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The growth of electronic payments can substantially reduce the social cost of a country's payment system. We provide an estimate of the potential savings in social cost and determine the responsiveness of payment users when relative prices are used to speed up the substitution of electronic for paper-based payments. While some countries (Norway, Japan) have encouraged their banking systems to establish explicit prices to promote electronic payments, others (the United States) have not. For the first time ever, survey data are available to permit estimation of a model of payment choice from which own price, cross price, and payment substitution elasticities are derived. The data, which are semiannual panel data, concern the use of three methods for making retail payments in Norway: cash withdrawals at ATMs, writing a check, or using a debit card at the point of sale. Our finding that payment users are quite sensitive to relative prices that reflect the relatively lower cost of electronic payments is generalizable. Both production techniques and consumer needs for payment instruments are very similar across developed countries, even though instrument usage differs. [ABSTRACT FROM AUTHOR]

Capitalism in northern societies is entering an age of advanced precarity. On the one hand, postindustrial societies are confronted by growing surplus populations for whom there exist few positive functions in the market. These new ‘dangerous classes’ are increasingly subject to surveillance, discipline, and exclusion as the policing and penal instruments of the state are called upon to detect and contain risk. On the other hand, capitalism’s ‘insiders’ are increasingly consigned to a precarious life of hyperflexible labor and generalized insecurity. Confronted with a growing mass of ‘social detritus’, augmented by advances in automation and catalyzed by accelerating flows of capital, states in the Global North will increasingly be forced to mobilize the disciplinary instruments of policing and punishment to contain the swelling ranks of problem populations. [ABSTRACT FROM AUTHOR]

The article examines the impact of stagflation on the economic conditions of developed countries during the 1970's, contrasting such conditions with those of the previous decade and using the contrast to illustrate the provisional nature of economic policy. The causes of stagflation are analyzed, the importance of free markets in economic growth are noted and the benefits and drawbacks of government intervention in the economy are discussed. Factors affecting the ability of democratic governments to enforce their economic policies are enumerated and the philosophical aspects of some central economic principles are addressed.

What is the future of American capitalism in this century? To answer this question we ask--and attempt to answer--a series of other questions. How has American capitalism changed during the past fifty years? Do the greatest economists say anything that sheds any light on the future of contemporary capitalism? And, what will the future of American capitalism be if any of the following systems is dominant during the rest of the century: market capitalism; regulated capitalism; planned capitalism; and command capitalism. The final conclusion here suggests that both democracy and bureaucratic capitalism will survive this century in the United States--but will do so in few other places in the world. [ABSTRACT FROM AUTHOR]

U.S.A. productivity growth has been decreasing relative to that of many other countries. The reasons for this should be viewed in terms of systems factors that affect the productive output of an over-developed country. [ABSTRACT FROM AUTHOR]

Ouchi's Theory Z prescribes how employees should be motivated for increased productivity. Based on the theoretical work of Emile Durkheim, it views the modern large corporation as a communal alternative to the shortcomings of other institutions in industrial mass society. Ouchi's assertion that Japan is the industrial society in which Theory Z has flourished receives limited support from research findings. Moreover, Ouchi's grounding of the theory in humanistic management seem unwarranted. [ABSTRACT FROM AUTHOR]

The article presents commentary and additional empirical evidence regarding the money supply volatility hypothesis of Milton Friedman, modeling the U.S. decline in income velocity in the 1980s as a result of volatile money supply growth. Support of this theory regarding Granger-causation analysis is cited and additional data is provided by the author from nine non-U.S. industrialized nations. The data suggests certain examples of evidence for Friedman's theory, but generally invalidates the general application of the principle.

This article examines impact that monetary aggregates have had in major industrialized countries while focusing specifically on Great Britain and Switzerland. The authors investigate factors that produced monetary growth in these countries and discuss some of the resulting policy implications. They examine some of the structural differences in the economies of the two countries that have resulted in different forms of growth. Their findings indicate that interest rates play an important role in determining the behavior of narrow and broad monetary growth.

