a critical assessment of some neo marxian trade theories the neo marxian unequal exchange literature has been largely bypassed in mainstream discussions of theories of comparative advantage during the 1970s in so far as the unequal exchange literature attempts to explain international factor price non equalisation for labour the problems addressed are of more general relevance in my work on this topic i have attempted to distinguish between studies within a classical marxian tradition some of which have been recently written and those neo marxian writers whose work is more broadly compatible with the sraffa or neo ricardian analysis of comparative advantage the purpose of this paper is to survey the latter sub set of the neo marxian literature not only because of its importance in many discussions of third world issues but also because of its own intrinsic merits

is the price level tied to the m2 monetary aggregate in the long run a long run link between money and prices is evident for the united states since the korean war if the m2 measure of money is used and the velocity of m2 v2 is modeled as a mean reverting series this link between m2 and prices is the basis for a dynamic model of inflation that compares favorably in forecasting exercises with phillips curve and more typical monetarist approaches the behavior of v2 is examined from 1870 to the present providing a basis for reconsidering previous findings that v2 follows a random walk copyright 1991 by american economic association

inflation dynamics and the output inflation trade off international panel data evidence we explore the impact of inflation and its variability on the output inflation trade off using a unified single step approach in a panel data context a limitation of earlier empirical approaches is that they focus on either cross country or country by country time series analyses this paper employs a dynamic heterogeneous panel data specification and uses an all encompassing estimation framework that accounts for parameter heterogeneity cross sectional dependence dynamics and non stationarity our sample covers 60 countries from 1970 to 2010 while inflation variability reduces the trade off for specific periods and country groups an unambiguous and more pronounced negative relation emerges between the inflation rate and the responsiveness of real output to nominal shocks the findings are in line with the new keynesian view of a negative association between the rate of inflation and the output inflation trade off as well as with the observed flattening of the phillips curve over the past decades

estimation of current quarter gross national product by pooling preliminary labor market data two methods of using labor market data as indicators of contemporaneous gross national product gnp are developed the establishment survey data are used by inverting a partial adjustment equation for hours a second gnp forecast can be extracted from the household survey by using okun s law using preliminary rather than final data adds about 2 to 4 percentage point to the expected value of the root mean squared errors and changes the weights that the pooling procedure assigns to the two forecasts the use of preliminary rather than final data results in a procedure that assigns more importance to the okun s law forecast

is inflation always and everywhere a monetary phenomenon using a sample of about 160 countries over the last 30 years we test for the quantity theory relationship between money and inflation when analysing the full sample of countries we find a strong positive relation between long run inflation and the money growth rate the relation is not proportional however the strong link between inflation and money growth is almost wholly due to the presence of high or hyper inflation countries in the sample the relationship between inflation and money growth for low inflation countries on average less than 10 per annum over the last 30 years is weak

financial technology shocks and the case of the missing m2 m2 growth was unusually weak in the early 1990s when its velocity soared although m2 growth subsequently recovered its velocity plateaued at a high level giving rise to a case of missing money these swings in m2 growth have accompanied opposite swings in bond mutual fund inflows m2 growth is better tracked and the missing m2 problem is resolved when money models are modified to account for shifts in bond mutual fund costs this approach avoids the capital gains and portfolio substitution problems posed by adding bond or equity funds to m2 while capturing the substitution effects relevant to money demand

third world indebted industrialization international finance and state capitalism in mexico brazil algeria and south korea the past fifteen years have seen two important developments in the international economic system the rapid industrialization of many less developed countries ldcs and their increasing indebtedness to private financial institutions massive bank loans have been used to fund industrial growth in many ldcs international financial markets have replaced multinational corporations as the third world s most important source of private foreign capital in four major borrowing countries mexico brazil algeria and south korea the process of indebted industrialization has its roots in the internationalization of finance the increasing role of the state and the use of funds raised on the international capital markets to finance industrial development the results include rapid expansions of ldc industrial production and ldc exports of manufactured products as well as the formation of an implicit partnership between private financial institutions and state capitalist elites in the third world

are monetary policy reaction functions asymmetric the role of nonlinearity in the phillips curve abstract this paper investigates the implications of a nonlinear phillips curve for the derivation of optimal monetary policy rules combined with a quadratic loss function the optimal policy is also nonlinear with the policy maker increasing interest rates by a larger amount when inflation or output are above target than the amount it will reduce them when they are below target specifically the main prediction of our model is that such a source of nonlinearity leads to the inclusion of the interaction between expected inflation and the output gap in an otherwise linear taylor rule we find empirical support for this type of asymmetries in the interest rate setting behaviour of four european central banks but none for the us fed

