Journal Archive

Volume 41, Issue 2, 2011

Download Issue 2: rar (rar 7.29MB) zip (zip 7.44MB)

Articles:

I POLICY DEBATES AND CONTROVERSIES
  • Australian Residential Solar Feed-in Tariffs: Industry Stimulus or Regressive Form of Taxation? (Tim Nelson, Paul Simshauser, and Simon Kelley)
II RECENT TRENDS IN ECONOMIC RESEARCH
  • Reducing the Lower Bound on Market Interest Rates (Ulrich van Suntum, Metin Kaptan, and Cordelius Ilgmann)
  • Does the ECB Rely on a Taylor Rule During the Financial Crisis? Comparing Ex-post and Real Time Data with Real Time Forecasts (Ansgar Belke and Jens Klose)
  • Economic Growth and FDI in Asia: A Panel-Data Approach (Aviral Kumar Tiwari and Mihai Mutascu)
  • Shared Equity Policy in Joint Ventures for Host Countries (Mei-Fang Chung)
  • Household Size Economies: Malaysian Evidence (Thaiyoong Penny Mok, Gillis Maclean, and Paul Dalziel)
  • New IMF Lending Facilities and Financial Stability in Emerging Markets (Jari John and Tobias Knedlik)
III BOOK REVIEWS
  • IDENTITY ECONOMICS: HOW OUR IDENTITIES SHAPE OUR WORK, WAGES, AND WELL-BEING George A. Akerlof & Rachel E. Kranton, Princeton, 2010, 185 pages, ISBN 978-0-691-14648-5

    Click here to go back to previous page


Australian Residential Solar Feed-in Tariffs: Industry Stimulus or Regressive Form of Taxation?

Tim Nelson, Paul Simshauser, and Simon Kelley

Pages: 113-129

Abstract: Feed-in Tariffs (FiT) for residential photovoltaic solar technologies are available in most Australian jurisdictions. Financial incentives under FiT are in addition to those provided by the Small-Scale Renewable Energy Scheme which forms part of the national 20% Renewable Energy Target. Little attention has been paid to the welfare impacts of FiT on retail electricity prices and social policy objectives. Our analysis indicates that current FiT are a regressive form of taxation. By providing estimates of household impact by income groupings, we conclude that wealthier households are beneficiaries and the effective taxation rate for low income households is three times higher than that paid by the wealthiest households.

Full Text PDF (0.82MB)

Click here to go back to previous page


Reducing the Lower Bound on Market Interest Rates

Ulrich van Suntum, Metin Kaptan, and Cordelius Ilgmann

Pages: 133-146

Abstract: This paper critically discusses three proposals to overcome the zero interest bound, which have recently been proposed by prominent economists. We trace back the historical origins of these proposals, reaching back to the late 19th century, and comment on their theoretical and practical deficiencies. We propose a much simpler method to spur real investment in times of a deep recession, based on long term central bank loans with low but non-negative base rates. With the prospect of decreasing default risks after the recession, this measure has a similar effect like negative base rates in time of crisis. We therefore hope to convey the message that the effects of the zero interest bound can at least be mitigated without substantially changing the existing monetary regime.

Full Text PDF (0.9MB)

Click here to go back to previous page


Does the ECB Rely on a Taylor Rule During the Financial Crisis? Comparing Ex-post and Real Time Data with Real Time Forecasts

Ansgar Belke and Jens Klos

Pages: 147-171

Abstract: We assess the differences that emerge in Taylor rule estimations for the ECB when using ex-post data instead of real time forecasts and vice versa. We argue that previous comparative studies in this field risk mixing up two separate effects. First, the differences resulting from the use of ex-post and real time data per se and, second, the differences emerging from the use of non-modified real time data instead of real-time data based forecasted values (and vice versa). Since both effects can influence the ECB reaction to inflation and the output gap either way, we use a more clear-cut approach to disentangle the partial effects. However, “good” forecasts have to be as close as possible to the forecasts the ECB governing council had at hand when taking its interest rate decision. Therefore we use two approaches to generate the forecasts: First, forecasts generated relying on a pure AR process and, second, explicit ECB staff projections which are available only at a quarterly frequency. So we found it indispensable to estimate all variants of the reaction function using also quarterly data. Our estimation results indicate that using real time instead of ex post data leads to higher estimated inflation and output gap coefficients. If real time forecasts are used (since actual data become available with a lag), the output response is reduced while the inflation response depends crucially on the inclusion of an interest rate smoothing term, the data frequency and forecast type.

Full Text PDF (1.07MB)

Click here to go back to previous page


Economic Growth and FDI in Asia: A Panel-Data Approach

Aviral Kumar Tiwari and Mihai Mutascu

Pages: 173-187

Abstract: This study examines the impact of foreign direct investment on economic growth in Asian countries. We did our analysis in the panel framework for the period 1986 to 2008. We also examined the nonlinearities associated with foreign direct investment and exports in the economic growth process of Asian countries under consideration. We find that both foreign direct investment and exports enhance the growth process. In addition, labour and capital also play an important role in the growth of Asian countries. We suggest an export-led growth path particularly at the initial stage of growth and in the later period, dependence on FDI might be a feasible option.

Full Text PDF (0.55MB)

Click here to go back to previous page


Shared Equity Policy in Joint Ventures for Host Countries

Mei-Fang Chung

Pages: 189-202

Abstract: This paper provides a game model for examining the host overseas investment policy and MNEs equity strategy in international joint ventures. This paper refines previous Chen & Chung’s (2008) results and considers the host policy about MNEs’ joint-venture. This paper shows foreign firms increase their technology transfer incentive because less competition from the joint-venture partner when a foreign firm holds lower shares. And the holding shares of foreign firms must be not smaller than 50 percent. The host welfare increases with foreign firms’ minority equity. The equity conflict exists in the higher technology spillover and transfer cost cases. Hence, the host governments always impose investment restrictions on MNEs in the Developing countries. Otherwise, it has more loose policy in the Developed countries.

Full Text PDF (1.38MB)

Click here to go back to previous page


Household Size Economies: Malaysian Evidence

Thaiyoong Penny Mok, Gillis Maclean, and Paul Dalziel

Pages: 203-223

Abstract: People live in households with different size and composition and they consume a variety of goods; categorised as private and public goods. With the existence of public goods in the household, doubling the household size need not increase the consumption expenditure twofold to maintain the same standard of living. Using households’ per capita expenditure from the Household Expenditure Survey 2004-2005, we estimate the household size economies indices for household consumption goods through the Seemingly Unrelated Regression. The results suggested that the lower income households enjoy savings from a wider range of public goods compared to the higher income households.

Full Text PDF (0.69MB)

Click here to go back to previous page


New IMF Lending Facilities and Financial Stability in Emerging Markets

Jari John and Tobias Knedlik

Pages: 225-238

Abstract: In the light of the current global financial and economic crisis, the International Monetary Fund (IMF) has undertaken some major reforms of its lending facilities. The new Flexible Credit Line and the High Access Precautionary Arrangements differ from what has been in place so far, by allowing for ex ante conditionality. This paper summarizes preconditions for effective last resort lending and evaluates the newly introduced measures, concluding that the Flexible Credit Line comes very close to what has been called an International Lender of Last Resort. The main obstacles are the low demand and slow progress in complementary reforms.

Full Text PDF (0.73MB)

Click here to go back to previous page

 

Book Reviews:

Full Text PDF (0.79MB)

Click here to go back to previous page