the effects of pension funds on markets performance a review the worldwide reforming process of pension systems triggered by the demographic transition and globalization has led several countries to implement multi pillar pension systems and enhance pension funds for this reason the studies on the effects that pension funds exert on markets performance have been flourishing in the last decades in this paper we provide an updated review of the empirical advances in this field of study with particular focus on the effects that pension funds produce on labour markets financial markets and economic growth

corporate conservatism and relative compensation this paper demonstrates that in a simple setting with managerial concern for reputation and asymmetric information on ability most managers may refrain from undertaking innovations that stochastically dominate an industry standard common components of uncertainty lead to market inferences of managerial ability based on relative performance managers who undertake the industry standard are consequently evaluated with a more accurate benchmark than those innovating discontinuities in compensation when performance is low because of firings lead managers to have differing valuations of an accurate benchmark depending on type in particular very high and very low ability managers are more likely to undertake superior innovations than those of average ability

financial development and economic growth a meta analysis we analyze 1334 estimates from 67 studies that examine the effect of financial development on economic growth taken together the studies imply a positive and statistically significant effect but the individual estimates vary widely we find that both research design and heterogeneity in the underlying effect play a role in explaining the differences in results studies that do not address endogeneity tend to overstate the effect of finance on growth while the effect seems to be weaker in less developed countries the effect decreases worldwide after the 1980s our results also suggest that stock markets support faster economic growth than other financial intermediaries

measuring persistence in croatian tourism evidence from the adriatic region this study examines the degree of persistence in foreign tourist arrivals and overnight stays for seven croatian coastal counties over the period january 1998 to december 2013 using fractional integration techniques our findings reveal that the respective regional tourism indicators exhibit seasonal unit roots which require seasonal first differences to render the respective time series stationary with respect to the long run evolution of the respective time series both the parametric and semi parametric fractional integration approaches show the degree of persistence is greater than zero but significantly less than one for the majority of the coastal counties impulse response analysis reveals indeed shocks to the deseasonalized time series either foreign tourist arrivals or foreign tourist overnight stays appear short lived with the exception of istria and primorje gorski kotar counties policy implications of the results are also discussed

globalization as a development strategy in latin america abstract the swinging of the pendulum toward policies that enhance latin america s insertion into the world economy diverted attention from domestic policies that continue to be essential for growth and development broadly defined six domestic policy areas are identified here increasing domestic savings implementing countercyclical fiscal policies mobilizing public resources investing in education promoting employment and reducing income inequality the opportunity cost of not having devoted due attention to these issues throughout the 1990s is surely enormous and for those countries still underplaying domestic variables the longer the delay the greater the costs the imperative of devoting more political capital to domestic strategies of development cannot be overstated whether international financial institutions choose to emphasize them or not

tourism terrorism and political violence in tunisia evidence from markov switching models abstract this study investigates the impact of terrorist attacks and political violence on the number of tourist arrivals and overnight stays in tunisia the dataset employed consists of monthly data that covers the period from january 2000 to september 2016 which includes several political and terrorist attacks in tunisia and the region empirically we investigate the true data generating process dgp of these two proxies of tourism activity by accounting for four statistical properties that characterize these series 1 seasonality 2 unit roots 3 breaks and 4 long memory behavior our empirical findings show strong evidence of stationarity five breaks in the tourist arrival time series and spurious long memory behavior by estimating a 3 state markov switching model consisting of the mean trend and variance we find that the tunisian jasmine revolution and two recent terrorist attacks one at the bardo national museum on march 18 2015 and the other at the tourist resort at port el kantaoui sousse on june 26 2015 played an important role in influencing the tourism activity of the country our empirical findings show also that local shocks have a more important impact than international shocks in influencing tourism activity interestingly we find that the effects of terrorist shocks have a long duration compared to political violence shocks several security marketing and economic policies have been proposed and discussed in the paper

union negotiations and corporate policy a study of labor concessions in the domestic steel industry during the 1980s abstract this paper studies managerial compensation financial reporting and dividend policies of the seven major domestic steel producers during requests for union concessions substantial layoffs reported losses and sacrifices by nonunion stakeholders buttressed managers case for union concessions from 1980 to 1988 sample firms reduced their work force by about 300 000 almost two thirds and annual wage payments from 16 1 to 8 6 billion reported income is lower during union negotiations controlling for cash flows as is managerial pay with average ceo salary plus bonus declining 18 dividend reductions and white collar pay cuts are substantial pervasive and clustered during union negotiations

