income inequality unemployment and suicide a panel data analysis of 15 european countries most panel data studies have employed overall suicide rates male and female to identify the determinants of suicide this research has also neglected the use of country specific linear time trends neglecting these factors may confound the empirical estimates of socio economic variables due to the impact of unobserved country specific determinants of suicide that are time varying empirical results from 15 european countries between 1970 and 1998 support this hypothesis specifically economic growth fertility rate and alcohol consumption seem to have a significant impact on male and female suicide rates after the inclusion of country specific linear trends contrary to prior studies suicide rates were not sensitive to income levels female labour participation rates and unemployment in addition the effect of divorce rate is specific to gender finally the results also illustrate the importance of employing age specific suicide rates compared to what has been traditionally used in trying to evalu

purchasing power parity based on effective exchange rate and cointegration 25 ldcs experience with its absolute formulation abstract with the development of cointegration technique the purchasing power parity ppp theory has received renewed attention most studies have tested the theory by using data from developed countries dcs and some high inflation less developed countries ldcs they have mostly rejected its empirical validity in this paper we use the concept of effective exchange rate and quarterly data over 1973 1988 to examine the experience of 25 ldcs for most countries we found little empirical support for the ppp

purchasing power parity and the pound dollar rate in the 1930s opponents of flexible exchange rates have stressed their volati lity during the 1930s while advocates of flexible exchange rates have stressed their relationship to fundamental economic variables the author reconciles the two views allowing that although exchange rates did move to preserve pruchasing power parity in the long run there could be substantial deviations from purchasing power parity in the short run for the pound dollar rate the source of the large fluctuations in the early 1930s lay in the asymmetric response of foreign exchange markets to fluctuations in britain and america while the latter adhered to the gold standard copyright 1987 by the review of economic studies limited

determinants of the equilibrium real exchange rate n b professor neary was based at university college dublin and queen s university ontario canada when this article was first published the full text of this article is not available in ora at this time citation neary j p 1988 determinants of the equilibrium real exchange rate american economic review 78 1 210 215

deviations from purchasing power parity in the long run this paper demonstrates that deviations from purchasing power parity reveal a remarkable and possibly startling consistency with martingale behavior during both fixed and flexible rate periods for a wide variety of countries and in both monthly and annual data since this pattern appears to be much more general than one would expect on the basis of models founded on international commodity arbitrage the paper proposes an alternative explanation which instead relies on financial arbitrage in bonds as the underlying mechanism this paper will demonstrate that deviations from purchasing power parity ppp reveal a remarkable and possibly startling consistency with martingale behavior during both fixed and flexible exchange rate periods for a wide variety of countries and in both monthly and annual data this pattern appears to be much more general than one would expect on the basis of models founded on international commodity arbitrage the paper therefore proposes an alternative explanation which does not presuppose free trade in goods but which instead relies on financial arbitrage in bonds as the underlying mechanism the major implication of the theory and the results is that ppp is as likely to be violated in the long as in the short run as an empirical matter deviations from ppp can be observed for most currencies at any instant see kravis et al 21 stockman 37 and genberg 15 among others these deviations are typically both cumulative and persistent the real exchange rate can remain on either side of parity for lengthy but variable time intervals of a year or more as a consequence the current consensus shared

alcohol related crashes and alcohol availability in grass roots communities this paper employs a unique panel data from 111 small non metropolitan incorporated cities in california during a 108 month period from january 1981 to december 1989 in order to analyse the effect of alcohol availability on highway safety negative binomial regression models are estimated which include alcohol licences per square mile as a measure of alcohol availability theoretically the sign of the alcohol licence density is indeterminate as it reflects a trade off of its effect on traffic exposure and on the time price alcohol among the findings increases in the density of general alcohol licences for off site on site alcohol consumption are beneficial detrimental to highway safety whereas increasing the density of beer wine licences have non uniform effects additional findings important to municipal policymakers are that dui arrests and increasing the price of alcohol reduce alcohol related crashes

