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Journal of Economic Surveys

Impact factor: 0.986 5-Year impact factor: 1.975 Print ISSN: 0950-0804 Online ISSN: 1467-6419 Publisher: Wiley Blackwell (Blackwell Publishing)

Subject: Economics

Most recent papers:

  • Information Theoretic Approaches In Economics.
    Jangho Yang.
    Journal of Economic Surveys. September 15, 2017
    Economics has seen a recent rise in interest in information theory as an alternative framework to the conventional notion of equilibrium as a fixed state, such as Walrasian market‐clearing general equilibrium. The information theoretic approach is predicated on the notion of statistical equilibrium (SE) that takes a distribution over all possible states as an equilibrium, and therefore predicts the endogenous fluctuations of the system along with its central tendency simultaneously. For this reason, SE approaches can explain the observed data without relying on arbitrary assumptions about random noise and provide useful insights for many interesting economic problems that conventional methods have not been able to satisfactorily deal with. In this paper, we review the key elements of information theory focusing on the notions and applications of entropy and SE in economics, particularly paying attention to how entropy concepts open up a new frontline of economic research.
    September 15, 2017   doi: 10.1111/joes.12226   open full text
  • Taking Stock: A Rigorous Modelling Of Animal Spirits In Macroeconomics.
    Reiner Franke, Frank Westerhoff.
    Journal of Economic Surveys. July 26, 2017
    This paper is a survey of the burgeoning literature that seeks to take the enigmatic concept of the animal spirits more seriously by building heterodox macro‐dynamic models that can capture some of its crucial aspects in a rigorous way. Two approaches are considered: the discrete choice and the transition probability approach, where individual agents face a binary decision and choose one of them with a certain probability. These assessments are adjusted upward or downward in response to what the agents observe, which leads to changes in the aggregate sentiment and the macroeconomic variables resulting from the corresponding decisions. Typical applications of the two approaches alternatively give rise to what will be called a weak and a strong form of animal spirits. On the whole, the literature included in this survey provides examples of applications of a modelling tool that demonstrates a considerable flexibility within a canonical framework.
    July 26, 2017   doi: 10.1111/joes.12219   open full text
  • Shifting Boundaries In Economics: The Institutional Cognitive Strand And The Future Of Institutional Economics.
    Angela Ambrosino, Magda Fontana, Anna Azzurra Gigante.
    Journal of Economic Surveys. July 19, 2017
    This paper aims at contributing to the debate on the future of institutional economics and of the field as a whole by starting from the literature that discusses the relationship between Old‐Original Institutional Economics and New Institutional Economics. It suggests that the process of reunifying OIE and NIE (and evolutionary economics) prompted by part of the literature could be improved by the contribution of the Cognitive Institutional Economics. The paper follows a two‐stage pathway: first, it frames the debate on the relationships between NIE and the OIE and it concentrates on a subset of the literature that shows that NIE's recent developments complicate the distinction between NIE and OIE, and it explores the possibility that NIE and OIE may merge so that an amalgam of NIE, OIE and Evolutionary Economics becomes the next economic paradigm. Secondly, the paper argues that a step forward in the direction outlined by the literature has been made by CIE, which is a research stream that developed from cross‐fertilization among NIE, OIE and the Hayekian contributions to the analysis of institutions. In the concluding remarks, the possible emergence of a single institutional paradigm is discussed in the light of the literature about change in economics.
    July 19, 2017   doi: 10.1111/joes.12214   open full text
  • What Explains The Difference In The Effect Of Retirement On Health? Evidence From Global Aging Data.
    Yoshinori Nishimura, Masato Oikawa, Hiroyuki Motegi.
    Journal of Economic Surveys. June 27, 2017
    This paper analyzes the reasons for differences in the estimated effect of retirement on health in previous studies. We investigate these differences by focusing on the analysis methods used by these studies. Using various health indexes, numerous researchers have examined the effects of retirement on health. However, there are no unified views on the impact of retirement on various health indexes. Consequently, we show that the choice of analysis method is one of the key factors in explaining why the estimated results of the effect of retirement on health differ. Moreover, we re‐estimate the effect of retirement on health by using a fixed analysis method controlling for individual heterogeneity and endogeneity of the retirement behavior. We analyze the effect of retirement on health parameters, such as cognitive function, self‐report of health, activities of daily living (ADL), depression, and body mass index in eight countries. We find that the effects of retirement on self‐report of health, depression, and ADL are positive in many of these countries.
    June 27, 2017   doi: 10.1111/joes.12215   open full text
  • Identifying Vulnerability To Poverty: A Critical Survey.
    Mauricio Gallardo.
    Journal of Economic Surveys. June 16, 2017
    In the economic literature on poverty, various methods have been proposed for measuring a phenomenon known as ‘vulnerability’. However, after more than a quarter century of research, no consensus has been reached on how to identify such vulnerable individuals within a given population. Some misunderstandings have also arisen from the overlapping of other closely related concepts, such as the expectation of being poor, expected poverty, multi‐period poverty and risk exposure. This paper offers a detailed conceptual discussion on vulnerability to poverty and its related elements, reviewing a wide range of identifying criteria provided in the literature. It is found that according to the state of the art in this field of research, two key elements stand out in identifying vulnerable individuals: an expected well‐being below the poverty line and a relevant risk of falling into poverty due to downside deviation from a reference level of well‐being. The traditional classification of vulnerability approaches has been updated into four groups: (i) those that stress the element of exposure to risk; (ii) those that emphasize the element of expected poverty; (iii) those that define vulnerability through a utility gap and (iv) those that are supported by a mean‐risk dominance criterion.
    June 16, 2017   doi: 10.1111/joes.12216   open full text
  • Causal Inference On Education Policies: A Survey Of Empirical Studies Using Pisa, Timss And Pirls.
    José M. Cordero, Víctor Cristóbal, Daniel Santín.
    Journal of Economic Surveys. June 09, 2017
    The identification of the causal effects of educational policies is the top priority in recent education economics literature. As a result, a shift can be observed in the strategies of empirical studies. They have moved from the use of standard multivariate statistical methods, which identify correlations or associations between variables only, to more complex econometric strategies, which can help to identify causal relationships. However, exogenous variations in databases have to be identified in order to apply causal inference techniques. This is a far from straightforward task. For this reason, this paper provides an extensive and comprehensive overview of the literature using quasi‐experimental techniques applied to three well‐known international large‐scale comparative assessments, such as PISA, PIRLS or TIMSS, over the period 2004–2016. In particular, we review empirical studies employing instrumental variables, regression discontinuity designs, difference in differences and propensity score matching to the above databases. Additionally, we provide a detailed summary of estimation strategies, issues treated and profitability in terms of the quality of publications to encourage further potential evaluations. The paper concludes with some operational recommendations for prospective researchers in the field.
    June 09, 2017   doi: 10.1111/joes.12217   open full text
  • Assessing The Olympic Games: The Economic Impact And Beyond.
    Pasquale Lucio Scandizzo, Maria Rita Pierleoni.
    Journal of Economic Surveys. June 07, 2017
    This study reviews the literature on the evaluation of the Olympic Games, within the broader framework of their significance as cultural assets and opportunities for endogenous growth and sustainable development of the host city. The study reviews the main approaches to the economic assessment of the Games, from the point of view of the underlying economic concepts and methodologies, as well as of the empirical results obtained. It focuses on the effects that are measured and on those, which even though important, are generally neglected. The methodologies utilized for the quantitative assessments of the Games are reviewed with special emphasis on impact and cost–benefit analysis, both on ex ante and ex post basis. The studies surveyed are analysed from the point of view of different sets of effects on the host city, and for a limited number of cases, on the host country. While the major focus is on hosting the Summer Olympics, some attention is also paid to the bidding cities, the Winter Olympics and the Paralympics. The general findings appear to be controversial with some hints of positive overall effects, but also with a well‐documented tendency to exaggerate the benefits and underestimate the costs of holding the Games in the ex ante versus the ex post studies. The survey finally suggests that ex post cross‐country econometric studies tend to catch sizable differential and persistent benefits ignored by individual studies, especially on macroeconomic and trade variables.
    June 07, 2017   doi: 10.1111/joes.12213   open full text
  • Migration And Institutions: Exit And Voice (From Abroad)?
    Thierry Baudassé, Rémi Bazillier, Ismaël Issifou.
    Journal of Economic Surveys. May 30, 2017
    A rapidly growing body of research examines the relationship between migration and institutions. Three strands of studies can be distinguished. Some studies focused on the role of domestic and foreign institutions in the decision to migrate. Others were interested by the impact of migration on institutional reforms in migrants' countries of origin. Recent studies focus on how migrants affect social and informal institutions in the destination countries. This survey puts together these three strands of literature with three purposes. First, we offer a short definition and synthetic typology of institutions, which provide a guide to understand several studies we have critically reviewed. Second, our analysis is presented following the analytic framework exit, voice, and loyalty of Hirschman in order to highlight the brain gain phenomenon for developing countries, from an institutional point of view. Third, we review the limited existing work on the very timely topic, whether migrants are harmful or not to institutions in the host countries.
    May 30, 2017   doi: 10.1111/joes.12212   open full text
  • Do Crises Induce Reform? A Critical Review Of Conception, Methodology And Empirical Evidence Of The ‘Crisis Hypothesis’.
    Mounir Mahmalat, Declan Curran.
    Journal of Economic Surveys. May 22, 2017
    The notion that economic crises induce the adoption of reform ranks among the most widely accepted concepts in the political economics literature. However, the underlying mechanism of the so‐called ‘crisis hypothesis’ has yet to be fully understood. This paper provides a comprehensive survey of the relevant empirical evidence to date, and scrutinizes the operationalization of the hypothesis’ key concepts: crisis, reform and the political mediation of reform during crises. We argue that the social perception of both crises and the subsequent cost of reform requires consideration of how these concepts are operationalized. As a product of the broader economic and institutional environment, social perceptions largely determine the manner in which the political mediation of reform during crises works. Present‐day methodological approaches fail to adequately reflect social perceptions and consequently compromise the determination of what constitutes both crisis and the cost of reform in the context of the crisis hypothesis. Most notably, the identification of crises by fixed thresholds constructed around macroeconomic variables impedes the interpretation of the hypothesis’ underlying mechanism. A fuller treatment of social perception within the operationalization of the hypothesis’ key concepts can enhance our understanding of how economic crises influence political dynamics in bringing about reform.
    May 22, 2017   doi: 10.1111/joes.12209   open full text
  • Teacher Characteristics And Their Effects On Student Test Scores: A Systematic Review.
    Johan Coenen, Ilja Cornelisz, Wim Groot, Henriette Maassen van den Brink, Chris Klaveren.
    Journal of Economic Surveys. May 18, 2017
    It has become widely accepted that teachers are important in facilitating student learning. Hundreds of empirical studies have tried to explain differences in student performance by evaluating the impact of particular teacher characteristics. Yet, this topic has not been the subject of a systematic review for more than 10 years, even though most of the empirical evidence has emerged over the past decade. This study provides an up‐to‐date review, drawing on empirical findings from several countries and distinguishing between acquired and sociodemographic teacher characteristics. This review confirms the existing consensus that subject‐related degrees and knowledge, and not general teacher certifications, are positively related to student performance and particularly so for Master's degrees in math and science. A new insight is that recent findings point out that teacher experience continues to contribute to student test scores throughout a teacher's career, instead of merely the first few years. An important future research avenue would be to examine which mechanisms can explain these teacher characteristic effects.
    May 18, 2017   doi: 10.1111/joes.12210   open full text
  • Behavior In Group Contests: A Review Of Experimental Research.
    Roman M. Sheremeta.
    Journal of Economic Surveys. April 28, 2017
    Group contests are ubiquitous. Some examples include warfare between countries, competition between political parties, team‐incentives within firms, and rent‐seeking. In order to succeed, members of the same group have incentives to cooperate with each other by expending effort. However, since effort is costly, each member also has an incentive to abstain from expending any effort and instead free ride on the efforts of other members. Contest theory predicts that the intensity of competition between groups and the amount of free riding within groups depend on the group size, sharing rule, group impact function, contest success function, and heterogeneity of players. We review experimental studies testing these theoretical predictions. Most studies find significant over‐expenditure of effort relative to the theory and significant heterogeneity of behavior within and between groups. Also, most studies find support for the comparative statics predictions of the theory (with the exception of the “group size paradox”). Finally, studies show that there are effective mechanisms that can promote within‐group cooperation and conflict resolution mechanisms that can de‐escalate and potentially eliminate between‐group conflict.
    April 28, 2017   doi: 10.1111/joes.12208   open full text
  • Why Is There A Lack Of Evidence On Knowledge Spillovers From Foreign Direct Investment?
    Matija Rojec, Mark Knell.
    Journal of Economic Surveys. April 03, 2017
    Empirical analyses of knowledge spillovers from foreign direct investment (FDI) offer mixed results; they find positive, neutral and negative FDI spillover effects. This lack of evidence mainly comes from the results of firm‐level panel data analysis. This is important since this approach seems to be the most appropriate for estimating FDI spillovers. The paper takes a look at recent substantive and methodological developments in FDI spillover analysis, which have brought some more optimistic results with regard to FDI spillovers, and can help in further development in this field. The main substantive development relates to the introduction of a broad variety of sources of firm heterogeneity (foreign affiliates as well as local firms) in the analysis. Others include differentiation between vertical (inter‐industry) and horizontal (intra‐industry) spillovers, and host country absorptive capacity for knowledge spillovers. Methodological developments relate to distinguishing between technological/knowledge and productivity spillovers, improvement of modelling and estimation methods, and an increased amount and quality of data.
    April 03, 2017   doi: 10.1111/joes.12207   open full text
  • Children And Their Parents: A Review Of Fertility And Causality.
    Damian Clarke.
    Journal of Economic Surveys. April 03, 2017
    Childbearing decisions are not made in isolation. They are taken in concert with decisions regarding work, marriage, health investments and stocks, as well as many other observable and non‐observable considerations. Drawing causal inferences regarding the effect of additional children on family outcomes is complicated by these endogenous factors. This paper lays out the issues involved in estimating the effect of additional child births on family outcomes, and the assumptions underlying the range of estimators and methodologies proposed in the economic literature. The common pitfalls of these estimators are discussed, as well as their potential to bias our interpretation of the effect additional births have on children and parents, both in the existing literature and in future work in the face of changing patterns of childbearing and child‐rearing.
    April 03, 2017   doi: 10.1111/joes.12202   open full text
  • Factor Models And Time‐Varying Parameter Framework For Forecasting Exchange Rates And Inflation: A Survey.
    Lasha Kavtaradze, Manouchehr Mokhtari.
    Journal of Economic Surveys. April 03, 2017
    A survey of models used for forecasting exchange rates and inflation reveals that the factor‐based and time‐varying parameter or state space models generate superior forecasts relative to all other models. This survey also finds that models based on Taylor rule and portfolio balance theory have moderate predictive power for forecasting exchange rates. The evidence on the use of Bayesian Model Averaging approach in forecasting exchange rates reveals limited predictive power, but strong support for forecasting inflation. Overall, the evidence overwhelmingly points to the context of the forecasts, relevance of the historical data, data transformation, choice of the benchmark, selected time horizons, sample period and forecast evaluation methods as the crucial elements in selecting forecasting models for exchange rate and inflation.
    April 03, 2017   doi: 10.1111/joes.12205   open full text
  • Economic Transition And Labour Market Dynamics In China: An Interpretative Survey Of The ‘Turning Point’ Debate.
    Prema‐chandra Athukorala, Zheng Wei.
    Journal of Economic Surveys. April 03, 2017
    Has the Chinese economy approached the ‘Lewisian turning point’ that marks the ending of the initial phase of industrial transformation fuelled by surplus labour? In this paper we undertake an interpretative survey of the literature on this issue, in the context of China's labour market conditions prior to the reforms and structural change of the past three decades. The available evidence is mixed, and our assessment makes a strong case for probing institutional constraints to labour mobility from an economy‐wide perspective, going beyond the confines of the rural economy.
    April 03, 2017   doi: 10.1111/joes.12206   open full text
  • From The Lab To The Field: A Review Of Tax Experiments.
    Giulia Mascagni.
    Journal of Economic Surveys. March 21, 2017
    Tax experiments have been gaining momentum in recent years, although this literature dates back several decades. With new developments in methods and data availability, tax experiments have gradually moved away from lab settings and towards the field. This movement from the lab to the field has happened against the background of the ‘credibility revolution’ in applied economics, which has seen more rigorous methods applied to policy relevant questions, and of the availability to researchers of administrative data from tax returns. These developments have allowed significant advances in the experimental literature on tax compliance. This paper reviews this literature, giving particular attention to field experiments using administrative data, but putting them in the broader context of the compliance literature. A particular effort is made to take a global perspective, in a literature that is only recently seeing the emergence of evidence from Africa, Latin America and Asia.
    March 21, 2017   doi: 10.1111/joes.12201   open full text
  • Leadership In Climate Change Mitigation: Consequences And Incentives.
    Gregor Schwerhoff, Ulrike Kornek, Kai Lessmann, Michael Pahle.
    Journal of Economic Surveys. March 21, 2017
    Initiatives in favor of unilateral action on climate change are frequently challenged by concerns over free riding. Nevertheless, we observe an increasing number of unilateral efforts at different administrative levels and in different parts of the world. Previous academic literature described various individual mechanisms where emissions abroad may increase or decrease as a reaction to unilateral emission reductions. In this paper, we collect a comprehensive set of both positive and negative reactions and analyze them in stylized models. This allows us to identify the most important characteristics that determine the potential of a leader to boost mitigation efforts abroad. We find that this potential depends on (i) a strong ability to generate knowledge through leadership, (ii) a high degree of credibility in the international community, and (iii) a similar economic structure to the most important emitters. While most effects are difficult to quantify, this comprehensive assessment suggests that leakage effects resulting from unilateral mitigation may well be outweighed by positive reactions.
    March 21, 2017   doi: 10.1111/joes.12203   open full text
  • Why Do We Lie? A Practical Guide To The Dishonesty Literature.
    Catrine Jacobsen, Toke Reinholt Fosgaard, David Pascual‐Ezama.
    Journal of Economic Surveys. March 17, 2017
    Over the last decade, a massive body of research has been devoted to uncovering human dishonesty. In the present paper, we review more than a hundred papers from this literature and provide a comprehensive overview by first listing the existing theoretical frameworks, and then covering the common empirical approaches, synthesizing the demographic and personal characteristics of those who cheat, identifying the behavioural mechanisms found that affect dishonesty and finally we finish by discussing how the empirical evidence fit theory. Overall, the review concludes that many people behave dishonestly, but also that it is a highly malleable behavior sensitive to elements such as decision contexts, behaviour of others, state of mind and depletion. The review can be used as an overview of the dishonesty literature or as a guide or work of reference for selected topics of interest.
    March 17, 2017   doi: 10.1111/joes.12204   open full text
  • Mis‐Specification Testing In Retrospect.
    Aris Spanos.
    Journal of Economic Surveys. March 07, 2017
    The primary objective of this paper is threefold. First, to undertake a retrospective view of Mis‐Specification (M‐S) testing, going back to the early 20th century, with a view to (i) place it in the broader context of modeling and inference and (ii) bring out some of its special features. Second, to call into question several widely used arguments undermining the importance of M‐S testing in favor of relying on weak probabilistic assumptions in conjunction with generic robustness claims and asymptotic inference. Third, to bring out the crucial role of M‐S testing in securing trustworthy inference results. This is achieved by extending/modifying Fisher's statistical framework with a view to draw a clear line between the modeling and the inference facets of statistical induction. The proposed framework untangles the statistical from the substantive (structural) model and focuses on how to secure the adequacy of the statistical model before probing for substantive adequacy. A case is made for using joint M‐S tests based on custom‐built auxiliary regressions with a view to enhance the effectiveness and reliability of probing for potential statistical misspecifications.
    March 07, 2017   doi: 10.1111/joes.12200   open full text
  • Local Labor Markets And Natural Resources: A Synthesis Of The Literature.
    Joseph Marchand, Jeremy Weber.
    Journal of Economic Surveys. February 01, 2017
    A primary way that natural resources affect a locality is through the demand for labor, with greater extraction requiring more workers. Shifts in labor demand can be measured through changes in employment and earnings, the main labor market outcomes, or through changes in the population and income, more generally. These changes may spillover into the nonresource economy, leading to greater overall effects or possibly crowd out; be spread unequally across the population, thereby altering the distribution of income and the poverty rate; or influence educational attainment, as people choose between additional schooling and work. In this review, the literature linking natural resources to local labor markets is synthesized by organizing existing studies according to their resource measurement and the outcomes that they consider. This synthesis provides an accessible guide to a literature that has boomed in recent years. It also identifies promising avenues for future research and lays a foundation to further generalize the evidence through an eventual meta‐analysis.
    February 01, 2017   doi: 10.1111/joes.12199   open full text
  • Monetary And Fiscal Policies Interaction In Monetary Unions.
    Pasquale Foresti.
