Current account determinants and external sustainability in periods of structural change

The aim of this paper is to study the main macroeconomic, financial and structural factors that shaped current account developments in Greece over the period from 1960 to 2007 and discuss these developments in relation to the issue of external sustainability. Concerns over Greece’s external sustainability have emerged since 1999 when the current account deficit widened substantially and exhibited high persistence. The empirical model used, which theoretically rests on the intertemporal approach, treats the current account as the gap between domestic saving and investment. We examine the behaviour of the current account in the long run and the short run using co-integration analysis and a variety of econometric tests to account for the effect of significant structural changes in the period under review. We find that a stable equilibrium current account model can be derived if the ratio of private sector financing to GDP, as a proxy for financial liberalisation, is included in the specification. Policy options to restore the country’s external sustainability are explored based on the estimated equilibrium model.     

Differential inflation,Phillips curves,and price competitiveness in a new euro-member country

This article analyzes the inflation process before and after a new country with a middle-income joined the eurozone. It starts with comparative price level gaps in the European single market and with a reformulated basic macroeconomic model for a country adopting the euro. The inflation process in Slovenia is analyzed with the Phillips curve. The Phillips curve before adoption of the euro is a classical equation with the NAIRU and the nominal exchange rate as a control variable. It was expected that the Phillips curve would have to be modified after the euro was adopted. The Phillips curve after the euro was adopted should take into account the initial comparative price level gap, the law of one price, and the Balassa effect. The result is higher differential inflation; that is, national inflation is higher compared with the rate in the eurozone. Differential inflation may have a detrimental effect on export-driven catch-up growth. Instruments for taming inflationary pressure could include a higher unemployment rate and lower growth of labour unit costs.     

Analysis of current account reversals via regime switching models

The analysis of sharp and persistent reductions of current account deficits, which can be characterized as the transition from an unsustainable to a more sustainable level of current account balance, relies often on ad hoc criteria for identification of reversal episodes. Within this paper, an empirical framework in terms of a regime switching approach is presented allowing simultaneous identification of current account reversal episodes and their determinants. Additionally, this approach is extended towards analysis of the impact of a reversal on the path of economic growth. Empirical investigation of a panel containing developing countries suggests a different timing of reversals compared to timing delivered by ad hoc criteria. However, several determinants of reversals discussed in the literature remain valid. Our estimates of costs implied by the occurrence of a current account reversal amount to a severe reduction of economic growth, where output costs are found to vary largely across countries.     

The Feldstein–Horioka Puzzle and Twin Deficits in Selected Countries

Hysteresis (unit root) of the current account, fiscal balance, and investment shares is found for the majority of industrial countries as well as selected emerging and transition economies between 1970 and 2001. Twin deficits are defined as a positive long-run relationship between the current account and the fiscal balance. The paper provides evidence for twin deficits in several countries, although we can see differences between the 1980s and the 1990s. Investment in some EU countries is financed to a relatively high degree at the international financial markets implying that the Feldstein-Horioka puzzle is less important in the EU.     

A Count Data Model of Technology Adoption

This paper investigates the main determinants of the adoption of flexible production technologies (FPTs), using a plant-level dataset of Portuguese manufacturing industry. Besides using a new dataset, this paper extends the framework of previous studies on technology adoption by taking into account the effect of demand uncertainty as an additional determinant of adoption. In order to examine this relationship, several econometric models for count data are estimated. These models deal with the discrete nature of the dependent variable and firm specific unobservable characteristics arising from the cross-section context. The main findings of the paper are: (i) rank effects and technological regimes are important determinants of technology adoption, as put forward in previous models of technology diffusion; (ii) demand uncertainty has a significant positive impact on the likelihood of adopting FPTs, which suggests that technological heterogeneity is important when modelling firms' investment decisions; (iii) the estimates were improved after controlling for excess zeros and overdispersion that characterizes our data.     

Privatizing Environmental Resources: The Need for Supervision of Clean Development Mechanism Contracts?

