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Patent protection, externalities, and income inequality The Manchester School (IF 1.063) Pub Date : 2024-03-02 Heng‐Chuan Kao, Hsiao‐Wen Hung
This paper develops a Schumpeterian growth model with considering consumption and leisure externalities. The main purpose of this study is to investigate the effect of patent protection policy on growth and inequality, as well as the interaction between policy effect and externalities. According to the log form utility function specification, this means that the elasticity of intertemporal substitution
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Closing the productivity gap with the US: Causes and consequences of the productivity program in Western Europe The Manchester School (IF 1.063) Pub Date : 2024-02-27 Michela Giorcelli
This paper studies to what extent the transfer of US managerial technologies to Europe after World War II contributed to closing the gap with US businesses. Between 1952 and 1958, the US government sponsored the Productivity Program, which promoted management training trips for European managers at US firms. Through the analysis of reports compiled by UK, France, Germany, and Italian participating
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Housing market, oil prices, and macroeconomic volatility in the G7 The Manchester School (IF 1.063) Pub Date : 2024-02-23 Luccas Assis Attílio
In this paper, we investigate house price shocks on the macroeconomic variables (financial market, inflation, and real sector) of the G7 economies. We use the GVAR to capture the spillover effects from the U.S. housing market and oil prices on these economies from 1991M3–2022M10. We identify the U.S. house price shock using the Structural Generalized Impulse Response Function, house supply and demand
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Institutional factors influencing productivity in medieval England: A case study of tin, lead and silver mining The Manchester School (IF 1.063) Pub Date : 2024-02-08 Catherine Casson, Mark Casson
This paper fills a gap in recent literature on productivity and regional development by examining the determinants of productivity in primary industries in English regions during the Middle Ages. It provides a comprehensive review of relevant literature on the tin, lead and silver mining industries in Medieval England. Modern studies of productivity typically focus on technology, labour skills, unionization
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Bertrand-Cournot profit reversal under non-commitment process innovation The Manchester School (IF 1.063) Pub Date : 2024-02-07 Qidi Zhang, Leonard F. S. Wang, Arijit Mukherjee
We provide a new reason for Bertrand-Cournot profit reversal. In a symmetric oligopoly, we show that firms get higher profits under Bertrand competition compared to Cournot competition under non-commitment process innovation if the products are sufficiently differentiated and there is positive knowledge spillover. As the number of firms increases, the degree of product differentiation over which the
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Issue Information The Manchester School (IF 1.063) Pub Date : 2024-02-02
No abstract is available for this article.
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Commercial policies, unilateral versus bilateral foreign ownership, and welfare The Manchester School (IF 1.063) Pub Date : 2024-01-11 Yang-Ming Chang, Quan Dong
This paper examines how cross-border ownership and restrictions affect commercial policies optimally chosen by the government of an importing country. Focusing on import competition in an oligopoly market served by two local producers and a foreign firm, we study and compare two partial ownership arrangements without corporate control: unilateral ownership by the foreign firm over a local producer
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Relative performance evaluation and wage inequality The Manchester School (IF 1.063) Pub Date : 2024-01-06 Jiancai Pi, Zixin Li
This paper studies the impact of relative performance evaluation (RPE) on skilled-unskilled wage inequality. We find that in an economy with full employment, skilled-unskilled wage inequality will be expanded when the strength of RPE increases. However, when the urban sector is under the minimum wage restriction, the impact of RPE on skilled-unskilled wage inequality depends on the substitution elasticity
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Mixed duopoly in two-sided markets The Manchester School (IF 1.063) Pub Date : 2024-01-04 Jeong-Yoo Kim
This paper considers a mixed duopoly two-sided market of platforms in which a private firm competes with a public firm in a linear city model with fixed demand of full coverage. We examine whether prices of platforms are lower in the mixed duopoly market than in the standard pure duopoly market in which two private firms compete. We show that introducing a public competitor may or may not induce lower
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Euro area inflation in the era of COVID-19: A permanent or a transitory phenomenon? The Manchester School (IF 1.063) Pub Date : 2024-01-03 Nicholas Apergis
The goal of this paper is to test the mean reversion process of the inflation rate in the Eurozone during the COVID-19 pandemic crisis. The study uses weekly data on consumer prices (measured through the Harmonized Consumer Price Index), spanning the period from 2020 to the mid of 2022. The findings document that euro area inflation follows a mean non-reverting process, with most of its components
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Issue Information The Manchester School (IF 1.063) Pub Date : 2023-12-06
No abstract is available for this article.
