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Showing papers on "Purchasing power published in 2014"


Journal ArticleDOI
TL;DR: In this paper, the authors explore the impact of reduced transaction costs on risk sharing by estimating the effects of a mobile money innovation on consumption, and find that, while shocks reduce consumption by 7 percent for nonusers, the consumption of user households is unaffected.
Abstract: We explore the impact of reduced transaction costs on risk sharing by estimating the effects of a mobile money innovation on consumption. In our panel sample, adoption of the innovation increased from 43 to 70 percent. We find that, while shocks reduce consumption by 7 percent for nonusers, the consumption of user households is unaffected. The mechanisms underlying these consumption effects are increases in remittances received and the diversity of senders. We report robustness checks supporting these results and use the four-fold expansion of the mobile money agent network as a source of exogenous variation in access to the innovation. (JEL E42, G22, O16, O17, Z13) In developing countries, informal networks provide an important means by which individuals and households share risk, though the insurance they provide is often incomplete. Economists have proposed a number of reasons for this incompleteness, including information asymmetries, which manifest in problems of moral hazard, and limited commitment, both of which induce positive correlations between realized income and consumption. In this article we emphasize a complementary source of incompleteness: transaction costs—literally, the costs of transferring resources between individuals. We test the impact of transaction costs on risk sharing by analyzing data from a large panel household survey that we designed and administered in Kenya over a three-year period to capture the expansion of “mobile money.” This financial innovation has allowed individuals to transfer purchasing power by simple short messaging service ( SMS) technology and has dramatically reduced the cost of sending money across large distances. Mobile money is a recent innovation in developing economies—one of the first and most successful examples to date is Kenya’s “M-PESA.” 1 In just four years after its

729 citations


Journal ArticleDOI
TL;DR: This paper established long-term trends in the purchasing power of the wages of unskilled workers and developed estimates for GDP per capita for medieval Egypt and Iraq, and argued that the environment of high wages that emerged after the Justinian Plague contributed to the Golden Age of Islam by creating demand for higher income goods.
Abstract: This study establishes long-term trends in the purchasing power of the wages of unskilled workers and develops estimates for GDP per capita for medieval Egypt and Iraq. Wages were heavily influenced by two long-lasting demographic shocks, the Justinian Plague and the Black Death and the slow population recovery that followed. As a result, they remained above the subsistence minimum for most of the medieval era. We also argue that the environment of high wages that emerged after the Justinian Plague contributed to the Golden Age of Islam by creating demand for higher income goods.

79 citations


Posted Content
TL;DR: The authors argue that the optimal monetary rule is a nominal GDP (NGDP) target, or something closely related, and they point out that the long-run stability of the price level is the most powerful argument in favor of the gold standard and that some of the worst outcomes were accompanied by unfortunate government intervention.
Abstract: The history of central banking is a story of one failure after another. This record does not mean that our actual monetary regimes have been the worst of all possible regimes--far from it. But it does mean that we can improve policy by learning from experience. Every proposed reform is a response to a previous failure, an implicit display of lessons learned. A big part of this story has been the search for a robust monetary system that could produce good outcomes under a wide variety of conditions, without having to rely on a central bank run by a benevolent and omniscient philosopher king. It is a search for a monetary rule that can provide the appropriate amount of liquidity to the economy, under widely differing conditions. In this article, I argue that the optimal monetary rule is a nominal GDP (NGDP) target, or something closely related. To understand the advantages of this approach, it helps to see how the theory and practice of central banking have changed over time--that is, to see what went wrong with some previous monetary regimes, and how past reformers responded to those failures. The Gold Standard It is not hard to see why gold and silver were used as money for much of human history. They are scarce, easy to make into coins, and hold their value over time. Even today one finds many advocates of returning to the gold standard, especially among libertarians. At the same time most academic economists, both Keynesian and monetarist, have insisted we can do better by reforming existing fiat standards. It is easy to understand this debate if we start with the identity that the (real) value of money is the inverse of the price level. Of course, in nominal terms a dollar is always worth a dollar, but in real terms the value or purchasing power of a dollar falls in half each time the cost of living doubles. During the period since we left the gold standard in 1933 the price level has gone up nearly 18-fold; a dollar today has less purchasing power than six cents back in 1933. That sort of currency depreciation is almost impossible under a gold standard regime; indeed the cost of living in 1933 wasn't much different from what it was in the late 1700s. This long-run stability of the price level is the most powerful argument in favor of the gold standard. The argument against gold is also based on changes in the value of money, albeit in this case short-term changes. Since the price level is inversely related to the value of money, changes in the supply or demand for gold caused the price level to fluctuate in the short run when gold was used as money. Although the long-run trend in prices under a gold standard is roughly flat, the historical gold standard was marred by periods of inflation and deflation. (1) Most people agree on that basic set of facts, but then things get more contentious. Critics of the gold standard like Ben Bernanke point to periods of deflation such as 1893-96, 1920-21, and 1929-33, which were associated with falling output and rising unemployment. This is partly because wages are sticky in the short run (see Bernanke and Carey 1996; Christiano, Eichenbaum, and Evans 2005). Supporters point out that the U.S. economy grew robustly during the last third of the 19th century, despite frequent deflation and a flawed banking system that was susceptible to periodic crises. They note wages and prices adjusted swiftly to the 1921 deflation, allowing a quick recovery. Countries with more stable banking systems, such as Canada, did even better. The big bone of contention is whether the Great Depression should be blamed on the gold standard or meddlesome government policies (see Cole and Ohanian 2004). My own research suggests the answer is "both" (see Silver and Sumner 1995). I do see some weaknesses in the arguments put forth by advocates of the gold standard. It is true that some of the worst outcomes were accompanied by unfortunate government intervention, particularly during the 1930s (see Cassel 1936 and Hawtrey 1947). …