    Journal of Economic Surveys. February 01, 2017
    In this paper, the literature on the interaction between monetary and fiscal policies in a monetary union is surveyed. By adopting the concept of symbiosis as a starting point, the paper highlights the importance of uncertainty, policy makers' preferences and targets. Then, the role of commitment to policy rules and coordination is addressed. The analysis also focuses on the importance of the data considered for the generation of the policy mix. As a final step, the paper discusses the main results in the literature on public debt management in a monetary union. All the reported theoretical results are then adopted to retrieve policy and institutional implications for the European Monetary Union.
    February 01, 2017   doi: 10.1111/joes.12194   open full text
  • Causes And Effects Of Corruption: What Has Past Decade's Empirical Research Taught Us? A Survey.
    Eugen Dimant, Guglielmo Tosato.
    Journal of Economic Surveys. January 23, 2017
    Corruption has fierce impacts on economic and societal development and is subject to a vast range of institutional, jurisdictional, societal, and economic conditions. It is this paper's aim to provide a reassessment and a comprehensive state‐of‐the‐art survey of existing literature on corruption and its causes and effects. A particularly strong focus is put on presenting and discussing insights resulting from empirical research and contrasting recent with older findings.
    January 23, 2017   doi: 10.1111/joes.12198   open full text
  • A Survey Of Jel Codes: What Do They Mean And Are They Used Consistently?
    Lea‐Rachel Kosnik.
    Journal of Economic Surveys. January 18, 2017
    The use and prevalence of JEL code categorization is wide in the field of economics, but what do JEL code classifications actually tell us? And are they used with consistency by academics in the field? Utilizing a data set of articles published in the American Economic Review from 1990 to 2008, we investigate whether there is heterogeneity in JEL codes assignments between authors and editors. We find that there is. A secondary goal of this paper is to survey overall thematic trends in JEL code usage over the past four and a half decades. One result is that JEL category M: Business Economics, in particular, appears to be thematically and spatially distinct from much of the rest of the published literature in the top general interest journals in the field.
    January 18, 2017   doi: 10.1111/joes.12189   open full text
  • Intra‐Household Experiments: A Survey.
    Alistair Munro.
    Journal of Economic Surveys. January 17, 2017
    Experiments with family groups are rare, but since many decisions are taken at the household level or occur within the household it is an important area to investigate. This paper provides a survey of the recent experimental work on intra‐household decision‐making. I discuss some of the challenges involved in doing experiments with couples and families and consider major areas that remain yet to be explored. While general themes from the research are still emerging, four results repeatedly occur: (1) the absence of efficiency in intra‐household decisions; (2) joint decisions that are not a convex combination of individual decisions; (3) individual behaviour is affected by opportunities for hiding actions from spouses and (4) deviations from standard models of microeconomics in line with those seen in the anomalies literature of individual decision‐making.
    January 17, 2017   doi: 10.1111/joes.12196   open full text
  • Risk‐Coping, Land Tenure And Land Markets: An Overview Of The Literature.
    Gwendoline Promsopha.
    Journal of Economic Surveys. January 17, 2017
    Over the last decades, a significant amount of literature has been published on informal risk‐coping in developing countries. In this paper, we review how informal risk‐coping has been addressed in the land tenure literature from two main perspectives: a first stream of research looks at how customary tenure and communal property perform key informal risk‐coping functions. A second subset of this literature analyses how informal risk‐coping creates land market imperfections through sharecropping or distress sales. The segmentation of the literature results from the Demsetzian property rights framework. Further research on risk‐coping and land tenure would benefit from examining recent work on property regimes.
    January 17, 2017   doi: 10.1111/joes.12191   open full text
  • Uncertainty And Density Forecasts Of Arma Models: Comparison Of Asymptotic, Bayesian, And Bootstrap Procedures.
    João Henrique Gonçalves Mazzeu, Esther Ruiz, Helena Veiga.
    Journal of Economic Surveys. January 17, 2017
    The objective of this paper is to analyze the effects of uncertainty on density forecasts of stationary linear univariate ARMA models. We consider three specific sources of uncertainty: parameter estimation, error distribution, and lag order. Depending on the estimation sample size and the forecast horizon, each of these sources may have different effects. We consider asymptotic, Bayesian, and bootstrap procedures proposed to deal with uncertainty and compare their finite sample properties. The results are illustrated constructing fan charts for UK inflation.
    January 17, 2017   doi: 10.1111/joes.12197   open full text
  • The Financial Repression‐Liberalization Debate: Taking Stock, Looking For A Synthesis.
    Konstantinos Loizos.
    Journal of Economic Surveys. January 13, 2017
    Financial repression and liberalization became the object of fierce debates between academics and policy makers since the early 1970s. As of the late 1980s, financial liberalization became also part of the ‘Structural Adjustment Programs’ sponsored by the International Monetary Fund and the World Bank. However, the literature on financial repression and liberalization remains controversial on its theoretical conclusions and policy implications. Given its importance for both the theory and policy of economic development and growth, this paper looks for a possible synthesis. After reviewing the theoretical contributions and empirical studies under the headings of the McKinnon–Shaw and new structuralists models, the survey concludes that a new synthesis might be found in the Post‐Keynesian attempt to take an institutional perspective within a globalised financial and economic environment.
    January 13, 2017   doi: 10.1111/joes.12195   open full text
  • The Innovation‐Employment Nexus: A Critical Survey Of Theory And Empirics.
    Flavio Calvino, Maria Enrica Virgillito.
    Journal of Economic Surveys. January 11, 2017
    Understanding whether technical change is beneficial or detrimental for employment is at the center of the policy debate, especially in phases of economic recession. So far, the effects of innovation – in its manifold declinations and intrinsic complexity – on labor demand have proven to be not unequivocal. This essay critically reviews the role of technical change in shaping employment dynamics at different levels of aggregation. First, it disentangles theoretically the role of different compensation mechanisms through which employment adjusts after an innovation is introduced. Second, it critically presents the most recent empirical evidence on the topic, with a focus on methods and limitations. Finally, it provides an attempt to conceptualize a number of stylized facts and empirical regularities on the innovation‐employment nexus.
    January 11, 2017   doi: 10.1111/joes.12190   open full text
  • On The Sources Of Heterogeneity In Banking Efficiency Literature.
    Francesco Aiello, Graziella Bonanno.
    Journal of Economic Surveys. January 11, 2017
    This study reviews the empirical literature on banking efficiency by conducting a meta‐regression analysis. The meta‐dataset consists of 1661 observations retrieved from 120 papers published over the period 2000–2014. While the role of study design and method‐specific characteristics of primary studies is evaluated, the focus concerns regulation in banking. The results are fourfold. First, parametric methods always yield lower levels of banking efficiency than non‐parametric studies. Second, banking efficiency is higher in studies using the value‐added approach rather than the intermediation method. Third, efficiency scores also depend on the journal's ranking and on the number of observations and variables used in the primary papers. Finally, regulation matters: primary papers focusing on countries with a liberalized banking industry provide higher values for efficiency scores.
    January 11, 2017   doi: 10.1111/joes.12193   open full text
  • Technological Innovation And Employment In Derived Labour Demand Models: A Hierarchical Meta‐Regression Analysis.
    Mehmet Ugur, Sefa Awaworyi Churchill, Edna Solomon.
    Journal of Economic Surveys. January 10, 2017
    The effect of technological innovation on employment is of major concern for workers and their unions, policy makers and academic researchers. We meta‐analyse 570 estimates from 35 primary studies that estimate a derived labour demand model. We contribute to existing attempts at evidence synthesis by addressing the risks of selection bias and that of data dependence in observational studies. Our findings indicate that: (i) hierarchical meta‐regression models are sufficiently versatile for addressing both selection bias and data dependence in observational data; (ii) innovation's effect on employment is positive but small and highly heterogeneous; (iii) only a small part of residual heterogeneity is explained by moderating factors; (iv) selection bias tends to reflect preference for upholding prevalent hypotheses on the employment effects of process and product innovations; (v) country‐specific effect‐size estimates are related to labour market and product market regulation in six OECD countries in a U‐shaped fashion; and (vi) OLS estimates reflect upward bias whereas those based on time‐differenced or within estimators reflect a downward bias. Our findings point out to a range of data quality and modelling issues that should be addressed in future research.
    January 10, 2017   doi: 10.1111/joes.12187   open full text
  • Child Care Prices And Maternal Employment: A Meta‐Analysis.
    Yusuf Emre Akgunduz, Janneke Plantenga.
    Journal of Economic Surveys. January 09, 2017
    The literature estimates for labor force participation elasticity with regard to child care prices are extensive and varying. While some estimates imply substantial gains from child care subsidies, others find insignificant effects. To determine the causes of the variance, this paper reviews and analyzes the elasticity sizes using estimates from 36 peer‐reviewed articles and working papers in the literature. We start by reviewing the theoretical and empirical aspects related to participation elasticity with regard to child care costs, paying special attention to sample characteristics, methodological aspects, and macro level factors. We conclude by providing a meta‐regression using control variables based on our review of the literature to explain some of the differences between the estimates. As research builds on and improves the methods and assumptions in prior works, elasticity estimates have become smaller over time. This decline might also be partially explained by changes in labor market characteristics. In countries with high rates of part‐time work and very high or very low rates of female labor force participation, we find elasticity rates to be smaller.
    January 09, 2017   doi: 10.1111/joes.12192   open full text
  • Successful In The Long Run: A Meta‐Regression Analysis Of Persistent Firm Profits.
    Stefan Hirsch.
    Journal of Economic Surveys. January 09, 2017
    We study the profit persistence literature by applying meta‐regression analysis (MRA) to a set of 36 empirical papers, which analyze the persistence of abnormal firm profits over time. The analyzed literature provides evidence for a mediocre degree of persistence in abnormal profits. An initial analysis of the distribution of reported profit persistence estimates reveals some degree of excess variation. This points toward publication bias that favors significant results independent of their algebraic sign. The MRA, however, reveals that publication bias is particularly favoring results that indicate profit persistence and thus contradict the neoclassical model of perfect competition. Moreover, the MRA enables to control for heterogeneity driven by the study design. We find that the analyzed country (developing vs. developed), the applied econometric approach, as well as the analyzed period of time are significant drivers of heterogeneity in reported persistence estimates.
    January 09, 2017   doi: 10.1111/joes.12188   open full text
  • A Review Of The Recent Literature On The Institutional Economics Analysis Of The Long‐Run Performance Of Nations.
    Peter Lloyd, Cassey Lee.
    Journal of Economic Surveys. December 21, 2016
    This paper reviews the recent (post‐2000) literature that assesses the importance of institutions as a factor determining cross‐country differences in growth rates or in the contemporary level of “prosperity.” It first sketches how institutional economics has evolved. It then examines critically the methods of analysis employed in the recent literature. The paper finds that this literature has made a major contribution to the analysis of the causes of economic growth but the relative importance of institutions as a determinant of long‐run growth and prosperity is still a wide open question.
    December 21, 2016   doi: 10.1111/joes.12186   open full text
  • The Gini Concentration Index: A Review Of The Inference Literature.
    Giovanni Maria Giorgi, Chiara Gigliarano.
    Journal of Economic Surveys. December 12, 2016
    More than a century ago, Corrado Gini proposed his well‐known concentration index for measuring the degree of inequality in the distribution of income and wealth. His index is still extremely relevant and widely used in several fields of research and application. In this paper, we focus on the inferential properties of the Gini index, and discuss the main directions of analysis proposed in the literature. The aim of the paper is to provide a comprehensive review of the main developments on the inferential aspects of the Gini concentration ratio. We feel that this work can provide a valuable contribution to those scholars who are approaching the large amount of literature on the inferential properties of the Gini index.
    December 12, 2016   doi: 10.1111/joes.12185   open full text
  • European Economic Integration And Comparative Advantages.
    Michele Boglioni, Stefano Zambelli.
    Journal of Economic Surveys. December 05, 2016
    On the basis of a set of Input‐Output tables we computed the European Net Product Possibility Frontier (NPPF) for the years from 1995 to 2011. During this period, several barriers to trade have been removed, allowing higher levels of trade and regional integration. Subsequently, we propose a method to check whether the prediction to be derived from Comparative Advantages (CAs) theory, namely, a specialization pattern that allows to reach the NPPF, is verified. The results suggest that CAs were not exploited well during the period considered and no positive trend emerged. The implication of our results is that there is ample scope for a coordinated policy aimed at improving allocation of resources. Further research on this topic seems to be necessary.
    December 05, 2016   doi: 10.1111/joes.12184   open full text
  • Sustainability And Wellbeing: A Scientometric And Bibliometric Review Of The Literature.
    Mubashir Qasim.
    Journal of Economic Surveys. November 28, 2016
    Interdisciplinary research on measuring the progress towards sustainability and well‐being (SaW) from different perspectives and in various contexts has developed dramatically over recent decades. This growth in the literature has not only added an enormous number of dimensions to the SaW debate, but the sheer scale of the expansion has challenged researchers to be able to conduct a comprehensive analysis of the available SaW indicators. In this work, we have proposed a hybrid method comprised of sophisticated scientometric analysis to summarise scientific developments in the massive text corpus of the SaW literature in conjunction with a more traditional literature review to categorise the ‘fuzzy’ details that remain. Scientometric analysis highlights that the developed OECD countries play a vital role in the development and applications of SaW indicators and we describe key developments in this regard via a range of graphical approaches. Using an extensive collection of existing SaW indicators, the analysis is then summarised in a matrix of ranked indicators which serve as a powerful tool to compare, contrast, filter and select indicators for SaW assessment with minimum redundancies between indicators. The approach undertaken in this study is intended to be flexible and can be extended and applied to other fields of research.
    November 28, 2016   doi: 10.1111/joes.12183   open full text
  • The Impact Of Fiscal Decentralization: A Survey.
    Jorge Martinez‐Vazquez, Santiago Lago‐Peñas, Agnese Sacchi.
    Journal of Economic Surveys. November 07, 2016
    In this paper, we offer a comprehensive and updated review of the impact of fiscal decentralization on the economy, society and politics. Our first target is the examination of two crucial and yet unsolved issues in the empirical literature on decentralization: the proper measurement of decentralization itself and its potential endogeneity in econometric estimates. Then, we discuss the main existing findings on the effects of decentralization on a relevant list of socio‐economic issues. The impact of fiscal decentralization reforms on political institutions and public policies is also considered. Complete answers on the impact of fiscal decentralization are not likely to be certain but, overall, there are reasons to be optimistic about the net positive result. Our survey by necessity has to be selective but it presents a balanced view of what is known and what is not yet known opening room for further research and practice on fiscal decentralization.
    November 07, 2016   doi: 10.1111/joes.12182   open full text
  • R&D Intensity And The Effective Tax Rate: A Meta‐Regression Analysis.
    Thomas Belz, Dominik Hagen, Christian Steffens.
    Journal of Economic Surveys. November 01, 2016
    We apply meta‐regression techniques to provide a quantitative review of the empirical literature on how research and development (R&D) expenses affect the effective tax rate (ETR). R&D expenses relate to a well‐accepted profit shifting channel, strategic placement of intellectual property within a multinational entity. Using a unique hand‐collected data set, we add a new perspective to the current base erosion and profit shifting (BEPS) state of research and debate, in three ways: First, observing that primary studies report mixed evidence on how R&D expenses affect ETR, we provide a consensus estimate for this effect. Second, we consider this effect in more detail by separating a tax accounting effect and a profit shifting effect, which to our knowledge has not yet been investigated. We detect that one‐third of the R&D effect on the ETR is due to the tax accounting effect and could be mitigated via book‐tax conformity. We further find that 10% of the profit shifting effect can be traced back to R&D tax credits. Third, our meta‐regression reveals factors that are possible sources of variation and bias in previous empirical studies.
    November 01, 2016   doi: 10.1111/joes.12181   open full text
  • When Ownership Structure Matters: A Review Of The Effects Of Investor Horizon On Corporate Policies.
    Alexandre Garel.
    Journal of Economic Surveys. November 01, 2016
    This paper surveys the literature on the impact of investor horizon on corporate policies. While the desire to encourage long‐term investor ownership is shared among managers, boards and policy makers, how greater long‐term investor ownership benefits corporate decisions and ultimately firm performance is still under academic investigation. The contribution of this paper is twofold. The paper's first contribution is providing an up‐to‐date review of theoretical and empirical findings. This paper introduces the groups of long‐term and short‐term investors and the related classification methodologies and investor horizon proxies used to form them. It further reviews the determinants of an investor's horizon. Then, this paper organizes the literature on the impact of investor horizon on corporate policies around three main channels: the short‐term pressure hypothesis, the monitoring hypothesis, and the catering hypothesis. The paper's second contribution is identifying six major challenges ahead that need to be addressed to improve the understanding of the impact of long‐term (short‐term) investor ownership on corporates policies. These challenges represent opportunities for further research.
    November 01, 2016   doi: 10.1111/joes.12180   open full text
  • The Erroneous Use Of China's Population And Per Capita Data: A Structured Review And Critical Test.
    John Gibson, Chao Li.
    Journal of Economic Surveys. October 15, 2016
    Hundreds of studies in economics misinterpret China's subnational population and per capita data. The most widely used population counts are of hukou registrations from each province, prefecture, county, or city rather than of the people living in each place and generating local gross domestic product. Over 220 million people have left their place of registration, while almost none had when reforms began, creating time‐varying errors in estimates of per capita income of subnational units. We survey empirical articles in blue ribbon journals, in development journals, and in regional and urban economics journals that use China's subnational data. Over 80% of articles use these data erroneously; most commonly the wrong population or employment counts are used to measure the size of subnational units, and per capita data are calculated with the wrong denominator for how variables are interpreted. We provide examples of errors from each group of journals, and a critical test of one highly cited study. Specifically, we show that if hukou registrations are erroneously used to measure the local population, following existing practice, conclusions about driving forces for urban area expansion are reversed. We give recommendations for more careful use of China's subnational population and per capita data.
    October 15, 2016   doi: 10.1111/joes.12178   open full text
  • The Empirics Of The Municipal Fiscal Adjustment.
    Maria Martin‐Rodriguez, Hikaru Ogawa.
    Journal of Economic Surveys. October 15, 2016
    We summarize the literature that uses the vector error‐correction model approach to analyze the dynamics of the municipal fiscal adjustment. The international comparison between samples collected from entire countries and specific regions reveals interesting similarities, but also remarkable differences. The main similarities are the fulfillment of the intertemporal budget constraint, the volatility of the budgetary components, and the importance of the intergovernmental transfers as an adjustment instrument. The most remarkable difference is the preponderant role of the own revenues in the USA, probably reflecting the larger fiscal autonomy of US municipalities. In most cases, the large municipalities seem to be more dependent on grants than their small counterparts, although this pattern is broken in Japan. Finally, partial evidence supporting the existence of moral hazard problems and the flypaper effect is provided.
    October 15, 2016   doi: 10.1111/joes.12179   open full text
  • Competition Between Equity Markets: A Review Of The Consolidation Versus Fragmentation Debate.
    Peter Gomber, Satchit Sagade, Erik Theissen, Moritz Christian Weber, Christian Westheide.
    Journal of Economic Surveys. September 23, 2016
    Technological advances and regulatory initiatives have led to the emergence of a competitive, but fragmented, equity trading landscape in several markets around the world. While these changes have coincided with benefits like reduced transaction costs, advancements in trading technology, and access to a diverse array of execution venues, regulators and market participants have also raised concerns about the welfare implications of innovations like dark pools as well as the resulting increase in execution complexity. Exchanges are often viewed as natural monopolies due to the presence of network externalities and economies of scale. However, heterogeneity in traders' preferences means that no single venue can serve the interests of all investors. Fragmentation of the marketplace can be seen as a direct outcome of this heterogeneity. In this paper, we review the theoretical and empirical literature examining the economic arguments and motivations underlying market fragmentation, the resulting implications for liquidity and price efficiency, and the role for public policy. Beyond the concerns for equity markets, the lessons from this literature are relevant for other asset classes experiencing an increase in competition between trading venues.
    September 23, 2016   doi: 10.1111/joes.12176   open full text
  • Nonparametric And Semiparametric Panel Data Models: Recent Developments.
    Juan M. Rodriguez‐Poo, Alexandra Soberon.
    Journal of Economic Surveys. September 23, 2016
    In this paper, we provide an intensive review of the recent developments for semiparametric and fully nonparametric panel data models that are linearly separable in the innovation and the individual‐specific term. We analyze these developments under two alternative model specifications: fixed and random effects panel data models. More precisely, in the random effects setting, we focus our attention in the analysis of some efficiency issues that have to do with the so‐called working independence condition. This assumption is introduced when estimating the asymptotic variance–covariance matrix of nonparametric estimators. In the fixed effects setting, to cope with the so‐called incidental parameters problem, we consider two different estimation approaches: profiling techniques and differencing methods. Furthermore, we are also interested in the endogeneity problem and how instrumental variables are used in this context. In addition, for practitioners, we also show different ways of avoiding the so‐called curse of dimensionality problem in pure nonparametric models. In this way, semiparametric and additive models appear as a solution when the number of explanatory variables is large.
