the internal market and hospital efficiency a stochastic distance function approach the uk internal market was one of the first european attempts to introduce a competitive mechanism in the provision of hospital services the assumption was that competition would have led hospitals to increase efficiency in the use of their resources the aim of this paper is to analyse the effectiveness of this kind of reform by measuring the changes in technical efficiency of a panel of 52 acute scottish hospitals observed from 1991 92 to 1996 97 the time period covers the whole duration of the internal market and the sample contains a different mix of both trusts and non trusts where the former embed the proper working of the reform the selected model is a stochastic output distance function that includes an interaction dummy variable to allow for parameters to change over time the results show a structural break after which hospitals change not only the way in which they provide their services but also the kind of services they provide favouring the quicker treatment of patients on a day basis

measuring the efficiency of european railways this paper is concerned with the definition and measurement of efficiency in a public body specifically railways the authors argue against commonly used measures such as profit and labour productivity in favour of a production possibility frontier approach physical measures of input and output are derived and applied using a variety of methodologies results from some of the most popular such as data envelopment analysis and corrected ordinary least squares using the translog function are shown to be potentially misleading two original approaches one using uniform efficiency distributions and the other applying bayesian state space techniques are developed and applied but these too are found to be potentially unreliable comparison with results from other authors finally lead to the conclusion that accurate measurement of efficiency is not possible although the research is able to indicate good and bad performers the final conclusion is that efficiency on the railway is a product primarily of go

effects of substituting energy with capital on china s aggregated energy and environmental efficiency abstract substituting energy with capital sec in economic productions has become a common practice both for business owners and policy makers to improve their energy and environmental efficiency however seldom previous studies on energy efficiency and or environmental performance evaluation took this role into account this paper aims to shed some light on the effects of sec on china s aggregated energy and environmental efficiency aeee within a parametric stochastic frontier analysis framework moreover influencing factors of regional efficiency score are also discussed using a pooled regression model the results indicate that sec poses significant effects on improving china s aeee and this impact appears obvious regional variation that regions with lower efficiency scores hold more extensive potential to improve their aeee by means of sec furthermore upgrading industrial structure and decreasing the proportion of coal in energy consumption make great sense to improve china s aeee

budget constrained frontier measures of fiscal equality and efficiency in schooling equality and efficiency are key issues in educational reform here the authors analyze the efficiency and equality consequences of various school finance reforms using a cost indirect output distance function this function readily models multiple output production under conditions of budgetary constraint and provides a natural measure of performance that is closely related to farrell type measures of efficiency the analysis suggests that despite school district inefficiency finance reforms can affect student achievement however any potential gains in output from redistribution are dwarfed by the potential gains from increased efficiency more strikingly the analysis demonstrates that budgetary reforms designed to equalize expenditures could actually increase the inequality of student achievement

do competitively acquired funds induce universities to increase productivity abstract this paper analyzes the impact of private and public third party funds on the productivity of swiss university departments and public research institutions estimating a production function assuming that labor inputs produce master students and scientific publications reveals a positive effect of public third party funding on productivity but not for private funds however once we include technology transfer as an additional output the coefficient for public third party funding turns insignificant while private funding becomes significant indicating that the disciplining effect of public donors focuses on publications while private donors foster technology transfer we employ three alternative approaches to tackle endogeneity and find qualitatively robust results

the influence of country risk factors on interest rate differentials on international bank lending to sovereign borrowers 1985 the influence of country risk factors on interest rate differentials on international bank lending to sovereign borrowers applied economics vol 17 no 3 pp 491 507

term premia and inflation uncertainty empirical evidence from an international panel dataset this paper provides cross country empirical evidence on bond risk premia i construct a panel of zero coupon nominal government bond yields spanning ten industrialized countries and nearly two decades i hence compute forward rates and then use two different methods to decompose these forward rates into expected future short term interest rates and term premiums the first method uses an affine term structure model with macroeconomic variables as unspanned risk factors the second method uses surveys i find that term premium estimates declined across countries over the sample period especially in countries that appear to have reduced inflation uncertainty by making substantial changes in the monetary policy frameworks of their central banks during the recent financial crisis term premiums have remained flat and even declined further in some countries perhaps reflecting the effects of quantitative easing actions by many central banks