Although derived from the USDA economy food plan, the Federal poverty thresholds have no real basis in a criterion of nutritional adequacy, but are a relative measure of poverty, suggesting that biological minima cannot be used to define poverty in a developed country. [ABSTRACT FROM AUTHOR]

This paper analyzes the impact of changes in monetary policy regimes on the relation between stock returns and changes in expected inflation. Post-war evidence from four countries reveals a direct link between these relations and the central banks' operating targets (i.e., money supply or interest rates). Specifically, the post-war negative relations between stock returns and changes in expected inflation are significantly stronger during interest rate regimes. [ABSTRACT FROM AUTHOR]

The article reports on national economic planning in France--which critics refer to as a form of central planning and advocates refer to as a market survey that provides information for making business decisions. Characteristics of the French plan include: a statement of social and economic objectives in a framework of business activities; planning commissions which offer information and advice and review target goals; and methods for implementing action and enforcing compliance. Data shows executives' perception of how much the national plan influences their decision making. Statistics show the occupational groupings of commission members. Positive effects such as dynamism and harmonization are mentioned, as well as the negative impact on competition.

Deceleration of economic growth is a characteristic feature of developed countries. Percentage gross domestic product (GDP) growth rate in the old Organization for Economic Co-operation and Development (OECD) countries has decreased approximately 2–3 times over the last 50 years, and countries have managed successfully to adopt this trend. The largest reduction of GDP growth rate was observed in countries such as Japan where the biocapacity exceedance was the largest. In addition, the analysis of long-term changes of GDP and self-reported life satisfaction in developed countries supports Easterlin's paradox indicating that richer people do not feel more satisfied with their lives; however, people from countries with higher per capita GDP feel more satisfied. At the same time, a statistically insignificant correlation was detected between GDP growth rate and life satisfaction, supporting a conclusion that in the developed countries further economic growth does not increase people's well-being. This suggests that decelerating the rate of economic growth gradually approaching the zero growth (steady state) phase is the natural way towards sustainability and it does not contradict the well-being objective in developed countries, especially ones with high biocapacity exceedance. [ABSTRACT FROM AUTHOR]

We investigate the relationship between economic growth and top income inequality under the influence of human and physical capital accumulation, using an annual panel of U.S. state-level data. Our analysis is based upon the 'unified' framework offered by Galor and Moav (2004) while the empirics account for cross-section dependence, parameter heterogeneity, and endogeneity, in nonstationary series. We conclude that changes in inequality do not influence growth, neither in the short run nor in the long run in the United States as a whole in the 1929-2013 period. Our findings are robust to the inclusion of overall income inequality measures. These findings provide support for the theoretical prediction of the unified theory of inequality and growth, according to which the growth effect of inequality becomes insignificant in the latest stages of economic development that the United States experiences during our period of investigation. Therefore, future policies aiming at moderating the concentration at the upper end of income distribution are not likely to have adverse growth consequences in developed countries such as the United States. ( JEL I21, O47, C23) [ABSTRACT FROM AUTHOR]

This paper examines the aftermath of postwar financial crises in advanced countries. We construct a new semiannual series on financial distress in 24 OECD countries for the period 1967-2012. The series is based on assessments of the health of countries' financial systems from a consistent, real-time narrative source, and classifies financial distress on a relatively fine scale. We find that the average decline in output following a financial crisis is statistically significant and persistent, but only moderate in size. More important, we find that the average decline is sensitive to the specification and sample, and that the aftermath of crises is highly variable across major episodes. A simple forecasting exercise suggests that one important driver of the variation is the severity and persistence of financial distress itself. At the same time, we find little evidence of nonlinearities in the relationship between financial distress and the aftermaths of crises. (JEL E32, E44, G01, N10, N20) [ABSTRACT FROM AUTHOR]