can we improve the perceived quality of economic forecasts a number of topics are discussed concerning how economic forecasts can be improved in quality or at least in presentation these include the following using 50 uncertainty intervals rather than 95 noting that even though forecasters use many different techniques they are all occasionally incorrect in the same direction that there is a tendency to underestimate changes that some expectations and recently available data are used insufficiently lagged forecasts errors can help compensate for structural breaks series that are more forecastable could be emphasized and that present methods of evaluating forecasts do not capture the useful properties of some methods compared to alternatives

the relevance of p star analysis to uk monetary policy recent articles have attempted to restore the use of a simple measure of the money supply as an indicator of future price levels p star and to reestablish a causal link from money to prices in this paper we argue that the p star approach is flawed it is certainly more complex than traditional monetarist approaches but the fundamental questions of causality are in no way either affected or resolved we argue that the p star relationship does not have a causal link with prices but rather the causality runs from prices to money we also find that there is some causality running from money to real income so that monetary conditions do seem to have some predictive power for future levels of activity copyright 1994 by royal economic society

trend inflation and monetary policy regimes in japan abstract this paper examines the dynamics of trend inflation in japan over the last three decades based on the smooth transition phillips curve model we find that there is a strong connection between the trend inflation and monetary policy regimes the results also suggest that the introduction of the inflation targeting policy and quantitative and qualitative easing in the beginning of 2013 successfully escaped from the deflationary regime but were not enough to achieve the 2 inflation target finally our results indicate the significance of exchange rates in explaining the recent fluctuations of inflation and the importance of oil and stock prices in maintaining the positive trend inflation regime

a quantitative comparison of sticky price and sticky information models of price setting i estimate sticky price and sticky information models of price setting for the united states via maximum likelihood techniques reaching several conclusions first the sticky price model fits best and captures inflation dynamics as well as reduced form equations once hybrid behavior is allowed second the importance of hybrid behavior in sticky price models is potentially consistent with a role for some information imperfections such as sticky information as a complement to nominal price rigidities finally the favorable results herein for the hybrid sticky price model when evaluated by statistics that summarize the relative fit of different models is consistent with the existing literature that is both supportive and dismissive of such models as this literature has largely ignored fit in evaluating such models many previous studies have focused on ancillary issues such as the standard errors associated with certain parameters or granger causality tests that may not provide much information about sticky price models

re examining the movements of crude oil spot and futures prices over time abstract we carry out a partial replication exercise of chang and lee 2015 unit root and cointegration analyses of crude oil spot and futures prices in doing so we offer an updated and expanded analysis based on a much wider set of oil futures series than that considered by chang and lee and we consider the impact of different temporal aggregation methods although we are not able to exactly replicate their findings we nonetheless reach qualitatively similar findings to theirs when using their dataset in terms of the long run properties and interactions of the spot and futures prices data likewise qualitatively comparable results are obtained when using our expanded dataset however a number of important qualitative differences from chang and lee arise in terms of the analysis of causality between spot and futures contract prices as part of our replication exercise we also investigate some aspects that were not originally considered by chang and lee in doing this we find that both the variability of futures prices as well as the speed of adjustment of futures spot price differentials increase as the maturity of the contracts increase

menu costs and phillips curves this paper develops a model of a monetary economy in which individual firms are subject to idiosyncratic productivity shocks as well as general inflation sellers can change price only by incurring a real menu cost we calibrate this cost and the variance and autocorrelation of the idiosyncratic shock using a new u s data set of individual prices due to klenow and kryvtsov the prediction of the calibrated model for the effects of high inflation on the frequency of price changes accords well with international evidence from various studies the model is also used to conduct numerical experiments on the economy s response to various shocks in none of the simulations we conducted did monetary shocks induce large or persistent real responses

the structural constraints of the world economy on national political development this study asserts that there are no unilinear patterns of political or economic development common to the states of the world we seek to illustrate using a pooled time series analysis that there are at least three distinct paths of politico economic development these paths correspond to the successive asymmetric integration of different clusters of states into the world economy along each trajectory of development we find that the constellation of internal political and economic relationships is defended by employing an ideology of political or economic democracy

