Scottish Journal of Political Economy 

About: Scottish Journal of Political Economy is an academic journal published by Wiley-Blackwell. The journal publishes majorly in the area(s): Wage & Unemployment. It has an ISSN identifier of 0036-9292. Over the lifetime, 1701 publications have been published receiving 35560 citations.

The Case for Regional Policies

Abstract: In Britain, as in other countries, we have become acutely aware in recent years of the existence of a ‘regional’ problem—the problem, that is, of different regions growing at uneven rates; with some regions developing relatively fast and others tending to be left behind. In some ways this problem of fast and slow growing regions has not led to the same kind of inequalities in regional standards of living, in culture or in social structure, in the case of Britain as in some other countries—such as Italy, the United States or France. And in general, the problem of regional inequalities within countries is not nearly so acute as that between the rich and poor countries of the world—with differences in living standards in the ratio of 20:1, or even 50:1, as between the so-called ‘advanced’ countries and the ‘developing’ countries. Yet, as investigations by Kuznets and others have shown, the tremendous differences that now divide the rich and poor nations are comparatively recent in origin. They are the cumulative result of persistent differences in growth rates that went on over periods that may appear long in terms of a life-span, but which are relatively short in terms of recorded human history—not more than a few centuries, in fact. Two hundred, or two-hundred-and-fifty years ago, the differences in living standards, or in the ‘stage’ of both economic and cultural development of different countries, or parts of the globe, were very much smaller than they are today.

Who Benefits from Foreign Direct Investment in the UK

Abstract: The presumed higher productivity of foreign firms and resulting spillovers to domestic firms has led governments to offer financial incentives to foreign firms. We investigate if there is any productivity or wage gap between foreign and domestic firms in the UK and if the presence of foreign firms in a sector raises the productivity of domestic firms. Our results indicate that foreign firms do have higher productivity than domestic firms and they pay higher wages. We find no aggregate evidence of intra-industry spillovers. However, firms with low productivity relative to the sector average, in low-skill low foreign competition sectors gain less from foreign firms.

Border Effects and the Gravity Equation: Consistent Methods for Estimation

Abstract: The CES monopolistic competition model is an especially convenient way to derive the gravity equation, especially when we allow for transport costs and other trade barriers. In that case, we need to take account of the overall price indexes in each country. We review three methods to do so: using published data on price indexes; using the computational method of Anderson and van Wincoop (2001); or using country fixed effects to measure the price indexes. The latter two methods are compared on the dataset dealing with trade between and within Canada and the US. The fixed effects method produces consistent estimates of the average border effect across countries, and is simple to implement, so it might be considered to be the preferred estimation method. Copyright 2002 by Scottish Economic Society.

Oil price shocks and stock market booms in an oil exporting country

Abstract: This paper analyses the effects of oil price shocks on stock returns in Norway, an oil-exporting country, highlighting the transmission channels of oil prices for macroeconomic behaviour. To capture the interaction between the different variables, stock returns are incorporated into a structural VAR model. I find that following a 10% increase in oil prices, stock returns increase by 2.5%, after which the effect gradually dies out. The results are robust to different (linear and non-linear) transformations of oil prices. The effects on the other variables are more modest. However, all variables indicate that the Norwegian economy responds to higher oil prices by increasing aggregate wealth and demand. The results also emphasize the role of other shocks; monetary policy shocks in particular, as important driving forces behind stock price variability in the short term.