free trade agreements and market integration evidence from south korea abstract we consider the effects of free trade agreements on market integration between south korea and its solo and trade bloc fta partners free trade agreements should reduce tariffs and trade costs and lead to faster home to foreign price convergence we investigate these ideas with a non linear self exciting threshold autoregressive tar model by introducing a threshold break at the effective fta date this strategy allows us to consider 1 whether trade costs have declined after the free trade agreement and 2 whether the speed of mean reversion in the home foreign price differential is faster after the fta our study includes nine of south korea s free trade agreements and covers twenty eight partner countries we find evidence that after free trade agreements trade costs have been reduced for nine countries providing evidence that greater market integration has been achieved on this score however evidence on whether the speed of home to foreign price convergence increases after free trade agreements is lacking

purchasing power parity yet again evidence from spatially separated commodity markets abstract this paper examines the empirical validity of the law of one price by exploiting the non stationarity of prices set in us dollars of varieties of wheat that are traded simultaneously in the usa rotterdam and japan we demonstrate the crucial role of transport costs in achieving cointegration long run ppp although systematic short run deviations from ppp occur we show that this does not imply profitable arbitrage opportunities jel c5 f3 g1

a reexamination of balassa s productivity bias hypothesis rency by ri s the price level in country i by pi and the price level in the united states by pu s the ppp theory postulates that ri u s pi pu s many studies have tried to verify whether exchange rates follow the path outlined by the ppp equation the empirical results at best are inconclusive for example j a frenkel tested the ppp by drawing data from the 1970s and showed that the ppp failed on the other hand n davutyan and j pippenger criticized frenkel s work and reversed his conclusion 2 both studies used ordinary least squares and two stage least squares methods even recent studies that have used a relatively modern econometric technique cointegration analysis have mostly rejected the ppp 3 several reasons have been given in the literature for the failure of the ppp or deviation of the ppp based exchange rates from equilibrium exchange rates including lack of free trade existence of transaction costs existence of nontradables simultaneity problems different weights used in constructing different national price indexes money and asset prices and real factors or real variables among the real variables the productivity differential between two countries has received most of the attention in the literature if we denote the market determined equilibrium exchange rate by re and the ppp based rate by pi pu s following the literature we

a comparison of unemployment income and mortality interaction for five european countries the relationship between unemployment and health status is examined in a comparative study of five european countries using a time series model the hypothesis considered in this paper is that the secular decline in mortality rates can be attributed to the secular rise in real per capita income and that the remaining fluctuations in mortality rates can be explained by cyclical movements in income and variations in unemployment the data concern the federal republic of germany france italy sweden and ireland

the collapse of purchasing power parities during the 1970 s one of the striking facts concerning the relationship beiveen prices and exchange rates during the 1970 s has been the dismal performance of the predictions of the simple versions of the purchasing power parity doctrine ppp that doctrine in its absolute version states that the equilibrium exchange rate between domestic and foreign currencies equals the ratio of domestic to foreign price levels the relative version of the doctrine relates equilibrium changes in exchange rates to changes in the ratio of domestic to foreign prices during the 1970 s short run changes in exchange rates bore little relationship to short run differentials in national inflation rates and frequently divergences from purchasing power parities have been cumulative this paper reviews and analyzes the empirical record of exchange rates and prices during the 1970 s and the analysis is based on the experience of the dollar pound the dollar frecch franc and the dollar dm exchange rates section 2 presents the evidence on ppp during the 1970 s and contrasts it with the evidence from the 1920 s a period during which the doctrine held up reasonably well this analysis is relevant for assessing whether the flexible exchange rate system was successful in providing national economies with an added degree of insulation from foreign shocks and whether it provided policymakers with an added instrument for the conduct of macroeconomic policy the evidence regarding devia tions from purchasing power parities is also relevant for determining whether there is a case for managed float section 3 attempts to explain what went wrong with

unit roots and the real exchange rate before world war i the case of britain and the usa abstract unit root and cointegration tests indicate that the dollar pound real exchange rate was stationary during the us greenback and gold standard periods purchasing powwer parity ppp performed about equally well in the two periods and better than in recent years deviations from ppp were corrected by changes in british prices and us gold dollar prices greenback prices did not adjust the similarity of the adjustment parameters in the two periods suggests that expectations of a return to gold were embedded in the greenback price of gold

purchasing power parity a quantitative reassessment of the 1920s experience abstract the purpose of this paper is to test the hypothesis of purchasing power parity the basic methodology is to start by estimating a general distributed lag equation relating the excchangr rate to its own past and to current and past relative price levels successively more restricted version are then proposed and tested against the general model two interesting facts come out of this one is that the proportionality restrictin is not supported by the data and the other is that all the models estimated by frenkel 1978 are rejected in favor of less restricted models

