We employ the total factor productivity (TFP) index in growth accounting as a proxy for productiv... more We employ the total factor productivity (TFP) index in growth accounting as a proxy for productivity growth to compare patterns and sources of output growth for a group of proximate countries in Asia−Pacific Economic Cooperation region. The estimates indicate that output growth has benefited from both TFP and factor input contributions albeit with differing magnitudes. Whereas TFP and capital are the dominant contributors to output growth in Japan and the tiger economies, capital and labour emerge as the dominant contributors in the baby tiger economies. In addition, Japanese productivity has on the average been growing over the past decade. It also emerges that foreign direct investment may be playing a prominent role of promoting the contribution of TFP.
The relationship between high levels of FDI and of economic growth has been of enduring interest ... more The relationship between high levels of FDI and of economic growth has been of enduring interest in the development literature, particularly in the context of economies like China which have enjoyed exceptional inflows of foreign capital as well as experiencing unprecedented economic growth. The specific literature on China has failed to come to a definite conclusion as to whether FDI does increase growth mainly because they focus on one or several different channels through which FDI might affect the macro-economy. A more comprehensive framework is necessary to investigate the overarching relationships between economic development and FDI, as identified by endogenous growth theory, by including the potential influences on them, and vice-versa, of domestic capital stock, human capital, the state of technology, the openness of the economy and its gradual liberalisation. Although we investigate those influences in a VAR framework, our main focus is the presence of long-run cointegration, between the relevant variables and aggregate output in longrun equilibrium. We find, and then identify, such long run structural relationships; one of which identifies a long-run "production function". In the long-run FDI reduces economic growth; but the latter increases the former. There are important impacts on variables such as employment, from FDI and other factors such as openness and technology transfer, which have both indirect or direct spill-over effects from FDI.
In this paper, we attempt to establish whether FDI has directly induced long-run effects on outpu... more In this paper, we attempt to establish whether FDI has directly induced long-run effects on output in a selection of APEC countries or whether such an influence, if any, has been transmitted indirectly through spillover effects.
In this paper we test directly for the restrictions impfied by rational expectations and structur... more In this paper we test directly for the restrictions impfied by rational expectations and structural neutrality. The tests are direct in the sense that they employ the Lucas output equation rather than the approximations to it, which replace the lagged output term by lagged monetary Shocks, commonly considered in the literature. The direct approach is considered preferable because it avoids these ad hoc approximations and saves significantly on degrees of freedom. The latter permits us to pursue a fully nested Sting proeeduxe, which was not possible in earlier work employing postwar U.K. annual data. e main result is that the rational expectations restrictions are not accepted.
History is important in order to understand the trade-related issues that confronted the Central ... more History is important in order to understand the trade-related issues that confronted the Central and Eastern European Countries (CEECs) immediately after 1989 as well as the past and current standing of their trade relations with the world outside the Council for Mutual Economic Assistance (CMEA), a body that governed trade relations between the countries of Central and Eastern Europe before 1989. This chapter discusses the CEECs’ international economic relations before 1989 by explaining the state monopoly and the planning of foreign trade, the inconvertibility of the currencies under the auspices of the CMEA.
Structural Change, Economic Interdependence and World Development, 1987
There has been growing concern in recent years, among analysis of disarmament, regarding the incr... more There has been growing concern in recent years, among analysis of disarmament, regarding the increasing volume of arms trade and transfer of military technology from advanced industrial nations to LDCs. The mechanics of the international trade in arms is well documented (SIPRI, 1982). Recent studies have generally emphasised the political and security aspects of the matter (see Cardesman, 1981; Pierre, 1982). On the other hand Sen and Smith (1982) have shown how important economic issues of arms sales can be modelled within a formal framework. The emphasis in much of the work mentioned above lies with the supplier countries and their analysis focusses mainly on the sellers of armaments. In this paper we concentrate on the recipient LDCs and analyse the impact of defence expenditure in the context of armament imports, domestic production of strategic equipment and technology transfers.
