability and usability of EUR and CNY as international payment currencies. [ABSTRACT FROM AUTHOR]

This paper explains the mechanism that causes the two motions of intergenerational mobility, monotonic motion and cyclical motion. Increasing longevity encourages incentives for education investment while decreasing transfers, which is the funding source for education. If longevity increases slowly, mobility increases monotonically. However, if longevity increases rapidly with economic development, mobility is cyclical owing to a largely decreasing transfer. This result is consistent with the empirical evidence in the literature on intergenerational mobility. In fact, China, where longevity increased rapidly, experienced a cyclical motion of mobility, whereas Norway, where longevity increased slowly, has experienced a monotonic motion of mobility. [ABSTRACT FROM AUTHOR]

This paper analyses the digitalisation of the global value chain (GVC) in the apparel and video game industries and its effects on firm behaviour and performance. It elaborates on several modes of digitalisation, namely, thin digitalisation, platform digitalisation and full-range digitalisation. Digitalisation contributes to the expansion of the volume of sales and profits while reducing labour costs. However, its impacts on profitability remain uncertain, with the benefits and costs offsetting each other. GVC digitalisation benefits startups by lowering entry costs and facilitating upgrading, whereas it may be detrimental to incumbent companies since it can enable platform providers to transform into competitors. [ABSTRACT FROM AUTHOR]

This paper examines the impact of e-commerce on local retail employment and its heterogeneity by employment and regional types, using Korean retail survey. Our findings reveal that the positive impact of online sales expansion is mainly confined to the growth of wage workers, though its elasticity with respect to online sales is much smaller than that of offline sales. When dividing the full sample by regional type, the positive employment effect of online sales on wage workers is significant only in non-metropolitan regions. In addition, the negative impact of online sales on non-wage workers is found only in metropolitan regions. [ABSTRACT FROM AUTHOR]

Existing studies have shown that the deterioration of domestic income distribution is an important cause for the decline in international trade. This paper investigates whether alleviating domestic income inequality could promote international trade. From the redistribution perspective, this study examines the relationship between state redistributive capacity and international trade by using unbalanced panel data of 153 countries from 1960 to 2018. According to our empirical findings, strengthening redistributive capacity promotes international trade by enhancing domestic society's perception of free trade. In addition, this promoting effect is independent of trade mode but varies with trade content, trade period, and trade subjects. [ABSTRACT FROM AUTHOR]

Using the unique grant level data, this paper shows that government R&D grants to private firms lead to more innovation when independent monitoring (e.g. outside directors) in the grant receiving firms is stronger, but to less innovation when chaebol influence (e.g. affiliated ownership) is stronger. However, the direct effect of independent monitoring on reported innovation is negative, while that of chaebol influence is positive. These results are consistent with the hypotheses that independent monitoring reduces the misuse of grant money; increases the efficiency of managing R&D grants; and reduces the overstatement of grant outcomes, while chaebol influence does the opposite. [ABSTRACT FROM AUTHOR]

To analyze precisely effects of foreign interest rate hike shocks, this paper categorizes small open economies into four kinds of types based on the net external credit (or debt) level and the financial integration level. The empirical result shows that responses of macroeconomic variables tend to differ substantially depending on the type of a small open economy. These findings imply that we need to consider the net external credit (or debt) level and the financial integration level of a small open economy when we predict the effect of a foreign interest rate hike shock. [ABSTRACT FROM PUBLISHER]

This paper examines the effects of working from home on mental health, with particular attention to the role of home environments. Using unique real-time survey data from South Korea collected during the COVID-19 pandemic, we find that working from home negatively affects the mental health of workers, with greater effects on women and those who are primarily responsible for housework while also maintaining market work. Surprisingly, workers who live with children in the household do not suffer from the negative effects of working from home. Our findings suggest that family-work interaction may be an important factor in the optimal design of working from home. [ABSTRACT FROM AUTHOR]

This paper investigates the effects of automation on job polarisation. Automation has been claimed to be one of the main causes for the job polarisation observed in many countries such as the US since the mid-1980s. Using the US Census data, we show that between 1980 and 2007 the increase in the usage of ICT capital is not statistically associated with changes in the employment and wage bill share of routine workers, although there is heterogeneity across industries. The main findings imply that ICT capital per se might not be the main factor driving job polarisation in the US. [ABSTRACT FROM AUTHOR]

