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Showing papers on "Purchasing power published in 2000"


Journal Article
TL;DR: Siegel as mentioned in this paper argues that stocks have been a wonderful long run investment, and can be expected to continue to be so, and makes a convincing case that stocks are much better for such long-run purposes than either bonds or money market instruments.
Abstract: Stocks for the Long Run Jeremy J. Siegel McGraw Hill, 1998 Jeremy Siegel has written a book that could have a great effect on the reader's wealth while challenging conventional academic views. It is written at the popular level but references the underlying academic articles (i.e. it is footnoted). Siegel is a finance professor at the University of Pennsylvania's Wharton School, so he is well qualified to draw on the academic literature. The basic message of the book is that stocks have been a wonderful long run investment, and can be expected to continue to be so. The emphasis is on the long run, because there is no doubt that stocks can be exceedingly risky in the short run. As an illustration of stocks' short-run risk, consider October 19, 1987, when the stock market dropped by 22.6% in one day (see Miller 1999 for a review of a book focusing on this episode). Because of the short-run riskiness of stocks, one who is saving for an event in the near future (such as the next vacation), runs a considerable risk of losing money. However, most saving is done not for such short-run purposes but for long-run purposes such as retirement, or to leave money to descendants. Siegel makes a convincing case that stocks are much better for such long-run purposes than either bonds or money market instruments. Bank deposits usually earn even less than money market instruments, and hence are also dominated by stocks. The textbooks I use in teaching finance present evidence that stocks have, on average, outperformed bonds since 1926. Siegel carries this evidence back to 1802, presenting data on the returns from stocks and bonds from 1802 to 1997. Over this long period stocks have had an average return of 8.4%, composed of price increases averaging 3.0%, and dividends averaging 5.4%. In contrast, long-term US government bonds have averaged 4.7%, and short-term US governments, 4.3%. This superiority of stocks held true for major subdivisions of the period studied also. Economists talk about the equity risk premium, the differential between stocks and bonds, which is usually interpreted as the reward to bearing the risks of equity. This of course varies tremendously year to year. Siegel plots a thirty-year running average of the equity risk premium. It is striking that it is virtually always well above 0% (the exceptions appear to be around 1841 and 1861, which are well over a century ago). Thus, for someone investing for the long run, it appears stocks virtually always exceed bonds in return. The riskiness of having stocks underperform bonds turns out to depend very much on the holding period. A fascinating graph (showing data from 1802 to 1997) shows the maximum and minimum real (i.e., inflation adjusted) annualized returns for various holding periods (p. 27). For short holding periods, there is the expected result that one can lose more money on stocks than on either bonds or T-bills, frighteningly more. The worst one-year return on stocks is -30.6% (the best is 66.6%). Incidentally, bonds prove to have appreciable risk over short periods also, with the worse bond performance being -21.9%, and the worst Treasury bill performance -15.6%. The bond and Treasury bill losses occur when high inflation lowers their real purchasing power. Bonds have this risk. In addition, they can experience large losses when interest rates rise unexpectedly, reducing their risk. That stocks are riskier than bonds, and bonds riskier than treasury bills (and bank deposits and other money market instruments) is standard textbook material. It is usually explained by investors disliking risk and being willing to incur higher risk only if rewarded with greater returns. Thus, investors should be willing to hold stocks only if promised much higher returns than bonds. However, most investors (especially those with large sums of money) have longer horizons than one year. However, the equity risk premium appears to shrink with holding periods. …

359 citations


Journal ArticleDOI
TL;DR: The authors studied the diversity among Chinese consumers across seven regional markets and found that consumers from various regions are significantly different from one another in terms of purchasing power, attitudes, lifestyles, media use, and consumption patterns.
Abstract: As one of the big emerging markets, China’s enormous population and rapid increase in consumer spending have attracted many multinational corporations (MNCs). Meanwhile, the misconception of China as a homogeneous market often leads to difficulties in assessing market demand and enacting effective strategies. Examines the diversity among Chinese consumers across seven regional markets. Data from a national survey suggest that consumers from various regions are significantly different from one another in terms of purchasing power, attitudes, lifestyles, media use, and consumption patterns. MNCs need to take a cautionary approach when expanding into the inland regions, and must adapt to the local market conditions and devise sustainable strategies.

267 citations


Journal ArticleDOI
TL;DR: In this article, a new set of current price estimates of per capita income, adjusted for each currency's purchasing power, is presented for a sample of mainly OECD countries during more than one and a half centuries.

