The Relationship Between Growth and Investment

This paper utilizes the growth accounting framework to derive and analyze the relationship between the rate of growth of output and the ratio of investment to output. With plausible parametric assumptions this framework is used to examine the recent controversy in Fiji on investment and growth. Our results support the concerns of some USP economists that a 5% growth rate for Fiji needs significantly higher investment rates and institutional reforms.Investment ratio, Growth targets, Growth accounting, Total Factor Productivity.

Investment Ratio and Growth

In growth and development policy investment ratio is an important policy instrument. However, there is no well defined framework to determine what should be the investment ratio for a given growth target. This paper explains the potential of Solow (1956) and Solow (1957) to explain the relationship between the target growth rate and investment ratio. Hypothetical data are used for illustration.Investment ratio, Growth targets, Growth accounting, Total Factor Productivity, Neo classical growth model.

Efficient Micro-Mobility using Intra-domain Multicast-based Mechanisms (M&M)

One of the most important metrics in the design of IP mobility protocols is the handover performance. The current Mobile IP (MIP) standard has been shown to exhibit poor handover performance. Most other work attempts to modify MIP to slightly improve its efficiency, while others propose complex techniques to replace MIP. Rather than taking these approaches, we instead propose a new architecture for providing efficient and smooth handover, while being able to co-exist and inter-operate with other technologies. Specifically, we propose an intra-domain multicast-based mobility architecture, where a visiting mobile is assigned a multicast address to use while moving within a domain. Efficient handover is achieved using standard multicast join/prune mechanisms. Two approaches are proposed and contrasted. The first introduces the concept proxy-based mobility, while the other uses algorithmic mapping to obtain the multicast address of visiting mobiles. We show that the algorithmic mapping approach has several advantages over the proxy approach, and provide mechanisms to support it. Network simulation (using NS-2) is used to evaluate our scheme and compare it to other routing-based micro-mobility schemes - CIP and HAWAII. The proactive handover results show that both M&M and CIP shows low handoff delay and packet reordering depth as compared to HAWAII. The reason for M&M's comparable performance with CIP is that both use bi-cast in proactive handover. The M&M, however, handles multiple border routers in a domain, where CIP fails. We also provide a handover algorithm leveraging the proactive path setup capability of M&M, which is expected to outperform CIP in case of reactive handover.Comment: 12 pages, 11 figure

A Panel Data Approach to the Contribution of Trade to the Growth of Selected East Asian Countries

Panel data methods are used to estimate the contribution of openness of trade to the long term or the steady state rate of growth of output (SSGR) of selected East Asia countries viz., Singapore, Malaysia, Thailand, Hong Kong, Korea and the Philippines. Since SSGR is unobservable, its estimates are derived by estimating modified production functions and by imposing the equilibrium conditions of the Solow (1956) growth model. Panel cointegration tests showed that there is a well defined long run relation between output, trade ratio and capital. Growth accounting exercise showed that factor accumulation is the dominant contributor to the SSGR of this region. Openness of trade, however, has made a significant contribution to SSGR by 1999-2003.Panel unit root and cointegration tests, Trade Openness, Total Factor Productivity and East Asian Countries

Time series estimates of the US new Keynesian Phillips curve with structural breaks

This paper uses recent US data to estimate the new Keynesian Phillips curve (NKPC) with three modifications. Firstly, the variables in the NKPC are found to be nonstationary. Therefore, it is estimated with the time series methods and the cointegrating equations are tested for structural breaks. Secondly, inflationary expectations are proxied with the survey data. Thirdly, unlike in the hybrid NKPC, the effects of the lagged inflation rates are introduced into the dynamic adjustment equations. This offers an opportunity to estimate these dynamic effects with a more general specification instead of the restricted partial adjustment mechanism underlying the hybrid NKPC. Our NKPC, with these changes, is consistent with its underlying micro foundations and forward looking expectations. The results of our NKPC can explain the dynamics of the US inflation rate as well as any other alternative model.US New Keynesian Phillips Curve, Forward looking expectations, Survey data, Wage share, Cointegration

Demand for Money in India: 1953-2003

The demand for money, especially in the developing countries, is an important relationship for formulating appropriate monetary policy and targeting monetary variables. In this paper we estimate the demand for narrow money in India and evaluate its robustness. It is found that there is a stable demand for money for almost half a century from 1953 to 2003. There is no evidence for any significant effects of the $1991$ financial reforms.Demand for money, Developing countries, Income and interest rate elasticities, Cointegration, Financial reforms.