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In this paper, it is shown that it matters a lot for empirical research whether policy is taken to be exogenously set or to be endogenous. In the model investment depends on policy that depends on economically important fundamentals and is, thus, endogenous. The paper analyzes what might be concluded when treating policies as randomly assigned, when in fact they are not. When policy is endogenous, the measured effects of policy on growth will generally be biased. Based on the model and OECD data, the signs of the biases for tax variables and for redistribution are derived. Based on these signed biases, the paper discusses some empirical results that seem puzzling from a theoretical viewpoint. The paper argues that regressing growth on policy can still yield important information if policy endogeneity is taken into account. [ABSTRACT FROM AUTHOR]

This paper makes the case for the conceptual use of the everyday in economic geography. It does this by firstly demonstrating the explanatory potential that lies in attending to the lived experience of economic development and, secondly, the ability of the everyday to occupy a meso-level analytical position that is sensitive to the agency of economic agents without undermining the role of structural forces. As a result of the in-depth, and detailed nature of the everyday, the explanatory powers offered by this initial focus on the micro-scale is useful to those economic geographers wishing to pursue a more qualitative and holistic understanding of the economy and of economic processes. Therefore, this paper contributes to a much longer project in economic geography concerned with broadening how the economy is defined and therefore studied. Specifically, it compliments and builds on the work of economic geographers engaged in practice-orientated research before turning to the work of Henri Lefebvre and Michel de Certeau in demonstrating the analytical richness of the everyday beyond a focus on social practice. In other words, the paper argues the need for economic geography to also attend to the lived experience of everyday life, the meanings and values ascribed to it, and not just socio-economic practices themselves. [ABSTRACT FROM AUTHOR]

A more polycentric global development landscape has emerged over the past decade or so, rupturing the formerly dominant North–South axis of power and knowledge. This can be traced through more diversified development norms, institutions, imaginaries and actors. This paper looks at one trend within this turbulent field: namely, the ways in which ‘Northern’ donors appear to be increasingly adopting some of the narratives and practices associated with ‘Southern’ development partners. This direction of travel stands in sharp contrast to expectations in the early new millennium that the (so‐called) ‘traditional’ donors would ‘socialise’ the ‘rising powers’ to become ‘responsible donors’. After outlining important caveats about using such cardinal terms, the paper explores three aspects of this ‘North’ to ‘South’ movement. These are (i) the stronger and more explicit claim to ‘win‐win’ development ethics and outcomes; (ii) the (re)turn from ‘poverty reduction’ to ‘economic growth’ as the central analytic of development; and (iii) related to both, the explicit and deepening blurring and blending of development finances and agendas with trade and investment. [ABSTRACT FROM AUTHOR]

The purpose of this paper is to reexamine Milton Friedman and Anna J. Schwartz's argument regarding major business cycle movements, limiting the analysis to business cycle peaks and excluding troughs. Friedman-Schwartz argued that appreciable changes in the rate of growth of the stock of money are a necessary and sufficient condition for appreciable changes in the rate of growth of money income. The necessity and sufficiency of a monetary deceleration for a business cycle peak are explored using a definition of monetary deceleration that takes account of both the size and duration of a change in the growth rate of money.

This paper presents an empirical analysis of the factors which promote entrepreneurial activity across a number of transition, developing and developed countries. It produces results which highlight the importance of institutions in promoting entrepreneurial activity. This work is part of an on-going research project on the relationship between the legal system and factors which influence economic development. In particular, it has been shown that legal rules protecting creditors and investors influence the size of financial markets which in turn influence economic development. Our paper thus extends the analysis of the impact of institutions beyond that previously established to demonstrate its influence on another driver of economic development. Copyright © 2005 John Wiley & Sons, Ltd. [ABSTRACT FROM AUTHOR]

Recent empirical observations indicate that firm size responds to cyclical fluctuations in economic activities. By analyzing the effects of endogenous overhead costs in the economy, this paper finds that in response to a fiscal expansion, firm size will increase if the relationship between overhead costs and the number of firms is positive, while firm size will decrease if the relationship is negative. [ABSTRACT FROM AUTHOR]

This paper proposes a dynamic framework of economic organization called the option-creating institution (OCI) model. The claim is made that firm, market, and hybrid governance structures emerge from the need for flexibility in an uncertain world. Each governance structure uniquely provides strategic real options that allow capitalist-entrepreneurs, with unique risk preferences, to better organize their economic activities. The real options perspective on economic organization is developed by drawing insights from the exchange and coordination perspectives. It is proposed that this real options perspective matches practicing decision makers' intuition and that an inductive OCI model will offer a prescriptive guide. Copyright © 2008 John Wiley & Sons, Ltd. [ABSTRACT FROM AUTHOR]

