comparing the incomes of nations a critique of the international comparison project this article s main purpose is to discuss certain key problems that arise in calculating purchasing power parities ppps when making international comparisons of real product while reviewing partially the work of irving kravis alan heston and robert summers 1982 before beginning the discussion the author wishes to record his opinion that this work of kravis heston and summers carried out and successively published over the past 15 years represents one of the great contributions to applied economics in the article that precedes this one kravis provides a survey of the applications of this type of data but it must be emphasized that any such listing can do only partial justice to the scope of new applications which seem to arise almost every day apart from applications to various aspects of international economic policy there is so much greater international variation in basic economic variables such as real income and relative prices than is usually found in typical intranational intertemporal comparisons that the new data inevitably represent an enormous increment in our science s general capacity for statistical experiment thus the debt owed to this team of research workers by the economics profession at large is immeasurable a ppp is essentially a form of international or interregional price index complicated but not essentially changed by the existence of national currencies for example suppose we found by some kind of index number calculation that the general price level in region a was 10 percent higher than in region b of the same country given a common currency the exchange rate between the money circulating in the two regions is clearly 1 0 but the ppp for region a in comparison with region b is 0 91 this being the number by which it is necessary to multiply a given nominal income in a to give it the same purchasing power as a corresponding income in b it follows that the ppp must be some average of the ratios among individual commodity prices in the two regions in the case of two countries with different currencies one can speak of a commodity ppp as being the rate of exchange between the two currencies which would equalize the price of a given commodity then the general ppp for the two countries is some average of the commodity ppps in international as in intertemporal comparisons there is a duality between the problem of measuring price levels and

economic growth and structure of domestic absorption evidence from internationally comparable data abstract using the chenery syrquin models of structural change and internationally comparable data on gdp per capita and shares of consumption investment and government spending for the 1960s and the 1970s a study is conducted of changes in the structure of domestic absorption that accompany economic growth relative to the conventional data real data indicate the fall in the share of consumption to be somewhat lower and the rise in the share of investment to be larger as gdp per capita rises the share of government is observed to decline although most previous studies indicate an increase in government share with economic growth

state investment tax incentives a zero sum game abstract over the past four decades state investment tax incentives have proliferated this emergence of state investment tax credits itc and other investment tax incentives raises two important questions 1 are these tax incentives effective in achieving their stated objective to increase investment within the state 2 to the extent these incentives raise investment within the state how much of this increase is due to investment drawn away from other states to begin to answer these questions we construct a detailed panel dataset for 48 states for 20 years the dataset contains series on output and capital their relative prices and establishment counts the effects of tax variables on capital formation and establishments are measured by the jorgensonian user cost of capital that depends in a nonlinear manner on federal and state tax variables cross jurisdictional differences in state investment tax credits and state corporate tax rates entering the user cost combined with a panel that is long in the time dimension are key to identifying the effectiveness of state investment incentives two models are estimated the capital demand model is motivated by the first order condition for a profit maximizing firm and relates at the state level the capital output ratio to the relative user cost of capital the twin counties model exploits both the spatial breaks discontinuities in tax policy at state borders and our panel dataset to relate at the county level the relative user cost to the location of manufacturing establishments using the capital demand model we find that own state capital formation is substantially increased by tax induced reductions in the own state price of capital and more interestingly substantially decreased by tax induced reductions in the price of capital in competitive states similarly using our twin counties model we find that county manufacturing establishment counts around state borders are higher on the side of the border with the lower price of capital but the difference is economically small suggesting that establishments are much less mobile than overall capital extensions of the capital demand model also reveal that state capital tax policy appears to be a zero sum game among the states in that an equiproportionate increase in own state and competitive states user costs tends to have no effect on own state capital formation

