de industrialisation and the balance of payments in advanced economies this paper defines de industrialisation as a secular decline in the share of manufacturing in national employment de industrialisation in this sense has been a widespread feature of economic growth in advanced economies in recent decades the paper considers briefly what explains this development and quantifies some of the factors responsible it then examines the experience of britain and america which are two countries that have combined rapid de industrialisation with a strong overall economic performance the paper considers both the domestic situation of manufacturing industry in these countries and its foreign trade performance it concludes by examining in detail the british balance of payments and documenting how improvements in the non manufacturing sphere have helped offset a worsening performance in manufacturing trade copyright 2004 oxford university press

male female urban income distributions in canada the service sector in a dependency model international trends of increasing income inequality have not occurred equally for male and female income distributions in canadian cities urban male income inequality declined from 1970 to 1980 it increased in the next decade but only to its 1990 level female income inequality has declined consistently these urban income distributions can be well explained using a dependency model in which the female income distribution is influenced by the male income distribution and the income gap between males and females this dependence effect is modified by urban characteristics male and female income distributions are more alike in larger cities and in cities with relatively higher female median incomes beginning in 1990 service sector employment contributes significantly to income inequality for both gender groups with a slightly greater effect for females

structural transformation the mismeasurement of productivity growth and the cost disease of services if workers self select into industries based upon their relative productivity in different tasks and comparative advantage is aligned with absolute advantage then the average efficacy of a sector s workforce will be negatively correlated with its employment share this might explain the difference in the reported productivity growth of contracting goods and expanding services instrumenting with defense expenditures i find the elasticity of worker efficacy with respect to employment shares is substantially negative albeit estimated imprecisely the estimates suggest that the view that goods and services have similar productivity growth rates is a plausible alternative characterization of growth in developed economies jel e23 e24 h56 j24 o41 o47 one of the strongest and seemingly most accurate characterizations of the process and problems of growth in advanced economies is william baumol s cost disease of services baumol s argument begun in papers as early as 1965 and continuing to this very day e g baumol and bowen 1965 baumol 1967 baumol blackman and wolff 1985 and baumol 2012 starts from the premise that productivity growth is inherently more difficult to achieve in the production of services than in the pro

labor productivity and the law of decreasing labor content this paper analyzes labor productivity and the law of decreasing labor content ldlc originally formulated by farjoun and machover 1983 first it is shown that the standard measures of labor productivity may be rather misleading owing to their emphasis on monetary aggregates instead the conventional classical marxian labor values provide the theoretically and empirically sound measures of labor productivity the notion of labor content and the ldlc are therefore central in order to understand the dynamics of capitalist economies second some rigorous theoretical relations between different forms of proflt driven technical change and productivity are derived in a general input output framework with flxed capital which provide deterministic foundations to the ldlc third the main theoretical propositions are analyzed empirically based on a new dataset of the german economy

energy demand and the composition of output growth abstract using the theory of the firm the effects of unbalanced rates of output growth on aggregate energy demand are examined theoretical results show that failure to consider unbalanced growth leads to bias in aggregate price elasticity estimates empirically differential output growth rates are important contributors to the overall growth of energy and other inputs they can be as important as net price effects in explaining input growth unbalanced growth effects help to explain changes in labor s productivity growth and have increased in importance since the arab oil embargo they are quite significant relative to other sources of change during business cycle downturns

did migration in the 1980s narrow the north south divide this paper integrates empirical analysis of the decision to migrate from a region with that of destination choice thus we are able to study how net migration and not just gross outflows are influenced by regional labour market circumstances the results suggest that relative regional wages rates but not relative unemployment and vacancy rates are effective in reallocating labour from regions experiencing adverse demand shocks we find little evidence that manual labour is migrating from those regions with relatively high manual unemployment but that migration plays a more conventional role in the regional adjustment process for non manual workers

sources of aggregate labour productivity growth in canada and the united states abstract in this paper we propose a decomposition technique to examine the sources of industrial contribution to aggregate labour productivity growth we show that in terms of pure labour productivity growth the manufacturing and service sectors contributed equally to the aggregate canada u s labour productivity growth gap during the 1987 98 period but in terms of total industrial contributions which also take into account the contributions from a change in relative size the service sector was the largest contributor we also find that high labour productivity growth industries did not attract resources from stagnant industries a phenomenon consistent with baumol s cost disease of stagnant industries jel classification o47 c43

industrial energy substitution during the 1980s in the greek economy abstract factor substitution in greek manufacturing during the 1980s is examined using pooled data in static and dynamic translog expenditure share models inputs are capital labor electricity and non electrical energy liquid solid gas own price elasticities for capital and labor are inelastic but for electricity more elastic 0 90 results indicate substitutability among factors in the short run in the long run electricity and capital are complements as are labor and non electrical energy greek manufacturing is predicted to continue decreased consumption of liquid fuels to the year 2000 continuing the electrification begun in the 1970s

the drivers of structural change the main goal of this paper is to provide an integrated survey of the literature devoted to identifying the drivers of structural change broadly defined as the process of reallocation of economic activity across the three broad sectors agriculture manufacturing and services using the ggdc 10 sector database this paper first presents the empirical facts associated with structural change in different regions of the world that is europe and the usa asia latin america and africa then reviews four determinants of structural change i changes in income ii changes in relative sectoral prices iii changes in input output linkages and iv changes in comparative advantage s via globalization and trade

dual labor markets urban unemployment and multicentric cities a two sector model of urban employment is developed which focuses on the formation of a secondary sector in response to a primary sector demand shock the optimal location of this single firm sector is shown to give rise to a multicentric urban spatial structure conditions are then established under which the new labor market equilibrium involves both a decrease in unemployment and an increase in net income for those unemployed these results are extended to a case where all unemployment benefits are financed by local taxation of firms here it is shown that profit incentives may exist for the primary sector to subsidize entry of the secondary sector c 1997 academic press

