the efficient hypothesis and deregulation the greek case the impact is examined of the 1988 monetary deregulation in greece on the efficiency of the foreign exchange market a news model reveals that the deregulation of the monetary system contributed to the presence of an efficient foreign exchange market

the new institutional economics this outstanding book presents new original contributions from some of the world s leading economists including ronald coase douglass c north masahiko aoki oliver e williamson and harold demsetz it demonstrates the extent and depth of the new institutional economics research programme which is having a worldwide impact on the economics profession

formal schooling and workforce participation in a rapidly developing economy evidence from compulsory junior high school in taiwan abstract using 18 consecutive household surveys this study explores the impact of taiwan s extension of tuition free education from 6 to 9 years upon schooling and labor market outcomes participation sector class of activity and work income i estimate upward shifts relative to preexisting trends of more than 0 4 years of education for males and 0 25 years for females in the first six cohorts affected by compulsory junior high schooling utilizing inter cohort variation within an instrumental variables iv strategy i find larger effects of schooling on females workforce participation and total earnings even controlling for selection

the regulatory treatment of utility diversification recent regulatory reform has gradually relaxed the constraints on vertical and horizontal diversification of public utilities after earlier strategies of conglomerate diversification utilities more recently started to expand into domestic and international activities more closely related to their core business sound diversification may improve corporate performance but raises complicated policy issues in firms operating in both regulated and unregulated markets the paper studies the problems of cross subsidization risk shifting and profit shifting that may result under conditions of partial regulation policy approaches that enable firms to pursue efficient diversification while reducing inefficient diversification incentives created by partial regulation are being analyzed

the speculative efficiency hypothesis the hypothesis that forward prices are the best unbiased forecast of future spot prices is often presented in the economic and financial analysis of futures markets this paper considers the hypothesis independently of its implications for rational expectations or market efficiency and in order to stress this fact the term speculative efficiency is used to characterize the state envisaged under the hypothesis if a market is subject to efficient speculation the supply of speculative funds is infinitely elastic at the forward price that is equal to the expected future spot price the expected future spot price is a market price determined as the solution to the underlying rational expectations macroeconomic model although the paper is primarily concerned with testing this hypothesis in the foreign exchange market the methodology introduced in the paper is of general application to all futures markets this abstract was borrowed from another version of this item

the government financial system and large private enterprises in the economic development of south korea abstract the paper investigates the main characteristics of the government business relationship in south korea in the past three decades to find out how it may have contributed to south korea s economic development it proposes that the government and large private enterprises in south korea should be viewed as constituting an internal organization namely a quasi internal organization as such extensive intervention by the government with south korea s financial system can be viewed as an internal capital market and consequently it could have led to a more efficient allocation of credit than possible in a free market financial system it also argues that the quasi internal organization has made it possible for the government to efficiently implement its developmental policies it is however pointed out that for the quasi internal organization to be successful in accelerating the pace of economic development the country must have a political leadership committed to the goal of economic development and must adopt an outward oriented development policy

agricultural development and the size distribution of personal income the tropical african experience abstract we use data from a sample of countries in tropical africa to investigate the relationship between relative income and growth rate of the agricultural sector and income inequality we find that an increase in the income of the agricultural sector relative to that of the non agricultural sector decreases income inequality the growth rate of agricultural production and the proportion of the labor force in the non agricultural sector were also found to be negatively correlated with income inequality

diversification by regulated monopolies and incentives for cost reducing r d the regulator is able to reduce the regulated revenue requirement due to the cost savings resulting from economies of scope then some of the benefits of joint production ultimately may be passed on to the consumers of the regulated products in the form of lower prices diversification into unregulated markets also increases the firm s incentives to engage in process innovation by providing opportunities for earning profits in unregulated markets investments in process innovation can lead to lower future costs of producing the regulated product and potential future price reductions to regulated customers i present a model of the firm s decision to diversify into an unregulated market and look at the implications of that decision for a firm s incentive to innovate and for consumer welfare the firm s choice is strongly influenced by the extent to which the regulator reduces the amount of fixed cost included in the regulated revenue requirement should the firm choose to diversify i show that if the regulator is able to observe production costs accurately at the time of a rate review then diversification increases the firm s incentive to innovate and leads to higher gains in consumers welfare over time