efficiency analysis of german electricity distribution utilities non parametric and parametric tests this study applies non parametric and parametric tests to assess the efficiency of electricity distribution companies in germany traditional issues in electricity sector benchmarking are addressed such as the role of scale effects and optimal utility size as well as new evidence specific to the situation in germany labour capital and peak load capacity are used as inputs and units sold and the number of customers as output the data cover 307 out of 553 german electricity distribution utilities a data envelopment analysis dea is applied with constant returns to scale crs as the main productivity analysis technique whereas stochastic frontier analysis sfa with distance function is the verification method the results suggest that returns to scale play but a minor role only very small utilities have a significant cost advantage low customer density is found to affect the efficiency score significantly in particular in the lower third of all observations surprisingly east german utiliti

politics and perceived country creditworthiness in international banking this paper marks a departure from most previous studies of country creditworthiness in international banking because it incorporates systematically generated quantitative indicators of political instability in the analysis the authors empirically test for the effects of political instability on perceived country creditworthiness using data on thirty heavily indebted developing countries for the period 1967 86 in addition to economic factors they examine the effects of three types of political instability regime change political legitimacy and armed conflict the authors also distinguish between proximate instability and chronic instability they find significant effects of proximate instability particularly in governmental regime on indicators of countries perceived creditworthiness copyright 1990 by ohio state university press

decomposition of total factor productivity in world health production a stochastic frontier approach while countries around the globe have increased spending on health care economists and policy makers have raised concerns over the productivity and efficiency of health care this article applies a stochastic frontier approach to address this issue using data from 141 countries for the period 1993 to 1997 from the perspective of productivity change our results suggest that gains in population health will be greater provided that more resources are allocated to investment in human capital we also show that the scale component accounts for 65 70 of the productivity change that is omitting the scale component in our case will result in a significant underestimation of the decline in the productivity of world health production we do not find evidence supporting the hypothesis that production frontiers differ between organization for economic cooperation and development oecd and non oecd countries however the change in productivity and scale elasticity do vary significantly between these countries

decomposition of productivity growth using distance functions the case of dairy farms in three european countries within an output distance function framework the total factor productivity growth index is decomposed into four components technical change technical and allocative efficiency and scale component we estimate stochastic translog output distance functions using panel data from dairy farms over the period 1991 94 for three european countries germany the netherlands and poland results indicate that the change in the productivity growth index in germany 6 and poland 5 are mainly dictated by the technical change component in contrast the productivity growth index in the netherlands 3 is influenced by allocative efficiency components

globalisation pass through and the optimal policy response to exchange rates abstract in this paper we examine how monetary policy should respond to nominal exchange rates in a new keynesian open economy model that allows for a non trivial role for sterilised intervention the paper develops the argument against the backdrop of the evolving policy making environment of asian economies sterilised intervention can be a potent tool that offers policymakers an additional degree of freedom in maximising global welfare we show that the gains to sterilised intervention are greater when goods market integration is low and exchange rate pass through is high however increased financial internationalisation reduces the effectiveness of sterilised intervention as the international policy trilemma becomes more relevant unsterilised intervention may also have a role to play although the potential welfare gains from this are generally smaller most central banks in asia have actively used sterilised foreign exchange intervention as a policy tool to smooth exchange rates but over time declining exchange rate pass through and the increasing international integration of financial and goods markets will tend to reduce the efficacy of sterilised intervention given the limited effectiveness of unsterilised intervention our model implies that the role of exchange rate movements in the optimal setting of monetary policy in asia is decreasing

international business cycles world region and country specific factors the paper investigates the common dynamic properties of business cycle fluctuations across countries regions and the world we employ a bayesian dynamic latent factor model to estimate common components in macroeconomic aggregates output consumption and investment in a 60 country sample covering seven regions of the world the results indicate that a common world factor is an important source of volatility for aggregates in most countries providing evidence for a world business cycle we find that region specific factors play only a minor role in explaining fluctuations in economic activity we also document similarities and differences across regions countries and aggregates jel f41 e32 c11 c32