This paper analyses the impact of foreign direct investment (FDI) on the development of local fir... more This paper analyses the impact of foreign direct investment (FDI) on the development of local firms. We focus on two likely effects of FDI: a competition effect which deters entry of domestic firms and positive market externalities which foster the development of local industry. Using a simple theoretical model to illustrate how these forces work we show that the number of domestic firms follows a u-shaped curve, where the competition effect first dominates but is gradually outweighed by positive externalities. Evidence for Ireland tends to support this result. Specifically, applying semi-parametric regression techniques on plant level panel data for the manufacturing sector we find that while the competition effect may have initially deterred domestic firms' entry, this initial effect has been outpaced by positive externalities making the overall impact of FDI largely positive in this country.
Distribution électronique Cairn.info pour De Boeck Supérieur. Distribution électronique Cairn.inf... more Distribution électronique Cairn.info pour De Boeck Supérieur. Distribution électronique Cairn.info pour De Boeck Supérieur. La reproduction ou représentation de cet article, notamment par photocopie, n'est autorisée que dans les limites des conditions générales d'utilisation du site ou, le cas échéant, des conditions générales de la licence souscrite par votre établissement. Toute autre reproduction ou représentation, en tout ou partie, sous quelque forme et de quelque manière que ce soit, est interdite sauf accord préalable et écrit de l'éditeur, en dehors des cas prévus par la législation en vigueur en France. Il est précisé que son stockage dans une base de données est également interdit. Article disponible en ligne à l'adresse Article disponible en ligne à l'adresse https://www.cairn.info/revue-journal-of-innovation-economics-2013-2-page-37.htm Découvrir le sommaire de ce numéro, suivre la revue par email, s'abonner... Flashez ce QR Code pour accéder à la page de ce numéro sur Cairn.info.
Journal of Economic Dynamics and Control, May 1, 1984
Journal of Economic Dynamics and Control 7 (1984) 153169. NorthHolland OPTIMAL CONTROL AND DIFFER... more Journal of Economic Dynamics and Control 7 (1984) 153169. NorthHolland OPTIMAL CONTROL AND DIFFERENTIAL GAME MODELS OF MILITARY EXPENDITURE IN LESS DEVELOPED COUNTRIES* Saadet DEGER UnioersitY of London, Birkbeck College, London WI P IPA, ...
Micro-foundations for the well-known gravity trade model are investigated. A new framework is ado... more Micro-foundations for the well-known gravity trade model are investigated. A new framework is adopted, together with assumptions that while strong are rather less restrictive than those typically employed in this context, thus enabling rather more complex and interesting results to be ...
Contributions to Conflict Management, Peace Economics and Development, 2013
Abstract The chapter provides a theory of war and conflict issues, and applies the theory to the ... more Abstract The chapter provides a theory of war and conflict issues, and applies the theory to the arms race and the possibility of war in the South Asian subcontinent. We try to give a new perspective on an old question: wars are not rational since they destroy the contestable resource over which disputes arise; yet, states that are rational frequently undertake them rather than going for the less costly option of settlement. In the chapter, a war game is played in which two states first build armaments and then, if they cannot achieve a settlement, fight a war, the outcome of which depends on strength of armaments, where at stake is a contestable resource. The anticipated outcome determines the bargaining threat point. “Technology” is a factor in any war, and so too is the cost of building armaments. States typically differ in technology and may also miscalculate their own relative technical position and war-fighting capability. Alternative models of settlement and war are presented in which states either believe the opposing state has the same perception of technical advantage, or else know the opposing state’s differing perception. Dynamic models, which include the effects of decay in information over time and strategic concerns, are examined. Finally, the results of the models are applied to the stylized facts of India-Pakistan rivalry and conflict, paying particular attention to institutional issues. It is demonstrated that the stylized facts of the Indo-Pakistani conflict and wars fit well with the theoretical conjectures of the analytical models. External conflicts and wars in South Asia are often related to internal causes, which allow the possibility of incomplete information; the two contending states miscalculate their own power in terms of war-fighting capability, so that war occurs.