This paper investigates the impact of geopolitical risk on trade costs across 43 countries from 1995 to 2019. The results show that geopolitical risk enters trade costs regressions positively and significantly. These findings are robust to the consideration of the different sub-periods, the sub-samples ex US and countries with the highest geopolitical risk, more control variables, the alternative estimation method, and the endogeneity issue. Given the importance of trade costs for welfare gains from trade, our results suggest a potential role for policy reforms that aim to reduce the geopolitical risk across the countries. [ABSTRACT FROM AUTHOR]

This paper investigates how structural oil market shocks transmit through real oil price changes to the U.S. core prices. Separating out the sources of oil price increases reveals that supply shocks lead to significant and persistent increases in core prices while oil inventory demand shocks pull them down. Other demand-driven shocks do not cause any significant core price fluctuations. Examining different sample periods, we find empirical evidence supporting the strengthening of the oil price pass-through to some degree since mid-1980; however, not much change in the pass-through has been observed since the outbreak of Covid-19. Our findings highlight that understanding the sources of oil price changes is crucial for gauging their impacts on core prices and furthermore, for the conduct of monetary policy. [ABSTRACT FROM AUTHOR]

This paper examines the interplay between the female labour supply and wages through human capital accumulation in South Korea, highlighting the significant gender wage gap and low female labor participation. Our findings suggest that wage subsidies alone are insufficient for narrowing the gender wage gap. Targeted wage subsidies for households with infants and toddlers can mitigate career interruptions and enhance human capital for women. However, it also attracts lower-productivity women into the labor market, further exacerbating the gender wage gap. Therefore, direct labour market structural reforms, such as the Anti-Gender Discrimination Act, are essential. [ABSTRACT FROM AUTHOR]

In this paper, we analyse the impacts of COVID-19 and the policy response to it in Korea based on a version of a Macro-SIR model with labour friction, and with multiple types of jobs and households. Due to substantial uncertainty in the model and parameters that govern the interaction between epidemiological and macroeconomic developments, we rely on a prior predictive analysis when simulating the model. We find that the model successfully predicts an endogenous rise in the number of confirmed cases in the second half of 2020, and a sharp decline in economic activity followed by a temporary recovery caused by the government transfer program. It also turns out that low-wealth households are more damaged from the pandemic due to larger losses in terms of labour income. In addition, it is shown that the consumption multiplier of the universal transfer program is around 0.09. [ABSTRACT FROM AUTHOR]

Mobile is a key sector promoting international trade, FDI and economic growth in the modern era. The objective of this paper is to examine the dynamic nexus between Mobile, trade, FDI and economic growth by employing a panel vector error correction model. Empirical results suggest that Mobile has more positively contributed to international trade in the low income country group than other groups, and it has a more positive impact on FDI inflow in the higher-income country group than other groups, it has a more powerful impact on economic growth in the middle-income country group than other groups. [ABSTRACT FROM AUTHOR]

This paper analyses the macroeconomic consequences of a fiscal policy implemented in South Korea during COVID-19, 'Korean Economic Impact Payment (KEIP)' program, that aims to stimulate offline consumption. In doing so, we modify a SIR-macro model by explicitly distinguishing online- and offline consumption goods. Benchmark analysis predicts that (1) there are positive effects on key macro variables at the impact while progress of the epidemic hardly changes and (2) the transfer multiplier from the KEIP is estimated to be about 0.5 at the impact, a value with what we expect from the usual neo-classical business cycle model. [ABSTRACT FROM AUTHOR]

This paper seeks to develop a theoretical strand of research in monetary economics by modelling central bank ability in the loss function. Recently, many working papers issued by the International Monetary Fund (IMF) prove that some central banks, particularly from developing countries, are suffering from serious operational problems that might affect their abilities to control the economy. Simultaneously, a literature review shows that the movements are toward using asymmetric loss function. Therefore, we utilize this function in the standard monetary approach. The results proved that both central bank ability and preference in developing countries are fundamental to explain inflation bias and the movement of monetary policy instrument. [ABSTRACT FROM AUTHOR]

This paper employs a field experiment to investigate in which information environment team-based incentives work better. The experiment was conducted in two spinning factories in Henan, China. We focus on workers who were doing the same individualistic task but still were paid according to team performances. For about three months, we have given three different types of performance feedback, baseline, intra-team, and inter-team feedbacks. We find that workers' productivity was highest with the intra-team feedback and lowest with the baseline feedback, which suggests that peer pressure and group status concern are of importance in making team incentives work. [ABSTRACT FROM AUTHOR]