227 citations


Journal ArticleDOI
TL;DR: This paper constructed an annual cost of living index for each continental American state from 1960 to 1995, which constitutes a deflator suitable for cross-sectional, time-series, and pooled research.
Abstract: An enormous amount of research on state politics and policy relies on monetary variables. Such variables are affected by differences in the purchasing power of a dollar over time and across states, but a lack of information about geographic variation in the costs of goods and services has kept social scientists from taking these differences into account. We remove this obstacle by constructing an annual cost of living index for each continental American state from 1960 to 1995. The index constitutes a deflator suitable for cross-sectional, time-series, and pooled research. After establishing the reliability and validity of our index using a battery of diagnostic tests, we illustrate the importance of deflating monetary variables by examining two variables that are often used in state politics research.

131 citations


Journal ArticleDOI
TL;DR: The evolution of the energy intensity paths in the period 1971 to 1992 shows developing and industrialized countries converging to a common pattern of energy use as discussed by the authors. But, developing countries have been reluctant to make commitments under the Kyoto Protocol as they oppose any measure to reduce greenhouse gas emissions that might constrain their economic development.

94 citations


Journal ArticleDOI
TL;DR: This article argued that the commodity is a better analytical starting point than the market and established a common essence for money as generalized purchasing power, a peculiarly bland essence that allows money to undertake the variety of social roles identified by Zelizer.
Abstract: This article addresses the issue of how the market and the non-market are to be understood especially by concentrating on the theory of money. For mainstream economics, the market is simply an institution facilitating exchange, money being the key instrument for alleviating the inefficiencies of barter. In contrast, recent work in other social sciences, such as that by Zelizer, distinguishes among markets, and various roles of money, depending on cultural and social content. While being sympathetic to such an approach, we claim that the commodity is a better analytical starting point than the market. Based on Marx's work, we then show what commodities have in common and establish a common essence for money as generalized purchasing power. This is a peculiarly bland essence that allows money to undertake the variety of social roles identified by Zelizer.

88 citations


Posted Content
TL;DR: Mundell as discussed by the authors argued that if a common money can be managed so that its general purchasing power remains stable, then the larger the currency area-even one encompassing diverse regions or nations subject to asymmetric shocks-the better.
Abstract: May 2000 Robert Mundell seems to be on both sides of the debate over European monetary unification and on the adoption of common monetary standards in other parts of the world. But this paradox can be resolved by noting that there are two Mundell models-earlier and later. From his theory of optimum currency areas published in 1961, Mundell seemed to be arguing in favor of making currency areas fairly small, as defined by the domain of labor mobility, so as to better offset asymmetric shocks, i.e., those affecting one area differently from another. However, in two important papers written in 1970, but not published until 1973 in an obscure conference volume, Mundell presents a different, and surprisingly modern, analytical perspective. If a common money can be managed so that its general purchasing power remains stable, then the larger the currency area-even one encompassing diverse regions or nations subject to asymmetric shocks-the better.

71 citations


Journal ArticleDOI
TL;DR: In this article, the authors looked at attitudes to tariffs for green power in light of the proposed phase-out of the non-fossil fuel obligation and found that whether someone was willing to pay more was significantly correlated with attitude, experience (whether they had visited an environmental centre) and the purchasing power placed on £5.
Abstract: Although financial support for renewable electricity sources has existed via the non-fossil fuel obligation since 1990, the UK ‘green power’ market is still in its infancy. This paper looks at attitudes to tariffs for ‘green power’ in light of the proposed phase-out of the non-fossil fuel obligation. The hypothesis tested was the consumers’ willingness to pay for electricity generated from renewable energy sources and to see if this was related to income and attitude. Data for analysis were taken from replies to a questionnaire sent to an energy-aware sub-population of Leicester which were analysed by a variety of statistical tests. Results of multiple regression analysis indicated that whether someone was willing to pay more was significantly correlated with attitude, experience (whether they had visited an environmental centre) and the purchasing power placed on £5. This finding has implications for the methods by which support for green tariffs can be increased. Education and raising people’s awareness through experience should be able to change attitudes and so increase their willingness to pay.