does ppp hold in the transition economies the case of poland hungary this paper uses non stationarity and cointegration of time series to investigate the validity of long run purchasing power parity for poland and hungary for the period 1981 1 1993 2 long run ppp is examined vis a vis three countries the united states united kingdom and germany although the nominal exchange rates and relative price ratios between poland and hungary and each of the three countries are non stationaary they are not cointegrated indicating a rejection of the hypothesis this conclusion is supported by the real exchange rate which follows a random walk

natural resource economics under the rule of hotelling abstract natural resource stocks held in situ are physical assets equilibrium in the assets market requires that their rates of return be such that their owners are just willing to hold on to them rather than invest elsewhere i discuss a number of factors relating to the evolution of extraction costs to the durability of the resource to market structure and to uncertainty that are important in correctly characterizing the rate of return on holding exhaustible natural resource stocks the emphasis is put on how those factors can potentially help bridge the gap between the basic hotelling s rule of natural resource exploitation and the historical behaviour of the flow price of a number of resources i also highlight some theoretical and empirical issues that need further attention

the u s current account a long and short run empirical perspective the persistence of the u s current account deficit is thought to be one of america s foremost economic problems an omen of a decline in u s economic hegemony that seems even more foreboding in the wake of plans for europe 1992 the u s current account balance began its sustained decline in the third quarter of 1982 having earlier hovered anywhere from an annualized surplus high of 22 2 billion to a deficit low of 26 64 billion between 1973 and 1982 beginning in the third quarter of 1982 the u s current account balance registered an annualized deficit of 29 billion this would be but one of many yet one of the smallest steps down the road to the triple digit deficits that have endured throughout the 1980s and remain today is the persistence of the current account deficit now in its eighth year an indication of a trend which fiscal prudence exchange rate intervention increases in u s competitiveness or demand stimulus abroad cannot suspend in the long run these issues are investigated by using the more recent work on unit roots and cointegration applications that have not yet been made regarding trade issues and trade related data granger causality tests are also used to investigate the short run causes of the current account deficit

entrepreneurship social mobility and income redistribution in south india development economists have been preoccupied with the problem of increasing the size of the gnp pie to the relative neglect of its distribution despite the recent disenchantment with the viewpoint that all classes share in the benefits of industrial growth empirical data on the distribution of income business opportunity and economic power are in short supply many of the studies on entrepreneurship and economic development when they are not apologetics for ruthless capitalist exploitation as paul baran suggests extol the achievements of the capitalist entrepreneur without examining class origins and monopoly advantage joseph schumpeter sees entrepreneurs irrespective of class origin as heroic figures with the dream and will to found a private kingdom to conquer adversity to achieve success for its own sake and to experience the joy of creation for gustav papanek 1967 the private entrepreneur who is frugal diligent far sighted remarkably able and willing to take political risks is in large part responsible for the success of pakistan in achieving rapid industrialization

an international comparison of prices and exchange rates a new test of purchasing power parity abstract this paper introduces a new approach based on divisia index numbers to test ppp with both short run and long run data for all major currencies simultaneously the short run results indicate that the predictions of ppp do not hold up at all well on the other hand however the long run data are quite consistent with the ppp hypothesis the results also identify five years as a broad measure of the length of the long run insolar as ppp is concerned

purchasing power parity as a long run relation dickey fuller and stock watson tests of purchasing power parity ppp as a long run proposition are provided within the cointegration framework proposed by granger since different countries use different weights to construct price indices the traditional constraint that the coefficients on the price indices should be unity in the log linear ppp relation is relaxed the absence of a general ppp relation cannot be rejected at most a ppp relation is indicated in five out of fifteen country pairs that are examined even if a long run ppp relation exists it is not found to be useful in predicting future nominal exchange rates which is consistent with efficient speculative markets

post bretton woods deviations from purchasing power parity in g7 exchange rates an empirical exploration abstract exchange rates have deviated substantially and idiosyncratically from purchasing power parity ppp since the breakdown of bretton woods in this paper a model incorporating both traditional ppp and financial market variables is constructed and tested on the us dollar s six g7 exchange rates during the floating rate era empirical tests show that the model s common set of variables with consistent signs can explain the divergent behavior of g7 exchange rates during 1973 2 90 2 idiosyncracies are reflected in different subsets of the model s variables entering significantly into each exchange rate s regression the existence of stable relationships is demonstrated by the equations co integration