    September 23, 2016   doi: 10.1111/joes.12177   open full text
  • A Literature Survey On Proposed African Monetary Unions.
    Simplice Asongu, Jacinta Nwachukwu, Vanessa Tchamyou.
    Journal of Economic Surveys. August 26, 2016
    This study provides a survey of recent advances in the literature on proposed African monetary unions. The survey comprises about 70 empirical papers published during the past 15 years. Four main strands are discussed individually and collectively. They comprise the proposed: (i) West African Monetary Zone (WAMZ), (ii) East African Monetary Union (EAMU), (iii) Southern African Monetary Union (SAMU) and (iv) African Monetary Union (AMU). We observe a number of issues with establishing the feasibility and/or desirability of potential monetary unions, inter alia, they are variations in: choice of variables, empirical strategies, sampled countries and considered periodicities. We address this ambiguity by reviewing studies with scenarios that are consistent with Hegelian dialectics and establish selective expansion as the predominant mode of monetary integration. Some proponents make cases for strong pegs and institutions as viable alternatives to currency unions. Using cluster analysis, disaggregating panels into sub‐samples and distinguishing shocks from responses in the examination of business cycle synchronisation provide more subtle policy implications. We caution that for inquiries using the same theoretical underpinnings, variables and methods just by modifying the scope/context and periodicity may only contribute to increasing the number of conflicting findings. Authors should place more emphasis on new perspectives and approaches based on caveats of, and lessons from the European Monetary Union (EMU) and CFA zones.
    August 26, 2016   doi: 10.1111/joes.12174   open full text
  • Exchange Rate‐Based Stabilizations: A Literature Review.
    Özlem Aytaç.
    Journal of Economic Surveys. August 22, 2016
    The exchange rate‐based stabilizations (ERBSs) that have been undertaken in chronic inflation countries have generated a controversial body of literature regarding the effects of disinflation programs, especially those on real consumption and output. This survey provides an extensive overview of the literature on ERBS. The paper covers various empirical studies that have attempted to document the macroeconomic regularities associated with ERBS, discussing both their strengths and their weaknesses. It analyzes diverse theoretical models that have been put forward to replicate the business cycles associated with ERBS, and sheds light on which models perform better using real data. The results suggest that durables incorporated weak credibility and sticky price model proves to be most compatible with the empirical regularities observed in the course of ERBS.
    August 22, 2016   doi: 10.1111/joes.12172   open full text
  • Caught In The Middle? The Economics Of Middle‐Income Traps.
    Pierre‐Richard Agénor.
    Journal of Economic Surveys. August 22, 2016
    This paper provides an overview of the recent analytical and empirical literature on middle‐income traps. The first part examines the descriptive and statistical evidence on these traps. The second discusses the various arguments that have been put forward to explain the existence, and persistence, of middle‐income traps. These arguments include diminishing returns to physical capital, exhaustion of cheap labor and imitation gains, insufficient quality of human capital, inadequate contract enforcement and intellectual property protection, distorted incentives and misallocation of talent, lack of access to advanced infrastructure, and lack of access to finance, especially in the form of venture capital. The third part considers public policies aimed at avoiding, and escaping from, middle‐income traps. The concluding part identifies a number of directions in which the empirical and theoretical literature could fruitfully evolve.
    August 22, 2016   doi: 10.1111/joes.12175   open full text
  • Does Government Spending Affect Income Inequality? A Meta‐Regression Analysis.
    Edward Anderson, Maria Ana Jalles D'Orey, Maren Duvendack, Lucio Esposito.
    Journal of Economic Surveys. August 22, 2016
    In this paper findings of a meta‐regression analysis are presented exploring the effects of government spending on income inequality, with a particular focus on low‐ and middle‐income countries. We identify a total of 84 separate studies containing over 900 estimates of the effect of one or more measures of spending on one or more measures of income inequality. The results show some evidence of a moderate negative relationship between government spending and income inequality, which is strongest for social welfare and other social spending, and when using the Gini coefficient or the top income share as the measure of inequality. However, both the size and direction of the estimated relationship between government spending and income inequality is affected by a range of other factors, including the control variables and estimation method used. We also find evidence of publication bias, in that negative estimates of the relationship appear to be under‐reported in the literature.
    August 22, 2016   doi: 10.1111/joes.12173   open full text
  • Reasons For Delisting And Consequences: A Literature Review And Research Agenda.
    Isabelle Martinez, Stéphanie Serve.
    Journal of Economic Surveys. July 07, 2016
    This paper discusses the literature on delisting, drawing on USA and international evidence. Given the great heterogeneity in delisting operations, we first consider the standard existing typology based on the initiator of the delisting (the stock market authorities, or the firm itself). Second, while managers often cite high compliance costs (especially due to Sarbanes–Oxley Act implementation) as the official reason for the voluntary delisting of their firm, we highlight that firms face different trade‐offs in their delisting decision. We also examine the reasons for involuntary delisting, especially the delisting dilemma faced by stock market authorities when the firm violates the listing requirements. Next, we review the economic consequences of delisting in terms of value creation or value destruction for shareholders. Finally, noting gaps in the literature and other contrasting results, we propose suggestions for future research.
    July 07, 2016   doi: 10.1111/joes.12170   open full text
  • The Rise And Decline Of Economic Policy As An Autonomous Discipline: A Critical Survey.
    Nicola Acocella*.
    Journal of Economic Surveys. July 01, 2016
    After Adam Smith's statement of market virtues, the process of gestation of economic policy as a rational set of rules for public agenda has been rather slow. Until not so long ago, economic policy as a discipline was often confined to prescribing practical rules intended to explain technical procedures of government intervention. Economic policy– as a coherent and to some extent autonomous discipline–only emerged in the late 1950s in Scandinavia, the Netherlands and Italy, when solid foundations indicating not only microeconomic but also macroeconomic market failures and a theory about the conditions for policy effectiveness and design were consistently developed. This paper intends to explain the reasons for the emergence of the discipline, the circumstances that favoured its diffusion, the reasons for its apparent setback and some factors that could facilitate its diffusion in the next years
    July 01, 2016   doi: 10.1111/joes.12168   open full text
  • Communication About Future Policy Rates In Theory And Practice: A Survey.
    Richhild Moessner, David‐Jan Jansen, Jakob de Haan.
    Journal of Economic Surveys. June 30, 2016
    We discuss the theoretical rationale for central bank communication about future policy rates, either as part of inflation targeting or in the form of forward guidance. We also summarize both actual central bank communication about future policy rates and empirical evidence on the effectiveness of these types of communication. We argue that there is a disconnect between the theory and practice of forward guidance, as theory assumes commitment on the part of the central bank, while in practice central banks generally do not commit. Future theoretical research on forward guidance should therefore take the absence of commitment by central banks into account.
    June 30, 2016   doi: 10.1111/joes.12169   open full text
  • Game Theory And Port Economics: A Survey Of Recent Research.
    Soraya Hidalgo‐Gallego, Ramón Núñez‐Sánchez, Pablo Coto‐Millán.
    Journal of Economic Surveys. June 30, 2016
    The last decade has seen a significant upsurge of studies seeking to examine the impacts of port agents’ strategic decisions. The outcome has been a wide range of results and conclusions. The aim of this work is to provide a review of this recent research in the port industry that uses strategic interaction approaches from industrial organization and game theory. The paper concentrates on five topics: ownership, relationship between ports and their hinterlands, port authorities and port operators’ relations, capacity investment decisions, and port specialization. We present the objectives, methodologies and results of the papers reviewed, with special emphasis on how models are developed. The results are not always consistent between the works analyzed. On the one hand, this could be due to the complexity of the port industry and the high number of agents that intervene. Researchers need to simplify reality to build their models by imposing restrictive assumptions. On the other hand, results could be very sensitive to the techniques used or to the differences on the port environment of the countries of study. However, some conclusions can be extracted and they present a good starting point to develop more sophisticated models. Finally, we also propose avenues for future research.
    June 30, 2016   doi: 10.1111/joes.12171   open full text
  • Effects Of Labor Reallocation On Productivity And Inequality—Insights From Studies On Transition.
    Joanna Tyrowicz, Lucas Velde, Jan Svejnar.
    Journal of Economic Surveys. June 09, 2016
    From a theoretical perspective, the link between the speed and scope of rapid labor reallocation and productivity growth or income inequality is ambiguous. Do reallocations with more flows tend to produce higher productivity growth? Does such a link appear at the expense of higher income inequality? We explore the rich evidence from earlier studies on worker flows in the period of massive and rapid labor reallocation, that is, the economic transition from a centrally planned to a market‐oriented economy in CEE. We have collected over 450 estimates of job flows from the literature and used these inputs to estimate the short‐run and long‐run relationship between labor market flows, labor productivity, and income inequality. We apply the tools typical for a meta‐analysis to verify the empirical regularities between labor flows and productivity growth as well as income inequality. Our findings suggest only weak and short‐term links with productivity, driven predominantly by business cycles. However, data reveal a strong pattern for income inequality in the short run—more churning during reallocation is associated with a level effect toward increased Gini indices.
    June 09, 2016   doi: 10.1111/joes.12167   open full text
  • The Decomposition And Dynamics Of Industrial Carbon Dioxide Emissions For 287 Chinese Cities In 1998–2009.
    Maximilian Auffhammer, Weizeng Sun, Jianfeng Wu, Siqi Zheng.
    Journal of Economic Surveys. May 25, 2016
    85% of China's GHG emissions are attributed to urban economic activities, and this share is expected to rise given China's fast urbanization process. This paper provides estimates of city‐level industrial CO2 emissions and their growth rates for all 287 Chinese prefecture‐level and above cities during the years 1998–2009. We decompose the CO2 emission changes into scale, composition and technique effects. The decomposition results show that these three effects differ significantly across the three tiers of cities in China. The scale effect contributes to rising CO2 emissions, while the technique effect leads to declining CO2 emissions in all cities. The composition effect leads to increasing CO2 emissions in the third‐tier cities, while it reduces CO2 emissions in the first and second‐tier cities, due to the relocation of energy‐intensive industries from the latter to the former type of cities. Based on these decomposition results, we identify the separate channels through which the inflow of FDI and the environmental regulations affect city‐level CO2 emissions. The decomposition framework in our paper can help policy makers and scholars to better understand Chinese cities’ trade‐offs between economic growth and environmental goals.
    May 25, 2016   doi: 10.1111/joes.12158   open full text
  • The Decoupling Of Emerging Economies: Theoretical And Empirical Puzzle.
    Antonio Pesce.
    Journal of Economic Surveys. May 24, 2016
    With the growing importance of the emerging economies (EEs) in the international scene, a lively debate has begun on whether the national economic cycles are converging or the cycles of EEs and advanced economies (AEs) are becoming disconnected, the so‐called ‘hypothesis of decoupling of EEs from the AEs’. Given the important practical implications that decoupling could have, for example, on the definition of national and international economic policies and on business strategies aimed at investment diversification and risk management, the question kindles not only the interest of academics but also policymakers and practitioners are very interested in the issue. The decoupling question has been long debated in different circles and from different points of view. This survey aims to retrace the steps of this debate and to provide some suggestions for future empirical researches.
    May 24, 2016   doi: 10.1111/joes.12165   open full text
  • Innovation Policy: Rationales, Lessons And Challenges.
    Jan Fagerberg.
    Journal of Economic Surveys. May 24, 2016
    Innovation policy has emerged as a new field of economic policy during the last few decades. This paper explores the rationales for national innovation policies, as laid out in the existing literature on the subject, and considers what the lessons and challenges for theory and practice in this area are. Innovation policy attempts to influence innovation activity, often with the purpose of increasing economic growth. But it can also have more specific aims such as preventing unwarranted climate change, improving national health, and so on. The increasing attention given to innovation policy at the national level from the 1990s onwards went hand in hand with the development of a new, systemic understanding of innovation, which in a better way than before accounted for the ‘stylised facts’ of innovation activity as identified by empirical work. The system approach, as the paper shows, came to have a significant influence on the subsequent policy discourse. Drawing on recent advances in innovation‐systems theory, a synthetic framework for the analysis of innovation policy is developed and used to highlight issues of particular relevance for the conduct of innovation policy and future scholarly work in this area.
    May 24, 2016   doi: 10.1111/joes.12164   open full text
  • Globalization And Climate Change: New Empirical Panel Data Evidence.
    Maoliang Bu, Chin‐Te Lin, Bing Zhang.
    Journal of Economic Surveys. May 24, 2016
    Whether globalization is good or bad for the environment has been studied intensively in recent years. However, few studies have explicitly provided a general picture of globalization around the world or considered the rich dimensions of globalization outside of economic globalization. By applying the new KOF globalization index in a panel data sample of 166 countries over the 1990–2009 period, our results suggest that, on average, overall carbon emissions rise with higher levels of economic, social and political globalization, although the effect varies by OECD and non‐OECD country group. After decomposing the main contributors of carbon emissions, our further data from the manufacturing and construction sector yield evidence consistent with a pollution haven effect in terms of climate change.
    May 24, 2016   doi: 10.1111/joes.12162   open full text
  • A New Direction In Environmental Economics.
    Brian Chi‐ang Lin, Siqi Zheng.
    Journal of Economic Surveys. May 24, 2016
    Sustainability has emerged as one of most pressing issues in the 21st century since it was recognized that everyone has a stake in Our Common Future. This paper provides an overview of original findings by leading scholars focusing on this field in this collection of special issue covering environmental economics for enhancing sustainability.
    May 24, 2016   doi: 10.1111/joes.12166   open full text
  • A Progress Report On Marxian Economic Theory: On The Controversies In Exploitation Theory Since Okishio ().
    Naoki Yoshihara.
    Journal of Economic Surveys. May 23, 2016
    This report explores the development of exploitation theory in mathematical Marxian economics by reviewing the main controversies surrounding the proper definition of exploitation since the contribution of Okishio. The report first examines the debates on the Fundamental Marxian Theorem and Class‐Exploitation Correspondence Principle, developed mainly in the 1970s and 1980s, followed by the property relation theory of exploitation by Roemer. Then, the more recent exploitation theory proposed by Vrousalis and Wright is introduced. Finally, the report introduces and comments on recent axiomatic studies of exploitation by focusing on the work of Veneziani and Yoshihara.
    May 23, 2016   doi: 10.1111/joes.12151   open full text
  • Cooperative Game Theory Applied To Ieas: A Comparison Of Solution Concepts.
    Marco Rogna.
    Journal of Economic Surveys. May 10, 2016
    This paper aims at providing a critical overview of the main solution concepts adopted by the cooperative game theoretical approach in analysing the constitution of an international environmental agreement (IEA). The first part is mainly descriptive and focuses on the basic features of the ‘global warming game’ characterizing the differences of the cooperative and non‐cooperative approaches to deal with this theme. It then presents the most adopted cooperative solution concepts critically analysing their ratio. Furthermore, two alternative solutions, the Rawlsian Nucleolus and a ‘revisited’ Nash Bargaining solution are proposed, both based on the concept of Minimum Feasible Core. The second part is dedicated to a numerical exercise based on a standard emissions game in order to compare the mentioned concepts with particular focus on their redistributive properties and on their capability to minimize the potential losses caused by free riding. The Rawlsian Nucleolus is, among the considered solutions, the one with the highest redistributive properties, outperforming, on this regard, the Chander and Tulkens solution that still tends to prioritize polluted countries. The ability of avoiding losses from free riding is shown to be strongly correlated with the redistributive properties of solution concepts till the point that their ranking perfectly coincides.
    May 10, 2016   doi: 10.1111/joes.12157   open full text
  • Statistical Arbitrage Pairs Trading Strategies: Review And Outlook.
    Christopher Krauss.
    Journal of Economic Surveys. May 09, 2016
    This survey reviews the growing literature on pairs trading frameworks, i.e., relative‐value arbitrage strategies involving two or more securities. Research is categorized into five groups: The distance approach uses nonparametric distance metrics to identify pairs trading opportunities. The cointegration approach relies on formal cointegration testing to unveil stationary spread time series. The time‐series approach focuses on finding optimal trading rules for mean‐reverting spreads. The stochastic control approach aims at identifying optimal portfolio holdings in the legs of a pairs trade relative to other available securities. The category “other approaches” contains further relevant pairs trading frameworks with only a limited set of supporting literature. Finally, pairs trading profitability is reviewed in the light of market frictions. Drawing from a large set of research consisting of over 100 references, an in‐depth assessment of each approach is performed, ultimately revealing strengths and weaknesses relevant for further research and for implementation.
    May 09, 2016   doi: 10.1111/joes.12153   open full text
  • Structural Equation Modelling And The Causal Effect Of Permanent Income On Life Satisfaction: The Case Of Air Pollution Valuation In Switzerland.
    Eleftherios Giovanis, Oznur Ozdamar.
    Journal of Economic Surveys. May 09, 2016
    This study examines the relationship between air quality and life satisfaction. Moreover, a panel structural equation modelling (SEM) is applied in order to capture the causal effect of permanent income on life satisfaction. Swiss Household Panel (SHP) Survey (2000–2013), which is a detailed micro level survey, is used for the analysis controlling for personal and household characteristics. Five air pollutants are examined in the entire analysis; ozone (O3), particulate matter (PM), carbon monoxide (CO), sulphur dioxide (SO2) and nitrogen dioxide (NO2). Furthermore, the marginal willingness‐to‐pay (MWTP) values for reducing air pollution are calculated. For the robustness checks, the SEM estimates are compared with those derived by the adapted Probit Fixed Effects (FE) model. Overall results show that MWTP values are higher for SO2 followed by O3 and NO2, while the lowest values are reported for CO and PM10. Moreover, it is found that the permanent income has a positive significant effect on life satisfaction. However, considering the SEM estimations, findings for the income effects on life satisfaction are stronger than those found from the adapted Probit FE estimates that lead to lower MWTP values.
    May 09, 2016   doi: 10.1111/joes.12163   open full text
  • One Without The Other? Behavioural And Incentive Policies For Household Waste Management.
    Ankinée Kirakozian.
    Journal of Economic Surveys. May 09, 2016
    This paper provides a review of economic studies that analyses the use of multiple policies to cope with waste management problems. We discuss the factors that influence selective sorting behaviour, and the most appropriate policies for their promotion. Based on the works analysed, our survey shows the original features of waste as an environmental problem requiring regulation. The traditional approach in which decisions respond to rational behaviour, particularly cost savings, has some limits. Although not all public policies seem justified, we argue that there might be a need for specific policies to promote recycling, preferably based on the provision of information to consumers or on behavioural instruments. Indeed, personal factors specific to each individual – such as emotions and the influence of social interaction – should be taken into account in the development of public policies. We review the literature related to different rationales and identify some avenues for future research.
    May 09, 2016   doi: 10.1111/joes.12159   open full text
  • Environmental Sustainability And The Greened Samuelson Rule.
    Yunmin Chen, Brian Chi‐ang Lin, John E. Anderson.
    Journal of Economic Surveys. May 09, 2016
    The purpose of this paper is to investigate the implementation of green government spending as an effective instrument for enhancing both environmental sustainability and economic efficiency. Utilizing a model with two types of households examined in the optimal taxation literature, this paper analyzes the impact of green spending, the properties of optimal tax rates, and the optimal provision of the public good. We derive a modified greened version of the Samuelson rule, that is, the optimal provision of the public good in connection with environmental sustainability. Our results indicate that the overall effect of green spending measured in terms of government revenue is subject to several factors such as the influence of green spending on environmental sustainability, the cost of green spending, pollution effects, and so on. To determine the optimal provision of public goods, the aforementioned factors have to be taken into account. For instance, if the pollution effect is stronger, the individual marginal effective tax rate and the commodity tax rate on the polluting good will increase to discourage the demand for consuming polluting commodities.
    May 09, 2016   doi: 10.1111/joes.12161   open full text
  • Economic Evolution In China Ecologically Fragile Regions.
    Xiangzheng Deng, Zhan Wang, Chunhong Zhao.
    Journal of Economic Surveys. May 09, 2016
    Economic evolution is considered as being driven by innovation of research and development (R&D) even if regional characteristics usually have critical impacts on various culture‐oriented living styles that change in a social transformation dynamically. In documented Chinese history, climate changes and geographic conditions are constraints of the economic evolution in ecologically fragile regions. Lots of unpublished indigenous knowledge of environmental adaptation as a part of culture have been excluded from innovative records. In this research, we review research records of several key factors closely associated with economic evolution in the history of study regions, including climate change, cultural transition, economic base, resource endowment and transportation accessibility. By surveying previous research records and contents, we examine the paths of economic evolution mixed with adaptive cultures response to climate change in each region and draw conclusions that (1) the economic evolution with regional climate changes interactively experience three stages of culture‐hindered, culture‐mixed, and culture‐impelled adaptation diversely; (2) regions that have higher economic performance with less innovative records highly likely have a relatively large number of indigenous knowledge unpublished throughout cultural evolution; and (3) English world has research preference to the regions that have lower economic performance with a distinctive culture in China.
    May 09, 2016   doi: 10.1111/joes.12160   open full text
  • Threshold Specification And Parameter Identification In The Generalized Ordinal Probit Model.
    Joseph V. Terza.