are australia s tourism markets converging in this paper we make an important contribution towards understanding australia s tourism industry by examining whether or not australia s tourism markets are converging we define convergence as the reduction in tourist arrivals differential which is calculated as the difference between total visitor arrivals to a country and visitor arrivals from a particular tourist source market we analyze australia s thirteen major tourist source markets using monthly data over the period january 1991 to september 2003 to test for convergence we use the univariate and panel lagrange multiplier lm tests our main finding is that when we allow for two structural breaks in the data series both univariate and panel lm tests provide strong evidence for convergence of australia s tourism markets this implies that policies aimed at attracting visitor arrivals from any one of australia s thirteen tourist source markets will boost the volume of tourists coming into the country

asymmetric contests with conditional investments rent seeking scenarios competitions for promotions and research and development r d races are examples of competitions in which participants expend resources regardless of whether they win or lose although similar in their all pay feature such competitions often differ in important dimensions these include the type of technologies employed in competition the type of asymmetries among competitors the degree to which expenditures are sunk and the number of prizes consider lobbying settings in which firms expend resources in order to influence a policymaker if expenditures take the form of monetary outlays and all firms have the same cost of capital then it is reasonable to think of firms marginal cost of influence as linear but if a firm has a reputational advantage and high costs of capital its lobbying technology may be more reasonably thought of as having convex costs relatively low marginal costs up to a moderate level of influence due to the reputational advantage and relatively high marginal costs at higher levels of influence due to the high costs of capital similarly the lobbying technology of a firm that is relatively unknown and has low costs of capital may be characterized by concave costs lobbying restrictions geographic location or preferential treatment by the policymaker further impact firms lobbying technologies inducing additional nonlinearities and asymmetries among firms in some lobbying settings firms also commit to expenditures conditional on a favorable outcome for example a firm may commit to building factories and creating new jobs if it is granted one of a limited number of manufacturing licenses thus the specification of firms lobbying technologies the type of asymmetries among firms the combination of unconditional and conditional investments and the number of eventual winners may change according to the lobbying setting studied the same is true for other competitions with an all pay feature in a competition for promotions workers often differ in their abilities experience and social skills more than one prize

a framework to update hofstede s cultural value indices economic dynamics and institutional stability this study offers an update of the hofstede cultural value dimensions we argue that changes in economic conditions are the source of cultural dynamics while the endurance of institutional characteristics provides the foundation for cultural stability it is found that national wealth measured by gdp per capita has a curvilinear relationship with individualism long term orientation and power distance scores relatively speaking uncertainty avoidance and masculinity mainly reflect some rather stable institutional traditions such as language religion climate ethnic homogeneity and legal origin and are less likely to change over time

the determinants of private saving in india abstract this paper examines the determinants of private saving in the process of economic development in the light of the indian experience it is found that the saving rate rises with both the level and the rate of growth of disposable income the real interest rate on bank deposits has a significant positive impact but the magnitude of the impact is modest public saving seems to crowd out private saving but less than proportionately furthermore the spread of banking facilities in the economy and the inflation rate have a positive impact and changes in the external terms of trade a negative impact on private saving

the interest elasticity of savings in developing countries the existing evidence abstract this paper presents a critical analysis of some of the most recent empirical work on the interest elasticity of savings in developing economies supported by a set of empirical results the paper argues that a the real interest elasticity of savings is not easily detected using the existing empirical models which generally yield insignificant interest rate parameters in the seventies b the existing models suffer from serious defects that make if very difficult to interpret the estimated parameters

determinants of private savings behaviour in turkey this study investigates the effects on private saving rates of a number of policy and non policy variables the analysis covers the period 1968 1994 the empirical private saving model for turkey is estimated the findings support the hypothesis that private saving rates have strong inertia the evidence indicates that government saving does not tend to crowd out private savings and the ricardian equivalence does not hold strictly income level has a positive impact on private saving rate and growth rate of income is not statistically significant from a policy point of view financial depth and development measures in turkey suggest that countries with deeper financial systems tend to have higher private saving rates private credit and real interest rates try to capture the severity of the borrowing constraints and the degree of financial repression for turkey moreover the negative impact of life expectancy rate lends support to the life cycle hypothesis the precautionary motive for saving is suppor

savings and the terms of trade under borrowing constraints the authors examine the extent to which permanent terms of trade shocks have an asymmetric effect on private savings using a simple three period model they show that if households expect to face binding constraints on borrowing in bad states of nature when the economy is in a long trough rather than a sharp peak savings rates will respond asymmetrically to favorable movements in the permanent component of the terms of trade in contrast with the predictions of conventional consumption smoothing models they test the asymmetric effects of terms of trade disturbances using an econometric model that controls for various standard determinants of private savings the results based on panel data for non oil commodity exporters of sub saharan africa for 1980 96 a group of countries for which movements in the terms of trade have traditionally represented a key source of macroeconomic shocks indicate that increases in the permanent component of the terms of trade measured using three alternative filtering techniques indeed tend to be associated with higher rates of private savings

