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On Money Uncertainty and Inflation for Taiwan
Yen-Sen,Ni And Man-Hwa, Wu
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The paper uses monthly
data of money and consumer price index from January 1988 to
December 2001 for Taiwan.We use GARCH
models and component GARCH models to retrieve money
volatilities and then test the effect of money uncertainty
to inflation.
With concerning symmetric and asymmetric models and with concerning
five different Jag-chosen criteria, our empirical results
show that money volatilities have significant, and positive
effects on inflation. It reveals that stable monetary policies
will be better for the economy in Taiwan, since money uncertainty
will cause the inflation and the fluctuation of economy in
Taiwan.
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Trade off between inflation and Unemployment Cointegration
Approach
P. AMBIGA DEVI AND SELVI. D. PRIYA
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There
were arguments for and against the trade-off inflation and
unemployment. There is fundamental disagreement between the
Keynesian, monetarist and new classical economists as to what
were the main causes of inflation and unemployment. Very little
empirical research on this topic was being carried out in
India. But these studies failed to analyse either the short
run dynamics or the long run equilibrium in inflation and
unemployment based on cointegration. approach. The
present work is an attempt to empirically test the relationship
between inflation and
unemployment using time series data on the Indian economy
applying the cointegration approach. The results of the study
indicated the first order autoregressive form of unemployment
suggested by Sargent did perform well for the Indian data.
Further, there was a mild support for the new classical proposition
that only the unanticipated rate of growth of money supply
lagged by two years
had real effect on unemployment. However the models on inflation
neither supported the monetarists nor the Keynesians schools
of thought. The level of unemployment was found to move towards
short run equilibrium and the rate of inflation was found
to be endogenous being explained by its own shocks.
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Government
Expenditures on Social Services : How Far Has the Poor Benetited
in Swaziland ?
OLUYELE AKINKUGBE
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The conventional wisdom
in both the public finance and development economics literature
seems to suggest that one of the major roles of government
in any society is to enhance social welfare through its fiscal
policy actions. An important way through which the government
could achieve this would be by spending on things of value
to people that they will not otherwise be able to provide
for themselves. In this regard, the conjecture is that public
spending should be directed, not just at promoting efficiency
by correcting for market failure in the economy, but also
promoting equity and reducing poverty through the distribution
of the gains from economic growth. In this paper we have shown
that despite substantial increases in government expenditures
on health, education and other social services in Swaziland,
poverty continues to be endemic and the poor continue to be
under-served in terms of access to basic education, primary
health care and better living conditions. The level of poverty
remains quite high; 70 per cent of the population continue
to live in the rural areas; a small proportion of the population
continue to hold a large portion of income; and land remains
largely in the hands of the minority. For the objective of
poverty reduction and equity to become achievable in Swaziland,
fiscal policy actions of the governments will need to be more
target at the currently underserved and the poor in the society,
particularly the rural dwellers. In this way, the access of
the poor people to health, education and other infrastructure
such as housing, safe water and other safety benefits could
be guaranteed and sustained.
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Optimizing
Strategy within Productive Location among Three Countries
under Exchange Rate Uncertainty : A Real Options Approach
CHIN - TSAI LIN AND CHENG - RU WU
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This study considers the
effects of two real exchange rates on strategies that govern
the locations of production of by firms that are entering
foreign markets in three countries. This investigation extends
the Cobb-Douglas batch process production model of Lin and
Wu (Indian Journal of Economics, 2004), which considers two
locations of production in two countries, respectively to
establish a decision valuation model for selecting the three
optimal locations for one in each country. A general form
of the first order of degree homothetic production functions
is also considered in relation to the rule for decision-making
in the proposed model. This paper applies the real options
approach (ROA) to evaluate the behavior of the transferable
location in the three countries. Furthermore, a Continuous-Time
model Optimization Problem is solved to obtain a closed form
solution of the threshold value, perform a sensitivity analysis,
and determine some characteristic strategies of operating
method for the CES batch process model for three countries,
omit summarized into useful insights for global managers.
