0000000000415597
AUTHOR
Rafael Doménech
Sigma-convergence in the OECD: Transitional Dynamics or Narrowing Steady State Differences?
The empirical literature of growth has steadly improved the econometric methods used mainly to address the effect of cross-country heterogeneity in the estimated convergence rate. In this paper, we highlight an important implication of this process of econometric refinement that has so far received little attention. We show that the picture that emerges from models that allow for generalised heterogeneity changes our view of the process of convergence within the OECD. Estimation methods that allow for non or partial heterogeneity stress the importance of transitional dynamics in the process of convergence. Thus sigma-convergence is mostly accounted for by beta-convergence. On the contrary, …
The financial impact of Spanish pension reform: A quick estimate
In this paper, we present a preliminary estimate of the financial impact of the recent reform of the Spanish pension system. After updating the projections of pension expenditure constructed in de la Fuente and Doménech (2010) for the period 2008-2060, we analyze the impact on this variable of raising the retirement age from 65 to 67 years, extending from 15 to 25 years the period over which wages are averaged to calculate the starting pension and increasing from 35 to 37 the number of contribution years required to obtain a 'full pension.' Conditional on a series of assumptions about the evolution of employment, productivity and demographics, our estimates suggest that these measures will …
Human Capital and Income Inequality: Some Facts and Some Puzzles
Using a broad number of indicators from an updated data set on human capital inequality for 146 countries from 1950 to 2010, this paper documents several facts regarding the evolution of income and human capital inequality. The main findings reveal that, in spite of a large reduction in human capital inequality around the world driven by a decline in the number of illiterates of several hundreds of millions of people, the inequality in the distribution of income has hardly changed. In many regions, the income Gini coefficient in 1960 was very similar to that in 2005. Therefore, improvements in literacy are not a sufficient condition to reduce income inequality, even though they improve life…
Convergence in the OECD: Transitional Dynamics or Narrowing Steady-State Differences?
I. INTRODUCTION Research on growth and convergence has proceeded through several stages that can be described as a process of accommodating cross-country heterogeneity into the convergence equation. In the first stage, the world could be described as countries approaching to equal (absolute convergence) or to different (conditional convergence) steady states. In both cases--see Baumol (1986) Barro and Sala i Martin (1992), or Mankiw et al. (1992)--the assumption of parameter homogeneity of the underlying production function was assumed and not tested. Later, some researchers (Knight et al. [1993], Islam [1995], Durlauf and Johnson [1995], or Caselli et al. [1996], among others) began to cha…
Macroeconomic performance and convergence in OECD countries
Abstract This paper investigates the robustness of the correlation between growth and a set of variables which comprises accumulation rates in human and physical capital and medium term macroeconomic indicators in OECD countries. We include these variables as additional regressors in the standard growth equation that comes from the human capital-augmented Solow model. Our results show that variables related to medium term macroeconomic performance affect both growth and convergence. In some periods these variables even outperform the explanatory power of the conventional growth variables such as the accumulation rates. Our results also suggest that it is difficult to analyse the contributio…
Service Regulations, Input Prices and Export Volumes: Evidence from a Panel of Manufacturing Firms
Utilizando datos de panel, este trabajo muestra que una mejor regulacion en el sector servicios reduce el precio de los consumos intermedios que soportan las empresas de manufacturas, especialmente aquellas de mayor tamano. El beneficio de un marco regulatorio que fomenta la competencia en el sector servicios se extiende a los mercados internacionales. Entre 1991 y 2007, las reformas en servicios habrian permitido a las grandes companias industriales espanolas incrementar sus exportaciones reales de bienes alrededor de un 22 % en terminos acumulados, a lo largo de este periodo, frente a un hipotetico escenario sin reformas. Mas aun, si se hubiera producido la convergencia en materia regulat…
