fdi and income inequality evidence from a panel of u s states this study employs state level panel data to explore the relationship between inward foreign direct investment fdi and income inequality in the united states using panel cointegration techniques that allow for cross sectional heterogeneity cross sectional dependence and endogenous regressors we find that the short run effects of fdi on income inequality are insignificant or weakly significant and negative in the long run however fdi exerts a significant and robust negative effect on income inequality in the united states this result for the united states as a whole does not imply that fdi narrows income gaps in the long run in each individual state there is considerable heterogeneity in the long run effects of fdi on income inequality across states with some states 21 out of 48 cases exhibiting a positive relationship between fdi in income inequality

demand for money in open economies abstract the demand for real cash balances deduced from an underlying portfolio model of the financial market is shown to depend upon domestic variables and foreign monetary developments the model is estimated using quarterly postwar data for canada germany uk and us there is clear evidence that demand for money is affected not only by changes in domestic variables such as permanent income domestic interest rate and price expectations but also by fluctuations in exchange rate expectations and foreign interest rates the conclusion that domestic monetary policy is fairly ineffective and domestic financial markets are highly vulnerable to changes in foreign financial and monetary developments need to be modified in light of the results presented in this paper

price flexibility in developing countries evidence and implications using data for a sample of 50 developing countries the empirical investigation evaluates determinants and implications of asymmetric price flexibility price inflation is characterized by high flexibility to adjust towards full equilibrium further price inflation accelerates flexibly with unanticipated demand growth in both the upward and downward directions in most of the countries under investigation asymmetry indicates higher upward flexibility compared to downward flexibility in many countries aggregate uncertainty determines the degree of asymmetry such that price flexibility is higher with respect to expansionary demand shocks compared to contractionary shocks the higher the variability of aggregate demand across countries in contrast higher trend price inflation increases downward price flexibility across countries output variability decreases with both upward and downward price flexibility in the face of aggregate demand shocks a the views expressed in this article are those of the a

trade liberalization and wage inequality abstract this paper studies empirically the link between trade liberalization and wage inequality in chile within the context of the heckscher ohlin samuelson hos model we use cointegration techniques to estimate the long run relationship between the skill premium in chile and product prices openness and factor endowments we find that the fall in the relative price of labor intensive goods helps explaining the increase in wage inequality in chile during the last two decades the increase in proportion of the labor force with college degree on the other hand tends to reduce wage inequality in chile openness measured as the volume of trade over gdp widens the wage gap between skilled and unskilled labor we offer some hypothesis on the elements that are behind this positive relationship between wage openness and inequality but no empirical work is done this area may be an interesting subject of research

on the utilisation controversy a theoretical and empirical discussion of the kaleckian model of growth and distribution this paper examines the utilisation controversy around the kaleckian model of growth and distribution we show that the federal reserve data on capacity utilisation which have been used by both sides of this debate are the wrong kind of data for the issue under examination instead a more appropriate measurement can be derived from the data on the average workweek of capital we argue that the long run dynamic adjustment proposed by kaleckian scholars lacks a coherent economic rationale we provide an alternative path towards the endogeneity of the desired utilisation at the micro and macro levels finally we examine the proposed adjustment mechanism econometrically our results verify the endogeneity of the normal utilisation rate

wars foodcost and countervailing policies a panel data approach abstract withholding food or providing it during a conflict is vital for peace missions and challenges for building sustainable peace the purpose of this paper is to introduce a new perspective in considering the impact of wars on relative wages in the food sector we define the foodcost as the share of wages paid to the food sector versus total manufacturing wages we try to estimate the effect of two types of wars namely civil and international wars on the foodcost and explore the policies that are likely to reduce that cost we use panel data for 41 countries from 1960 to 1999 to answer these questions the empirical results show that civil wars positively affect the foodcost while international wars apparently do not the policy implication of this analysis is that in the event of a civil war policy makers lack the resources to exert control on a rising foodcost a rise in the foodcost could be translated into higher food prices or lower purchasing power over food either of which may have devastating impacts on social and economic well being in the event of an international war as opposed to a civil war governments have a greater capacity to prioritize and mobilize resources therefore the impact of an international war on the foodcost is positive but weak the foreign aid remains an effective countervailing tool for reducing the increase in the foodcost