This article argues that a current trend in global sustainable development governance is actively to engage the private sector in participating in the process of implementing global and national policy goals. This trend is based on the notion that the private sector has the ideas, technologies and resources at its disposal that can be channelled to addressing global environmental challenges. This new trend does not, however, take into account the past and present implications of private sector investment in fields such as mining and forestry. Nor does it closely examine how private sector rules will subsequently infiltrate and govern environmental management. On the basis of an examination of current policy developments and contracts in the area of environmental management and their implications for developing countries, this article argues in favour of establishing an authority that oversees the legitimacy and legality of these new contracts, especially in, but not limited to, the area of climate change.     

STRIKING CONSISTENCY AND PREDICTABILITY IN INTERNATIONAL INVESTMENT LAW FROM THE PERSPECTIVE OF DEVELOPING COUNTRIES

The fragmentation of international investment law into bilateral investment treaties (BITs) and other international investment agreements (IIAs) made it impossible as a system of law. In addition, the potential for inconsistent and conflicting decisions (especially against developing countries) in investment treaty arbitrations are abundant. The causes of this situation are two-fold and concern both substantive law and procedural law. Concerning the substance, the fragmentation of sources of international investment law plays a significant role in disaggregating coherence. Due to the large number of BITs, a state measure might be assessed differently under the two existing investment treaties, with each treaty specifying different standards of investment protection, even varying with the nationality of the investor affected. Inconsistent decisions can also result from the possibility of having multiple proceedings, in the same or different form, relating to an identical set of facts that can arise from independent claims. For developing countries, who face investment law disputes more frequently than developed countries, an ideal solution would be a global investment treaty or a plurilateral investment agreement under the World Trade Organization (WTO) and use its dispute settlement system to resolve investment disputes.     

Re-examining the saving-investment nexus: threshold cointegration and causality evidence from the ECOWAS

The aim of this paper is to re-examine the relationship between saving and investment in the case of ECOWAS countries. We then employ the Gregory and Hansen (J Econometr 70:99?C126, 1996a; Oxford Bull Econ Stat 58:555?C560, 1996b) threshold cointegration tests and the Toda and Yamamoto (J Econometr 66:225?C250, 1995) causality procedure. Threshold cointegration approach allows estimating changes in the saving-retention coefficients over time. Using yearly data for the period from 1960 to 2007, we show out two groups of countries regarding the cointegration test results. In the first group (The Gambia and Togo), capital is perfectly mobile since there is no long-run relationship between savings and investment. The second group comprised of the ten other ECOWAS countries studied, is characterized by an incomplete capital mobility. Moreover, in the second group the saving-retention coefficient is time-varying in most of the ECOWAS countries (except for Benin and Niger) and is different from a country to another one. The changes in the saving-retention coefficients indicate how international capital mobility has changed. Moreover, the inclusion of trade openness and country size in the saving-investment equation reduces the saving retention coefficients implying improvement of capital mobility over time. Furthermore, investment rates cause saving rates in Benin, Guinea-Bissau and Niger while saving rates cause investment rates in Cote d??Ivoire, Nigeria and Sierra Leone.     

Part-time employment: a comparative analysis of Spain and the Netherlands

Most industrialized countries have seen part-time employment as a percentage of total employment increasing in the last decade. This paper presents the results of a comparative study of part-time employment in Spain and the Netherlands. The project comprises a legal comparative study of the effectiveness of the normative solutions provided by the Dutch and Spanish legal orders regarding the protection of part-time workers and the promotion of part-time employment, with special attention paid to the gender dimension of part-time work in both countries; and an analysis, based on data extracted from the European Community Household Panel (1995–2001), of the determinants of part-time employment in both countries and an examination of the extent to which part-time jobs are used as stepping-stones to full-time positions. We have found significant country differences regarding females’ decisions to take part-time jobs. We also have found that, in general, Dutch females are not less likely than their male counterparts to increase the number of hours they work. However, this applies only to those females who are part of a couple or have children younger than 12 years. In Spain, females are 2.6 times less likely than their male counterparts to switch from a part-time to a full-time job.     