short versus long run implications of trade liberalization for poverty in three developing countries the impacts of global trade reform on poverty are a key concern in the current trade negotiations under the doha development agenda the aggregate poverty impacts of trade reform are in turn strongly linked to the impacts of such reforms on the rural population as they constitute the overwhelming majority of the poor in almost all developing countries this paper uses a new micro simulation methodology designed to analyze this critical issue the methodology is first explained and then applied to three developing countries of particular interest chile malawi and vietnam a key feature is the distinction between the short run impacts of reform where many factors most importantly selfemployed labor of the poor tend to be immobile between sectors and the longer run impacts when factors find their highest return regardless of the sector of employment this distinction makes an enormous difference and

the contribution of nonhomothetic preferences to trade abstract this paper estimates the economic significance of preference nonhomotheticity in international trade tastes are assumed to be identical but budget shares depend on per capita income a linear expenditure system is estimated for 34 countries over 11 commodity aggregates a counterfactual exercise is conducted to estimate the volume of trade caused by deviations from homotheticity the results indicate that nonhomothetic preferences may account for as much as one quarter of interindustry trade flows

state and local fiscal policy and growth at the border abstract the paper studies the connection between state and local fiscal policy as measured by the share of government spending and revenues in personal income and the economic activity of counties that share a state border i construct a panel of pairs of us counties that share a state border from the 1970s to 2012 economic activity is measured by county employment wages and business establishments the state and local government spending and revenue shares are aggregates for the states on the respective sides of the border i estimate distributed lag regressions of changes in economic activity on changes in state and local government budgets in two ways the first double difference utilizes change in the difference between border counties this suggests a quite modest relocation of economic activity away from states with fiscal expansion i then look at activity on each side of the border separately and find more substantial and consistently negative effects of fiscal expansion on both sides of the border a border county shares the negative consequences for its neighbor of growth in the size of that neighbor s state and local governments this negative fiscal externality is roughly half the size of the direct negative effects from similar own state spending increases and the sum of the two is substantial economically

relative prices and investment rates abstract we construct a panel for the price of aggregate investment over consumption and report the following observations 1 relative price differences across countries are large over the entire sample period and this conclusion is not affected by excluding non tradable consumption goods 2 relative price dispersion has decreased during the sample period 3 relative price changes are not persistent across periods while average price levels are moreover the persistence in relative price levels is higher for countries at low relative prices we show that the relative price of investment is negatively correlated with investment rates in a cross section of countries the standard one sector growth model is a natural framework to study quantitatively the effects of barriers to capital accumulation since there is a very simple mapping between barriers to investment and relative prices in this environment we simulate a calibrated version of the model in which barriers follow a stochastic process common to all countries and estimated using relative price data and obtain statistics for investment rates that closely resemble what we observe in the data in particular the model accounts for 90 of the 1985 gini index of relative investment rates and the decline in investment rate dispersion over time the model has two limitations as a theory of development first it cannot account for the income disparity in the data unless we assume unmeasured capital with barriers affecting the broad measure of capital second even under these extreme assumptions the model cannot account for the evolution of income disparity over time

measuring global poverty why ppp methods matter abstract we present theory and evidence to suggest that in the context of analyzing global poverty the eks approach to estimating purchasing power parities yields more appropriate international comparison of real incomes than the geary khamis approach our analysis of the 1996 and 2005 international comparison project data confirms that the geary khamis approach substantially overstates the relative incomes of the world s poorest nations and this leads to misleading comparisons of poverty across regions and over time the eks index of real income is much closer to being a true index of economic welfare and is therefore preferred for assessment of global poverty

the determinants of u s state economic growth a less extreme bounds analysis this study investigates u s state economic growth from 1970 to 1999 i innovate on previous studies by developing a new approach for addressing model uncertainty issues associated with estimating growth equations my approach borrows from the extreme bounds analysis approach of leamer while also addressing concerns raised by granger and uhlig sala i martin and others that not all specifications are equally likely to be true i then apply this approach to identify robust determinants of state economic growth my analysis confirms the importance of productivity characteristics of the labor force and industrial composition of a state s economy i also find that policy variables such as 1 size and structure of government and 2 taxation are robust and economically important determinants of state economic growth jel 040 051 h10 h20 h30 h70 r11 r58 c51