does money matter the robustness of evidence from vector autoregressions traditionally empirical macroeconomic research begins with the use of theory to construct a highly restricted structural econometric model the determination of the nature of those restrictions is fraught with difficulty and thus many specification decisions turn out to be largely ad hoc and of dubious validity once these specification issues have been probably inadequately addressed and a structural model constructed it is then estimated using complicated econometric techniques requiring sophisticated computer programs recently an alternative approach to modeling macroeconomic time series has come into wide use this alternative introduced by sims 1980a 1980b suggests the use of vector autoregression var models to analyze time series relationships among macroeconomic variables the fact that the use of this approach has proliferated widely in a relatively brief period of time is due not only to the very persuasive criticisms of traditional methods made by sims see especially sims 1980a but perhaps even more to the perception that specification and estimation problems are greatly simplified the user of the var approach imposes few restrictions and can generally use ordinary least squares estimation procedures the var approach is thus believed to be largely free of the spurious specification assumptions and consequent specification errors necessitated by traditional macroeconometric procedures

installed base and compatibility innovation product preannouncements and predation a good is often more valuable to any user the more others use compatible goods the authors show that this effect may inhibit innovation if an installed base exists and transition to a new standard must be gradual early adopters bear a disproportionate share of transient incompatibility costs this can produce excess inertia the installed base however is stranded if the new standard is adopted this may create excess momentum these dynamic effects have strategic implications temporary price cutting can permanently prevent entry and product preannouncements can be critical in innovation these strategic actions have ambiguous welfare effects

inequality democracy and institutions a critical review of recent research this paper surveys the theoretical and empirical literature on the effect of economic and political inequality on institutions the current understanding suggests that unequal societies develop exploitative and inefficient institutions empirical research which is scant and has mainly concentrated at cross national level supports to some extent the existence of an inverse relationship between inequality and institutions but more analysis is needed future empirical research should undertake country state and micro level analysis which are a necessary complement to aggregate level studies the effect of inequality could also take place indirectly through the influence of inequality on democratization

conditional variance and the risk premium in the foreign exchange market abstract we investigate the existence of a risk premium in the foreign exchange market based on the conditional variance of market forecast errors the forecast errors are assumed to follow the arch process introduced by engle 1982 estimation and diagnostic testing of the model are discussed and results are presented for the currencies of the united kingdom france germany japan and switzerland

changing labor market conditions and economic development in hong kong the republic of korea singapore and taiwan china in the newly industrializing economies nies of hong kong the republic of korea singapore and taiwan china the entire working population has benefited from labor market institutions the east asian nies attained and maintained generally full employment improved their job mixes raised real earnings and lowered their rates of poverty this article reaches two principal conclusions first labor market conditions continued to improve in all four economies in the 1980s at rates remarkably similar to their rates of aggregate economic growth second labor market repression was not a major factor in the growth experiences of these economies in the 1980s it thus appears that labor market repression is neither necessary nor desirable for outward oriented economic development

wage setting institutions and economic growth abstract wage setting institutions in several asian and latin american economies are compared and contrasted the asian economies have relied more on market wage determination whereas the latin american economies have encouraged institutions which push wages in key sectors up above market clearing levels market wage determination combined with exportled growth has resulted in rapidly rising real wages in the context of full employment in the asian

a reapraisal of the capital goods sector in hong kong the case for free trade abstract this paper was provoked by an earlier one by fransman 1982 in which he examined the functioning of the capital goods sector in hong kong and came to the conclusion that it needed special protection by the government to allow it to reap the benefits of externalities essential for increasing its design and production capabilities statistical evidence is provided indicating that the capital goods sector as conventionally defined is prospering even following fransman 1982 and equating the capital goods sector with the machine producing sector the latest survey of production indicates considerable dynamism his case for infant industry protection is further weakened by consideration of the nature of the particular industrial structure of hong kong and the quality of the social relations that prevail between entrepreneurs it is argued that the costs of singling out the capital goods sector for special treatment in terms of the impact of the highly competitive export oriented manufacturing sector are likely to be high while the theoretical benefits from externalities are liable to be illusory in a small economy

the new institutional economics and its applicability to development abstract the several remarkable developments in the social sciences which have come to be known as the new institutional economics nie have not yet been fully exploited for analyzing the determinants and effects of institutional change in the context of development this paper identifies two important components of the nie and illustrates both a potential complementarities between them and b their applicability to various problems and policies in the long term development of developing countries

