This paper investigates empirically the effects of established country-to-country trade on income convergence across countries. Using the β-convergence criterion we demonstrate that poorer economies grow faster than richer economies with international trade. Consequently, we find empirical evidence of a convergence in per capita income among richer and poorer countries. Monte Carlo models are estimated to simulate the characterization of β-convergence in randomly created trading groups of 8 to 23 member countries’ economies. Our results indicate that income convergence is less likely to occur in our randomly created trading partnerships than in those that are formed as part of existing trade relationships. This result reaffirms the argument that countries that have established trade relationships are more likely to experience income convergence than countries that lack such trade relationships. Additionally, our research provides new empirical evidence on the impact of international trade on economic growth in general. This information is particularly valuable for the current analyses of the costs and benefits of restricting international trade in the U.S. and elsewhere.

Riparian Zone Protection: The Use of the Willingness-toAccept Format in a Contingent Valuation Study

∗This paper analyzes two channels through which a change in labor income tax may affect output. First, a tax cut provides higher work incentives, thereby increasing the aggregate output through an increase in the aggregate labor supply. Second, a tax-cut increases disposable income and the aggregate demand. An increase in the aggregate demand leads to a higher level of aggregate output. The first channel is believed to have a permanent effect on output movements, while the latter has only a temporary effect. This paper captures these two effects by defining two disturbances on the basis of the existing economic theory.

This paper examines association between the cyclical component of agricultural output and rainfall in India. When the cause of food inflation is because of supply shortage driven by inadequate rainfall and poor irrigation facilities, then a contractionary monetary policy may lead to stagflation. Considering agricultural output and rainfall data from four states in India we find evidence in favor of association.

This paper investigates the impact of globalization on income inequality distribution in 60 developed, transitional, and developing countries. Using Kearney's (2002, 2003 and 2004) data and principal component analysis (PCA), two globalization indices are created. One of these indices is the equally weighted index. The other index is derived from the principal component analysis. The Gini coefficient of a country is regressed on each index, respectively, in all 60 test cases. The main contribution of this paper is its finding of a negative relationship between both globalization indices and the Gini coefficient for all 60 countries under investigation. Furthermore, test results indicate that this relationship is robust. Therefore, the empirical evidence presented in this paper supports the claim that globalization helps reduce income distribution inequality within countries.

Objective: To gather pilot data on the economic impact of terminal illness on families and on the feasibility of training caregivers as a method of stemming illness-related poverty.Design: Exploratory, descriptive study involving semistructured interviews with patient and caregiver dyads.Setting: Pallium India Palliative Care Clinic in Trivandrum, Kerala, India.Participants: Eleven patient-caregiver dyads (22 individual participants) visiting Pallium India in 2008.Methods: Trained interviewers conducted face-to-face interviews consisting of 114 questions with the patient and caregiver separately. Questions covered topics of economic impact of illness on household, family, and individual. Questions included if the illness had so impacted families that they needed to sell assets or significantly reduce work and/or schooling.Results: All families reported that patients were obliged to give up work as a result of illness. In seven families, the caregiver also had to change work habits. All respondents stated illness had forced them to sell assets. Ten households reported that their children were obliged to miss school due to the illness. All respondents indicated they would use trained caregivers to help with the care burden if available. Nine respondents thought that use of trained caregivers would have reduced or prevented some of the household's illness-related change. Nine caregivers said they would be interested in becoming a trained caregiver.Conclusion: These data indicate that a definitive study would be feasible and would reveal how much assistance caregiver training could lend to household socio-economic resilience.

The hypothesis that the forward rate is an unbiased predictor of the future spot rate has been questioned time and again. In majority of the cases empirical evidence suggests that forward rates are neither efficient nor rational forecasts of future spot rates. The rejection of the forward rate unbiasedness hypothesis can be attributed to a misspecified theoretical model. In this paper we consider the misspecification to be in the form of exclusion of an explanatory variable, the risk premium. We test the unbiasedness hypothesis by including a time-varying risk premium using the GARCH-M representation. The risk premium is modeled by extending the Domowitz and Hakkio (1985) ARCH framework and by applying a GARCH (1, 1) specification. The exchange rates data are from January 1991 to February 2008 for U.K., Canada, Australia and Japan, the four advanced economies and for India, the emerging market economy, the data ranges from January 1999 to February 2008.