    Journal of Economic Surveys. April 27, 2016
    The following note corrects errors in the review and exposition of the generalized ordinal probit model as offered by Greene et al. (2014,Journal of Economic Surveys 28: 109‐133).
    April 27, 2016   doi: 10.1111/joes.12092   open full text
  • Management Control Systems In Family Firms: A Review Of The Literature And Directions For The Future.
    Zoë Helsen, Nadine Lybaert, Tensie Steijvers, Raf Orens, Julie Dekker.
    Journal of Economic Surveys. April 27, 2016
    Family firms play a significant role in the global economy. Although family firm literature has devoted much time and effort to investigating topics concerning corporate governance, leadership, ownership and succession, accounting issues have received relatively scant attention. In this paper, we assemble and critically review extant literature on the choice of management controls. This is an essential topic for firms as management control systems (MCS) are used to make sure subordinates behave in function of the goals of the firm. Family firms, however, have distinct features, such as differences in governance structures and goals, which can have a significant impact on whether and how MCS are used. We conclude this review paper by providing avenues for future research that can advance our understanding of both the determinants and the outcomes of the choice of MCS.
    April 27, 2016   doi: 10.1111/joes.12154   open full text
  • Household Cooperation In Waste Management: Initial Conditions And Intervention.
    Marie Briguglio.
    Journal of Economic Surveys. April 22, 2016
    The need to divert municipal solid waste away from landfill is an important policy goal in many countries, and the possibility that households cooperate in this endeavor, an oft pursued solution. There is a vast body of theoretical and empirical work which provides insights on the kind of household conditions and intervention that may stimulate such cooperation. This paper reviews the relevant literature in environmental and behavioural economics and synthesizes it around two themes: (1) initial conditions conducive to cooperation (including household motives and constraints and, by association, the demographics of cooperative households) and (2) intervention that may stimulate (or suppress) cooperation. Three distinct attributes of intervention are examined in particular detail, namely convenience, charges and communication. The paper concludes by providing a succinct set of cues for policy‐makers and scheme‐operators wishing to stimulate household cooperation in waste management, and by identifying gaps in the literature which merit further research.
    April 22, 2016   doi: 10.1111/joes.12156   open full text
  • Detecting Volcanic Eruptions In Temperature Reconstructions By Designed Break‐Indicator Saturation.
    Felix Pretis, Lea Schneider, Jason E. Smerdon, David F. Hendry.
    Journal of Economic Surveys. April 20, 2016
    We present a methodology for detecting breaks at any point in time‐series regression models using an indicator saturation approach, applied here to modelling climate change. Building on recent developments in econometric model selection for more variables than observations, we saturate a regression model with a full set of designed break functions. By selecting over these break functions using an extended general‐to‐specific algorithm, we obtain unbiased estimates of the break date and magnitude. Monte Carlo simulations confirm the approximate properties of the approach. We assess the methodology by detecting volcanic eruptions in a time series of Northern Hemisphere mean temperature spanning roughly 1200 years, derived from a fully coupled global climate model simulation. Our technique demonstrates that historic volcanic eruptions can be statistically detected without prior knowledge of their occurrence or magnitude‐ and hence may prove useful for estimating the past impact of volcanic events using proxy reconstructions of hemispheric or global mean temperature, leading to an improved understanding of the effect of stratospheric aerosols on temperatures. The break detection procedure can be applied to evaluate policy impacts as well as act as a robust forecasting device.
    April 20, 2016   doi: 10.1111/joes.12148   open full text
  • Economic Targets And Loss‐Aversion In International Environmental Cooperation.
    Doruk İriş.
    Journal of Economic Surveys. April 15, 2016
    In the standard emission problem, each country's ruling party decides on an optimal level of emissions by analyzing the cost and benefit to the country. However, such policy decisions are often influenced by political parties' incentives to be elected. Voters tend to give higher priority to economic issues than they do to environmental ones. As a result, political parties have additional incentives to reach a critical economic benefit level, at a cost of higher emission level, in order to satisfy voters' expectations in economic issues. Therefore, this study explores the implications of political parties being averse to insufficient economic performance relative to a critical economic target level on sustaining an international environmental agreement on emission levels. In doing so, we allow countries to have asymmetric concerns about economic targets, as well as asymmetric technology levels. We find that stronger concerns about economic targets deter the most cooperative emission levels countries could jointly sustain. Furthermore, technological asymmetry could either deepen or offset this impact. These results suggest that efforts on achieving substantial international environmental agreements should be supported at the citizen level to eliminate the adverse effects.
    April 15, 2016   doi: 10.1111/joes.12155   open full text
  • The Circular Relationship Between Inequality, Leverage, And Financial Crises.
    Rémi Bazillier, Jérôme Hericourt.
    Journal of Economic Surveys. March 30, 2016
    In this paper, we put into perspective the recent literature which points to inequality as a possible cause of credit bubbles, by reintegrating it into a more general analysis on the two‐way relationship between inequality and finance. We focus more specifically on situations where high inequalities and widespread access to credit coexist, and argue that, even when institutions maintain more or less equal access to finance, there may be a dynamic, positive circular relationship between inequality and financial development. However, even if there is some evidence in the literature of a positive causal impact of inequality on credit, this does not preclude other important, cofounding factors. The conclusions concerning the distributional impact of finance are more ambiguous. A survey of the empirical literature highlights several issues that must be tackled. First, endogeneity: reverse causality and coincidental factors are major concerns. Second, the choice of consistent measurements for the key variables (both credit and inequality) has strong empirical implications, and must be grounded on relevant theoretical channels. Third, those circular dynamics have substantial policy implications for emerging economies, since an increasing number face a joint increase in inequality and credit.
    March 30, 2016   doi: 10.1111/joes.12150   open full text
  • Overbidding And Heterogeneous Behavior In Contest Experiments: A Comment On The Endowment Effect.
    Subhasish M. Chowdhury, Peter G. Moffatt.
    Journal of Economic Surveys. March 23, 2016
    We revisit the meta‐analysis of Sheremeta on overbidding in contest experiments and focus on the effect of endowment on overbidding. Sheremeta assumes, and finds evidence of, an increasing linear relationship between endowment and overbidding, Quantal Response Equilibrium (QRE) predicts an increasing concave relationship, while Baik and colleagues find an inverted U‐shaped relationship in their analysis of a single experiment. We use the same data as in Sheremeta, but employ a different econometric model which leads to support for both QRE and the inverted U‐shaped relationship. Following Baik and colleagues, we posit that the inverted‐U relationship may be interpreted in terms of a wealth effect.
    March 23, 2016   doi: 10.1111/joes.12152   open full text
  • A Survey Of The Literature On Environmental Innovation Based On Main Path Analysis.
    Nicolò Barbieri, Claudia Ghisetti, Marianna Gilli, Giovanni Marin, Francesco Nicolli.
    Journal of Economic Surveys. March 21, 2016
    This paper reviews the literature on environmental innovation (EI) and systematizes it by means of an original methodology identifying the main directions in which the literature on EI has developed over time. In order to do so, two algorithms are adopted and used to analyse a citation network of journal articles and books. The main path analysis reveals that this literature revolves around the following topics: i) determinants of EI; ii) economic effects of EI; iii) environmental effects of EI and iv) policy inducement of EI. Each of these topics is discussed and implications from the main findings as well as possible future research extensions are outlined.
    March 21, 2016   doi: 10.1111/joes.12149   open full text
  • On The (Political) Origin Of ‘Corporate Governance’ Species.
    Massimiliano Vatiero.
    Journal of Economic Surveys. March 14, 2016
    Although economies, business practices and living standards have converged since WWII, corporate structures continue to differ among the advanced economies of the world. Looking at the diversity of corporate structures of large‐sized firms around the world (and over time) would fascinate Charles Darwin. This work develops a critical review of the literature on political determinants of corporate governance through the Darwinian theory (including some Lamarckian aspects). As Darwin, in his work On the Origin of Species, explicates the diversity of species of tortoises, finches and iguanas of the Galapagos Islands, so Darwinism may contribute in understanding the origin and the persistence of corporate diversity. In particular, this paper takes into account politics‐driven variations, their inheritances, and the subsequent selection of advantageous ‘corporate’ attributes.
    March 14, 2016   doi: 10.1111/joes.12147   open full text
  • A Meta‐Analysis Of Fdi And Productivity Spillovers In Developing Countries.
    Binyam A. Demena, Peter A. G. van Bergeijk.
    Journal of Economic Surveys. March 02, 2016
    This meta‐analysis reviews the intrasector heterogeneity of productivity spillovers from foreign direct investment (FDI) in 31 developing countries through a larger more comprehensive data set. We investigate how the inconsistencies in the reported spillover findings are affected by publication bias, characteristics of the data, estimation techniques, and empirical specification, analyzing 1450 spillover estimates from 69 empirical studies published in 1986–2013. Our findings suggest that reported FDI spillover estimates are affected by publication bias. In combination with model misspecification of the primary studies, the bias overstates the genuine underlying meta‐effect, but the meta‐effect remains economically and statistically significant. Our results emphasize that spillovers and their sign largely depend systematically on specification characteristics of the primary studies and publication bias. Publication bias is not caused by “best practice” choices. Future research needs to cover more developing countries and to investigate not only whether spillovers occur, but also to explore inside the black box of how spillovers actually emerge.
    March 02, 2016   doi: 10.1111/joes.12146   open full text
  • Research On The Motion Picture Industry: State Of The Art And New Directions Off The Beaten Track Away From Theatrical Release.
    Florian Kumb, Reinhard Kunz, Gabriele Siegert.
    Journal of Economic Surveys. March 01, 2016
    The motion picture industry has been subject of extensive academic research over the last decades. However, most scholars focused on the U.S. theatrical motion picture market. The number of research activities regarding even more profitable release windows, such as home video or television, has been substantially lower. Although international distribution is essential for a motion picture project to break even, there has been little significant re‐search on most other markets. This paper aims at summarizing the current state of research on the motion picture industry, particularly from marketing and management perspective, revealing research gaps, and proposing recommendations for future research endeavors. Therefore, a three‐pillar scheme is developed to systemize previous findings: Research on intraorganizational decision making, contractual relationships between national stakeholders, and international market competition are differentiated. Since these insights are mainly derived from U.S. theatrical exhibition, they can hardly be applied to other markets and exhibition windows. Thus, potential research areas are identified to expand knowledge of posttheatrical and international markets.
    March 01, 2016   doi: 10.1111/joes.12145   open full text
  • Insurance By Government Or Against Government? Overview Of Public Risk Management Policies.
    Jan Libich, Martin Macháček.
    Journal of Economic Surveys. February 25, 2016
    In what contexts is it desirable that the government, rather than the private sector, takes on the role of an insurer and helps people reduce risks? Our discussion implies that while in a number of areas individuals benefit from well‐designed insurance provided by their government, ill‐designed public policies (for example existing pay‐as‐you‐go pension systems) force individuals to insure against their government. It is further discussed how governments could improve their risk managing role in many areas by using income contingent loans, provided the country has high‐quality institutions and governance. Such loans to artists, sportspeople, flood victims or collapsing financial institutions would replace the existing nonrepayable transfers, grants, subsidies and bailouts. Using a simple efficiency‐equity‐sustainability framework for comparing income contingent schemes with conventional public and private insurance policies, we document that this would enable governments to extend their insurance assistance to a greater number of people and institutions – in a way that is not only equitable but also efficient and fiscally sustainable.
    February 25, 2016   doi: 10.1111/joes.12144   open full text
  • Approaches And Methods For The Econometric Analysis Of Market Power: A Survey And Empirical Comparison.
    Oleksandr Perekhozhuk, Thomas Glauben, Michael Grings, Ramona Teuber.
    Journal of Economic Surveys. February 11, 2016
    This study discusses two widely used approaches in the New Empirical Industrial Organization (NEIO) literature and examines the strengths and weaknesses of the Production‐Theoretic Approach (PTA) and the General Identification Method (GIM) for the econometric analysis of market power in agricultural and food markets. We provide a framework that may help researchers to evaluate and improve structural models of market power. Starting with the specification of the approaches in question, we compare published empirical studies of market power with respect to the choice of the applied approach, functional forms, estimation methods and derived estimates of the degree of market power. Thereafter, we use our framework to evaluate several structural models based on PTA and GIM to measure oligopsony power in the Ukrainian dairy industry. The PTA‐based results suggest that the estimated parameters of oligopsony power are significantly different from zero, while GIM‐based results do not indicate any evidence of oligopsony market power in the Ukrainian dairy industry. Moreover, estimations results vary substantially due to the employed estimation procedure.
    February 11, 2016   doi: 10.1111/joes.12141   open full text
  • Wickedness In Social Choice.
    Wulf Christian Gaertner.
    Journal of Economic Surveys. January 27, 2016
    In an article from 1973, Rittel and Webber distinguished between ‘tame’ or ‘benign’ problems on the one hand and ‘wicked’ problems on the other. The authors argued that wicked problems occur in nearly all public policy issues. Since different groups adhere to different value‐sets, solutions can only be expressed as better or worse. By no means can they be viewed as definitive or objective. In this paper we consider, from this very angle, the theory of social choice which is about the aggregation of individual preferences with the aim to derive a consistent social preference. We show that collective choice offers wicked problems of various types which differ in their degree of severity. We hereby concentrate on welfare functions and voting schemes of different kinds and discuss these in the light of various criteria such as Arrow's independence condition, Condorcet consistency, monotonicity, manipulability, and other properties.
    January 27, 2016   doi: 10.1111/joes.12143   open full text
  • Intertemporal Substitution In Consumption: A Literature Review.
    Julian Thimme.
    Journal of Economic Surveys. January 19, 2016
    This paper reviews the status quo of the empirical literature about the elasticity of intertemporal substitution (EIS) in consumption. Aiming to answer the question what the true magnitude of the parameter really is, it discusses several recent advances of the theory and highlights challenges for the estimation. Although the general discussion still seems to be prevailed by Hall's early EIS estimates close to zero, we show that several deviations from the time‐additive constant relative risk aversion model speak in favor of considerably higher values. Our treatment is supposed to provide researchers a hint at which parameter is a reasonable and incontrovertible choice for the calibration of models in macroeconomics and finance.
    January 19, 2016   doi: 10.1111/joes.12142   open full text
  • Taxation And The User Cost Of Capital.
    John Creedy, Norman Gemmell.
    Journal of Economic Surveys. December 28, 2015
    This paper provides a review of the concept of user cost and its determinants. Particular attention is given to the influence of taxation. The concept of user cost relates to the rental, the rate of return to capital, that arises in a profit maximizing situation in which further investment in capital produces no additional profit. This paper sets out in some detail the range of assumptions involved in obtaining alternative expressions for the user cost. The user cost refers to a before‐tax capital rental, the rate of return that ensures that the (after‐tax) cost of capital is equal to the post‐tax returns over its life. Hence, associated with the user cost measure is an effective marginal tax rate. This can differ substantially from the statutory marginal rate applicable to the investor. A related effective average tax rate is also defined.
    December 28, 2015   doi: 10.1111/joes.12137   open full text
  • Stated Preferences For Public Services: A Classification And Survey Of Approaches.
    Felix Schläpfer.
    Journal of Economic Surveys. December 28, 2015
    The wider range of stated preference approaches to value public goods has not been systematically reviewed in recent years. The objective of this paper is to provide an overview of this literature and to evaluate the strengths and limitations of alternative approaches. Since the public referendum has served as a ‘blueprint’ for survey design, two key dimensions by which many surveys differ from the public referendum are used for a simple classification of approaches. This yields eleven approaches, including different variants of micro‐based demand surveys, referendum surveys, budget allocation surveys and contingent valuation surveys. Their evaluation in terms of the preference information they produce and the assumptions they require suggests there is no single preferred approach. Instead, each approach has its characteristic profile of strengths and limitations which follow from how it strikes the balance between the conflicting goals of measuring entire willingness‐to‐pay distributions and presenting manageable, credible and incentive compatible questions. Ultimately, judgments about the suitability of alternative approaches for specific objectives should rely on empirical evidence. Progress in the field could greatly benefit from a routine implementation of powerful experimental validity tests in applied work.
    December 28, 2015   doi: 10.1111/joes.12140   open full text
  • The Meaning Of Failed Replications: A Review And Proposal.
    Michael A. Clemens.
    Journal of Economic Surveys. December 26, 2015
    The welcome rise of replication tests in economics has not been accompanied by a consensus standard for determining what constitutes a replication. A discrepant replication, in current usage of the term, can signal anything from an unremarkable disagreement over methods to scientific incompetence or misconduct. This paper proposes a standard for classifying one study as a replication of some other study. It is a standard that places the burden of proof on a study to demonstrate that it should have obtained identical results to the original, a conservative standard that is already used implicitly by many researchers. It contrasts this standard with decades of unsuccessful attempts to harmonize terminology, and argues that many prominent results described as replication tests should not be described as such. Adopting a conservative standard like this one can improve incentives for researchers, encouraging more and better replication tests.
    December 26, 2015   doi: 10.1111/joes.12139   open full text
  • A Theoretical Approach To Sterilized Foreign Exchange Intervention.
    Mauricio Villamizar‐Villegas*, David Perez‐Reyna.
    Journal of Economic Surveys. December 01, 2015
    In this paper, we survey prominent theories that have shaped the literature on sterilized foreign exchange interventions. We identify three main strands of literature: (1) that which deems interventions futile; (2) that which requires some market friction (i.e. limited arbitrage) in order for interventions to be effective; and (3) that which advocates the use of interventions as long as they convey signals on the stance of future monetary policy. We contribute to the literature in three important ways. First, by reviewing new theoretical models that have surfaced within the last decade. Second, by further penetrating into the theory of interventions in order to analyze the key features that make each model distinct. And third, by only focusing on sterilized operations, which allows us to sidestep the effects induced by changes in the stock of money supply. In addition, the models that we present comprise both a macro and microstructure approach so as to provide a comprehensive view of the theory behind exchange rate intervention.
    December 01, 2015   doi: 10.1111/joes.12136   open full text
  • The Threat Effect Of Active Labor Market Programs: A Systematic Review.
    Trine Filges, Anne Toft Hansen.
    Journal of Economic Surveys. November 06, 2015
    This paper is a systematic review of the threat effect of active labor market programs for unemployed individuals. The threat effect is the induced change in the hazard rate of leaving unemployment prior to program participation. Studies included in the review all estimated a threat effect, with the participants in all cases being unemployed individuals in receipt of benefit of some kind during their tenure of unemployment. Eight of these studies have been included in a meta‐analysis: The meta‐analysis, which has been carried out using a random effects model to account for heterogeneity, indicated a hazard ratio of 1.25 for the pooled estimate. We conclude that active labor market programs constitute a statistically significant threat effect, although it is modest.
    November 06, 2015   doi: 10.1111/joes.12134   open full text
  • A New Cinderella Story: Joint Ventures And The Property Rights Theory Of The Firm.
    Valeria Gattai, Piergiovanna Natale.
    Journal of Economic Surveys. November 04, 2015
    Joint ventures (JVs) are a common form of inter‐firm collaboration and, unsurprisingly, the subject of a vast literature, extending from economics to management and business studies. Issues of control are central to the definition of JVs, and this naturally calls for an interpretation in the context of the property rights theory (PRT) of the firm. In a series of seminal papers, Grossman, Hart and Moore (GHM) offer a rigorous framework to predict the allocation of control rights. Notably, under the standard assumptions of GHM, JVs are suboptimal. However, JVs are not suboptimal in more general settings where a number of the original framework's assumptions are relaxed. In the context of PRT, this paper surveys more than 20 contributions that address the optimality of JVs under contract incompleteness. The surveyed papers question the assumptions of GHM and reveal the circumstances in which JVs outperform sole ownership. Although contributions are scattered over time and bibliographical sources, we believe sufficient material has accumulated over 25 years of economic modelling to encourage some systematization. The discussion is organized in an intuitive and non‐technical way; in particular, effort is devoted to analysing each paper in detail and providing a unified framework.
    November 04, 2015   doi: 10.1111/joes.12135   open full text
  • From Institutions To Financial Development And Growth: What Are The Links?
    Andrés Fernández, César E. Tamayo.
    Journal of Economic Surveys. October 13, 2015
    This paper presents an integrated overview of the literature linking institutions, financial development, and economic growth. From the large body of research on institutional development, the paper first selects those contributions that make it possible to study the role of institutional arrangements in ameliorating/worsening the information frictions and transaction costs that characterize the development of financial markets. The paper then investigates the theoretical mechanisms by which these specific frictions affect economic growth and presents the stock of empirical evidence quantifying the impact of institutions on growth through financial development.
    October 13, 2015   doi: 10.1111/joes.12132   open full text
  • A Closer Look At Value Premium: Literature Review And Synthesis.
    Eero Pätäri, Timo Leivo.