explaining differences in the domestic savings ratio across countries a panel data study this article seeks to analyse the major determinants of differences in the domestic savings ratio between countries using panel data for 62 countries over the period 1967 95 a basic distinction is made between the determinants of the capacity to save and the willingness to save the capacity to save depends primarily on the level of per capita income but non linearly and the growth of income the life cycle hypothesis and the empirics strongly support these hypotheses the willingness to save is assumed to depend on financial variables such as the rate of interest the level of financial deepening and inflation we find no support for a positive interest rate effect but strong support for the level of financial deepening measured by the ratio of quasi liquid liabilities to gdp inflation exerts a mild positive effect on saving but soon turns negative total saving may also depend on tax effort but a surprisingly strong negative relation is found between the ratio of tax revenue to gdp and the domestic savings ratio

testing for the random walk hypothesis in the case of visitor arrivals evidence from indian tourism testing for the random walk hypothesis which asserts that a series is a non stationary process or a unit root process in the case of visitor arrivals has important implications for policy if for instance visitor arrivals are characterized by a unit root then it implies that shocks to visitor arrivals are permanent however if visitor arrivals are without a unit root this implies that shocks to visitor arrivals are temporary this study provides evidence on the random walk hypothesis for visitor arrivals to india using the recently developed im et al 2003 and maddala and wu 1999 panel unit root tests both tests allow one to reject the random walk hypothesis implying that shocks to visitor arrivals to india from the 10 major source markets have a temporary effect on visitor arrivals

capital taxation quantitative explorations of the inverse euler equation economies with private information provide a rationale for capital taxation in this paper we ask what the welfare gains from following this prescription are we develop a method to answer this question in standard general equilibrium models with idiosyncratic uncertainty and incomplete markets we find that general equilibrium forces are important and greatly reduce the welfare gains once these effects are taken into account the gains are relatively small in our benchmark calibration these results do not imply that dynamic aspects of social insurance design are unimportant but they do suggest that capital taxation may play a modest role

a survey of recent developments in the literature of finance and growth this paper provides a survey of the recent progress in the literature of financial development and economic growth the survey highlights that most empirical studies focus on either testing the role of financial development in stimulating economic growth or examining the direction of causality between these two variables although the positive role of finance on growth has become a stylized fact there are some methodological reservations about the results from these empirical studies several key issues unresolved in the literature are highlighted the paper also points to several directions for future research

a fractionally integrated autoregressive moving average approach to forecasting tourism demand the primary aim of this paper is to incorporate fractionally integrated arma p d q arfima models into tourism forecasting and to compare the accuracy of forecasts with those obtained by previous studies the models are estimated using the volume of monthly international tourist arrivals in singapore empirical findings demonstrate the evidence that the approach we propose generates relatively lower sample mean absolute percentage errors mapes this study also deals with the volatile data faced by a forecaster we use the asian financial crisis and the september 11 event as examples of economic and political shocks with respect to the objective of shaving the coefficient mape forecasts based on the selected arfima models dominate convincingly

a note on time preference and the tobin effect abstract this paper proposes an alternative time preference specification to uzawa preferences time preference is modeled as an increasing function of real wealth so that the tobin effect and stability rest on optimizing behavior as opposed to counterintuitive preference assumptions

business cycle fluctuations and household saving in oecd countries a panel data analysis abstract we investigate the cyclicality of the household saving to household disposable income ratio for a panel of 16 oecd countries over the period 1969 2012 we find evidence that the household saving ratio is countercyclical we empirically investigate whether the determinants of saving suggested by a standard buffer stock model of saving can explain this finding the three main determinants of household saving implied by such a model i e unemployment risk household wealth and credit constraints have a significant impact on the household saving ratio while their combined effect completely offsets its countercyclicality the saving regression results are robust to potential endogeneity of the regressors to making use of a reduced sample size that leaves out the period of the great recession and to the one by one addition of variables suggested by alternative theories that also predict a countercyclical saving ratio

the relationship between income inequality and aggregate saving an empirical analysis using cross country panel data abstractif the rich save more than the poor an increase in income inequality raises aggregate saving we investigate whether income inequality is positively related to aggregate saving ratio by estimating a fixed effect model based on a panel data of 48 countries for the period 1991 2010 we find evidence that aggregate saving ratio increases with income inequality using various inequality measures in particular the effect of income distribution on saving is greater and statistically more significant with in financially developed rich and oecd countries it suggests that the rich save much more than the poor under advanced financial system and in a rich country we also find that the relationship between income inequality and saving ratio is closer in the 2000s than the 1990s this finding may result from financial development and the high income level in the 2000s