an analysis of the driving forces of co2 emissions embodied in japan china trade abstract by using the latest china japan input output data sets and the index decomposition analysis ida approach this article analyzes the driving forces of co2 emissions embodied in trade between the two countries during 1990 2000 we found that the growth of trade volume had a large influence on the increase of co2 emissions embodiments in bilateral trade the dramatic decline in carbon intensity of the chinese economy is a primary cause in offsetting co2 emissions exported from china to japan over 1995 2000 we argue that a better understanding of the factors affecting co2 emissions embodied in international trade will assist in seeking more effective climate policies with wider participation in the post kyoto regime

spatial competition with a land market hotelling and von thunen unified we introduce into the standard spatial competition model the consumption of land by households and study the spatial competition under the influence of a land market in contrast to the standard assumption of a fixed given distribution of households we introduce the possibility of households relocation in reaction to firms location decisions thus the spatial distribution of households is treated as endogenous and a land market is introduced on which households compete for land use households consume simultaneously land and firms output accordingly the demand of each household becomes in turn endogenous as it depends on the income left after the land rent is paid not surprisingly the results obtained within this more general framework prove to be very different from the standard results for example in the 2 and 3 firm cases the optimal configuration of firms is a nash equilibrium when transport costs are high enough or the amount of vacant land is large enough the existence property is restored in the 3 firm case when the transport costs are high enough the introduction of vacant land causes a discontinuous change in the set of equilibrium configurations

a growing trend toward knowledge work in canada abstract this paper answers three questions related to the growing trend toward knowledge occupations in canada i what was the magnitude of the trend between 1971 and 1996 ii was the trend a widespread phenomenon or was it restricted to specific industries iii what are the proximate causes of the trends using five censuses 1971 1981 1986 1991 1996 and the input output i o data the paper provides evidence that the canadian economy is becoming increasingly knowledge based although the upgrading trends differ across knowledge occupations moreover we find that this phenomenon is spread across all industrial sectors finally using a decomposition analysis borrowed from wolff and baumol three factors the substitution effect the productivity lag effect and the demand effect have been examined in order to shed some light on these trends we find that these effects vary according to the nature of the knowledge involved in these different groups of occupations thus reflecting not only the importance of the technological change skill bias but also the increasing complexity of controlling and managing the new economic activities

the role of manufacturing in regional growth harris r i d 1987 the role of manufacturing in regional growth reg studies 21 301 312 since a shift in regional policy away from manufacturing to aiding services is being advocated this paper re examines the role of manufacturing in regional growth from both an empirical and theoretical viewpoint first of all it discusses the importance of manufacturing s share of output concluding that in output terms and prior to 1979 manufacturing has not been displaced by services in shares of total output secondly the paper focuses on the theoretical importance of manufacturing to the growth of regional output showing that for most theories demand side growth pole cumulative causation manufacturing is the natural base for growth potential harris r i d 1987 le role des industries de fabrication dans la croissance regionale reg studies 21 301 312 vu que l on propose une reorientation de la politique regionale au depens des industries de fabrication et en faveur du tertiaire cet article

it pays to be different endogenous heterogeneity of firms in an oligopoly abstract heterogeneous firms can be supported by familiar conditions of technology and demand in a two stage duopoly game firms choose technologies simultaneously in stage i from a continuous technology set in stage ii once technological commitments have been made firms choose quantities and the equilibrium price is determined if the technology set is insufficiently convex firms choose only the extreme production technologies in some cases they choose the same technology in others they choose different technologies when compared to socially optimal industry structures equilibria tend to have too little heterogeneity uncertainty about demand or costs favors the emergence of heterogeneous firms

the distributional effects of local labor demand and industrial mix estimates using individual panel data abstract this paper finds that increases in local labor demand have significant progressive effects on the income distribution and significantly reduce poverty the anti poverty effects of stronger demand have not lessened in recent years local labor demand s benefits are particularly great for younger less educated men labor demand s benefits are similar for blacks and whites and men and women the paper also finds that shifts in the local industrial mix toward manufacturing or other high wage industries do not have progressive effects and do not reduce poverty

does product lifetime extension increase our income at the expense of energy consumption abstract the present paper contributes to modeling a simple social accounting method with cumulative product lifetime distributions and argues how product lifetime extension affects income flow throughout the entire economic system empirical analysis focusing on automobile use ordinary passenger vehicle small passenger vehicle and light passenger vehicle in japan revealed that if all of the additional income gain from product lifetime extension flows into the investment sector a one year lifetime extension during the ten years of the study period 1990 2000 would have led to an increase in income in 2000 amounting to 7 billion yen as well as contributing to savings in energy amounting to 4 10 6 gj that is longer term passenger vehicle use increases income and decreases energy consumption under special cases we also found that in the general case when less than 93 of additional income resulting from vehicle lifetime extension is directed to the investment sector a 1 year automobile lifetime extension increases income at the expense of energy consumption

the political economy of urban transport system choice this paper analyzes the political economy of transport system choice with the goal of gaining an understanding of the forces involved in this important urban public policy decision transport systems pose a continuous trade off between time and money cost so that a city can choose a fast system with a high money cost per mile or a slower cheaper system the paper compares the socially optimal transport system to the one chosen under the voting process focusing on both homogeneous and heterogeneous cities while considering different landownership arrangements the analysis identifies a bias toward underinvestment in transport quality in heterogeneous cities