export led development labour market conditions and the distribution of income the case of singapore the newly industrialising countries nics of east asia have attracted considerable attention in recent years and the impressive economic performance of the gang of four hong kong taiwan singapore and south korea in particular has played an important part in what little 1982 describes as the resurgence of neo classical economics in development thinking the experience of these outward looking export oriented economies is contrasted with the record of the more inward looking import substituting policies adopted by many other less developed countries ldcs and is interpreted as confirmation of the neoclassical thesis that economies which permit the market mechanism to establish a structure of equilibrium prices and incentives can expand in accordance with their comparative advantage generating significant employment gains rapid economic growth and improvements in income distribution the employment gains represent the predictable consequences of the expansion of labour intensive manufactured exports as little 1981 notes in his comparative study of south korea taiwan hong kong and singapore the major lesson is that labour intensive export oriented policies were the prime cause of an extremely rapid and labour intensive industrialisation p 42 the employment intensity of the export oriented industrialisation eoi strategy is in turn seen as the central factor behind improvements in income distribution thus balassa 1982 argues that gains in employment may also be obtained as exports increase the demand for labour and thereby improve income distribution p 59 fields 1984 reiterates the point quite simply if everyone in the labour force is employed at a market clearing wage inequality is less than if some are employed at higher than market clearing wages and others are unem ployed and earn nothing p 81 minimum government intervention has facilitated the efficient operation of the market fields 1984 for example regards the difference in wage setting processes supply and demand in the east asian nics institutional wage

moral hazard and nonmarket institutions dysfunctional crowding out or peer monitoring the authors examine a situation in which insurance is characterized by moral hazard when market insurance is provided supplementary mutual assistance between family and friends unobservable to market insurers will occur when nonmarket insurers have no better information than market insurers the mutual assistance not only crowds out market insurance but is also harmful and therefore dysfunctional alternatively when nonmarket insurers can observe each other s effort perfectly mutual assistance is beneficial these results point to the potential importance of peer monitoring mechanisms in mitigating moral hazard copyright 1991 by american economic association

atheoretical macroeconometrics a critique abstract the spurious nature of the restrictions used to identify many macroeconometric models has led some researchers to advocate a style of econometric inquiry that is less dependent on prior theoretical restrictions of the sort that were central to the approach of the cowles commission this development which we call atheoretical macroeconometrics is summarized and evaluated in the current paper it is contrasted with an updated version of the cowles commission approach we conclude that while some of the exercises of atheoretical macroeconometrics are valid those that have attracted the most attention and appear the most innovative exogeneity testing impulse response analysis and policy analysis using estimated vector autoregressions are based on incorrect analysis

wage differentials in brazil theory and evidence the investigation of wage determination and wage differentials in developing countries has concentrated on the effects of human capital and different sources of segmentation associated with institutional arrangements and structural characteristics on earnings in this article we use micro data for brazil for the 1980s and 1990s to test several competitive theories and models with segmentation explained by efficiency wages we find that unmeasured abilities and efficiency wage models seem to play a role in wage determination while compensating differentials and transitory difference theories were found to be irrelevant to wages formation

evidence of risk premiums in foreign currency futures markets benchmark portfolios for con sumption and wealth when the parameters rep resenting the prices of the covariance risks areheld constant no risk premiums are detected however when these prices are allowed to varywith the conditional expected returns and vari ances of the benchmark portfolios possibly reflect ing changing investment opportunities strong evi dence of risk premiums is obtained recent examinations of foreign currency futures datahave tested the hypothesis that today s futures priceis an unbiased predictor of tomorrow s price againstan unspecified alternative hypothesis the accumu lated evidence against the unbiasedness hypothesishas not been accompanied by evidence consistentwith a particular equilibrium risk premium model

employment income distribution and economic growth in seven small open economies resurgent interest has been manifested among development economists in trickle down i e the view that the more rapid the rate of economic growth the more rapid the improvement in employment and income distribution throughout this paper the term income distribution will refer to the location and dispersion of the pattern of incomes i e to absolute incomes and poverty and to relative income inequality empirical evidence supports trickle down in some cases but the evidence is contrary to trickle down in others the evidence from my own study of six countries experiences2 is summarised in tables i and 2