a theory of exit in duopoly we develop a duopoly model in which exit occurs because of the existence of fixed costs or opportunity costs each firm enters the market knowing its own cost but not that of its opponent as times goes on each firm becomes increasingly pessimistic about the cost of its remaining rival the time of exit is the only strategic variable so that our model is a war of attrition in contrast to the classic war of attrition however we assume that with positive probability each firm s costs may be low enough that staying in forever is a dominant strategy thus our model unlike the classic one has a unique equilibrium

household saving in developing countries first cross country evidence although most studies have relied on domestic or private sector saving data this article uses household data available from the u n system of national accounts for a sample of 10 countries household saving functions are estimated using combined time series and cross country observations in order to test households responses to income and growth rates of return monetary wealth foreign saving and demographic variables the results show that income and wealth variables affect saving strongly and in ways consistent with standard theories inflation and the interest rate do not show clear effects on saving which is also consistent with their theoretical ambiguity foreign saving and monetary assets have strong negative effects on household saving which suggests the importance of liquidity constraints and monetary wealth in developing countries

does the quality of institutions enhance savings the case of sub saharan africa over the last three decades there has been increasing disparity in savings across regions and income groupings globally in this paper we investigate whether the quality of institutions explains

the structure of tourist expenditure in fiji evidence from unit root structural break tests the central aim of this paper is to investigate whether shocks to fiji s tourism industry have a permanent effect or a transitory effect on tourist expenditure in fiji to accomplish this aim the zivot and andrews 1992 one break test and the lumsdaine and papell 1997 two break tests are used the one break and two break tests reveal 1987 the year of the military coups in fiji as the year of the break moreover it is possible to reject the unit root null leading to the conclusion that shocks to fiji s tourism industry have a transitory effect on tourist expenditure in fiji

the optimal allocation of prizes in contests we study a contest with multiple not necessarily equal prizes contestants have private information about an ability parameter that affects their costs of bidding the contestant with the highest bid wins the first prize the contestant with the second highest bid wins the second prize and so on until all the prizes are allocated all contestants incur their respective costs of bidding the contest s designer maximizes the expected sum of bids our main results are 1 we display bidding equlibria for any number of contestants having linear convex or concave cost functions and for any distribution of abilities 2 if the cost functions are linear or concave then no matter what the distribution of abilities is it is optimal for the designer to allocate the entire prize sum to a single first prize 3 we give a necessary and sufficient conditions ensuring that several prizes are optimal if contestants have a convex cost function

a comparison of saving rates microdata evidence from seventeen latin american and caribbean countries using microdata on expenditure and income for seventeen latin american and caribbean countries this paper presents stylized facts on saving behavior by age education income and place of residence counterfactual saving rates are computed by imposing the saving behavior the population distribution or the income distribution of two benchmark economies the united states and korea the results suggest that the difference in national saving rates between latin america and caribbean and the benchmark economies can mainly be attributed to differences in saving behavior of the population and to a lesser extent to differences in the distribution of the population by education levels other demographic or income distribution differences are not quantitatively important as explanations of saving rates

equilibrium in sealed high bid auctions there is a voluminous theoretical literature on sealed high bid auctions auctions in which bids are sealed and the high bidder pays his bid see for example vickrey 1961 myerson 1981 riley and samuelson 1981 milgrom and weber 1982 matthews 1983 maskin and riley 1984 holt 1980 cox smith and walker 1988 a critical property on which this literature relies is the existence of equilibrium in which buyers bidding strategies are monotonic in their types this enables the analyst to perform comparative statics as the distribution of types changes and to compare the welfare properties of the high bid auction with those of other auction institutions one case in which the existence of monotonic equilibrium is readily established is that in which buyers types are distributed smoothly independently and symmetrically in this case there exists a symmetric equilibrium one in which all bidders share the same bidding behaviour as a function of their valuations and this bid function is the solution to a first order differential equation

the determinants of household and private savings in thailand a broad set of possible determinants of household and private savings behaviour is examined through an in depth case study of thailand during the period 1960 to 2004 results suggest that an increase in economic growth inflation and terms of trade all have a significant positive impact on household and private saving rates in contrast the availability of bank credit tends to reduce household and private saving rates while an increase in both old and young dependency has a negative impact on household and private saving rates the magnitude of the impact on the former is far greater than that on the latter furthermore public saving seems to crowd out household and private saving but less than proportionately this reflects a possible role of fiscal policy in increasing national savings in the economy over and above these variables corporate saving is another important determinant of household saving an increase in the former brings about a significant reduction in the latter