empirical determinants of purchasing power parity deviations abstract this paper investigates the empirical determinants of purchasing power parity ppp deviations over the recent period of flexible exchange rates transitory ppp deviations arise in a world in which prices are sticky but where exchange rates respond instantaneously to news permanent ppp deviations occur when price indices differ across countries and the world is subject to real shocks regressions consistent with the hypothesis that current exchange rate changes create immediate ppp deviations which are slowly dissipated but not eliminated imply that both sticky prices and real shocks are responsible for the recent failure of ppp

purchasing power parity in the long run a test of the dollar pound exchange rate 1890 1978 this paper tests the purchasing power parity ppp hypothesis by analyzing t he long run tendency of the dollar pound exchange rate using data sin ce 1890 two different models are considered 1 a na ive model and 2 a modified monetary model the conditions of propor tionality and symmetry cannot be rejected when using the naive model the final results using the monetary model however indicate that t he existence of permanent deviations from ppp cannot be ruled out copyright 1987 by ohio state university press

purchasing power parity and cointegration the greek evidence from the 1920s abstract this paper presents empirical evidence which supports the purchasing power parity ppp hypothesis for three bilateral exchange rates involving the greek drachma during the 1920s using the technique of cointegration of economic time series the results are obtained for a period of high money supply growth and a high and variable rate of inflation which gave rise to large differentials in price movements between greece and the other countries the speed at which long run ppp was reached following a shock was 50 per cent per month confirming the results of other studies of ppp over the 1920s and explaining the supportive evidence for long run ppp even though data over a short period were used jel f31

a practical approach to oil wealth management application to the case of kazakhstan abstract this study presents a practical approach to oil wealth management by bringing together various dimensions oil production and sustainability of oil reserves impact on the economy and the balance of trade and the impact on the fiscal balance government debt and the national oil fund within a long term planning framework the study provides a quantitative depiction of the above dimensions to 2050 for the case of kazakhstan where the country s oil output has grown from about 0 6 million barrels day mb d in the late 1990s to 1 8 mb d in 2013 and it is expected to reach a peak of 3 5 mb d by 2035 the analysis of this study indicates that within the limits of proven oil reserves kazakhstan s oil production capacity would collapse to negligible amounts after the peak period of 2035 this envisaged scenario will have undesirable impacts on the economy balance of trade and fiscal balance both prior and after 2035 to avoid these erratic impacts the study examines an alternative conservative production scenario that would enable the country to maintain its level of oil production until 2050 and to manage better the transition to a non oil economy

policy convergence the exchange rate mechanism and the misalignment of exchange rates some tests of purchasing power parity and generalized purchasing power parity the paper focuses on the convergence issues and the long run credibility of the european monetary system ems and more specifically on the evaluation of the effectiveness of the exchange rate mechanism erm in generating a stabilizing effect on real exchange rates across member countries for this purpose we execute some tests of long run purchasing power parity ppp for an erm group and a non erm group of countries using both the engle and granger procedure and the more powerful johansen cointegration technique we also execute a test of generalized ppp exploiting an idea developed by enders and hurn testing for ppp in a multicountry setting may be a useful methodology to identify the optimal currency area suggested by the data generation process on the basis of the reported homogeneity of real exchange rate behaviour of the countries considered

unemployment and mortality in post war scotland abstract one of the more controversial topics in the literature examining the influence of unemployment on health is the hypothesised relation between unemployment and mortality this paper presents a time series analysis of unemployment and mortality in post war scotland using a variety of model specifications and several measures of the age and duration structure of male unemployment we find little evidence of a consistent association between unemployment and male mortality from all causes in different age cohorts unemployment however appeared to be more closely associated with variations in mortality rates from ischaemic heart disease but the direction of effect was sensitive to the choice of maximum lag length between unemployment and mortality there was also little evidence that per capita real incomes or health expenditure exerted a significant influence on mortality our general findings and the methodological limitations of macro studies of the relationship between unemployment and mortality highlight the importance of investigating the health consequences of unemployment using well controlled longitudinal studies of individuals