The paper analyzes the formative mechanism of the import and export technology effect, the trade contribution and squeezing effect on technology of agricultural FDI, and further regionally discusses this issue in China. The contribution of agricultural FDI to the import and export of agricultural products is remarkable. The agricultural FDI and growth rate of international trade had crowding out effects on domestic agricultural investment. There is a significant positive correlation in the study of regional technical spillover. Agricultural FDI investment enhances the ability of agricultural research and development, to produce technology spillover. Midwest regional technology spillover is not obvious. [ABSTRACT FROM AUTHOR]

Antitrust law in Korea regulates internal transactions by the owner and his family, or 'Person with Special Interest (PSI)' of a large business group. Its regulatory grounds, however, are not well-established. This paper analyses internal transactions from the perspective of competition policy, particularly, exclusionary effects. Internal transactions between the upstream- and downstream-affiliates of a business group shrink the size of the upstream market and hence squeeze the profitability of potential entrants. Thus, it may exclude the entrants which, absent the transactions, would enter the market and contribute to consumers. In addition, it may lead to a breach of the fiduciary duty of PSI. We provide some policy implications by analysing the optimal behaviour of PSI. [ABSTRACT FROM AUTHOR]

In market economies, agents who provide labour are distinct from investors who own assets. This paper highlights how such an 'investor ownership' arrangement mitigates an external finance problem, especially when new ideas and technologies are adopted in production. When agents are credit constrained, assigning asset ownership to investors, and hold up can be seen as a commitment device that leads to better outcomes. The feature that assets can be used to hold up agents is a productive attribute which I model as an output of production: assets which have been used in past production embody this attribute, and assets which have not, do not. The analysis predicts (i) the share of project specific assets owned by investors increases over time, and (ii) project specific asset values increase then decrease over time, both resulting from a staged financing of new projects. The paper emphasises the importance of investor protection: bargaining power vis-à-vis the agents who produce. Lowering investor protection results in lower production scale and TFP, through partial and general equilibrium effects. [ABSTRACT FROM AUTHOR]

This paper investigates whether the recent rise in tariffs on goods produced in China will lead processing trade manufacturing plants now located in China to delocate to the U.S. By using a hypothetical extraction method and examining the global value chains of income, we compare the factor payments in the Chinese and U.S. manufacturing sectors. Our estimates indicate that the average tariff rate necessary to move the processing trade firms is 48.15%, i.e. well above the current 25% rate. However, the average tariff rate needed for shifting China's processing plants to Mexico decease to 20.32%. [ABSTRACT FROM AUTHOR]

This paper provides a macroeconomic model that can simultaneously explain output and unemployment multipliers which are consistent with empirical evidence. To this end, this paper has merged and investigated a model with deep habit formation in private and public consumptions and a model with a labour market friction that generates involuntary unemployment stemming from the monopolistic power of differentiated labour services. The model with a baseline calibration seems to produce quantitatively plausible responses of key macroeconomic variables in response to a government expenditure shock. [ABSTRACT FROM AUTHOR]

This paper uses the theoretical underpinnings of the real options theory framework to investigate whether uncertainty affects a firms' decision to directly export versus indirectly export and to determine whether indirect exports may offset the negative effects of uncertainty on export intensity. Using firm-level survey data of 40 emerging countries, we find that uncertainty and firms' export intensity are negatively correlated. We also find that an increase in uncertainty increases a firms' willingness to export through trade intermediaries. These results when considered holistically imply that trade intermediaries are able to countervail the negative effect of uncertainty on firms' export intensity. [ABSTRACT FROM AUTHOR]

We develop a small open economy DSGE-based New Keynesian model incorporating the demand for oil, to focus on whether the PBoC targets core inflation or headline inflation including oil price inflation, and investigating the macroeconomic effect of oil price shocks. Based on both counterfactual simulations and welfare evaluations, our results indicate that targeting both core inflation and non-core inflation are inferior to the one purely pegged to core inflation, suggesting the central bank should target core inflation instead of headline inflation. Our paper contributes to a growing literature on monetary policy in China and other emerging market economies. [ABSTRACT FROM AUTHOR]