the search for a development economics abstract in this paper i first note some of the pieces of evidence that suggest that development has gone reasonably well since the early 1950s then i discuss why this evidence is not fully convincing and examine the content and sources of development failures the main reason why development is so often accompanied by disappointment and tensions is that it is largely an effort to replicate the west rather than an effort to set in motion an indigenous process of change within the traditional sectors themselves the efforts to replace the values and institutions and relationships of the traditional society by imported ones create tensions and uncertainty that can offset the increase in welfare that larger amounts of goods and services could produce if the present less developed countries do not seek to imitate present gnp rich countries what approach is available to them a country must find its own way and to do this it must search it must learn it must choose and it must do all these things in a world with gnp rich countries readily available for imitation the content of these three notions search learning choice is examined in some detail in the last part of the article

market efficiency and cointegration an application to the sterling and deutschemark exchange markets abstract the assumption that the foreign exchange market is efficient that is that agents are risk neutral and use all available information rationally so that the forward exchange rate is an unbiased predictor of the future spot rate is a property often imposed in theoretical international macroeconomic models although a vast empirical literature has evolved to test market efficiency we use recent developments in the theory of cointegration to provide new methods of testing several aspects of foreign exchange market efficiency we ffind evidence inconsistent with market efficiency for both germany and the united kingdom

learning and the capital goods sector under free trade the case of hongkong abstract attention is focused on technological change and attendant learning processes in the more industrialized third world countries the importance of relatively simple learning processes is stressed and the conditions necessary for facilitating more complex forms of learning particularly protection and promotion are examined here it is shown that the capital goods sector is of central importance the case study material deals with the machine producing sector in hong kong chosen as the representative case of free trade and minimal government intervention and comparison is made with learning processes in a number of other more industrialized third world countries including india argentina and taiwan in the final section the implications of the discussion of learning for theories and techniques of investment allocation including social cost benefit analysis the effective rate of protection and the related domestic cost of foreign exchange are examined

changing beliefs and systematic rational forecast errors with evidence from foreign exchange this paper addresses a new interpretation to the appearance in the early 1980s of systematic errors in forecasting the dollar exchange rate following a change in the process of a fundamental variable market participants revise their beliefs about the process using bayes rule since the market does not immediately recognize the change forecast errors are on average wrong during a period when the market is rationally learning for conservative parameter values the learning behavior of the dollar exchange rate in the early 1980s appears consistent with about half of the dollar s underprediction implied by the forward market copyright 1989 by american economic association

international competitiveness technical change and the state the machine tool industry in taiwan and japan abstract it is widely accepted that the growth performance of japan and the asian newly industrialized countries hong kong singapore south korea and taiwan is partly the result of the international competitiveness they have achieved in a number of export industries it remains however to explain how this competitiveness was achieved in the first part of the paper an attempt at such an explanation based on the theory of comparative advantage is critically examined it is argued that while this explanation does have some explanatory power it does not deal adequately with a the role of technical and productivity change b the causal mechanisms underlying economic growth and c the role of the state the rest of the paper examines the case of machine tools in taiwan and japan showing the importance of these three factors as well as a number of others as determinants of international competitiveness the paper ends with a discussion of policy dilemmas relating to international competitiveness in the taiwanese machine toot industry

tests of rational expectations and no risk premium in forward exchange markets abstract this paper tests the simple efficiency hypothesis i e that traders have rational expectations and charge no risk premium in the forward exchange market it uses a statistical procedure which is consistent under a large class of heteroscedasticity and a set of data which takes into account the institutional features of the forward exchange market the results show that this procedure leads to stronger rejections of the simple efficiency hypothesis than do procedures using the standard assumption of homoscedasticity

caricom countries and appropriate technology abstract caricom governments believe that the growth and development of regional economies depend upon export oriented production moreover they are liberalizing their trade regimes in this environment some writers are urging them to adopt a more appropriate namely labor intensive technology this paper contends that the commitment to export oriented production the liberalization of trade regimes the shortage of financial resources and the poverty of regional infrastructure preclude the adoption of a labor intensive technology it therefore concludes that within the context of caricom the most appropriate technology is the most recent which is also the most capital intensive

