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We explore determinants of job reallocation, employment change and average job tenure in this paper. A model which associates technological advances with the process of economic growth is modified and analysed. The features of this model allow for the possibility of asymmetric behaviour when looking at the net change in employment. Workplace data from Australia (AWIRS95) are used to test the predictions generated from the model for both employment change and average job tenure. Results are presented that provide clear evidence as to the nature of workplaces in which net employment growth is concentrated. We find that employment growth is asymmetrically related to expected changes in demand for the output of the workplace. We also find that employment is lower for workplaces that are larger, older, have greater union density, offer higher relative earnings, or are operating in a more competitive environment. The impacts on average tenure are as expected from the model and from these changes in employment. Overall there is a substantial degree of agreement between the predictions of the model and our empirical results. [ABSTRACT FROM AUTHOR]

According to Harvey (1988) , the forecasting ability of the term spread on economic growth is due to the fact that interest rates reflect investors' expectations about the future economic situation when deciding their plans for consumption and investment. Past literature has used ex post data on output or consumption growth as proxies for their expected value. In this paper, we employ a direct measure of economic agents' expectations, the Economic Sentiment Indicator elaborated by the European Commission, to test this hypothesis. Our results indicate that a linear combination of European yield spreads explains a surprising 93.7\% of the variability of the Economic Sentiment Indicator. This ability of yield spreads to capture economic agent expectations may be the actual reason for the predictive power of yield spreads about future business cycle. [ABSTRACT FROM AUTHOR]

The main task of central banks is to set the level of short-term nominal interest rates in reaction to economic developments, with the aim of achieving their statutory objectives (typically some combination of inflation and output variability). If agents are forward-looking, central banks can achieve better macroeconomic outcomes by committing to follow a rule-like behaviour. Against this background, the contribution of this paper is twofold. First, it estimates a small-scale model of the euro area economy that can be used as a benchmark for the evaluation of different simple policy rules in the euro area economy. Second, it studies the performance of a relatively new type of rule, labelled ‘speed limit’ (SL), where the nominal interest rate reacts to the rate of growth in the output gap. The main conclusion of the study is that an SL policy performs remarkably well. [ABSTRACT FROM AUTHOR]

It has long been an article of faith amongst regional economists that increasing returns to scale are necessary to explain the punctiform location of economic activity and population. However, there is no consensus in the empirical literature over whether returns to scale are constant or increasing. A notable example of this lack of agreement is provided by the static-dynamic Verdoorn law paradox. While the dynamic Verdoorn law (specified using growth rates) yields estimates of substantial increasing returns to scale, the static Verdoorn law (specified using log-levels) indicates only the presence of constant returns to scale. In this paper, we explain the static-dynamic Verdoorn law paradox by showing that estimates of returns to scale obtained using the static law are subject to a spatial aggregation bias, which biases the estimates towards constant returns to scale. We illustrate our arguments by means of simulation exercises. The results obtained hold general lessons for applied economic analysis using spatial data. [ABSTRACT FROM AUTHOR]

(1433) Audrone Jakaitiene and Stephane Dees Forecasting the world economy is a difficult task given the complex interrelationships within and across countries. This paper proposes a number of approaches to forecast short-term changes in selected world economic variables and aims, first, at ranking various forecasting methods in terms of forecast accuracy and, second, at checking whether methods forecasting directly aggregate variables (direct approaches) outperform methods based on the aggregation of country-specific forecasts (bottom-up approaches). Overall, all methods perform better than a simple benchmark for short horizons (up to 3 months ahead). Among the forecasting approaches used, factor models appear to perform the best. Moreover, direct approaches outperform bottom-up ones for real variables, but not for prices. Finally, when country-specific forecasts are adjusted to match direct forecasts at the aggregate levels (top-down approaches), the forecast accuracy is neither improved nor deteriorated (i.e. top-down and bottom-up approaches are broadly equivalent in terms of country-specific forecast accuracy). [ABSTRACT FROM AUTHOR]