Summary: This paper describes a weekly economic index (WEI) developed to track the rapid economic developments associated with the onset of and policy response to the novel coronavirus in the United States. The WEI is a weekly composite index of real economic activity, with eight of 10 series available the Thursday after the end of the reference week. In addition to being a weekly real activity index, the WEI has strong predictive power for output measures and provided an accurate nowcast of current‐quarter GDP growth in the first half of 2020, with weaker performance in the second half. We document how the WEI responded to key events and data releases during the first 10 months of the pandemic. [ABSTRACT FROM AUTHOR]

An introduction is presented in which the editor discusses various reports within the issue on topics including volatility of Chinese economic activities, globalization and industrial performance in China, and regional disparities and productivity in China.

This paper traces the yearly response of gross domestic product growth--both aggregated and disaggregated into its agricultural and non-agricultural components--to four types of natural disasters: droughts, floods, earthquakes, and storms. The paper uses a methodological approach based on pooling the experiences of various countries over time. It consists of vector autoregressions in the presence of endogenous variables and exogenous shocks (VARX), applied to a panel of cross-country and time series data. The analysis finds heterogeneous effects on a variety of dimensions. First, the effects of natural disasters are stronger on developing than on advanced countries. Second, not all natural disasters are alike in terms of the growth response they induce, and some can even have positive effects on economic growth. Third, severe disasters often carry much worse effects than moderate effects do. Fourth, the timing of the growth response varies with both the type of natural disaster and the sector of economic activity. Copyright © 2011 John Wiley & Sons, Ltd. [ABSTRACT FROM AUTHOR]

Based on China's Input–Output Tables of 2002, 2007, and 2012, this paper employs a network analysis technique to evaluate the roles, positions, and evolution of tourism‐related sectors in industrial networks. The results revealed that China's tourism industrial network has loose density. The tourism‐related sectors have limited backward linkage effects and play limited intermediary roles in resource flows with regard to the rest of the economy, and the linkage strengths vary by sector. The sectors that occupy the same roles and positions as the tourism‐related sectors are concentrated in tertiary sectors. The service‐economy features of tourism‐related sectors are increasingly significant. [ABSTRACT FROM AUTHOR]

This paper revisits the nexus between real effective exchange rate (REER) and total factor productivity (TFP) by controlling for trade openness, financial development and natural resources rents. We use a sample of 60 high‐income and upper‐middle income countries over the period 1995–2015 and employ the GMM estimation framework. Our results advance the empirical knowledge on the drivers of REER by providing robust evidence that the impact of TFP is not uniform across different country clusters. We find that in high‐income countries, increasing productivity causes the REER to depreciate hence becoming more trade competitive while the opposite is true for upper‐middle income countries. Furthermore, financial development and natural resources rents have no meaningful impact in the case of upper‐middle income countries but retain a significant effect in high‐income countries. Trade openness plays a key role in explaining the variation in REER in both country clusters. [ABSTRACT FROM AUTHOR]

This paper reconstructs China's economic development between 1840 and 1912 with an estimation of Gross Domestic Product (GDP). It provides for the first time a time series of GDP (per capita) for the late Qing Dynasty (1644–1911), based on sectoral output and value added, in current as well as in constant prices. The present estimation of per capita GDP in the late Qing period comes out higher than previous estimations, but it still suggests low average levels of Chinese living standards. The economy during the late Qing Empire was characterized by a large and growing agricultural sector and displayed only minor structural changes. Only in the beginning of the twentieth century did the economy start to show signs of growth. [ABSTRACT FROM AUTHOR]

Taking a long‐term look at U.S. economic growth over 1870–2014, this paper focuses on the spillovers from the shadow or the unofficial economy to growth in the official sector. Shadow activities might spur or retard economic growth depending on their interactions with the formal sector and impacts on the provision of public goods. Nesting the analysis in a standard neoclassical growth model, we use a relatively new time series technique to estimate the short‐run dynamics and long‐run relationship between economic growth and its determinants. Results suggest that prior to World War II (WWII) the shadow economy had a negative effect on economic growth; however, post‐WWII the shadow economy was beneficial for growth. The sanding effect of the shadow economy in the earlier period is especially robust to alternate considerations of possible endogeneity and an alternate set of growth determinants. [ABSTRACT FROM AUTHOR]