60 citations


BookDOI
TL;DR: Suryahadi et al. as mentioned in this paper developed a consistent series on poverty's evolution from February 1996 to August 1999 using various data sets and studies, and they study the appropriate method for comparing changes in poverty between the February 1996 and February 1999 Susenas surveys, but they produce two base cases: one working forward from 1996 and one working backward from 1999.
Abstract: The relative price of food increased considerably during Indonesia's recent economic crisis, so the explicit (or implicit) choice of the weight given to the inflation rate for food prices dramatically affects calculations of the poverty rate. Poverty is intrinsically a complex social construct, and even when it is narrowly defined by a deficit of consumption spending, many thorny issues arise in setting an appropriate poverty line. Suryahadi, Sumarto, Suharso, and Pritchett limit themselves to examining how poverty - defined on a consistent, welfare-comparable basis - changed in Indonesia during a series of crises that began in August 1997. Using various data sets and studies, they develop a consistent series on poverty's evolution from February 1996 to August 1999. Specifically, they study the appropriate method for comparing changes in poverty between the February 1996 and February 1999 Susenas surveys. To set a poverty line for 1999 that is conceptually comparable to that for 1996 involves a standard issue of price deflation: How much would it cost in 1999 to purchase a bundle of goods that would produce the same level of material welfare as the money spent at the poverty line in 1996? Empirically, given major changes in the relative prices of food, the key issue is the weight given food prices in the price index. Using different deflators produces a range of plausible estimates, but they produce two base cases: one working forward from 1996 and one working backward from 1999. If one accepts the official figure of 11.34 percent for February 1996, poverty increased from the immediate pre-crisis rate of about 7-8 percent in the second half of 1997 to the post-crisis rate of about 18-20 percent by September 1998 and 18.9 percent in February 1999. If one begins from the best estimate of the poverty rate in February 1999 (27.1 percent), poverty rose by 9.6 percentage points from 17.5 percent in February 1996. Since February 1999, poverty appears to have subsided considerably but - two years after the crisis started - is still substantially higher than it was immediately before the crisis. This paper - a product of the Environment and Social Development Sector Unit, East Asia and Pacific Region - is part of a larger effort in the region to develop a national poverty strategy for Indonesia. Lant Pritchett may be contacted at lant_pritchett@harvard.edu.

55 citations


Journal ArticleDOI
TL;DR: In this paper, the authors trace the history of foreign direct investment in UK retailing since 1850 and conclude that cross-border retailing will continue to increase, and to do so at a rate close to twice that of the growth in consumer purchasing power.
Abstract: A newly compiled dataset allows us to trace the history of foreign direct investment in UK retailing since 1850. Our results suggest that the upsurge of cross‐border activity in the 1980s and early 1990s was exceptional in absolute terms. However, when compared to the most likely determinant of entry rates, consumer purchasing power, the recent upturn is best seen as a return, after several decades of relatively low entry rates, to the high level of FDI prevailing in the early twentieth century. Moreover, we conclude that cross‐border retailing will continue to increase, and to do so at a rate close to twice that of the growth in consumer purchasing power.

43 citations


Journal ArticleDOI
Byung-Yeon Kim1
TL;DR: In this paper, the authors analyzed the causes of repressed inflation in the Soviet consumer market during 1965-1989 and found that retail price subsidies, which rose from 4% of state budget expenditure in 1965 to 20% in the late 1980s, intensified consumer market disequilibrium.
Abstract: Using recently available Soviet material, this paper analyses the causes of repressed inflation in the Soviet consumer market during 1965-1989. We found that retail price subsidies, which rose from 4% of state budget expenditure in 1965 to 20% in the late 1980s, intensified consumer market disequilibrium. The provision of these subsidies had negative effects on the market by maintaining the purchasing power of households for consumer goods and by increasing the budget deficit. Furthermore, the demand of enterprises for consumer goods without legitimate permission tended to increase during 1965-1989.

Book ChapterDOI
TL;DR: The authors provided a comparison of real academic salaries by converting the nominal salaries in each country to their purchasing power equivalents, using the Big Mac Index, and found that real academic salary levels are highest in Hong Kong and Singapore, relative to the developed countries, while Hong Kong tax and social security deductions are lowest.
Abstract: In recent years, academic staff unions and associations have argued for higher salaries for academics on the grounds that existing salaries have not kept pace with inflation, are well-below commercial salaries and, most glaringly, are much lower than the salaries of their overseas counterparts. However, most international comparisons are made based on exchange rate conversions, which is inappropriate since purchasing power differentials are only reflected in exchange rates in the long term. Furthermore, the volatility of exchange rates makes such conversions highly inaccurate. In this chapter, we provide a comparison of real academic salaries by converting the nominal salaries in each country to their purchasing power equivalents, using the Big Mac Index. Our results show that real academic salaries are highest in Hong Kong and Singapore, relative to the developed countries, while Hong Kong tax and social security deductions are lowest. Furthermore, real salary levels, combined with intrinsic considerations such as the quality of life, indicate that Canada and New Zealand are unattractive places for visiting/migrating academics, while Australia and the US are relatively attractive. We suggest that our findings could be of use to policy-makers and academic unions in salary negotiations, as well as academics making relocation decisions.