65 citations


Proceedings Article
18 Jul 2014
TL;DR: A three-week experiment in search of price discrimination in airline tickets does not find any evidence for systematic price discrimination, and alternative explanations for the observed price differences are provided.
Abstract: Price discrimination refers to the practice of dynamically varying the prices of goods based on a customer's purchasing power and willingness to pay. In this paper, motivated by several anecdotal ac-counts, we report on a three-week experiment, conducted in search of price discrimination in airline tickets. Despite presenting the companies with multiple opportunities for discriminating us, and contrary to our expectations, we do not find any evidence for systematic price discrimi-nation. At the same time, we witness the highly volatile prices of certain airlines which make it hard to establish cause and effect. Finally, we provide alternative explanations for the observed price differences.

54 citations


Journal ArticleDOI
TL;DR: In this paper, the authors pointed out that steady slow economy growth rates of most mature, saturated markets will also heavily affect global demand and provision of health care services as well as other economy branches, and they overtly recommend to multinational companies dealing with health care to focus on emerging markets and BRICs in particular if they are willing to survive.
Abstract: Acronym BRIC was created 2001 with the notion of marking the most promising and huge emerging markets outside the established postwar high income economies. Brazil, Russia, India and China’s nominal GDP growth rates continue to outpace the ones of Western Europe, North America and Japan before, during and after world macroeconomic crisis. This global phenomena will also heavily affect global demand and provision of health care services as well as other economy branches. The key cause for such change is occurrence of enormously massive middle class of citizens in these countries. Their health insurance coverage is extending together with package of services covered within such plans. Not less important is the overall growth of purchasing power followed by stronger affordability of vast portion of medical goods and services commonly paid out-of-pocket by ordinary citizens. Observing the changing landscape of global health care we should take into account steady slow economy growth rates of most mature, saturated markets. This also reflects to consumer demand for health services which remains strong in rich countries but true expansion of global market size happens actually elsewhere. This is acknowledged by all major market analysis agencies. They overtly recommend to multinational companies dealing with health care to focus on emerging markets and BRICs in particular if they are willing to survive. The key target to harvest long term profits and sustainable presence among pharmaceutical industry and medical equipment manufacturers worldwide shall remain emerging market investment for a long course of years to come. KEY WORDS : BRICs, emerging markets, global, health care, demand, medical services

50 citations


Book
15 Jun 2014
TL;DR: Dowd as mentioned in this paper examines new innovations such as Bitcoin, the Liberty Dollar and e-gold and concludes that competition in this field is welcome given the lamentable history of state money which has seen its purchasing power shrink greatly over the years.
Abstract: New forms of private monies regularly hit the newspaper headlines. However, there is relatively little discussion of whether such innovations will last the pace and perform effectively the functions that we expect of money. This monograph, by one of the leading scholars in the field of private money and free banking, examines new innovations such as Bitcoin, the Liberty Dollar and e-gold. Kevin Dowd concludes that competition in this field is welcome given the lamentable history of state money which has seen its purchasing power shrink greatly over the years. However, the author also concludes that, whilst recent developments in private monetary systems are welcome and may herald a forthcoming revolution, new monies face many challenges. Some of those challenges relate to the nature of the private monies themselves. Other challenges come from law enforcement agencies that are determined to prevent competition with state money. Kevin Dowd outlines the regulatory and legal changes that will be necessary if beneficial innovation is to thrive and discusses how developments in private money are part of a more general movement amongst people who wish to reduce the role of the state in their lives. This monograph is essential reading for anybody interested in new developments in money, finance and banking.