In this chapter, unlike the others, we employ the broadest definition of the CEECs since we are a... more In this chapter, unlike the others, we employ the broadest definition of the CEECs since we are analyzing trade flows and structures in the widest possible geographical sense. Since trade interrelationships are complex and multilateral, it is but natural to take a wider definition than we have hitherto employed. It also facilitates data collection and econometric analysis which is the central focus of this chapter. Hence, for empirical analysis and a wider perspective, our database and information set for CEECs are somewhat different, although the substantive conclusions are similar. However, in later chapters, we revert back to our specific countries.
This chapter discusses briefly the transition journey that Central and Eastern European Countries... more This chapter discusses briefly the transition journey that Central and Eastern European Countries (CEECs) have travelled in the last two to three decades. It mentions the faltering early years, the sunk costs of transition, the transformation into maturing upper-income countries, the expansion of trade as well as the process of integration with the European Union, which acts as a core catalyst in growth acceleration. It highlights the importance of trade in general and its importance for the CEECs in particular. We explain the advantages of specialization and trade. We also present the challenges that trade faces in the context of globalization.
Since planned economies were relatively autarkic, none of them traded extensively with the capita... more Since planned economies were relatively autarkic, none of them traded extensively with the capitalist outside world. During the transition, as trade relationships widened internationally, these economies also went through a process of creating new institutions and organizations that required new skills and attitudes more relevant to the global trading world. The relationship between citizens and the state also changed substantially. This chapter discusses the importance and the role played by institutions in a changing economic environment. It also analyzes how institutional change affected the business participants in the new capitalist environment.
Since planned economies were relatively autarkic, none of them traded extensively with the capita... more Since planned economies were relatively autarkic, none of them traded extensively with the capitalist outside world. During the transition, as trade relationships widened internationally, these economies also went through a process of creating new institutions and organizations that required new skills and attitudes more relevant to the global trading world. The relationship between citizens and the state also changed substantially. This chapter discusses the importance and the role played by institutions in a changing economic environment. It also analyses how institutional change affected the business participants in the new capitalist environment.
All advanced countries experienced a sharp decline in the volume of exports during the interwar p... more All advanced countries experienced a sharp decline in the volume of exports during the interwar period. With the onset of the Great Depression, beggar-thy-neighbour policies were introduced to restrict international trade in the hope of maintaining domestic employment. While focusing mainly on the UK, this paper investigates the export trade performance of the three main industrial countries, the United States, the United Kingdom and Germany. Aggregate export functions will be estimated for each country over the 1920s and the 1930s, with particular emphasis placed on the changes in trade policy. Quarterly data sets will be constructed for the United States, the United Kingdom and Germany from domestic sources. The data for the UK will be extracted from the Board of Trade Journal and have been rarely used in econometric work, whereas the German data will be from Ritschl (2002) and the source for the US series will be Balke & Gordon (1986). Time series econometric techniques will be e...
What impact do random events have on individuals? How do they adapt to living in an uncertain, st... more What impact do random events have on individuals? How do they adapt to living in an uncertain, stochastic environment? Risk and Uncertainty in Economics pays tribute to the significant contribution made by James L. Ford to our understanding of these questions.
Sales of arms are a significant component of international trade and raise a range of pressing po... more Sales of arms are a significant component of international trade and raise a range of pressing policy issues. After a short review of the market, this paper provides a formal model of the trade which allows for competing, forward-looking suppliers whose welfare depends on both ...
While previous chapters have concentrated on trade-related issues (including foreign direct inves... more While previous chapters have concentrated on trade-related issues (including foreign direct investment and institutions with global values), we now consider the inter-dependencies that exist between foreign trade, European integration, economic development and structural change within the common framework of transition. The performance of Central and Eastern European Countries (CEECs) is a classic example of ‘diversity in unity’ where countries have faced differing economic environments and pursued different tactical and strategic policies while maintaining a common vision within the framework of market reforms. The dynamics of economic change, starting from early transition with high sunk costs, to the ‘big push’ forward given by membership of the European Union to the adverse impact of the Great Recession (the ‘big pull’ backward) is explained within a formal framework.