Journal ArticleDOI
TL;DR: The United States has long enjoyed a unique position of economic supremacy. as discussed by the authors The United States is far and away the most populous of the advanced market economies; for most of the past century it has also had substantially higher per capita income than any other major nation.
Abstract: The United States has long enjoyed a unique position of economic supremacy. Not only is it far and away the most populous of the advanced market economies; for most of the past century it has also had substantially higher per capita income than any other major nation. As a result, the only puzzle about the Pax Americana that took shape in the 1940s is that it took so long in coming: at the time the United States actually took on the mantle of world leadership, it had about as much purchasing power as all other market economies combined. By the early 1990s, however, almost everyone believed that the age of U.S. supremacy was nearing its end. U.S. GDP per capita was no longer exceptional when measured at current exchange rates, although when measured at purchasing power parity instead the United States still led its rivals in real output per head. Perhaps more significant, other advanced countries had clearly overtaken U.S. productivity in some industries, and surpassed the United States in some technologies. The rapid growth of Asian developing countries further suggested that the balance of world economic power might be shifting away from the original advanced nations; probably nobody now alive will see China come anywhere close to U.S. income per capita, but all it has to do is reach one-fifth of the U.S. level to become the world’s largest economy in absolute terms. While prophets of “declinism” like Kennedy (1989) and Thurow (1992) did not entirely dominate the discourse—Nye (1992), for example, argued that despite its gradual relative economic decline the United States retained the resources to remain the world’s political leader for decades to come— circa 1992 few people would have dared to suggest that a second “American century” might be in prospect. At the millennium, however, such suggestions are indeed being made (for

Journal Article
TL;DR: In the early 1990s, pharmaceutical companies of America and Europe acquired a strong research orientation that led to a cascade of new therapeutic entities, including additional antiinfectives, vaccines, diuretics, and then other agents to reduce heart attack risks, tranquilizers, antidepressants, birth control pills, anti-fungal agents, immunosuppressants, cortico-steroids, AIDS inhibitors, powerful pain relief agents, and many other agents effective against specific diseases as mentioned in this paper.
Abstract: When I was a high school student during the late 1940s, the first so-called "wonder drugs"-initially penicillin and then the broad-spectrum antibiotics such as tetracycline-were entering the U.S. market. From their profitable experience developing the broadspectrum antibiotics, the leading pharmaceutical companies of America and Europe acquired a strong research orientation that led to a cascade of new therapeutic entities, including additional antiinfectives, vaccines, diuretics, and then other agents to reduce heart attack risks, tranquilizers, antidepressants, birth control pills, anti-fungal agents, immunosuppressants, cortico-steroids, AIDS inhibitors, powerful pain relief agents, and many other agents effective against specific diseases. Thanks to this pharmaceutical revolution, life spans have been prolonged, the incidence and duration of hospital stays have been reduced, and the quality of countless citizens' lives has been enhanced.1 The benefits of modern pharmaceutical therapy have accrued mainly to the citizens of the world's more prosperous nations. United Nations staff have estimated that average purchases per capita of modern pharmaceutical products (excluding traditional medicines) in 1990 (calculated at prevailing exchange rates) in diverse parts of the world were as follows:2 North America $123.90 European Community 102.90 Other Western Europe 85.70 Japan 276.60 South and East Asia 5.00 China 4.80 Latin America 20.30 Sub-Saharan Africa 3.30 A rough extrapolation of these figures reveals that the 73 percent of the world's 1990 population located in south and east Asia, including China, Sub-Saharan Africa, and Latin America, consumes only 16.2 percent of modern pharmaceutical output by dollar volume. One consequence of the inadequate purchasing power that limits such nations' ability to consume pharmaceuticals is a higher rate of morbidity and debility, which in turn impairs the growth of income so that pharmaceuticals can be afforded-a vicious cycle. Nearly all of the research-oriented pharmaceutical companies responsible for innovations in drug therapy have their home bases in the United States, the European Community nations, or Japan, where demand is most intense and highly able scientists interacting with first-rate universities are at hand. Excepting those of Japan, the research-oriented pharmaceutical companies are among the most multinationally oriented enterprises in the world. Discovering a new drug and carrying it through the tests required to obtain marketing approval from regulatory agencies in the United States and Europe costs upwards of $100 million per successful new chemical entity. Once such a large investment has been made, there are powerful incentives to obtain requisite regulatory approvals in other nations and sell the product as widely as possible. Foreign markets are served both by exporting, often from a tax haven such as Puerto Rico, Ireland, or Singapore, and through direct plant investment in consuming nations. According to United Nations estimates, pharmaceutical imports averaged 8.2 percent of domestic consumption during 1989 in developed nations and 19.8 percent in less-developed nations.3 In 1980, approximately 27 percent of the world's d,:mand was satisfied through local production by foreign-owned companies.4 Since then, the extent of multinational operation has increased, in part due to numerous crossborder mergers. In 1995, members of the Pharmaceutical Research and Manufacturers of America trade association recorded prescription drug sales of $65 billion within the United States and $37 billion outside the United States.5 Most of the R&D outlays incurred by pharmaceutical companies are made to discover therapeutically interesting molecules and prove their efficacy and safety through extensive human trials-i.e., to create knowledge that approximates what economists call a pure public good. …