The paper aims at analyzing the circumstances and objectives of the regional integration in the context of global development. The EU is one of the most influential and important actors of the global world, which represents one of the most developed examples of the regional integration. During the development, the EU went through the several stages on enlargement. Even nowadays, without having targeted to the reactive new member in foreseen future, the EU continues the process of integration of adjacent regions by setting goals and priorities through different forms such as the European Neighborhood, the Eastern Partnership, Association Agreements, various types of Trade agreements. The Eastern Partnership which represents the EU's eastern neighborhood consisting by former soviet republics has steadily gone up with integration: 1. Georgia, Moldova, and Ukraine have already signed the Association Agreement (AA) including Deep and Comprehensive Free Trade Areas (DCFTAs) with the EU and now these countries work on further progress in terms of the Implementation of AA/DCFTA; 2. Armenia and Azerbaijan are seeking new framework to up-grade their relationship with the EU, Belarus created EU Belarus Co-ordination Group and acts within the Single Support Framework program for 2017-2020. The evolution of EaP countries' trade data evidently show the changes and growing dynamics in the region. The obvious increasing tendency of trade volumes predicts for further success in the future after the DC FTAs are enacted fully for some countries and/or other trade facilitation measures are utilized fully for others. A new approach to the economic growth also suggests that benefit from economic growth supports poverty reduction, widely spreads across sectors and affects the majority of the labor force and hence, rise the welfare of the population. In this context, Corporate Social Responsibility (CSR) appears to be a useful tool to achieve this overwhelming goal. In the difficult business climate prevailing in most of the EaP countries, the role of the EU support could include raising awareness on CSR and supporting the implementation of relevant standards in the enterprises that are benefiting from the EU assistance. [ABSTRACT FROM AUTHOR]

The objective of this article is to fill an existing gap in the literature by constructing an index which attempts to assess the degree of a nation's immunity to economic risk by quantifying its level of economic independence and its ability to survive unilaterally. To do so, and following the conventional methodology of indices, the article first identifies the dimensions underlying economic independence and then selects the various indicators that best reflect each dimension. It then normalizes each indicator by using its highest and lowest historic goalposts. Finally, it averages the composite index using specific weights assigned first to each indicator and second to each dimension. The economic independence index, which was constructed for 112 countries, provides a gauge to such countries on where they stand in terms of economic resilience and how much risk they face if they were to stand alone economically, or pursue policies that are undesirable from the perspective of more economically powerful countries. This index thus provides a tool for governments to measure the direction and magnitude of government action needed to improve their respective nations' level of economic independence. [ABSTRACT FROM AUTHOR]

Technical change is a major driving force for economic growth and development, thus technological change and innovations could be a powerful process that opens up opportunities to increase social welfare and benefits for societies. Whether opportunities turn into real benefits and allow for broad participation depends on a number of factors. In this contribution we focus on three questions. First, what are the drivers of and the gains from technological change? Second, is there broad participation in the gains from technological change? Third, what mechanisms generate asymmetric participation or even non-participation? Reviewing the literature, we obtain two sets of answers, one set for developed countries (DCs) and one for less developed countries (LDCs). For DCs, technology is still the driving force for aggregate progress. Innovations are driven by a combination of private and public R&D investments and the diffusion of innovations is spurred by innovative competition. Due to various reasons - such as technical bias, educational attainment, new firm concepts, globalization and outsourcing, disempowerment of labor unions, decreasing labor share in aggregate income, or agglomeration effects - we identify major differences in participation in gains across different groups. Further, technology that originated in DCs is transferred to LDCs. We identify the channels of technological transfer that allow LDCs to potentially participate in the benefits. Here, the development of the modern sector with links to international value chains plays a major role. However, global diffusion of technology and its gains are very diverse. Reasons for this diverse participation in gains include power structures in global value chains combined with an excess supply of labor and the malfunctioning of local governments and institutions in LDCs. [ABSTRACT FROM AUTHOR]

The middle and long-term slowdown in growth dynamics could bring serious social and political problems for V4 countries (Czech Republic, Slovak Republic, Hungary, Poland) and Romania. It would threaten reaching benefits from potential of convergence process with the developed countries of the European Union. As a result, the V4 economies and Romania should find solutions to achieving a sustainable growth that is associated with an improvement of their international competitiveness. This paper provides an empirical analysis of factors that might determine a stable economic growth in the five mentioned countries. The empirical analysis conducted for the period of 2003-2016 employed Bayesian generalized ridge regression. The main results indicated that the FDI promoted economic growth in all countries, except the Slovak Republic. Only in the Czech Republic, the expenditure on education generated economic growth, while the expenditure on R&D had positive effects in Romania, Hungary and the Czech Republic. [ABSTRACT FROM AUTHOR]