optimal design of research contests procurement of an innovation often requires substantial effort by potential suppliers motivating effort may be difficult if the level of effort and quality of the resulting innovation are unverifiable if innovators cannot benefit directly by marketing their innovations and if the buyer cannot extract up front payments from suppliers we study the use of contests to procure an innovation in such an environment an auction in which two suppliers are invited to innovate and then bid their prizes is optimal in a large class of contests if contestants are asymmetric it is optimal to handicap the most efficient one

long live democracy the determinants of political instability in latin america abstract we investigate the underlying causes of political instability in a panel of 18 latin american countries from 1971 2000 we test whether regime type regime durability factionalism income inequality ethnic diversity ethnic discrimination regional spillover effects urban growth and macroeconomic variables matter for instability we find several important results 1 democracy has a significant negative effect on instability that is robust to several alternative specifications 2 factionalised political systems experience higher instability 3 income inequality ethnic fractionalisation and urban growth have important nonlinear effects on instability and 4 of the macroeconomic variables we study only openness to trade has a significant negative effect on instability

why are latin america s savings rates so low an international comparative analysis abstract this paper presents a theoretical and empirical assessment of the determinants of savings rates with special emphasis on latin american savings rates the study is based on international comparisons using data from 36 countries for 1970 1992 a distinction is made between private and public savings the later are endogenously determined by economic and political variables per capita income growth is the most important determinant of private and public savings public savings are lower in countries with higher political instability public savings crowd out private savings but less than proportionately low latin american savings are due to the magnitudes of their determinants rather than structural differences

debt and creative destruction why could subsidizing corporate debt be optimal the existing theoretical literature provides little justification for a corporate debt subsidy we illustrate the welfare benefit of this subsidy and study how the social costs and benefits change with the duration of industry distress in our model two firms engage in socially wasteful competition for survival in a declining industry firms differ on two dimensions exogenous productivity and endogenously chosen amount of debt financing resulting in a two dimensional war of attrition debt financing increases incentives to exit which although costly for the firm is socially beneficial these benefits decline as industry distress shortens our normative model sheds light on why the debt tax subsidy still persists around the world analogously the model can also rationalize a seemingly ad hoc feature of the u s tax system which subsidizes the conflict of interest between debt and equity regarding firm liquidation this paper was accepted by amit seru finance

institutions and savings in developing and emerging economies domestic savings are an important prerequisite for capital formation and growth in this paper we analyze a new channel through which institutions influence aggregate savings and economic development whereas research in the field of savings decisions concentrates largely on the level of the individual the literature on institutions and growth as well as on aggregate savings formation focuses on the aggregate national level first we develop a framework that brings together both lines of reasoning arguing that institutions may influence the individual savings decision as well as national savings in aggregate this potential for institutional quality to influence economic performance has been neglected so far second we build upon the empirical literature on aggregate savings formation and provide results supporting our hypothesis that better economic institutions drive aggregate savings formation upwards by contrast we do not find such effects in the case of the political environment our findings are robust when checked against a number of changes in explanatory variables estimation methods and the treatment of instruments

international evidence on how income inequality and credit market imperfections affect private saving rates abstract this paper empirically examines the hypothesis that income distribution exerts an independent effect on private saving rates across countries and tests particular channels for income inequality to affect private saving rates cross sectional and panel regression results show that inequality has a robust positive effect on private saving rates that depends on financial market development and credit available to the private sector the paper thus identifies credit market imperfections as the likely reason for the inequality private saving link the data provide no evidence supporting a subsistence channel for inequality to affect private saving as suggested by nonhomothetic utility functions

saving in the world abstract this paper presents new evidence on the behavior of saving in the world by extending previous empirical research in several dimensions after extensively surveying the relevant theoretical and empirical literature the paper reports estimates of saving determinants relying on the newly constructed and largest available database covering 165 countries over 1981 2012 the empirical specification includes determinants not considered in the literature explores differences in saving behavior nesting the 2008 10 crisis period and four different country groups searches for commonalities across key saving aggregates national private household and corporate saving rates and is subject to a robustness analysis based on different estimation techniques the results confirm in part existing research but also shed light on some ambiguous or contradictory findings and highlight the role of neglected determinants compared to the literature we find a larger number of significant determinants changes across periods and country groups and similarities across different saving aggregates