What is the relationship between trade and economic growth? Does trade positively affect economic growth? Owing to the ambiguity of this relationship, the empirical relationship has remained open ( Rodriguez and Rodrik, 2001 ; Baldwin, 2003 ). This paper introduces “trade structure” variables, borrowed from the paper of Lederman and Maloney (2003 ), and applies them to the relationship. A dynamic panel estimation for the data of 66 countries during 1991–2004 is used to verify the validity and robustness of the relationship. Trade structure variables show strong evidence of positive effects on growth. Free-trade agreements/areas (FTAs) also enhance economic growth. East Asia shows a different relationship between trade and growth than the world and reflects a weaker role of FTAs in its growth. [ABSTRACT FROM AUTHOR]

This paper investigates the reasons behind the resilience of China's economy to the global financial tsunami. China's economy is lowly leveraged in its banking, household, public and external sectors and, therefore, is less plagued by the global deleveraging than most developed economies. Chinese domestic sectors have improved significantly over the past decade, giving them larger capacity to cope with external shocks than during the Asian financial crisis a decade ago. Contrary to the conventional wisdom that China's economic growth is highly dependent on exports, we find that the main growth engine for China is domestic demand. Destocking, rather than falling exports, was the main cause of the sharp economic slowdown in China in late 2008 and early 2009. Therefore, the global economic slowdown should have limited impact on China's economy. We forecast a sustained economic recovery in China in 2009–2011, with real GDP growth exceeding 10 percent in 2010. [ABSTRACT FROM AUTHOR]

The purpose of this paper is to test regional convergence and to investigate interregional disparities in terms of per capita income in Greece. The novelty of our study lies in the use of a disaggregated dataset for an extended time period (1971–2003) at two regional levels (NUTS II & NUTS III). Our results indicate that there is β convergence between prefectures but not among regions, while no evidence of σ convergence is found at both regional levels. Also, the GDP geographic concentration and population density have a negative impact on growth, which outweighs the positive growth effect of population geographic concentration and GDP spatial inequality. Thus, policies aiming at the decentralization of economic activity in Greece might enhance growth and regional equality simultaneously. Finally, we do not find economic dualism across geographic areas; however, rich prefectures seem to converge faster than poor ones. [ABSTRACT FROM AUTHOR]

Using the interregional input–output model, the present paper analyzes the impact of Olympic-related investments on the economic development of Beijing and its surrounding areas, as well as the rest of China. The interregional input–output model provides a satisfactory simulation and analysis of Olympic-related investments that are implemented in Beijing and other areas and their spillover effects on other regions. We estimate that from 2002 to 2007, Olympic-related investments will add 2.02, 0.23 and 0.09 percent annually to gross regional products of Beijing, its surrounding areas and the rest of China, respectively. [ABSTRACT FROM AUTHOR]

This paper addresses the question of whether or not a theory of total factor productivity (TFP) is needed in order to explain the observed large per capita income differences across countries. As the argument that it is needed has been reached by calculating TFP empirically, we show that the way the estimates of TFP have been computed is not an innocuous issue. To illustrate our point, we discuss how two well-known textbooks on growth theory present the arguments and the problems associated with these expositions. We conclude that the tautological nature of the estimates of TFP lies at the heart of an important question that the empirical literature on economic growth has been dealing with during recent years. Hence, our arguments cast doubt on the need for a theory of TFP. [ABSTRACT FROM AUTHOR]

In the period of 1990s alone, four waves of financial crises occurred around the world. The repeated occurrence of financial crises stimulated a large number of theoretical and empirical studies on the phenomena, in particular studies on the determinants of or early warning signals of financial crises. Nonetheless, the different studies of early warning systems have achieved mixed results and there remains much room for further investigation. Since, so far, the empirical studies have focused on conventional economic modelling methods such as simplified probabilistic models and regression models, in this study we examine whether new insights can be gained from the application of the fuzzy clustering method. The theories of fuzzy sets and fuzzy logic offer us the means to deal with uncertainties inherent in a wide variety of tasks, especially when the uncertainty is not the result of randomness but the result of unknown factors and relationships that are difficult to explain. They also provide us with the instruments to treat vague and imprecise linguistic values and to model nonlinear relationships. This paper presents empirical results from analysing the Finnish currency crisis in 1992 using the fuzzy C-means clustering method. We first provide the relevant background knowledge and introduce the fuzzy clustering method. We then show how the use of fuzzy C-means method can help us to identify the critical levels of important economic indicators for predicting of financial crises. Copyright © 2007 John Wiley & Sons, Ltd. [ABSTRACT FROM AUTHOR]

The article discusses a financial framework for economic growth in the United States. The article presents a unified financial counterpart to a long-term economic projection. Based on assumptions of varying rates of growth, a set of projections of economic activity in 1970 is presented. A "judgment" model will be selected based on the results of the projections. The article then introduces a theoretical framework that links levels of economic and financial activity. By using the "judgment" model as a reference, the pattern of relationships will be applied to a projection of assets and liabilities for the individual components of the financial network.