Journal ArticleDOI
TL;DR: In a competitive environment, established cultural institutions need to justify their activities and to provide measurable indications of success when applying for public and private funds as mentioned in this paper, while there is much less tangible information on the economic, political, or public impact of our institutions.
Abstract: In a competitive environment, established cultural institutions need to justify their activities and to provide measurable indications of success when applying for public and private funds. Science centers are part of the movement striving to enhance public understanding of science. The educational aspects of science centers have been the subject of numerous studies, while there is much less tangible information on the economic, political, or public impact of our institutions. There is clear evidence that learning behaviors occur in non-formal settings. Crude assessments of the economic contribution by a cultural institution to the local economy can fairly easily be made. These include the direct purchasing power of the institutional budget and the salaries that the employees get, and an estimate of the direct costs related to the visits. An indication of the impact on local communities may be estimated from the attendance figures as a percentage of the total metropolitan population. Science centers tend to attract media attention for the exhibitions, programs, and events that they stage. This can be measured. The impact on the local economy, on political agendas, and on public perception of science has been only rudimentarily studied. Methods have not been developed, nor have the critical questions been clarified. More research, including compilation of existing scattered proprietary data, is needed. An active role in promoting a research agenda, or at least in compiling and accessing relevant data, could be taken by the professional organizations of science centers.

Journal ArticleDOI
TL;DR: In this paper, the authors argue that if today's governing principles that inspire policy choices and priority setting in our societies (which claim to be "knowledge-based societies") are to remain in place in the course of the coming five to ten years, the relative position of the less developed regions (and cities) vis-a-vis the most developed ones will again deteriorate, even though per capita real purchasing power might also slightly increase in the less developing regions.
Abstract: The thesis here submitted for debate and criticism is as follows: if today's governing principles that inspire policy choices and priority setting in our societies (which claim to be “knowledge- based societies”) are to remain in place in the course of the coming five to ten years, the relative position of the less developed regions (and cities) vis-a-vis the most developed ones will again deteriorate, even though per capita real purchasing power might also slightly increase in the less developed regions. The if-hypothesis, however, is not the only possible pattern of future developments. Because present economic and political leaders are, in general, the promoters and supporters of today's predominant principles, the only way to make possible alternative future developments based on solidarity, sustainability and democracy is that citizens themselves take the initiative, locally and globally, to modify present practices and define new goals and new priorities. In consideration of the results obtained in recent years by civil social movements and protests, one may reasonably consider it as a possible scenario.