Despite the emergence of remittances studies, knowledge about their effect on economic development is still ambiguous. This paper investigates the impact of remittances at macroeconomic level in developing countries controlling for endogeneity problems with the use of panel vector autoregression (panel VAR). The findings suggest that remittances have a positive, albeit small, impact on economic growth even without considering the role of institutions. When institutions are included, the pattern of response remains unaltered. A distinction between low versus high remittances participation in economic activity evidences that, although the impact of remittances on growth is similar, appreciation of the exchange rate occurs in economies with high remittances participation. Finally, a distinction by geographical region reveals that Eastern European economies receive the greatest benefit from these flows, followed by the Americas and Asia; however, African economic growth does not appear to have a statistically significant impact. [ABSTRACT FROM AUTHOR]

This paper analyzes, in the light of recent contributions of New Economic Geography models, the spatial consequences of transport cost reductions. So far, the role of transport costs have been only partially unveiled; papers focused either on the Dixit-Stiglitz-Iceberg framework or on the alternative framework put forth by Ottaviano et al. (2002) ,—which departs from the former in preferences and transport modeling. This paper goes a step further, offering a comprehensive view that includes the two approaches, in contexts both of two and of more than two locations. Contrary to other revisions of the literature focused mainly on the centripetal forces included in these models, we emphasize the role of dispersion forces. In a two-location setting, the results seem quite robust against changes in transportation modeling, so that considering either multiplicative transport costs or additive the predictions are identical. However, when allowing for a multilocation setup, the analysis becomes more complex. [ABSTRACT FROM AUTHOR]

This paper quantifies the impact of external aid channelled through a support agency that practises a participatory approach to development. Researchers compiled completed project data collected from the non-governmental organisation (NGO) Agua del Pueblo and discovered a positive relationship between external funding for water development projects and resulting economic development. This paper discusses the importance of water development as a channel for achieving overall economic development and the importance of the participatory approach for community development projects. Copyright © 2012 John Wiley & Sons, Ltd. [ABSTRACT FROM AUTHOR]

Globally, 152 million children are involved in economic activities. Poverty is the main cause of child labor, and the lack of social norms and inadequate legal systems are contributing factors. In order to understand the cause of child labor and provide appropriate assistance, this paper focuses on the accumulation of human capital and social capital. The first part of the paper shows that, historically, child labor has been highly dependent on the initial endowments of human capital and social capital. We also show that the condition of bifurcation from an identical initial condition depends on the productivity derived from social capital. The second part of the paper examines the effect of development aid in recipient countries, particularly the effect of two types of programs that attempt to eliminate child labor and provide support to strengthen social capital. We show that both programs are effective at making the economy better off. However, large amounts of development aid for the program that strengthens social capital can make the economy of middle‐income countries worse off. [ABSTRACT FROM AUTHOR]

Abstract: This paper analyses how the functional components of public expenditure and spending‐driven consolidations affect the economic growth, unemployment, and income inequality. A dynamic panel data least squares dummy variable estimator estimator is employed over a sample of 15 European Union countries during the period 1990–2012. The empirical results show that real GDP growth decreases when fiscal austerity measures are implemented, especially if they are spending‐driven. Cuts in public expenditure undermine economic growth, namely if they slash spending on public order, recreation, and education. Spending cuts on education, in particular, affect the investment in human capital, harming not only growth but also economic, social, and human development. The unemployment rate also proved to be significantly boosted when austerity measures restrict spending on education, whereas income inequality rises when social protection expenditures are cut. [ABSTRACT FROM AUTHOR]

This paper has three main aims. First, the paper introduces the concept of integrated reporting (< IR>) as described by the International Integrated Reporting Council ( IIRC). A background to the development of the < IR> concept over the 4-year period from the inception of the IIRC in 2010 is provided, culminating in the release by the IIRC of a Consultation Draft ( CD) of the < IR> framework in March 2013. Second, the paper discusses key issues currently being debated relating to the CD that the IIRC will need to resolve prior to the expected release of their < IR> framework in late 2013. This discussion is based on issues identified and reported to the IIRC by a subcommittee of the International Association for Accounting Education and Research ( IAAER) comprised of international accounting academics. Finally, the paper identifies a range of potential research issues relating to the development and implementation of < IR>. [ABSTRACT FROM AUTHOR]