why do term structures in different currencies co move abstract yield curve fluctuations across different currencies are highly correlated this paper investigates this phenomenon by exploring the channels through which macroeconomic shocks are transmitted across borders macroeconomic shocks affect current and expected future short term rates as central banks react to changing economic environments investors could also respond to these shocks by altering their required compensation for risk macroeconomic shocks thus influence bond yields both through a policy channel and through a risk compensation channel using data from the us the uk and germany we find that world inflation and us yield level together explain over two thirds of the covariance of yields at all maturities further these effects operate largely through the risk compensation channel for long term bonds

the empirics of international monetary transmission identification and the impossible trinity the transmission of monetary policy across borders is central to many open economy models research has tried to evaluate the impossible trinity through estimating international interest rate linkages under alternative exchange rate regimes using realized base country interest rates such interest rates include anticipated and endogenous elements which need not propagate internationally we compare international interest rate responses under pegged and non pegged regimes to identified unanticipated and exogenous u s interest rate changes and realized u s interest rate changes we find important differences in estimated transmission from the two sets of measures identified interest rate changes demonstrate a greater concordance with the impossible trinity than realized rate changes

a new look at debt rescheduling indicators and models this paper presents logit and discriminant models of debt rescheduling the models incorporated new short term debt data and variables representing economic shocks the 30 country database covered the period from 1975 to 1982 and contained the largest number of debt rescheduling observations of any previous database because of the new indicators and more recent data the models captured the effects of the changes that have occurred in the world economy since the oil price shocks and the period of rapid debt accumulation by the developing countries compared to the earlier research models the models have proven to be efficient in forecasting debt reschedulings

exchange market pressure in oecd and emerging economies domestic vs external factors and capital flows in the old and new normal abstract we study the ways domestic and external global factors such as risk appetite global liquidity u s monetary policy and commodity prices affected the exchange market pressure before and after the global financial crisis as well as the role of these factors during the federal reserve s tapering episode utilizing a comprehensive database on capital controls we investigate whether control measures have a significant impact on mitigating exchange market pressure associated with capital flows net and gross using quarterly data over the 2000 2014 period and a dynamic panel model estimation we find that external factors played a significant role in driving exchange market pressure for both oecd countries and emerging market countries with a larger impact on the latter while the effect of net capital flows on exchange market pressure is muted short term gross portfolio inflows and outflows comprise important factors that account for exchange market pressure short term portfolio flows and long term foreign direct investment flows have a significant impact on exchange market pressure for emerging market economies and no significant effect for oecd countries capital controls seem to significantly reduce the exchange market pressure although the economic size of this impact is highly dependent on the institutional quality

globally correlated nominal fluctuations fluctuations in nominal variables aggregate price levels and nominal interest rates are documented to be substantially more synchronized across countries at business cycle frequencies than fluctuations in real output a transparent mechanism accounting for this striking feature of the nominal environment is described and quantitatively evaluated it is based on the interaction between small cross country spillovers of shocks taylor rules and domestic no arbitrage conditions the mechanism is robust to various parameterizations and extensions aligning the model with other important aspects of domestic and international fluctuations furthermore its key features are consistent with cross country forecasts from consensus survey

decent rural employment and farm production efficiency empirical evidence from tanzania and ethiopia promoting decent rural employment by creating new jobs in rural areas and upgrading the existing ones could be one of the most efficient pathways to reduce rural poverty this article systematically investigates the impact of decent rural employment on agricultural production efficiency in ethiopia and tanzania the analysis applies an output oriented distance function approach with an estimation procedure that accounts for different technological demographic socioeconomic institutional and decent rural employment indicators data of the 2011 round of living standards measurement study integrated surveys on agriculture for the two countries are used and a set of indicators is derived to proxy core dimensions of decent rural employment the findings of our analysis show that decent rural employment contributes to agricultural production efficiency

