On Mitra's Sufficient Condition for Topological Chaos: Seventeen Years Later
Liuchun Deng, M. Ali Khan
Economics Letters,
March
2018
Abstract
This letter reports an easy extension of Mitra’s “easily verifiable” sufficient condition for topological chaos in unimodal maps, and offers its application to reduced-form representations of two economic models that have figured prominently in the recent literature in economic dynamics: the check- and the M-map pertaining to the 2-sector Robinson–Solow–Srinivasan (RSS) and Matsuyama models respectively. A consideration of the iterates of these maps establishes the complementarity of the useful 2001 condition with the 1982 (LMPY) theorem of Li–Misiurewicz–Pianigiani–Yorke when supplemented by a geometric construction elaborated in Khan–Piazza (2011).
Read article
Real Effects of Bank Capital Regulations: Global Evidence
Yota D. Deli, Iftekhar Hasan
Journal of Banking and Finance,
2017
Abstract
We examine the effect of the full set of bank capital regulations (capital stringency) on loan growth, using bank-level data for a maximum of 125 countries over the period 1998–2011. Contrary to standard theoretical considerations, we find that overall capital stringency only has a weak negative effect on loan growth. In fact, this effect is completely offset if banks hold moderately high levels of capital. Interestingly, the components of capital stringency that have the strongest negative effect on loan growth are those related to the prevention of banks to use as capital borrowed funds and assets other than cash or government securities. In contrast, compliance with Basel guidelines in using Basel- and credit-risk weights has a much less potent effect on loan growth.
Read article
TV and Entrepreneurship
Viktor Slavtchev, Michael Wyrwich
IWH Discussion Papers,
No. 17,
2017
Abstract
We empirically analyse whether television (TV) can influence entrepreneurial identity and incidence. To identify causal effects, we utilise a quasi-natural experiment setting. During the division of Germany after WWII into West Germany with a free-market economy and the socialistic East Germany with centrally-planned economy, some East German regions had access to West German public TV that – differently from the East German TV – transmitted images, values, attitudes and view of life compatible with the free-market economy principles and supportive of entrepreneurship. We show that during the 40 years of socialistic regime in East Germany entrepreneurship was highly regulated and virtually impossible and that the prevalent formal and informal institutions broke the traditional ties linking entrepreneurship to the characteristics of individuals so that there were hardly any differences in the levels and development of entrepreneurship between East German regions with and without West German TV signal. Using both, regional and individual level data, we show then that, for the period after the Unification in 1990 which made starting an own business in East Germany, possible again, entrepreneurship incidence is higher among the residents of East German regions that had access to West German public TV, indicating that TV can, while transmitting specific images, values, attitudes and view of life, directly impact on the entrepreneurial mindset of individuals. Moreover, we find that young individuals born after 1980 in East German households that had access to West German TV are also more entrepreneurial. These findings point to second-order effects due to inter-personal and inter-generational transmission, a mechanism that can cause persistent differences in the entrepreneurship incidence across (geographically defined) population groups.
Read article
Non-linearity in the Finance-Growth Nexus: Evidence from Indonesia
Nuruzzaman Arsyad, Iftekhar Hasan, Wahyoe Soedarmono
International Economics,
August
2017
Abstract
This paper investigates the finance-growth nexus where bank credit is decomposed into investment, consumption, and working capital credit. From a panel dataset of provinces in Indonesia, it documents that higher financial development measured by financial deepening and financial intermediation exhibits an inverted U-shaped relationship with economic growth. This non-linear effect of financial deepening is driven by both investment credit and consumption credit. These results suggest that too much investment credit and, to a lesser extent, consumption credit are detrimental to economic growth. Ultimately, only financial intermediation associated with working capital credit has a positive and monotonic impact on economic growth.
Read article
25 Jahre Deutsche Einheit: eine Erfolgsgeschichte?
Gerhard Heimpold, R. Land, K. Schroeder, Joachim Ragnitz
Wirtschaftsdienst,
2015
Abstract
Der Beitrag gibt ein Vierteljahrhundert nach Herstellung der Deutschen Einheit einen Überblick über den erreichten Stand der wirtschaftlichen Entwicklung in Ostdeutschland. Ungeachtet erzielter Fortschritte hängt ein weiteres Aufholen vom erfolgreichen Strukturwandel ab.