Water as a political good: implications for investments

There is an urgent need for investments in the water sector. Still about a billion people lack access to drinking water services, and the double amount lacks proper sanitation services. To reach the Millennium Development Goals (MDGs) substantial additional funding needs to be accessed. In view of the low priority given to the water sector by all prospective investors, the perspective of failure to reach the MDGs is eminent. The main argument made in this paper is that a formidable obstacle in accessing and using funds in the water sector is the omission to include explicitly the political nature of water in investment decisions. Due to its multifaceted and internally conflicting character, politics are a fact of life in the water sector. The menu of (suitable) investment options for a given locality is very much dependent on the political environment in which these water services are to be provided. While the impact of the political realm on water services is often acknowledged (most frequently in negative terms as it is seen as one of the main causes of poor performance of public utilities), few professionals really take the political environment explicitly into account when taking decisions relating to the provision of water services. In this paper it is propagated that the political dimension of water should be made explicit in an attempt to increase access and sustainability of investments in the water sector. Sound and sustainable investment in water services can only be achieved by taking into account the existing political environment in which those water services are to be delivered.     

Across the Sloping Meadow Floor: An Empirical Analysis of Preremoval Detention of Noncitizens

In many countries, the law permits state authorities to detain noncitizens before deportation. Typically judicial decisions about preremoval detention must be made within a short period of time during which deportable noncitizens are held in police premises, and depending on the country detention may last just one month (e.g., France) or up to 18 months (the Netherlands). While previous research has explored various dimensions of noncitizen detention including the legal procedure, health consequences, the condition of detention centers, and the lives of deportable noncitizens, the empirical assessment of the determinants of decisions on preremoval detention are largely unexplored. Using data from court proceedings of police petitions of detention in Spain and a quantitative strategy, in this article we undertake an empirical analysis of noncitizen detention combining personal background of deportable noncitizens, legal factors of the case, and the behavior of different actors involved in the procedure. To do it, we fit models that take into account variation occurred at judicial district levels. Results indicate, on the one hand, that relevant actors involved in the procedure use different informational cues to decide on cases. On the other hand, the role of prosecutors and attorneys during hearings proves also relevant to predict detention.     

Is SADC an optimal currency area? Evidence from the generalized purchasing power parity test

In this paper we investigate the likelihood of a proposed monetary union in the Southern African Development Community (SADC) from the view point of the generalized purchasing power parity (GPPP) hypothesis and optimum currency area theory. We apply Johansen’s multivariate co-integration technique. The findings from this study confirm that GPPP holds among SADC member countries included in this study on account of cointegration and stationarity in real exchange rate series. South African rand normalized long run beta coefficients of all the real exchange rates are below one except in the case of the Mauritian rupee and all bear negative signs except in the case of the Angolan New Kwanza and Mauritian rupee. This is evidence that supports monetary union in the region except for Angola and Mauritius. Moreover, the panel cointegration tests also confirm the cointegration among real exchange rate series of SADC countries. However, the absolute magnitudes of the short run adjustment coefficients of SADC countries’ real exchange rates are low and bear positive signs in some cases. This finding implies that the observed slow speed of adjustment for (log) real exchange rate of SADC member states might constrain the effectiveness of stabilization policies in the wake of external shocks, rendering SADC countries vulnerable to macroeconomic instability in the region. This result has important policy implications for the proposed monetary union in SADC.     

Investment and labor income shares

Economic Change and Restructuring - We explore empirically the determinants of labor shares focusing on the role of investment. We use a cross-country framework and consider up to 99 countries for...     

论国际投资争议的“强制性仲裁”

传统理论与实践都认为，自愿性是仲裁的基础和核心。但随着国际社会与国际交往的发展。在国际投资领域已经开始出现了强制性仲裁。国际投资领域中的强制性仲裁的出现，对于国际商事仲裁的发展具有一定的影响，是国际商事仲裁发展的新动向，而且随着发达国家通过投资条约及其他国际条约日益加强对投资者的保护。以及发展中国家日益加强对外国投资的吸引力度，强制性仲裁可能会有更大的发展。其所涉及范围也可能从投资领域扩及到其他领域。     

国际投资条约中投资的确定与东道国发展的考量

根据《ICSID公约》规定,国际投资仲裁庭享有管辖权的前提是有关投资是否属于《ICSID公约》以及相关国际投资条约规定的适格投资,而在判定适格投资的标准中,东道国发展是争议最大的一个标准,相关仲裁庭依据"Salini标准",在裁决中或者认为东道国发展是判定投资的标准之一,或者否认,并在措辞用语上有所不同。《ICSID公约》、世界银行集团的相关文件以及国际投资条约对有关问题的规定表明,东道国发展是大多数国际投资法文件规定的目的或宗旨,其是裁定适格投资的参考因素,但不是必要条件。不过鉴于可持续发展原则对于国际投资活动的要求,有关投资应当有利于东道国的经济、社会或环境方面的可持续发展,而不是纯粹的经济发展。中外双边投资条约中"促进缔约国繁荣"的原则要适时改进。     