a seasonal analysis of asian tourist arrivals to australia rapid economic growth in south east and east asia has seen a surge in tourist arrivals from this region to australia in the 1990s prior to the currency crisis in late 1997 the purpose of the paper is to use autoregressive integrated moving average arima models to explain the nonstationary seasonally unadjusted quarterly tourist arrivals from hong kong and singapore to australia from 1975 1 to 1996 4 as the tourist arrivals series display strong seasonal patterns deterministic and stochastic seasonality are examined as possible explanations for variations in the international tourist arrivals series the hylleberg et al journal of econometrics 99 pp 215 38 1990 test for seasonal unit roots is used to examine stochastic seasonality in the various series

does income inequality raise aggregate saving this paper reviews analytically and empirically the links between income distribution and aggregate saving consumption theory brings out a number of direct channels through which income inequality can affect overall household saving positively in most cases however recent political economy theory points toward indirect negative effects of inequality through firm investment and public saving on aggregate saving on theoretical grounds the sign of the saving inequality link is therefore ambiguous this paper presents new empirical evidence on the relationship between income distribution and aggregate saving based on a new and improved income distribution database for both industrial and developing countries the empirical results using alternative inequality and saving measures and various econometric specifications on both cross section and panel data provide no support for the notion that income inequality has any systematic effect on aggregate saving these findings are consistent with the theoretical ambiguity q 2000 elsevier science b v all rights reserved

the relation between savings and growth cointegration and causality evidence from asia the direction of causality between savings and growth remains unclear even though it is of critical importance for development policy in this paper granger causality analysis is undertaken for seven asian countries using the vecm engle and granger and var procedures we find that in most cases the direction of causality runs primarily from growth or income to savings although in some countries there is also evidence of a feedback effect from savings to income and growth thus development policy should focus less on promoting high savings rates and more on promoting high growth rates estimation of the savings functions are presented using engle and granger s static ols and stock and watson s dynamic ols dols procedures where appropriate the high savings rates in asia are found to be due to the high rate of growth of income per capita declining shares of dependent population and some special institutional features such as the high central provident fund rates in singapore interest rates ar

all pay contests this paper studies a class of games all pay contests which capture general asymmetries and sunk investments inherent in scenarios such as lobbying competition for market power labor market tournaments and r d races players compete for one of several identical prizes by choosing a score conditional on winning or losing it is weakly better to do so with a lower score this formulation allows for differing production technologies costs of capital prior investments attitudes toward risk and conditional and unconditional investments among others i provide a closed form formula for players equilibrium payoffs and analyze player participation a special case of contests is multiprize complete information all pay auctions

what drives private saving around the world the authors investigate the policy and non policy factors behind saving disparities using a large panel data set and an encompassing approach including several relevant determinants of private saving they extend the literature in several dimensions by 1 using the largest data set on aggregate saving assembled to date 2 using panel instrumental variable techniques to correct for endogeneity and heterogeneity 3 performing robustness checks on changes in estimation procedures data samples and model specification their main empirical findings a private saving rates show considerable inertia are highly serially correlated even after controlling for other relevant factors b private sector rates rise with the level and growth rate of real per capita income so policies that spur development are in indirect but effective way to raise private saving rates c predictions of the life cycle hypothesis are supported in that dependency ratios generally have a negative effect on private saving rates d the precautionary motive for saving is supported by the finding that inflation conventionally taken as a summary measure of macroeconomic volatility has a positive impact on private saving holding other facts constant e fiscal policy is a moderately effective tool for raising national saving f the direct effect of financial liberalization are largely detrimental to private saving rates greater availability of credit reduces the private saving rate financial depth and higher real interest rates do not increase saving

consumption puzzles and precautionary savings abstract when marginal utility is convex agents accumulate savings as a precautionary measure against labor income eventualities this paper shows that precautionary savings can go a long way in making the excess growth excess smoothness and excess sensitivity features of consumption consistent with the stochastic processes of labor income observed in the u s at the microeconomic level

understanding domestic savings an empirical approach abstractthere are two unusual and important features in the evolution of the savings rate in chile first the economy increased the average savings rate by 11 percentage points in the period 1985

barriers to formal saving micro and macroeconomic effects this paper examines different barriers to formal saving considering various interventions and their possible effects at microeconomic and macroeconomic levels it presents a comprehensive review of the literature based on a detailed classification of the barriers associated with supply side factors related to access to financial products and demand side barriers related to the use and frequency of use of those products the paper concludes that this classification and analysis contributes to a fuller understanding of the question of financial inclusion and how to achieve it

forecasting tourism demand with arma based methods abstract the forecast of tourism volume in the form of arrivals is of special importance for tourism and other hospitality industries because it is an indicator of future demand thereby providing basic information for subsequent planning and policy making in this paper three univariate arma based models are applied to tourism demand as represented by the number of world wide visitors to hong kong japan korea taiwan singapore thailand the philippines australia and new zealand the study employs both monthly and quarterly time series generated from nine principal tourist destinations in asian pacific region in the forecasting exercise to ensure the reliability of the forecasting evaluation forecasting performance based on disaggregated arrival series in a particular destination is examined as well the general impression is that the arma based models perform very well and in some cases the magnitude of mean absolute percentage error is lower than 2 level