01 Jan 2000
TL;DR: In this paper, the commercial sector plays an important role in national family planning markets even in countries where contraceptive prevalence is low, and that commercial sector does not always develop coincidentally as prevalence grows or as the program matures.
Abstract: Using Demographic and Health Surveys data for 45 countries this paper demonstrates that the commercial sector plays an important role in national family planning markets even in countries where contraceptive prevalence is low and that the commercial sector does not always develop coincidentally as prevalence grows or as the program matures. It also examines three sets of factors to explain variations in commercial market share across countries namely: microeconomic or household factors macroeconomic or business climate factors and programmatic factors. Commercial market share for family planning is related to many factors. The cross-national analysis shows that broad-based purchasing power improved knowledge of reproductive health critical densities of population and appropriate public policy are each associated with relatively strong commercial sectors. This paper recommends that public health policymakers take steps to integrate the commercial sector into their programs by developing economic and policy environments supportive of its expansion. Factors for which key policy support may be able to generate increased use of the commercial sector for family planning are also identified.

Journal ArticleDOI
TL;DR: In this article, the implications for textbook publishing in Kenya under a new policy on textbook procurement was addressed, and the main aim of the policy was to transform a largely government run publishing system by liberalising the textbook market through private sector participation.
Abstract: This article will address the implications for textbook publishing in Kenya under a new policy on textbook procurement. The new policy was launched in September 1998. The main aim of the policy was to transform a largely government run publishing system by liberalising the textbook market through private sector participation. This would give schools and parents the freedom to choose the books to be used in their schools. With continuing reduction in government textbook expenditure (since 1988), it will remain to be seen whether parents have enough purchasing power to buy books. The intensity of marketing to schools and parents will have to be stepped up by publishers if they are to succeed in the more competitive market.

Journal ArticleDOI
TL;DR: In this article, the authors studied the endogenous determination of pricing to market, in a real option model with time dependent transportation costs, where the future terms of trade are random, and they explained why relative PPP should hold more tightly in emerging markets, and why pricing-to-market would be observed more frequently in the OECD countries.
Abstract: This paper explains why relative PPP should hold more tightly in emerging markets, and why pricing to market would be observed more frequently in the OECD countries. It studies the endogenous determination of pricing to market, in a real option model with time dependent transportation costs, where the future terms of trade are random. Allowing time dependent transportation costs adds a dimension of investment to the pre-buying of imports, implying that financial considerations determine the frequency of pricing to market, and the deviations from relative PPP. If the expected discounted cost of last minute delivery is higher than pre-buying, one exercises the option of spot market imports if the realized terms of trade are favorable enough. Pricing to market is observed in countries characterized by low terms of trade volatility and low financing costs. In these circumstances, imports are pre-bought, and the spot market for imports is inactive. In countries where the financing costs and the terms of trade volatility are high, few imports are pre-bought, the price of imports is determined by the realized real exchange rate, and a version of relative PPP holds. With an intermediate level of terms of trade volatility and of financing costs, a mixed regime is observed. If the realized real exchange rate is weak, pricing to market would prevail, increasing consumers' welfare by shielding them from the adverse purchasing power consequences of weak terms of trade. If the realized real exchange rate is favorable enough, more imports are purchased in the spot market, and the relative PPP would hold. Higher financing costs increase the cost of pre-buying imports, reducing thereby the frequency of pricing to market, increasing the expected relative price of imports, reducing the expected deviations from relative PPP, and reducing welfare.

Posted Content
TL;DR: In this article, the volume and commodity structure of EU trade with the transition countries in central and eastern Europe (CEECs) is estimated on the assumption that it will follow the pattern of trade among market economies.
Abstract: The volume and commodity structure of EU trade with the transition countries in central and eastern Europe (CEECs) is estimated on the assumption that it will follow the pattern of trade among market economies. A gravity-type approach at the level of product groups is used, combining geography and factor-proportions theory of international trade. It is shown that there is still considerable potential for a further rise in East-West trade if the CEECs' national product is valued at purchasing power parities, instead of market exchange rates. Considering divergent income levels and distance between East and West, the EU's comparative advantages are in specialised-supplier, scale-intensive and science-based goods, whereas the CEECs' comparative advantages are in labour-intensive and resource-intensive goods. The intersectoral specialisation pattern will become "flatter" and the share of intra-industry trade will grow when the income differentials decrease.

Patent
07 Aug 2000
TL;DR: In this paper, an unplanned event prevents a power seller from meeting all or part of its obligations under a power supply contact, which gives rise to a need on the part of the seller, or the buyer purchasing power from the seller to purchase power at market price, by issuing an insurance policy.
Abstract: A method for insuring against risks in a restructured energy industry, wherein an unplanned event prevents a power seller from meeting all or part of the power seller's obligations under a power supply contact which gives rise to a need on the part of the seller, or on the part of the power buyer purchasing power from the seller, to purchase power at market price, by issuing an insurance policy (103) pursuant to which an insurer is obligated to indemnify an insured, the seller or buyer of replacement power, if the market price for replacement power exceeds the insurance price, and a computer-implemented system (101) for generating the insurance policy (103).