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Will automation and robotics lead to more inequality? The Manchester School (IF 1.063) Pub Date : 2023-12-02 Elise S. Brezis, Amir Rubin
This paper presents a new framework for analyzing automation, robotics, and high-tech, which differs from the canonical model of technological progress by incorporating the higher education system. The main difference is that there is not just one type of skilled workers, but two types, and there is not one type of education but two - elite universities and standard ones. The gap between these two
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Are pro-productivity policies fit for purpose? The Manchester School (IF 1.063) Pub Date : 2023-11-30 Bart van Ark, Klaas de Vries, Dirk Pilat
In this paper we examine productivity trends, drivers of productivity growth and pro-productivity policies across the G-20 economies since 1970. While we find distinctly different productivity growth dynamics between G-20 economies and over time, one common observation is a widely shared slowdown in labour productivity growth since the 2010s underpinned by lower (or even negative) total factor productivity
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Current account dynamics: A SVAR analysis when the country-specific shocks are correlated at leads The Manchester School (IF 1.063) Pub Date : 2023-11-01 César R. Sobrino, Ellis Heath
The assumption of no correlation of the structural shocks as Blanchard and Quah's identification (BQ) assumes is not suitable when central banks, through discretionary policies or inflation targeting regimes, affect the output growth among other goals. In this study, we analyze the present value model of the current account (PVM) using a three-SVAR specification and a modified BQ to identify three
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Frictions and the diffusion of automation The Manchester School (IF 1.063) Pub Date : 2023-10-30 Nikolaos Charalampidis
This paper studies the implications of business cycle frictions for the diffusion of permanent changes in automation. Incorporating task-based production in different versions of the New Keynesian model reveals considerable short-run implications. Price-distorting nominal rigidities amplify the labor displacement and attenuate the productivity and welfare gains of automation during the transition to
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Total factor productivity and structural reforms: Evidence from advanced economies sector-level data The Manchester School (IF 1.063) Pub Date : 2023-10-27 João Tovar Jalles
This paper computes a new measure of capacity utilization-adjusted Total Factor Productivity (TFP) using sector-level data from a sample of 18 Advanced Economies and 24 industries between 1970 and 2014. We then empirically examine the impact of structural reforms (labor and product market) on TFP by means of the local projection method. Structural reforms follow a narrative-base construction which
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Payment delay in workfare programmes and household welfare: Theory and some evidence from India The Manchester School (IF 1.063) Pub Date : 2023-10-18 Parantap Basu, Rajesh Raj S. N, Kunal Sen
Using the lens of a life cycle model, we argue that an administrative failure of a wage payment delay in a workfare programme could adversely affect the welfare of the poor through two channels. First, it imposes an implicit consumption tax on the household. Second, it changes the status of labour from a “cash” to a credit” good and encourages workers with negative net worth to work harder to clear
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Issue Information The Manchester School (IF 1.063) Pub Date : 2023-10-03
No abstract is available for this article.
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Correction to Fixed-fee vs. royalty licensing under asymmetric demand information The Manchester School (IF 1.063) Pub Date : 2023-09-07
In Li & Yanagawa (2021), the name and number of the funding project was omitted. This should be as follows: Funding: This work was supported by Guangdong Office of Philosophy and Social Science Grant Number GD19CYJ08.
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International trade: Smarten up to talk the talk The Manchester School (IF 1.063) Pub Date : 2023-09-05 Levi Haas, Klaus R. Schenk-Hoppé
International trade is currently under fire from many sides. Protectionist trade policies are on the rise, putting an end to the decade-long March of free trade. Making sense of the daily headlines and having an informed opinion on your own has rarely been more important than it is now. Our work aims to explain the driving forces behind international trade, its history, how it shaped the world, its
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Issue Information The Manchester School (IF 1.063) Pub Date : 2023-08-01
No abstract is available for this article.