regional heterogeneity in the relationship between fiscal imbalances and foreign exchange market pressure summary the relationship between fiscal imbalances and other macroeconomic variables is complex and multifaceted however it remains important to understand it not least in order to facilitate the design of appropriate policy one central issue is whether the relationship varies across countries or groups of countries if it does an implication is that policy will also have to be differentiated this paper empirically explores the relationship between fiscal imbalances and pressures in the foreign exchange fx market in latin america caribbean lac and east asia the pacific eap regions using panel data over 1970 2000 it finds that fiscal imbalances have a significant effect on fx pressures in lac but not in eap

the saving collapse during the transition in eastern europe almost all of the transition economies in eastern europe and the former soviet union experienced a severe decline in their national saving rates the saving collapse could be explained by the elimination of involuntary saving a feature of central planning or by a change in equilibrium saving reflecting the new economic circumstances following the end of socialism the predicted saving rates of market economies with the same fundamentals as the transition economies before the transition are computed to test for the presence of involuntary saving the results provide some support for the hypothesis of consumption smoothing also considered is whether differences m the extent of liberalization affected saving rates in the cross section of transition economies this is found to be the case greater liberalization is association with lower saving with a one year lag to the extent that liberalization is associated with future growth this finding is consistent with smoothing m the face of output evolving along j curve

declining public pensions in an era of demographic ageing will private provision fill the gap abstract demographic crisis and imprudent commitments have induced a crisis in public pension programmes in oecd countries will present and prospective cutbacks lead to greater private saving either in the form of private pension provision or in other forms of saving the paper surveys existing evidence and provides new results on three questions do individuals substitute private for public provision of savings when public pension programmes are cut back voluntarily do individuals respond to incentives to join sponsored or tax subsidised arrangements if encouraged by the government and if individuals are prepared to make such arrangements and where saving is voluntary do they save enough to replace previous prospective public pension flows

capital mobility in developing countries some measurement issues and empirical estimates an economy s financial integration with the outside world the extent of capital mobility across its borders is a key determinant of some of its most important macroeconomic properties yet little is known about this characteristic of many developing economies an important stumbling block in the empirical assessment of financial integration openness is the many approaches to measuring it the author describes and evaluates different tests of capital mobility surveys existing evidence and applies four tests of capital mobility to assess the degree to which the many developing countries tested have achieved integration with the world financial markets the four tests are the 1 magnitude of gross capital flows 2 uncovered interest rate parity 3 strength of saving investment correlations and 4 behavior of domestic consumption over time the evidence suggests that most developing countries can be considered to be financially open in only 18 of the 57 developing countries classified did the data fail to show financial openness and that many countries may be experiencing an increased degree of integration with world financial markets

saving in developing countries theory and review in the literature on economic development much of the interest in saving has been focused on the relation between saving and growth but saving is not only about accumulation it is about smoothing consumption in the face of volatile and unpredictable income and helping to ensure the living standards of poor people whose lives are difficult and uncertain this paper develops a model of households which cannot borrow but which accumulate assets as a buffer stock to protect consumption when incomes are low such households dissave as often as they save do not accumulate assets over the long term and have on average very small asset holdings but their consumption is markedly smoother than their income much of the evidence is as consistent with this view of saving as it is incosistent with standard views of smoothing over the life cycle and with explanations of the link between saving and growth in terms of life cycle saving behavior consumption smoothing is also a useful way of thinking about government policy where volatility in the world prices of taxed commodities can generate sharp fluctuations in government revenues as well as reallocations of revenue between the private and public sectors many important policy issues in developing countries hinge on issues of consumption and smoothing and research on these issues is currently likely to be more productive than work on the relation between saving and growth

financial liberalisations in latin america in the 1990s a reassessment this paper studies the experience of latin america latam with financial liberalisation in the 1990s the rush towards financial liberalisations in the early 1990s was associated with expectations that external financing would alleviate the scarcity of saving in latam thereby increasing investment and growth yet the data and several case studies suggest that the gains from external financing are overrated the bottleneck inhibiting economic growth is less the scarcity of saving and more the scarcity of good governance a possible interpretation for these findings is that in countries where private savings and investments were taxed in an arbitrary and unpredictable way the credibility of a new regime could not be assumed or imposed instead credibility must be acquired as an outcome of a learning process consequently increasing the saving and investment rates tends to be a time consuming process this also suggests that greater political instability and polarisation would induce consumers to be more cautious in increasing their saving and investment rates following a reform hence reaching a sustained take off in latin america is a harder task to accomplish than in asia