This paper discusses the incentives for innovation by a manager-led firm. In particular, it is investigated how remuneration practices influence the choice of a risky project. In the first place, a dynamic model with uncertainty is used to determine the optimal employment level with exogenous growth and risk. In the second part of the paper, growth and risk are explained by R&D expenditures. Optimal investment expenditures for R&D are derived for (i) the profit-maximizing firm and (ii) the managerial firm, where the manager receives a fixed salary as well as a variable share of profits. If risk neutrality is assumed, then no difference exists. However, if risk aversion is considered, the managerial firm will invest more into R&D than the owner-led company. Size-related salaries are an additional reason for higher expenditures of R&D by managers. Copyright © 2013 John Wiley & Sons, Ltd. [ABSTRACT FROM AUTHOR]

In the 1990s, Malaysia, along with other East Asian countries, achieved rapid economic growth rates. Research has yet to ascertain the extent to which this rapid economic growth was due to the development of global production networks. The main objective of the paper is to examine the impact of international production fragmentation on productivity growth. The paper hypothesises that international production fragmentation increases productivity growth through trade and foreign direct investment, and that productivity growth increases due to skill-intensive industries producing within an international production network. [ABSTRACT FROM AUTHOR]

In this paper we explore how satellite images of global night lights from year 1992 to 2003 can be used to estimate economic activity at the sub-regional level in the US and China. The night lights based estimates of economic activity are then spatially analysed and compared with subregional economic indicators where available for selected years. We also briefly discuss two theoretical models that shed light on the geospatial patterns reflected by the night light data. The results are presented with a series of maps, charts and tables. Resumen. En este artículo exploramos el uso potencial de imágenes de satélite de la iluminación nocturna global desde 1992 a 2003 para estimar la actividad económica a escala subregional en los EE.UU. y en China. A continuación se analizan espacialmente las estimaciones de la actividad económica basadas en la iluminación nocturna y se comparan con los indicadores económicos subregionales disponibles para los años del estudio. Discutimos también brevemente dos modelos teoréticos que podrían ilustrar los patrones geoespaciales que reflejan los datos de iluminación nocturna. Los resultados se presentan junto con una serie de mapas, gráficos y cuadros. [ABSTRACT FROM AUTHOR]

Almost 20 years ago, an article in Economic Papers by Altman and Daly asked 'Do fluctuations in the macroeconomy influence Aboriginal employment status?' This paper revisits this question in view of recent evidence. Indigenous people are more likely than before to be employed in industries similar to that of other Australians, and hence are less insulated from the business cycle. The greater engagement in the Australian economy is not something to be feared as it means that Indigenous employment will eventually respond to sustained macroeconomic growth. Indeed, Indigenous employment in the private sector converged rather quickly to the Australian average over the ten years of buoyant economic conditions between 1996 and 2006. Economic slow-downs do circumscribe the ability to improve Indigenous employment outcomes, but this simply means that educational and training investments become even more important in ensuring that Indigenous people are in a competitive position once economic growth picks up again. [ABSTRACT FROM AUTHOR]

Copyright of Regional Science Policy & Practice is the property of Wiley-Blackwell and its content may not be copied or emailed to multiple sites or posted to a listserv without the copyright holder's express written permission. However, users may print, download, or email articles for individual use. This abstract may be abridged. No warranty is given about the accuracy of the copy. Users should refer to the original published version of the material for the full abstract. (Copyright applies to all Abstracts.)

In the paper we aim to introduce a statistical dating and detection of turning points giving them a first economic interpretation. The main advantage of the proposed approach is represented by the fact that classical and growth cycles are jointly considered both in the dating and in the detecting stage. A key result of this choice is a better description of different economic phases as well as a more accurate investigation of the economic cyclical behaviour. The proposed approach considerably improves the relevance of information delivered to users in comparison with a standard analysis based only on classical or growth cycle components. [ABSTRACT FROM AUTHOR]

Scholars of agrarian change have long debated the nature of capitalist transition in the countryside, including whether the deepened interlinking of local, national, and transnational economic activities make past trajectories of agrarian transformation unlikely to reoccur in the present. This essay makes the case that Giovanni Arrighi's work has much to add to our understanding of the agrarian question in global historical perspective. We focus in particular on Arrighi's research on trajectories of change in the Calabrian region of southern Italy, and his essay "Capitalist Development in Hostile Environments." In this piece, Arrighi and co‐author Fortunata Piselli develop two key insights. The first is that the pathways to capitalism are diverse, non‐linear, and historically contingent such that within one country—or, in the case of Italy, a single subnational region—multiple trajectories can be found. The second is that the outcomes of capitalist transition vary based on a country's position in the international hierarchy of wealth, meaning that agrarian transformation is compatible with both economic development and underdevelopment. We describe the three methodological principles that enabled Arrighi to develop his analysis of capitalist transition and explain how the papers collected in this special issue reflect and extend the Arrighian approach to agrarian political economy. [ABSTRACT FROM AUTHOR]