The effects of wage flexibility on activity and employment in Spain
Abstract In this paper we estimate the macroeconomic effects of the greater wage and firms’ internal flexibility promoted by the economic policies implemented since 2012, which changed markedly Spanish labour regulations. To do so, we propose a structural VAR that allows us to break down changes in main macroeconomic variables into different structural shocks. From a policy perspective, the estimation of the structural shocks allows us to simulate a counterfactual scenario, whereby we conclude that the effects of less rigid labour market are positive and significant. Our results suggest that, if these policies were implemented at the beginning of the crisis, they could have avoided a signif…
Tax Reforms and Labour-market Performance: An Evaluation for Spain using REMS
This paper uses REMS, a Rational Expectations Model of the Spanish economy designed by Boscá et al (2007), to analyse the effects of lowering the overall tax wedge to the level prevailing in the US. Our results partially confirm previous findings in the literature: a reduction in the overall tax wedge of 19.5 points, in order to reach the US levels, has a positive effect in the long run, increasing total hours by about 7 per cent and GDP by about 8 percentage points. In terms of GDP per adult, these results account for 1/4 of the gap with respect to the US, but imply a reduction of only one percentage point in the labour productivity gap. The rise in total hours per adult is explained by a …
Inferencia en modelos dinámicos uniecuacionales con variables integradas
Publicado
Search, Nash bargaining and rule-of-thumb consumers
Abstract This paper analyses the effects of introducing two typical Keynesian features, namely rule-of-thumb (RoT) consumers and consumption habits, into a standard labour market search model. RoT consumers use the margin that hours and wage negotiation provides them to improve their lifetime utility, by narrowing the gap in utility with respect to Ricardian consumers. This margin for intertemporal optimisation has not been studied yet, because this class of restricted agents has been mainly used in models with no equilibrium unemployment. Our approach allows for a deeper study of the effects of shocks on vacancies, unemployment, hours, wages and how they interact. As habits increase, RoT c…
Sorolla : su vida y su arte
116 il·lustracions en blanc i negre
The impact of cultural and creative industries on the wealth of countries, regions and municipalities
[EN] This paper compares the total impact of cultural and creative industries (CCIs) on per capita income of countries, regions and municipalities. We estimate the total effects of CCIs in 78 developed and developing countries in 5 continents, in 275 European regions and in 518 municipalities in the European region of Valencia, using data obtained from multiple databases and nonparametric local linear least squares. The average effects of CCIs are positive in the three territorial scales, in both low- and high-income locations, and increase in conjunction with increases in development, with high and very high developed places showing greater impacts. CCIs are, thus, a powerful resource for …
Los efectos económicos del Mercado Único
En este artículo se evalúa el proceso de integración económica en Europa en el contexto de globalización de las últimas décadas y se analizan los efectos económicos del Mercado Único mediante la construcción de contrafactuales. Los resultados indican que no se encuentra un impacto diferencial positivo y relevante en el crecimiento de la renta per cápita, de la productividad y del empleo de sus países miembros, que se han visto particularmente afectados por crisis del euro de 2011. A la vista de estos resultados, se analiza la importancia de completar el mercado único y avanzar en la arquitectura de la Unión Económica y Monetaria (UEM) y en el proceso de construcción de la Unión Europea, en …
The Redistributive Effects of the EU Budget: An Analysis and Proposal for Reform
This paper was written as part of a research project cofinanced by the European Fund for Regional Development and Fundacion Caixa Galicia. Additional financial support was provided by the Spanish Ministry of Education and Culture under grants SEC99-1189 and SEC99-0820.