The purpose of this paper is to shed more light on the effects of changes in quality of economic, legal and political institutions on income inequality in the advanced countries over the last two decades. Using the robust panel model on a sample of 21 OECD countries, it is found that the impact of elitization of society is more pronounced than the impact of unionization on income redistribution, but both effects are less expressed in comparison to the influence of institutional changes on redistribution. In a globalized economy, insufficient redistribution and high inequality might be interpreted as the consequence of institutional inertia to disruptive technological and business changes. [ABSTRACT FROM AUTHOR]

The international economic and financial-monetary crisis, as we know, began in developed economies. Just over eight years after the official announcement of Lehman Brothers bankruptcy (On September 15, 2008, Lehman announced its bankruptcy and AIG shares collapsed on international stock exchanges), the overall situation has seen a significant improvement, the macroeconomic damage created by the crisis has been largely focused, but not in a homogeneous manner along the economies and regions. The present paper tries to fit the current situation and perspective of developed economies (such as the US, the eurozone, Canada, Japan, the UK and others) in a general picture to capture the most relevant indicators, in perspective and in the unfavorable state of the world economy. Thus, according to the data presented by the International Monetary Fund and the United Nations experts, it seems that the forecasts for the current and the forthcoming year are not encouraging, and even have seen unfavorable revisions, both on savings categories and globally, of some indicators such as gross domestic product, economic growth, demand and supply of goods and services, exports and imports, exchange rate, etc. All these aspects will be presented below. [ABSTRACT FROM AUTHOR]

Copyright of Journal of Global Economics / Revista de Economie Mondială is the property of Institute for World Economy 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.)

The paper conducts a qualitative narrative appraisal of the existing empirical literature on the key macroeconomic determinants of economic growth in developing and developed countries. Much as other empirical studies have investigated the determinants of economic growth using various econometric methods, the majority of these studies have not distinguished what drives or hinders economic growth in developing or developed countries. The study finds that the determinants of economic growth are different when this distinction is used. It reveals that in developing countries the key macroeconomic determinants of economic growth include foreign aid, foreign direct investment, fiscal policy, investment, trade, human capital development, demographics, monetary policy, natural resources, reforms and geographic, regional, political and financial factors. In developed countries, the study reveals that the key macroeconomic determinants that are associated with economic growth include physical capital, fiscal policy, human capital, trade, demographics, monetary policy and financial and technological factors. [ABSTRACT FROM AUTHOR]

The organizational structure of multinational enterprises (MNEs) is mainly made up of subsidiaries located in emerging and advanced countries. Consequently, they usually compete against the same rivals simultaneously in both emerging and advanced contexts. Multimarket contact (MMC) theory analyzes the competitive dynamics that arise in these situations. However, researchers have paid more attention to the consequences of multimarket contact in developed countries than to its effect in emerging countries. To explore the impact of the macroenvironment on the relationship between MMC and performance, we examine how coinciding with multimarket rivals in emerging economies alters the effect of MMC on firm performance. Our research, which is developed with a sample from the mobile telecommunications industry, shows that the presence of MNEs in emerging countries hinders the development of mutual forbearance practices and, therefore, reduces the positive effect of MMC on firm performance. [ABSTRACT FROM AUTHOR]

I have spent close to 20 years cataloging transactions between households in Thai villages, along with a research team. Just this past summer, we documented a number of ways in which even relatively poor villages have money markets not dissimilar in some ways from New York financial markets, with borrowing and repayment passing along links in credit chains. In another project, we have been looking at month-by-month school attendance, grade level completion, and graduation for children in these villages, following them from birth to graduation. The Townsend Thai project is a theory-based data collection endeavor, measuring and mapping village and larger economies into general equilibrium frameworks. This paper reviews a number of findings, implications, applications, and lessons learned, and considers next steps. [ABSTRACT FROM AUTHOR]