electoral cycles in government employment evidence from us gubernatorial elections abstract incumbents may opportunistically design policies increasing employment before elections or postpone cuts until afterwards i investigate electoral cycles in public sector employment around us gubernatorial elections exploiting staggered gubernatorial election cycles across states i use both county fixed effects models and a geographic discontinuity design that compares neighboring counties at state borders with a difference in gubernatorial election cycles consistent with manipulation state and local government employment per capita are higher leading up to elections afterwards employment abruptly returns to normal political and spatial heterogeneities are investigated including by election competitiveness term limits incumbent party affiliation and ideological alignment between the incumbent and the state legislature or local citizens differences across types of government employment and private sector employment are also explored

are international monetary fund quotas unfavorable to less developed countries a normative historical analysis abstract the international monetary fund criterion of economic size receives normative justification as the determinant of quotas but size must be represented by appropriately measured income reserves and trade the fund s income measure is deficient because it uses exchange rates rather than purchasing power parities to convert figures to a common currency if a favourable quota disparity is defined as an actual quota above the quota predicted by economic size less developed countries had adverse disparities early in imf history but increasingly favorable disparities over time given the inertia of relative quotas members would do well to maximize their initial quota

the spillover effects of state spending abstract this paper estimates the extent to which state spending is influenced by the spending of neighboring states examining several different metrics of neighborliness in order to better identify the channels for interstate spillovers it improves on previous studies by taking advantage of exogenous shocks to state medical spending to abstract from correlated local conditions and by allowing for spatial autocorrelation focusing on mandated increases in medical spending the analysis shows that each dollar of state spending causes spending in neighboring states to increase by almost 90 cents the most predictive measure of neighborliness is the degree of population mobility between states suggesting that rational concerns about adverse migration may drive the interdependence of state spending policy

what impact does the choice of formula have on international comparisons in this paper an empirical comparison of a number of alternative multilateral index number formulae is undertaken the magnitude of the effect of choosing one formula over another is ascertained using an appropriate cross sectional data set constructed under the auspices of the eurostat oecd purchasing power parity programme to this end a new indicator is proposed that facilitates the measurement of the difference between two sets of bloc consumption shares each computed using a different multilateral comparison method jel classification c31 c43 c81 e31 f31 o57 quel impact est ce que le choix des formules a sur les comparaisons internationales ce memoire propose une comparaison empirique d un certain nombre de formules de nombres indices multilateraux on tente de jauger la magnitude de l impact du choix d une formule plutot qu une autre en utilisant une base de donnees transversales appropriee construite sous l egide du programme de parite du pouvoir d achat eurostat ocde on propose un nouvel indicateur qui facilite la mesure de la difference entre deux ensembles de patterns de consommation chacun calculea l aide d une methode de comparaison multilaterale differente

income taxes and the destination of movers to multistate msas abstract we examine how differences in state income tax rates as well as other state and local taxes and public service expenditures influence the choice of state of residence for households federal tax filers moving into multistate metropolitan areas msas using data from the irs on the migration of taxpayers msas that are on borders provide a spatial discontinuity discrete differences in state tax rates within a single labor market these msas allow residents to live in one state and work in another state we find that differences in state income tax rates have a significant impact on the relative rate of migration to the states within an msa however contrary to what would be expected this impact is only significant in msas in which the filing state is based on employment states without reciprocity and not for those states in which the filing state is the state of residence states with reciprocity in msas where states do not have reciprocity agreements a difference of ten percent in tax rates leads to a 4 1 percent difference in the relative rate of incoming taxpayers analogously we find that a ten percent difference in state tax rates in these msas results in a 3 3 percent difference in the rate of tax base inflow agi our results suggest that one reason that differences in state income taxes appear to have more impact in multistate msas without reciprocity is that only relatively large differences in state income tax rates have any impact on migration and these differences are much more pronounced in msas without reciprocity