the location of export oriented foreign direct investment in the caribbean basin this paper analyzes the location of export oriented manufacturing investment the analysis focuses on direct investment in the caribbean basin using micro data for all reported manufacturing plant openings from 1984 87 we test a broad range of influences on country selection and compare the results with the existing literature on foreign direct investment in less developed countries the probability of country selection was estimated with a conditional logit model the estimates were then used to predict the location of caribbean basin investments made in 1988 and 1989 twelve independent variables were tested six variables had a statistically significant positive relationship with plant location per capita gnp exchange rate devaluation the length of income tax holidays the size of free trade zones political stability and manufacturing concentration negative relationships were found for the wage rate inflation rate transportation cost and profit repatriation restrictions

flexible exchange rates prices and the role of news lessons from the 1970s recent experience with flexible exchange rate systems has led to renewed interest in the operation of foreign exchange markets as reflected in many recent studies of the principal determinants of exchange rates the 1970s witnessed the dramatic alteration of the international monetary system from a regime of pegged exchange rates which prevailed for about a quarter of a century since the bretton woods conference into a regime of flexible though managed rates as a consequence of the emergence of the new legal and economic system traders national governments and international organisations were confronted with new economic problems choices and instruments during the 1970s ex change rates fluctuated widely and inflation rates accelerated the international monetary system had to accommodate extraordinarily large oil related shocks which affected trade flows in goods and assets huge oil payments had to be recycled uncertainties concerning future developments in international politics reached new heights and the prospects for the world economy got gloomier these developments placed unprecedented pressures on the markets for foreign exchange as well as on other asset markets they were associated with a large slide in the value of the us dollar and resulted in speeding up the creation of new institutions like the european monetary system which provided the formal framework for the management of exchange rates among members

can caricom countries replicate the singapore experience this article tries to ascertain whether caricom countries1 can replicate the economic success of singapore based on export oriented industrialisation whereas it is possible for caricom countries to increase exports of some manufactures to industrial countries the article contends that export oriented policies currently urged upon caricom countries will not effect a replication of the singapore experience in an age of growing protectionism rapid technological change an inadequate indigenous social infrastructure and existing labour relations in the region

economic transition and urban transformation of china the interplay of the state and the market the transition of the chinese economy from plan to market has led to dramatic economic restructuring and urban transformation since the economic reforms and open door policy in 1978 the state and the market which are the two basic regulating mechanisms have significantly changed their role in economic and urban development in this transition in china we attempt to examine the interplay of the state and the market in facilitating economic growth and producing new urban space after replacing socialism with state capitalism four major waves of urbanisation and urban development have been identified in terms of the interaction of the state and the market in producing different forms of urban development which also bring about economic transition in china we further examine the new form of urban development in the fourth stage of urbanisation which is represented by the rapid growth of producer services and the resulting development of central business districts economic transition and urban transfor

a re examination of the unbiased forward rate hypothesis in the presence of multiple unknown structural breaks we test the unbiased forward rate ufr hypothesis using new tests for cointegration developed by hatemi j 2008a that allows for multiple unknown structural breaks we analyse the australian dollar aud euro eur british pound gbp and japanese yen jpy versus the us dollar usd spot rates and forward rates relationship during the period 5 january 1999 to 28 december 2006 we find that the ufr does hold when the effects of the unknown structural breaks are taken into account the parameters that we obtained were close to unity hence taking into account transaction cost and the existence of a risk premium earning arbitrage profits may still not be possible thus the markets for these currencies may still be considered as efficient

credibility and reputation building in the developmental state a model with east asian applications abstract we use a game theoretic model to analyze the role of credibility reputation and investment coordination in a developmental state our model focuses on why a soft state serving narrow social groups so often obtains in less developed countries and under what conditions a hard or developmental state can emerge the model highlights the dilemma that although state and private sector alike may want economic growth both must simultaneously invest to achieve it but the equilibrium outcome analogous to the prisoner s dilemma is investment by neither even when initial conditions are favorable and a state is potentially developmental with the genuine capability to elicit private sector investment this may not materialize and an equilibrium of low or no investment will prevail to avoid this deadlock and foster growth the successful developmental state must demonstrate commitment by promoting its developmental credentials through a process of reputation building a consequent incentive to act tough together with seeming advantages of authoritarianism in implementing the developmental state may help to explain why it is often associated with an authoritarian political system