industrial composition interindustry effects and the u s productivity slowdown this paper investigates the effect of shifts in output composition on the slowdown of productivity growth in the united states between 1947 67 and 1967 76 i employ a leontief input output framework and a divisia index of aggregate productivity growth to separate the effects of changes in sectoral rates of technical progress from the effects of changes in output composition and interindustry flows on the change in overall productivity growth of the approximately 2 percentage point decline in overall total factor productivity growth 17 to 22 was due to compositional effects and the remainder to other factors t he importance of shifts in input or output composition in explaining the recent productivity slowdown in the united states has been a source of some controversy estimates of such shift effects vary considerably for example gollop 1982 calculated that resource shifts were actually an offset to the slowdown in productivity growth kutscher mark and norsworthy 1977 estimated that employment shifts had no effect on productivity growth thurow 1979 ascribed half of the slowdown between 1965 72 and 1972 77 to employment shifts and nordhaus 1972 attributed 77 of the decline from 1948 55 to 1965 71 to employment shifts in a related paper the possible reasons for these disparate results were discussed at length see baumol and wolff forthcoming briefly these differences stem primarily from the use of different concepts and measures actually three different concepts are used in the literature the first is a resource allocation or equilibrating shift effect which measures the increase in productivity that can result from a more efficient allocation of resources cf denison 1979a 1979b and 1984 norsworthy harper and kunze 1979 and gollop 1982 while interesting in itself this resource reallocation effect is a somewhat limited notion measuring the movement toward the efficient frontier instead of the outward movement of the frontier over time the second concept is the so called level effect which assesses the effect of resource shifts on overall productivity growth by holding constant the productivity levels of the various sectors of the economy cf nordhaus 1972 kutscher mark and norsworthy 1977 and thurow 1979 this measure was found to be quite arbitrary depending on the arbitrary choice of base year used in the computation the third is the so called rate effect which assesses the effect of shifts in resources by holding constant sectoral rates of productivity growth cf nordhaus 1972 baily 1982 and gollop 1982 all three authors found that the rate effect had a negligible influence on the productivity slowdown this measure is the most theoretically sound of the three and my measure will fall in this category though differ in significant ways from previous formulations and show a greater effect on overall productivity growth from compositional changes i shall first develop a general model to measure such shifts or composition effects from a leontief input output framework sections i and ii results for the u s economy over the 1947 76 period will then be reported with particular emphasis on accounting for the productivity slowdown after 1967 sections iii iv and v conclusions and a comparison with other results will be discussed in section vi vii and viii i the standard model following the work of peterson 1979 let us define x column vector of gross output by sector at time t y column vector of final demand by sector at time t at matrix of inter industry technical coefficients at time t it row vector of labor coefficients at time t showing employment per unit of output kt row vector of capital stock coefficients at time t showing the capital stock required per unit of output p row vector of prices at time t showing the price per unit of output of each industry received for publication june 27 1983 revision accepted for publication october 19 1984 new york university i would like to express my appreciation to wassily leontief william baumol m i nadiri mark schankerman martin baily and andrew sharpe for helpful comments and to the division of information science and technology of the national science foundation for financial support

innovation spending and productivity growth in the german economy 1980 1986 a newly developed technique involving vertically integrated input output sectors is used to examine the relationship between labour productivity and innovation expenditures in the german economy during the period 1980 to 1986 the productivity measures used dubbed harrod robinson read hrr take into account the direct and indirect labour used in each consumption goods sector included in these measures is the labour content of new capital investment the hrr measures show higher rates of productivity growth in most sectors compared to the simple direct labour requirements measures this is due to the fact that the hrr measures take into account the increased efficiency with which new capital is produced the second part of the study examines the relationship between labour productivity and innovation expenditures as measured by the ifo institute for economic research munich innovation survey using cross section data for 58 german industries a strong correlation was found between direct labour pr

the impact of outsourcing on the transaction costs and boundaries of manufacturing abstract this paper discusses the concept of outsourcing along with an account of the economic benefits that are achieved by reconfiguring the organization and reducing the transaction costs of providing products and services with the practice of outsourcing experiencing exceptional growth this paper examines the corresponding change decline in uk manufacturing as an economic activity and considers how the economic benefits of outsourcing alter the contribution that an organization makes to a sector s gross domestic product to assess this issue an input output methodology for measuring economic restructuring in uk manufacturing is presented

new goods and the measurement of real economic growth measured economic growth has slowed in advanced economies since the mid 1970s a number of explanations have been advanced one being that the slowdown is an artifact of the statistical system in particular one suspected source of error is the way the statistical system deals with the new kinds of information products that are central to the current wave of technical change these goods are often produced with dramatic and historically unprecedented increasing returns to scale hence their introduction is followed by a considerable period of falling prices much of which may be going unmeasured given the usual lags before new products enter the commodity baskets on which price deflators are based in addition there is a general sense that the pace of technical change has been accelerating the conjecture is that the benefits of this very novelty and the increased range of choice are going unmeasured and that these factors are becoming more important over time diewert and fox 1997 a number of analyses have sought to quantify the extent to which new goods are a source of bias in price measurement and also therefore in the measurement of real i e deflated economic growth e g diewert 1996 grilliches 1996 u s senate boskin et al advisory commission 1996 crawford 1993 the consensus is that there is an upward bias on the order of half a percent per annum however the boskin commission considered only the product cycle biases arising from unmeasured price declines that occur after a commodity first appears on the market their estimates do not include any measure of the novelty of new goods as such nor the effects due to differential impacts by income group to aid our thinking we have constructed a simplified model of an economy and then used this to explore the effects of introducing new goods on various measures of real economic growth 2 our model xecon for experimental economy includes both utility loving individuals and profit motivated firms xecon also includes a statistician who computes several variants of the time series of real gdp based on alternative empirical price deflators finally xecon has an omniscient creator who can measure social welfare and compute true standard of living indices

the deindustrialisation tertiarisation hypothesis reconsidered a subsystem application to the oecd7 the diffusion of outsourcing both national and international and vertical fdis among manufacturing firms along with the higher integra tion of business services in manufacturing has recently led to question the empirical evidence supporting the deindustrialisation tertiarisation dt hypothesis rather than a real phenomenon it has been argued dt would be an apparent one mainly due to the reorganization of production across national and sectoral boundaries the empirical studies that have dealt with the topic so far have not been able to effectively rule out such possibility because of two main limitations the sectoral level of the analysis and or the national focus in order to overcome them the paper carries out an appreciative investigation of the actual extent of the dt occurred in the oecd area over the 80s and the 90s by moving from a sector to a subsystem perspective thus retaining both direct and indirect relations and by referring to a pseudo world of 7 oecd countries thus taking into account the global dimension of the phenomenon the results strongly support the dt hypothesis although the weight of business sector services in the manufacturing subsystem increased acting as a counterbalancing tendency to the manufacturing decline subsystem shares significantly decreased thus confirming dt as a more fundamental trend of modern economies