structural change and poverty in africa a decomposition anakysis for cote d ivoire abstract this paper provides evidence that economic destabilization and the absence of managed structural change in an economy can be more harmful to the welfare of the poor than the process of adjustment itself evidence comes from four consecutive years of household survey data from cote d ivoire spanning both a period of adjustment and destabilization these constitute a unique data base in africa to assess the impact of structural change on the poor the analytic methodology used is that of static and dynamic decomposition of poverty measures along policy relevant dimensions

wagner s hypothesis in time series and cross section perspectives evidence from real data for 115 countries internationally comparable data on income and government expenditure for 115 countries covering the period 1950 80 are used to assess the validity of wagner s hypothesis individual country time series data and several intercountry cross sections are studied besides a tremendous diversity in the position for various countries the results indicate that while there is support for the hypothesis in some time series data sets such support is lacking in most cross section estimates much of the support for the hypothesis reported in many earlier studies therefore was probably due to either use of limited samples or inadequate data comparability across the observations studied copyright 1987 by mit press

international price discrimination the pharmaceutical industry abstract it is generally asserted that price discrimination is a common feature of the international pharmaceutical market resulting in unnecessarily high medical costs to developing countries since it is pharmaceuticals that are the largest component of their health care expenditures however little comprehensive empirical research has been carried out to test this hypothesis this article compares the prices of identical packages of pharmaceutical products for 32 countries for the year 1975 and examines which factors contribute to thehuge price differences a strong positive relationship between price level and per capita gdp is found a 10 increase in per capita income being associated with on average 8 higher drug prices the implementation of direct price control measures by the government results on average in a 20 price reduction while government policies such as bulk purchasing through a centralized government agency promotion of the use of generics and to a lesser extent excluding patent protection seem to be sucessful in lowering the general price level of pharmaceuticals these results suggest that the pharmaceutical industry charges what the market will bear

housing market interventions and mobility an international comparison government interventions in housing markets usually have a strong side effect of lowering residential mobility interventions tend to raise the price of owner occupied dwellings and to lower rents compared with household incomes an index of these two tendencies is calculated for major conurbations of 16 countries among these switzerland south korea sri lanka and the former german democratic republic are of particular interest the rank order correlation of the index with residential mobility appears to be strong 0 962 and with an elasticity of 0 815 three quarters of the variance is explained no correlation was found with the home ownership rate in so far as lower mobility impairs housing welfare market interventions should be avoided but it is recognised that such interventions primarily reflect concern for equity and externalities

sudden stops sectoral reallocations and the real exchange rate abstract a sudden stop of capital flows into a developing country tends to be followed by a rapid switch from trade deficits to surpluses a depreciation of the real exchange rate and decreases in output and total factor productivity substantial reallocation takes place from the nontraded sector to the traded sector we construct a multisector growth model calibrate it to the mexican economy and use it to analyze mexico s 1994 95 crisis when subjected to a sudden stop the model accounts for the trade balance reversal and the real exchange rate depreciation but it cannot account for the decreases in gdp and tfp extending the model to include labor frictions and variable capital utilization we still find that it cannot quantitatively account for the dynamics of output and productivity without losing the ability to account for the movements of other variables

the heterogeneity of the consumer s preferences over time a system wide analysis of discrete panel data abstract the paper uses the individual and overall tests of heterogeneity for two complete piglog models of expenditure equations fitted to discrete survey data to investigate a possible change in the consumer s preferences in australia between 1975 76 and 1983 84 the evidence lends support to the hypothesis of significant behavioral change and also indicates that this change is attributable mainly to the convolution of the consumption patterns in current housing costs and food

economic information versus quality variation in cross country data data quality in the penn world tables varies systematically across countries that have different growth rates and are at different stages of economic development thus intro ducing measurement error correlated with variables of economic interest we explore this problem with three examples from the literature showing that the problem appears to be minor in growth convergence regressions but serious in estimating the effect of income volatility on growth and in a cross country lest of the permanent income hypothesis the results suggest at the least a need for performing appropriate sensitivity tests before draw