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Public expenditure, risk sharing and economic growth The Manchester School (IF 1.063) Pub Date : 2023-07-31 Lifeng Zhang
We develop an endogenous growth model with expanding variety in which asymmetric information frictions arise when R&D firms need access to external funding to finance their R&D investments and public expenditure affects the magnitude of hidden costs, in turn affecting the severity of asymmetric information frictions. We show that public expenditure affects growth by influencing risk sharing, thereby identifying
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Worker commitment and establishment performance in Europe The Manchester School (IF 1.063) Pub Date : 2023-07-28 John T. Addison, Paulino Teixeira
Using a cross section of matched data from the employee and management questionnaires of the European Company Survey for 28 nations, this paper investigates the determinants of worker commitment and the potential contribution of commitment to establishment performance. An index of worker commitment is constructed from employer perceptions of the motivation of workers and their retention and absenteeism
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Interest rate, price level, and the inflation rate: Evidence from the UK during the gold standard regimes The Manchester School (IF 1.063) Pub Date : 2023-07-17 Taufiq Choudhry
This paper empirically investigates the Gibson Paradox and the Fisher Effect for the UK during different metallic and non-metallic regimes. The paper applies long-span monthly data on the long-term interest rate and the price index from 1790 to 1931. The ARDL cointegration is employed to study the long-term relationship. Significant evidence is provided for the paradox during the uninterrupted gold
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Do financial markets predict macroeconomic performance? US evidence from risk-based measures The Manchester School (IF 1.063) Pub Date : 2023-07-07 David G. McMillan
Financial markets are expected to predict macroeconomic conditions as movement in the former depends upon expectations of future performance for the latter. However, existing evidence is mixed. We argue that this arises because the stock return and term structure series typically used in studies, fail to sufficiently capture investor risk preferences. For US data, we use the variance risk premium (VRP)
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Real interest rate parity in practice: Evidence from Asia-pacific economies The Manchester School (IF 1.063) Pub Date : 2023-07-06 Ming-Jen Chang, Shikuan Chen, Chih-Chung Chien
This research investigates the relationship between real interest rate parity and the interest parity puzzle across several economies in the Asia-Pacific region. Unlike previous studies, we establish a comprehensive theoretical framework for parity and utilize macroeconomic and financial market data from 15 economies in the region to examine it. Our findings indicate that most countries exhibit mild
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A rent-limiting design of professional self-regulation The Manchester School (IF 1.063) Pub Date : 2023-06-30 Krzysztof Szczygielski
We consider a government that purchases a public good or a private good for public consumption from a heterogenous group of professionals (such as scientists, doctors, or lawyers) in an environment characterized by an extremely high level of information asymmetry. Specifically, we assume that the government needs information from a self-regulatory organization (SRO) of agents (such as a research council
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Notes on excess entry theorem in a Kantian oligopoly The Manchester School (IF 1.063) Pub Date : 2023-06-17 Yasuhiko Nakamura
This study revisits the excess entry theorem for quantity and price competition with substitutes and complements in a Kantian oligopoly. In such an oligopoly, we demonstrate that the equilibrium market outcomes are the same between the aforementioned two types of competition regimes with substitutes and complements, and in particular, each firm's equilibrium price and consumer surplus do not depend
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Behavior-based price discrimination in the domestic and international mixed duopoly The Manchester School (IF 1.063) Pub Date : 2023-06-12 Suzuka Okuyama
This study investigates mixed markets in which a social welfare-maximizing public firm and a private firm engage in behavior-based price discrimination (BBPD). A total of two cases are considered: one where domestic shareholders completely own the private firm and one where foreign shareholders completely own it. In the domestic mixed duopoly, BBPD is irrelevant from the viewpoint of domestic social
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A note on the social efficiency of free entry in Cournot oligopoly in a pure network goods market The Manchester School (IF 1.063) Pub Date : 2023-06-12 Tsuyoshi Toshimitsu
We explore the social efficiency of free entry in a pure network goods market where Cournot oligopolistic competition prevails and consumers have passive expectations. Focusing on network compatibility between firms, we consider the cases of two network systems: a firm-specific system and a single industry-wide network system. We demonstrate the following results. In the firm-specific network system
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Property rights enforcement and wage inequality The Manchester School (IF 1.063) Pub Date : 2023-06-07 Jiancai Pi, Pengqing Zhang
This paper establishes a general equilibrium model to investigate how property rights enforcement impacts wage inequality when unproductive and productive activities coexist. We consider enforcement funded by a gross income tax, a labor tax, or a capital tax, and find that in all of the three schemes, when property rights enforcement is relatively efficient and the skilled sector is more capital intensive
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Issue Information The Manchester School (IF 1.063) Pub Date : 2023-06-01
No abstract is available for this article.