inflation dynamics when inflation is near zero this paper discusses the likely evolution of u s inflation in the near and medium term on the basis of 1 past u s experience with very low levels of inflation 2 the most recent japanese experience with deflation and 3 recent u s micro evidence on downward nominal wage rigidity our findings question the view that stable long run inflation expectations and downward nominal wage rigidity will provide sufficient support to prices such that deflation can be avoided we show that an inflation model fitted on japanese data over the past 20 years which accounts for both short and long run inflation expectations matches the recent u s inflation experience quite well while the model indicates that u s inflation might be subject to a lower bound it does not rule out a prolonged period of mild deflation going forward in addition our micro evidence on wages suggests no obvious downward rigidity in the firm s wage costs downward rigidity in individual wages notwithstanding as a consequence downward nominal wage rigidity may provide little offset to deflationary pressures in the current u s situation despite some circumstantial evidence that this channel might have been at work in the past

developmental states and socialist industrialisation in the third world development economics as a discipline and the idea of the state as the organiser of economic activity are inseparable basic concepts and distinctions are put forward to unravel the complex question of the role of the state in the industrialisation process these are then used to examine the state in three waves of socialist industrialisation which shows a strong capacity to mobilise and direct economic social and political resources the typically pervasive state may however outlive its historically progressive role and become a bastion of economic irrationality and political authoritarianism

on the transformation of theorems abstract professor w ethier 1979 has argued that replacing land by capital in the familiar 2 2 trade model leaves the four basic theorems unaffected with time phasing and a positive interest rate in fact ethier s hos and fpe theorems are different in kind from the traditional ones the traditional theorems predict certain results in terms of trade independent data ethier s theorems describe equilibrium in terms of factor endowments and intensities defined by equilibrium prices hence his theorems do not support his central message that nothing is lost in trade theory by treating capital as if it were homogeneous land

inflation and output dynamics with state dependent pricing decisions this paper studies a state dependent pricing model in which firms face a fixed cost of changing their pricing plans a pricing plan specifies an entire sequence of time varying future prices allowing firms to choose a pricing plan rather than a single price generates inflation inertia in the response of the economy to small changes in the growth rate of money allowing firms to choose when to change their pricing plan generates a non linear response of inflation and output to small and large changes in the money growth rate the non linear solution method also reveals that the model generates an asymmetric response of output and inflation to monetary expansions and contractions

lessons on monetary policy from the 1980s t he half decade running from mid 1982 to mid 1987 was a pretty good era for u s monetary policy as these things go a sharp easing of policy beginning some time around midyear 1982 helped set in motion a recovery from the most severe business downturn the united states had experienced since the 1930s a downturn that tight monetary policy earlier on had deliberately brought about in order to slow the alarming acceleration of prices the recovery that ensued developed into a sustained expansion that continued without interruption through the end of 1987 thereby setting a new record for the longest recorded business expansion in u s peacetime experience a fiscal policy based on unprecedentedly large and continually growing structural budget deficits was a major factor underlying this record length expansion but at least monetary policy did not stand in the way just as importantly the severe 1981 82 recession served its intended purpose of substantially restoring price stability and even after five years of expansion inflation remained modest by recent historical standards at least as judged by these outcomes for the standard objectives of macroeconomic policy u s monetary policy was a distinct success during these years economists hoping to say something useful about monetary policy have had a tougher time the quantitative relationships connecting income and price movements to the growth of familiar monetary aggregates including especially the m1 measure of the money stock that had been the chief focus of monetary policy during 1979 82 utterly fell apart during this period moreover the collapse of these long standing

the international context for industrialisation in the coming decade export orientated industrialisation strategies are currently in vogue whether as an active choice by ldcs or as a consequence of pressure from the imf and the world bank the attractiveness of these strategies stems from the historic success of the nics particularly south korea taiwan singapore and hong kong yet there are signs that the changing nature of the global economy will have a major impact on industrialisation in peripheral economies and in particular on eoi strategies this paper focuses on four aspects of this changing international climate restricted market access radical electronics based technical change the nature of the structural adjustment programmes enforced by the imf and the world bank and the effect of increased military expenditures in the third world