Posted Content
01 Jan 2000
TL;DR: The authors pointed out that the minimum wage actually creates unemployment for the unskilled, and that it is a positive hann to those at the bottom of the labor market, rather than benefiting them.
Abstract: There is perhaps no greater cognitive dissonance thari that which exists between the view that economists and non economists have about the minitniini wage law. According to the latter; most recently articulated by President Clinton in an attempt to raise the level of coverage from $5.15 to $6.15, this law is all that stun& betweri pQorer working Americans and a continued loss in the purchasing power of their salaries. However; as the present paper points out, this is a stlare arid a delusion. The minimum wage actually creates unemployment for the unskilled. Far from benefitting them, it is a positive hann to those at the bottom of the labor market.

Journal ArticleDOI
TL;DR: In particular, after a money injection, the purchasing power of all nominal balances is reduced, which leads households to increase leisure as discussed by the authors, which is the so-called inflation tax effect.
Abstract: Many economists agree that there exists empirical evidence for the existence of a positive and long-lasting effect of monetary shocks on output in the short-run. For instance, Sims and Zha (1995) or Christiano, Eichenbaum and Evans (1996) found such evidence for the US economy, and Sims (1992) and Bee and Hairault (1993) provide some empirical support for a positive and long-lasting hump-shaped response of output on US and European data. Any model that aims at explaining the Business Cycle should be able to account for these stylized facts. The basic cash-in-advance business cycle model (Cooley and Hansen (1989)) fails to account for these facts. In particular, it predicts an instantaneous fall in output following a positive money growth shock. Indeed, after a money injection, the purchasing power of all nominal balances is reduced, which leads households to increase leisure. This is the so-called inflation tax effect.


01 Jun 2000
TL;DR: In this article, the authors investigated the impact of heterogeneous outside options on the bargaining process and hence on the purchasing power of money and showed that a tight money policy engineered by open market operations can be inflationary even when the real interest rate is less than the growth rate of the economy.
Abstract: The dissertation consists of three essays on macroeconomic theory The first essay investigates monetary theory with special attention given to bilateral strategic bargaining It uses a version of the search-theoretic model of money developed by Kiyotaki and Wright (1991) to study the implication of agents’ strategic behavior on the purchasing power of money The dependence of agents’ preferences on the quality of match as well as the quantity consumed is considered in order to study the impact of heterogeneous outside options on the bargaining process and hence on the purchasing power of money The model naturally gives rise to price dispersion due to endogenously dispersed outside option values The purchasing power of money thus depends not only on what it will buy in the future, but also on who matches with whom Strategic bargaining and Nash solutions do not coincide even in a steady state Strategic bargaining results in a higher market volatility than does Nash bargaining because the values of outside options are match-specific and Nash bargaining does not use all of the information provided by the market The second essay reconsiders the link between tight money policies and inflation in the spirit of Sargent and Wallace’s (1981) influential paper “Some Unpleasant Monetarist Arithmetic” In contrast to the previous results, this essay shows that a tight money policy engineered by open market operations can be inflationary even when the real interest rate is less than the growth rate of the economy The key to

Book
01 Jan 2000
TL;DR: In this article, the authors argue that domestic debt has redistributed income in the wrong direction: from the poor to the rich (and from Egyptians to foreigners), and that food subsidy is one of the policy measures used by the government to redistribute some of the purchasing power from the rich to the poor.
Abstract: The first study in this issue argues that domestic debt has redistributed income in the wrong direction: from the poor to the rich (and from Egyptians to foreigners). The second argues that food subsidy is one of the policy measures used by the government to redistribute some of the purchasing power from the rich to the poor. Cairo Papers in Social Science, Vol. 23 No. 1.

Journal ArticleDOI
TL;DR: The authors suggests that the low dividend yield and high price-to-earnings ratio on the S&P 500 imply that investors have reduced their required return on equities, probably because they have become more comfortable with equity investments.
Abstract: It is reasonable to expect the recent performance of the domestic equity markets to continue? This article suggests that the low dividend yield and high price-to-earnings ratio on the S&P 500 imply that investors have reduced their required return on equities, probably because they have become more comfortable with equity investments. Going forward, equities are likely to earn less than the 11% compounded return enjoyed since 1926. Institutions may need to reevaluate their goals and investment strategies to better assure they maintain fund purchasing power net of spending.