a formalisation and test of the factor productivity explanation of international differences in service prices this paper extends and integrates previous models of the determinants of international differences in the prices of services relative to tradable commodities the authors provide a model capable of identifying the effects of differences in total factor productivity on service price differences separately from the effects of factor endowment differences they propose a method for measuring these factor productivity difference effects and apply this to a sample of sixty countries in 1980 the authors results provide support both for the endowment difference and productivity difference explanations suggesting that in this context at least the two hypotheses are complements rather than competitors copyright 1996 by economics department of the university of pennsylvania and the osaka university institute of social and economic research association

public open access and private timber harvests theory and application to the effects of trade liberalization in mexico a common popular assertion is that trade liberalization encourages deforestation but whether this is true depends on how trade policies affect the allocation of land among competing uses and how they influence illegal cutting of public forests a model is presented that allows for forests to be either public or private and public forests are divided into protected or managed and threatened categories effects of price changes are shown on each part of the forest an empirical version of the model is applied to the case of mexico with nafta most scenarios considered show that nafta will have positive long run effects on forest cover in mexico but that this is net of losses on private lands

wealth varying intertemporal elasticities of substitution evidence from panel and aggregate data abstract this paper constructs and estimates a model of consumer preferences in which the intertemporal elasticity of substitution ies of consumption expenditure rises with the level of wealth the purpose of this paper is to measure the effect that systematic variation in the ies of poor and rich consumers has on the ies of aggregate consumption expenditure we find economically significant differences in the ies of poor and rich consumers in indian panel data on the consumption of individual households we also find economically significant differences in the ies measured in aggregate time series data for the u s and india

extending the sample size in cross country demand analysis abstract results from different phases of the international comparison project and from different sets of countries are compared and combined

corruption competition and democracy abstract this paper presents a model of the interaction between corrupt government officials and industrial firms to show that corruption is antithetical to competition it is hypothesized that a government agent that controls access to a formal market has a self interest in demanding a bribe payment that serves to limit the number of firms this corrupt official will also be subject to a detection technology that is a function of the amount of the bribe payment and the number of firms that pay it under quite normal assumptions about the shape of the graph of the detection function multiple equilibria can arise where one equilibrium is characterized by high corruption and low competition and another is characterized by low corruption and high competition some suggestive empirical evidence is presented that supports the main hypothesis that competition and corruption are negatively related

true world income distribution 1988 and 1993 first calculation based on household surveys alone the paper derives world income or expenditure distribution of individuals for two years 1988 and 1993 it is the first paper to calculate world distribution for individuals based entirely on household survey data from 91 countries and adjusted for differences in purchasing power parity between the countries measured by the gini index inequality increased from an already very high 63 in 1988 to 66 in 1993 the increase was driven more by rising differences in mean incomes between the countries than by rising inequalities within countries the most important contributors were rising urban rural differences in china and slow growth of rural incomes in south asia compared to several large developed market economies

capitalism socialism and productivity an econometric analysis of ces and translog functions abstract the authors inquire whether there is a difference in productivity between capitalist and socialist economies perhaps varying with the level of development data on 65 countries in 1975 provide a basis for estimating ces and translog functions relating national income to nine resource variables and two variables influencing productivity prior information on marginal products is used in deriving bayesian estimates the estimates indicate that although the relative productivity of socialist economies may decline with development the differences in productivity are insignificant at all observed levels of development

u s state and local fiscal policy and economic activity do we know more now early reviews of the academic literature on the economic effects of state and local taxes and expenditures suggested that not enough was known upon which to base policy the reviews called for better data and improvements in empirical methodology this paper reviews studies conducted since the early literature reviews to assess our current state of knowledge the conclusion of the study is that we know more now but our knowledge is unlikely to ever be sufficient to provide universal policy guidance rather we suggest that more research is needed on specific state and local policies for specific circumstances consistent with the general principles that guide place based policy