the techno bureaucratic elite and the entrepreneurial state in dependent industrialization a common characteristic of dependent industrializing countries is a substantial direct entrepreneurial role for the state one explanation for this is that in dependent industrializing countries the system of allocation and production has been captured by a key group the techno bureaucratic elite the argument is that this elite lends its political support to the state in return for the state substituting as entrepreneur in the industrialization process in this article we analyze the theoretical implications of this explanation of the entrepreneurial state a formal model is constructed of the relationship between state entrepreneurship material consequences for the techno bureaucratic elite and important domestic and international constraints we then use deductive methods to analyze the logic of state entrepreneurship among other things we show how cyclical fluctuations in the global economy are reflected in constantly changing levels of state entrepreneurship and we investigate the consequences of alternative kinds of dependency syndromes for histories of entrepreneurial substitution and for streams of benefits to the techno bureaucratic elite it is demonstrated that there is an inverse relationship between the tendencies to reach stable levels of state entrepreneurship and the long term potential for economic growth

estimating potential output core inflation and the nairu as latent variables this article proposes a new method to obtain estimates of the nairu the core inflation rate and the trend investment rate for the united states using an unobserved components model that is compatible with the usual decomposition of real gross domestic product into trend and cycle the model includes okun s law a forward looking phillips curve and an accelerator type investment equation and accounts for some volatility breaks in two components the unknown parameters in the model are estimated by maximum likelihood using a kalman filter initialized with a partially diffuse prior and the unobserved components are estimated using a smoothing algorithm our results show that the output gap is positively correlated with the deviations of the investment rate from its trend and the inflation rate from core inflation and negatively correlated with the deviations of the unemployment rate from the nairu

money and inflation in the euro area a case for monetary indicators abstract this paper examines inflation indicators for the euro area by studying the relationship between inflation output money and interest rates using data spanning 1980 2001 the central finding is that both the output gap and the real money gap the difference between the real money stock and the long run equilibrium real money stock contain considerable information regarding future inflation in contrast the eurosystem s money growth indicator the difference between nominal money growth and a reference value the prominent first pillar in its monetary strategy contains little information about future inflation and no information beyond that contained in the output and real money gaps the predictive performance of the output gap has improved compared to that in a previous version of this paper most likely because of better estimation methods

modeling inflation dynamics a critical review of recent research in recent years a broad academic consensus has arisen around the use of rational expectations sticky price models to capture inflation dynamics these models are seen as providing an empirically reasonable characterization of observed inflation behavior once suitable measures of the output gap are chosen and moreover are perceived to be robust to the lucas critique in a way that earlier econometric models of inflation are not we review the principal conclusions of this literature concerning 1 the ability of these models to fit the data 2 the importance of rational forward looking expectations in price setting and 3 the appropriate measure of inflationary pressures we argue that existing rational expectations sticky price models fail to provide a useful empirical description of the inflation process especially relative to traditional econometric phillips curves of the sort commonly employed for policy analysis

estimating potential output as a latent variable this article proposes a new method for estimating potential output in which potential real gross domestic product gdp is modeled as an unobserved stochastic trend and deviations of gdp from potential affect inflation through an aggregate supply relationship the output and inflation equations together form a bivariate unobserved components model which is estimated via maximum likelihood through the use of the kalman filter algorithm the procedure yields a measure of potential output and its standard error and an estimate of the quantitative response of inflation to real growth and the output gap

revisiting the relationship between spot and futures oil prices evidence from quantile cointegrating regression article i nfo since most real decisions depend upon current market states or whether it is advantageous to the participants themselves this paper revisits the relationship between spot and futures oil prices of west texas intermediate covering 1986 to 2009 with an innovative approach named quantile cointegration different to previous perspectives we target the issues of cointegrating relationships causalities and market efficiency based on different market states under different maturities of oil futures in our empirical analysis except for market efficiency long run cointegrating relationships and causalities between spot and futures oil prices have significant differentials among futures maturities and the performances of spot oil markets furthermore the response of spot prices to shocks in 1 month futures oil prices is much steeper in high spot prices than in low spot prices this phenomenon is consistent with the prospect theory kahneman and tversky 1979 in that the value function is generally steeper for losses than for gains

output gaps and monetary policy in the emu area abstract several considerations suggest that the ecb may respond to emu wide output gaps in setting policy estimated reaction functions indicate that central banks respond to output gaps a taylor rule in which the central bank responds to inflation and the gap accounts for recent movements in interest rates in the emu area and optimal control exercises conducted in estimated econometric models suggest that reacting to the gap may be optimal even if the central bank cares solely about inflation in this paper we obtain point estimates with associated confidence bands of the emu wide output gap using uc models

