The distinguished contributors in this volume provide a variety of essays, which are written in honor of Emmanuel Drandakis. These essays fall into four uniform areas of economics: economic growth, general equilibrium, labor economics and game theory and applications. The editors focus on a select set of issues that stand high on the agenda of academic research. They provide fresh insights and approaches to the analysis of these issues, and thus open up wider avenues for our understanding of the dilemmas posed for theory and policy. Readers are offered new empirical evidence on such thorny social problems as, for example, unemployment, the intergenerational transmission of human capital and the response of wages to price and endowment changes.
This volume is devoted to three key themes central to studies in regional science: the sub-national labor market, migration, and mobility, and their analysis. The book brings together essays that cover a wide range of topics including the development of uncertainty in national and subnational population projections; the impacts of widening and deepening human capital; the relationship between migration, neighborhood change, and area-based urban policy; the facilitating role played by outmigration and remittances in economic transition; and the contrasting importance of quality of life and quality of business for domestic and international migrants. All of the contributions here are by leading figures in their fields and employ state-of-the art methodologies. Given the variety of topics and themes covered this book, it will appeal to a broad range of readers interested in both regional science and related disciplines such as demography, population economics, and public policy.
Many of the contributors are from Athens University, Greece, where economist Drandakis taught for four decades before his recent retirement. Focusing on his primary interests of economic growth, general equilibrium, labor economics, and game theory and its applications, the 14 essays consider such topics as discounting and the growth of net national product, beliefs and the neutrality of money, the incidence of increased unemployment in the Group of Seven from 1970 to 1974, labor incentives and manumission in ancient Greek slavery, and the economics of research joint ventures. Annotation copyrighted by Book News, Inc., Portland, OR
I study how international trade affects labor market outcomes and economic growth. In the first chapter, I study how international trade affects wage inequality within and between firms. Using matched employer-employee data from Germany, I document that the firm-size wage premium is higher for skilled compared to less-skilled workers and that larger firms disproportionately employ more skilled workers. I show, using a new quantitative framework, that non-homothetic production and monopsonistic competition in labor markets can rationalize these reduced-form findings. To estimate the model, I propose a new econometric method to identify non-homotheticity in the presence of upward-sloping labor supply curves separately. Counterfactual exercises quantitatively show that the mechanism implies sizeable distributional effects of trade. The second chapter, co-authored with Yann Koby, combines reduced-form evidence with a new model of a dynamic multi-country and multi-sector economy to study the link between trade and structural transformation. The model accounts for major drivers of structural change—including sector-biased technological change and income effects, as well as technological and factor-driven motives for trade. We provide a characterization of the existence and uniqueness of the equilibrium. We quantify the model to the years 1995 to 2011 and then use it to discuss the decline in U.S. manufacturing and the role of service trade in influencing employment in the manufacturing sector. The third chapter, co-authored with Bastian Krieger, studies the effect of trade in services on firms' innovation activities. We combine unique micro-data from Germany with a simple theory of international trade and innovation to provide causal evidence that trade in innovation services increases innovative activities in firms, accounting for market size and competition effects of trade integration.
Abstract: This dissertation studies economic growth, directly and indirectly, from three different perspectives: labor markets, financial markets, and social institutions. The issues addressed are the effect on labor markets of implementing an unemployment insurance system when eligibility is stochastic, the predictive power of sovereign spreads for future economic growth and inflation, and the impact of the democratic history of a country on economic growth. The first chapter studies the quantitative effects on the labor market of implementing an unemployment insurance system in which not all unemployed are eligible for unemployment benefits, and moreover, eligibility is positively correlated with labor productivity. The main result is that higher benefits result on higher negotiated wages for the proportion of unemployed who are insured and lower wages for the uninsured. Moreover, the average behavior of the market is driven by the proportion of insured unemployed. Consequently, the standard results are obtained: higher benefits increase average unemployment, market tightness, average wages and unemployment duration. The second chapter studies whether the spreads of sovereign bonds issued in international markets provide marginal information with which one can predict output growth and inflation. These instruments have only rarely been studied, especially in the context of emerging countries. The tests carried out for Argentina, Brazil, Chile, Malaysia and Mexico show that, in most cases, spreads are useful as leading indicators for output growth. To a lesser extent, they are also useful for predicting inflation. The main contribution of the paper is to provide an alternative financial leading indicator for economies that lack indicators at the domestic level. The third chapter proposes a particular way of thinking about the causal effect of social institutions and their impact on economic growth. The key insight is that institutions' effects cumulate over time. In contrast with the previous literature that found that current democracy plays little or no role in determining output growth this chapter shows that cumulative experience with democracy is a very significant factor. The tests are robust to several specifications, different measures of the stock of democracy and different samples.
This book examines the critical themes of employment, growth and development to focus on challenges and opportunities, both old and new, in the contemporary world economy. The essential theme that runs through the book is that there is a strong relationship not only between employment and growth, but also between employment and development, where the causation runs in both directions. The author shows how employment transforms economic growth into meaningful development by providing livelihoods and incomes to people. While the book is primarily concerned with developing countries, it considers industrialized countries as points of reference or comparison, since the latter are a large part of an interdependent world, in which problems faced by the two sets of countries are frequently connected and sometimes common. The ten essays in this volume also provide a macroeconomic analysis of development problems situated in the wider context of a changing world economy, exploring possible solutions, to understand the implications for countries and for people. A timely collection by an eminent economist, this book will be useful to teachers, students and researchers in economics, especially those interested in macroeconomics, political economy and development studies.