working time reduction and employment experiences in europe and economic policy recommendations the paper seeks to evaluate the evidence on the employment effects of the collective working time reductions in europe over the past 20 years while theoretical analyses produce contradictory assessments most empirical studies show positive employment effects but take insufficient account of the conditions under which the reductions in working time were implemented these conditions for the success of collective working time reductions include an active training policy designed to minimise skill shortages in the labour market the modernisation of work organisation wage increases in conjunction with productivity gains and a more equal income distribution

finance and income inequality in kazakhstan evidence since transition with policy suggestions abstractkazakhstan gained independence in 1990 and has undergone significant changes in economic social and trade conditions since then we analyse the effects of financial development on income inequality in kazakhstan incorporating economic growth foreign investment education and the role of democracy as the drivers we establish that income inequality in kazakhstan is impaired by financial development in summary we send three messages for policy purposes first strengthening financial sector is necessary to close the gap between haves and have nots second attracting fdi beyond the hydrocarbon sector is necessary to alleviate inequality finally adaptation of education system to the new social and economic environment would help in improving income distribution

the inflationary experiences of six developing countries in asia an investigation of underlying determinants this paper investigates major deteminats of the inflation rate in six asian developing countries the sample includes low and moderate high inflation cases for the investigation a monetarist model of the inflation rate adjusted to account for important external factors is used the results show that the growth of the money stock was not a primary source of inflation in all countries however various factors that influence the public s willingness to hold money are behind inflationary pressures across countries among these some are external factors stemming from changes in foreign interst rates and import prices overall the evidence suggests that the success of domestic policy in fighting inflation is highly dependent on the unique inflationary experience of each country

food supply and inflation abstract the paper presents an analytic version of the latin american structuralist theory of inflation it emphasizes the difference between the productive sectors of the economy and draws attention to the fact that the inflationary process is closely linked to inconsistent claims for shares in income it describes a keynesian economy with two three sectors real desired wages are rigid money is passive it is shown that the structuralist hypotheses are capable of generating disequilibria that can lead to constantly rising prices without any built in mechanism to offset them steady inflation can only persist if workers allow their real wage to be kept below target as the workers try to catch on the model will blow up an accelerating inflation can be observed in many latin american countries during periods when wage settlements aimed at restoring inflation losses escaped the government control the paper also explores the implications of foreign trade it shows that under structuralist hypotheses external disequilibria cannot be corrected through exchange rate devaluations alone and it examines the stagflationary impacts of an increase in the price of imported intermediates

foreign direct investment and income inequality further evidence abstract this paper examines the relationship between foreign direct investment fdi and income inequality special attention has been paid to data comparability and model specification by comparing models with and without geographical dummies this study shows that the statistically significant correlation between fdi and income inequality widely obtained in earlier studies might capture more of the geographical difference in inequality than the deleterious influence of fdi and to the extent that fdi does give rise to more unequal income distribution in the host less developed countries ldcs only east southeast asia ldcs appear to have been harmed by the inflow of fdi during the 1970s it should be noted however that the second result refers only to the marginal impact not the total impact apart from fdi our empirical evidence suggests that the level of economic development the direct role of government and to a smaller degree the significance of the agriculture sector in an ldc are crucial determinants of income inequality

does economic globalisation affect income inequality a meta analysis a large volume of econometric literature has studied the impact of economic globalisation on income inequality around the world however reported econometric estimates vary substantially which makes it difficult to draw valid conclusions this paper presents a quantitative summary and analysis of existing estimates regarding the globalisation inequality relationship we use a new data set consisting of 1 254 observations from 123 primary studies by applying meta analysis and meta regression methods we obtain several main findings first globalisation has a small to moderate inequality increasing effect second while the effect of trade globalisation is small financial globalisation shows a more sizeable and significantly stronger inequality increasing impact third we find an average inequality increasing impact of globalisation in both advanced and developing countries fourth education and technology moderate the impact of globalisation on income inequality