41 citations


Journal ArticleDOI
TL;DR: Evidence is found of coherent world drug markets driven by both local realities and international relations, suggesting that relations in legal and illegal markets are directed in opposite directions.

41 citations


Journal ArticleDOI
TL;DR: In this article, the authors explored the relationship between purchasing strategies practiced by less-powerful buyers and their purchasing power and found that purchasing strategies were set in response to individual constraints from sources of purchasing power.

40 citations


Journal ArticleDOI
TL;DR: In this paper, the universality of steadily rising education expenditures among OECD nations, as predicted by "Baumol and Bowen's cost disease", was confirmed, and it was shown that this trajectory of costs can be expected to continue for the foreseeable future.

38 citations


Journal Article
TL;DR: In this paper, the authors have proposed for providing subsidy to the local industry and protect safeguard to local entrepreneurs of the poultry industry, which is one of the most promising sectors for Bangladesh.
Abstract: Poultry industry is one of the most promising sectors for Bangladesh. This industry can provide various opportunities to increase GDP growth rate plus equitable distribution through arranging food security as well as ensuring self -employment, creating purchasing power and reducing poverty at a large scale. About 44 per cent of daily human intake of animal protein comes from livestock products. The poultry industry has been supplying quality protein to the people of Bangladesh at the lowest price in the world. The study outlined major concerns focusing on the entire problems. The followings points have been finally consider as comprehensive issues; lack of quality chicks, high price of feed, marketing problem, insufficient bank loan, lack of quality vaccine, the vaccine price is very high and bird flu. It is observed that to import poultry related products huge amount of valuable foreign exchange will be spent. We have proposed for providing subsidy to the local industry and protect safeguard to the local entrepreneurs of the poultry industry. Keywords: Poultry, Problem, Prospect, Dropping, Bangladesh

37 citations


Journal ArticleDOI
TL;DR: In this paper, the authors find GPOs to be procompetitive and suggest an antitrust policy that preserves the benefits of GPO operations while protecting consumers from any competitive shortcomings, and propose an auction-based solution.
Abstract: Group purchasing organizations (GPOs) consolidate the purchasing power of their members and negotiate contracts with input suppliers on their behalf. GPOs have received attention from the Department of Justice and Federal Trade Commission because of concerns over monopsony power and standardization of hospital production costs. GPOs have been criticized in the literature for their contracting practices, which may appear to be exclusionary, and their funding mechanism, which may lead to incentive incompatibility. We analyze these competitive concerns in turn. We find GPOs to be procompetitive and suggest an antitrust policy that preserves the benefits of GPO operations while protecting consumers from any competitive shortcomings. Copyright © 2013 John Wiley & Sons, Ltd.

Journal ArticleDOI
TL;DR: The authors investigate the possibility that negative moral associations can reduce the desirability and perceived value of money, and that they do so by threatening to contaminate individuals' perceptions of their morality.
Abstract: We investigate the possibility that negative moral associations can reduce the desirability and perceived value of money, and that they do so by threatening to contaminate individuals’ perceptions of their morality. In Study 1, participants filled out fewer raffle tickets to obtain a money prize with immoral associations and perceived it to have less purchasing power than a morally neutral prize. In Study 2, we experimentally manipulated participants’ moral self-image, reasoning that ameliorating moral self-image concerns would make participants less averse to accepting morally tainted money. Consistent with this, participants who recounted a past virtuous act completed more tasks to receive monetary payment with immoral associations than participants who recounted a neutral act. These findings provide experimental evidence that immoral associations reduce the desirability of morally tainted money by threatening to contaminate the recipient’s moral self-image.