In this paper, we investigate the role of inflation rates in determining economic growth in 15 sub-Saharan African countries, which are all members of the Southern African Development Community, between 1980 and 2009. The results, based on panel time-series data and analysis (we use the fixed effects and fixed effects with instrumental variables estimators to account for heterogeneity and endogeneity in thin panels), suggest that inflation has had a detrimental effect to growth in the community. We highlight that inflation has offset the Mundell- Tobin effect and consequently reduced the much needed economic activity in the community, and also the importance of an institutional framework conducive to a stable macroeconomic environment as a precondition for development and prosperity in the community. [ABSTRACT FROM AUTHOR]

This paper evaluates the economic impact of the $14 billion preparatory infrastructure investments for the 2010 FIFA World Cup in South Africa. We use satellite data on night light luminosity at municipality and electoral district level as a proxy for economic activity, applying synthetic control methods for estimation. For the average World Cup municipality, we find significantly positive, short‐run effects before the tournament, corresponding to a reduction of unemployment by 1.3 percentage points. At the electoral district level, we reveal distinct effect heterogeneity, where especially investments in transport infrastructure are shown to have long‐lasting, positive effects, particularly in rural areas. [ABSTRACT FROM AUTHOR]

This article studies the impact of disease epidemics on the worldwide prevalence of the shadow or the underground economy. The informal sector has low entry barriers and provides an easy short‐term option for the supply of goods and services during epidemics when traditional supply lines are cut or strained. Furthermore, the enforcement resources might be directed elsewhere during epidemics, lowering the expected costs of shadow operations. Using data for over 125 nations, we find that the incidence of epidemics positively and significantly contributes to the spread of the underground sector. These findings withstand a series of robustness checks. [ABSTRACT FROM AUTHOR]

ABSTRACT There is a rising awareness and interest of corporations about corporate sustainable behaviour. Sustainability issues are increasingly integrated into corporate strategies, actions, and behavior. Different approaches, systems, and instruments have been developed to support corporate sustainability management. An important aspect of any sustainability-related corporate initiative is to train employees and to develop sustainability-related competencies. To enable education and training in this area, an interdisciplinary team of researchers, consultants and practitioners developed a management game called 'sustainability manager' (). This paper presents the key features of this business simulation and reflects the experiences of the application of this management game in training. This management game is based on a business simulation, i.e. a company is modelled using web technology and soft computing approaches. The sustainability manager can be used as a web-based training instrument for sustainability management and can be adapted to specific training situations. Copyright © 2013 John Wiley & Sons, Ltd and ERP Environment. [ABSTRACT FROM AUTHOR]

This paper applies a factor-augmented Markov-switching model to the South African economy to provide an alternative classification of the business cycle and its turning points. In the principal components step, 123 variables are used to establish the aggregate cyclicality in all sectors of the economy with the number of factors chosen using a modified Bai and Ng method. By exploiting the rich nature of the dataset, we provide a model with well-defined statistical properties that compares favourably with the South African Reserve Bank ( SARB) dating points. Combining the results of the parametric approach followed in the Markov-switching model and the non-parametric approach followed by the SARB should allow for a robust turning point analysis. A Markov-switching model of real gross domestic product is also estimated because this variable is commonly used in the literature and provides a benchmark for the factor models. [ABSTRACT FROM AUTHOR]

Introduces the articles written by Arthur Lewis which focused entirely on economic development and labor supply in the developed countries.

Southeast Asia is a development success story. By 2025, it is forecast that extreme poverty in the region will have been ‘eradicated’. Does this mean that the challenges so evident in the 1960s when the countries of the region began to pursue development have been met, and the objectives achieved? The paper makes a case for thinking afresh about development and the poverty project, recognising that development is never neatly achieved but, rather, re‐worked, re‐engineered and re‐imagined over time. This is done through identifying different categories of ‘poor’, each produced through different poverty‐making processes, measured and viewed in different ways, and their poverty addressed using different approaches and policies. With specific reference to the cases of Laos and Thailand, and drawing on longitudinal research in the latter country, it is argued that while economic growth does trickle down, it trickles down in quite discrete and often contingent ways. Furthermore, there is always development work to be done, because development creates its own work. [ABSTRACT FROM AUTHOR]