income inequality and fdi evidence with turkish data abstractthis article explores how foreign direct investment fdi and other determinants impact income inequality in turkey in the short and long run we apply the nonlinear auto regressive distributed lag ardl modelling approach which is suitable for small samples the data for the study cover the years from 1970 to 2008 the empirical results indicate the existence of a co integration relationship among the variables with asymmetric adjustment of the income distribution in the short and long run the negative impact of fdi on the gini coefficient decreasing income inequality is statistically significant in the short and long run though with a quantitatively small impact in both cases in the short run gdp growth increases inequality initially an effect that is reversed in the next period increases in domestic gross capital formation decreases inequality and increases in the literacy rate have very minor adverse effects on income equality however in the long run these variables have no sta

does foreign direct investment affect wage inequality an empirical investigation we use a panel of more than 100 countries for the period 1980 2002 to analyse the relationship between inward foreign direct investment fdi and wage inequality we particularly check whether this relationship is nonlinear in line with a theoretical discussion we find that the effect of fdi differs according to the level of development we depict two different patterns one for oecd developed and one for non oecd developing countries results suggest the presence of a nonlinear effect in developing countries wage inequality increases with fdi inward stock with such effect diminishing with further increases in fdi for developed countries wage inequality decreases with fdi inward stock and there is no robust evidence to show that this effect is nonlinear

the monetarist explanation of inflation the experience of six asian countries abstract studies on inflation employing the harberger type monetarist model have focused almost entirely on the hogh inflation experiences usually those of latin american countries this model is applied here to the six asian countries which contain low and moderate inflation cases the empirical results show that the growth of money stock was not the primary source of inflation in these countries the failure of the monetarist model to explain the behavior of prices in asian countries may be due 1 partly to the monetization of these economies which makes the growth of money stock endogenous and 2 partly to its rigid specification which excludes the impact of the various domestic and external cost pressures to test the validity of the latter proposition the monetarist model is augmented by the inclusion of import prices which are widely alleged to have intensified inflationary pressures the empirical results do indeed provide support for this view as regards monetary policy the findings of this paper suggest that monetary discipline may be by and large ineffective in controlling inflation in moderate inflation countries

the polarization of the u s labor market this paper analyzes a marked change in the evolution of the u s wage structure over the past fifteen years divergent trends in upper tail 90 50 and lower tail 50 10 wage inequality we document that wage inequality in the top half of distribution has displayed an unchecked and rather smooth secular rise for the last 25 years since 1980 wage inequality in the bottom half of the distribution also grew rapidly from 1979 to 1987 but it has ceased growing and for some measures actually narrowed since the late 1980s furthermore we find that occupational employment growth shifted from monotonically increasing in wages education in the 1980s to a pattern of more rapid growth in jobs at the top and bottom relative to the middles of the wage education distribution in the 1990s we characterize these patterns as the u201cpolarization u201d of the u s labor market with employment polarizing into high wage and low wage jobs at the expense of middle wage work we show how a model of computerization in which computers most strongly complement the non routine abstract cognitive tasks of high wage jobs directly substitute for the routine tasks found in many traditional middle wage jobs and may have little direct impact on non routine manual tasks in relatively low wage jobs can help explain the observed polarization of the u s labor market this abstract was borrowed from another version of this item

job polarization in europe the structure of employment is always changing and economists are always trying to understand those changes in the 1990s the idea of skill biased technological change sbtc was used to understand the shift in employment toward more educated workers see david h autor and lawrence f katz 1999 for a survey however in recent years it has become appar ent that a more nuanced approach is needed the idea of sbtc might lead one to predict a uni form shift in employment away from low skilled and toward high skilled occupations but studies for the united states autor katz and melissa s kearney 2006 and the united kingdom goos and manning 2007 have shown that there is growth in employment in both the high est skilled professional and managerial and lowest skilled personal services occupations with declining employment in the middle of the distribution manufacturing and routine office jobs this is what goos and manning 2007 term job polarization although see the introduc tion to goos and manning 2007 for antecedents of these ideas there are several hypotheses about the rea sons for job polarization first the routiniza tion hypothesis first put forward by autor frank levy and richard murnane 2003 sug gests that the effect of technological progress is to replace routine labor which tends to be clerical and craft jobs in the middle of the wage distribution second there is the view that globalization in general and offshoring in par ticular is an important source of change in the job structure in the richest countries see for example alan s blinder 2007 third there may be a link between job polarization and