Journal ArticleDOI
TL;DR: In the case of the European Central Bank (ECBundesbank), the representative of the German Bundesbank was outvoted by the majority of the Governing Council of the ECB to pave the way for the implementation of Draghi's rescue policy.
Abstract: On 26 July 2012, the European Central Bank (ECB) issued a new currency, the “Draghi.” A country where the Draghi has the status of legal tender must be fabulously wealthy—a single coin gives unlimited purchasing power to its owner. This is one way to characterize ECB President Mario Draghi's pledge to do “whatever it takes” to save the Euro. It is widely believed that the move prevented the common currency from breaking apart. Yet, the ECB's resolve caused severe conflict within the European System of Central Banks (ESCB). A few weeks later, when the Governing Council of the ECB formally adopted the Outright Monetary Transactions (OMT) program to pave the way for the implementation of Draghi's rescue policy, the representative of the German Bundesbank was outvoted. Subsequently—in a maneuver quite unusual among central bankers—he appealed to the public to stir up support for his opposition to the policy.

Journal ArticleDOI
25 Jul 2014
TL;DR: In this article, the impact of cooperative purchasing on buyers' purchasing power in the humanitarian sector has been investigated in a case of several humanitarian organizations aiming to increase their purchasing power, but the effectiveness of the cooperative purchasing strategy is unclear.
Abstract: Purpose – The purpose of this paper is to understand the impact of cooperative purchasing on buyers’ purchasing power. Purchasing in the humanitarian sector has traditionally been characterized by a low level of coordination due to inter-agency competition for funding, diverging mandates and other organizational differences. Relationships with commercial suppliers have also remained arm's-length and often dormant due to high levels of uncertainty and strict public procurement rules and regulations. However, recent pushes for increased efficiency and effectiveness are driving humanitarian agencies toward cooperative purchasing – a purchasing strategy that is claimed to be highly beneficial for members of the purchasing consortium not least for its ability to increase buyers’ purchasing power. In reality, the effectiveness of the strategy in increasing purchasing power is unclear. Design/methodology/approach – The authors study a single case of several humanitarian organizations aiming to increase their lev...

Journal ArticleDOI
TL;DR: In this article, the authors analyzed the challenges and opportunities of the luxury market in Iran as an Islamic country and concluded that although implementing a market-oriented culture is central to marketers' success, it is not right to just focus on religion as a separating factor that can isolate the Muslim market.
Abstract: Purpose – The purpose of this paper is to analyze the challenges and opportunities of the luxury market in Iran as an Islamic country. The focus is on religion as a factor that can make some challenges for luxury products, and then to find opportunities or similarities in Muslim markets due to the luxury consumption. Design/methodology/approach – As it is a literature review article, the authors used past research works and compared different perspectives that exist about the topic. Findings – It was concluded that although implementing a market-oriented culture is central to the marketers’ success, it is not right to just focus on religion as a separating factor that can isolate the Muslim’s market. It was suggested to change one's viewpoint and analyze the market with a broader vision that can bring innovative ideas and also find similarities and differentiations between Islamic luxury markets with non-Islamic luxury markets. Originality/value – Muslim consumers have a huge purchasing power in countries...

Journal ArticleDOI
TL;DR: In this article, the authors present results of research focused on regional price levels estimation in the Czech Republic and the aim of their work is to evaluate the reliability of regional PPS indicators and raise serious analytical and political issues.
Abstract: There is probably no question that regional price levels must be taken into account when any regional analysis is done and that price levels should be reflected in regional policies as well. The current approach of most researchers and policy makers is to use regional indicators converted, for the case of EU regions, in Purchasing Power Standard (PPS). Although the PPS indicators work well for countries they probably fail for regions. The main reason is that regional purchasing power standards do not reflect actual regional price levels – there is only a national parity (price level) which is equally applied to all the regions within a country. This downgrades the reliability of regional PPS indicators and raises serious analytical and political issues. The key problem is that most regional socio-economic indicators can significantly change when regional price levels are taken into account. The aim of this article is to present results of research focused on regional price levels estimation in the Czech R...

Journal ArticleDOI
TL;DR: The authors derived the first high-frequency measure of the US labor share for the whole economy and found that the labor share has held remarkably steady indeed, but that the quasi-stability masks a sizable composition effect that is detrimental to labor.
Abstract: Economic theory frequently assumes constant factor shares and often treats the topic as secondary. We will show that this is a mistake by deriving the first high-frequency measure of the US labor share for the whole economy. We find that the labor share has held remarkably steady indeed, but that the quasi-stability masks a sizable composition effect that is detrimental to labor. The wage component is falling fast and the stability is achieved by an increasing share of benefits and top incomes. Using NIPA and Piketty-Saez top-income data, we estimate that the US bottom 99 percent labor share has fallen 15 points since 1980. This amounts to a transfer of $1.8 trillion from labor to capital in 2012 alone and brings the US labor share to its 1920s level. The trend is similar in Europe and Japan. The decrease is even larger when the CPI is used instead of the GDP deflator in the calculation of the labor share.