debt arrears in latin america do political variables matter political instability and debt problems characterise latin america in the last two decades this article estimated a logit model of debt arrears including economic as well as political variables our results suggested that both economic and political indicators affected debt repayment in latin america during 1971 86 we also cast a shadow on the viewpoint that authoritarian and military regimes have an advantage over democratically elected governments with regard to debt related issues

the debt crisis structural explanations of country performance abstract this paper develops a cross country statistical model of debt rescheduling and the secondary market valuation of ldc debt which links these variables to key structural characteristics of developing countries such as the trade regime the degree of income inequality and the share of agriculture in gnp our most striking finding is that higher income inequality is a significant predictor of a higher probability of debt rescheduling in a cross section of middle income countries we attribute this correlation to various difficulties of political management in economies with extreme inequality we also find that outward orientation of the trade regime is a significant predictor of a reduced probability of debt rescheduling

early warning of debt rescheduling abstract this study addresses the early warning of debt rescheduling by developing countries the early warning capability of different statistical methods is compared by using the same data base i e 52 countries from 1974 to 1978 the results especially show that cluster analysis techniques don t do well and that multiple discriminant analysis is inferior to logit analysis the integration of qualitative and projected data is proposed in order to arrive at bank specific systems

monetary policy and financial spillovers losing traction abstract has financial globalisation compromised central banks effectiveness in managing domestic financial conditions this paper tackles this question by studying the dynamics of bond yields encompassing 31 advanced and emerging market economies to gauge the extent to which external financial conditions complicate the conduct of monetary policy we isolate a contagion component by focusing on comovements in measures of bond return risk premia that are unrelated to domestic economic fundamentals our contagion measure is designed to more accurately capture relative to simple yield correlation spillovers driven by exogenous global shifts in risk preference or appetite in contrast to what simple comovements in bond yields suggest emerging market economies appear to be much less susceptible to global contagion than advanced economies and the overall sensitivities to contagion have not increased after the global financial crisis the extent to which financial spillovers have compromised policy traction thus appears to be lower relative to studies based on common variation in bond yields

synergy and learning effects of informal labor sharing arrangements summary we study the effects of informal labor sharing arrangements and other social interactions on farmers productivity in a developing country context testing whether these types of social and work interactions lead to productivity gains through learning synergy or both using a rich panel data set of ethiopian subsistence farmers we estimate a distance function of grains production and find large productivity gains approximately 33 and 29 in 1999 and 2004 from labor sharing due to synergy effects that boost labor productivity however labor sharing does not lead to learning as the productivity gains observed in years with labor sharing disappear in following years if the farmers do not continue to engage in labor sharing labor sharing partners are either neighbors relatives members of the same funeral and religious associations or have plots next to each other which together reduce labor sharing as a single venue for learning however the synergy effect is strong enough to warrant the design of extension and outreach policies that recognize and utilize farmers informal social networks such as labor sharing arrangements

consistency in performance rankings the peru water sector regulators can utilize a number of alternative methodologies for comparing firm efficiency but these approaches need to be robust to be accepted by stakeholders this study evaluates the consistency of water utility performance rankings for peruvian water utilities the results indicate that data envelopment analysis dea and stochastic frontier analysis sfa yield similar rankings in this case in addition the techniques have comparable success for identifying the best and worst performing utilities however these rankings based on sophisticated statistical techniques are not highly correlated with those developed by the peruvian water regulator sunass this result does not invalidate the performance rankings obtained by the regulator since those rankings are based on more dimensions of utility performance however they illustrate the importance of developing sound techniques for identifying weak utilities improvements in sector performance require that benchmarking be given greater attention t

the determinants of efficiency and productivity in european railways this article evaluates the economic performance of european railways over the period 1972 to 1999 the cost structure of the railway industry is analysed using a stochastic frontier approach estimated within the framework of a translog cost system the results confirm that european railways experience significant cost increases due to inefficient behaviour in contrast to previous studies however the estimates indicate a much greater role for allocative rather than technical inefficiency overall inefficiencies can essentially be explained by the supply of excess capacity and by the over employment of labour inputs regarding productivity it appears to be technological progress and not levels of efficiency or scale economies that provide the most convincing explanation for variance in growth rates within the sample