on the heterogeneity of sectoral growth and structural dynamics evidence from austrian manufacturing industries this article studies the factors driving structural dynamics across austrian manufacturing industries using a structural vector autoregressive model svar framework we identify sectoral labour productivity and demand shocks that are orthogonal to aggregate shocks we analyse the sectoral impulse response patterns and find that the effect of industry labour productivity shocks on industry output growth is quite heterogeneous we devise a taxonomy that allows us to classify industries according to the effect productivity and demand shocks have on output growth we also show that productivity shocks are quite heterogeneous not just across industries but also over time whereas shocks to sectoral demand growth are more systematic we test the taxonomy in a panel regression and are able to confirm our sector specific findings industry demand shocks and aggregate productivity and demand shocks lead always to an increase in industry output and industry employment

mesures de la croissance de la productivite dans un cadre d equilibre general l economie du quebec entre 1978 et 1984 the authors propose a new measure of total factor productivity tfp growth in a general equilibrium setting it measures by how much the efficiency frontier moves outwards given the availability of primary resources the technology and the structure of domestic final demand prices are endogenous the authors apply this new measure to the quebec economy between 1978 and 1984 they find negative tfp growth rates in most of the manufacturing industries and positive and relatively high growth rates in the service sectors aggregate annual tfp growth was 1 1 percent over this period

wage competition with heterogeneous workers and firms we study imperfect competition in the labor market when both workers and firms are heterogeneous when firms cannot observe workers skill firms pay workers equal wages but workers absorb training costs when firms can identify worker types firms pay different net wages to different workers voters select the level of general education that is financed by a lump sum tax workers are on average better off when firms can observe workers skill for a given level of general human capital but the median voter prefers a higher level of general human capital when firms cannot observe worker types

does city structure affect job search and welfare we develop a model in which workers search efficiency is negatively affected by access to jobs workers location in a city is endogenous and reflects a trade off between commuting costs and the surplus associated with search different configurations emerge in equilibrium notably the unemployed workers may reside far away segregated city or close to jobs integrated city we prove that there exists a unique and stable market equilibrium in which both land and labor markets are solved for simultaneously we find that despite inefficient search in the segregated city equilibrium the welfare difference between the two equilibria is not so large due to differences in commuting costs we also show how a social planner can manipulate wages by subsidizing taxing the transport costs and can accordingly restore the efficiency

readjustment potentials in industrial energy efficiency and structure abstract with the availability of input output data for 1977 it is possible to analyze the short run effects of the 1974 energy price increase as well as other factors on the energy efficiency of the industries of the economy such an analysis is conducted here using a number of measures derived through the energy input output model attention is focused on patterns of energy use changes in energy intensities through time and the factors which underlie these changes a specific measure of the degree to which energy substitution is attributable to changes in direct and indirect energy requirements is developed and estimated results show that large changes in the economy s overall industrial energy requirements are not observed between 1963 and 1977 however for individual fuels large changes in intensity values are not at all uncommon among industries

symmetric equilibrium existence and optimality in differentiated product markets abstract equilibrium existence and optimality are analysed in a market for products differentiated by their variety a game of three stages is analysed firms enter in the first stage choose varieties in the second stage and choose prices in the third stage the existence of subgame perfect equilibria is established at equilibrium products are symmetrically located in the space of characteristics and are offered at equal prices the surplus maximizing solution is characterized and it is shown that surplus maximizing product diversity is lower than the equilibrium one

structural change and the kaldor facts in a growth model with relative price effects and non gorman preferences u s data reveal three facts 1 the share of goods in total expenditure declines at a constant rate over time 2 the price of goods relative to services declines at a constant rate over time and 3 poor households spend a larger fraction of their budget on goods than do rich households i provide a macroeconomic model with non gorman preferences that rationalizes these facts along with the aggregate kaldor facts the model is parsimonious and admits an analytical solution its functional form allows a decomposition of u s structural change into an income and substitution effect estimates from micro data show each of these effects to be of roughly equal importance

relative prices and sectoral productivity the relative price of services rises with development a standard interpretation of this fact is that productivity differences across countries are larger in manufacturing than in services the service sector comprises heterogeneous categories we document that many disaggregated service categories such as transportation communication and finance feature a negative income elasticity of relative prices whereas the relative price of aggregate services is mostly driven by large expenditure categories in housing collective government and health that feature a positive income elasticity of relative prices we also document a substantial reallocation of expenditures in services from categories with positive income elasticities traditional services to categories with negative elasticities non traditional services as income rises using an otherwise standard multi sector development accounting framework extended to include an input output structure we find that the cross country income elasticity of sectoral productivity is large in non traditional services 1 15 smaller in manufacturing 1 05 and much smaller in traditional services 0 67 eliminating cross country productivity differences in non traditional services reduces aggregate income disparity by 58 percent a 7 9 fold reduction in aggregate productivity differences we also find that the heterogeneity between traditional and non traditional services has a substantial impact on aggregate productivity and that the input output structure is important in this assessment

the modest environmental relief resulting from the transition to the service economy a service transition is supposed to lead to the decline of energy intensity energy gdp we argue that this interpretation is overly optimistic because the shift to a service economy is somewhat of an illusion in terms of real production several recent studies of structural effects on energy intensity have made the error of using sector shares in current prices combined with gdp in constant prices which is inconsistent and ignores the different behaviour of prices across sectors we use the more correct method of sector shares in constant prices and make an attempt to single out the effect from the real service transition by using two complementary methods shift share analyses in current and constant prices and logarithmic mean divisia index lmdi for 10 developed and 3 emerging economies a service transition is rather modest in real terms the major driver of the decline in energy intensity rests within the manufacturing sector meanwhile the transition to a service sector had a small downward impact on energy intensity in 7 of the developed countries and no impact in the others for emerging economies like brazil mexico and india it is the residential sector that drives energy intensity down because of the declining share of this sector as the formal economy grows and as a consequence of switching to more efficient fuels less

structural change in a multisector model of growth we study a multi sector model of growth with differences in tfp growth rates across sectors and derive sufficient conditions for the coexistence of structural change characterized by sectoral labour reallocation and constant aggregate growth path the conditions are weak restrictions on the utility and production functions commonly applied by macroeconomists we present evidence from us two digit industries that is consistent with our predictions about structural change and successfully calibrate the historical shift from agriculture to manufacturing and services we show quantitatively that reasonable deviations from our conditions do not have a big impact on the properties of the model