Abstract: The tourism sector's contribution to economic development depends upon complex and dynamic socioeconomic, environmental, and institutional factors. Policymakers require objective evidence to base decisions on which public policies or investments to pursue. In this paper we develop an economy‐wide approach to assessing public investments in tourism. The approach is powerful in that it considers all inter‐sectoral linkages that are critical for tourism‐sector analysis. This framework is linked to a microsimulation module that enables estimation of household‐level and destination‐specific impacts and the distribution of benefits. To illustrate the framework and the insights it can generate, we apply it to a public investment in Belize's Cayo District. Our findings show that the overall level of economic activity increases while an appreciation of the real regional exchange rate results in slower growth in traditional nontourism exports. Greater availability of capital and labor to meet increased demand would reduce this effect. The investment results in a reduction in the poverty headcount on the order of 0.7 percentage points, though there is a small increase in inequality that is a function of the skill requirements of the new positions created as a result of the investment. [ABSTRACT FROM AUTHOR]

This paper utilizes a novel dynamic propensity score matching approach for multiple cohorts of U.S. counties between 1989 and 1999 to examine local economy resilience to rare natural disasters. Affected counties are sorted based on disaster intensity and are carefully matched to similar counties that did not experience a disaster. A difference-in-difference estimator compares trends of affected counties' postdisaster business establishments, employment, and payroll to counterfactual trends in the matched counties. All affected counties experienced short-run drops in economic activity that was particularly noticeable in higher-intensity disasters. In the longer run, less distressed counties returned to their estimated counterfactual trends, but countieswith lower predisaster socioeconomic conditions still lagged in growth, particularly in cases of lowerintensity disasters. Policymakers can use this information to better prepare responses to future disasters. [ABSTRACT FROM AUTHOR]

In recent years, the endogenous development ( ED) approach has gained influence within the rhetoric of European rural development policies ( RP). This paper provides a fundamental critique of the approach and shows that neither the economic elements of RP in general nor ED in particular are targeted towards the specific economic needs and capabilities of rural areas. The second part of this paper consists of the search for possible alternative concepts for a more targeted and effective RP. Based on a synopsis of existing theories, an integrated approach is proposed that builds upon the different coordination mechanisms for economic activity suggested by different theories. The new, integrated perspective enables an economic characterisation of rural areas and indicates that the successful support of local coordination of economic activity is determined by specific local conditions. It also makes evident that localised approaches usually cannot compensate rural areas for the lack of agglomeration advantages. Therefore, programmes for the economic development of rural areas which support the local coordination of economic activity remain a second-best policy. As such, they do not free the state from policies of spatial redistribution if the political aim is the creation of comparable living conditions. [ABSTRACT FROM AUTHOR]

This paper assesses both interregional and intraregional innovation inequality in China from 1995 to 2006. It is revealed that the east-central-west inequality has increased over time, whereas the inter-provincial inequality showed a V-pattern until 2003; Both inequality measures oscillated from 2004 to 2006. Using a decomposition framework recently developed by one of the authors, we determined that the major factors driving innovation inequality are population, economic development level, R&D, location and openness. The aggravated innovation inequality reflects the growth of China's innovation centers in the eastern region and their admission into the global innovation networks. The fact that R&D is a major factor driving the inequality suggests that, considered in the present study, the efficiency of R&D investment improved in certian regions during the period (1995-2006). Finally, geographic location and openness affect innovation inequality primarily through the coupled evolution of innovation capability and economic development, resulting in first-mover advantages to provinces of the eastern region. [ABSTRACT FROM AUTHOR]

This paper investigates the sensitivity of Colombian GDP growth to the surrounding macroeconomic environment. We estimate a Bayesian VAR model with informative steady-state priors for the Colombian economy using quarterly data from 1995 to 2007. A variance decomposition shows that world GDP growth and government spending are the most important factors, explaining roughly 17 and 16 per cent of the variance in Colombian GDP growth respectively. The model, which is shown to forecast well out-of-sample, can also be used to analyse alternative scenarios. Generating both endogenous and conditional forecasts, we show that the impact on Colombian GDP growth of a substantial downturn in world GDP growth would be non-negligible but that the decline still would be mild by historical standards. [ABSTRACT FROM AUTHOR]

Social conflicts are a serious obstacle to economic growth in many Latin American societies, affecting economic activity both in the short and the long run. The purpose of this paper is twofold. First, we develop a methodology to estimate the direct, short-run impact of frequently occurring exponents of local conflicts, such as road blockings, on economic activity. The methodology is based on using high frequency (daily) data to estimate the relation between a proxy for economic activity and the occurrence of road blockings. Careful analysis of impulse-response functions traces the effect of such local social conflicts on economic activity. This information is combined with the aggregate annual time series relation between gross domestic product (GDP) and the high frequency proxy for economic activity to estimate the direct cost of local social conflicts for the economy as a whole. Second, we apply the proposed methodology to analyse the direct economic costs of road blockings in Bolivia, using detailed daily information for the year 2003. The results show that these costs are large. Stronger institutions are a critical factor in reducing the prevalence of such conflicts and to avoid the huge economic costs that they imply. Copyright © 2008 John Wiley & Sons, Ltd. [ABSTRACT FROM AUTHOR]

