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Keywords: factor-saving technical change; induced innovation; industrial revolution Abstract Using historical data for the 1700-1914 period, this paper analyses the nature and direction of technical change in Britain. The evidence in this paper indicates that, over this long period, labour-saving technology adoption was a major response to changes in relative factor prices, thus supporting the hypothesis that 'induced innovation' was a major driver of technical change during the British industrial revolution. Labour saving was made possible and sustained by capital-augmenting and energy-augmenting technical change coupled with continuous capital accumulation and abundant energy supplies. This process placed the British economy on a higher capital-labour ratio equilibrium, and was the primary force driving sustained productivity growth, which further raised wages and living standards. Byline: Ravshonbek Otojanov, Roger Fouquet, Brigitte Granville

Studies have shown that external capital account liberalisation can boost capital inflows and augment economic development. Nevertheless, in the case of developing and emerging economies (DEE), adverse currency fluctuations could hamper external competitiveness due to relative price differences creating currency overvaluation, which might not be mitigated via financial openness alone. Therefore, this paper uses annual panel data for 35 DEEs over 40 years to explore whether financial openness of countries can help preserve their external price competitiveness, in the presence of greater trade openness and better institutional quality. Our findings suggest that financial openness alone does not aid export competitiveness, unless it is supported by greater trade openness. In addition, both cross country and regional analyses show that financial openness can benefit economies in maintaining their export competitiveness if they have stronger quality of institutions. Our results remain robust when we estimate the role of financial openness and institutional quality jointly on external competitiveness across regions, and during the pre‐ and post‐crisis periods. We conclude that financial openness alone is not sufficient to improve external competitiveness of an emerging economy, but it does help in the presence of greater trade openness or better institutions, enabling reduction in trade costs and thereby making these countries more price‐competitive. [ABSTRACT FROM AUTHOR]

Byline: Brigitte Granville, Dominik Nagly We analyse how government policy can exert a positive influence on public attitudes towards the Economic and Monetary Union given the existing fiscal policy framework and thus increase the likelihood of survival of the Eurozone. Results from applying the Brender and Drazen ('Consolidation of New Democracy, Mass Attitudes, and Clientelism', The American Economic Review, Vol. 99, No. 2, pp. 304-309) political economy model indicate the extent of the difficulty of maintaining public support for the monetary union. Article Note: We appreciate comments on an early version by Peter Boone, Vladislav Skovorodov, Judith Shapiro, Amos Witztum and by anonymous reviewers in our revisions.

We explore the impact of informal institutions on technological change in transition, comparing the 89 regions of the Russian Federation. We use panel data during the period of recovery and growth, 1998-2004. The one-country framework provides a constant background -- unlike, for example, in cross-country studies -- against which variance in institution building may be observed. Property rights reform ranged from full enforcement in the Northwest to blocking in Communist regions in the Southeast. We find an unambiguous relationship between early strong reform and technological change. In our model, the quality of informal institutions is proxied by investment risk (ExpertRA Regions rating agency).

This article examines the long-run two-way causal relationship between government revenues and spending and their interaction with the yearly change in public debt for eighteen OECD countries by using annual data for 1976-2017 period. The empirical literature has mainly focused on the long run relationship between government expenditure and revenues or other single country time series while only a few studies have used panel causality analysis and none have investigated the link with the evolution of public debt ratios. The purpose of this paper is to present a dynamic model identifying the underlying relationships constituting the fiscal policy set-up in sample countries. We apply a robust dynamic panel causality methodology based on SUR systems and Wald tests with country specific bootstrap critical values. The study also aims to provide the basis for recommendations on the policy response to public finance challenges stemming from exogenous shocks like the global pandemic that began in 2020. By developing an enhanced analysis of the long-term causal relationship between taxation, spending and their interaction with changes in public debt, the study not only provides fresh insights into the sustainability and optimal design of fiscal adjustment efforts but also offers a country-specific schematization as a guide for policymaking. [ABSTRACT FROM AUTHOR]