We employ the total factor productivity (TFP) index in growth accounting as a proxy for productiv... more We employ the total factor productivity (TFP) index in growth accounting as a proxy for productivity growth to compare patterns and sources of output growth for a group of proximate countries in Asia−Pacific Economic Cooperation region. The estimates indicate that output growth has benefited from both TFP and factor input contributions albeit with differing magnitudes. Whereas TFP and capital are the dominant contributors to output growth in Japan and the tiger economies, capital and labour emerge as the dominant contributors in the baby tiger economies. In addition, Japanese productivity has on the average been growing over the past decade. It also emerges that foreign direct investment may be playing a prominent role of promoting the contribution of TFP.
The relationship between high levels of FDI and of economic growth has been of enduring interest ... more The relationship between high levels of FDI and of economic growth has been of enduring interest in the development literature, particularly in the context of economies like China which have enjoyed exceptional inflows of foreign capital as well as experiencing unprecedented economic growth. The specific literature on China has failed to come to a definite conclusion as to whether FDI does increase growth mainly because they focus on one or several different channels through which FDI might affect the macro-economy. A more comprehensive framework is necessary to investigate the overarching relationships between economic development and FDI, as identified by endogenous growth theory, by including the potential influences on them, and vice-versa, of domestic capital stock, human capital, the state of technology, the openness of the economy and its gradual liberalisation. Although we investigate those influences in a VAR framework, our main focus is the presence of long-run cointegration, between the relevant variables and aggregate output in longrun equilibrium. We find, and then identify, such long run structural relationships; one of which identifies a long-run "production function". In the long-run FDI reduces economic growth; but the latter increases the former. There are important impacts on variables such as employment, from FDI and other factors such as openness and technology transfer, which have both indirect or direct spill-over effects from FDI.
In this paper, we attempt to establish whether FDI has directly induced long-run effects on outpu... more In this paper, we attempt to establish whether FDI has directly induced long-run effects on output in a selection of APEC countries or whether such an influence, if any, has been transmitted indirectly through spillover effects.
In this paper we test directly for the restrictions impfied by rational expectations and structur... more In this paper we test directly for the restrictions impfied by rational expectations and structural neutrality. The tests are direct in the sense that they employ the Lucas output equation rather than the approximations to it, which replace the lagged output term by lagged monetary Shocks, commonly considered in the literature. The direct approach is considered preferable because it avoids these ad hoc approximations and saves significantly on degrees of freedom. The latter permits us to pursue a fully nested Sting proeeduxe, which was not possible in earlier work employing postwar U.K. annual data. e main result is that the rational expectations restrictions are not accepted.
History is important in order to understand the trade-related issues that confronted the Central ... more History is important in order to understand the trade-related issues that confronted the Central and Eastern European Countries (CEECs) immediately after 1989 as well as the past and current standing of their trade relations with the world outside the Council for Mutual Economic Assistance (CMEA), a body that governed trade relations between the countries of Central and Eastern Europe before 1989. This chapter discusses the CEECs’ international economic relations before 1989 by explaining the state monopoly and the planning of foreign trade, the inconvertibility of the currencies under the auspices of the CMEA.
Structural Change, Economic Interdependence and World Development, 1987
There has been growing concern in recent years, among analysis of disarmament, regarding the incr... more There has been growing concern in recent years, among analysis of disarmament, regarding the increasing volume of arms trade and transfer of military technology from advanced industrial nations to LDCs. The mechanics of the international trade in arms is well documented (SIPRI, 1982). Recent studies have generally emphasised the political and security aspects of the matter (see Cardesman, 1981; Pierre, 1982). On the other hand Sen and Smith (1982) have shown how important economic issues of arms sales can be modelled within a formal framework. The emphasis in much of the work mentioned above lies with the supplier countries and their analysis focusses mainly on the sellers of armaments. In this paper we concentrate on the recipient LDCs and analyse the impact of defence expenditure in the context of armament imports, domestic production of strategic equipment and technology transfers.