Patent
16 Apr 2014
TL;DR: In this article, a push method and device for commodity information is proposed, where commodity price ranges are determined according to the number of times of network behaviors on commodities by users, and can be distinguished accurately and reliably, and therefore complete price range data can be obtained.
Abstract: The invention discloses a push method and device for commodity information. According to the method, commodity price ranges are determined according to the number of times of network behaviors on commodities by users, and can be distinguished accurately and reliably, and therefore complete price range data can be obtained, and the problem that due to the fact that the price ranges of the commodities are divided according to the commodity price in the prior art, the price range data are not accurate can be solved. The purchasing power ranges of the users are determined according to the number of times of the network behaviors on the commodities by the users and the commodity price ranges, the commodity information corresponding to the purchasing power ranges of the users is pushed to the users, effective and accurate commodity information push can be carried out on the basis of the accurate and complete item price range data, and the problems that the accurate commodity information can not be searched and matched when the commodity information is pushed in the prior art, the searching and matching operation takes up system resources excessively, and the system treatment efficiency is lowered are solved.

Journal ArticleDOI
01 Sep 2014
TL;DR: In this paper, the authors define the middle class as "a segment of the population that has discretionary income at its disposal" and define it as a consuming class whose spending is not oriented solely to subsistence.
Abstract: class and the spread of modern mass marketing has long been highlighted (Coleman 1983). The ever-increasing purchasing power of the middle class has stimulated the emergence of a mass-market consumer society (Blumin 1989). Nowadays, understanding the evolution of international strategic marketing in emerging countries calls for studying the middle class there. Formulating ‘profiles’ to describe the middle class in different geographic contexts in order to make comparisons between them is an important part of this process of market representation for strategic marketing. The relation between the emergence of a middle class and marketing involves multiple levels and its study is bound to lead to the creation of theory as well as practical applications. Brands aimed mainly at middle-class members, which represents a major objective of modern worldwide retail distribution. But what is ‘the middle class’? And what are the best parameters on which to base a definition of middle class? On the one hand, it is a segment of the population that has discretionary income at its disposal. So, it is a consuming class whose spending is not oriented solely to subsistence. Moreover, its emergence is quite closely related to urbanization. However, this is just one component of the phenomenon – the tip of the iceberg. The submerged bulk of the iceberg involves its members’ education levels and occupations, and at an even more basic level, their values and expectations. Observing middle class evolution in both advanced and emerging countries today is a fundamental issue in international strategic marketing. The ongoing mega-trends involving the middle class in traditional industrial power economies, as well as the newly developing ones, mirror the processes of globalization. Such trends present a two-faced ‘Janus’ aspect, leading, on the one hand, to the creation of a transnational market with converging purchasing power, but on the other, the simultaneous persistence of many cultural differences. By way of example, although the Chinese midTRENDS IN MIDDLE CLASS AS A DRIVER FOR STRATEGIC MARKETING

Journal ArticleDOI
TL;DR: The authors examined the impact of a substantial rise in Brazil's living standards on the development of the country's large soft-drink market, during a six-year period that saw unprecedented growth in the share of generic soda brands.
Abstract: The "emerging middle class" has become a force of economic importance in many consumer markets around the globe. A striking phenomenon in some of these markets is the growth of "generic," low-price brands that compete with established premium brands over the expanding consumer purchasing power. In this paper we examine the impact of a substantial rise in Brazil's living standards on the development of the country's large soft-drink market, during a six-year period that saw unprecedented growth in the share of generic soda brands. Our demand study draws on data sources that capture both social mobility and market outcomes. Our analysis suggests that the emergence of a price-sensitive, new middle class aided the growth of the fringe. Our estimated demand model rationalizes a drastic price cut by Coca-Cola that allowed it to contain the fringe's growth.