the importance of local corporate taxes in business location decisions evidence from french micro data determinants of businesses locations are known to be multiple locations of partners and competitors are crucial as well as the territory s local characteristics to consider the importance of local taxes we build a poisson model to explain the number of business creations observed in a given municipality first results suggest that there are unobserved factors driving firm creation that are positively correlated with the level of local taxes to deal with this potential source of endogeneity we present an approach close to regression discontinuity design we find that everything else being equal higher local taxes actually tend to deter firms from setting up in a given zone but the effect is weak

user cost and housing tenure in developing countries abstract this paper reports on research conducted at the world bank to increase understanding of developing country housing markets in particular of housing demand behavior the objectives of the paper are 1 to briefly review recent evidence on housing demand parameters in developing countries including new estimates for colombia egypt el salvador ghana india jamaica korea and the philippines and 2 to examine similarities and differences among cities in housing demand the analysis emphasizes differences in housing demand by tenure particularly for renters and owners but also for squatters and non squatters and paralleling the literature in developed countries stresses the importance of accounting for the impact of income and relative prices on housing demand

the social costs of higher food prices some cross country evidence abstract this paper uses cross country data from 34 developing countries to examine the correlation between the real cereal price paid by consumers aggregate calorie intake and the infant mortality rate the results suggest that higher cereal prices across countries are associated with higher infant mortality the elasticity is between 0 2 and 0 6 however this correlation does not exist using time series data for individual countries the results require further investigation nevertheless they suggest that although the short run costs of higher farm prices may not immediately be evident there may be important long run social costs

the quality of consumption some australian evidence abstract the paper reports new estimates of theil s index of the quality of consumption for four age groups and at two levels of affluence income for australian households over the period 1975 iv to 1982 iv with special emphasis on the role played by energy and non energy commodity groups the evidence reveals an improvement in the quality of consumption of energy and energy related goods and a quality deterioration in food clothing and rent at all income levels and for all four age groups

assessing the effects of local taxation using microgeographic data we study the impact of local taxation on the location and growth of firms our empirical methodology pairs establishments across jurisdictional boundaries to estimate the impact of taxation our approach improves on existing work as it corrects for unobserved establishment heterogeneity for unobserved time varying site specific effects and for the endogeneity of local taxation applied to data for english manufacturing establishments we find that local taxation has a negative impact on employment growth but no effect on entry

conversion factor instability in international comparisons of health care expenditure parkin mcguire and yule 1987 hereafter pmy report that a regression of per capita health care expenditure on per capita income using different conversion factors exchange rates gdp ppps health ppps gave rise to different results in this note we apply updated data to the same empirical relationship in contrast to pmy we find no noticeable conversion factor instability in that relationship either with respect to the health care income elasticity or with the magnitude of multiple correlation coefficient

economic policy and the relative price of services in ldcs abstract low relative prices of nontraded services are a feature of developing economies recent explanations focus on structural issues such as factor endowments and returns to scale this paper argues that economic policy may also contribute to low ldc service prices in a three sector model with wage differentials financial repression unambiguously depresses both per capita real income and the price of nontraded goods in contrast to most current models tariffs and production subsidies can also depress nontraded goods prices

divergence and convergence in international development a decomposition analysis of inequality in the world system the convergence hypothesis of conventional modernization theory suggests that the nations of the world are becoming more similar critics have argued that nations are diverging and becoming dissimilar over time this paper brings unique data analytic procedures and a world system perspective to bear on this debate we suggest that world system theory provides a framework for explaining the simultaneous occurrence of both convergence and divergence specifically the logic of world system theory suggests that divergence occurs between the three zones of nations core semiperiphery and periphery whereas convergence occurs within them with respect to economic development our analyses indicate that predictions concerning divergence were partially supported and predictions concerning convergence held only for the core trends within the periphery and semiperiphery question the utility of world system theory

government expenditure and equilibrium real exchange rates abstract government expenditures financed by lump sum taxes influence real exchange rates potentially via a resource withdrawal channel and a consumption tilting channel recent theoretical and empirical studies have considered only the effects of government spending through the resource withdrawal channel we solve for the theoretical relationships among the real exchange rate relative private consumption relative government consumption and tradables and nontradables production in a two country general equilibrium model and then estimate the model s structural equations the results suggest that government expenditures influence real exchange rates approximately equally via the resource withdrawal and consumption tilting channels and that government and private consumption are complements in utility