This paper analyzes why the global financial crisis in 2008 severely affected Asia's trade. Asia has been suffering from the falls in export demand from developed countries. However the abrupt trade declines in Asia are not fully explained by reactions to this as in previous experiences. The question is why the financial crisis in 2008 brought about the abrupt and deep collapse in world trade, while other world-wide recessions had more moderate effects on world trade. This paper shows that the dynamic relationship between trade and trade finance is one important factor in explaining this question. This paper also applies the Granger (causality) test to uncover different relationships in the developed and developing economies and show different results for different countries in Asia. We employ a Markov-Switching FAVAR (Factor Augmented VAR) to show that global liquidity shocks are important factors in explaining the huge and abrupt trade drops in Asia. [ABSTRACT FROM AUTHOR]

Copyright of Ekonomski Vjesnik is the property of Ekonomski Vjesnik 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.)

Even before the financial crisis, many developed economies were facing growing inequality and struggling to maintain employment and earnings. This paper addresses two key questions. What has happened to inequality? Where will tax and welfare reforms have most impact? The UK is used as a running example. The analysis suggests that the pattern of sluggish real wages at the bottom looks set to continue, and longer-term earnings growth will come mainly from high-skilled occupations. Growing earnings inequality will bring increasing pressure on the tax and welfare system. A blueprint for a coherent tax policy reform is presented. [ABSTRACT FROM AUTHOR]

Do populations grow as countries become richer? In this study we estimate the effects on population growth of shocks to national income that are plausibly exogenous and unlikely to be driven by technological change. For a panel of over 139 countries spanning the period 1960-2007, we interact changes in international oil prices with countries' average net-export shares of oil in GDP. Controlling for country and time fixed effects, we find that this measure of oil price induced income growth is positively associated with population growth. The IV estimates indicate that a 1 percentage point increase in GDP per capita growth over a 10-year period increases countries' population growth by around 0.1 percentage points. Furthermore, we find that this population effect results from both a positive effect on fertility and a negative effect on infant and child mortality. [ABSTRACT FROM AUTHOR]

Hunger and poverty are main critical issues in less developed countries (LDCs) and can be attributed to the fact that almost 70% of the LDC populations are employed in the agricultural sector. Although the international trade can reduce food insecurity in LDCs, for example, facilitating the access to larger markets, the volatility in food prices since the late 2000s has negatively affected the food availability. This study examines the effects of trade on the food security and traces a U-shaped relationship between two variables, using 2000-2010 panel data for the LDCs. The results are robust across different methods and show that the food security decreases in the initial stages of the trade expansion but increases beyond a given threshold. The key finding of this study is the U-shaped relationship between trade and food security, which suggests that the policy makers should pay more attention to expanding investments in the agricultural productivity, particularly from the viewpoints of the self-sufficiency and self-reliance. [ABSTRACT FROM AUTHOR]

Copyright of Industrial Relations / Relations Industrielles is the property of Universite Laval, Department of Industrial Relations 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.)

When, how and why did the expectation of exponential economic growth emerge historically? This article explores this question through a transnational historical analysis of economic and policy-making expertise within the debates of the industrialized countries' think tank, the Organization for Economic Cooperation and Development (OECD) and its predecessor, the OEEC. It focuses in particular on the setting of growth targets in the years 1952, 1961, and 1970. These targets not only illustrate the escalatory logic of exponential growth but also highlight the changing concepts, justifications, and implications that mark the (re-) making of the economic growth paradigm at key junctures in postwar history. [ABSTRACT FROM AUTHOR]

Copyright of Management (1429-9321) is the property of University of Zielona Gora 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 this paper, we first compare house price cycles in advanced and emerging economies using a new quarterly house price data set covering the period 1990-2012. We find that house prices in emerging economies grow faster, are more volatile, less persistent, and less synchronized across countries than in advanced economies (AEs). We also find that they correlate with capital flows more closely than in AEs. We then condition the analysis on an exogenous change to a particular component of capital flows: global liquidity, broadly understood as a proxy for the international supply of credit. We identify this shock by aggregating bank-to-bank cross-border credit and by using the external instrumental variable approach introduced by Stock and Watson (2012) and Mertens and Ravn (2013). We find that in emerging markets (EMs) a global liquidity shock has a much stronger impact on house prices and consumption than in AEs. We finally show that holding house prices constant in response to this shock tends to dampen its effects on consumption in both AEs and EMs, but possibly through different channels: in AEs by boosting the value of housing collateral and hence supporting domestic borrowing; in EMs, by appreciating the exchange rate and hence supporting the international borrowing capacity of the economy. [ABSTRACT FROM AUTHOR]

