The paper analyses the impact of knowledge spillovers on output per worker at the industry level using a primal production function approach. The paper make three different contributions in the international spillovers literature: first identifies trade related spillovers under alternative assumptions regarding the information transferred through imports; second, explores the importance of horizontal and vertical FDI in knowledge spillovers and third looks at how institutional factors determine the impact on FDI related spillovers on productivity. The main findings of the paper are: international knowledge spillovers are an important driver of industry output per worker; the economic size of this effect is smaller the more restrictive the assumptions are about the amount of information embodied in imports; the elasticity of output with respect to spillovers is not negligible but it is definitely lower than industry’s own RD the effect of spillovers on productivity is mainly driven by high technology industries; gains from FDI spillovers are horizontal, high protection of intellectual property rights and the ease of doing business increase substantially the effectiveness of both horizontal and vertical FDI related spillovers.

Knowledge Spillovers and Output per Worker: An Industry-level Analysis for OECD Countries

This paper studies consumers' inflation expectations using micro-level data from the Surveys of Consumers conducted by University of Michigan. It shows that beyond the well-established socio-economic factors such as income, age or gender, other characteristics such as the households' financial situation and their purchasing attitudes are important determinants of their forecast accuracy. Respondents with current or expected financial difficulties, pessimistic attitudes about major purchases, or expectations that income will go down in the future have a stronger upward bias in their expectations than other households. However, their bias shrinks by more than that of the average household in response to increasing media reporting about inflation. Equivalent results are found during recessions.

/pdf/consumers-attitudes-and-their-inflation-expectations-1ltzbyw4h3.pdf

Consumers’ Attitudes and Their Inflation Expectations

In this paper we propose a new multivariate GARCH model with time- varying correlations. We adopt the vech representation based on the conditional variances and the conditional correlations. While each conditional-variance term is assumed to follow a univariate GARCH formulation, the conditional-correlation matrix is postulated to follow an autoregressive moving average type of analogue. By imposing some suitable restrictions on the conditional-correlation-matrix equation, we construct a MGARCH model in which the conditional-correlation matrix is guaranteed to be positive definite during the optimisation. Thus, our new model retains the intuition and interpretation of the univariate GARCH model and yet satisfies the positive-definite condition as found in the constant-correlation and BEKK models. We report some Monte Carlo results on the finite-sample distributions of the MLE of the varying- correlation MGARCH model. The new model is applied to some real data sets. It is found that extending the constant-correlation model to allow for time-varying correlations provides some interesting time histories that are not available in a constant-correlation model.

A Multivariate GARCH Model with Time-Varying Correlations

This paper examines the usefulness of survey-based measures of inflation expectations to predict inflation using hybrid versions of New Keynesian Phillips Curve (NKPC). While both 3 months ahead an...

https://www.econstor.eu/bitstream/10419/193462/1/WPS01-2019.pdf

Inflation expectations of households: do they influence wage-price dynamics in India?

/pdf/is-money-demand-really-unstable-evidence-from-divisia-2j80ogdv.pdf

Is money demand really unstable? Evidence from Divisia monetary aggregates

Assessing India’s productivity trends and endogenous growth: New evidence from technology, human capital and foreign direct investment

We analyze the inflation expectation formation of Indian Households using Inflation Expectations Survey of Households dataset, and draw out its implications for the effectiveness and use of the expectations channel of monetary policy transmission. Using quantitative responses we discover that households' expectations are adaptive and backward looking. They are not efficient. Food inflation has a significant short run impact but the effect of core inflation increases over the long run. There is considerable heterogeneity across households with females, daily workers, young and retired persons having higher inflation expectations than their counterparts. Unlike advanced economies, retired persons have higher expectations perhaps due to the accumulated information about higher inflation in the past, inadequate social security and underdeveloped pension schemes. Households do not overreact in comparison to the forecasts of RBI and professional forecasters. But short term reactions are significant and heterogeneous across households. The large speed of adjustment, absence of over-reaction, low response coefficients to commodity shocks in a simultaneous and impact of the RBI's forecasted path bodes well for successfully anchoring household inflation expectations in the process of inflation targeting, but requires that these forecasts are carefully made with a focused use of the expectations channel. Communications have more of an impact on inflation expectations than the interest rate. A repo rise actually raises inflation expectations pointing to the ineffectiveness of the aggregate demand channel and of aggressive rate rises.

Modeling heterogeneity and rationality of inflation expectations across Indian households

This study analyses the time-varying correlation of money and output using the DCC GARCH model for the Euro, India, Poland, the UK and the US. Apart from simple sum money, this model uses Divisia m...

Testing the Friedman–Schwartz hypothesis using time-varying correlation analysis

This study analyzes the socio-economic factors that influence inflation expectations of Indian households. Using Consumer Confidence Survey data we discover that inflation expectations of households depend largely on inflation perceptions, income, education of the respondents, and outlook on economy, employment and spending. Women, lower income individuals and less educated persons tend to have higher inflation expectations. Macroeconomic variables like inflation, repo rate and GDP growth rate influence inflation expectations positively. Along with these variables, inflation projections by the Reserve Bank of India play a pivotal role in influencing inflation expectations of households. A significant role of the Reserve Bank in anchoring inflation expectations via communications is visible from this analysis.

Prashant Mehul Parab

Papers

Assessing India’s productivity trends and endogenous growth: New evidence from technology, human capital and foreign direct investment

Modeling heterogeneity and rationality of inflation expectations across Indian households

Testing the Friedman–Schwartz hypothesis using time-varying correlation analysis

Modeling Consumers' Confidence and Inflation Expectations

What Influences Aggregate Inflation Expectations of Households in India