Addressing the Net Balances Problem as a Prerequisite for EU Budget Reform: A Proposal
Presentado también como comunicación en el XI Encuentro de Economía Aplicada, celebrado del 5 al 7 de junio de 2008 en la Universidad de Salamanca (España)
A rational expectations model for simulation and policy evaluation of the Spanish economy
This paper presents the model used for simulation purposes within the Spanish Ministry of Economic Affairs and Finance. REMS (a Rational Expectations Model for the Spanish economy) is a small open economy dynamic general equilibrium model in the vein of the New-Neoclassical-Keynesian synthesis models, with a strongly micro-founded system of equations. In the long run REMS behaves in accordance with the neoclassical growth model. In the short run, it incorporates nominal, real and financial frictions. Real frictions include adjustment costs in consumption (via habits in consumption and rule-of-thumb households) and investment into physical capital. Due to financial frictions, there is no per…
Understanding innovation in creative industries: knowledge bases and innovation performance in art restoration organisations
[EN] This paper studies innovation in the creative industry of art restoration, which is characterised by an intensive use of symbolic knowledge. Using the resource-based view of the firm as a theoretical framework, this study adapts Community Innovation Survey (CIS) methodology to this industry, creating and exploiting a unique dataset from the restoration departments of museums in 43 countries on 5 continents. The results suggest that the type and composition of the knowledge bases in play influence a department¿s absorptive capacity to access external information sources and thereby impact innovative outcomes. The article contributes to innovation literature by capturing innovation proce…
Analysing innovation in museums through qualitative comparative analysis
[EN] The aim of this paper is to analyse innovation in the processes undertaken by museums in the conservation and restoration of artworks. Information from 90 conservation and restoration departments from museums in 43 countries was analysed using qualitative comparative analysis. Two theoretical concepts - knowledge bases (analytical, synthetic, symbolic) and modes of innovations (Science, Technology and Innovation; Doing, Using, and Interacting) - were used to define necessary and sufficient conditions which explain innovation in artwork restoration. Two important results were obtained from the analysis. The first indicated that innovation was explained by the combination of symbolic and…
Some new results on interest rate rules in EMU and in the US
Abstract This paper offers two new results on interest rate rules. First, we show that the empirical evidence from 1970 onwards for the US is compatible with a Taylor rule when we consider the possibility of changes in the inflation target and in the real interest rate. Second, recursive estimates of a forward-looking version of the Taylor rule for EMU confirm an increasing weight for inflation in the area, possibly as a consequence of the EMS, and, furthermore, a convergence in the nineties to the German value observed for the whole period. This process has coincided with an important reduction in the deviation of inflation across EMU countries. The results also show that credibility probl…
INTERNATIONAL AND INTERTEMPORAL COMPARISONS OF REAL PRODUCT IN OECD COUNTRIES A GROWTH SENSITIVITY ANALYSIS
This paper provides two new data sets for comparisons of real income in OECD countries. The first set provides adjusted real series for GDP and its components from 1960 to 1993 based on OECD 1990 purchasing power parities. The second set uses OECD PPP of different benchmark years, and interpolates these applying national price indices. Comparisons between both alternatives, Penn World Tahle Mark 5 (PWT 5) and its new version (PWT 5.6), in terms of economic growth and convergence, reveal some remarkable differences. Moreover, there are wider differences concerning the relative countries' position in GDP per capita ranking. Estimations of convergence equations based on OECD data yield a bette…
HUMAN CAPITAL IN GROWTH REGRESSIONS: HOW MUCH DIFFERENCE DOES DATA QUALITY MAKE?.
We construct a revised version of the Barro and Lee (1996) data set for a sample of OECD countries using previously unexploited sources and following a heuristic approach to obtain plausible time profiles for attainment levels by removing sharp breaks in the data that seem to reflect changes in classification criteria. It is then shown that these revised data perform much better than the Barro and Lee (1996) or Nehru et al (1995) series in a number of growth specifications. We interpret these results as an indication that poor data quality may be behind counterintuitive findings in the recent literature on the (lack of) relationship between educational investment and growth. Using our prefe…
Financial and fiscal shocks in the great recession and recovery of the Spanish economy
In this paper we develop and estimate a new Bayesian DSGE model for the Spanish economy that has been designed to evaluate different structural reforms. The small open economy model incorporates a banking sector, consumers and entrepreneurs who accumulate debt, and a rich fiscal structure and monopolistic competition in products and labor markets, for a country in a currency union, with no independent monetary policy. The model can be used to evaluate ex-ante and ex-post policies and structural reforms and to decompose the evolution of macroeconomic aggregates according to different shocks. In particular, we estimate the contribution of financial and fiscal shocks to both the crisis of the …