Read article
Lessons from Schumpeterian Growth Theory
Philippe Aghion, Ufuk Akcigit, Peter Howitt
American Economic Review,
No. 5,
2015
Abstract
By operationalizing the notion of creative destruction, Schumpeterian growth theory generates distinctive predictions on important microeconomic aspects of the growth process (competition, firm dynamics, firm size distribution, cross-firm and cross-sector reallocation) which can be confronted using rich micro data. In this process the theory helps reconcile growth with industrial organization and development economics.
Read article
What Do We Learn from Schumpeterian Growth Theory?
Philippe Aghion, Ufuk Akcigit, Peter Howitt
P. Aghion, S. N. Durlauf (eds.), Handbook of Economic Growth, Volume 2B, Amsterdam: North Holland,
2014
Abstract
Schumpeterian growth theory has operationalized Schumpeter’s notion of creative destruction by developing models based on this concept. These models shed light on several aspects of the growth process that could not be properly addressed by alternative theories. In this survey, we focus on four important aspects, namely: (i) the role of competition and market structure; (ii) firm dynamics; (iii) the relationship between growth and development with the notion of appropriate growth institutions; and (iv) the emergence and impact of long-term technological waves. In each case, Schumpeterian growth theory delivers predictions that distinguish it from other growth models and which can be tested using micro data.
Read article
The Relationship between Knowledge Intensity and Market Concentration in European Industries: An inverted U-Shape
Niels Krap, Johannes Stephan
IWH Discussion Papers,
No. 3,
2008
Abstract
This paper is motivated by the European Union strategy to secure competitiveness for Europe in the globalising world by focussing on technological supremacy (the Lisbon - agenda). Parallel to that, the EU Commission is trying to take a more economic approach to competition policy in general and anti-trust policy in particular. Our analysis tries to establish the relationship between increasing knowledge intensity and the resulting market concentration: if the European Union economy is gradually shifting to a pattern of sectoral specialisation that features a bias on knowledge intensive sectors, then this may well have some influence on market concentration and competition policy would have to adjust not to counterfeit the Lisbon-agenda. Following a review of the available theoretical and empirical literature on the relationship between knowledge intensity and market structure, we use a larger Eurostat database to test the shape of this relationship. Assuming a causality that runs from knowledge to concentration, we show that the relationship between knowledge intensity and market structures is in fact different for knowledge intensive industries and we establish a non-linear, inverted U-curve shape.
Read article
Alterung und technologisches Innovationspotential : Eine Linked-Employer-Employee-Analyse
Lutz Schneider
IWH Discussion Papers,
No. 2,
2007
Abstract
Growth in advanced economies is essentially driven by innovation activities. From a demographic point of view the question rises, whether the trend of an ageing workforce will affect the innovation capacities of these economies. To answer this question, the paper examines on the basis of a German linked-employer-employee-dataset, whether an older workforce lowers a firm’s potential to generate product innovations. The empirical approach is based on an Ordered-logit regression model, relating a firm’s innovation potential to the age composition of its employees. The analysis provides evidence of significant age effects. The estimated age-innovation-profile follows an inverted-ushaped pattern, it peaks at the age of about 40 years. A separate estimation shows, that the technician’s and engineer’s age seems to be particularly relevant.
Read article
Progressivity and Flexibility in Developing an Effective Competition Regime: Using Experiences of Poland, Ukraine, and South Africa for developing countries
Franz Kronthaler, Johannes Stephan
IWH Discussion Papers,
No. 6,
2006
Abstract
The paper discusses the role of the concept of special and differential treatment in the framework of regional trade agreements for the development of a competition regime. After a discussion of the main characteristics and possible shortfalls of those concepts, three case countries are assessed in terms of their experience with progressivity, flexibility, and technical and financial assistance: Poland was led to align its competition laws to match the model of the EU. The Ukraine opted voluntarily for the European model, this despite its intense integration mainly with Russia. South Africa, a developing country that emerged from a highly segregated social fabric and an economy dominated by large conglomerates with concentrated ownership. All three countries enacted (or comprehensively reformed) their competition laws in an attempt to face the challenges of economic integration and catch up development on the one hand and particular social problems on the other. Hence, their experience may be pivotal for a variety of different developing countries who are in negotiations to include competition issues in regional trade agreements. The results suggest that the design of such competition issues have to reflect country-particularities to achieve an efficient competition regime.
Read article