London School of Economics and Political Science

About: London School of Economics and Political Science is a education organization based out in London, United Kingdom. It is known for research contribution in the topics: Population & Politics. The organization has 8759 authors who have published 35017 publications receiving 1436302 citations.

Detrending, stylized facts and the business cycle

Abstract: The stylized facts of macroeconomic time series can be presented by fitting structural time series models. Within this framework, we analyse the consequences of the widely used detrending technique popularised by Hodrick and Prescott (1980). It is shown that mechanical detrending based on the Hodrick–Prescott filter can lead investigators to report spurious cyclical behaviour, and this point is illustrated with empirical examples. Structural time-series models also allow investigators to deal explicitly with seasonal and irregular movements that may distort estimated cyclical components. Finally, the structural framework provides a basis for exposing the limitations of ARIMA methodology and models based on a deterministic trend with a single break.

Why There is a Democratic Deficit in the EU: A Response to Majone and Moravcsik

Abstract: Giandomenico Majone and Andrew Moravcsik have argued that the EU does not suffer a ‘democratic deficit’. We disagree about one key element: whether a democratic polity requires contestation for political leadership and over policy. This aspect is an essential element of even the ‘thinnest’ theories of democracy, yet is conspicuously absent in the EU.

Explaining job polarization: Routine-biased technological change and offshoring

Abstract: This paper documents the pervasiveness of job polarization in 16 Western European countries over the period 1993-2010. It then develops and estimates a framework to explain job polarization using routine-biased technological change and offshoring. This model can explain much of both total job polarization and the split into within- industry and between-industry components.

Industrial Structure and the Nature of Innovative Activity

Abstract: A substantial portion of the increase in the output of advanced industrial nations is widely judged to have been attributable to technical progress. There is also overwhelming evidence that this progress has not occurred merely in a random manner (see, e.g. Schmookler, 1962}. Yet there is not much in the way of economic theory to explain either its rate or its direction, and particularly little that has a reasonably precise micro-economic foundation.^ This lacuna is important, because a recognition of the importance of technical progress raises serious doubts about the adequacy with which traditional micro-economic models allow one to understand the functioning of modern market economies, and to develop policy prescriptions (e.g. with respect to anti-trust policy). The lacuna is also surprising, for it has become a commonplace, at least since the work of Schumpetcr (1947), that the pace of inventive and innovative activity is related to market structure. Moreover, there must be many who share the Schumpeterian belief that perfect competition is inimical to inventive activity, and that the gains from such activity more than offset the welfare loss arising from production inefficiency associated with market power.^ However, a substantial part of the recent industrial organisation literature would appear to have interpreted tests of the Schumpeterian thesis in a somewhat different manner.^ It is often argued now that industrial concentration and large size spur inventive activity. It is as though concentration is a cause of innovations.^