22 Sep 2000
TL;DR: In this paper, the authors highlight a reality that may constitute the single most important challenge facing humankind for the coming decades: how can all the world's citizens be assured access to food supplies, health, and economic well-being, and how can these people be sustained without destruction of the remaining forest and wilderness regions? Malthusian Optimism The Declaration of Human Rights, Article 25 (1), states that "everyone has the right to a standard of living adequate for health and wellbeing for himself and of his family, adequate food, clothing, housing and medical care."
Abstract: Can the great potentials of biotechnology ensure food security and economic development in the developing world? The human race recently passed two milestones that captured brief international press coverage. Late in 1999, the world's population passed the 6 billion mark, having doubled in only 40 years, and just a few months later, India's billionth citizen was born. These milestones drew public attention to an issue of international importance: continued population growth and the threat this growth poses for global food security and Earth's ecosystems. Presently, 80 percent of the world's population resides in developing countries. Despite declining birth rates, the world populations will continue to rise, reaching between 8 and 10 billion people by the year 2050. Almost all this increase will occur in the developing countries, where population density is expected to nearly double from approximately 55 people per square kilometer (142 persons per square mile) at present, to 90 to 100 people per square kilometer (260 per square mile) by 2050. [1] These statistics highlight a reality that may constitute the single most important challenge facing humankind for the coming decades: how can all the world's citizens be assured access to food supplies, health, and economic well-being, and how can these people be sustained without destruction of the remaining forest and wilderness regions? Malthusian Optimism The Declaration of Human Rights, Article 25 (1), states that "everyone has the right to a standard of living adequate for health and well-being for himself and of his family, adequate food, clothing, housing and medical care...." Despite these idealistic words, the Food and Agricultural Organization (FAO) of the United Nations recently estimated that approximately 800 million people in the developing world do not have enough to eat. A population equivalent to North America and Western Europe combined does not have access to sufficient food to maintain body weight and perform light activities such as preparing food, caring for family members, or attaining employment. Children suffer most from undernutrition, which leaves them susceptible to disease and hinders their full physical or mental development. Surprisingly, that figure is viewed as a partial success. It actually represents a drop in real numbers and a significant reduction since the early 1970s in the percentage of the population in developing countries that suffers malnutrition. Nevertheless, the rate of progress in addressing food insecurity in the developing countries is below that set at the World Food Summit in 1996, which demands that 20 million people per year be removed from the trap of persistent hunger. Regional inconsistencies are also cause for concern. While some regions have seen significant improvements, sub-Saharan Africa is regressing, with the actual number of Africans suffering from insufficient nutritional intake increasing since 1992. [2] Present and future access to sufficient food depends not just on increasing crop yields--the so-called Maithusian optimism--but is dependent on a complex interaction of factors. The most important of these are the price and availability of agricultural products, access to employment, and the income or purchasing power of any given individual. These in turn are determined by large and small-scale economic factors, international trade policies, and uncontrollable parameters such as weather patterns. Some commentators in the industrialized North currently believe there is enough food in the world and that it just needs to be distributed better. That, in our opinion, is dangerously misleading. It is a delusion to seriously consider that the surpluses of the North can or will be sustained indefinitely to feed present and future populations in the South. Market Forces Agriculture is the foundation of human nutrition and health and the major economic activity in most developing countries. …

Posted Content
TL;DR: In this article, the authors examined the output and productivity performance of the transport and communication sector in South Korea and Australia, from 1990 to 1998, and introduced a method for derivation of appropriate currency converters or purchasing power parities (PPPs) to enable quantification of output at various disaggregated levels.
Abstract: This paper examines the output and productivity performance of the Transport and Communication sector in South Korea and Australia, from 1990 to 1998. The aim of the paper is two-fold. First, the paper is the first in a series which compares the performance of various industries within the service sector. Second, it introduces a method for derivation of appropriate currency converters or purchasing power parities (PPPs) to enable quantification of output and productivity at various disaggregated levels. This method is based on the industry-of-origin approach as refined by the International Comparisons of Output and Productivity (ICOP) project based at the University of Groningen.