This paper analyses the impact of foreign direct investment (FDI) on the development of local fir... more This paper analyses the impact of foreign direct investment (FDI) on the development of local firms. We focus on two likely effects of FDI: a competition effect which deters entry of domestic firms and positive market externalities which foster the development of local industry. Using a simple theoretical model to illustrate how these forces work we show that the number of domestic firms follows a u-shaped curve, where the competition effect first dominates but is gradually outweighed by positive externalities. Evidence for Ireland tends to support this result. Specifically, applying semi-parametric regression techniques on plant level panel data for the manufacturing sector we find that while the competition effect may have initially deterred domestic firms' entry, this initial effect has been outpaced by positive externalities making the overall impact of FDI largely positive in this country.
Distribution électronique Cairn.info pour De Boeck Supérieur. Distribution électronique Cairn.inf... more Distribution électronique Cairn.info pour De Boeck Supérieur. Distribution électronique Cairn.info pour De Boeck Supérieur. La reproduction ou représentation de cet article, notamment par photocopie, n'est autorisée que dans les limites des conditions générales d'utilisation du site ou, le cas échéant, des conditions générales de la licence souscrite par votre établissement. Toute autre reproduction ou représentation, en tout ou partie, sous quelque forme et de quelque manière que ce soit, est interdite sauf accord préalable et écrit de l'éditeur, en dehors des cas prévus par la législation en vigueur en France. Il est précisé que son stockage dans une base de données est également interdit. Article disponible en ligne à l'adresse Article disponible en ligne à l'adresse https://www.cairn.info/revue-journal-of-innovation-economics-2013-2-page-37.htm Découvrir le sommaire de ce numéro, suivre la revue par email, s'abonner... Flashez ce QR Code pour accéder à la page de ce numéro sur Cairn.info.
Journal of Economic Dynamics and Control, May 1, 1984
Journal of Economic Dynamics and Control 7 (1984) 153169. NorthHolland OPTIMAL CONTROL AND DIFFER... more Journal of Economic Dynamics and Control 7 (1984) 153169. NorthHolland OPTIMAL CONTROL AND DIFFERENTIAL GAME MODELS OF MILITARY EXPENDITURE IN LESS DEVELOPED COUNTRIES* Saadet DEGER UnioersitY of London, Birkbeck College, London WI P IPA, ...
Micro-foundations for the well-known gravity trade model are investigated. A new framework is ado... more Micro-foundations for the well-known gravity trade model are investigated. A new framework is adopted, together with assumptions that while strong are rather less restrictive than those typically employed in this context, thus enabling rather more complex and interesting results to be ...
Contributions to Conflict Management, Peace Economics and Development, 2013
Abstract The chapter provides a theory of war and conflict issues, and applies the theory to the ... more Abstract The chapter provides a theory of war and conflict issues, and applies the theory to the arms race and the possibility of war in the South Asian subcontinent. We try to give a new perspective on an old question: wars are not rational since they destroy the contestable resource over which disputes arise; yet, states that are rational frequently undertake them rather than going for the less costly option of settlement. In the chapter, a war game is played in which two states first build armaments and then, if they cannot achieve a settlement, fight a war, the outcome of which depends on strength of armaments, where at stake is a contestable resource. The anticipated outcome determines the bargaining threat point. “Technology” is a factor in any war, and so too is the cost of building armaments. States typically differ in technology and may also miscalculate their own relative technical position and war-fighting capability. Alternative models of settlement and war are presented in which states either believe the opposing state has the same perception of technical advantage, or else know the opposing state’s differing perception. Dynamic models, which include the effects of decay in information over time and strategic concerns, are examined. Finally, the results of the models are applied to the stylized facts of India-Pakistan rivalry and conflict, paying particular attention to institutional issues. It is demonstrated that the stylized facts of the Indo-Pakistani conflict and wars fit well with the theoretical conjectures of the analytical models. External conflicts and wars in South Asia are often related to internal causes, which allow the possibility of incomplete information; the two contending states miscalculate their own power in terms of war-fighting capability, so that war occurs.