Project Appraisal for the Keynesian Investment Planner

This paper outlines a theory of project appraisal wherein the neoclassical premises of conventional cost-benefit analysis are replaced by their Keynesian counterparts. The paper shows how the social rate of return on public and private investment, the private and social discount rates, and other concepts used in cost-benefit analysis may be modified to take account of the income externalities generated by the multiplier, mark-up pricing, and the causal priority of investment over saving.     

Do Corporate Tax Concessions Really Matter for the Success of Free Economic Zones?

Not only a large number of developing countries but also transition economies have established free economic zones (FEZs) with the aim of attracting foreign capital by providing tax incentives, creating employment opportunities, and promoting exports and regional development. Tax investment promotion schemes include profit tax exemption, free or accelerated depreciation, investment tax allowance, subsidy for investment costs, etc., the effects of which on firms’ investment decisions can be compared based on the net present value model. This study suggests that even a low corporate tax rate combined with generous depreciation rules does not provide incentives for investors when the inflation rate is high. A case study on Najin–Sonbong FEZ in North Korea delivers a wide range of more crucial economic and political reasons why such a development project can fail, although tax concessions offered there are more favourable than those in China and other Asian nations.     

Ethical and practical principles underlying the end of life decisions

"I will not relinquish old age, if it leaves my better part intact. But, if it begins to shake my mind, if it destroys its faculties one by one, if it leaves me not life but breath, I will depart from the putrid or tottering edifice. If I must suffer without hope or relief, I will depart, not through fear of the pain itself, but because it prevents all for which I would live." Seneca, the great Roman statesman of 1st century AD, spoke these words 2 millennia before the Netherlands became, on November 28, 2000, the first country in the world to legalize euthanasia. The decisions pertaining to end of life, whether legalized or otherwise, are practiced in many parts of the world but not reported on account of legal implications. Lack of awareness regarding the distinction between different procedures on account of legal status granted to them in some countries is the other area of concern. Debate among the medical practitioners, lawmakers, and the public taking into consideration the cultural, social, and religious ethos will lead to increased awareness, more safeguards, and improvement of medical decisions concerning the end of life.     

Constitutionalising Enlargement, Enlarging Constitutionalism

Abstract:   The relationship between the present enlargement and the development of an active constitutional discourse in the EU is a complex one. On the one hand, it may appear that the pre-existence and the current extension of the constitutional acquis threatens to confront the enlargement countries, many of whom are understandably jealous of their recently won constitutional autonomy, with a fait accompli whereby their membership of the club is conditional upon acceptance of an already mature constitutional doctrine and culture. On the other hand, EU constitutional discourse is by no means a closed book, or one which systematically favours old members over new. Rather, it remains an open-textured and provisional affair which is bound to address certain deep-rooted and urgent tensions over institutional design and fundamental values and which may do so in a manner that combats rather than accentuates the possibility of discrimination against the new members. In this regard, the current Convention on the Future of Europe and the Intergovernmental Conference to which it is directed represent a key episode in the ongoing development of the EU's constitutional identity.     

Impact of Currency Boards on Fiscal Policy in Central and Eastern European Countries

The paper focuses on the impact of currency boards on fiscal policy in transition economies. Starting with an overview of theoretical and empirical studies in the related area, it tests for the interaction between monetary policy regimes and fiscal policy in Central and Eastern European countries who aim for the membership in the European Union. The theoretical background of this study lies in the model of Tornell and Velasco (1998). They demonstrate that fiscal transfers do not ultimately depend on the chosen exchange rate and monetary policy, but only on the world's real rate of interest and the rate of time preference of the fiscal authority. A sample of 10 accession candidates constitutes a group of countries which go through similar macroeconomic stabilisation processes but have chosen different nominal anchors. The paper investigates whether there are any systematic differences between those countries with a currency board arrangement and those without. The empirical evidence suggests that currency boards enhance fiscal discipline in Central and Eastern European countries.