    Journal of Economic Surveys. September 24, 2015
    This paper provides a systematic review of value premium literature that examines the performance difference between value and growth stocks and the possible reasons for it. We compare and synthesize the results from the different regional stock markets and different sample periods. The literature is categorized according to stock selection criteria that are based on either individual valuation ratios, such as E/P, B/P, D/P, S/P, CF/P, and enterprise value‐based multiples, or composite value criteria that aim to capture more than one dimension of relative value simultaneously or combine them with other classification criteria. We also compare the efficacy of various selection criteria to each other and synthesize the literature on the explanations for the value anomalies. The overall evidence shows that the best criterion varies over time and across the markets. The relative efficacy of different valuation criteria also seems to depend on numerous methodological choices. Recent studies have given mild evidence that combining traditional valuation ratios either with each other or with some financial statement variables could at least in some cases enhance the value premium, although very few studies have provided transparent comparisons between the results based on individual valuation ratios and those based on composite value criteria.
    September 24, 2015   doi: 10.1111/joes.12133   open full text
  • The Governance Of Financial Supervision: Recent Developments.
    Donato Masciandaro, Marc Quintyn.
    Journal of Economic Surveys. September 22, 2015
    This paper examines the evolution of financial supervision as a policy tool over the last three decades, with a focus on the issues raised by the Global Crisis. It considers a sample of advanced and emerging economies to discuss the four main questions debated in the literature, and addressed in the economic policy arena: the architecture of supervision, the role of the central bank as supervisor, the governance of supervision, and financial supervision vs. the internationalization of finance. Our survey finds that, on each of these issues, theory and practice do not offer clear‐cut answers and unambiguous optimal solutions. At the same time, the most promising approach is to tackle financial supervision as a principal‐agent problem, where economics and political economy approaches must be used in combination to improve both positive and normative analyses of supervisory governance.
    September 22, 2015   doi: 10.1111/joes.12130   open full text
  • Bank Competition And Financial Stability: Much Ado About Nothing?
    Diana Zigraiova, Tomas Havranek.
    Journal of Economic Surveys. September 10, 2015
    The theoretical literature gives conflicting predictions on how bank competition should affect financial stability, and dozens of researchers have attempted to evaluate the relationship empirically. We collect 598 estimates of the competition‐stability nexus reported in 31 studies and analyse the literature using meta‐analysis methods. We control for 35 aspects of study design and employ Bayesian model averaging to tackle the resulting model uncertainty. Our findings suggest that the definition of financial stability and bank competition used by researchers influences their results in a systematic way. The choice of data, estimation methodology, and control variables also affects the reported coefficient. We find evidence for moderate publication bias. Taken together, the estimates reported in the literature suggest little interplay between competition and stability, even when corrected for publication bias and potential misspecifications.
    September 10, 2015   doi: 10.1111/joes.12131   open full text
  • Is The Capital Structure Logic Of Corporate Finance Applicable To Insurers? Review And Analysis.
    Jan Dhaene, Cynthia Hulle, Gunther Wuyts, Frederiek Schoubben, Wim Schoutens.
    Journal of Economic Surveys. August 22, 2015
    Since the financial crisis of 2008, next to banks, insurers have received increasing attention from researchers and regulators because of their crucial role in the financial system. A key point for a stable insurer is its capital structure, i.e. the choice between equity, debt and provisions in financing its operations. Based on earlier work a quickly developing literature has directly applied capital structure theories (in particular trade‐off and pecking order) from corporate finance to insurers’ financing choices. Corporate finance concepts used herein however, are developed for industrial firms. In this paper we provide an overview of the literature on the capital structure of insurers, but contribute by systematically clarifying how to account for the specificities of insurers when transferring the trade‐off and pecking‐order logic from an industrial to an insurer context. This way, we add several new insights on an insurer's choice between equity, financial debt and provisions. In particular, we are able to explain why, as compared to industrial firms, insurers use less financial debt, and why insurers focus so strongly on self‐financing. Finally, we identify multiple avenues for future research.
    August 22, 2015   doi: 10.1111/joes.12129   open full text
  • The Creation And Diffusion Of Innovation In Developing Countries: A Systematic Literature Review.
    Giacomo Zanello, Xiaolan Fu, Pierre Mohnen, Marc Ventresca.
    Journal of Economic Surveys. August 08, 2015
    In this study, we review the literature on the creation and diffusion of innovation in the private sectors (industry and services) in developing countries. In particular, we collect evidence on what are the barriers to innovation creation and diffusion and the channels of innovation diffusion to and within developing countries. We find that innovation in developing countries is about creation or adoption of new ideas and technologies; but the capacity for innovation is embedded in and constituted by dynamics between geographical, socio‐economic, political and legal subsystems. We contextualize the findings from the review in the current theoretical framework of diffusion of innovations, and we emphasize how the institutional context typical of developing countries impacts the diffusion itself.
    August 08, 2015   doi: 10.1111/joes.12126   open full text
  • Towards An Economics Of Awards.
    Bruno S. Frey, Jana Gallus.
    Journal of Economic Surveys. August 07, 2015
    Awards are a widespread phenomenon. They cater to the fundamental desire for social recognition and serve as a valuable incentive to influence behaviour. The study of awards such as medals, prizes and titles has in recent years gained momentum in economics, complementing the longstanding focus on material incentives. To evaluate the effectiveness of awards as a motivator is difficult as the effect of awards must be separated from the fact that awards are meant to be given to the best. We show how research on awards has advanced over the last couple of years, thus providing points of departure for future work.
    August 07, 2015   doi: 10.1111/joes.12127   open full text
  • Advertising's Elusive Economic Rationale: Public Policy And Taxation.
    Ciaran Driver.
    Journal of Economic Surveys. July 27, 2015
    Advertising and its effects have been debated for well over a century. In the last few decades a generally sceptical view of the benefits of advertising has been overturned by a series of academic advances in economics that detail a variety of ways in which advertising may affect the economy and society. This academic work has however been paralleled by a growing popular and political opposition to advertising and its social effects. In this paper, the positive economic case for advertising is challenged by an assessment of the main channels of its influence and by a review of the associated empirical findings on its economic and wider impact. A policy response of limiting the tax deductibility of business advertising is explored.
    July 27, 2015   doi: 10.1111/joes.12122   open full text
  • Approaches To Inequality Of Opportunity: Principles, Measures And Evidence.
    Xavier Ramos, Dirk gaer.
    Journal of Economic Surveys. July 27, 2015
    We put together the different conceptual issues involved in measuring inequality of opportunity, discuss how these concepts have been translated into computable measures, and point out the problems and choices researchers face when implementing these measures. Our analysis identifies and suggests several new possibilities to measure inequality of opportunity. The relevance of the conceptual issues and modelling choices are illustrated with findings from the empirical literature on income inequality of opportunity.
    July 27, 2015   doi: 10.1111/joes.12121   open full text
  • Commercial Property Price Indexes And The System Of National Accounts.
    W. Erwin Diewert, Kevin J. Fox, Chihiro Shimizu.
    Journal of Economic Surveys. July 27, 2015
    This paper studies the problems associated with the construction of price indexes for commercial properties that could be used in the System of National Accounts (SNA). Property price indexes are required for the stocks of commercial properties in the Balance Sheets of the country. Related service price indexes for the land and structure input components of a commercial property are required in the Production Accounts of the country if the Multifactor Productivity of the Commercial Property Industry is calculated as part of the SNA. The paper reviews existing methods for constructing an overall Commercial Property Price Index (CPPI) and concludes that most methods are biased (due to their neglect of depreciation) and more importantly, not able to provide separate land and structure subindexes. A class of hedonic regression models that is not subject to these problems is discussed.
    July 27, 2015   doi: 10.1111/joes.12117   open full text
  • Creating A Lab In The Field: Economics Experiments For Policymaking.
    Angelino C. G. Viceisza.
    Journal of Economic Surveys. July 14, 2015
    In this paper, I focus on the role that artefactual and certain framed field experiments (what I term “lab‐like field experiments” or LFEs) play in informing policymaking. Using examples, primarily from rural contexts in developing countries, I identify four main purposes of LFEs: (1) to test theories or heuristic principles; (2) to identify and estimate parameters associated with characteristics; (3) to explore the structural nature of parameters derived from empirical methods including other types of experiments; and (4) to assess methodological difficulties associated with LFEs and how these can impact parameter estimates. I address the importance of generalizability for LFEs that are intended to inform policymaking and in the process, emphasize the complementary role between LFEs and other empirical methods, in particular other experiments. Finally, I discuss nine basic principles for conducting LFEs and suggest four directions for future research.
    July 14, 2015   doi: 10.1111/joes.12118   open full text
  • Which Agglomeration Externalities Matter Most And Why?
    Henri L.F. Groot, Jacques Poot, Martijn J. Smit.
    Journal of Economic Surveys. May 28, 2015
    This paper revisits the ongoing discussion on the importance of agglomeration externalities – specifically specialization, diversity and competition effects – that may contribute to innovation, productivity and urban employment growth. Previous meta‐analyses suggested that the evidence on agglomeration externalities is strongly context‐specific. Expanding an earlier analysis of 31 articles, we seek to draw in this paper more robust conclusions by means of the statistical evidence for agglomeration externalities presented in 73 scientific articles, all building on the seminal work of Glaeser et al. (1992). Our results confirm that the heterogeneity among studies is huge and can only be partially accounted for by means of an ordered probit analysis. Additionally, some evidence of publication bias is found. We conclude that the conventional lines of inquiry in this literature may now have reached strongly diminishing returns. New lines of inquiry, using rich micro‐level data on firms and workers, dynamic general equilibrium models at the macro level, more attention for spatial and temporal variation in the impacts of agglomeration, and further investigations into the spatial scope of externalities are promising avenues for further research that can enhance our understanding of how agglomeration externalities continue to fuel our increasingly urbanized world.
    May 28, 2015   doi: 10.1111/joes.12112   open full text
  • Individual Determinants Of Self‐Employment Entry: What Do We Really Know?
    Nadia Simoes, Nuno Crespo, Sandrina B. Moreira.
    Journal of Economic Surveys. May 25, 2015
    The analysis of the decision to enter into self‐employment is a hot topic in the economic literature. Among the elements that most directly influence this decision, individual factors are central. This study produces a comprehensive survey of the impact of these factors, covering both the theoretical arguments and the main conclusions emerging from the empirical studies. We analyze 12 critical determinant factors of the entry into self‐employment grouped into seven categories: (1) basic individual characteristics (gender, age, marital status, and children); (2) family background (parents and spouse); (3) personality characteristics; (4) human capital (education and experience); (5) health condition; (6) nationality and ethnicity; and (7) access to financial resources. While for some of the factors solid conclusions can be found, for others additional research is still needed in order to shed further light on their influence.
    May 25, 2015   doi: 10.1111/joes.12111   open full text
  • Radicalism Versus Gradualism: An Analytical Survey Of The Transition Strategy Debate.
    Ichiro Iwasaki, Taku Suzuki.
    Journal of Economic Surveys. May 21, 2015
    Academic debate on a transition strategy for former socialist economies continues even a quarter century after the collapse of the communism in Central and Eastern Europe and the former Soviet Union. In this paper, through an analytical survey of 137 preceding studies, we present an overall picture of the debate and examine the relationship between the debate attitudes and the literature attributes in related studies. We found that the radicalists maintain a consistent debate attitude from the viewpoints of time speed and policy sequence of economic transition, while the debate attitude of the gradualists is more diversified. We also found that there is another group of researchers that stays within the framework of the radicalism‐versus‐gradualism debate while at the same time keeping at arm's length from both the radicalists and the gradualists. In addition, our regression estimation of qualitative selection models provides interesting findings on the relationship between the debate attitudes and the literature attributes.
    May 21, 2015   doi: 10.1111/joes.12110   open full text
  • Reinventing Foreign Aid For Inclusive And Sustainable Development: Kuznets, Piketty And The Great Policy Reversal.
    Simplice Asongu.
    Journal of Economic Surveys. May 01, 2015
    This survey essay reviews close to 200 papers in arguing that in order to achieve sustainable and inclusive development, foreign aid should not orient developing countries toward industrialization in the perspective of Kuznets but in the view of Piketty. Abandoning the former's view that inequality will fall with progress in industrialization and placing more emphasis on inequality in foreign aid policy will lead to more sustainable development outcomes. Inter alia: mitigate short‐term poverty, address concerns of burgeoning population growth, train recipient governments on inclusive development, fight corruption and mismanagement and avoid the shortfalls of celebrated Kuznets’ conjectures. We discuss how the essay addresses post‐2015 development challenges and provide foreign aid policy instruments with which discussed objectives can be achieved. In summary, the essay provides useful policy measures to avoid past pitfalls. ‘Output may be growing, and yet the mass of the people may be becoming poorer’ (Lewis). ‘Lewis led all developing countries to water, proverbially speaking, some African countries have so far chosen not to drink’ (Amavilah). Piketty has led all developing countries to the stream again and a challenging policy syndrome of our time is how foreign aid can help them to drink.
    May 01, 2015   doi: 10.1111/joes.12109   open full text
  • Macro‐Finance Linkages.
    James Morley.
    Journal of Economic Surveys. April 20, 2015
    In this survey, I review the academic and policy‐oriented literature on the linkages between financial markets and the rest of the economy. First, I summarize the leading economic theories for why the financial sector can influence the macroeconomy. Second, I consider empirical research on spillovers from the financial sector to the rest of the economy, as well as across financial markets in different countries. Third, I discuss key monetary policy debates regarding the appropriate response of central banks to financial conditions. Finally, I conclude with an overview of the major gaps in the existing literature.
    April 20, 2015   doi: 10.1111/joes.12108   open full text
  • Referee Bias.
    Thomas Dohmen, Jan Sauermann.
    Journal of Economic Surveys. March 19, 2015
    This paper surveys the empirical literature on the behavior of referees in professional football and other sports. Referees are typically appointed by a principal to be impartial, especially when unbiased referee judgment is vital for the accomplishment of the principal's objective. Answering whether referees make biased decisions and understanding the causes that lead referees to digress from their principal duty of impartiality is therefore fundamental from a theoretical point of view. At the same time, assessing the prevalence and origin of referee bias is germane to various domains of life. Referee bias is particularly relevant in sports, where partial decision‐making can determine competition outcomes, which can have strong repercussions on athletes' careers and supporters' well‐being.
    March 19, 2015   doi: 10.1111/joes.12106   open full text
  • Credit Default Swaps: Has The Gfc Influenced Perceptions Of Their Utility For Banks?
    Roshanthi Dias.
    Journal of Economic Surveys. March 19, 2015
    Credit Default Swaps (CDSs) are considered as one of the most versatile financial innovations of the 21st century. Since its inception, the credit derivatives market has grown to a peak of $64 trillion in 2008 in terms of gross notional values (Cont, ). However, after the onset of the GFC, this market has decreased to a large extent. While there is evidence that promotes the risk reduction properties of CDSs, there is a growing body of research post GFC that identifies destabilising effects of these instruments. In this paper, I review the relevant scholarly literature and provide evidence of how the views on CDSs have changed post GFC due a deeper investigation of issues such as systemic risk, regulatory arbitrage, information asymmetry and risk‐taking, among others, in the banking industry. This paper provides a survey of the literature of views ‘for’ and ‘against’ the use of CDSs during pre and post GFC periods and finally concludes that in comparison to the pre GFC period, post GFC there is a significant increase in the literature that highlights the detrimental nature of CDSs.
    March 19, 2015   doi: 10.1111/joes.12105   open full text
  • Fama On Bubbles.
    Tom Engsted.
    Journal of Economic Surveys. February 26, 2015
    While Eugene Fama has repeatedly expressed his discontent with the notion of an “irrational bubble,” he has never publicly expressed his opinion on “rational bubbles.” On empirical grounds Fama rejects bubbles by referring to the lack of reliable evidence that price declines are predictable. However, this argument cannot be used to rule out rational bubbles because such bubbles do not necessarily imply return predictability, and return predictability of the kind documented by Fama does not rule out rational bubbles. On data samples that include the 1990s, there is evidence of an explosive component in stock market valuation ratios, consistent with a rational bubble.
    February 26, 2015   doi: 10.1111/joes.12104   open full text
  • Government Size And Growth: A Rejoinder.
    Andreas Bergh, Magnus Henrekson.
    Journal of Economic Surveys. February 04, 2015
    In our 2011 survey of the literature in the Journal of Economic Surveys on the effect of government size on economic growth in wealthy countries we find a relatively consistent pattern: An increase in government size by 10 percentage points is associated with a 0.5–1 percentage point lower annual growth rate. This conclusion is questioned by Colombier. In this rejoinder we present a rebuttal of Colombier's argument based on a detailed scrutiny of his own statistical evidence and regression results. Furthermore, we note that several new papers that have appeared since our original paper was published give support to our main conclusion.
    February 04, 2015   doi: 10.1111/joes.12103   open full text
  • Walking Down Wall Street With A Tablet: A Survey Of Stock Market Predictions Using The Web.
    Michela Nardo, Marco Petracco‐Giudici, Minás Naltsidis.
    Journal of Economic Surveys. January 16, 2015
    ‘A blindfolded chimpanzee throwing darts at The Wall Street Journal could select a portfolio that would do as well as the (stock market) experts’ [Malkiel (2003) The efficient market hypothesis and its critics. Journal of Economic Perspectives 17(1): 59–82)]. However, what if this chimpanzee could browse the Internet before throwing any darts? In this paper, we ask whether online news has any influence on the financial market, and we also investigate how much influence it has. We explore the burgeoning literature on the predictability of financial movements using online information and report its mixed findings. In addition, we collate the efforts of various disciplines, including economics, text mining, sentiment analysis and machine learning, and we offer suggestions for future research.
    January 16, 2015   doi: 10.1111/joes.12102   open full text
  • Corporate Governance Of Banks: A Survey.
    Jakob Haan, Razvan Vlahu.
    Journal of Economic Surveys. January 13, 2015
    This paper reviews the empirical literature on the corporate governance of banks. We start by highlighting the main differences between banks and nonfinancial firms and focus on three characteristics that make banks special: (i) regulation, (ii) the capital structure of banks, and (iii) the complexity and opacity of their business and structure. Next, we discuss the characteristics of corporate governance in banks and how they differ from the governance of nonfinancial firms. We then review the evidence on three governance mechanisms: (i) boards, (ii) ownership structures, and (iii) executive compensation. Our review suggests that some of the empirical regularities found in the literature on corporate governance of nonfinancial institutions, such as the positive (negative) association between board independence (size) and performance, do not hold for banks. Also, existing work provides no conclusive results regarding the relationship between different governance mechanisms and various measures for banks’ performance. We discuss potential explanations for these mixed results.
    January 13, 2015   doi: 10.1111/joes.12101   open full text
  • Structural Vector Autoregressions: Checking Identifying Long‐Run Restrictions Via Heteroskedasticity.
    Helmut Lütkepohl, Anton Velinov.
    Journal of Economic Surveys. December 05, 2014
    Long‐run restrictions have been used extensively for identifying structural shocks in vector autoregressive (VAR) analysis. Such restrictions are typically just‐identifying but can be checked by utilizing changes in volatility. This paper reviews and contrasts the volatility models that have been used for this purpose. Three main approaches have been used, exogenously generated changes in the unconditional residual covariance matrix, changing volatility modelled by a Markov switching mechanism and multivariate generalized autoregressive conditional heteroskedasticity models. Using changes in volatility for checking long‐run identifying restrictions in structural VAR analysis is illustrated by reconsidering models for identifying fundamental components of stock prices.
    December 05, 2014   doi: 10.1111/joes.12100   open full text
  • Stabilisation Policy, Rational Expectations And Price‐Level Versus Inflation Targeting: A Survey.
    Michael Hatcher, Patrick Minford.
    Journal of Economic Surveys. November 17, 2014
    We survey literature comparing inflation targeting (IT) and price‐level targeting (PT) as macroeconomic stabilisation policies. Our focus is on New Keynesian models and areas that have seen significant developments since Ambler's (2009, Price‐level targeting and stabilisation policy: a survey. Journal of Economic Surveys 23(5): 974–997) survey: optimal monetary policy; the zero lower bound; financial frictions and transition costs of adopting a PT regime. Ambler's conclusion that PT improves social welfare in New Keynesian models is fairly robust, but we note an interesting split in the literature: PT consistently outperforms IT in models where policymakers commit to simple Taylor‐type rules, but results in favour of PT when policymakers minimise loss functions are overturned with small deviations from the baseline model. Since the beneficial effects of PT appear to hang on the joint assumption that agents are rational and the economy New Keynesian, we discuss survey and experimental evidence on rational expectations and the applied macro literature on the empirical performance of New Keynesian models. Overall, the evidence is not clear‐cut, but we note that New Keynesian models can pass formal statistical tests against macro data and that models with rational expectations outperform those with behavioural expectations (i.e. heuristics) in direct statistical tests. We therefore argue that policymakers should continue to pay attention to PT.
    November 17, 2014   doi: 10.1111/joes.12096   open full text
  • Global Value Chains: A Survey Of Drivers And Measures.
    João Amador, Sónia Cabral.
    Journal of Economic Surveys. November 17, 2014
    Global value chains (GVCs) emerged as the paradigm for the international organization of production. For most goods and services production is nowadays vertically fragmented across different countries and this reality gave rise to a significant new strand of research in international trade. This article starts by discussing the major driving forces of GVCs in recent decades. Next, it surveys the main measures of GVCs, accounting for their different scopes and required data sets. The article highlights the timing of the contributions to the literature, signalling their sequential nature and the trend toward more accurate and data‐demanding indicators.