Journal ArticleDOI
30 Jun 2014
TL;DR: The Big Mac Index has been used as a rule of thumb to determine the over- or under-valuation of international currencies based on the theory of purchasing power parity since 1986.
Abstract: The Economist magazine has been publishing the Big Mac Index using it as a rule of thumb to determine the over- or under-valuation of international currencies based on the theory of Purchasing Power Parity since 1986. According to the theory, using the Big Mac as a tradable single-good basket, the Dollar-value of the hamburger should be equalized around the world due to arbitrage. The popularity and following of the Big Mac Index led the authors to the following two questions: 1) How effective is the Big Mac price as an indicator of overall inflation? and 2) how accurate are exchange rate movement predictions based on Big Mac prices? They find that Big Mac prices tend to lag overall inflation rates, which is highly important in studies that use Big Mac prices as measures of affordability or real incomes over time. As a guide to exchange rate movements, there is support for the theory of Purchasing Power Parity, but only as a qualitative indicator of movement in the nominal exchange rate in rich and economically stable countries, proving less effective in forecasting exchange rate movements in emerging markets. The statistical analysis is carried out using data from 1986 to 2012 from The Economist and from the World Bank for 54 countries. The importance of these findings lies on the widespread use of the index and thus perpetuation of perceptions on the relative value of currencies in the areas of corporate finance, international trade and finance, and international business.

Posted Content
TL;DR: The authors microfound asymmetric household expectations using ambiguity-aversion: households, who do not know the quality of their information, overweight inflationary news and underweight deflationary news since it increases their purchasing power, and showed that monetary policy has asymmetric effects on employment, output and wage inflation in ways consistent with the data.
Abstract: Household expectations of the inflation rate are much more sensitive to inflation than to disinflation. To the extent that workers have bargaining power in wage determination, this asymmetry in their beliefs can make wages respond quickly to inflationary forces but sluggishly to deflationary ones. I microfound asymmetric household expectations using ambiguity-aversion: households, who do not know the quality of their information, overweight inflationary news since it reduces their purchasing power, and underweight deflationary news since it increases their purchasing power. I embed asymmetric beliefs into a general equilibrium model and show that, in such a model, monetary policy has asymmetric effects on employment, output, and wage inflation in ways consistent with the data. Although wages are downwardly rigid in this environment, monetary policy need not have a bias towards using inflation to grease the wheels of the labor market.

Journal Article
TL;DR: In this article, the authors employed an empirical modeling and model selection for monthly inflation in Ghana from January 2009 to December 2013 using the Box-Jenkins approach, and the results showed that ARIMA (1, 2, 1) model was appropriate for modelling the inflation rates with a maximum log likelihood value of -64.21, and least AIC value of 134,43, AICc values of 134.87 and BIC values of 140.61.
Abstract: Inflation is the persistent increase in the level of consumer prices or a persistent decline in the purchasing power of money. Inflation is of global concerns because it can distort economic patterns and can result in the redistribution of wealth when not anticipated, thus there is a need to know the pattern of inflation in the country. In this study, we employed an empirical modeling and model selection for monthly inflation in Ghana from January 2009 to December 2013 using the Box-Jenkins approach. The results showed that ARIMA (1, 2, 1) model was appropriate for modelling the inflation rates with a maximum log likelihood value of -64.21, and least AIC value of 134,43, AICc value of 134.87 and BIC value of 140. 61. An ARCH-LM test and Ljung-Box test on the residuals of the models revealed that the residuals are free from heteroscedasticity and serial correlation respectively. Ghana is likely to experience a persistence increase in inflation rate with double digit hence the government should reconsider his monetary policies. Keywords: Inflation, Box-Jenkins, Empirical, Ghana.

Journal ArticleDOI
TL;DR: In this paper, the authors discuss the concept of sustainable public procurement, reveals its main ideas and applications, and assesses the current situation in Lithuania, overviews the good practice of other countries and provides recommendations for measures to extend the application of socially oriented procurement.
Abstract: Public procurement concentrates large public sector’s purchasing power, and has a significant impact on each country’s economic development. The purpose of public procurement procedure is transparency, non-discrimination and accordance to the principles of fair competition in acquisition of goods, services and works necessary for the smooth functioning of the public administration. Besides, public procurement can be one of the most important instruments for sustainable development and other purposes useful to the whole society and the economy of the country. This article briefly discusses the concept of sustainable public procurement, reveals its main ideas and applications. One of them, the social sphere, was chosen the main object of the research. The possibility to decrease unemployment, to increase an integration of socially vulnerable group, and to achieve other socially-oriented goals through an effective implementation of the social aspect of sustainable public procurement has been illustrated. Thus, the article analyses the concept of social procurement, assesses the current situation in Lithuania, overviews the good practice of other countries and provides recommendations for measures to extend the application of socially oriented procurement.