aggregation and the estimated effects of economic conditions on health this paper considers the relationship between economic conditions and health with a focus on different approaches to geographic aggregation after reviewing the tradeoffs associated with more and less disaggregated analyses i update earlier state level analyses of mortality and infant health and then consider how the estimated effects vary when the analysis is conducted at differing levels of geographic aggregation this analysis reveals that the results are sensitive to the level of geographic aggregation with more disaggregated analyses particularly county level analyses routinely producing estimates that are smaller in magnitude further analyses suggest this is due to spillover effects of economic conditions on health outcomes across counties

do real exchange rates follow a nonlinear mean reverting process in developing countries in an effort to fight relatively high inflation many developing countries try to manage their nominal exchange rates through official intervention in addition developing countries tend to have high transportation costs tariffs and nontariff barriers these factors are among the sources of generating nonlinearity in real exchange rates and hence some nonlinear adjustment toward purchasing power parity ppp in developing countries in this paper we employ monthly real effective exchange rate reer data of 88 developing countries and test the null of nonstationarity versus an alternative of linear stationarity by the means of a conventional unit root test and compare the results with those obtained from a new test in which the null is the same but the alternative hypothesis is nonlinear stationarity the latter test supports the ppp theory in more developing countries compared with the former test suggesting that nonlinear adjustment toward ppp in developing countries is an important phenomenon reported country characterizations indicate that reversion in reer occurs more often for high inflation countries and for countries with high flexibility in their exchange rates

economic factors and traffic crashes in new zealand the aim of this study was to examine the changes in the trend and seasonal patterns of fatal crashes in new zealand in relation to changes in economic conditions between 1970 and 1994 the harvey harvey and durbin journal of the royal statistical society 149 3 187 227 1986 structural time series model stsm an unobserved components class of model was used to estimate the quarterly number of fatal traffic crashes independent variables included distance travelled the unemployment rate uer real gross domestic product per capita rgdp the proportion of motorcycles the proportion of young males in the population alcohol consumption per capita the open road speed limit and dummy variables for the 1973 and 1979 oil crises and seatbelt wearing laws distance travelled rgdp uer and alcohol consumption per capita were significant factors in explaining the short run dynamics of fatal crashes with the effect of rgdp greater than uer increases in either rgdp or uer were related with decreas

systems of bilateral real exchange rates it is agrued that purchasing power partly should not be tested as a series of separate bilateral relationship instead a country s set of bilateral real exchange rates should be tested as a complete system this study implements such an approach on two different datasets for the group of seven major industrial countries the results contrast sharply with the related work carried out by abuaf and jorion 1990 a tentative theoretical framework is sketched against which the results can be interpreted

the measurement of inflation a stochastic approach the stochastic approach to index number theory views each commodity price change as an independent observation on the underlying rate of inflation so that inflation can be estimated by averaging over all the prices this article extends the approach by a allowing for sustained changes in relative prices b showing the link with divisia index numbers and c deriving standard errors for the inflation estimates the results are illustrated with australian data

cointegration tests of purchasing power parity the case of swiss exchange rates abstract this paper tests purchasing power parity ppp as a long run equilibrium condition by examining the long run relationshiop between exchange rates and wholesale price indices using cointegration tests this paper avoids some of the problems of previous cointegration tests of ppp by using more precise data pretests and by not imposing a priori restrictions upon the cointegrating vector of the nine combinations of swiss exchange rates and price indices examined cointegration is detected in seven cases thus supporting ppp as a long run equilibrium jel f31 c32

a model of uk real effective exchange rate behaviour an integrated model of the uk real effective exchange rate is examined which links purchasing power parity with trade flow and asset market mechanisms furthermore time series and econometric analysis using quarterly data from 1972 to 1987 are applied the results obtained are broadly consistent with this model and imply that the uk real effective exchange rate index is constant in the long run

haircuts or hysteresis sources of movements in real exchange rates abstract we empirically assess the importance of two sources of real exchange rate movements in models where ppp holds only among traded goods real exchange rate variation results from relative price movements within countries an alternative explanation relies on hysteretic price setting and nominal exchange rate changes using disaggregated price data from 11 oecd nations we find some support for the non traded goods models for example prices of haircuts in canada and the united states are unrelated in the long run we find stronger evidence to support models that emphasize sticky prices transportation costs or other impediments to frictionless trade