the politics of adjustment lessons from the imf s extended fund facility the international debt crisis has forced painful economic adjustments on the developing world in the short run it has forced governments to seek to correct payments imbalances through stabilization programs usually undertaken with conditional assistance from the international monetary fund imf the crisis has also revealed deeper weaknesses in many third world economies weaknesses demanding more basic reforms in the structure of incentives prices and investment

technical efficiency of european railways a distance function approach this study has two principal objectives the first objective is to measure and compare the performance of european railways the second objective is to illustrate the usefulness of econometric distance functions in the analysis of production in multioutput industries where behavioural assumptions such as cost minimization or profit maximization are unlikely to be applicable using annual data on 17 railways companies during 1988 1993 multioutput distance functions are estimated using corrected ordinary least squares cols the resulting technical efficiency estimates range from 0 980 for the netherlands to 0 784 for italy with a mean of 0 863 the distance function results are also compared with those obtained from single output production functions where aggregate output measures are formed using either total revenue or a tornqvist index the results obtained indicate substantial differences in parameter estimates and technical efficiency rankings casting significant doubt upon the reliability of

the rise of dollar credit in emerging market economies and us monetary policy this paper examines the hypothesis that the boom in dollar credit in the emerging market economies is associated with excessively low interest rate in the us for this purpose we use a multivariate correlated unobserved component model that allows for correlation between shocks to dollar credit interest rates and dollar index both in the short run and in the long run in addition it also provides us a quantitative estimate of the permanent and transitory movements in dollar credit in emerging markets us interest rate and the dollar index the results from this model do suggest that a temporary decline in interest rate and dollar index below their long run levels are associated with an increase in dollar credit with a very high degree of negative correlation the estimate of the cyclical component of the dollar credit in emerging market from our model captures the recent boom and bust in this market and compares favorably to a univariate trend cycle decomposition benchmark

the long run creditworthiness of developing countries theory and practice this paper analyzes the determinants of developing country long run creditworthiness focusing on the process of capital accumulation relative to external debt creditworthiness depends on the actual capital stock compared with a critical level representing the gross wealth just sufficient to ensure that interest payments to foreigners never exhaust national output given expected gross inflows and existing outstanding debt hence the probability of rescheduling is linked to debt service capital net inflows capital investment rates and income levels the empirical results based on a probit analysis of historical rescheduling incidents are quite robust and supportive of the theoretical framework

economic efficiency and frontier techniques abstract most of the literature related to the measurement of economic efficiency has based its analysis either on parametric or on non parametric frontier methods the choice of estimation method has been an issue of debate with some researchers preferring the parametric and others the non parametric approach the aim of this paper is to provide a critical and detailed review of both core frontier methods in our opinion no approach is strictly preferable to any other moreover a careful consideration of their main advantages and disadvantages of the data set utilized and of the intrinsic characteristics of the framework under analysis will help us in the correct implementation of these techniques recent developments in frontier techniques and economic efficiency measurement such as bayesian techniques bootstrapping duality theory and the analysis of sampling asymptotic properties are also considered in this paper

sovereign default interest rates and political uncertainty in emerging markets abstract a large body of the empirical literature shows that high turnover rates length of tenure of policymakers and the degree of conflict within a country affects sovereign spreads debt and default rates we help to rationalize such claims by including these political features in a dynamic stochastic small open economy model of sovereign debt and default in this way we offer a complementary approach to the econometric analyses in the literature consistent with the data the quantitative analysis shows that politically unstable and more polarized economies experience higher default rates and larger level and volatility of sovereign interest rate spreads

a performance assessment of the angolan soccer league abstractthis article analyses the technical efficiency of the angolan soccer league from 2008 to 2014 using a translog distance stochastic frontier model the greene stochastic frontier model presented in 2005 and kumbhakar stochastic frontier model presented in 1990 are adopted and the covariates used include luanda location funding by the oil company sonangol club supported by rich fans and club relegated during the period policy implications are then derived