knowledge dynamics structural change and the geography of business services the article provides a review of and presents some empirical evidence on the dynamics of knowledge structural change and spatial concentration of economic activities focusing on the case of business services it explores how the role of knowledge has evolved in relation to the dimensions of i science technology and structural change ii the long term processes of tertiarisation of the economy in particular the growth of business services iii the spatial concentration of business services as an outcome of the increasing volume and complexity of knowledge and the need to manage it through spatial proximity our arguments are supported by empirical evidence on the spatial concentration of business services in the european regions

environmental innovations in services manufacturing services integration and policy transmissions abstract this paper investigates the relevant factors behind the almost unexplored realm of environmental innovation in services using a dataset of 8161 italian service firms specifically we test whether manufacturing services integration matters for environmental innovations in addition taking account for the heterogeneity of the service industries we analyse whether environmental policies for manufacturing transmit induced innovation effects to services our findings show that i the drivers of environmental innovations related to carbon abatement and energy efficiency differ across industries and ii cooperation training environmental management systems and public funding play key roles in these processes the integration of services and manufacturing through push and pull effects and the environmental policy transmission effect from manufacturing to services generally do not seem to have a positive impact on the diffusion of environmental innovations

foreign direct investment and de industrialisation the purpose of this study is to discuss the various issues regarding de industrialisation and to systematically analyse the causes of this phenomenon in addition the effect of the recent increase in foreign direct investment on de industrialisation will be analysed unlike extant studies this study employs a more reliable method of estimation known as the generalised method of moments system for establishing the importance of foreign direct investment fdi with regard to de industrialisation for a general assessment of the different factors of de industrialisation including fdi this study classifies the causes of de industrialisation in oecd countries into external and internal factors as a result the analysis has proved that not only internal and external factors are major factors of de industrialisation fdi inflow and outflow are also major factors

an energy factor proportions model of the us economy abstract a factor proportions model examines the effects of falling energy input and its rising price in the us economy based on a novel production function motivated by the definition of physical work this physical production function specifies separate interaction of energy and labor with capital estimated with annual data from 1951 to 2008 energy has a large output elasticity and inelastic own input demand a rising energy price lowers the return to capital in the general equilibrium even though capital is a moderate substitute for energy energy has robust comparative static elasticities linked to manufacturing in the general equilibrium

outsourcing labor market pooling and labor contracts this paper considers the interaction between input sharing and labor market pooling in urban areas in particular it examines the impact of the size of a city and business risks on the organizational structures of firms located in urban agglomerations and it also discusses the impact of organizational structure on incentives to insure workers against income risks it is shown that manufacturing firms suffer from a coordination game in their decision to outsource production the existence of idiosyncratic risks causes manufacturers to refrain from outsourcing the incentives to offer wage and employment protection to workers are more pronounced when manufacturers outsource the production of their inputs to a local market which mitigates the impact of labor market pooling

competition and teacher pay i introduction recent policy initiatives are increasing the degree of competition in primary and secondary education the number of charter schools is growing at an astounding rate vouchers are available to eligible children in florida utah and a number of cities including washington d c kafer 2005 school districts throughout the country are experimenting with subcontracting campuses to private firms the increasing popularity of policies that foster school competition dovetails with a burgeoning literature on the effects of educational competition researchers have examined the effects of educational competition on academic outcomes average public school spending and school district efficiency l this research has largely ignored the effects of increased competition on teacher pay yet reductions in the market power of school districts could have a significant impact on teacher earnings if school districts behave as typical monopsonists or oligopsonists when hiring then a lack of competition suppresses wages and policies that are designed to enhance competition among schools could lead to higher teacher salaries ceteris paribus 2 alternatively if a school district s position as a monopolistic provider of education services generates economic rents there are few parties to whom those rents might be dissipated besides school district personnel if teachers have been able to appropriate a share of the economic rents generated by the market power of school districts then increased competition could lower teacher salaries 3 this study uses individual data on more than 335 000 teachers from 670 texas school districts to explore the empirical relationship between competition and teacher pay the analysis suggests that a lack of competition in the public school system has led to significant market power for texas school districts resulting in lower wages for most texas teachers but higher wages for teachers in relatively concentrated markets ii theoretical models the elementary and secondary education industry in the united states is often highly concentrated more than 30 of u s educational markets are served by a single public school district and there are many more that are served by only a handful of educational providers 4 the concentrated nature of education markets suggests two alternative models of teacher wage determination the first is a classic oligopsony model and the second is a rent sharing model an oligopsony model of teacher wage determination boal and ransom 1997 lay out a classic cournot model of oligopsony that can be directly applied to the educational labor market 5 firms school districts choose an employment level l sub i to maximize the firm s revenue function r sub i given the employment level of all other firms in the market l sub i 1 r sub i l sub i w l sub i l sub i l sub i the market wage is determined by the total employment of all firms the first order condition for each firm implies that it chooses l sub i such that 2 mrp sub i w w l sub i l epsilon sup 1 in this model the gap between the marginal revenue product of firm i mrp sub i and the wage rate w depends on the firm s employment share l sub i l and the inverse wage elasticity of labor supply for the market epsilon sup 1 6 assuming that firms have different marginal revenue products the employment weighted average across all the firms in the market is 3 summation over i mrp sub i w l sub i wl epsilon sup 1 summation over i l sub i l sup 2 the last term on the right hand side is the familiar herfindahl index of market concentration thus wages are a function of market concentration h the employment weighted average marginal revenue profit per worker bar

winter is coming robert gordon and the future of economic growth this comment assesses the claim of the rise and fall of american growth that for coming decades growth in us tfp will continue the disappointing pace of the last decade while predicting future technological advance is difficult there are indications that gordon may actually be too optimistic on future tfp growth the share of output from manufacturing which still generates the majority of r d expenditures and has historically more rapid tfp growth will continue to fall there are substantial obstacles to rapid tfp advance in much of the rest of the economy construction transport health care and other services

electricity substitution some local industrial evidence substitution elasticities between electricity production and non production labor and capital in alabama s textiles paper chemicals and primary metals industries are estimated there is generally weak substitution between inputs and declining shares of production labor textiles exhibit a trend toward more capital intensive techniques all outputs are biased away from electricity electricity demand is price inelastic which implies regulatory constraints are binding