Journal ArticleDOI
TL;DR: In this article, the authors show that an increase in income inequality associates with higher purchasing power of the poor, and that the poor can benefit from price changes induced by higher income inequality.
Abstract: We show theoretically that the poor can benefit from price changes induced by higher income inequality. As the number of poor increases, the market for products aimed toward the poor grows, and such products become more profitable. As a result, there are circumstances where an increase in income inequality associates with higher purchasing power of the poor. Using cross-country data on the price of one kilogram of rice and the price of a Big Mac hamburger, we confirm a negative association between income inequality and the price of inferior goods, robust to the inclusion of a large set of control variables. Results are also robust to a first difference specification and to a two-stage instrumental variables approach. Examining economic well-being, it is thus important to analyze not only the incomes of households, but also the prices of the products and services that they buy.


Posted Content
TL;DR: In this article, the authors examined the relationship between unit labor costs and price developments for the whole economy and for the main sectors for the period 2000-2013 and concluded that raising productivity is the critical factor that will improve the competitiveness of the economy.
Abstract: In recent years, the rate of change of prices in the Greek economy does not seem to react proportionately to large reductions in wage costs cuts in the effort for fiscal consolidation and improving competitiveness. The disconnection between of price and wage developments makes harder the functioning of the monetary policy transmission channel. The proper function of the latter is important as hastens the target adjustments in terms of competitiveness and consumer purchasing power, thus supporting the growth and stability of the economy. This study examines the relationship between unit labor costs and price developments for the whole economy and for the main sectors. For the period 2000-2013 the econometric investigation provides evidence that prices and unit labor costs are characterized by a long-run equilibrium relationship and that for the whole economy, prices influence the development of unit labor costs, and vice versa. But for the period 2010-2013, the empirical findings show that the overall economy and particularly in the industrial sector, changes in unit labor costs have been largely disconnected from those prices, resulting in a profit margin to grow. The large reduction in unit labor costs is primarily due to the reduction in nominal compensation per employee and not an increase in labor productivity. Concluded that raising productivity is the critical factor that will improve the competitiveness of the economy, since the benefits of a possible further reduction of wages is ambiguous, and, moreover, such a policy would lead to a loss of social cohesion.

01 Jan 2014
TL;DR: In this paper, the authors focused on the analysis of competitive within the fast-moving consumer goods (FMCG) sector, and drew lessons for competition policy, and aimed at shedding light on competitive conditions prevailing in the FMCGs retail trade sector.
Abstract: The fast-moving consumer goods (FMCG) sector is an important contributor to India's GDP. Fast moving consumer goods (FMCGs) constitute a large part of consumers' budget in all countries. This study is aimed at to shed light on competitive conditions prevailing in the FMCGs retail trade sector. This study also focused on the analysis of competitive within the sector, and draws lessons for competition policy. FMCG Industry is characterized by a well established distribution network, low penetration levels, low operating cost, lower per capita consumption and intense competition between the organized and unorganized segments. India's FMCG sector creates employment for more than three million people in downstream activities. It is currently growing at double-digit rate and is expected to maintain a high growth rate. Indian buyers were a bit conservative partly due to lesser disposable income and partly due to fewer competitive and more variety of products. Food inflation could restrict consumers' demand and pricing flexibility for FMCG while lowering consumers' purchasing power that diverts purchases away from certain FMCG.

Journal ArticleDOI
TL;DR: The impact of inflation on the purchasing power of the Tunisian consumer and see the new mode of governance after the revolution is discussed in this article, where the authors aim to show the impact of the dinar's devaluation on purchasing power.

Book ChapterDOI
01 Jan 2014
TL;DR: In this article, the authors study how buyers with low purchasing power, how they buy what they need, and how their decisions affect their power, and the constraints from power relations.
Abstract: Power is a complex concept in any relationship. Its relative, perceptive, intangible, context dependent, and multifaceted nature has made it difficult to study. In this research, the aim was not to study power per se, but to study purchasing in light of the existing constraints from power relations. This PhD dissertation is about buyers with low purchasing power, how they buy what they need, and how their decisions affect their power.