This paper explores the economic impact of illegal immigration in a dynamic general equilibrium model when the domestic labour supply is elastic and the fiscal policies include various taxes and income transfers. We first find that despite the mixed effects of illegal immigration on endogenous leisure-labour and saving-investment decisions, illegal immigration improves the welfare of domestic households in a dynamic competitive economy. The countervailing effects, however, show the wage differential improves individual welfare but hurts aggregate production. We then examine how the fiscal policies of illegal immigration influence a decentralised competitive equilibrium. Whereas the equivalence of economic incidence requires taxation on illegal immigrants, partial compliance causes the nonequivalence between labour income taxes and payroll taxes. Again, due to the countervailing effects, fiscal burden causes an adversary effect on the welfare of domestic households but stimulates aggregate economic performance. The opposite effects also arise in the fiscal contribution of illegal immigrants. [ABSTRACT FROM AUTHOR]

This paper analyses how financial institutions' arbitrary intermediation behaviors, including adjustments in bank lending and deposit rates, influence monetary policy transmission channels. For the analysis, we develop a New Keynesian Dynamic Stochastic General Equilibrium (NK DSGE) model with parameters estimated to fit the Korean conditions. The role of banks is subsequently examined by classifying monetary policy transmission channels (real rate channel, nominal debt channel, financial accelerating channel, and banking attenuator channel). A notable part of this analysis is the inclusion of the banking sector in the model specifically with the intent to study transmissions from the financial sector to the real economy. This paper follows this line of inquiry with recent research in mind. Empirical analysis verifies the existence of the banking attenuator effect in Korea, which means banks act to reduce the effect of monetary policies. This indicates that if financial intermediaries strengthen arbitrary adjustment behaviors of lending and deposit rates, the effect of the monetary policy intended to relieve volatility in the business cycle may not be as high as expected. [ABSTRACT FROM AUTHOR]

This paper builds on the recent literature on firm heterogeneity in international trade and foreign direct investment (FDI), and aims to empirically examine how firm productivity affects a firm’s foreign market entry strategy beyond the simple binary choice between exporting and FDI. Utilizing the panel data of Taiwanese manufacturing firms during 2002–2012, we further classify FDI methods by whole ownership or a joint venture to investigate a firm’s foreign expansion decision. By performing Kolmogorov–Smirnov (KS) tests, we find that if a firm is more productive, it is more likely to choose FDI rather than exporting. However, productivity of firms choosing whole ownership is not so different from choosing a joint venture. Furthermore, a more productive firm is more likely to conduct both whole ownership of the foreign subsidiary and a joint venture formation in the case of FDI. [ABSTRACT FROM PUBLISHER]

This paper uses the sample companies in China, taking the promulgation and implementation of the <> as an external event shock, and studies the impact of product market competition on stock price crash risk. The result shows that product market competition significantly reduces stock price crash risk, which is quite different from the conclusion under the American economic environment. Further research finds that high management agency problems and opacity of enterprise information may be the impact channel of product market competition to reduce stock price crash risk. [ABSTRACT FROM AUTHOR]

This paper investigates the missing link between multi-dimensional components of social capital and the size of the shadow economy, an association generally considered to be ambiguous. A simple agency model shows that social capital and the shadow economy are connected through a mechanism reducing the perceived level of corruption. Using a sample of 65 countries, 1999 to 2007, the paper finds that social trust, social norms (e.g. tax morale), and a broad index of social capital are robust, negative determinants of the shadow economy. [ABSTRACT FROM AUTHOR]

What is environmental, social, and governance (ESG) data and how do we evaluate its quality and effectiveness? This form of evaluation is important, as it is a precondition for investors trying to integrate ESG in investment decisions. Previous literature describes intrinsic properties of ESG data (e.g. multifaceted-ness and context dependence) and highlights a trade-off between the validity and reliability of ESG data, which is often tied to the lack of theoretical foundations and scarcity of high-quality ESG data. Encouragingly, new data technologies have improved the accessibility, availability, and transparency of ESG data, but an agreed theoretical framework to evaluate ESG data quality is still lacking. This paper seeks to fill that theoretical gap by proposing a 'user-oriented' approach to evaluate ESG data. In this framework, we consider ESG data to be a 'continuous concept with limitless boundaries' and characterise it in terms of its width and depth. The bearing of width and depth on ESG data quality is ultimately a function of the investment decisions in which such data is used: the approach we endorse is therefore user-centric. This study then shows how ESG data, when it is of high quality, maps onto the investment decision-making processes. [ABSTRACT FROM AUTHOR]