automation and the worldwide restructuring of the electronics industry strategic implications for developing countries abstract governments in developing countries are placing a high priority on the development and expansion of an export oriented electronics industry thus the structural change and technological transformation currently being experienced throughout the world will have major implications for their success due to the oligopolistic nature of the internationalization process in this industry the use of computerized and automation technologies in electronics manufacture is likely to penetrate into a very select group of third world industrial growth poles in asia latin america and the middle east the extent and location of this penetration will be largely controlled by the oecd based multinationals consequently the expected positive developmental effects may be diminished and limited to those few growth poles these new constraints must be understood by ldc governments in order for them to implement countervailing strategies

explaining the growth performances of asian developing economies i development performance of developing countries no matter how it is measured the growth performance of the newly industrializing economies nies stands out that of the southeast asian group with the exception of the philippines and that of china is also impressive the south asian countries have done much less well with countries in sub saharan africa the caribbean and latin america even further behind the nies have also done well in two other crucial indicators of development income distribution and the quality of life in a study of 34 developing countries j riedel found that taiwan has the best income distribution surpassing even that of sri lanka while singapore south korea and hong kong are placed in the top third of the sample the nies also did extremely well in two measures of the quality of life the percentage of the age group enrolled in secondary education and the life expectancy at birth where they are well ahead of the other groups thus the nies have not only grown much faster than other economies but have also done better in bringing about a more equitable distribution of income and a better quality of life other measures of economic performance e g employment and wages growth equity performance e g reduction in the absolute level of poverty and quality of life performance e g the number of doctors per capita could have been used but they would have shown the same thing this finding is generally accepted however there is no generally accepted explanation for the different development performances this article will examine the claims of the major explanations and then propose a new way of looking at them in order to make the task manageable it will be limited to the developing countries of asia

employment and economic growth in costa rica abstract costa rica s economic growth in the last 25 years has had favorable labor market and income distribution consequences overall employment growth kept pace with labor force growth the mix of jobs improved real wages rose and relative inequality and absolute poverty fell but during the economic crisis of 1980 1982 when real per capita income plummeted labor market conditions deteriorated markedly unemployment doubled employment composition worsened and real wages fell by 40 growth labor market conditions and income distribution

tests of exchange market efficiency fragile evidence from cointegration tests abstract several recent papers have employed engle and granger 1987 cointegration tests to determine whether or not markets are efficient we use a new test for cointegration due to johansen 1988 to examine market efficiency with respect to the us dollar exchange rates for canadian japanese and west german currencies the fragile nature of the test indications suggests that cointegration methodologies cannot be relied upon to provide reliable evidence on market efficiency

floating exchange rates expectations and new information abstract this paper analyzes the relationship between forward exchange rates future spot rates and new information a stochastic model of exchange rate determination is used to formally show how unanticipated changes in the exchange rate determinants or news affect the spot rate the empirical analysis indicates that new information plays an important role in explaining the market forecasting error or difference between the spot rate and the forward rate determined in the previous period

clothing chips and competitive advantage the impact of microelectronics on trade and production in the garment industry abstract this paper presents the results of a research project which examined the impact of microelectronics on the nature of production and the patterns of international trade in the clothing industry empirical evidence is given on the effects of microelectronics related innovations currently being used by clothing manufacturers in the developed countries radical innovations have been introduced in the pre assembly stage which have revolutionized this phase of production in contrast the introduction of microelectronics into assembly technology is still limited as a result the clothing industry remains reliant on labor intensive techniques that place it at a competitive disadvantage compared to low wage developing countries hence the determinants of international competitive advantage in the industry remain largely unaltered however due to increasing concentration and major new r d efforts in the public and private sector it is argued that the preconditions are being laid for a fundamental structural and technological transformation of the industry in the north which could have very important implications for the competitive position of third world clothing exporters emphasis is also placed upon the continued restraining effects of protectionist barriers imposed by the main importing nations and on the differential impact of this on the ability of newer entrants to achieve rapid and sustained export growth

can the east asian model of development be generalized abstract export led growth has become increasingly popular among analysts and some governments as a development strategy besides contrasting its virtues to the distortions of the import substitution model popular through the 1960s advocates of the model frequently illustrate its merits by pointing to the remarkable success of its most prominent practitioners the east asian gang of four hong kong korea singapore and taiwan this study explores a possible limitation of the model known as the fallacy of composition while the model may work well if pursued by a limited number of countries it may break down if a large majority of developing countries seeks to pursue it at the same time because the resulting outpouring of manufactured exports might be more than western markets could absorb protectionist response might be the result of attempts to generalize the east asian export model of growth