This paper identifies the major factors explaining GDP growth in a number of Southeast Asian countries during the 1980s and early 90s. Estimates of the contribution of technological change, increases in the endowments of labor and capital, movements in the terms of trade, and changes in domestic output prices are reported for Hong Kong, Japan, South Korea, the Philippines, and Thailand. Partial results for Indonesia and Malaysia are also shown. An index number approach is used; it has a tight theoretical foundation being based on the GNP/GDP function approach to modeling the production sector of an open economy. [ABSTRACT FROM AUTHOR]

ABSTRACT We propose a new framework for building composite leading indicators for the Spanish economy using monthly targeted predictors and small-scale dynamic factor models. Our leading indicator index, based on the low-frequency components of four monthly economic variables, is able to predict the onset of the Spanish recessions as well as the gross domestic product (GDP) growth cycles and classical industrial production cycles, both historically and in real time. Also, our leading indicator provides substantial aid in forecasting annual and quarterly GDP growth rates. Using only real data available at the beginning of each forecast period, our indicator one-step-ahead forecasts shows substantial improvements over other alternatives. Copyright © 2013 John Wiley & Sons, Ltd. [ABSTRACT FROM AUTHOR]

This paper develops a simple theory governing the relationship between useful energy consumption and national output that explains why the adjusted elasticities found by two economists turned out to be greater than one. The theory is quantified by reference to a wide range of countries covering the whole spectrum of economic development and is tested against the actual experience over 20 to 25 years of individual countries. Conformity to the theory was very close and the efficiency-in-use coefficients computed by economists were found to hold good for periods of 20 to 25 years. Briefly, the hypothesis states that as a country moves through the various stages of its economic development from primitive subsistence agriculture to the ultimate state of fully energy-dependent production, its useful energy elasticity steadily falls from a high value tending asymptotically to one. By itself this proposition is of little use to energy forecasters, because it simply substitutes the requirement to predict energy intensiveness of output for the requirement to predict energy consumption. If we can satisfy ourselves that real GDP per capita is a good measure of energy intensiveness, however, then the relationship derived above can be used as the basis for a mathematical model linking useful energy consumption per capita with GDP per capita.

The search for uniformities in the growth patterns of individual industries rose to a peak some 30 years ago in the explorations of economists Simon S. Kuznets and in the subsequent comprehensive work of Arthur F. Burns. Partly because of the widespread acceptance of these results and attendant explanations of their inevitability, and partly because of the compelling attractions of other economic problems, little additional work was done in this area for an extended period. Recent portents of a revival of interest stem from three sources: the growing output of long-term forecasts for individual industries, which invites a search for generalizations and efforts to reinvigorate research and theory relating to economic growth by probing the behavior of disaggregated sectors. This paper will concentrate primarily on reviewing Burns's expectations and comparing them with actual results over the following 25 years as a basis for: suggesting revisions in the interpretation of his original findings; outlining needed modifications in the theory as well as the pattern of industrial growth paths; and exploring the possibility of developing patterned expectations for the growth of individual commodities and firms.