factor endowments nontradables prices and measures of openness abstract the familiar dollar index of country openness is obtained essentially by attempting to remove the influence of nontradables prices from data on country price levels with residual price differences hypothesised to measure trade impediments differences in nontradables prices are in turn hypothesised to reflect differences in factor endowments which dollar proxies by gdp per capita this paper examines both the theoretical and empirical biases introduced to estimates of nontradables prices by using this proxy we show that while the approach provides a reasonable approximation on average relatively agricultural land or labour abundant countries are particularly poorly captured by gdp per capita

financial repression and the relative price of non traded goods abstract the financial structure of ldcs affects differences in relative prices among nations we show empirically that financial repression depresses the relative price of non traded goods

the demand for housing in developing countries empirical estimates from household data cities in developing countries are growing at extraordinary rates often compressing into decades the urbanization process that has taken centuries in developed countries in coping with this growth public authorities have devised a wide range of policy instruments to influence the rate and character of city expansion to meet the needs of people for shelter and urban services and to allocate resources in ways that redistribute both the costs and benefits of urban growth ideally such policy formulation should be informed by a careful understanding of the behavior of urban markets in fact little information on market behavior is available to the policymakers of developing countries such basic information is needed for improved project design and even more important for improved sector wide policies this paper reports on research conducted at the world bank to increase understanding of developing country housing markets in particular of housing demand behavior while the overall project examines both the demand for housing characteristics and the demand for housing as a composite good this paper addresses only the latter the objectives of this paper are 1 to review briefly previous evidence on housing demand parameters in developing countries 2 to present new evidence on housing demand parameters based on application of standardized models and comparable variable definitions in 16 cities in eight developing countries colombia egypt el salvador ghana india jamaica korea and the philippines and 3 to examine similarities and differences among cities in housing demand and in a preliminary way offer explanations for place to place differences limited comparisons are also made to two u s cities in order to begin comparison of developing and developed country market behavior

trade and structural change nics and next tier nics as transitional economies abstract the paper finds a strong association between rapid change in the sectoral composition of output and exports structural change and rapid export growth in the newly industrializing countries capital formation appears to be encouraged in dynamic economies by the underpricing of investment goods vis a vis consumption and government goods within these economies also the underpricing of investment goods in dynamic economies is relatively greater than in less dynamic economies whereas other research has found low price distortion to be associated with high growth and an outward rather than an inward looking orientation these associations are seriously challenged and more caution is urged in reaching generalized conclusions

a comparative study of national price levels agricultural prices and exchange rates abstract this paper attempts a comparison of national price levels agricultural prices and exchange rates across countries and over the years 1975 and 1980 using recently produced results from the united nations statistical office and the food and agriculture organization this paper suggests that in most developing countries official exchange rates are more overvalued relative to gdp based purchasing power parities ppps but less overvalued relative to agricultural output based ppps gdp based ppps in most developed countries are however closer to official exchange rates hence conventional opinion as to the existence of significantly lower agricultural output prices in most developing countries is not supported by this study at the same time protection afforded farmers in terms of higher agricultural output prices is indicated in many developed countries it is also observed that in asia agricultural output prices relative to nonagricultural prices have declined over the period 1975 1980 whereas the opposite trend seems to be the case in africa no distinct trend differences over the period are evident for the european experience however agricultural output prices in asia in 1980 were still higher than in africa a few policy implications of these observations are discussed briefly at the conclusion of the paper

nontradable goods prices and per caita income an application to regional korean data pooled time series cross sectional regional data for korea over the period 1985 1991 are used to investigate points which emerged from the united nations international comparison project the results based on a regional analysis are opposite to those of the icp the prices of services do not increase more rapidly in fast growing than in slow growing regions this regional analysis provides constradictory evidence to the widely recognized stylized fact that the prices of nontradables increase with real per capital income by a larger margin than the prices of tradables increase