    November 17, 2014   doi: 10.1111/joes.12097   open full text
  • Do Institutions Affect Citizens' Selection Into Politics?
    Thomas Braendle.
    Journal of Economic Surveys. November 17, 2014
    Political economy has primarily paid attention to the principal‐agent relationship between citizens and politicians and the role of competition and institutions in disciplining political agents. However, as the electoral control of politicians and the credibility of policy commitments are limited, this perspective needs to be complemented with an economics of political selection that takes into account the heterogeneity in the quality of those elected to political office. We review the emerging literature, which investigates the institutional determinants of political selection. We discuss pay in politics, parties, their candidate selection procedures and electoral rules, institutions enhancing transparency in politics, and institutions which govern dual office holding in different branches of government. We argue that further comparative analyses are essential in order to gain an improved understanding of the impact that institutions have on political outcomes, not only via the channel of accountability, but also via the channel of selection.
    November 17, 2014   doi: 10.1111/joes.12098   open full text
  • Real‐Time Data And Fiscal Policy Analysis: A Survey Of The Literature.
    Jacopo Cimadomo.
    Journal of Economic Surveys. November 12, 2014
    This paper surveys the empirical research on fiscal policy analysis based on real‐time data. This literature can be broadly divided into four groups that focus on: (1) the statistical properties of revisions in fiscal data; (2) the political and institutional determinants of projection errors by governments; (3) the reaction of fiscal policies to the business cycle and (4) the use of real‐time fiscal data in structural vector autoregression (VAR) models. It emerges that, first, fiscal revisions are large and initial releases are biased estimates of final values. Secondly, strong fiscal rules and institutions lead to more accurate releases of fiscal data and smaller deviations of fiscal outcomes from government plans. Thirdly, the cyclical stance of fiscal policies is estimated to be more ‘counter‐cyclical’ when real‐time data are used instead of ex post data. Fourthly, real‐time data can be useful for the identification of fiscal shocks. Finally, it is shown that existing real‐time fiscal data sets cover only a limited number of countries and variables. For example, real‐time data for developing countries are generally unavailable. In addition, real‐time data on European countries are often missing, especially with respect to government revenues and expenditures. Therefore, more work is needed in this field.
    November 12, 2014   doi: 10.1111/joes.12099   open full text
  • Are Women Really More Risk‐Averse Than Men? A Re‐Analysis Of The Literature Using Expanded Methods.
    Julie A. Nelson.
    Journal of Economic Surveys. May 11, 2014
    While a substantial literature in economics and finance has concluded that ‘women are more risk averse than men’, this conclusion merits investigation. After briefly clarifying the difference between making generalizations about groups, on the one hand, and making valid inferences from samples, on the other, this essay suggests improvements to how economists communicate our research results. Supplementing findings of statistical significance with quantitative measures of both substantive difference (Cohen's d, a measure in common use in non‐Economics literatures) and of substantive overlap (the Index of Similarity, newly proposed here) adds important nuance to the discussion of sex differences. These measures are computed from the data on men, women and risk used in 35 scholarly works from economics, finance and decision science. The results are considerably more mixed and overlapping than would commonly be inferred from the broad claims made in the literature, with standardized differences in means mostly amounting to considerably less than one standard deviation, and the degree of overlap between male and female distributions generally exceeding 80%. In addition, studies that look at contextual influences suggest that these contribute importantly to observations of differences both between and within the sexes.
    May 11, 2014   doi: 10.1111/joes.12069   open full text
  • Cannabis Use And Its Effects On Health, Education And Labor Market Success.
    Jan C. Ours, Jenny Williams.
    Journal of Economic Surveys. May 11, 2014
    Cannabis is the most popular illegal drug. Its legal status is typically justified on the grounds that cannabis use has harmful consequences. Empirically investigating this issue has been a fertile topic for research in recent times. We provide an overview of this literature, focusing on studies which seek to establish the causal effect of cannabis use on health, education, and labor market success. We conclude that there do not appear to be serious harmful health effects of moderate cannabis use. Nevertheless, there is evidence of reduced mental well‐being for heavy users who are susceptible to mental health problems. While there is robust evidence that early cannabis use reduces educational attainment, there remains substantial uncertainty as to whether using cannabis has adverse labor market effects.
    May 11, 2014   doi: 10.1111/joes.12070   open full text
  • Measuring The Diversity Of Household Spending Patterns.
    Andreas Chai, Nicholas Rohde, Jacques Silber.
    Journal of Economic Surveys. April 07, 2014
    Households tend to diversify their spending across a wide range of goods and services as they become more affluent. Recently, there has been growing interest in understanding the precise manner in which this spending diversification process takes place. We review what facts are known about this process and the underlying behavioural tendencies that are thought to drive it. In addition, we clarify the relationship between different approaches to measuring the level of spending diversity. A number of indices are employed, including measures based on joint probabilities, distances and the concept of entropy. Using UK household spending data, we show the extent to which these measures deliver different results and shed light on the nature of behavioural heterogeneity.
    April 07, 2014   doi: 10.1111/joes.12066   open full text
  • Is Financial Support For Private R&D Always Justified? A Discussion Based On The Literature On Growth.
    Benjamin Montmartin, Nadine Massard.
    Journal of Economic Surveys. April 06, 2014
    Many economists have long held that market failures create a gap between social and private returns to research and development (R&D), thereby limiting private incentives to invest in R&D. However, this common belief that firms significantly underinvest in R&D is increasingly being challenged, leading the rationale behind public support for private R&D to be questioned. In this paper, we attempt to clarify the perspectives of two sources: the theoretical literature on endogenous growth, and its recent developments in integrating a geographical dimension, and the empirical literature that measures the social returns to R&D in relation to the private returns. Ultimately, we are able to clearly distinguish among different types of market failures and compare their relative impact on the gap between the private and social returns to R&D. Two main conclusions are reached. First, systematic firm underinvestment in R&D is not demonstrated. Second, even though instances of underinvestment do occur, they are mainly explained by surplus appropriability problems rather than by knowledge externalities. This suggests the need for a new policy mix that employs more demand‐oriented instruments and is more concentrated on identifying efficient allocations among activities rather than merely increasing global private R&D investment.
    April 06, 2014   doi: 10.1111/joes.12067   open full text
  • Financial Development And Economic Growth: A Meta‐Analysis.
    Petra Valickova, Tomas Havranek, Roman Horvath.
    Journal of Economic Surveys. April 06, 2014
    We analyze 1334 estimates from 67 studies that examine the effect of financial development on economic growth. Taken together, the studies imply a positive and statistically significant effect, but the individual estimates vary widely. We find that both research design and heterogeneity in the underlying effect play a role in explaining the differences in results. Studies that do not address endogeneity tend to overstate the effect of finance on growth. While the effect seems to be weaker in less developed countries, the effect decreases worldwide after the 1980s. Our results also suggest that stock markets support faster economic growth than other financial intermediaries.
    April 06, 2014   doi: 10.1111/joes.12068   open full text
  • Assessing The Regional Economic Impacts Of Defense Activities: A Survey Of Methods.
    Josselin Droff, Alfredo R. Paloyo.
    Journal of Economic Surveys. March 28, 2014
    Defense activities exercised in a specific region may alter the region's economic performance. An accurate assessment of the potential economic impacts of defense activities is a valuable undertaking to enable regional planners to prepare for changes. The variety in the methods (among others, input–output models, economic base models, Keynesian regional multipliers, fixed‐effects estimators, and case‐study approaches) inspired by geography, sociology, and political science can pose a dilemma. We detail the historical and theoretical background of each method, as well as select exemplary cases where these methods were applied. By examining old and “new” methods, we aim to construct a typology that could be valuable to all stakeholders. In this sense, defense economics can also contribute to the allied social sciences by outlining evaluation methods that may be applicable to other fields.
    March 28, 2014   doi: 10.1111/joes.12062   open full text
  • A Survey Of Recent Research In Chinese Economic History.
    Kent Deng.
    Journal of Economic Surveys. March 28, 2014
    In the past two decades or so, the field of Chinese economic history has become bigger, more colourful, and more diversified than ever before. This article reviews the new development in scholarship in the filed of Chinese economic history. Apart from the lingering debate on China's performance in pre‐modern times (pre‐1750), China's growth and development in the 19th and 20th centuries has attracted more scholarly attention and thus has become increasingly more important in the understanding of China.
    March 28, 2014   doi: 10.1111/joes.12064   open full text
  • Measurement, Evolution, Determinants, And Consequences Of State Capacity: A Review Of Recent Research.
    Antonio Savoia, Kunal Sen.
    Journal of Economic Surveys. March 12, 2014
    There is increasing realization that state capacity is a fundamental ingredient for effective governance, and is a crucial element of long‐run economic development. This paper offers an overview of the strengths and limitations in current empirical research on the measurement of state capacity. The paper also surveys the fast emerging literature on the determinants and effects of state capacity. We argue that existing measures on governance quality used in cross‐national research can be usefully exploited to capture different aspects of state capacity, and show that post the end of the Cold War, developing economies have experienced improvements in legal, administrative and bureaucratic capacity, but the gap with advanced economies is still wide. Future research should address the short temporal coverage of available measures of state capacity, as well as providing a systematic quantitative assessment of the determinants of capacity and of its effects on development outcomes, such as health and education, which have not received sufficient scrutiny.
    March 12, 2014   doi: 10.1111/joes.12065   open full text
  • Social Identity And Redistributive Preferences: A Survey.
    Joan Costa‐Font, Frank Cowell.
    Journal of Economic Surveys. February 20, 2014
    Social identity has become accepted as a key concept underpinning the endogeneity of economic behaviour and preferences. It is important in explaining attitudes towards redistribution and pro‐social behaviour. We examine how economic theory measures social identity and its effects on preferences towards redistribution, social solidarity and redistributive institutions. Empirical evidence indicates that social identity carries weight in explaining the presence of social preferences and attitudes towards redistributive institutions.
    February 20, 2014   doi: 10.1111/joes.12061   open full text
  • Contracts, Entrepreneurs, Market Creation And Judgement: The Contemporary Mainstream Theory Of The Firm In Perspective.
    Paul Walker.
    Journal of Economic Surveys. February 07, 2014
    This survey gives an overview of the theory of the firm as it is formulated within the contemporary ‘mainstream’ of economics. Two groupings of theories are briefly discussed: principal–agent and incomplete contract models. Next, three of the most recent contributions regarding firms are considered. The reference point approach is looked at first followed by a discussion of Spulber's book The Theory of the Firm. Last, we consider the entrepreneurial judgement perspective.
    February 07, 2014   doi: 10.1111/joes.12058   open full text
  • The Economics Of Counterterrorism: A Survey.
    Friedrich Schneider, Tilman Brück, Daniel Meierrieks.
    Journal of Economic Surveys. February 07, 2014
    We provide a review of theoretical and empirical contributions on the economic analysis of terrorism and counterterrorism. We argue that simple rational‐choice models of terrorist behavior – in the form of cost‐benefit models – already provide a well‐founded theoretical framework for the study of terrorism and counterterrorism. We also hint at their limitations which relate to the failure of accounting for the dynamics between terrorism and counterterrorism that may produce unintended second‐order effects as well as for the costs associated with counterterrorism and its international dimension. We reevaluate previously proposed counterterrorism strategies accordingly. Finally, in the light of our findings, we discuss interesting areas of future research.
    February 07, 2014   doi: 10.1111/joes.12060   open full text
  • Theory And Evidence In Psychology And Economics About Motivation Crowding Out: A Possible Convergence?
    Agnès Festré, Pierre Garrouste.
    Journal of Economic Surveys. January 31, 2014
    The empirical relevance of motivation crowding out is a controversial issue in economics and psychology. As already pointed out by Frey and Jegen (), this is partly due to the historical development of two distinct and parallel strands of literature that stem from different theoretical traditions, have radically different tenets and therefore, are difficult to reconcile. In this survey, we go back to the details of the debates that took place independently among psychologists and economists, and sketch an integrative interdisciplinary approach likely to favor a more fruitful collaboration between economics and psychology. From this perspective, experimental economics (both field and laboratory) is viewed as a major research field shedding new light on the conditions of relevance of motivation crowding out.
    January 31, 2014   doi: 10.1111/joes.12059   open full text
  • The Economics Of Corporate Social Responsibility: A Firm‐Level Perspective Survey.
    Patricia Crifo, Vanina D. Forget.
    Journal of Economic Surveys. January 02, 2014
    This paper analyzes the economics of Corporate Social Responsibility (CSR), as a private response to market imperfections in order to satisfy social preferences. Depending on whether they affect regulation, competition or contracts, market imperfections driving CSR decisions are classified in three categories: public goods and bads and altruism; imperfect competition; and incomplete contracts. We successively present these drivers of CSR decisions and highlight the nature of incentives (external or internal) at work and the testable (and tested) hypotheses in the reviewed studies. We finally review the link between CSR and financial performance, as well as between CSR and social and environmental performance. A twofold discrepancy appears in the literature, opening future research paths: a disconnection between our understanding of CSR drivers and CSR impacts; and a knowledge gap between CSR financial and social consequences, the latter having received little attention.
    January 02, 2014   doi: 10.1111/joes.12055   open full text
  • Does Education Reduce Income Inequality? A Meta‐Regression Analysis.
    Abdul Abdullah, Hristos Doucouliagos, Elizabeth Manning.
    Journal of Economic Surveys. December 19, 2013
    This paper reexamines the effects of education on inequality through a comprehensive meta‐regression analysis of the extant empirical literature. We find that education affects the two tails of the distribution of income: Education reduces the income share of top earners and increases the share of the bottom earners. Education has been particularly effective in reducing inequality in Africa. Some of the results suggest that secondary schooling appears to have a stronger effect than primary schooling, though this finding is not always robust. The heterogeneity in reported estimates can be largely explained by differences in the specification of the econometric model and measure of inequality and education.
    December 19, 2013   doi: 10.1111/joes.12056   open full text
  • Beyond Gdp: An Overview Of Measurement Issues In Redefining ‘Wealth’.
    Giuseppe Munda.
    Journal of Economic Surveys. December 18, 2013
    In the last decades, a growing quantity of literature has been written about concepts such as quality of life and well‐being as a proxy for evaluating societal prosperity and progress. This paper analyses the theoretical foundations and the empirical validity of multi‐dimensional technical tools that can be used for well‐being measurement. There is no doubt that there is a lot of complexity and fuzziness inherent in multi‐dimensional concepts such as well‐being. A possible reduction of this complexity, a pre‐condition for policy‐making, introduces the problem of the descriptors used: indicators and indexes. In a multi‐dimensional framework, multi‐criteria evaluation is a consistent approach for the construction of so‐called composite indicators. Often, some individual indicators improve while others deteriorate. This is the classical conflictual situation dealt with in multi‐criteria evaluation; in particular non‐compensatory methods are quite relevant, since compensability implies complete substitutability between different types of capital. Uncertainty and sensitivity analysis can estimate the robustness of the results obtained and help the framing of the debate around the conceptual framework used, that is, which representation of reality (and thus which societal values and interests) has been considered.
    December 18, 2013   doi: 10.1111/joes.12057   open full text
  • Alternative Weighting Approaches To Computing Indexes Of Economic Activity.
    G.C. Lim, Viet Hoang Nguyen.
    Journal of Economic Surveys. December 04, 2013
    This paper compares the weighting schemes in the traditional, principal component and dynamic factor approaches to summarizing information from a number of component variables. To facilitate the comparison, we propose a framework to discuss the approaches with respect to their implied loadings in a latent variable model. We also propose a way to transform the dynamic factor index into an analogous index which is a weighted average of the components. The framework shows the strengths and weakness of the alternative weighting schemes and the sense in which the dynamic factor approach has the advantage of capturing both the significance and the variability of the components.
    December 04, 2013   doi: 10.1111/joes.12053   open full text
  • Heteroscedasticity Or Production Risk? A Synthetic View.
    Antti Saastamoinen.
    Journal of Economic Surveys. December 04, 2013
    Two veins of literature, namely, production risk literature and stochastic frontier analysis, are examined. Both fields are concerned of output variation; the former due to exogenous shocks, the latter due inefficiency. By covering the literature from both the fields, this review suggests that the concept of heteroscedasticity can be utilized to build a synthesis between these mainly separate branches of literature. However, the synthetic approach brings a challenge how to differentiate between different sources of output variation. This challenge is identified as the main obstacle to meaningfully combine the two approaches.
    December 04, 2013   doi: 10.1111/joes.12054   open full text
  • Economic Analysis Of Knowledge: The History Of Thought And The Central Themes.
    Samuli Leppälä.
    Journal of Economic Surveys. December 02, 2013
    Following the development of knowledge economies, there has been a rapid expansion of economic analysis of knowledge, both in the context of technological knowledge in particular and decision theory in general. This paper surveys this literature by identifying the main themes and contributions, and outlines the future prospects of the discipline. The wide scope of knowledge‐related questions in terms of applicability and alternative approaches has led to the fragmentation of research. Nonetheless, one can identify an enduring quest for analyzing various aspects of the generation, dissemination and use of knowledge in the economy.
    December 02, 2013   doi: 10.1111/joes.12052   open full text
  • Cantillon And Hume On Money And Banking: The Foundations Of Two Theoretical Traditions.
    Laurent Le Maux.
    Journal of Economic Surveys. November 24, 2013
    The distinction between the ‘classical’ monetary theory and ‘quantity’ theory has been proposed in literature on money and banking. The overall feature of the classical theory of money is that it holds one principle of regulation for each kind of issue (metallic money, bank issues and paper money) whereas the quantity theory applied the causality and proportionality postulates for all kinds of monies. Without claiming to adjudicate the validity of such a distinction, the paper investigates the foundation of each tradition. In this respect, this paper, respectively, examines, and provides a survey of the secondary literature on, Cantillon's Essai and the Hume's Discourses.
    November 24, 2013   doi: 10.1111/joes.12051   open full text
  • A Survey On The Four Families Of Performance Measures.
    Massimiliano Caporin, Grégory M. Jannin, Francesco Lisi, Bertrand B. Maillet.
    Journal of Economic Surveys. August 14, 2013
    Performance measurement is one of the most studied subjects in financial literature. Since the introduction of the Sharpe ratio in 1966, a large variety of new measures has appeared constantly in scientific journals as well as in practitioners' publications. The most complete and significant studies of performance measures, so far, have been written by Aftalion and Poncet, Le Sourd, Bacon, and Cogneau and H übner. A review of the most recent literature led us to collect several dozen measures that we classify into four families. We first present the class of relative measures, starting with the Sharpe ratio. Secondly, we analyse absolute measures, beginning with the most famous one ‐ the Jensen alpha. Thirdly, we study general measures based on specific features of the return distribution, where the pioneering contributions are those of Bernardo and Ledoit, and Keating and Shadwick. Finally, the fourth set concerns a few measures that explicitly take into account the investor's utility functions.
    August 14, 2013   doi: 10.1111/joes.12041   open full text
  • Flexible Retirement.
    Daniel Vuuren.
    Journal of Economic Surveys. August 05, 2013
    Flexible retirement – that is, the opportunity to choose one's own personal retirement age – is a hedge against pension risk and provides insurance to workers facing health or productivity shocks. Flexible retirement and flexible pension schemes are in practice closely linked because of imperfect capital markets and institutional restrictions. I discuss three necessary conditions to provide insurance through flexible retirement. First, it should be possible to adjust the pension starting date at limited cost. This condition is gradually being fulfilled, as many countries are moving toward more actuarially neutral pension schemes. Second, individuals should be willing to adjust their labor supply in case of a wealth shock. This condition seems largely fulfilled, although the available empirical evidence suggests that the ‘standard retirement age’ is at least as important as the income effect. Third, the labor market should be able to deal with flexible individual retirement decisions. This condition is gaining importance, but has not yet received much attention in the literature. Institutions often hamper employment past the ‘standard retirement age’. Moreover, the hiring rates of older workers are low and their unemployment duration is high. Institutional reforms facilitating flexible retirement opportunities are desirable from an insurance perspective.
    August 05, 2013   doi: 10.1111/joes.12042   open full text
  • What Has 20 Years Of Public–Private Pay Gap Literature Told Us? Eastern European Transitioning Vs. Developed Economies.
    Jelena Lausev.
    Journal of Economic Surveys. July 24, 2013
    This paper surveys the literature on public–private sector pay differentials based on 20 years of research in transitioning countries of Eastern Europe (EE) and compares the results with estimates obtained from developed market economies. The majority of empirical studies from EE economies found evidence of public sector pay penalties during the period of economic transition from a communist to market‐based economy. In developed economies, however, the average differential is usually around zero or positive. The public sector pay inequality reducing effect relative to the private sector is greater in transitioning economies than in developed economies. Nevertheless, there is evidence that the sign of the public sector pay gap as well as the relative public sector pay distribution change with the progress of economic transition towards those usually observed in developed economies. Different pay‐setting arrangements between private and public sectors and competition for workers seem to be major arguments for the existence of systematic pay differences between the two sectors.