what makes the output inflation trade off change the absence of accelerating deflation in japan it is standard to model the output inflation trade off as a linear relationship with a time invariant slope we assess empirical evidence for two sets of theories that allow for endogenous variation in the slope of the short run phillips curve at an empirical level we examine why large negative output gaps in japan in the late 1990s did not lead to accelerating deflation but instead coincided with stable albeit moderately negative inflation our results suggest that this episode is most convincingly interpreted as reflecting a gradual flattening of the phillips curve we find that this flattening is best explained by models with endogenous price durations these models imply that in any economy where trend inflation is substantially lower or substantially higher today than in past decades time variation in the slope of the phillips curve has become too important to ignore

new keynesian economics and the phillips curve models with sticky prices are an important part of new keynesian economics the author shows that several of the new keynesian models imply a formulation that is similar to the expectations augmented phillips curve of milton friedman and edmund phelps he then presents new estimates of the new keynesian phillips curve the author uses two proxies for price expectations survey based measures and an econometric based measure originally developed by bennett mccallum 1976 overall the results are consistent with the model but the survey based results are more precise suggesting that the surveys may be better measures of actual expectations copyright 1995 by ohio state university press

the lucas hypothesis on the phillips curve further international evidence abstract this paper is a further attempt to test the lucas hypothesis on the phillips curve by making cross country comparisons that hypothesis posits that nominal shocks affect real aggregates only if individuals mistake them for what they are not movements in real variables the existence of a trade off between output and inflation is conditional on economic agents misinterpreting the price movements they observe countries with widely fluctuating exogenous shocks will have a more vertical phillips curve as their inhabitants sharpen their instrumental to differentiate between real and nominal shocks hence cross country comparisons provide fertile grounds to test this hypothesis if it holds true we should find a positive correlation between phillips curve slopes and the standard deviations of the exogenous shocks the evidence presented here confirms lucas s findings

cross regime evidence of macroeconomic rationality rational expectations macromodels predict that the short run effects of monetary shocks on real output x should be negatively related across policy regimes to the variability of such shocks this paper presents cross regime tests of this and related propositions based on a sample of 47 countries the within regime estimates reveal a consistent pattern of positive short run real output effects with neutrality of money holding in the long run the cross regime tests show that x is negatively related to the variance of monetary shocks positively related to the variance of real output shocks negatively related to the variance of velocity shocks and unrelated to either the mean or variance of anticipated money growth

monetary analysis and monetary policy in the euro area 1999 2006 abstract this paper assesses the practical experience of monetary analysis at the ecb from the introduction of the euro in 1999 through 2006 the paper exploits a unique and rich real time data set containing both the vintages of data and the economic models that have been employed in the ecb s monetary analysis during the first eight years of monetary union it embodies both a description of how monetary analysis was conducted over this period and a quantitative evaluation of the indicators of risks to price stability that derived from this analysis a close investigation of this material is used to evaluate the role monetary analysis has played in the evolution of monetary policy in the euro area

the nonlinear phillips curve and inflation forecast targeting symmetric versus asymmetric monetary policy rules we study a simple small dynamic economy that a policymaker is attempting to control via use of a monetary policy rule the model features a convex phillips curve in that positive deviations of aggregate demand from potential are more inflationary than negative deviations are disinflationary using dynamic optimization techniques we find that the form of the optimal monetary policy reaction function is asymmetric we show that in the optimal rule the interest rate is a nonlinear function of the deviation of inflation from its target and of output from potential with asymmetry optimal monetary policy becomes more active as uncertainty about the impact of policy increases we thus provide an important and novel theoretical reason why increased uncertainty can lead to more aggressive rather than toward more cautious optimal policies

endogenous time dependent rules and inflation inertia in this paper we endogenize fixed price time dependent rules to examine the output effects of monetary disinflation we derive the optimal rules in and out of inflationary steady states and develop a methodology to aggregate individual pricing rules which vary through time because of strategic complementarities we have to solve both problems simultaneously this allows us to reassess the output costs of monetary disinflations including aspects such as the roles of the initial level of inflation and of the degree of strategic complementarity in price finally we relax the strict assumption of pure time dependent rules by allowing price setters to re evaluate their rules at the time disinflation is announced