financial development and the price of services this article explores the links between financial development and the low relative price of services in less developed countries ldcs the empirical phenomenon of services priced lower in ldcs than in developed countries dcs is now quite thoroughly documented in the data gathered by i kravis a heston and r summers in their important work with the united nations international comparison project following r mckinnon and e shaw recent work emphasizes the importance of financial development in successful economic growth 2 we use a simple three sector model with nontraded goods to trace causal connections between financial policies and the structure of relative prices using data on relative prices from the international comparison project study we show that the extent of financial repression is a significant predictor of the spread of relative service goods prices across nations at differing stages of development as well as among ldcs alone the term financial repression describes a set of policies that aim to extract revenue from the financial system and to use the financial system to funnel resources into specific sectors of the economy 3 governments can extract revenue via forced sales of government debt to the banking system this is usually accomplished through a variety of reserve requirements which in many ldcs exceed 50 of deposits 4 interest rate controls on both loan rates and deposit rates are used to channel credit to politically worthy sectors or to specific projects so that the implicit subsidy does not appear on the government s balance sheet rates of monetary growth inconsistent with sta

tax avoidance and business location in a state border model abstract previous studies have struggled to demonstrate that higher taxes deter business activity we revisit this issue by estimating the effect of changes over time in cross border differences in state tax conditions on the tendency for new establishments to favor one side of a state border over the other identification is enhanced by taking account of previously overlooked reciprocal agreements that require workers to pay income tax to their state of residence as opposed to their state of employment when reciprocal agreements are in force higher personal income tax rates lure companies from across the border while corporate income tax and sales tax rates have the opposite effect where reciprocal agreements are not in place the results are largely reversed these patterns are amplified in heavily developed locations and differ in anticipated ways by industry and corporate non corporate status of the establishment overall results strengthen the view that state level tax policies do affect the location decisions of entrepreneurs and new business activity but not in a way that lends itself to a one size fits all summary

computation of standard errors for geary khamis parities and international prices a stochastic approach one of the areas receiving little attention in the past in index number theory is providing standard errors for the index number estimates recently clements and izan and selvanathan used the stochastic approach to index numbers to derive standard errors for the rate of inflation and laspeyres and paasche index numbers in this article we use this approach to compute standard errors associated with purchasing power parities computed using geary khamis aggregation procedure in the international comparisons project of the united nations we assess the quality of the standard errors using efron s bootstrap technique

estimating consumer demands across the development spectrum maximum likelihood estimates of an implicit direct additivity model abstract this paper characterizes consumer demand patterns across the development spectrum using elasticity estimates from a demand system possessing non linear engel effects demands for six broadly defined goods are then projected under the assumption that per capita expenditure growth rates differ across the development spectrum such projections illustrate the extent to which non linear income effects generate more plausible demand responses estimated marginal budget shares for food decline in a logistical manner and range from about 0 5 for ethiopia to less than 0 05 for the usa engel elasticities for food range from 0 95 for ethiopia to less than 0 1 for the usa

privatization and economic growth an empirical investigation from a sample of developing market economies this paper explores the economic determinants of privatization programmes and the macroeconomic impact of this institutional reform on the growth rate of the gdp a sample of thirty five developing market economies is considered over the 1988 92 period probit and tobit models are used to identify the determinants of successful privatization programmes then regressions are run where probabilities probit and expected values tobit are successively included as additional regressors beside the potential influence of other economic policy variables a significant positive effect is highlighted giving evidence of the importance of divestiture the economic effect is found to be stronger when this institutional reform took place in industry or infrastructure

world product and income international comparisons of real gross product the volume reports on the third phase of the united nations international comparison project icp the main results provide comparisons of real gross domestic product gdp per capita for thirty four countries in 1975 quantity and price comparisons are given also for personal consumption capital formation and public consumption and further subdivisions of final expenditures on gdp are estimated