does fdi actually affect income inequality insights from 25 years of research while there are 25 years of empirical research on how fdi may affect income inequality there is surprisingly no consensus on this issue in this paper we conduct a meta analysis on the effect of fdi on inequality using 543 empirical studies from 1995 to 2019 among various factors we find that the development level of the study country has the strongest influence on the direction in which fdi affects income inequality when the primary studies are sorted into three groups based on the gdp per capita of their sample areas the within group estimates on the effect of fdi on income inequality become strongly consistent with each other particularly we find that fdi is associated with higher inequality for the low income group has no statistically significant effect for the middle income group and is associated with lower inequality for the high income group this observation suggests that fdi may increase income inequality as a country initially develops but reduce inequality as development deepens

autoregressive modelling and money income causality detection abstract a step wise procedure based on granger s concept of causality and abaike s final prediction error criterion is suggested as a practical means to identify the order of lags of each variable in a multivariate autoregressive process the model seems useful because it can serve as a reduced form formulation to avoid imposing often spurious or false restrictions of the model it also provides a reasonably powerful test of causality the idea is applied to u s postwar money and income data it is found that between m1 and gnp a bivariate feedback model fits the data best between m2 and gnp a one way causal model from money to income performs better diagnostic checks applied to our model seem to indicate the adequacy of our approach

capital utilization economic growth and convergence abstract optimal decisions by economic agents regarding the utilization of capital lead to empirically plausible speeds of convergence in one sector models of economic growth the relationship between depreciation and capital utilization plays a crucial role in slowing down convergence to the steady state cross country differences in the extent to which the capital utilization decision is internalized along the transition path may lead to differences in convergence rates even for countries with similar initial and terminal conditions finally by assuming a constant depreciation rate and full capital utilization standard growth models may be overstating the magnitude of the steady state equilibrium

skill biased technology transfer around the world in this paper we consider the extent to which skill biased technological changes are transferring across international borders thereby altering the skill structure of labour markets evidence of increased relative demand for skilled workers is uncovered in the manufacturing sectors of 37 high middle and low income countries skill biased technology transfer is central to the increased demand for skilled workers in middle income countries in low income countries there is less evidence of such a mechanism operating

spillovers from foreign direct investment within or between industries this paper contributes an estimation framework to measure both technological and linkage externalities from foreign direct investment fdi empirical research dealt mainly with intra industry spillovers from fdi with restrictive treatment of inter industry effects until recently however as optimal organization of the multinational corporation mnc involves minimization of profit losses due to leakage of technical information to competitors host country firms within the mnc s sector experience limited productivity gains ensuing fdi host country producers in other sectors may benefit for example mncs transfer knowledge to local downstream clients or outsource to local upstream suppliers hence fdi substitutes within sector domestic investment but complements it across sectors the net impact on aggregate capital formation by host country producers hinges on the interaction between linkages and spillovers estimations based on the colombian manufacturing census yield the sectoral pattern of fdi spillovers displaying knowledge propagation between but not within industries the findings reveal outsourcing relationships of mncs with local upstream suppliers as the channel of diffusion

a re examination of the demand for money in small developing economies this paper re examines the money demand function in three small open economies of asia korea pakistan and singapore in addition to using the relatively new procedure of error correction modelling the roles of variables such as a the expected change in the exchange rate b foregin interest rates and c foreign exchange risks on money demand are examined in testing the importance of these variables in the money demand function special attention is paid to testing the assumptions of the classical linear regression model the sample period for each country spans from 1973 1 through 1990 1 the empirical results suggest that the error correction specification performs very well in addition to the traditional variables the results suggest that at least some measure of foreign monetary developments appear to have some significant effect on money demand behaviour in these small developing economies