the economic effects of energy price shocks large fluctuations in energy prices have been a distinguishing characteristic of the u s economy since the 1970s turmoil in the middle east rising energy prices in the u s and evidence of global warming recently have reignited interest in the link between energy prices and economic performance this paper addresses a number of the key issues in this debate what are energy price shocks and where do they come from how responsive is energy demand to changes in energy prices how do consumers expenditure patterns evolve in response to energy price shocks how do energy price shocks affect u s real output inflation and stock prices why do energy price increases seem to cause recessions but energy price decreases do not seem to cause expansions why has there been a surge in the price of oil in recent years why has this new energy price shock not caused a recession so far have the effects of energy price shocks waned since the 1980s and if so why as the paper demonstrates it is critical to account for the endogeneity of energy prices and to differentiate between the effects of demand and supply shocks in energy markets when answering these questions

eurosystem monetary targeting lessons from u s data abstract using a small empirical model of inflation output and money estimated on u s data we compare the relative performance of monetary targeting and inflation targeting the results show monetary targeting to be quite inefficient yielding both higher inflation and output variability this is true even with a nonstochastic money demand formulation our results are also robust to using a p model of inflation therefore in these popular frameworks there is no support for the prominent role given to money growth in the eurosystem s monetary policy strategy

escaping from a liquidity trap and deflation the foolproof way and others existing proposals to escape from a liquidity trap and deflation including my foolproof way are discussed in the light of the optimal way to escape the optimal way involves three elements 1 an explicit central bank commitment to a higher future price level 2 a concrete action that demonstrates the central bank s commitment induces expectations of a higher future price level and jump starts the economy and 3 an exit strategy that specifies when and how to get back to normal a currency depreciation is a direct consequence of expectations of a higher future price level and hence an excellent indicator of those expectations furthermore an intentional currency depreciation and a crawling peg as in the foolproof way can implement the optimal way and in particular induce the desired expectations of a higher future price level i conclude that the foolproof way is likely to work well for japan which is in a liquidity trap now as well as for the euro area and the united states in case either would fall into a liquidity trap in the future

dependence on foreign investment and economic growth in the third world estimates of the extent to which third world countries have experienced slower rates of growth than those in the industrialized west since i960 indicate a weak relation between initial wealth and subsequent economic growth that follows an inverted u shape pattern while the lowest growth rates are found among the poorest countries of the third world the highest growth rates are found not in the industrialized west but in the wealthiest third world countries drawing on contending arguments associated with modernization and dependency perspectives the relationship between foreign investment and growth within the third world is examined results undermine the idea that foreign investment inhibits growth suggesting instead that flows of foreign investment may facilitate growth especially among the initially wealthier countries of the third world

money and velocity during financial crises from the great depression to the great recession abstract this study models the demand for a broad monetary aggregate m2 from the great depression through the great recession key to the model is the interaction between a measure of time variation in economic agents perceived financial risk and an index of the cost of portfolio adjustment the finding of a useful money demand relationship suggests that skepticism regarding the indicator role of a broad liquid money aggregate as a policy guide may be exaggerated further our model provides some guidance for policymakers who face the challenge of unwinding large balance sheets as risk premia return to normal and velocity adjusts

international evidence on a new keynesian theory of the output inflation trade off this article provides empirical evidence on the validity of a new keynesian theory of the output inflation tradeoff the theory offered by laurence ball n gregory mankiw and david romer 1988 synthesizes recent work on menu costs and imperfect competition used to ground keynesian theory in maximizing behavior the present paper focuses on a key prediction namely that higher average inflation makes output less sensitive to nominal shocks that proposition is tested using data for each of forty three countries importantly average inflation is found to have the predicted effect in a significant fraction of those countries an outcome which supports the new keynesian view copyright 1991 by ohio state university press

state structure and economic adjustment of the east asian newly industrializing countries an analysis of the economic adjustment policies of hong kong singapore south korea and taiwan during the 1970s and 1980s shows that these east asian newly industrializing countries nics which faced common problems in sustaining their recent industrial growth responded to the challenge with industrial adjustment strategies that differed in their degree of intensity of state involvement and emphasis on national control to explain this divergence in adjustment strategies the article explores the variations in the national political structures of the four nics and focuses particularly on three aspects of state structure the organization of the economic bureaucracy the institutional links between the state and private sector and the larger state society relations the article demonstrates the usefulness of moving beyond the generalizations of the developmental state view by carefully disaggregating these aspects of state structure and by exploring the ordering logic that gives coherence to them