This paper analyzes the extent to which technology progress and youth employment are related. In doing so, we divide workers into two groups – young workers and old (prime-aged) workers - and then estimate the elasticity of substitution between (physical) capital and workers à la Jaimovich et al. (2013. "The Demand for Youth: Explaining Age Differences in the Volatility of Hours." American Economic Review 103 (7): 3022–3044) by using the Korean labour market data between 2000 and 2014. Our findings indicate that the elasticity of substitution is greater (or at least not smaller) for young workers than for old workers. [ABSTRACT FROM AUTHOR]

Two ETFs were listed to track the secondary-battery industry on 12 September 2018 in the Korea Stock Exchange market. They are virtually identical except that one is designed by humans while the other is made by machines. This paper compares the two ETFs and find little difference in their investment strategies except that machines are more likely to pick high book-to-market stocks than humans. Machines are also more likely to pick past losers and outperform human-designed ETF afterwards. The results suggest that machines can do equally good as humans as ETF/index designers. [ABSTRACT FROM AUTHOR]

This paper provides novel evidence that investors can build a better performing portfolio by exploiting industry level consensus recommendations. A minimum variance portfolio, combined with consensus recommendations, yields a higher Sharpe ratio and certainty equivalent returns. A minimum variance portfolio with no short-selling constraint consistently outperforms an equally weighted portfolio when exploiting consensus recommendations, which is an innovation compared to the existing literature. Our results suggest that sell-side analysts and brokers provide valuable information in the financial market and we benefit from incorporating the information in the portfolio optimisation. [ABSTRACT FROM AUTHOR]

This paper investigates how financial development and financial structure affect the growth effect of monetary policy using panel data from 49 countries over the period 1980-2014. We find robust evidence that financial development has a significantly negative impact on the growth effect of monetary policy. We also find that the growth effect of monetary policy tends to be more pronounced as the financial structure of a country becomes more market-based. These results not only add interesting new evidence to the recent literature on the growth effects of monetary policy, but also provide some important insights into the financial determinants of monetary policy effects on economic growth, which have largely been ignored in the previous literature. [ABSTRACT FROM AUTHOR]

Previous empirical studies show mixed support for the hypothesis that the impact of technology diffusion from multinational enterprises (MNEs) on host country productivity growth depends on host country absorptive capacity. One explanation is that the results of these empirical studies are sensitive to the measures of absorptive capacity used. This paper contributes to the empirical literature by investigating average years of schooling and total factor productivity gap as measures of host country absorptive capacity in 38 developed and developing countries. Panel data regression equations are estimated using a cross-sectionally heteroskedastic and timewise autoregressive (CHTA) model. The paper has two main results. The first result does not support the hypothesis that the technology diffusion from MNEs has a positive impact on the productivity growth in developing countries. The second result is that the total factor productivity gap is more appropriate than average years of schooling to measure host country absorptive capacity. This may suggest that the results of previous studies that used average years of schooling should be interpreted with caution. [ABSTRACT FROM AUTHOR]

This paper is a general assessment of monetary policy in major OECD countries during the 1990s. Within a simple policy framework that combines money growth, nominal income, and an open economy IS-LM type Mundell-Fleming model, the paper discusses the major strands in the conduct of monetary policy in developed industrial economies. It throws light on such problems as "rules versus discretion", management of exchange rates, the effect of monetary changes on income and prices, and the rupture of monetary policy with other instruments of economic policy that also affect the economy. [ABSTRACT FROM AUTHOR]

This paper investigates properties of the money demand functions of Group of Six (G6) member countries (Canada, France, Italy, Japan, U.K., and U.S.) using the estimation and inference techniques of panel cointegration. Empirical analyses are conducted by estimating money demand equations of G6 countries individually and as a whole, allowing heterogeneity in individual specific fixed effects across countries through dynamic, nonstationary panel estimation techniques. By using recently developed panel cointegration techniques, the paper contributes to the literature of money demand studies by improving the power performance of the relevant estimation and inference procedures. It reports fully modified OLS (FMOLS) estimation results of the money demand model for different data frequencies, to find varying signs and magnitudes of real income, interest rates and inflation elasticities of money demand for G6 nations. [ABSTRACT FROM PUBLISHER]