long run purchasing power parity revisited a monte carlo simulation the existence of long run purchasing power parity ppp implies that a cointegration vector of nominal exchange rate domestic price and foreign price is expected regardless of using the engle granger two step method or johansen maximum likelihood approach however this paper has found conflicting results the engle granger technique tends to reject the long run ppp hypothesis whereas the johansen method is generally supportive of long run ppp via monte carlo simulations the present paper finds that the johansen approach has a bias toward supporting long run ppp especially under the circumstances in which the assumption of normally or and independently and identically distributed disturbance terms is violated

economic fluctuations and health outcome a panel analysis of asia pacific countries the purpose of this study is to assess the effects of economic fluctuations on health outcome by using data obtained from eight asia pacific countries over the period 1976 to 2003 and a fixed effects model to conduct the regression analysis the results of this study indicate that unemployment rate is negatively and significantly correlated with total mortality and mortality rates from cardiovascular diseases motor vehicle accidents and infant mortality these findings are consistent with the view that health may improve during economic downturns in addition suicide is found to move countercyclically with economic fluctuations socioeconomic factors such as age and gender also play important roles in affecting the mortality rates the results also show that unemployment has a stronger immediate and contemporaneous rather than a sustained effect on mortality rates finally this study concludes that the effects of economic fluctuations on health outcome tend to lead to erroneous conclusions if the fi

a panel project on purchasing power parity mean reversion within and between countries abstract previous time series studies have shown evidence of mean reversion in real exchange rates deviations from purchasing power parity ppp appear to have half lives of approximately four years however the long samples required for statistical significance are unavailable for most currencies and are potentially inappropriate because of regime changes in this study we re examine deviations from ppp using a panel of 150 countries and 45 annual post wwii observations our panel shows strong evidence of mean reversion that is similar to that from long time series ppp deviations are eroded at a rate of approximately 15 annually i e their half life is around four years such findings can be masked in time series data but are relatively easy to find in cross sections

purchasing power parity and real factors it is acknowledged that purchasing power parity ppp fails in empirical tests the position adopted is that real factors are an omitted variable from the ppp relationship and are the cause of divergences from ppp the real exchange rate as being determined by supply and demand shift factors as in stockman 1987 and neary 1988 is modelled we then empirically estimate a real exchange rate equation and use the fitted value as a generated regressor in tests of ppp it is demonstrated that when changes in the real exchange rate are incorporated into the ppp relationship ppp improves

pro cyclical mortality across socioeconomic groups and health status abstract using variation across geographic regions a number of studies from the u s and other developed countries have found more deaths in economic upturns and less deaths in economic downturns we use data from regions in norway for 1977 2008 and find the same pro cyclical patterns using individual level register data for the identical population we find that disadvantaged socioeconomic groups are not hit harder by pro cyclical mortality than advantaged groups we also find that other indicators of deteriorated health than death like becoming disabled are pro cyclical overall our analysis suggests that pro cyclical mortality is rather related to deaths of people already in deteriorated health than to people of low socioeconomic status

recessions healthy no more abstract over the 1976 2010 period total mortality shifted from strongly procyclical to being weakly or unrelated to macroeconomic conditions the association is likely to be poorly measured when using short less than 15 year analysis periods deaths from cardiovascular disease and transport accidents continue to be procyclical however countercyclical patterns have emerged for fatalities from cancer mortality and external causes among the latter non transport accidents particularly accidental poisonings play an important role