is past prologue prospects for state and local sales tax bases general sales taxes provide substantial fractions of state and local revenues in the us however state and local sales tax bases have been eroding steadily during the past 50 years base erosion contributes to fiscal stress in the states therefore prospects for continued sales tax base erosion are important to state tax administrators policymakers and public finance economists this article offers a quantitative assessment of base erosion we construct time series of a representative state sales tax base and its price index and estimate a structural demand system for taxed and untaxed commodities we use the estimates to forecast the sales tax base over coming years time series forecasts and a weighted average forecast are constructed to reduce the likelihood of forecast error the results suggest slow but relentless base erosion and possible recurring fiscal stress in states where sales tax revenues make up sizable fractions of total tax revenues

multinational enterprises service outsourcing and regional structural change this paper offers a joint analysis of two phenomena characterizing most advanced economies in recent decades the rise of foreign ownership in manufacturing activities and the pervasiveness of the service economy the aim of the study is to examine the structural transformation of regional economic systems within the uk by focusing on the role played by foreign multinational enterprises mnes in manufacturing in facilitating the development of services from a conceptual perspective this research relies on different strands of literature on the impact of foreign direct investment fdi on recipient economies on outsourcing and regional structural transformation and on the identification of local multipliers the empirical analysis focuses on a specific demand side channel for structural change the forward linkage established by foreign manufacturing mnes with local service providers through outsourcing descriptive evidence shows that service outsourcing by foreign plants operating in manufacturing is pervasive compared to outsourcing by their domestic counterparts on this basic premise we estimate the multiplicative effects that foreign manufacturing activity has on the creation of service jobs in local labour markets in order to produce reliable estimates of a local multiplier the methodology adopts an instrumental variable approach our findings suggest that foreign presence in manufacturing can be a catalyst of regional structural change by stimulating the generation of new jobs in the tertiary sector via demand linkages

r d capital rate of return on r d investment and spillover of r d in japanese manufacturing industries the effect of r 50d on productivity growth in japanese manufacturing industries is examined using more accurate firm r 50d expenditure data than widely used data based on financial statements series of r 50d capital are constructed then rate of return on r 50d investment is estimated in addition the impact of other industries r 50d on the productivity growth of an industry is also estimated an attempt is made to determine the effect of electronics technology upon the productivity growth of other industries through the transaction of the intermediate electronics goods with improved quality and through the diffusion of the new technological knowledge discovered japanese technology trade 1977 1981 copyright 1989 by mit press

sources of structural change in the united states 1963 78 an input output perspective a 400 sector input output framework is used in the decomposition of industry output change in the united states during the period 1963 78 into the portion att ributable to changes in the level and composition of final demands and the fraction attributable to changing input output coefficients the analysis concludes that for nearly 80 percent of the 400 industri es final demand changes account for the majority of output change the most rapidly growing and most rapidly declining sectors are among those most affected by coefficient change these results underscore the role of aggregate economic policy as a channel of any national industrial policy copyright 1987 by mit press

car ownership and the labor market of ethnic minorities we show how initial wealth differences between low skilled minorities and white workers can generate differences in their labor market outcomes this even occurs in the absence of a taste for discrimination against ethnic minorities or exogenous differences in distance to jobs because of the initial wealth difference minorities cannot afford to buy a car while whites can car ownership allows whites to reach more jobs per unit of time which gives them a better bargaining position in the labor market as a result in equilibrium ethnic minorities end up with both higher unemployment rates and lower wages than whites furthermore we also show that it takes more time for minorities to reach their jobs even though they travel less miles when employed those predictions are consistent with the data better access to capital markets or better public transportation will reduce the differences in labor market outcomes

sources of output change in china 1987 1997 application of a structural decomposition analysis since the beginning of the economic reforms implemented in the industrial sectors of china the economy has grown and changed rapidly the high gdp growth rates recorded since 1985 have stimulated unprecedented changes in the economic structure of this developing economy the major causes of the changes are the increase in consumption and investment production technological change and trade the objective was to analyse this type of structural change and to explore the sources of economic growth during the period 1987 1997 by using the method of structural decomposition analysis sda the chosen sda method based on the comparison between two input output tables allowed us to decompose each sector s and industry s output growth it enabled the relative impact of final demand and technological change of each industry on overall growthto be measured

the decomposition of disturbances to national output of china the evidence of sectoral and regional shocks the chinese government has established policies to promote its industrial sectors and to develop coastal provinces since the late 1978 to investigate the extent and reason the output growth in china has been influenced by these policies an error component model is employed to decompose the importance of sectoral and regional shocks to variations in national output the results show that both sectoral specific shocks common across regions and regional specific shocks common across sectors are important in explaining the disturbance of national output in china specifically sectoral specific shocks consistently explain relatively more disturbance of chinese output than regional specific shocks do our empirical results are somewhat different from stockman 1988 and costello 1993 since they show almost equal explanatory power of sectoral and national shocks in accounting for national outputs in oecd countries

learning by doing changes in industrial structure and trade patterns and economic growth in a small open economy abstract this paper presents a simple dynamic model which allows for changes in both industrial structure and trade patterns during the process of economic growth learning by doing in the producer service sector is the source of endogenous growth interesting interdependences between economic growth and the structure of the economy are obtained economic growth is accompanied by changes in industrial structure and comparative advantage while changes in industrial composition of the manufacturing sector accelerate economic growth furthermore this paper analyzes the relationship between economic growth and the endowment structure and the effects of two types of technology transfers on economic growth

service boom in the indian economy an analysis of causal influences the article decomposes the influence behind the growth of service activities in the indian economy over the last three decades into three components the final demand effect input structure effect and reallocation effect and makes empirical assessments thereof in terms of the influences the behaviour of the group of services used basically as intermediate inputs designated as category i services was distinct from the rest of heterogeneous services combined as community social and personal services the study finds that apart from the final demand effect the other two influences too played very important but different roles in different phases of growth

