Empirical Economics

Russell, Bill; Rambaccussing, Dooruj

doi: 10.1007/s00181-017-1404-5pmid: N/A

‘Modern’ theories of the Phillips curve inadvertently imply that inflation is an integrated or near-integrated process, but this implication is strongly rejected using US data. Alternatively, if we assume that inflation is a stationary process around a shifting mean (due to changes in monetary policy), then any estimate of long-run relationships in the data will suffer from a ‘small-sample’ problem as there are too few stationary inflation ‘regimes’. Using the extensive literature on identification of structural breaks, we identify inflation regimes which are used in turn to estimate with panel data techniques the US long-run Phillips curve.

Evgenidis, Anastasios; Philippas, Dionisis; Siriopoulos, Costas

doi: 10.1007/s00181-018-1448-1pmid: N/A

This paper analyses the international transmission of US monetary policy shocks. We use a time-varying, factor-augmented VAR framework to examine how and to what extent the propagation of US policy shocks affects the South East Asian (SEA) and European Union (EU) economies, through various transmission channels. We find that in the SEA economies, the income absorption effect is the most pronounced channel as indicated by the significant worsening of the trade balance of these countries, which provokes a reduction in their output. In addition, wealth effects and the balance sheet channel have an important contribution in the transmission of the shock to these economies. In the EU, the initial rise observed in output as a result of the shock is driven more by exchange rate movements rather than movements in the trade balance. In terms of changes in the magnitude of the effect of the shock over time, we find that the deepening of global integration dampens the effect of the shock on the foreign economies in core macroeconomic and financial variables. Moreover, the impact of the shock on the foreign economies has increased in the post-crisis period.

Jiménez-Martín, Sergi; Juanmarti Mestres, Arnau; Vall Castelló, Judit

doi: 10.1007/s00181-017-1396-1pmid: N/A

In this paper, we explore the relationship between economic conditions and disability insurance (DI) participation in Spain during the Great Recession. Using individual-level longitudinal data, we show that DI awards are procyclical, contrary to the countercyclical behavior found in most of the previous literature. We show that DI applications are not responsive to the business cycle and that economic conditions have no effect on the composition of new DI awardees, suggesting that DI participation in Spain is not driven by partially disabled individuals resorting to the DI program as a result of bad labor market conditions. Furthermore, we argue that the procyclical behavior of DI awards may be driven by an informal increase in screening stringency and by an improvement in the health status of the population as a result of worse economic conditions.

Mendoza-Velázquez, Alfonso; Ventosa-Santaulària, Daniel; Germán-Soto, Vicente

doi: 10.1007/s00181-017-1401-8pmid: N/A

Using a recently proposed Euclidian measure to quantify inter-regional inequality in per capita GSP (gross state product), we study the convergence among Mexican states during the 1940–2010 period. In ten cases, we find that GSP inequality diverges while the rest of the states’ GSP inequality can be described as the following catching-up or lagging behind processes. For the later processes, we also find evidence of structural breaks. The shifts in the evolution of regional inequality in Mexico for various cases coincide with two distinct periods: the “Mexican Miracle” phase and the “oil/debt crisis” phase.