Purchasing power

About: Purchasing power is a research topic. Over the lifetime, 2714 publications have been published within this topic receiving 36866 citations. The topic is also known as: adjusted for inflation.

The Development of Mortgage Finance in China

Abstract: IntroductionAwell-functioning housing finance system will benefit the economy through prosperous real estate development, construction sector employment, more efficient resource allocation, and lower macroeconomic volatility.(1) In particular, as mortgages are essential to enhance buyers' purchasing power and expedite the path to homeownership, many countries have committed to financial innovations creating robust mortgage markets in the past decades. However, the Global Financial Crisis (GFC) around 2008 showed that while innovative financial products can help households achieve the dream of homeownership, they might have adverse effects on the housing and financial sectors and even on the overall economy.China is transitioning from a socialist central planned economy to a market economy, and both its financial and housing development are still in their early stages. This makes the development of the housing finance system more fundamental and more challenging than in market economies. Along with the flourishing housing development that began in the 1990s, the residential mortgage sector grew rapidly in the 2000s, becoming a financial engine for the housing boom. (2) In September 2014, the Chinese government proposed developing a secondary mortgage market with mortgage-backed securitisation (MBS) (3) to ease the capital shortage problem in the banking system and to reverse the housing downturn that began at the end of 2013. As the global economy remains in the shadow of the GFC triggered by problems in the subprime mortgage markets in the United States, many scholars doubt this strategy and pose several questions: Will MBS development lead to a similar economic crisis in China? Is China ready for the development of a secondary mortgage market under its existing institutions, norms, and regulations? And how is the role of housing justified in the overall socio-economic development?Updated studies on the Chinese mortgage system, particularly on the secondary market, remain a neglected aspect in the growing English literature on Chinese housing research. This paper tries to fill this gap through a comparative analysis of the current Chinese mortgage market with the markets before or in the early stage of GFC in some advanced economies that had seen the most prosperous development of the mortgage market but suffered most from the GFC. The purpose of the study is to inform market participants and policy-makers in China about the range of mortgage product offerings available in other countries, and to explore the potential and rigidities of development of the secondary mortgage market in China at present state.The development of housing finance in ChinaThe restructuring of the housing finance systemThe housing finance system before the 1980s was simple. Under the central planning regime, the private housing market and residential mortgage lending were absent. Housing was treated as a social welfare product funded and delivered by the government and its agencies (e.g., state-owned enterprises and housing bureaus). This institutional design put huge financial burdens on the government and led to insufficient housing provision nationwide. The average living space per capita decreased from 4.5 m2 in 1952 to 3.6 m2 in 1978, much lower than that in many other countries, e.g., 18 m2 in the United States, 15 m2 in Singapore, 13 m2 in Japan, and 13 m2 in the Soviet Union around 1978. (4)The economic reforms that began in 1978 restructured the housing system by privatising existing welfare housing and introducing a private housing market. The government adopted a variety of strategies to expand funding sources for housing to reduce dependence on the government for housing development. Housing savings banks and the Housing Provident Fund (HPF) were the major innovations in the 1980s and early 1990s.In October 1987, the first housing savings bank, Yantai Housing Savings Bank, was established in Shandong Province. …

Domestic Food Aid Programs

Abstract: This chapter presents facts about various food aid programs, their costs, the number of people they serve, and controversial policy issues surrounding the individual programs. It discusses the benefits to direct recipients, producers, and to society and explores future expectations for food aid. Since prices that are reasonable to most households may not allow low income households to secure adequate nutritious food, special food aid programs are designed to prevent hunger and suffering and to invest in human capital. The original objective of US food aid programs, in the 1930s, was to provide a way to dispose of surplus agricultural commodities purchased by the government in order to stabilize farm prices and incomes. Food aid programs in the United States are a mixture of the last two, delivering food and/or purchasing power. Domestic food aid is largely financed through federal programs which are administered at the state and local levels.

Incentive models of the labour market

Abstract: Globalization has entered a new stage, with new and varying constellations of winners and losers and thus, calls for a new policy paradigm. In contrast to the traditional way of thinking - the welfare state redistributes purchasing power to the disadvantaged to support them in the event of adverse shocks - now workers must be made more adaptable and be encouraged to stabilize themselves if hurt from globalization. This dissertation examines several labour market policies with various incentive models of the labour market, which explain the microeconomic decisions relevant to the transitions in the labour market in terms of the incentives that economic agents face. To fulfil its new role the following three reform policies for the welfare state are analysed: Unemployment accounts, employment subsidies and flexicurity. Finally, a new modelling strategy of two-sided search with frictions and heterogeneities, which is able to account for empirical stylized facts, is proposed for future policy analysis and prediction.

Latin America’s First Export Era: Reassessing Its Economic Contribution

Abstract: This initial chapter offers the general framework for the collective research project whose results are presented in this volume. It summarizes central proposals from conventional and current interpretations of Latin America during the first export era that have moved us to undertake this endeavor. Then, it describes the set of parameters that contributors employ in order to assess the economic contribution of exports in the seven study cases that conform this volume. They include descriptive indicators (nominal and real value series, terms of trade) and a set of analytical parameters on exports, like their direct contribution to economic growth, their purchasing power and return value, positive externalities, linkages with industrial and other activities, and energy transition.

Purchasing Power Disparity: Who Could Consume More before 1914?

Abstract: Economic historians' Divergence debates since 2000 have asked a different question from that asked by Angus Maddison. The issue has become "when did countries' contemporaneous purchasing powers diverge?", not "when did countries' productivity grow at different rates?" The two questions have different answers, especially before 1914. Using pre-1914 current-price comparisons of real purchasing powers on six continents, this article sketches some historical geography of the departures from the conventional Maddison estimates. The underlying reason for the divergence between projections back from 1990 and current-price comparisons from long ago is that before the great 1870-1914 wave of trade globalization, consumer staples were not traded over great distances, and regions specialized in narrow luxury trade. Inter-continental price ratios for subsistence goods thus varied more widely than since 1914. The new measures open up a new economic history of international and intra-national differences in purchasing power before 1914. Northwest Europe was further ahead of Asian countries than earlier measures have shown, apparently due to a Gerschenkron effect in the Maddison approach. On the other hand, Northwest Europe was behind America and Australia across the nineteenth century.