    July 24, 2013   doi: 10.1111/joes.12039   open full text
  • What Have We Learned From Three Decades Of Research On The Productivity Of Public Capital?
    Pedro R.D. Bom, Jenny E. Ligthart.
    Journal of Economic Surveys. July 10, 2013
    The last three decades have witnessed a great deal of research effort devoted to measuring the private output elasticity of public capital. The wide range of available estimates have precluded any consensus so far, however. This paper reconciles the empirical findings of the literature by quantitatively analyzing a sample of 578 estimates collected from 68 studies for the 1983–2008 period. Using meta‐regression analysis, we show how study design characteristics and publication bias can explain a large fraction of the variation across estimates. We find a short‐run output elasticity of public capital supplied at the central government level of 0.083, which increases to 0.122 in the long run. If, in addition, only core infrastructure at a regional/local level of government is considered, these estimates are almost doubled. The average output elasticity of public capital amounts to 0.106. Our results suggest that public capital is undersupplied in OECD economies.
    July 10, 2013   doi: 10.1111/joes.12037   open full text
  • Measuring Macroeconomic Instability: A Critical Survey Illustrated With Exports Series.
    Joël Cariolle, Michaël Goujon.
    Journal of Economic Surveys. July 09, 2013
    For at least 40 years, the analysis of the causes and consequences of macroeconomic instability has greatly deepened our understanding of the handicaps faced by developing countries. This concern on economic instability is evidenced by a broad spectrum of indicators, based on the deviation of observed values of a given economic aggregate from its reference or trend value. In general, the choice of this or that indicator is not discussed advocating that the resulting instability indicators are closely correlated. Focusing on measurements of instability in export revenue data for 134 countries from 1970 to 2005, this paper finds that this assertion may be true for variance‐based indicators, measuring the average magnitude of deviations from the trend. However, great discrepancies may arise between different measures of the asymmetry or of the occurrence of extreme deviations around the trend when different trend computation methods are used. Our purpose is, therefore, to invite further discussions regarding the use of these indicators, and to highlight the different dimensions of instability, which have been so far unheeded by the economic literature.
    July 09, 2013   doi: 10.1111/joes.12036   open full text
  • Institutions, Economics And The Development Quest.
    Duarte N. Leite, Sandra T. Silva, Oscar Afonso.
    Journal of Economic Surveys. July 07, 2013
    Institutions crucial for the analysis of how agents deal with uncertainty have been gaining increasing relevance on the economic research agenda. In this paper, we analyze the institutional literature aiming to explain why this perspective obtains better results than others in development economics. In particular, we stress the relevance of New Institutional Economics as an adequate framework for a broad understanding of development issues.
    July 07, 2013   doi: 10.1111/joes.12038   open full text
  • Corruption's Direct Effects On Per‐Capita Income Growth: A Meta‐Analysis.
    Mehmet Ugur.
    Journal of Economic Surveys. June 12, 2013
    Corruption is a symptom of weak institutional quality and could have potentially adverse effects on economic growth. However, heterogeneity in reported findings makes it difficult to synthesize the evidence base with a view to test competing hypotheses and/or support evidence‐based policy and practice. To address this issue, we have extracted 327 estimates of corruption's direct effect on per‐capita GDP growth from 29 primary studies, following a peer‐reviewed and pre‐published systematic review protocol. Precision‐effect and funnel asymmetry tests indicate that corruption has a negative effect on per‐capita GDP growth after controlling for publication selection bias and within‐study dependence. However, multivariate meta‐regression analysis results indicate that the overall effect is not robust to inclusion of moderating variables through a general‐to‐specific procedure for model specification. We report that the marginal effect of corruption on per‐capita GDP growth is more adverse when the primary study estimates relate to long‐run growth, are based on low‐income‐country data only, and extracted from journal papers. The effect is less adverse in studies that use the International Country Risk Guide corruption perceptions index and in those reporting estimates from two‐stage least‐squares estimations.
    June 12, 2013   doi: 10.1111/joes.12035   open full text
  • Embodied Carbon In Trade: A Survey Of The Empirical Literature.
    Misato Sato.
    Journal of Economic Surveys. May 03, 2013
    This paper critically reviews the literature on embodied carbon in trade and evaluates our present empirical understanding of these flows. A careful comparison of quantitative results from this literature exposes significant inconsistencies. For instance, estimates for emission embodied in world trade in 2004 range between 4.4 Gt and 6.2 Gt CO2, the difference corresponding to around half of Europe's annual emissions. A few consistent themes do nevertheless emerge from the literature. Most importantly, emissions in trade constitute a large and growing share of global emissions. Uncertainty about country‐level embodied emissions remains large, however, which presents severe limitations for the practical application of embodied carbon principles in climate policy.
    May 03, 2013   doi: 10.1111/joes.12027   open full text
  • Evidence On The Impact Of Tariff Reductions On Employment In Developing Countries: A Systematic Review.
    Xavier Cirera, Dirk Willenbockel, Rajith W.D. Lakshman.
    Journal of Economic Surveys. April 11, 2013
    This paper analyses the evidence on the impact of tariff reductions on employment in developing countries. We carry out a systematic review of the existing empirical literature, and include both, ex post econometric evidence and ex ante Computable General Equilibrium (CGE) simulation studies. The synthesis of results suggests that the effects of tariff reductions on employment are country and trade policy specific. When looking across higher quality econometric studies that control for the endogeneity of tariffs, only a couple of studies have statistically significant results, and these suggest that employment is likely to decrease slightly in the short run following trade liberalization. This is consistent with the notion that there are winners and losers from trade policy reform. These results are in contrast with the CGE findings, which by design incorporate projections of the medium‐run economy‐wide knock‐on effects suggested by economic theory. The synthesis of CGE studies suggests non‐negative effects of trade liberalization on aggregate employment and moderate inter‐sectoral labour reallocation effects.
    April 11, 2013   doi: 10.1111/joes.12029   open full text
  • A Survey Of The Economics Of Patent Systems And Procedures.
    Andrew Eckert, Corinne Langinier.
    Journal of Economic Surveys. April 11, 2013
    The last several decades have seen increases in patenting activity worldwide, as well as growing issues related to patent quality. In response to these quality issues a recent patent literature has emerged, that investigates the behavior and incentives of patent examiners, applicants, and third parties. In this paper, we provide an overview of patent procedures, patent systems and a survey of the new economic literature on patent systems. Both theoretical and empirical papers are considered. Policy implications coming from this literature are presented.
    April 11, 2013   doi: 10.1111/joes.12034   open full text
  • Did Inequality Cause The U.S. Financial Crisis?
    Till Treeck.
    Journal of Economic Surveys. April 11, 2013
    In his widely discussed book ‘Fault Lines’ (2010), Raghuram Rajan argues that many low and middle income consumers have reduced their saving and increased debt since income inequality started to soar in the United States in the early 1980s. This has temporarily kept private consumption and employment high, but it also contributed to the creation of a credit bubble. This surge in household indebtedness turned out to be unsustainable in the financial crisis starting in 2007. Although Rajan and others emphasize the role of government in promoting credit to those households with declining relative (permanent) incomes, other strands of the literature have focused more explicitly on the implications of rising inequality for aggregate demand and households’ demand for credit. These differences in emphasis may explain why the literature on the inequality‐crisis nexus appears somewhat disparate, even though the various strands are far from mutually exclusive but rather complement each other. We therefore place the ‘Rajan hypothesis’ in the context of competing theories of consumption, and survey the empirical literature on the effects of inequality on household behaviour. We conclude that the empirical evidence calls for a renaissance of the relative income hypothesis of consumption.
    April 11, 2013   doi: 10.1111/joes.12028   open full text
  • What's To Know About The Credibility Of Empirical Economics?
    John Ioannidis, Chris Doucouliagos.
    Journal of Economic Surveys. April 11, 2013
    The scientific credibility of economics is itself a scientific question that can be addressed with both theoretical speculations and empirical data. In this review, we examine the major parameters that are expected to affect the credibility of empirical economics: sample size, magnitude of pursued effects, number and pre‐selection of tested relationships, flexibility and lack of standardization in designs, definitions, outcomes and analyses, financial and other interests and prejudices, and the multiplicity and fragmentation of efforts. We summarize and discuss the empirical evidence on the lack of a robust reproducibility culture in economics and business research, the prevalence of potential publication and other selective reporting biases, and other failures and biases in the market of scientific information. Overall, the credibility of the economics literature is likely to be modest or even low.
    April 11, 2013   doi: 10.1111/joes.12032   open full text
  • Demand, Customer Base‐Line And Demand Response In The Electricity Market: A Survey.
    Almas Heshmati.
    Journal of Economic Surveys. April 09, 2013
    The increasing use of demand‐side management, as a tool to reliably meet electricity demands at peak time, has stimulated interest among researchers, consumers and producer organiza‐tions, managers, regulators and policymakers. This research reviews the growing literature on models which are used to study demand, customer base‐line (CBL) and demand response in the electricity market. After characterizing the general demand models, the CBL, based on which the demand response models are studied, is reviewed. Given the experience gained from the review and existing conditions, the study combines an appropriate model for each case for a possible application to the electricity market; moreover, it discusses the implications of the results. In the literature, these aspects are studied independently. The main contribution of this survey is attributed to the treatment of the three issues as sequentially interdependent. The review is expected to enhance the understanding of the demand, CBL and demand response in the electricity market and their relationships. The objective is conducted through a combination of demand and supply side managements in order to reduce demand through different demand response programs during peak times. This enables electricity suppliers to save costly electricity generation and at the same time reduce energy vulnerability.
    April 09, 2013   doi: 10.1111/joes.12033   open full text
  • The Theory Of Endogenous Market Structures.
    Federico Etro.
    Journal of Economic Surveys. April 07, 2013
    Most market structures are neither perfectly or monopolistically competitive: they are characterized by a few large firms that are engaged in strategic interactions in their production and investment decisions and whose number is endogenous. The theory of endogenous market structures analyzes markets in partial and general equilibrium where strategies affect entry and entry affects strategies, and exogenous primitive conditions on technology and preferences affect the equilibrium. We discuss applications to industrial organization, international trade, business cycle theory, international finance, growth and implications for welfare and for competition, trade, fiscal and monetary policy.
    April 07, 2013   doi: 10.1111/joes.12020   open full text
  • Monetary Policy And Economic Imbalances: An Ethnographic Examination Of Central Bank Rituals.
    Arthur Grimes.
    Journal of Economic Surveys. March 18, 2013
    We apply the ethnographic tools of economic anthropology to analyse a particular ritual performed by the high priest of the Arbee sub‐tribe in the South Pacific island group of Aotearoa. (In other island groups, this high priest is sometimes known as the Governor of the Reserve Bank of New Zealand.) The ritual is considered by many within Aotearoa to be the cause of The Imbalance in The Economy. We analyse this claim and show that it has similarities (and equal validity) to claims of other cargo cults within the South‐West Pacific region.
    March 18, 2013   doi: 10.1111/joes.12024   open full text
  • Convertible Bond Pricing Models.
    Jonathan A. Batten, Karren Lee‐Hwei Khaw, Martin R. Young.
    Journal of Economic Surveys. March 18, 2013
    Convertible bonds are an important segment of the corporate bond market, with worldwide outstandings approaching US$235 billion. Simple pricing models value a convertible bond as being equivalent to a straight bond with an embedded option that enables the bond holder to convert to a specific amount of common stock. The straight bond is subject to both interest rate and credit risk, whereas the option to convert is dependent on the underlying stock price, which exposes the convertible bond holder to equity risk. The complexity of these features means that convertible bonds tend to be treated casually in major derivatives and corporate finance textbooks. This paper presents a survey of the theoretical and empirical aspects of convertible bond pricing. The limitations of these studies are highlighted to identify those areas of research that may improve the valuation process and facilitate the application of these securities for corporate financing.
    March 18, 2013   doi: 10.1111/joes.12016   open full text
  • What's To Do About Empirical Economics?
    T.D. Stanley.
    Journal of Economic Surveys. March 18, 2013
    There is no abstract available for this paper.
    March 18, 2013   doi: 10.1111/joes.12026   open full text
  • Patent Enforcement: A Review Of The Literature.
    Kimberlee Weatherall, Elizabeth Webster.
    Journal of Economic Surveys. March 15, 2013
    Without the confidence that patent rights can be enforced quickly and efficiently, when needed, the patent system will not stimulate innovation. For this reason, governments, academics, international institutions and the private sector have poured significant resources into gathering and analysing statistics on patent enforcement over the last two decades. This paper reviews these studies and finds that while infringement is relatively common, much enforcement occurs informally and less than 1–2% of patents incur litigation. New strategic uses of the enforcement system, especially by nonpracticing entities, are the major emerging enforcement issue, especially in the United States. While the old problem of litigation costs attracts the lion's share of empirical attention, it has produced remarkably few solutions to date.
    March 15, 2013   doi: 10.1111/joes.12009   open full text
  • The Continuous Wavelet Transform: Moving Beyond Uni‐ And Bivariate Analysis.
    Luís Aguiar‐Conraria, Maria Joana Soares.
    Journal of Economic Surveys. February 21, 2013
    A body of work using the continuous wavelet transform has been growing. We provide a self‐contained summary on its most relevant theoretical results, describe how such transforms can be implemented in practice, and generalize the concept of simple coherency to partial wavelet coherency and multiple wavelet coherency, moving beyond bivariate analysis. We also describe a family of wavelets, which emerges as an alternative to the popular Morlet wavelet, the generalized Morse wavelets. A user‐friendly toolbox, with examples, is attached to this paper.
    February 21, 2013   doi: 10.1111/joes.12012   open full text
  • Tourism, Residents’ Welfare And Economic Choice: A Literature Review.
    Marta Meleddu.
    Journal of Economic Surveys. February 21, 2013
    Over the past decades, tourism development has raised economics, social and environmental issues, particularly for host communities. This paper provides a wide ranging review of the existing literature aimed at underpinning empirical tourism research with a robust economic framework. So far, tourism research has mostly focused on either quantitative or qualitative approaches that lack a strong economic theoretical setting. Most of the literature on resident's welfare analysis concentrates on their attitudes and perceptions without taking explicitly into account their preferences about policy development based on a cost‐benefit assessment. Hence, the purpose of this paper is to draw connections within the current body of research to explain the relationship between residents and tourism activity, as well as consumer theory and economic choice. In this way, it is possible to construct a multidimensional framework that allows one to analyse residents’ welfare in a systematic and more comprehensive manner.
    February 21, 2013   doi: 10.1111/joes.12013   open full text
  • Real Options And The Cross‐Section Of Expected Stock Returns.
    Graeme Guthrie.
    Journal of Economic Surveys. February 18, 2013
    This paper surveys the theoretical literature investigating the effect of firms’ investment flexibility on the cross‐section of expected stock returns. Real options analysis derives firms’ value‐maximizing investment policies as functions of exogenous fundamental drivers of profitability and calculates firms’ market values as functions of the same variables. These functions yield the relationship between expected stock returns and firm fundamentals. Several plausible explanations for the value premium – the high average stock returns earned by firms with high book‐to‐market ratios – emerge from this literature.
    February 18, 2013   doi: 10.1111/joes.12011   open full text
  • The Causal Link Between Financial Incentives and Weight Loss: An Evidence‐Based Survey of the Literature.
    Alfredo R. Paloyo, Arndt R. Reichert, Holger Reinermann, Harald Tauchmann.
    Journal of Economic Surveys. January 25, 2013
    Obesity and overweight are linked to diseases that cost society a significant amount of resources. While behavior modification can reduce the problem, instigating such lifestyle changes is an uneasy task. One potential way to reduce the problem is through the use of financial incentives. In this survey, we review the available evidence, properly emphasizing studies that credibly yield meaningful estimates of the effect of financial incentives on weight loss. We find that the scientific literature on the subject has not yet satisfactorily settled whether such a mechanism is effective at eliciting the desired behavioral and health outcomes. We therefore advocate a rigorous large‐scale randomized experiment to provide reliable estimates of the effect.
    January 25, 2013   doi: 10.1111/joes.12010   open full text
  • Theoretical And Practical Arguments For Modeling Labor Supply As A Choice Among Latent Jobs.
    John K. Dagsvik, Zhiyang Jia, Tom Kornstad, Thor O. Thoresen.
    Journal of Economic Surveys. January 18, 2013
    Abstract Models of labor supply derived from stochastic utility representations and discretized sets of feasible hours of work have gained popularity because they are more practical than the standard approaches based on marginal calculus. In this paper we argue that practicality is not the only feature that can be addressed by means of stochastic choice theory. This theory also offers a powerful framework for developing a more realistic model for labor supply choices, founded on individuals having preferences over jobs and facing restrictions on the choice of jobs and hours of work. We discuss and clarify how this modeling framework deviates from both the conventional discrete approach [Van Soest, A. (1995) Structural models of family labor supply. A discrete choice approach. Journal of Human Resources 30: 63–88), as well as the standard textbook approach based on marginal calculus (Hausman, J.A. (1985) The econometrics of nonlinear budget sets. Econometrica 53: 1255–1282]. We furthermore discuss how the model based on job choice can be applied to simulate effects of alternative restrictions on hours of work.
    January 18, 2013   doi: 10.1111/joes.12003   open full text
  • A Survey of Trade and Wage Inequality: Anomalies, Resolutions and New Trends.
    Yoshinori Kurokawa.
    Journal of Economic Surveys. December 29, 2012
    This paper surveys recent studies on trade and wage inequality. We first introduce some trade‐based explanations for increased wage inequality. There are, however, a number of criticisms of this line of thought based on the ‘trade‐wage inequality anomaly’, the ‘price‐wage anomaly’, and the small volume of trade. Mainly due to these criticisms, trade‐based explanations for rising wage inequality have been limited in the economic literature. Rather, the primary explanations for wage inequality have been based on skill‐biased technological change. Some trade models, however, have weakened the above criticisms, and more economists now argue that the effect of trade, though relatively small compared to that of technological change, is more significant than generally believed. Finally, we attempt to link new trends in inequality, such as job polarization and within‐group inequality, to the trade and wage inequality literature.
    December 29, 2012   doi: 10.1111/joes.12007   open full text
  • Heterogeneity In Ordered Choice Models: A Review With Applications To Self‐Assessed Health.
    William Greene, Mark N. Harris, Bruce Hollingsworth, Timothy A. Weterings.
    Journal of Economic Surveys. December 06, 2012
    Abstract Discrete variables that have an inherent sense of ordering across outcomes are commonly found in large data sets available to many economists, and are often the focus of research. However, assumptions underlying the standard ordered probit (which is usually used to analyse such variables) are not always justified by the data. This study provides a review of the ways in which the ordered probit might be extended to account for additional heterogeneity. Differing from other reviews in scope, application and relevance in economic settings, a series of issues pertaining to choices of variables, and the economic assumptions underlying each model are discussed in the context of measuring the underlying health of respondents. The models are applied to a wave of the household, income and labour dynamics in Australia survey, in order to check the appropriateness of such assumptions in an applied context.
    December 06, 2012   doi: 10.1111/joes.12002   open full text
  • Qualitative And Mixed‐Methods Research In Economics: Surprising Growth, Promising Future.
    Martha A. Starr.
    Journal of Economic Surveys. December 06, 2012
    Qualitative research in economics has traditionally been unimportant compared to quantitative work. Yet there has been a small explosion in use of quantitative approaches in the past 10–15 years, including ‘mixed‐methods’ projects which use qualitative and quantitative methods in combination. This paper surveys the growing use of qualitative methods in economics and closely related fields, aiming to provide economists with a useful roadmap through major sets of qualitative methods and how and why they are used. We review the growing body of economic research using qualitative approaches, emphasizing the gains from using qualitative‐ or mixed‐methods over traditional ‘closed‐ended’ approaches. It is argued that, although qualitative methods are often portrayed as less reliable, less accurate, less powerful and/or less credible than quantitative methods, in fact, the two sets of methods have their own strengths, and how much can be learned from one type of method or the other depends on specific issues that arise in studying the topic of interest. The central message of the paper is that well‐done qualitative work can provide scientifically valuable and intellectually helpful ways of adding to the stock of economic knowledge, especially when applied to research questions for which they are well suited.
    December 06, 2012   doi: 10.1111/joes.12004   open full text
  • Survey of Social and Economic Growth in Se Europe – A New Conceptual Frame for Sustainability Metrics.
    Mirjana Golušin, Olja Munitlak Ivanović, Andrea Andrejević, Simonida Vučenov.
    Journal of Economic Surveys. December 06, 2012
    The practice so far has indicated that there is a sensitive relationship that exists between social and economic subsystem of sustainable development, therefore this research suggests comparison of the states of these two subsystems as a new conceptual frame which is essential for strategic conceptualization of development. The research pointed out a rather visible collision between the achieved degree of economic and social development in the countries of South Eastern Europe in respect to Germany and France, which were taken into consideration as two of the most developed countries in the European Union and in the entire world. The indicators which are given in this research point to the necessity of further scientific and practical consideration of strategic conceptualization of relationship between economics and society.