This paper quantifies and analyses the extent of restrictions on inward foreign direct investment (FDI) in the service sector in developed and developing countries. Services account for an increasing share of global FDI. Recognition of the economic benefits of FDI clashes with nationalistic economic, political and national security concerns about foreign takeover of ‘strategic’ sectors, such as telecommunications, finance and transport. Consequently, almost all countries impose restrictions on FDI in services. Several different types of restrictions are considered: limitations on foreign ownership, screening or notification procedures, management restrictions and operational restrictions. These restrictions on FDI are computed at the industry level and then aggregated into a single measure for the service sector as a whole for 23 developed and 50 developing countries. Notwithstanding the worldwide trend towards liberalisation of restrictions, there remain substantial disparities between regions and individual countries in the severity of restrictions on inward FDI in services. The lowest restriction scores are in Europe and Latin America, whereas East Asia, South Asia and the Middle East have the highest levels of restrictions. The evolution over time of FDI restrictions is also presented for developed countries over the period 1981–2005, showing liberalisation in all countries, especially since the early 1990s, although to varying extents across countries. The severity of restrictions also differs considerably by sector, with electricity, telecommunications, transport and finance most restricted. The paper also finds a strong negative correlation of restrictiveness with inward stocks of FDI in services, suggesting that restrictions impede FDI. [ABSTRACT FROM AUTHOR]

Gender inequality and the lack of gender development are major problems in developing countries. Neoclassical economics has generally argued that economic development will greatly enhance gender development. However, more recent work has emphasized the role of institutions. In this paper, a distinction is made between malleable institutions and those that change only over long periods of time. Empirical estimations of the impacts of economic development, malleable institutions, and hard-to-change institutions on gender development are carried out. The results indicate that both economic development and reform of malleable institutions are important determinants of relative gender performance. However, non-malleable institutions and cultural practices limit the impact that reform and economic development can have on relative gender performance. [ABSTRACT FROM AUTHOR]

There is a surprising gap in the economic literature on social capital. First, we lack studies addressing the effects of social capital on those facets of development that can contribute in making growth more sustainable in the long run, like, for example, human development and social cohesion. Second, it is still unclear what type of networks may exert a positive effect on the different dimensions of development. In particular, the literature has not yet provided a rigorous assessment of the role of strong family ties, that are generally referred to as a form of bonding social capital causing backwardness. This paper investigates the relationship between the three types of social capital so far identified by the literature (i.e. bonding, bridging and linking), and the “quality” of economic development, as expressed by human development and an index of social well-being summarizing the state of health of urban ecosystems, public services, gender equality, and labour markets. The empirical analysis is articulated in two stages carried out by means of a multivariate analysis and of a structural equations models analysis. The results suggest that the linking social capital shaped by voluntary organizations has significantly positive effect on human development, but is irrelevant for social well-being. The bonding social capital shaped by strong family ties negatively affects human development, but significantly fosters the quality of life, mainly through a reduction of workers' precariousness. The bridging social capital of weak ties connecting friends and acquaintances follows the pattern of bonding social capital: it is reinforced by strong family ties and has significantly negative effect on human development. [ABSTRACT FROM AUTHOR]

This paper provides a survey of the recent progress in the literature of financial development and economic growth. The survey highlights that most empirical studies focus on either testing the role of financial development in stimulating economic growth or examining the direction of causality between these two variables. Although the positive role of finance on growth has become a stylized fact, there are some methodological reservations about the results from these empirical studies. Several key issues unresolved in the literature are highlighted. The paper also points to several directions for future research. [ABSTRACT FROM AUTHOR]

The postwar business cycle in Lebanon was dominated by the exchange rate based stabilization (ERBS) program implemented by the successive postwar governments. In the early period 1993–2002, a boom-bust dynamics was generated during which the economy exhibited the well-documented stylised facts of ERBS programs. The paper develops a cyclical index (ci) for Lebanon during this period and a VAR model shows that real interest rates (rr) had a significant impact on the dynamics of the business cycle during the early ERBS period. The second period 2002–2005 was marked by a recovery generated by foreign aid given to Lebanon in the Paris II international donors' conference held in November 2002. The period ended in a recession in 2005 brought about by the assassination of Lebanon's ex-prime minister Rafic Hariri. The third phase of the business cycle was caused by the Israel–Lebanon war in the summer of 2006 which led to widespread civilian and infrastructure damage and ended a brief recovery in early 2006. Throughout the period 2002–2006, foreign aid was instrumental in the resilience of the ERBS program. Copyright © 2007 John Wiley & Sons, Ltd. [ABSTRACT FROM AUTHOR]