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Spatial agglomeration or dispersion under Cournot-Bertrand competition The Manchester School (IF 1.063) Pub Date : 2023-05-16 Hsiao-Chi Chen, Shi-Miin Liu, Sung-Chi Lin
This research explores the equilibria of a spatial model with consumers having finite reservation prices and two firms under Cournot-Bertrand competition. We find three types of equilibria. For high effective reservation prices, a unique equilibrium exists with spatially agglomerating firms serving all consumers. For medium effective reservation prices, the intermediate-location-differentiation firms
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Environment, alcohol intoxication and overconfidence: Evidence from a lab-in-the-field experiment The Manchester School (IF 1.063) Pub Date : 2023-05-04 Iain W. Long, Kent Matthews, Vaseekaran Sivarajasingam
Alcohol has long been known as the demon drink; an epithet owed to the numerous social ills it is associated with. Our lab-in-the-field experiment assesses the extent to which changes in intoxication and an individual's environment lead to changes in overconfidence or cognitive ability that are, in turn, often linked to problematic behaviours. Results indicate that it is the joint effect of being intoxicated
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Sequential tariffs with increasing marginal costs The Manchester School (IF 1.063) Pub Date : 2023-04-25 Kangsik Choi, Seonyoung Lim
This study examines the superiority of the discriminatory and uniform tariff regimes under both simultaneous and sequential arrangements in terms of social and global welfare by considering asymmetrically increasing marginal costs among exporters. Under Cournot competition, the importing country has an incentive to manipulate the tariff structure using a sequential tariff arrangement, which implies
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The effect of changes in the terms of trade on GDP and welfare: A Divisia approach to the System of National Accounts The Manchester School (IF 1.063) Pub Date : 2023-04-20 Nicholas Oulton
What effect, if any, do changes in the terms of trade have on the level of output (GDP) or welfare? I examine this issue through two versions of a textbook, Heckscher-Ohlin-Samuelson (HOS), two-good model of a small, open economy. In the first version both goods are for final consumption. In the second, one good is an imported intermediate input into the other. In both versions, economic theory suggests
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Issue Information The Manchester School (IF 1.063) Pub Date : 2023-04-02
No abstract is available for this article.