bureaucracy inefficiency and time this paper examines the bureaucrat s choice between devoting resources to economic rents organizational slack and maximizing the budget of the agency a new model of bureaucracy is developed using utility rather than a demand function as its foundation it is shown that increases in income alter the slack budget constraint to favor organizational slack over budget maximization modern federal bureaucracies in the u s are predicted to be slack maximizing and x inefficient

estimated substitution elasticities of a nested ces production function approach for germany this paper demonstrates an econometric estimation of substitution elasticities of a nested constant elasticity of substitution production function ces between capital energy and labour for the west german industry in the last few years ces production functions have become more important in economic modelling especially for applied general equilibrium models where ces production functions are an important building stone in the literature different results of estimated elasticities can be found this paper investigates three different approaches for nested ces production functions and their estimated substitution elasticities capital energy and labour are estimated as substitutes for the west german industry in the long run

incorporating experience curves in appliance standards analysis the technical analyses in support of u s energy conservation standards for residential appliances and commercial equipment have typically assumed that manufacturing costs and retail prices remain constant during the projected 30 year analysis period there is however considerable evidence that this assumption does not reflect real market prices costs and prices generally fall in relation to cumulative production a phenomenon known as experience and modeled by a fairly robust empirical experience curve using price data from the bureau of labor statistics and shipment data obtained as part of the standards analysis process we present u s experience curves for room air conditioners clothes dryers central air conditioners furnaces and refrigerators and freezers these allow us to develop more representative appliance price projections than the assumption based approach of constant prices these experience curves were incorporated into recent energy conservation standards for these products the impact on the national modeling can be significant often increasing the net present value of potential standard levels in the analysis in some cases a previously cost negative potential standard level demonstrates a benefit when incorporating experience these results imply that past energy conservation standards analyses may have undervalued the economic benefits of potential standard levels

endogenous job destruction and job matching in cities we propose a spatial search matching model where both job creation and job destruction are endogenous workers are ex ante identical but not ex post since their jobs can be hit by a technological shock which decreases their productivity they reside in a city and commuting to the job center involves both pecuniary and time costs as a result workers with high wages are willing to live closer to jobs to save on time commuting costs we show that in equilibrium there is a one to one correspondence between the productivity space and the urban location space workers with high productivities and wages reside close to jobs have low per distance commuting costs and pay high land rents we also show that higher per distance commuting costs and higher unemployment benefits lead to more job destruction

social welfare and income inequality in a system of cities abstract this paper develops a general equilibrium model of a system of core periphery cities to examine the main determinants of intra and inter regional income disparities the economy is populated by a continuum of homogeneous unskilled and heterogeneous skilled workers unskilled workers whose wages are determined competitively specialize in food production in local cities skilled workers whose wages are determined according to a nash bargain manufacture a high tech commodity in the metropolis we establish conditions under which this core periphery equilibrium spatial configuration emerges we show that both intra and inter regional income disparities are present the determinants of each type of disparity and the social welfare implications are fully investigated our results suggest that public policy programs that improve income equality may not be necessarily welfare enhancing

how urbanization affect employment and social interactions we develop a model where the unemployed workers in the city can find a job either directly or through weak or strong ties we show that in denser areas individuals choose to interact with more people and meet more random encounters weak ties than in sparsely populated areas we also demonstrate that for a low urbanization level there is a unique steady state equilibrium where workers do not interact with weak ties while for a high level of urbanization there is a unique steady state equilibrium with full social interactions we show that these equilibria are usually not socially efficient when the urban population has an intermediate size because there are too few social interactions compared to the social optimum finally even when social interactions are optimal we show that there is over urbanization in equilibrium

technological change in canada 1961 80 an application of the surrogate wage function this paper applies c ozol s surrogate wage function to canadian input output data to analyz e the general properties of technological change during the 1961 80 p eriod technological change manifests itself in the shifts of the est imated surrogate wage curves which indicate the changing capital and labor intensities of the production system the empirical results of this study imply that technological progress in canada is generally l abor saving over the entire 1961 80 period and capital saving over th e 1961 66 period the actual tendencies of the technological evolutio n investigated appear to be explained by the continuous mechanization of the production process

a physical production function for the us economy this paper introduces and presents an estimate of a production function motivated by physics with labor and energy providing force to produce work the separate interactions of capital with labor and energy lead to reliable estimates for us output from 1951 to 2008 with fixed capital assets the labor force and total btu energy inputs underpaid energy has an output elasticity twice that of labor overpaid labor faces elastic own substitution while there is weak substitution for capital the policy implications of these properties are discussed

structural change in advanced nations a new set of stylised facts we provide new evidence on patterns of structural change in advanced economies reconsidering the stylised facts put forward by kaldor 1963 kuznets 1971 and maddison 1980 since 1980 the services sector has overwhelmingly predominated in the economic activity of the european union japan and the us but there is substantial heterogeneity among services personal finance and business services have low productivity growth and increasing shares in employment and gdp by contrast shares of distribution services are constant and productivity growth is rapid we find that the labour share in value added is declining while the use of ict capital and skilled labour is increasing in all sectors and regions

dynamic translog and linear logit models a factor demand analysis of interfuel substitution in us industrial energy demand abstract we compare and contrast two popular dynamic flexible functional forms for cost functions the translog and the logit j bus econ stat 8 1990 347 353 using data on us industrial energy demand from 1960 to 1992 which has been analysed by previous studies energy econ 11 1989 89 94 appl econ 21 1989 931 945 j bus econ stat 13 1995 459 465 we show the crucial role played by different dynamic formulations of the translog in this analysis of factor demands with respect to rates of dynamic adjustment and substitution possibilities we conclude that the poor performance of the dynamic translog relative to the dynamic logit cannot be explained solely by dynamic model mis specification or the inclusion of price unresponsive non energy fuel use data our most robust empirical result is that coal and oil are substitutes

monopsony in the labor market this paper surveys recent theoretical and empirical research on monopsony in labor markets broadly defined as upward sloping labor supply to an employer we compare older monopsony models based on small numbers of employers with newer models based on labor market frictions such as moving costs and search we also compare older econometric approaches that focus on static wage concentration relationships with newer approaches that focus on dynamics our review of empirical estimates suggests that monopsony power based on small numbers of employers is probably rare but occasionally large while monopsony power based on frictions is probably widespread but small on average