The author discusses the article “Global Liquidity, House Prices, and the Macroeconomy: Evidence from Advanced and Emerging Economies” by Ambrogio Cesa-Bianchi, Luis Felipe Cespedes, and Alessandro Rebucci, which appears in the current issue. He assesses the authors' analysis of the role of global bank credit levels in causing fluctuations in home prices. Topics include economic shocks and the challenge of explaining how house price trends and volatility differ between countries.

The Commitment to Development Index has been developed to assess seven policy areas of rich countries that affect the development of poor countries and to rank the rich countries from this perspective. This article aims to analyze the environmental component of this index. The environmental dimension is a legitimate part of the concept behind the index because preserving global environmental resources is essential for the future development prospects of poorer countries. The operationalization of the dimension, however, gives rise to several issues, such as the combination of policy and practice indicators, data availability and credibility, and other specific aspects that affect the information value of individual indicators and the component as a whole. Acknowledging the difficulty of constructing such a component, we suggest several options for its modification. [ABSTRACT FROM AUTHOR]

This paper analyzes differences in price-role orientations between economically developed and emerging markets and how these differences influence store brand and store format preferences. It extends cross-national research on price-role orientations by (1) focusing on culturally similar but economically different countries, (2) relating differences to preferences for store brands and low-price store formats, and (3) analyzing these effects for functional versus hedonic and low- versus high-price product groups. Based on theories explaining the effects of income on individual price perception and behavior, we hypothesize cross-national differences in price and value consciousness, the price-quality schema, and prestige sensitivity. Furthermore, we present a theoretical link between these price-role orientations and store format preferences based on the ability of store formats to address different price roles. A survey conducted in Germany and Poland reveals several cross-national differences in price-role orientations and resulting preferences, which, however, depend on product group characteristics. [ABSTRACT FROM AUTHOR]

Transfer pricing are the prices at which a company transfers physical goods and intangible property or provides services to affiliated companies. Transfer pricing mechanism is the most frequently used instrument for the transfer of the tax base from countries with high tax to low tax countries. In the context of transfer pricing, all transactions should be made only respecting the principle of market value (Arm's length principle). Under current conditions, we can say that globalization influences the transfer pricing, because it makes possible to transfer profits from one country to another, by removing state barriers. The expression "transfer pricing" is used as shorthand for multinational corporations to store profits in tax havens and to avoid tax evasion in developed countries. These two terms (transfer pricing and tax havens) combined, make the benefits of affiliated groups to grow impressively. [ABSTRACT FROM AUTHOR]

This paper deals with the interaction between fictitious capital and the neoliberal model of growth and distribution, inspired by the classical economic tradition. Our renewed interest in this literature has a close connection with the recent international crisis in the capitalist economy. However, this discussion takes as its point of departure the fact that standard economic theory teaches that financial capital, in this world of increasing globalization, leads to new investment opportunities which improve levels of growth, employment, income distribution, and equilibrium. Accordingly, it is said that such financial resources expand the welfare of people and countries worldwide. Here we examine some illusions and paradoxes of such a paradigm. We show some theoretical and empirical consequences of this vision, which are quite different and have harmful constraints. [ABSTRACT FROM AUTHOR]

