Applied Economics Letters

Antioch, Gerard

doi: 10.1080/758529495pmid: N/A

This paper uses cointegration and error correction modelling to investigate how Governments across the Tasman have corrected fiscal imbalances. Australian Governments have used revenue and expenditure adjustments to correct long term fiscal imbalance. In the short term, however, taxes constrain spending in Australia. In New Zealand, expenditure adjustments are relied upon to correct long term fiscal imbalance. Thus, in neither country it could be said that spending priorities predominately drive decisions to raise taxes.

Felipe, Jesus

doi: 10.1080/758529496pmid: N/A

This paper discusses McCombie's (1987) empirical evidence on the Simon–Shaikh critique. It is argued that while the theoretical argument is correct, the evidence presented depends on the adjustment of the stock of capital for capacity utilization. Probably factor shares are not sufficiently constant in this data set for the Cobb–Douglas form to provide a good approximation to the accounting identity.

Theodossiou, I.; Yannopoulos, A.

doi: 10.1080/758529497pmid: N/A

This paper analyses the factors affecting the duration of an unemployment spell for primary and secondary workers. It evaluates the pattern of hazard rates for exit from unemployment after taking into account the effects of person-specific heterogeneity and shows that workers employed in the lower-tier sector have longer unemployment spells than the remainder.

Govindasamy, Ramu; Jin, Songqing

doi: 10.1080/758529498pmid: N/A

Seemingly Unrelated Regression models were used to examine the factors that influence the corn acreage in selected states in the US. Planted acre was modelled as a function of lagged planted acres, lagged production, and lagged price for states California, Florida, New Jersey, New York, Pennsylvania, and the US. States such as New Jersey and New York which have a short growing season compared to California and Florida. Also there is a notion that the small acreage in New Jersey is affected by production from other states such as California, Florida, New York, and Pennsylvania. The results indicate that lagged planted acreage significantly contributes toward current planted acres of sweet corn in all the five states and in the US. Production lag significantly contributes toward planted acres only in New York. Finally, the price lag significantly contributes toward planted acres in New York and Pennsylvania. The sign of the significant variable indicates that the current planted acre is positively influenced by the lagged planted acres, production lag and the price lag.

Kambhampati, Uma S.

doi: 10.1080/758529499pmid: N/A

Firms strive to become industry leaders for a number of reasons including the market power that such a position endows upon them, the prestige relating to it as well as the increase in profits that it often results in. In this paper, we concentrate on the duration of survival of leaders and on the factors that influence it. To facilitate our investigation, we use duration analysis to estimate a survival function, both with and without time varying covariates. Our results indicate that, on average, in India, a firm maintains its leadership position for approximately five years (though this is significantly higher in the ‘high concentration ratio industries’). Its survival fits a logistic distribution best, implying that the hazard of failure is nonlinearly related to time. On the one hand, the size of the firm itself, its previous experience in leading the industry and economies of scale in the industry all extend the duration of leadership. On the other hand, the larger the size of the firm's rivals and the larger its profits relative to the industry average, the shorter its duration of survival at the top.

Hasan, Mohammad

doi: 10.1080/758529500pmid: N/A

This paper re-examines the relationship between alternative monetary aggregates (M0 and M4) and other macroeconomic variables in the United Kingdom. The results of a five-variable VAR analysis are indicative of bidirectional causality between each of the monetary aggregates and real output. Our findings of a feedback relationship between M0-real income, and M4-real income makes each of the monetary aggregates a poor intermediate target variable. Moreover, contrary to most research work in this area, we find a feedback relationship between M0 and prices which appears to support the monetary accomodation hypothesis.

Neves, Pedro Duarte

doi: 10.1080/758529501pmid: N/A

This note describes two alternative approaches to identify the parameters that characterize intertemporal female labour supply, allowing for uncertainty, nonparticipation and nonseparability. Econometric results indicate that the choice of functional forms is one of the most important issues in the empirical analysis of labour supply.

Dutt, Swarna D.

doi: 10.1080/758529502pmid: N/A

This paper undertakes a study of the Purchasing Power Parity doctrine as a long run equilibrium condition among a highly economically integrated set of nations, namely members of the European Monetary System (EMS). Here we examine the bivariate cointegration properties of the intra-EMS spot exchange rate series and their price ratios, using the modern null of cointegration approach. Our results support the parity hypothesis within the union.

Freeman, Donald G.

doi: 10.1080/758529503pmid: N/A

The issue of stationarity is a critical one in time series modelling. Tests designed to detect unit roots are sensitive, however, to model specification. While it has previously been shown that the presence of moving average errors may adversely affect the size of Dickey–Fuller type tests for stationarity in finite samples, this paper demonstrates that the order of the moving average process is also important. Critical values of unit root tests for MA(2) processes are shown to be larger than comparable values for MA(1) processes, which are in turn larger than Dickey–Fuller values. Consumer Price Inflation is estimated as an MA(2) process and is tested for stationarity using the computed critical values for time series with MA(2) errors.

Waller, Eddy

doi: 10.1080/758529504pmid: N/A

With public spending subject to increasing security, the private sector has grown in influence in providing welfare. The public and private mix of welfare has been theorized in many academic disciplines but has not received full quantitative application. This letter attempts an estimation of the average costs of in-patient stay in each sector and finds that the public sector offers the greater efficiency using this measure. It goes on to calculate the number of treatments that would be possible if all health resources were allocated to the public sphere.