In this chapter, unlike the others, we employ the broadest definition of the CEECs since we are a... more In this chapter, unlike the others, we employ the broadest definition of the CEECs since we are analyzing trade flows and structures in the widest possible geographical sense. Since trade interrelationships are complex and multilateral, it is but natural to take a wider definition than we have hitherto employed. It also facilitates data collection and econometric analysis which is the central focus of this chapter. Hence, for empirical analysis and a wider perspective, our database and information set for CEECs are somewhat different, although the substantive conclusions are similar. However, in later chapters, we revert back to our specific countries.
This chapter discusses briefly the transition journey that Central and Eastern European Countries... more This chapter discusses briefly the transition journey that Central and Eastern European Countries (CEECs) have travelled in the last two to three decades. It mentions the faltering early years, the sunk costs of transition, the transformation into maturing upper-income countries, the expansion of trade as well as the process of integration with the European Union, which acts as a core catalyst in growth acceleration. It highlights the importance of trade in general and its importance for the CEECs in particular. We explain the advantages of specialization and trade. We also present the challenges that trade faces in the context of globalization.
Since planned economies were relatively autarkic, none of them traded extensively with the capita... more Since planned economies were relatively autarkic, none of them traded extensively with the capitalist outside world. During the transition, as trade relationships widened internationally, these economies also went through a process of creating new institutions and organizations that required new skills and attitudes more relevant to the global trading world. The relationship between citizens and the state also changed substantially. This chapter discusses the importance and the role played by institutions in a changing economic environment. It also analyzes how institutional change affected the business participants in the new capitalist environment.
Since planned economies were relatively autarkic, none of them traded extensively with the capita... more Since planned economies were relatively autarkic, none of them traded extensively with the capitalist outside world. During the transition, as trade relationships widened internationally, these economies also went through a process of creating new institutions and organizations that required new skills and attitudes more relevant to the global trading world. The relationship between citizens and the state also changed substantially. This chapter discusses the importance and the role played by institutions in a changing economic environment. It also analyses how institutional change affected the business participants in the new capitalist environment.
All advanced countries experienced a sharp decline in the volume of exports during the interwar p... more All advanced countries experienced a sharp decline in the volume of exports during the interwar period. With the onset of the Great Depression, beggar-thy-neighbour policies were introduced to restrict international trade in the hope of maintaining domestic employment. While focusing mainly on the UK, this paper investigates the export trade performance of the three main industrial countries, the United States, the United Kingdom and Germany. Aggregate export functions will be estimated for each country over the 1920s and the 1930s, with particular emphasis placed on the changes in trade policy. Quarterly data sets will be constructed for the United States, the United Kingdom and Germany from domestic sources. The data for the UK will be extracted from the Board of Trade Journal and have been rarely used in econometric work, whereas the German data will be from Ritschl (2002) and the source for the US series will be Balke & Gordon (1986). Time series econometric techniques will be e...
What impact do random events have on individuals? How do they adapt to living in an uncertain, st... more What impact do random events have on individuals? How do they adapt to living in an uncertain, stochastic environment? Risk and Uncertainty in Economics pays tribute to the significant contribution made by James L. Ford to our understanding of these questions.
Sales of arms are a significant component of international trade and raise a range of pressing po... more Sales of arms are a significant component of international trade and raise a range of pressing policy issues. After a short review of the market, this paper provides a formal model of the trade which allows for competing, forward-looking suppliers whose welfare depends on both ...
While previous chapters have concentrated on trade-related issues (including foreign direct inves... more While previous chapters have concentrated on trade-related issues (including foreign direct investment and institutions with global values), we now consider the inter-dependencies that exist between foreign trade, European integration, economic development and structural change within the common framework of transition. The performance of Central and Eastern European Countries (CEECs) is a classic example of ‘diversity in unity’ where countries have faced differing economic environments and pursued different tactical and strategic policies while maintaining a common vision within the framework of market reforms. The dynamics of economic change, starting from early transition with high sunk costs, to the ‘big push’ forward given by membership of the European Union to the adverse impact of the Great Recession (the ‘big pull’ backward) is explained within a formal framework.
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