The 2008 financial crisis has served as a catalyst for re-examining the forces of systemic financial crisis, the leading of which was perceived to be the inaccurate credit ratings. Although sovereign credit ratings constitute a small part of the credit rating industry, the impact of unexpected downgrades or upgrades has a huge potential to distort a well-functioning financial system. There appeared plenty of researches in the literature that discussed the inaccuracy of sovereign credit ratings and argued that these measurements are negative biased toward developing countries. By using ordered response models, this paper investigates whether this bias stems partially from cross country variations in the quality of institutions. Measured by six different governance indicators namely "Control of Corruption", "Voice and Accountability", "Political Stability and No Violence", "Government Effectiveness", "Regulatory Quality", and "Rule of Law", institutional quality was found to have positive impact on the rating decisions. Although the simulation of the estimation results revealed that all the governance indicators reduce prediction errors significantly, "Government Effectiveness" and "Regulatory Quality" were predominantly responsible for low sovereign credit ratings. [ABSTRACT FROM AUTHOR]

During the last three decades government debt has increased in most developed countries. During the same period we have also observed a significant liberalization of international financial markets. We propose a multicountry model with incomplete markets and show that governments may choose higher levels of debt when financial markets become internationally integrated. We also show that public debt increases with the volatility of uninsurable income (idiosyncratic risk). To the extent that the increase in income inequality observed in some industrialized countries has been associated with higher idiosyncratic risk, the paper suggests another potential mechanism for the rise in public debt. (JEL D31, E62, F65, H63) [ABSTRACT FROM AUTHOR]

In this paper, we 'slice up the global value chain' using a decomposition technique that has recently become feasible due to the development of the World Input-Output Database. We trace the value added by all labor and capital that is directly and indirectly needed for the production of final manufacturing goods. The production systems of these goods are highly prone to international fragmentation as many stages can be undertaken in any country with little variation in quality. We seek to establish a series of facts concerning the global fragmentation of production that can serve as a starting point for future analysis. We describe four major trends. First, international fragmentation, as measured by the foreign value-added content of production, has rapidly increased since the early 1990s. Second, in most global value chains there is a strong shift towards value being added by capital and high-skilled labor, and away from less-skilled labor. Third, within global value chains, advanced nations increasingly specialize in activities carried out by high-skilled workers. Fourth, emerging economies surprisingly specialize in capital-intensive activities. [ABSTRACT FROM AUTHOR]

We examine the evolution of real per capita GDP around 100 systemic banking crises. Part of the costs of these crises owes to the protracted nature of recovery. On average, it takes about 8 years to reach the pre-crisis level of income; the median is about 6.5 years. Five to six years after the onset of crisis, only Germany and the United States (out of 12 systemic cases) have reached their 2007-2008 peaks in real income. Forty-five percent of the episodes recorded double dips. Post-war business cycles are not the relevant comparator for the recent crises in advanced economies. [ABSTRACT FROM AUTHOR]

From 1980 to 1992, emerging and developing countries grew by 3.4 percent per year. Their annual rate of growth increased to 5.4 percent between 1993 and 2012. No such increase occurred for advanced nations, whose average growth from 1980 to 2012 was roughly constant (excluding the impact of the 2008-2009 Recession). Developing nations turned themselves around by embracing discipline-sustained commitment to a pragmatic and flexible growth strategy. Three illustrations of discipline through the lens of trade, fiscal, and debt reforms in the developing world offer relevant, practical lessons for recovery in advanced economies and continued catch-up growth in developing nations. [ABSTRACT FROM AUTHOR]

Providing services has become the most important sector of the economy and the main dynamic factor of the economic competition, within the developed countries economies. In such economies, the sector of economies has assimilated the workforce issued in the other sector, when this over plus of labor force represented simultaneously the cause of its expansion. The services have had a double part: they contribute on both the material entertainment of the labor force, as well as on maintaining the reestablishment of people's health, to their physical and intellectual recovery, to the development of the individual, as regards the cultural and scientific points of view, and implicitly, to the growth of the living standards. For the time being, one can characterize the economies of the developed countries, as well as of many other countries in progress of development, as services oriented economies; the development and diversification of services has been determined by the need of satisfying diversified social needs. In this way, the part of services aims on becoming proportional to their contribution within the process of economic growth. One can definitely say that between services and the economic growth, a double conditioning takes place, meaning: on one hand, the development of services appears as a consequence of the economic growth, and on the other hand, it grows up the economic growth, thus contributing on diversifying the production and on improving the level of training or qualification of the labor force. [ABSTRACT FROM AUTHOR]