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Overseas Mergers
and Acquisitions by Indian Enterprises : Patterns and Motivations
JAYA PRAKASH PRADHAN AND VINOJ ABRAHAM
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This
paper examines the patterns and motivations behind the overseas
M & As by Indian enterprises. It is found that a large
majority of overseas M & As originated within services
sector led by software industry and in overwhelming cases
were directed towards developedcountries of the world
economy. The main motivations of Indian firm's overseas
acquisitions have been to access international market,firm-specific
intangibles like technology and human skills, benefits from
operational synergies, overcome constraints from limited home
market growth, and survive in an increasingly competitive
business environment. Further it has been found that overseas
acquirers in the case of manufacturing sector tends to be
large sized and research intensive,while they are older, large
sized and export-oriented in the case of software sector.
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An Analysis of the
Growth of Manufacturing Sector in West Bengal (1977-1988)
ARPITA BANERJEE AND DEBESH CHAKRABORTY
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The paper analyses growth
of the manufacturing sector in West Bengal in a more disaggregative
way for the period 1977-1998 as this sector is dynamic in
any economy. The compound growth mtes for the two-digit industries
have been calculated for the period 1977-1998 and also for
the period 1977-1992 and 1992-1998. The results show that
the industrial situation in the state at the time 1977-1992
was dismal but after this period the situation is improving
to some extent. Growth rate of most of the industries accelerated
during reform period. To know the concentration of industries
Hirshman Herfindal Index has also been calculated in the paper.
To know the closeness between employment and output and also
the relation between employment and capital, employment elasticity
with respect to output and employment elasticity with respect
to capital have been calculated. The results of employment
elasticity with respect to output show that manufacture of
jute. beverages, furniture, wool. silk has positive employment
elasticities indicating labour intensiveness of these industries.
The employment elasticity with respect of fixed capital shows
negative sign for most of those industries which show positive
sign for employment elasticity with respect to output implying
substitutability between capital and labour. However manufacture
of food, cotton textile. wool. silk. leather shows complementarity
between these two factors. Concluding remarks are presented
in the paper.
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Migration as A Source
of Human Resource Development : An Analysis of Indian Empirical
Experience
SHRI PRAKASH AND NILASANTHA MOHANTY
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The study has estimated
the value of migrants' contribution to growth of a state.
This has been a neglected aspect, though the role of migration
in economic growth has attracted attention of economists,
analysts and policy makers.
Migration accelerates growth by shifting manpower from labour
surplus region/nations, sectors and occupations to those experiencing
shortages, moving the economy towards equilibrium in human
resource allocation and utilization. It shifts the demand
curve for labour upwards to the right, raising investment,
employment, wages and about. This study develops an input-output
model of inter-state migration to detennine (i) Markov-Chain
propabilities of spatial pattern of migration, and (ii) Value
of migrants to the economy for which an input-output model
has been developed.
The study reveals that (a) distance determines the choice
of state/region of migrants destination. where job opportunities
are available at comparable wages; (b) migrants prefer industrially/agriculturally
developed states/regions as the destination of migration;
(c) agricultural labour dominates the occupational structure
of migrants, reflecting the dominance of rural to rural rather
than rural to urban migration. This contradicts the Todaro
hypothesis of the dominance of rural to urban migration; and
(d) migration. besides generating employment, raises productivity,
and hence, the earnings of the migrants. thereby improving
not only economic conditions of migrants but also promoting
growth of the economy.
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Exports, Importsand
Output in the US : What Causes What ?
TSANGYAO CHANG, WENRONG LIU AND HENRY
THOMPSON
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Cointegration and vector
autoregression are used to examine relationships among exports,
imports, and output in the United States from 1971 to 2001.
These three variables are co integrated. There is bi-directional
Granger causality for output-imports and exports-imports,
but only unidirectional causality from output to exports.
Impulse response and variance decomposition analyses tell
similar stories. Exports do not appear to have led to economic
growth in the US over this period.
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