    December 06, 2012   doi: 10.1111/joes.12006   open full text
  • Labor Market Effects Of Unemployment Insurance Design.
    Konstantinos Tatsiramos, Jan C. Ours.
    Journal of Economic Surveys. December 06, 2012
    With the emergence of the Great Recession unemployment insurance (UI) is once again at the heart of the policy debate. In this paper, we review the recent theoretical and empirical evidence on the labor market effects of UI design. We also discuss policy issues related to UI design, including the structure of benefits, the role of liquidity constraints and the pros and cons of a UI system in which the generosity of UI benefits is varying over the business cycle. Finally, we identify potential areas of future research.
    December 06, 2012   doi: 10.1111/joes.12005   open full text
  • Choosing Among Alternative Long‐Run Event‐Study Techniques.
    Dionysia Dionysiou.
    Journal of Economic Surveys. October 03, 2012
    Abstract This paper reviews the long‐run event‐study debate by outlining the strengths and weakness of the most commonly used alternative techniques. The fist part of the discussion highlights that prior literature has failed to provide a single risk‐adjusted model of long‐run abnormal returns with no biases. Subsequently, the paper provides guidance on how one can choose among pertinent alternative techniques. As a conclusion, researchers ought to choose among alternative techniques after considering issues such as (i) the nature of dataset and market of interest, (ii) the event type (regulatory or corporate), (iii) returns’ time‐interval, (iv) association of the event with accounting data, (v) sample characteristics and prior evidence regarding similar events, as well as (vi) risk changes following the event. Robustness tests are essential, while the road for further research regarding the appropriate technique(s) is open.
    October 03, 2012   doi: 10.1111/j.1467-6419.2012.00742.x   open full text
  • Evaluating Macroeconomic Forecasts: A Concise Review Of Some Recent Developments.
    Philip Hans Franses, Michael McAleer, Rianne Legerstee.
    Journal of Economic Surveys. September 16, 2012
    Macroeconomic forecasts are frequently produced, widely published, intensively discussed, and comprehensively used. The formal evaluation of such forecasts has a long research history. Recently, a new angle to the evaluation of forecasts has been addressed, and in this review we analyze some recent developments from that perspective. The literature on forecast evaluation predominantly assumes that macroeconomic forecasts are generated from econometric models. In practice, however, most macroeconomic forecasts, such as those from the IMF, World Bank, OECD, Federal Reserve Board, Federal Open Market Committee (FOMC), and the ECB, are typically based on econometric model forecasts jointly with human intuition. This seemingly inevitable combination renders most of these forecasts biased and, as such, their evaluation becomes nonstandard. In this review, we consider the evaluation of two forecasts in which: (i) the two forecasts are generated from two distinct econometric models; (ii) one forecast is generated from an econometric model and the other is obtained as a combination of a model and intuition; and (iii) the two forecasts are generated from two distinct (but unknown) combinations of different models and intuition. It is shown that alternative tools are needed to compare and evaluate the forecasts in each of these three situations. These alternative techniques are illustrated by comparing the forecasts from the (econometric) Staff of the Federal Reserve Board and the FOMC on inflation, unemployment, and real GDP growth. It is shown that the FOMC does not forecast significantly better than the Staff, and that the intuition of the FOMC does not add significantly in forecasting the actual values of the economic fundamentals. This would seem to belie the purported expertise of the FOMC.
    September 16, 2012   doi: 10.1111/joes.12000   open full text
  • Extreme Value Theory In Finance: A Survey.
    Marco Rocco.
    Journal of Economic Surveys. September 16, 2012
    Abstract Extreme value theory is concerned with the study of the asymptotic distribution of extreme events, that is to say events which are rare in frequency and huge in magnitude with respect to the majority of observations. Statistical methods derived from it have been employed increasingly in finance, especially for risk measurement. This paper surveys some of those main applications, namely for testing different distributional assumptions for the data, for Value‐at‐Risk and Expected Shortfall calculations, for asset allocation under safety‐first type constraints, and for the study of contagion and dependence across markets under conditions of stress.
    September 16, 2012   doi: 10.1111/j.1467-6419.2012.00744.x   open full text
  • Managing The Process Of Removing Capital Controls: What Does The Literature Suggest?
    Winston Moore.
    Journal of Economic Surveys. September 07, 2012
    Economic theory suggests that opening the capital account should allow a country to diversify away economic shocks, increase capital inflows, expand economic growth and efficiency as well as encourage governments to pursue good policies. The empirical evidence with regard to these theoretical predictions, however, are in some instances debatable. Many studies, for example, have reported mixed results as it relates to the impact of capital account integration on growth, exchange rates, trade and policy discipline. This paper provides a review of this literature as well as some recommendations for policymakers in relation to managing the process of removing capital controls.
    September 07, 2012   doi: 10.1111/joes.12001   open full text
  • Peasants Against Private Property Rights: A Review Of The Literature.
    Thomas Vendryes.
    Journal of Economic Surveys. August 23, 2012
    Abstract.   Land is the main – if not the only – asset for a majority of people in developing countries. The definition and allocation of rights over land are thus naturally essential aspects of individuals’ daily lives, as well as critical determinants of social and economic development. The privatization of land rights has long been seen as a necessary process, enhancing both efficiency and equity. However, privatized land rights have not always emerged endogenously, while exogenously driven programs of land privatization have not always been successful nor popular. This has raised questions about the expected benefits of land rights privatization. This paper aims at summarizing the main arguments and studies, both theoretical and empirical, on this issue, with a specific focus on the factors that can make privatization inefficient or detrimental for the most concerned individuals.
    August 23, 2012   doi: 10.1111/j.1467-6419.2012.00743.x   open full text
  • Recent Developments In Quantitative Models Of Sovereign Default.
    Nikolai Stähler.
    Journal of Economic Surveys. August 17, 2012
    The current crisis and discussions, in the euro area in particular, show that sovereign debt crises/defaults are no longer confined to developing economies. Following crises in many Latin American countries, the literature on quantitative dynamic macro models of sovereign default has been advancing rapidly. Current debate should take note of the findings of this literature – an extensive overview of which has been provided in this paper. This paper also discusses the inherent difficulties as well as possibilities of integrating this type of model into standard business cycle models (RBC and DSGE models). This is likely to be particularly helpful when using models to analyse upcoming issues in the euro area, such as a suitable sovereign insolvency law or the assumption of joint liability.
    August 17, 2012   doi: 10.1111/j.1467-6419.2012.00741.x   open full text
  • Co‐Integrating Var Models And Economic Policy.
    Francesco Carlucci, Francesco Montaruli.
    Journal of Economic Surveys. July 27, 2012
    Abstract This paper surveys some relevant contributions to the economic literature on co‐integrating vector autoregressive (VAR) models [vector error correction mechanisms (VECMs)], emphasizing their usefulness for economic policy. It further discusses some theoretical aspects that are necessary for a complete understanding of their potential. The theoretical introduction of the co‐integrating VAR model is followed by an illustration of its applications to monetary policy, fiscal policy and exchanges rates as well as in establishing the effects of structural bilateral shocks between countries (the so‐called global VAR, or GVAR, models). Special attention is paid to the VECM capacities of being used in conjunction with dynamic stochastic general equilibrium models and of jointly specifying the short‐ and long‐run dynamics, thus representing the steady‐state of economic systems (by means of the co‐integration relations) and the short‐run dynamics around it.
    July 27, 2012   doi: 10.1111/j.1467-6419.2012.00740.x   open full text
  • A Critical Review Of Contagion Risk In Banking.
    Augusto Hasman.
    Journal of Economic Surveys. July 24, 2012
    Abstract The recent financial crisis has focused the attention of scholars and policymakers on how to improve financial stability through better macro‐prudential regulation and supervision. In this paper, we compare the existing theoretical and empirical literature on contagion through the banking system. It is argued that the structure of the interbank market, the size of banks, the linkages among them, the level of correlation of their investments and the transparency of the regulator are key factors in determining the possibility of contagion. We discuss the different findings and present avenues for future research.
    July 24, 2012   doi: 10.1111/j.1467-6419.2012.00739.x   open full text
  • Static Common Agency And Political Influence: An Evaluative Survey.
    Graham Mallard.
    Journal of Economic Surveys. July 05, 2012
    Abstract The common agency model is among the most productive economic frameworks of recent times, generating important results in the analysis of political influence, industrial organization and public goods provision. This paper presents a survey of the applications of the common agency model to issues of political influence, examining the applications and their results. It also discusses a number of the weaknesses of this literature, weaknesses that open up important avenues of further research in the directions of interest group formation, the nature of lobbying, the political system, behavioural demands and empirical analysis.
    July 05, 2012   doi: 10.1111/j.1467-6419.2012.00737.x   open full text
  • Assessing The Effect Of Public Subsidies On Firm R&D Investment: A Survey.
    JoséÁngel Zúñiga‐Vicente, César Alonso‐Borrego, Francisco J. Forcadell, José I. Galán.
    Journal of Economic Surveys. July 05, 2012
    Abstract.   This survey examines the empirical literature on the relationship between public R&D subsidies and private R&D investment over the past five decades. The survey reveals a considerable heterogeneity of empirical results that cannot be explained fully by methodological issues. We aim to provide further explanations of the possible causes of that heterogeneity. In particular, we emphasise a set of issues that, in our view, are critical to understanding the potential effect of public R&D subsidies on private R&D spending. Special attention is paid to the dynamic aspects and composition of firm R&D, the constraints faced by the firm (such as financial constraints), and the amount and source of public subsidies. None of these issues have been investigated in depth. We formulate a set of research assumptions to guide future empirical research in this field.
    July 05, 2012   doi: 10.1111/j.1467-6419.2012.00738.x   open full text
  • Applications Of Behavioural Economics To Tax Evasion.
    Nigar Hashimzade, Gareth D. Myles, Binh Tran‐Nam.
    Journal of Economic Surveys. May 24, 2012
    Abstract The paper reviews recent models that have applied the techniques of behavioural economics to the analysis of the tax compliance choice of an individual taxpayer. The construction of these models is motivated by the failure of the Yitzhaki version of the Allingham–Sandmo model to predict correctly the proportion of taxpayers who will evade and the effect of an increase in the tax rate upon the chosen level of evasion. Recent approaches have applied non‐expected utility theory to the compliance decision and have addressed social interaction. The models we describe are able to match the observed extent of evasion and correctly predict the tax effect but do not have the parsimony or precision of the Yitzhaki model.
    May 24, 2012   doi: 10.1111/j.1467-6419.2012.00733.x   open full text
  • Identification Methods In Vector‐Error Correction Models: Equivalence Results.
    Lance A. Fisher, Hyeon‐seung Huh.
    Journal of Economic Surveys. May 22, 2012
    Abstract In a structural vector‐error correction (VEC) model, it is possible to decompose the shocks into those with permanent and transitory effects on the levels of the variables. Pagan and Pesaran derive the restrictions which the permanent–transitory decomposition of the shocks imposes on the structural VEC model. This paper shows that these restrictions are equivalent to a set of restrictions that are applied in the methods of Gonzalo and Ng and King et al. (KPSW). Using this result, it is shown that the Pagan and Pesaran method can be used to recover the structural shocks with permanent effects identically to those from the Gonzalo and Ng and KPSW methods. In the former case, this is illustrated in the context of Lettau and Ludvigson's consumption model and in the latter case in KPSW's six variable model. There are also two other methods for which the Pagan and Pesaran approach can deliver identical permanent shocks which are also discussed.
    May 22, 2012   doi: 10.1111/j.1467-6419.2012.00734.x   open full text
  • Macroprudential Policy – A Literature Review.
    Gabriele Galati, Richhild Moessner.
    Journal of Economic Surveys. May 11, 2012
    Abstract.    The recent financial crisis has highlighted the need to go beyond a purely micro approach to financial regulation and supervision. As a consequence, the number of policy speeches, research papers and conferences that discuss a macro perspective on financial regulation has grown considerably. The policy debate is focusing in particular on macroprudential tools and their usage, their relationship with monetary policy, their implementation and their effectiveness. Macroprudential policy has recently also attracted considerable attention among researchers. This paper provides an overview of research on this topic. We also identify important future research questions that emerge from both the literature and the current policy debate.
    May 11, 2012   doi: 10.1111/j.1467-6419.2012.00729.x   open full text
  • The ‘Who And Why’ Of Lottery: Empirical Highlights From The Seminal Economic Literature.
    Levi Perez, Brad Humphreys.
    Journal of Economic Surveys. May 10, 2012
    Abstract Lotteries operate today in many countries around the world. This type of gambling is usually run by governments and is sometimes described as regressive. Lottery is an unfair bet, so explaining the purchase of lottery tickets by risk‐averse consumers has been a challenge for economic theory. Lotteries can be analysed from either of two economic perspectives: as a source of public revenue or as a consumer commodity. In this paper the state of economic research on lotteries is reviewed, focusing on its main empirical findings.
    May 10, 2012   doi: 10.1111/j.1467-6419.2012.00732.x   open full text
  • Hedonic Price Indexes For Residential Housing: A Survey, Evaluation And Taxonomy*.
    Robert J. Hill.
    Journal of Economic Surveys. April 26, 2012
    Every house is different. It is important that house price indexes take account of these quality differences. Hedonic methods which express house prices as a function of a vector of characteristics (such as number of bedrooms and bathrooms, land area and location) are particularly useful for this purpose. I consider here some developments in the hedonic methodology, as it is applied in a housing context, that have occurred in the last three decades. A number of hedonic house price indexes are now available. However, it is often difficult to see how these indexes relate to each other. For this reason I attempt to impose some structure on the literature by developing a taxonomy of hedonic indexes, and then show how existing indexes fit into this taxonomy. Also discussed are some promising areas for future research in the hedonic field. In particular, greater use needs to be made of spatial econometric and nonparametric methods to exploit the increased availability of geospatial data. The main criticisms of the hedonic approach are evaluated and compared with those of the repeat‐sales and stratified median methods. The overall conclusion is that the advantages of the hedonic approach outweigh its disadvantages.
    April 26, 2012   doi: 10.1111/j.1467-6419.2012.00731.x   open full text
  • The Role Of Fees In Patent Systems: Theory And Evidence.
    Gaetan de Rassenfosse, Bruno van Pottelsberghe de la Potterie.
    Journal of Economic Surveys. February 13, 2012
    This paper reviews the economic literature on the role of fees in patent systems. Two main research questions are usually addressed: the impact of patent fees on the behavior of applicants and the question of optimal fees. Studies in the former group confirm that a range of fees affect the behavior of applicants and suggest that a patent is an inelastic good. Studies in the latter group provide grounds for both low and high application (or pre‐grant) fees and renewal (or post‐grant) fees, depending on the structural context and policy objectives. The paper also presents new stylized facts on patent fees of 30 patent offices worldwide. It is shown that application fees are generally lower than renewal fees, and renewal fees increase more than proportionally with patent age.
    February 13, 2012   doi: 10.1111/j.1467-6419.2011.00712.x   open full text
  • The Distance Puzzle And Low‐Income Countries: An Update.
    Céline Carrère, Jaime de Melo, John Wilson.
    Journal of Economic Surveys. January 19, 2012
    The ‘distance effect' measuring the elasticity of trade flows to distance has been found to be rising since the early 1970s in a host of studies based on the gravity model, leading observers to call it the ‘distance puzzle'. However, this puzzle is regularly challenged by new developments in the specification of the gravity equation or in its estimations. We propose an original survey on the existing methods used to quantify the distance puzzle – basically the computation of an average distance of trade, a meta‐analysis on existing gravity papers and the implementation of recent econometric developments, all on a well‐specified gravity equation both in cross‐section and panel data. We apply all these methods to a unique large database (124 countries from 1970 to 2006). It appears that if all these new developments can change the amplitude of the increase in the trade elasticity to distance, none solve the distance puzzle. We confirm the existence of this puzzle and identify that it only applies to low‐income countries which exhibit a significant rising distance effect on their trade of around 18% between 1970 and 2006 while the distance ‘puzzle' for trade within richer countries disappears.
    January 19, 2012   doi: 10.1111/j.1467-6419.2011.00715.x   open full text
  • Trade Diversification, Income, And Growth: What Do We Know?
    Olivier Cadot, Céline Carrère, Vanessa Strauss‐Kahn.
    Journal of Economic Surveys. January 12, 2012
    This paper surveys the empirical literature on export and import diversification and its linkages with growth. We review widely used measures of diversification and the evidence about their evolution focusing on how export diversification relates to trade liberalization and economic development. We also discuss the linkages between trade diversification and productivity at the firm and industry level, highlighting new advances on the linkages between import diversification and productivity.
    January 12, 2012   doi: 10.1111/j.1467-6419.2011.00719.x   open full text
  • The Causes Of Childhood Obesity: A Survey.
    Georgia S. Papoutsi, Andreas C. Drichoutis, Rodolfo M. Nayga.
    Journal of Economic Surveys. January 12, 2012
    Childhood obesity rates are rapidly rising in many countries. Because it is highly likely that obesity will persist into adulthood, current rates undermine the health and future of people in developed as well as developing countries. This public health epidemic carries significant economic, social as well as individual‐level consequences and has become a research topic of significant interest in various disciplines including economics. We survey the literature in economics and related disciplines associated with the causes of childhood obesity and synthesize the results to provide a better understanding of the explanations for the rising childhood obesity rates. This is an important step in crafting effective policies to combat global childhood obesity trends.
    January 12, 2012   doi: 10.1111/j.1467-6419.2011.00717.x   open full text
  • The Experimental Economics Of Religion.
    Robert Hoffmann.
    Journal of Economic Surveys. January 12, 2012
    Abstract This paper surveys the experimental economics approach to the study of religion. The field has a place in the context of the scientific study of religion generally and the social psychology of religion in particular, but employs distinct economic methods which promise new and different insights. In particular, certain features of the experimental approach as used by economists such as incentive compatibility are particularly appropriate for studying the effect of religion on individual behaviour. The paper discusses results obtained so far in terms of two roles of religion in shaping individual behaviour, that is, as a social group identifier and as a set of values.
    January 12, 2012   doi: 10.1111/j.1467-6419.2011.00716.x   open full text
  • Deliberative Monetary Valuation: In Search Of A Democratic And Value Plural Approach To Environmental Policy.
    Alex Y. Lo, Clive L. Spash.
    Journal of Economic Surveys. January 05, 2012
    The use of deliberative methods to assess environmental values in monetary terms has been motivated by the potential for small group discussion to help with preference formation and the inclusion of non‐economic values. In this review, two broad approaches are identified: preference economisation and preference moralisation. The former is analytical, concentrates upon issues of poor respondent cognition and produces a narrow conception of value linked to utilitarianism. The latter emphasises political legitimacy, appeals to community values and tends to privilege arguments made in the public interest. Both approaches are shown to embrace forms of value convergence, which undermine the prospects for value pluralism. As a result exclusion and predefinition of values dominates current practice. In order to maintain democratic credentials, the importance attributed to monetary value needs to be left as an open question to be addressed as part of a process determining an “agreement to pay”. To this end we identify a discourse‐based approach as a third way consistent with the democratic and value plural potential of deliberative monetary valuation.
    January 05, 2012   doi: 10.1111/j.1467-6419.2011.00718.x   open full text
  • The ‘Reference Point’ Approach To The Theory Of The Firm: An Introduction.
    Paul Walker.
    Journal of Economic Surveys. December 22, 2011
    There is a small but growing literature on the ‘reference point’ approach to incomplete contracts as formulated by Hart and Moore. The reference point approach has begun to be applied to the theory of the firm in 3 recent papers. This introduction reviews the main theoretical aspects of each of these papers. It then discusses the relationship between the reference point approach to the firm, the transaction cost approach and the property rights approach. Here it is argued that the reference point approach is a step back towards ex post inefficiencies, away from reliance on ex ante inefficiencies.
    December 22, 2011   doi: 10.1111/j.1467-6419.2011.00714.x   open full text
  • Monetary Policy In A Non‐Representative Agent Economy: A Survey.
    Michał Brzoza‐Brzezina, Marcin Kolasa, Grzegorz Koloch, Krzysztof Makarski, Michał Rubaszek.
    Journal of Economic Surveys. November 22, 2011
    It is well known that central bank policies affect not only macroeconomic aggregates, but also their distribution across economic agents. Similarly, a number of papers demonstrated that heterogeneity of agents may matter for the transmission of monetary policy to macro variables. Despite this, the mainstream monetary economics literature has so far been dominated by dynamic stochastic general equilibrium models with representative agents. This paper aims to tilt this imbalance towards heterogeneous agents setups by surveying the main positive and normative findings of this line of the literature, and suggesting areas in which these models could be implemented. In particular, we review studies that analyse the heterogeneity of (i) households’ income, (ii) households’ preferences, (iii) consumers’ age, (iv) expectations and (v) firms’ productivity and financial position. We highlight the results on issues that, by construction, cannot be investigated in a representative agent framework and discuss important papers modifying the findings from the representative agent literature.
    November 22, 2011   doi: 10.1111/j.1467-6419.2011.00710.x   open full text