This paper is an empirical investigation of the feasibility of an optimum currency area (OCA) in South Asia. Countries are good candidates for forming an OCA if their economies are similarly structured and if their economies share similar responses to exogenous shocks. That is, among other characteristics, good candidates for forming an OCA will share a coincident pattern of economic booms and recessions. We use a state space time series model with a stochastic trend to explore the extent to which the Indices of Industrial Production for South Asian nations share common dynamic responses to exogenous shocks.

This article is an empirical investigation of the potential feasibility of an optimum currency area (OCA) in South Asia. Under an OCA, member countries share a common currency (like the Euro), and forego autonomy with respect to monetary policy instruments. Countries are good candidates for forming an OCA if there is a long-run relationship in the trend (permanent) component of output. Our results indicate existence of such a long-run relationship in the trend component of gross domestic product (GDP) among the member countries in South Asia. Hence, the South Asia region has the potential to form an OCA.

American Journal of Agricultural EconomicsVolume 88, Issue 3 p. 768-770 Books Reviewed Development Economics Basudeb Biswas, Basudeb Biswas Utah State UniversitySearch for more papers by this author Basudeb Biswas, Basudeb Biswas Utah State UniversitySearch for more papers by this author First published: 01 August 2006 https://doi.org/10.1111/j.1467-8276.2006.00895_2.xRead the full textAboutPDF ToolsRequest permissionExport citationAdd to favoritesTrack citation ShareShare Give accessShare full text accessShare full-text accessPlease review our Terms and Conditions of Use and check box below to share full-text version of article.I have read and accept the Wiley Online Library Terms and Conditions of UseShareable LinkUse the link below to share a full-text version of this article with your friends and colleagues. Learn more.Copy URL Share a linkShare onFacebookTwitterLinkedInRedditWechat No abstract is available for this article. Volume88, Issue3August 2006Pages 768-770 RelatedInformation

This study analyzes exchange rate pass-through in the presence of monopolistic competition in the U.S. automobile market. Using cointegration techniques, we investigate how foreign competing firms' prices interact following an exchange rate-shock. The results generally indicate price interdependence (competition) among the rival firms. In one case where we did not find any price interdependence, the extent of exchange rate pass-through was higher. This validates the economic intuition that a low degree of price competition corresponds with a high degree of exchange rate pass-through.

This chapter uses a new ecological-economic approach to analyze the role of time in range management in a dynamic and stochastic setting. We first construct a theoretical model of a parcel of rangeland in which time restrictions are used to manage the land. We then show how the dynamic and the stochastic properties of this rangeland can be used to construct two managerial objectives that are ecologically and economically meaningful. Finally, using these two objectives, we discuss an approach to range management in which the manager has two interrelated goals. This manager maximizes the profits from range operations and (s)he also takes steps to move the rangeland away from the least desirable state of existence.

A multivariate technique called principal component analysis is used to combine measures of human development. The first principal component index is the linear combination of component indexes with maximal information content. This multivariate technique accounts for differences in the variances of component indexes as well as interdependence among the component indexes. The first principal component of the three indexes used in the HDI (life expectancy, education, GDP) yields international rankings nearly identical to the HDI itself. We interpret this as theoretical support for the HDI ranking system as a metric of international human development. Also, we create a new index which is the first principal component of the five indexes: the three components of the HDI together with two additional indexes that capture gender inequality and child malnutrition. The international ranking of countries from most to least developed, according to the new index, is quite similar to the HDI ranking.

The notion of a reservation value is a key feature of most contemporary dynamic and stochastic models of land development. It is clear that the magnitude of the reservation value has a fundamental bearing on the decision to develop or preserve land. This notwithstanding, many papers that analyze land development in a dynamic and stochastic setting treat a landowner's reservation value as an exogenous variable. Therefore, the purpose of this paper is to endogenize the reservation value in the context of a model of land development over time and under uncertainty. Our analysis shows that the optimal reservation value is the solution to a specific maximization problem. In addition, we also show that there exist theoretical circumstances in which the optimal reservation value is unique.