Search

This paper examines the relationship between trust and economic growth. Taking panel data and using a fixed-effects estimation for a 41-country sample over the time period from 1980 to 2004 and with a total of 129 observations, the paper points out that economic growth is negatively related to an increase in trust. This negative finding is in contrast to most empirical findings using a cross-sectional design. The common knowledge which has governed the nature of discussions in social science and economics for the last ten years, that trust is generally positively related to economic performance, must be seriously questioned. From a policy point of view an increase in trust is crucial for countries with low levels of trust, but can likely be neglected by countries with sufficient levels of trust and may even hamper economic performance in countries with high levels of trust. The relationship is tested in the context of EU countries, OECD countries and developing countries. Interpersonal trust and systemic trust is differentiated. [ABSTRACT FROM AUTHOR]

SUMMARY The paper discusses the use of fiscal policy as a tool of economic stabilization in seven OECD countries since the mid-fifties. It draws on a recent empirical study, with attached fiscal policy recommendations, made by an expert group within the OECD, in which the author was a member. The method of analysis in the paper is to compare on one hand the 'direct' impact on aggregate demand of fiscal policy changes with on the other hand the timing of the business cycle. Among the countries included in the study, the U. K. and Sweden seem to have most systematically tried fiscal policy as an instrument of economic stabilization. It seems quite clear that the policy in the U. K. has been rather unsuccessful against the background of domestic economic conditions, whereas the experiences in Sweden are considerably more promising. In other countries fiscal policy has been used at particular occasions for economic stabilization, such as in Germany and Belgium during some periods with tendencies to recessions (1958 and 1962), in the U. S. to move the economy closer to full capacity utilization (1964-65) and at several occasions in various countries as part of a policy package to avoid balance of payments crises. It does not seem that forecasting mistakes have been the main obstacle to a more efficient stabilization policy. Time lags in the decision-making procedure, as well as lack of determination and firmness in policy, seem to have been more important obstacles. Another important complication has been conflicts of goals. Sometimes the policy has been more geared to the external than to the internal economic situation. At other times when the policy has been directed to influence the development of prices, unemployment problems have arisen, particularly as the price variable usually seems to lag the business cycle of the volume components. There has also been a tendency to let the expansionary actions during recessions last too long a time, thereby giving the next boom a 'flying start'. [ABSTRACT FROM AUTHOR]

This paper proposes a new method for constructing R&D capital stocks developed to avoid the common assumption of a constant rate of knowledge depreciation, which implies wear and tear of knowledge. The method models the development of R&D capital stocks as a process of creative destruction linking the depreciation of knowledge to the emergence of new knowledge. A first empirical assessment of the new method – measuring the influence of R&D capital stocks on production in the manufacturing sectors of 12 OECD countries – produces plausible and robust results. [ABSTRACT FROM AUTHOR]

Examines the argument that happiness causes growth using poll data from the Organization for Economic Co-operation and Development countries. Importance of happiness in preserving decency in society; Positive correlation between trust in people and economic growth; Happiness as a measure of the degree of the overall quality of life.

It is worth noting that 82% of the cross industry variation in PFRD has been explained without using any explanatory variable measuring the cost advantages of an American versus a 'rest of the world' R & D location. While such a variable certainly belongs in the regressions run, it is and will remain prohibitively difficult to obtain unless the OECD or some other international body publishes suitable comparative data[38]. Significant multicollinearity between this omitted independent variable and the eight others used in the regressions is, with the possible exception of LWRDI, a very remote possibility.
This study develops and empirically tests a 'scenario' describing the evolution of a typical American multinational manufacturing corporation's (AMMC's) foreign research and development (R&D) activity. It finds that international differences in R & D factor costs probably have very little effect on R & D location decisions. The critical variables appear instead to be less traditional things like the time elapsed since the AMMC first engaged in foreign production. That such variables were discovered and emphasized in the study is a result of the 'satisficing' approach adopted in its 'scenario'. In vindicating that approach, the paper's findings also show the need for economic theorizing to take explicit account of the fact that information costs something to obtain and to use. [ABSTRACT FROM AUTHOR]

The existence of a quasi-periodic cycle in growth rates of major economic indicators has become one of the more popular stylized facts in interpreting postwar macro-dynamics. In this paper, we examine the statistical record of sixteen OECD countries over the 1950-1970 period to determine the degree of regularity in movements of annual growth rates in both GNP and several disaggregated components. The WALLIS-MOORE test is employed to establish the significance of the deviation of growth rate fluctuations from those of a purely random series. In only 13 of the 90 series investigated were these deviations statistically significant and in only two countries, Germany and Finland, were more than one growth series significantly non-random. These results suggest that there is little statistical significance to the growth cycle hypothesis from an annual perspective and that postwar macro-dynamics generally fail to reflect in the growth rate domain much of the regularity observed in the more traditional business cycle of the prewar period. [ABSTRACT FROM AUTHOR]

Summary Research conducted by university researchers for industry constitutes one of the main channels through which knowledge and technology are transferred from science to the private sector. Since the value of such inputs for the innovation performance of firms has been found to be considerable, it is not surprising that firms increasingly seek direct access to university knowledge. In particular, industry funding for university research has been increasing in most OECD countries. This development, however, spurred concerns regarding possible long-run effects on scientific output. While some policy makers argue that the potential of universities to foster and accelerate industrial innovations is not yet fully exploited, others are concerned with the distraction of academics from their actual research mission. Our results show for a sample of professors in science and engineering in Germany that a higher budget share from industry reduces publication output of professors both in terms of quantity and quality in subsequent years. This finding supports the 'skewing problem' hypothesis for science and engineering faculty in Germany. If information sharing among scientists via publications is the basis for cumulative knowledge production and thus for scientific progress, industry funding that reduces publications may have detrimental effects on the development of science. On the other hand, we find that industry funding has a positive impact on the quality of applied research if measured by patent citations. Industry funding may thus have beneficial effects by improving impact and quality of more applied research. If industry funded research results in successfully patentable and industrially relevant technologies it may create economic as well as social value. [ABSTRACT FROM AUTHOR]

For a number of OECD countries, the deterioration of labour market outcomes for less-skilled workers since the early 1980s has coincided with a steady decline in union membership. Globalisation is commonly believed to have contributed to both developments. However, recent studies fail to find support for the presumption that globalisation adversely affects unions. Revisiting this issue by using a novel globalisation index we find that globalisation has indeed contributed to deunionisation. In delving further into the issue, we find that it is social integration, rather than economic or political integration, that has been the main contributor to the decline in union membership. [ABSTRACT FROM AUTHOR]