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Product design with attribute dependence The Manchester School (IF 1.063) Pub Date : 2023-03-29 José A. Novo-Peteiro
This paper studies how product design and pricing strategies are affected by the existing relationship between the characteristics that integrate the product. The analysis shows that complementarity and low substitutability encourage the provision of quality incorporated to the products and increase the quality distortion and cannibalization problems that are common in segmented markets. A two-product
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Competition mode and common ownership in a mixed oligopoly The Manchester School (IF 1.063) Pub Date : 2023-03-07 Lili Xu, Yidan Zhang, Toshihiro Matsumura
Price competition is more intense than quantity competition in private oligopolies, wherein all firms are profit maximizers. However, in mixed oligopolies where one state-owned public firm competes with profit-maximizing private firms, price competition may not result in tougher competition than quantity competition. In this study, we introduce common ownership, a distinct feature of recent financial
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Does surround-bidding corruption hurt procurers? The Manchester School (IF 1.063) Pub Date : 2023-03-07 Yuanzhu Lu, Xundong Yin, Hu Zhang
We consider a model of corruption in the form of surround-bidding in a first-price procurement auction in which bidders' private cost follows uniform distribution. We find that the briber's high-price bidding function is less aggressive than honest suppliers' while his low-price one is more aggressive. As the bribery cost increases, both the briber's low-price and high-price bidding functions become
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Forecasting inflation with a zero lower bound or negative interest rates: Evidence from point and density forecasts The Manchester School (IF 1.063) Pub Date : 2023-03-06 Christina Anderl, Guglielmo Maria Caporale
This paper investigates the predictive power of the shadow rate for the inflation rate in countries with a zero lower bound (the US, the UK and Canada) and in those with negative rates (Japan, the Euro Area and Switzerland). Using shadow rates obtained from two different models (the WX(3) and the KANSM(2) ones) and for different LB parameters we compare the out-of-sample forecasting performance of
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Access to bank financing and start-up resilience: A survival analysis across business sectors in a time of crisis The Manchester School (IF 1.063) Pub Date : 2023-03-03 Angelo Castaldo, Rosanna Pittiglio, Filippo Reganati, Domenico Sarno
The presence of exogenous global shocks due to the 2007/2008 economic and financial crisis and the current global pandemic crisis are deeply hampering economic operators' overall ability to access credit. Small and medium-sized enterprises and start-ups are most severely affected by credit rationing. This paper investigates whether access to bank loans in the early stage of a start-up's lifecycle is
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Centralized bargaining with pre-donation in a vertically related industry The Manchester School (IF 1.063) Pub Date : 2023-02-16 Ismail Saglam
This paper studies the incentives for, and the welfare effects of, pre-donation in a vertically related industry where two downstream firms that produce a homogenous good jointly bargain, using the generalized Nash rule, with an upstream firm over a linear input price before they engage in Cournot competition. We theoretically show that the downstream industry has no incentive to make any pre-donation
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Issue Information The Manchester School (IF 1.063) Pub Date : 2023-02-15
No abstract is available for this article.
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Input price discrimination and strategic inventory The Manchester School (IF 1.063) Pub Date : 2023-02-12 Toshiki Matsuoka
We consider a two-period model with strategic inventory and explore the welfare implications of banning input price discrimination. We find that inventory incentive is stronger under input price discrimination. Under uniform pricing, an increase in an inventory of a firm equally lowers the rival's wholesale price. It expands the rival's production, suppresses the firm's output, and weakens the incentive
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Foreign passive ownership and tariff-induced free technology transfer under vertical integration The Manchester School (IF 1.063) Pub Date : 2023-02-03 Chuyuan Zhang, Sang-Ho Lee
This study constructs a vertical structure model in which a foreign firm holds upstream partial passive ownership and examines tariff-induced free technology transfer from the firm to its downstream rival. We show that a strategic tariff can induce technology transfer when the share of foreign ownership is large, which always yields higher welfare under both vertical separation and integration, while
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Issue Information The Manchester School (IF 1.063) Pub Date : 2022-12-05
No abstract is available for this article.
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Does the employment effect of national minimum wage vary by non-employment rate? A regression discontinuity approach The Manchester School (IF 1.063) Pub Date : 2022-11-29 Lei Xu, Yu Zhu
We extend the Regression Discontinuity model to evaluate the procyclicality of employment effect of minimum wage and show that previous estimates may be biased due to failure to account for the local non-employment rate. The results suggest that the positive employment effect of increasing minimum wage is strongly procyclical, that is, is more pronounced in areas with low non-employment rates. Under
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Bank deposits and textual sentiment: When an European Central Bank president's speech is not just a speech The Manchester School (IF 1.063) Pub Date : 2022-11-24 Dimitris Anastasiou, Apostolos Katsafados
We investigate whether the textual sentiment affects European depositors' behavior in withdrawing their deposits. We construct two textual sentiments able to capture the perceived uncertainty. Our findings suggest that a high frequency of uncertainty and weak modal words in the European Central Bank (ECB) president's monthly speeches leads both households and non-financial corporations to withdraw
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Managerial delegation, network externalities and loan commitment The Manchester School (IF 1.063) Pub Date : 2022-11-09 Xubei Lian, Kai Zhang, Leonard F. S. Wang
In this paper, we show that, compared with no network externalities, firms always obtain higher profits and social welfare in the presence of positive network externalities, irrespective of the managerial delegation contracts. Furthermore, we show that whether the owner chooses market share delegation or sales delegation contracts relies on the type and strength of network externalities. If the network
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Issue Information The Manchester School (IF 1.063) Pub Date : 2022-10-01
No abstract is available for this article.