inequality saving and global imbalances a new theory with evidence from oecd and asian countries global imbalances are attributable to savings deficiency in some economies and savings glut in others the recent global crisis has triggered widespread social conflict over income inequality the inequality saving link has again become a pressing issue needing serious attention we present a new theory to explain why the link between inequality and saving is negative in oecd countries but positive in emerging asia we also offer an econometric analysis of differences in inequality saving links between those economies we find that aggressive financial services lead to a negative link by creating income illusion for overconsumption but imperfect financial markets contribute to a positive link by interacting with industrial policies as part of growth strategies while ignoring liquidity constraints on consumption

household saving behaviour in an extended life cycle model a comparative study of china and india abstract this paper examines the determinants of household saving in china and india over the last few decades using the life cycle model with appropriate modifications to account for the expected benefits of pension saving consistent with the predictions made in the life cycle model higher income growth promotes more household saving and higher age dependency does the opposite an increase in the inflation rate appears to encourage household saving interestingly the evidence suggests that an increase in expected pension benefits tends to discourage household saving in china in the long run but the reverse is found in india

a theory of debt and equity diversity of securities and manager shareholder congruence this paper shows how the optimal financial structure of a firm complements incentive schemes to discipline managers and how the securities return streams determine the claim holders incentives to intervene in management the theory rationalizes 1 the multipucity of securities 2 the observed correlation between return streams and control rights of securities and 3 the partial congruence between managerial and equity holder preferences over policy choices and monetary rewards as well as the low level of interference of equity in management the theory also offers new prospects for a reappraisal of the earlier corporate finance literature

determinants of household saving in taiwan growth demography and public policy this article examines the determinants of household saving in the process of economic development in the light of the taiwanese experience during the period 1952 99 the methodology involves the estimation of a saving rate function derived within the life cycle framework it is found that the household saving rate rises with both the level and the rate of growth of household disposable income the real deposit rate has a significant positive impact but the magnitude of the impact is modest public saving seems to crowd out private saving but less than proportionately while both old and young dependency in population have a negative impact on the saving rate the magnitude of the impact of the former is far greater than that of the latter increased availability of social security provisions and enhanced credit availability also seem to reduce saving as regards methodological implications the study casts doubt on the usual practice of lumping together public corporate and household savings in savin

patience and prosperity abstract this paper introduces wealth dependent time preference into a simple model of endogenous growth the model generates adjustment dynamics in line with the historical facts on savings and economic growth in europe from the high middle ages to today along a virtuous cycle of development more wealth leads to more patience which leads to more savings and further increasing wealth savings rates and income growth rates are thus jointly increasing during the process of development until they converge towards constants along a balanced growth path during the transition to modern growth an economy in which the association of wealth and patience is stronger overtakes an otherwise identical economy and generates temporarily diverging growth rates

effects of transitory shocks to aggregate output on consumption in poor countries this paper provides instrumental variables estimates of the response of aggregate private consumption to transitory output shocks in poor countries to identify exogenous unanticipated idiosyncratic and transitory variations in national output we use year to year variations in rainfall as an instrumental variable in a panel of 39 sub saharan african countries during the period 1980 2009 our estimates yield a marginal propensity to consume out of transitory output of around 0 2 to explain this result we show using instrumental variables techniques that there is a significant negative effect of transitory output shocks on net current transfers and a significant positive and quantitatively large effect on the trade balance an important implication is that frictions to private financial flows do not necessarily imply large effects of transitory shocks to aggregate output on private consumption in poor countries

taxation and savings a neoclassical perspective this paper discusses recent neoclassical analyses of taxation and savings contrary to the popular view that fiscal policy has highly ambiguous impacts on savings neoclassical models admit a host of policies with clear and potentially quite powerful affects on the accumulation of wealth the paper considers four fundamental types of fiscal policies and compares their quantitative affect on savings the essential elements of these policies involve inter and intragenerational redistribution marginal and intra marginal taxation and the level of government consumption conventional accounting measures of taxes spending and deficits provide at best little guide to changes in underlying fiscal instruments and at worst precisely opposite indicators of the direction of such changes indeed the continued use of and concern with conventional fiscal measures is symptomatic of wide spread fiscal illusion these points are developed within the context of certainty models the paper also considers the role of fiscal policy in both mitigating and exacerbating economic risks facing the private sector since precaution is a major motivation for saving governments can greatly influence wealth accumulation either by using fiscal policy to pool private risks or by making fiscal policy itself highly uncertain this abstract was borrowed from another version of this item