resources as a constraint on growth for a considerable part of its history the american economy has functioned as a cowboy economy it has been a cowboy economy in the sense that there have been no important resource constraints on growth this is not to say that land minerals and a clean environment have been freely available rather agricultural land could be obtained at roughly constant costs most essential minerals have been present at fairly high grade in considerable abundance and the environment could be used as a sink without becoming fouled in the last several decades however cropland has stayed almost constant some high grade mineral deposits have been exhausted and the carrying capacity of our environment has been strained the scarcity of resources has led many to argue that the operating rules of our economy must change whereas in the cowboy economy we could afford to use our resources profligately the new view of economic growth is that the closing of all our frontiers means that we are now operating in a spaceship economy in a spaceship economy great attention must be paid to the sources of life and to the dumps where our refuse is piled things which have traditionally been treated as free goods air water quiet natural beauty must now be treated with the same care as other scarce goods it would seem difficult to question the observation that the world economy is progressing toward a closed system many have carried this observation further describing a future imperiled by famine depleted of essential materials running out of energy or choking in its own exhaust fumes behind these pessimistic visions is a deeper skepticism about the very fruits of economic growth economists have for the most part ridiculed the new view of growth arguing that it is merely chicken little run wild i think that the new view of growth must be taken seriously and analyzed carefully what have we learned about the new view the first set of studies relates to theoretical investigations by theoretical i mean propositions based on largely untested assumptions about model structure perhaps hypothetical would be a more accurate term in this category belong the celebrated writings sponsored by the club of rome as well as many offshoots of this work jay forrester dennis h meadows et al these works have demonstrated that under certain conditions involving technology population and resource availability a sustained growth path for consumption is not possible the conclusions of these works have not generally been accepted by economists because of the dubious nature of many of their assumptions in particular the assumptions regarding population growth and technology are quite unsatisfactory several authors have shown that the conclusions of these models are not robust to minor modifications in structure thus r boyd showed that introducing a new factor called technology would drastically alter the model s path my work 1973a showed that any of three changes in model structure ongoing technological progress adequate factor substitution or population decline would lead to opposite and more optimistic results it should be stressed however that all yale university

cointegration and tests of purchasing power parity nonstationarity in the levels of spot exchange rates and domestic and foreign price indices makes the use of conventional tests of the absolute version of purchasing power parity ppp inappropriate if ppp is true inter country commodity arbitrage ensures that deviations from a linear combination of spot exchange rates and domestic and foreign price levels should be stationary under these conditions exchange rates and price levels should form a cointegrated system we find the null hypothesis of no cointegration cannot be rejected for all five countries thus violating the long run absolute version of ppp

real dollar exchange rate under the bretton woods and floating exchange rate regimes abstract the focus of the paper is on real exchange rates for the dollar over the period 1957 to 1985 most such exchange rates followed an almost steplike pattern showing relatively little movement in the late 1950s and 1960s falling abruptly and then remaining low in the 1970s and finally in the 1980s rising back to levels close to those that prevailed initially contrary to much recent commentary therefore the period that appears different is not the last five years but the decade that preceded them an important factor underlying this pattern of exchange rate movement according to results presented in the paper was the behavior of monetary policy and hence inflation in the united states what remains to be established is the precise mechanism linking money and real exchange rates and the relative strength of those links

a test of the purchasing power parity hypothesis the purchasing power parity ppp hypothesis is examined in the case of less developed countries although the issue has been debated extensively in the context of the developed countries there has hardly been any study using the experience of the less developed countries quarterly data from four countries is used for the period 1961 1 1990 4 and hardly any evidence is found of the hypothesis a special test namely a cointegration test designed for the hypothesis has been implemented

an empirical examination of long run purchasing power parity using cointegration techniques this paper presents an empirical analysis of long run purchasing power parity ppp for five major exchange rates using recently developed econometric techniques on the cointegration of economic time series our empirical results are extremely unfavourable to the ppp hypothesis as a long run equilibrium condition even with an allowance made for measurement error and or tranportation costs in particular we are unable to reject the hypothesis of non cointegration of the exchange rate and relative prices for any of the countries concerned far from finding a stable long run proportionality between exchange rates and relative prices our results therefore suggest that they tend to drift apart without bound

unemployment and infant health times series evidence from the state of tennessee this is the first study that decomposes unemployment into its structural and cyclical components and investigates their impact on income distribution controlling for the influence of inflation increases in structural unemployment have a substantial

is there trend reversion in purchasing power parity abstract this study presents some empirical evidence on purchasing power parity ppp using residualbased co integration tests engle and granger s 1987 tests and the ratio of the variance of higher order differences to the variance of the first difference of the residuals of the cointegrating regression are used monthly data over a span of 30 years do not provide any empirical support to the theory conversely in the annual data long run equilibrium tendencies are evident since ppp has been widely used to provide an anchor for the equilibrium exchange rate our results indicate that such an assumption is not completely inadequate

purchasing power parity and relative price variability evidence from the 1970s abstract one curious fact to emerge from the return to flexible exchange rates in the 1970s was the failure of empirical tests of simple versions of the purchasing power parity ppp doctrine this paper seeks to establish whether that observed poor performance of ppp can be attributed to uncertainty regarding the rate of inflation due to the large variations in relative prices experienced during the 1970s the evidence is found to be unsupportive of the notion