do oil spot and futures prices move together abstract this paper investigates the time varying correlation and the causal relationship between crude oil spot and futures prices using a newly developed approach wavelet coherency analysis in time frequency domain first we find evidence of a long run cointegration relationship between oil spot and futures prices moreover the short run causality is more significant in shorter maturity pairs versus longer maturity pairs in the vector error correction framework second the results from wavelet coherency analysis show significant dynamic correlations between variables in the time frequency domain third the illustration of the phase difference series around zero suggests that spot and futures prices contribute to the dynamics of the long run equilibrium fourth and finally we provide reasons for the structural changes in oil prices and also recommend investment strategies corresponding to risk diversification future studies focusing on the behavior of oil prices should consider the characteristics of the time frequency space and lead lag dynamic relationships

the structural location of third world states within the international division of labor this study attempts to determine the factors that affect a third world country s role in the international division of labor as measured by the degree of processing of its exports in 1980 competing hypotheses arising from the classical and neoclassical economic neo marxist and modernization literatures are tested by using a cross sectional design in which the units of analysis are third world states for which comprehensive data could be collected the findings suggest that a number of states have ascended the hierarchy of the international division of labor through a process of indebted industrialization the present study provides empirical support for frieden s 1981 contention that international banking capital rather than direct transnational investment has been relied upon by proactive third world states in their effort to diversify their exports by developing more advanced production processes

state dependent pricing and the general equilibrium dynamics of money and output economists have long suggested that nominal product prices are changed infrequently because of fixed costs in such a setting optimal price adjustment should depend on the state of the economy yet while widely discussed statedependent pricing has proved difficult to incorporate into macroeconomic models this paper develops a new tractable theoretical state dependent pricing framework we use it to study how optimal pricing depends on the persistence of monetary shocks the elasticities of labor supply and goods demand and the interest sensitivity of money demand

trade industrialisation and the visible hand the paper examines the neo classical case for the export orientated industrialisation strategy questioning not only its representation of what has occurred in the newly industrialising countries but also raising some doubts about the validity of the analytical model which is implicit in its policy prescriptions an alternative analytical framework and political economy model is then sketched out the experience of south korea and taiwan is used for illustrative purposes highlighting areas where further conceptual and empirical analysis is required to give a fully blown alternative story an appendix offers a brief summary and critique of some recent neo classical work on the relationship between price distortion and growth

cyclical changes in firm volatility we estimate changes in the volatility of firm level sales earnings and employment growth of us firms our method differs from existing measures for firm level sales and employment volatility in that it not only captures longer run changes in volatility but also measures cyclical changes in firm volatility we detect substantial cyclical variation in firm specific volatility around trend firm specific volatility was low in the early 1990s rose in the mid and late 1990s and was high around 2000 our results are consistent with the hypothesis deduced from models with financial frictions that rising idiosyncratic volatility before 2001 contributed to the coincident rise in the external finance premium and to the 2001 recession endogenous pricing models imply that price adjustment is less frequent and disinflation more costly when firm specific volatility is low consistent with endogenous pricing models we find that the output cost of disinflation was three times larger in the early 1990s than in the early 2000s

industry and underdevelopment re examined recent work by lipton stewart warren and others has from differing standpoints called into question much of the conventional wisdom of the dependency school shared by my book industry and underdevelopment about the relationship between development and industrialisation four of these arguments that industrialisation is necessary to meet human needs that underdeveloped countries are in general not succeeding in industrialising that capital intensive technology is desirable and that industrialisation requires more autarky are re examined they are all found to be in need of considerable modification but the general lines of the proferred alternatives to them are for the most part not accepted either part of the problem is diagnosed as insufficient concern for the human consequences of actually existing industrialisations and too nationalistic a conception of socialism

testing for cointegration power versus frequency of observation further monte carlo results abstract this paper studies the effects of increasing the frequency of observation and the data span on the johansen cointegration tests the ability of the tests to detect cointegration depends more on the total sample length than the number of observations

inflation and monetary dynamics in the us a quantity theory approach in this article we investigate the long run link between inflation and money growth in the united states since 1960 a measure of the long run inflation trend is constructed which bears the interpreation of monetary inflation rate and is directly related to the excess nominal money growth process money growth less output growth as postulated by the quantity theory consistent with the memory characteristics of the series their fractional integration and cointegration properties are taken into account in empirical modelling the proposed measure is then compared with several existing measures of core inflation aimed at capturing long run inflation dynamics but unrelated to money growth the monetary long run inflation rate performs well in out of sample forecasting exercises especially over a 2 3 year horizon yielding valuable information to monetary policymakers