local labor markets job matching and urban location we present a new way of modeling local labor markets by linking the space of workers skills and the physical space of cities the key lesson of our analysis is that firms exploit workers in these two spaces by setting wages that are below the competitive level the degree of monopsony power depends on the elasticity of the firm s labor pool which is inversely related to the costs workers incur in commuting and acquiring skills our analysis thus shows how socioeconomic ghettos emerge as workers with poor skill matches are also those who incur the highest commuting costs

a logistic growth theory of public expenditures a study of five countries over 100 years this paper offers a new theory and empirical testing of long term trends of public expenditures for five countries while wagner s law would imply an exponential growth process of the ratio between public expenditures and national income g y the law should be rejected both on theoretical and empirical grounds because it disregards the role of ever increasing distortionary taxation however under some conditions the combination of wagner s law and the pigou s conjecture that the excess burden of taxation constrains the growth of public expenditures can be captured by a non linear first order differential equation the equation is the verhulst s logistic originally invented to model malthusian predictions on population growth the integration of a verhulst equation generates an s shaped curve this analytical framework combines intuitions from a welfare economics and a public choice perspective and potentially offers a new research strategy on the dynamics of government expenditures we offer preliminary econometric estimates on long run trends around 1870 1990 of g y in u s u k france germany italy these estimates confirm a pattern of similar trajectories in spite of different national parameters and suggest that the logistic view of growth of government is consistent with observed data

search in cities the aim of this paper is to expose the recent developments of urban search models which incorporate a land market into a search matching framework using these models we will be able to explain why unemployment rates vary within a city how city structure affects workers labor market outcomes how unemployment benefits and the job destruction rate affect the growth of cities and why workers living far away from job centers search less intensively and experience higher unemployment rates than those residing closer to jobs we are also able to explain why as compared to whites black workers spend more time commuting to work but travel less miles and search for jobs over a smaller area

private versus public schools in post apartheid south african cities theory and policy implications blacks and whites have different incomes decide where to locate in the city and which school to send their children to we show that despite the tuition fees imposed by whites and their remote location some black pupils attend the private school this market solution is shown not to be optimal because whites overprice education in order to limit black attendance at the private school three types of education policies are then considered transportation subsidies private school vouchers and public school spending the efficiency of such policies depends on the fee setting behavior of whites that strongly varies from one policy to another

labor specialization and the extent of the market this paper presents an analytical model of labor specialization workers make human capital investment decisions on the depth and the breadth of their skill given that firms have diverse job requirements and increasing returns to scale workers invest more for the depth of their human capital and less for the breadth as the size of the labor market increases also the larger the size of the market the more varieties of job requirements are used so that the average match between a worker and a firm improves

monopsony power pay structure and training although interest in monopsonistic influences on labor market outcomes has revived in recent years only a few empirical studies provide direct evidence on this topic in this article the authors analyze the effect of monopsony power on pay structure using a direct measure of labor market thinness the authors find evidence of monopsony power as firms facing fewer local competitors offer lower wages to skilled labor and trainees but not to unskilled labor the findings have important implications for the economic theory of training as most recent models assume monopsonistic pay setting for skilled labor but not for trainees

gray water and environmental externalities international patterns of water pollution through a structural decomposition analysis abstract despite regulatory measures restricting industrial and agricultural operations from pouring pollutants into lakes streams and rivers around 1 1 trillion m3 of wastewater were still disposed in waterways around the world in 2009 and this amount continues to grow several studies have analyzed the determinants of gray water increase at local level but so far none has explored them in an international context to highlight the role of global value added chains and the dichotomy between developed and developing nations in order to provide insights on the dynamics of water pollution worldwide this paper analyzes the main drivers of gray water discharge during the 1995 2009 period and the effort on reducing gray water compared to other environmental externalities based on the world input output database a structural decomposition analysis sda of gray water generation shows that domestic demand for food is the main driver of gray water changes in all countries while relocation of industrial activities to developing nations has disproportionally transferred this burden from developed countries manufacturing industries we highlight that while national policies should target water pollution from the agri food sector within each country water discharges from manufacturing sectors in global value chains need to be regulated from an international perspective besides the empirical evidence on water pollution drivers currently lacking in the environmental literature this paper also introduces a novel hybrid multiplicative additive sda that overcomes the issue of distributing large interaction terms in standard additive models and allows simulating mitigation scenarios it portrays the heterogeneity among sectors of how environmental abatement policies affect water and air pollution

labour productivity and energy intensity in australia 1974 87 an input output analysis abstract energy and labour productivity in australia is examined using the notion of vertical integration in an input output framework results indicate a decline in productivity growth rates during the 1978 1982 period for both energy and labour energy productivity growth was negative during this period the productivity slowdown was pronounced in the natural resource sectors agriculture food products and minerals results indicate that movements in primary input efficiency are positively correlated suggesting that input complementarity may override substitution effects during macroeconomic shocks

on the rate of return to schooling quality empirical evaluation of the effect of school quality or type and amount of resources per student on adult earnings requires a conceptual framework a model of the returns to schooling in a simple human capital growth context is extended to illustrate how factors such as consumption benefits of students parental concern over equity between siblings and use of schools to facilitate parental labor supply can alter the apparent return to school quality the need for microlevel time diary and other data on human capital formation in both classrooms and families is highlighted copyright 1996 by mit press

is there monopsonistic discrimination against immigrants the authors investigate immigrants and natives labor supply to the firm within an estimation approach based on a dynamic monopsony framework applying duration models that account for unobserved worker heterogeneity to a large administrative employer employee data set for germany they find that immigrants supply labor less elastically to firms than do natives under monopsonistic wage setting the estimated elasticity differential predicts a 7 7 log points wage penalty for immigrants thereby accounting for the entire unexplained native immigrant wage differential of 5 8 to 8 2 log points when further distinguishing immigrant groups differing in their time spent in the german labor market their immigration cohort and their age at entry the authors find that the observed unexplained wage differential is larger for those groups that show a larger elasticity differential relative to natives these findings not only suggest that search frictions are a likely cause of employers more pronounced monopsony