Overview: Forecasts steady but near-term signals mixed Our world growth forecasts are steady this month, at 2.3% for 2016 and 2.7% for 2017., One factor behind the more stable outlook is the rally in financial markets since mid-February. This rally appears to have been the result of a number of factors including a more dovish Fed and an improvement in some near-term economic indicators., The implied 12-month ahead Fed funds rate dropped around 0.5% from its January peak to mid-February and remains around 0.35% lower now. So the Fed still apparently has the capacity to boost markets with changes in communication policy., The Citigroup economic surprise indicators have also improved over recent weeks, especially for emerging markets where the indicator is back in positive territory. The G10 index nevertheless remains clearly negative., Other economic signals are mixed. The latest reading of OE's world trade indicator (based on survey evidence for March) suggests a modest improvement, although again the indicator continues to signal weak world trade growth., Meanwhile, there have been some warnings of potentially softer labour market conditions. Though payrolls gains have remained solid, a weighted sum of the employment subindices of the US ISM surveys has dropped sharply over recent months. A similar index for the Eurozone is more positive, although it has also softened from its late-2015 peaks., These mixed signals suggest limited likelihood of near-term upgrades to the world growth outlook and overall we maintain our view from last month that risks look skewed to the downside - so that further monetary policy stimulus remains a possibility., This assessment appears to be shared, to some extent at least, by global bond markets. US 10-year yields have dropped back to only 1.7% since mid-March (only 0.1% above their February lows), with German yields at just 0.1% and Japanese yields at - 0.1%. So the 'great squeeze' on G7 bond yields is still continuing. [ABSTRACT FROM AUTHOR]

We evaluate the predictive power of leading indicators for output growth at horizons up to 1 year. We use the MIDAS regression approach as this allows us to combine multiple individual leading indicators in a parsimonious way and to directly exploit the information content of the monthly series to predict quarterly output growth. When we use real-time vintage data, the indicators are found to have significant predictive ability, and this is further enhanced by the use of monthly data on the quarter at the time the forecast is made. Copyright © 2009 John Wiley & Sons, Ltd. [ABSTRACT FROM AUTHOR]

The article looks at the economic developments in the Euro Area by highlighting a few core characteristics of the Euro Area as a whole and those of the largest five economies of the Euro Area. It provides some key economic performance indicators and examines the policy of the European Central Bank (ECB). The progress in the Stability and Growth Pact (SGP) is briefly discussed, before reviewing the external dimension of the euro. It offers a reflection on the developments with Economic and Monetary Union (EMU) over the reviewed time period. A brief summary and outlook for 2007 is presented.

The author responds to comments by Angus Maddison about the article "China's Reform Period Economic Growth: How Reliable Are Angus Maddison's Estimates," published in the March 2006 issue of "Review of Income & Wealth."

In this article, we argue that there are strong reasons for using linear instead of exponential models when analysing post-war economic growth. Incorrect model specifications will lead to misinterpretations of the underlying economic reality and to erroneous economic forecasts. Our argument is based on an empirical investigation of real Gross Domestic Product per capita growth in 25 Organization for Economic Co-operation and Development (OECD) countries (and three country aggregates) during the post-war period using the Box-Cox transformation method. The conclusion is that per capita growth is generally (more or less) linear (and definitely not exponential) for the level of economic development represented by these countries. Based on this we argue that analyses of growth should use linear instead of exponential models. This change of model could give new insights into problems connected with economic growth. [ABSTRACT FROM AUTHOR]

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The article focuses on typologies and evidence that serve as a guide to economic growth in Europe during the nineteenth century. There has also been increased reliance on comparative methods by historians seeking to achieve a cross-fertilization of explanatory ideas. For both purposes it is desirable, for the first purpose essential, that any historical generalizations called into aid should be not only true of several particular instances but also should be very widely applicable. It could be harmfully misleading if what looked to be proclamations of universal relationships turned out to be no more than accounts of one or two highly individual cases, disguised in the language of generality. All the chief schemes expounding alleged universalities in the history of economic growth have received plenty of criticism, both appreciative and hostile, but it is doubtful whether they have often been starkly confronted by the question whether the evidence they use is comprehensive enough to provide a secure foundation of genuine history for edifices as vast as they have grown to be. They have been challenged on grounds of unclarity or inappropriateness in their basic concepts, or because they have been inaccurate on some specific points, or because some particular case may be more convincingly interpreted by postulating a different chain of causation.

The article offers an outlook for the world economy. It is expected that the impact on global growth would be modest, given the limited decline in equity markets. The U.S. housing sector has worsened and set to remain a drag on the overall growth. Based on data on employment and consumption, resilience is seen in the wake of the crisis. The cost of borrowing for firms and consumers have been driven by the repricing of risk and the liquidity squeeze in money markets. Meanwhile, gross domestic product growth in the Eurozone was disappointing at 0.3%.