hypergrowth in an east asian nic public policy and capital accumulation in singapore abstract singapore has produced the world s highest investment ratios known to account for growth more rapid than in any other less developed country over the past three decades but such high investment needs explanation we trace singapore s public policy of increasing tax concessions and infrastructural spending in effect subsidies to private firms and use an open economy neoclassical model to show how by attracting footloose foreign capital and raising investment levels these policy measures can drive growth the consequent transformation of living standards in singapore suggests in accordance with theory but contrary to most practice that for some less developed countries effectively zero tax on foreign direct investment may be a beneficial strategy yet for both singapore and other would be late industrializers major issues of development strategy arise from the kind of input driven growth analyzed in this article

the developmental state government and singapore s economic development since 1960 abstract government interventionism is widely acknowledged to characterize less developed countries but consensus is lacking as to whether it promotes economic development and if so how the present article analyzes the nature of government involvement in the singapore model of economic development and emergence of a developmental state closely associated with this model it compares singapore s experience with south korea s and taiwan s where government also contributed to development success and with other asian countries where government failed to play a strong developmental role

diversification incentives under price based and cost based regulation this article considers two schemes of regulationforfirms that serve both monopoly markets and markets subjected to substantial competition the first form cost based regulation combines elements of rate of return regulation on monopoly markets with filly distributed cost pricing much like the form of regulation currently in place in the domestic telephone industry the secondform price based regulation would establish rate caps on noncompetitive services and allow the firm to enter into competitive markets and charge whatever prices it might like in those markets models of both forms of regulation are developed and analyzed with respect to incentives for cost misreporting choice of technology cost reducing innovation choices of prices and output levels and diversification into competitive markets

grassroots organizations and ngos in rural development opportunities with diminishing states and expanding markets abstract this article undertakes to deal systematically with nongovernment organizations ngos and grassroots organizations gros usually treated as a residual category ten levels for development decision making and action are identified in the tradition of central place theory three of these are considered local or grassroots because of their collective action possibilities then three sectors are delineated instead of the usual two ngos are part of the collective action sector which differs from the public and private sectors in theoretically consistent ways a careful distinction is made between institutions and organizations usually conflated in the literature examples of accelerated rural development through grassroots organizations and ngos are discussed form asia africa and latin america

common stochastic trends in a system of exchange rates univariate tests reveal strong evidence for the presence of a unit root in the univariate time series representation for seven daily spot and forward exchange rate series furthermore all seven spot and forward rates appear to be cointegrated that is the forward premiums are stationary and one common unit root or stochastic trend is detectable in the multivariate time series models for the seven spot and forward rates respectively this is consistent with the hypothesis that the seven exchange rates possess one longrun relationship and that the disequilibrium error around that relationship partly accounts for subsequent movements in the exchange rates a general consensus has emerged in recent years that many macroeconomic time series such as gnp consumption expenditures disposable income etc can be characterized by a stochastic trend model in particular nelson and plosser 22 described this property as one of being difference stationary so that the first difference of a time series is stationary an alternative trend stationary model where a stationary component is added to a deterministic trend term has generally been found to be less appropriate 1 similarly it has long been recognized that many financial time series such as foreign exchange rates are nonstationary e g in meese and singleton 21 the issue of nonstationary is not merely a statistical curiosity but has several important implications for the modeling of exchange rates for instance many models of exchange rate determination under rational expectations require stationarity assumptions when solving out the expected future values of the fundamentals further there has been some controversy over the appropriate transformations to use when conducting tests of whether the forward rate is an unbiased and efficient predictor of the future spot exchange rate 2 some authors e g frenkel 11 12 have conducted tests in levels while geweke and feige 14

economics of development and the development of economics the purpose of this paper is to restore some historical perspective by highlighting the many contributions of development economics to the rest of economics we will point out to the younger generations how some of the glittering ideas they currently play with originally came from that now neglected field and how in some cases they have rediscovered with great fanfare insights that were well known in the development literature familiarity with which would have enriched their own work