fund flow versus flow flow in production theory reflections on georgescu roegen s contribution abstract the paper discusses nicholas georgescu roegen s contribution to production theory comparing it with the contributions of john von neumann and piero sraffa and emphasizing the problem of the choice of technique it is shown that georgescu roegen s fund flow approach in which fixed capital is taken to be an immutable agent can be misleading and cannot address issues that are easily handled by the alternative flow flow approach that reduces fixed capital to circulating within a joint products framework and allows adequate treatment of the wear and tear of machines as well as the problem of capital utilization

an eclectic model of recent ldc macroeconomic policy analyses summary after decades of neglect there has been a growing concern in the 1970s with the theoretical and econometric analysis of short run macroeconomic policy in ldcs this paper attempts an eclectic synthesis of the recent work on this subject developing a standard ldc model of aggregate demand and aggregate supply that can be readily compared with the textbook models for advanced economies comparative static analyses of monetary policy fiscal policy devaluation and wages policy are conducted and it is shown that the standard macropolicy prescriptions often produce non standard results monetary restriction and devaluation are particularly suspect as they are likely to produce both recession and price rises

technology trade and factor prices abstract the view that recent changes in the distribution of income primarily reflect technology rather than trade may be the majority opinion but has been harshly criticized by some trade economists this paper will argue that the critique in fact misses the point essentially because the critics undertake the wrong thought experiments trade volumes are not irrelevant if one poses the question correctly one immediately realizes that small trade volumes are inconsistent with a story that attributes large distributional effects to trade the factor bias of technological change is not immaterial except in the case where such change takes place in a small open economy as opposed to one that can affect world prices and where technical change occurs only in that economy rather than occurring simultaneously in other economies as well since the real situation does not meet either criterion factor bias definitely does matter most surprisingly the much maligned use of a factor content approach to infer the effects of trade on factor prices turns out to be an entirely justified procedure when carefully applied

does foreign investment liberalisation enhance women s economic status micro evidence from urban china this paper analyses the effects of inward foreign direct investment fdi on female earnings and women s economic status in households using chinese urban household survey data from 1997 to 2008 the identification exploits the substantial relaxation of foreign investment regulations immediately after china s accession to the wto in 2002 the difference in differences estimation results show that fdi liberalisation has improved women s economic status significantly by increasing female earnings in sectors more exposed to fdi further analyses indicate that foreign investment liberalisation facilitates the promotion of female employees in their career ladders and increases their skill premium which are two important channels through which women enhance their economic independence

capital utilization and factor specificity in this study a model of firm behavior that allows the level of capital utilization to be optimally chosen by cost minimizing firms is embedded into the standard specific factors model employed in the international trade literature the resulting generalization of the specific factors model provides several new insights for instance allowing for variable utilization in either or both sectors gives rise to a greater variety of possible trade patterns than forcing utilization to remain constant similarly international differences in the willingness to work during abnormal hours generate a wider variety of trade patterns than are possible in the standard specific factors model finally this model allows a reconciliation of the dual scarcity explanation of the nineteenth century anglo american pattern of trade with the historical evidence on levels of utilization

on the utilisation controversy a rejoinder and some comments the critique by gahn and gonzalez 2019 of the conclusions in nikiforos 2016 regarding what data should be used to evaluate whether capacity utilization is endogenous to demand is weak for the following reasons i the federal reserve board frb measure of utilization is not appropriate for measuring long run variations of utilization because of the method and purpose of its construction even if its difference from the measures of the average workweek of capital aww were trivial this would still be the case if anything it would show that the aww is also an inappropriate measure ii gahn and gonzalez choose to ignore the longest available estimate of the aww produced by foss which has a clear long run trend iii their econometric results are not robust to more suitable specifications of the unit root tests under these specifications the tests overwhelmingly fail to reject the unit root hypothesis iv other estimates of the aww which were not included in nikiforos 2016 confirm these conclusions v for the comparison between the aww series and the frb series they construct variables that are not meaningful because they subtract series in different units when the comparison is done correctly the results confirm that the difference between the aww series and the frb series has a unit root vi a stationary utilization rate is not consistent with any theory of the determination of capacity utilization even if demand did not play a role there is no reason to expect that all the other factors that determine utilization would change in a fashion that would keep utilization constant