Previous aid effectiveness research often claims that foreign aid has been unsuccessful in increasing growth rates. This result could be due either to methodological weaknesses, or to genuine aid efficiency losses. Empirically, the author finds that once the best available techniques are employed, aid has a significant but moderate average effect on growth over the period 1970–2001. A promising explanation of why the estimated returns to aid are not larger is that bilateral aid had no significant effect on growth during the Cold War (pre-1990), but had a significant and sizeable effect thereafter. In contrast, multilateral aid seems to have had sizeable and significant effects throughout. These results imply that the negative conclusions drawn by earlier research should be interpreted in their proper historical context, rather than as a necessary condemnation of current aid effectiveness. Copyright © 2007 John Wiley & Sons, Ltd. [ABSTRACT FROM AUTHOR]

The theory of endogenous growth and the geography and growth synthesis both consider that local growth and spatial concentration of economic activities emanate from localised knowledge spillovers ( Lucas 1988 ; Martin and Ottaviano 1999 ). Since the end of the 1980's, the spatial dimension of knowledge diffusion has been investigated from an empirical point of view, and the existence and role of local spillovers has been generally confirmed (see among others Jaffe 1989 ; Audretsch and Feldman 1996 ). The concern that now arises is to unravel the mechanisms underlying and explaining the geographical knowledge spillovers. The aim of this special issue is to present the latest new findings on such questions and to identify some new lines of research for future work. Before presenting the content of this special issue, we very briefly review the main results of the empirical literature on the geography of innovation. We also explain the context of this special issue by pointing out some of the limitations faced by this literature and, by stressing the complex dynamic and network dimensions of the observed processes of production and diffusion of knowledge. [ABSTRACT FROM AUTHOR]

This paper explores how the occurrence of local indeterminacy and endogenous business cycles relates to dynamic inefficiency, as defined by Malinvaud (1953), Phelps (1965) and Cass (1972). We follow Reichlin (1986) and Grandmont (1993) by considering a two-period overlapping generations model of capital accumulation with labor–leisure choice into the first-period of an agent's life and consumption in both periods. We first show that local indeterminacy and Hopf bifurcation are necessarily associated with a capital–labor ratio that is, at steady state, larger than the Golden Rule level. Consequently, paths converging asymptotically towards the steady state are shown to be dynamically inefficient, as there always exists another trajectory that starts with the same initial conditions and produces more aggregate consumption at all future dates. More surprising, however, is our main result showing that stable orbits, generated around a dynamically inefficient steady state through a supercritical Hopf bifurcation, may, in contrast, be dynamically efficient. [ABSTRACT FROM AUTHOR]

Much has been written about prospects for US current account adjustment, including the possibility of what is sometimes referred to as a ‘disorderly correction’: a sharp fall in the exchange rate that boosts interest rates, depresses stock prices and weakens economic activity. This paper assesses some of the empirical evidence bearing on the plausibility of the disorderly adjustment scenario, drawing on the experience of previous current account adjustments in industrial economies. We examined the paths of key economic performance indicators before, during and after the onset of adjustment, building on the analysis of Freund (2000) . We found little evidence among past adjustment episodes of the features highlighted by the disorderly adjustment hypothesis. Although some episodes in our sample experienced significant shortfalls in GDP growth after the onset of adjustment, these shortfalls were not associated with significant and sustained depreciations of real exchange rates, increases in real interest rates or declines in real stock prices. By contrast, it was among the episodes where GDP growth picked up during adjustment that the most substantial depreciations of real exchange rates occurred. These findings do not preclude the possibility that future current account adjustments could be disruptive, but they weaken the historical basis for predicting such an outcome. [ABSTRACT FROM AUTHOR]

This paper analyses the liberalisation of foreign direct investment (FDI) in Mexico since the late 1980s, and its relationships with exports and imports. Such a process has eased the access of multinational corporations (MNCs) to the country, which has promoted exports. However, it has also resulted in a higher import content and the displacement of local firms, which has limited Mexico's economic development through the balance of payments constraint. The analysis is supported by the existence of linkages – bidirectional Granger causality – between exports, imports and FDI. [ABSTRACT FROM AUTHOR]