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The effect of education on homeownership: Evidence from 20th century school attendance laws in the United States The Manchester School (IF 1.063) Pub Date : 2022-09-09 Mary A. Silles
This article examines the causal impact of schooling on the probability of homeownership using decennial US Census data between 1960 and 2000. This is done by employing an instrumental variable approach that exploits historical changes in state mandatory schooling and child labour laws which affected the educational attainment of individuals with relatively low levels of schooling. Aggregate results
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The leverage effect of bundling on monopoly power and product quality The Manchester School (IF 1.063) Pub Date : 2022-09-05 Hui-Ling Chung, Jin-Li Hu, Yan-Shu Lin
This paper re-examines the leverage effect of bundling under vertical quality differentiation. That is, it studies whether or not the firm can still extend its monopoly power from the monopolist product market to the competing product market by bundling under vertical product quality differentiation. There is an intangible product (such as cloud storage, after sale service, etc.) in a bundled package
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On interconsumer externalities in a model of sales The Manchester School (IF 1.063) Pub Date : 2022-08-28 Evangelos Rouskas
I highlight interconsumer externalities in a static model of sales with homogeneous products and bidimensional consumer heterogeneity wherein there exists two-type search intensity heterogeneity and two-type valuation heterogeneity. An increase in the percentage of consumers with high valuation creates a dichotomy in the market. The consumers who experience the increase in their valuation become better
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Reviewing demand regimes in open economies with Penn World Table data The Manchester School (IF 1.063) Pub Date : 2022-08-23 André M. Marques
This paper uses the Penn World Table dataset to examine capacity utilization response to changes in the wage share in six developed countries from 1960 to 2019. Our vector autoregression model allows regression coefficients and volatilities to be time-varying in nature. A rolling window shows that capacity utilization response to the wage share is unstable. We find that a 1-standard deviation shock
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Inflation persistence and monetary policy: DSGE-VAR approach The Manchester School (IF 1.063) Pub Date : 2022-08-19 Kuo-Hsuan Chin
We study the dynamics of U.S. inflation persistence and the sources resulting to it over the “Great Inflation” and “Great Moderation” periods. It is different from most of the current studies in that we consider a Bayesian VAR model with the DSGE prior, the so-called DSGE-VAR approach, in which the prior economic information is coming from a small-scale New Keynesian DSGE model. In the recursive estimation
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Issue Information The Manchester School (IF 1.063) Pub Date : 2022-08-05
No abstract is available for this article.
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Organizational form and multiple exportable goods in export rivalry trade The Manchester School (IF 1.063) Pub Date : 2022-07-08 Kangsik Choi
Focusing on the multiple exportable goods between intrabrand and interbrand competition in the export rivalry market, we analyze foreign firms' endogenous choice of organizational form in the face of tariffs. It is shown that if the degree of intrabrand competition is sufficiently high, firms provide corporate incentives (i.e., U-form) when goods are substitutes and divisional incentives (i.e., M-form)
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Currency returns and systematic risk The Manchester School (IF 1.063) Pub Date : 2022-07-02 Fernanda Gonçalves, Giuliano Ferreira, Alex Ferreira, Pedro Scatimburgo
We investigate the relationship between currency excess returns and Gross Domestic Product (GDP) in a Consumption Capital Asset Pricing Model. GDPs are observable systematic risk factors in our asset pricing equations. The correlation between the unobservable systematic factors is explored by Seemingly Unrelated Regressions estimations. The sample comprises the period from 1999:M01 to 2019:M12 and
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Issue Information The Manchester School (IF 1.063) Pub Date : 2022-06-28
No abstract is available for this article.