Testing genuine saving

The World Bank has been publishing estimates of adjusted net or"genuine"saving since 1999. This measure of saving treats depletion of natural resources as a type of economic depreciation. Hamilton uses recent theoretical results relating growth in saving to growth in future consumption to provide a test of genuine saving using historical data. Did measured genuine saving in 1976, for example,"predict"the observed changes in consumption over subsequent decades? The author tests four alternative measures of saving econometrically. The worst measure, in terms of explained variation, is traditional net saving. Genuine saving adjusted to reflect population growth exhibits the worst fit with theory. Both gross saving and genuine saving perform better, with good concordance with theory, while genuine saving exhibits a moderate advantage in terms of goodness of fit.Economic Investment&Savings,Environmental Economics&Policies,Banks&Banking Reform,Economic Theory&Research,Contractual Savings

Comprehensive wealth, intangible capital, and development

Existing wealth estimates show that in most countries intangible capital is the largest share of total wealth. Intangible capital is calculated as the difference between total wealth and tangible (produced and natural) capital. This paper uses new estimates of total wealth, natural capital, and physical capital for a panel of countries to shed light on the constituents of the intangible capital residual. In a development-accounting framework, the authors show that factors of production are very successful in explaining the variation in output per worker when they use intangible capital instead of human capital as a factor of production. This suggests that intangible capital captures a broad range of assets typically included in the total factor productivity residual. Human capital is an important factor, both in statistical and economic terms, in regressions decomposing intangible capital.Economic Theory&Research,Banks&Banking Reform,Debt Markets,Investment and Investment Climate,Emerging Markets

Measuring National Income and Growth in Resource-Rich, Income-Poor Countries

GDP, the leading economic measurement, is outdated and misleading. . . . It’s like grading a corporation based on today’s cash flow and forgetting to depreciate assets and other costs. – Joseph Stiglitz, “Good Numbers Gone Bad,” Fortune, October 2, 2006.National income, growth, natural resources, resource-rich, income-poor, GPD, wealth, assets, exports, imports

Oil Stock Discovery and Dutch Disease

We set out a model of a small open economy exporting oil and a traditional exportable in return for produced capital. The small open economy also has local production of a non-traded good. We first observe that the size of the traditional export sector declines with an exogenous increase in the country's oil stock. Strong Dutch disease (SDD) involves a net diminution in produced capital in use in the small open economy after the oil discovery shock. SDD turns on the exportable sector being relatively capital intensive.Dutch disease, resource discovery, invariant earnings

Oil Stock Discovery and Dutch Disease

We set out a model of a two-good, small open economy exporting a traditional exportable in order to �finance capital goods rental payments. We observe that the traditional export sector declines with an exogenous increase in the country's oil export earnings, while the local goods sector expands. For input price effects to emerge, land is needed as a third input. For the "large land" case, we can have imports of capital steadily decline as oil earnings expand. Earnings from oil sales are stationary under our annuitization construction.Dutch disease, resource discovery, invariant earnings

Negative Group Velocity

The group velocity for pulses in an optical medium can be negative at frequencies between those of a pair of laser-pumped spectral lines. The gain medium then can amplify the leading edge of a pulse resulting in a time advance of the pulse when it exits the medium, as has been recently demonstrated in the laboratory. This effect has been called superluminal, but, as a classical analysis shows, it cannot result in signal propgation at speeds greater than that of light in vacuum.Comment: v3 adds discussion of "rephasing", and adds a figure. v4 adds references to the early history of negative group velocity, and adds a figure; thanks to Alex Grani

Resource Windfalls, Macroeconmic Stability and Growth: The Role of Political Institutions

We use a new dataset on non-resource GDP to examine the performance of commodity-exporting countries in terms of macroeconomic stability and economic growth in a panel of up to 129 countries during the period 1970-2007. Our main findings are threefold. First, we find that overall government spending in commodity-exporting countries has been procyclical. Second, we find that resource windfalls initially crowd out non-resource GDP which then increases as a result of the fiscal expansion. Third, we find that in the long run resource windfalls have negative effects on non-resource sector GDP growth. Yet, the effects turn out to be statistically insignificant when controlling for government spending. Both the effects of resource windfalls on macroeconomic stability and economic growth are moderated by the quality of political institutions.commodity, fiscal policy, macroeconomic stability, economic growth

Capital accumulation and resources depletion - a Hartwick rule counterfactual

How rich would resource-abundant countries be if they had actually followed the Hartwick Rule (invest resource rents in other assets) over the past 30 years? The authors use time series data on investments and rents onexhaustible resource extraction for 70 countries to answer this question. The results are striking: Gabon, Trinidad and Tobago, and Venezuela would all be as wealthy as the Republic of Korea, while Nigeria would be five times as well off as it is currently. The authors also derive a more general rule for sustainability-maintain positive constant genuine investment-and use this to draw further empirical results.International Terrorism&Counterterrorism,Economic Theory&Research,Fiscal&Monetary Policy,Capital Markets and Capital Flows,Decentralization,Economic Theory&Research,Environmental Economics&Policies,International Terrorism&Counterterrorism,Economic Growth,Banks&Banking Reform

BLAP-Tags, TUBEs and DUB-Chips: Combined Novel Technologies will Advance Molecular Epithelial Physiology

The field of ubiquitylation and deubiquitylation of proteins in molecular physiology is growing at a rapid rate. Our understanding of molecular physiology of these processes may become limited by the advancement of technologies that scientists can employ. Therefore, it is important to approach physiological questions of ubiquitylation and deubiquitylation of proteins from a multiple methodological direction. Indeed, the role of ubiquitylation and deubiquitylation of proteins in cellular function has been implicated in the pathophysiology of human diseases including cancer, viral diseases, and neurodegenerative disorders. There are many modulators (activators and inhibitors) of ubiquitylation and deubiquitylation. Therefore, the link is being able to rapidly assess potential modulators of ubiquitylation and deubiquitylation and determine which specific modulators play a role(s) within a particular physiological setting. After the specific modulators have been identified, further experimentation is required to assess the downstream use as potential clinical targets for a particular disease. The first step is to identify the specific modulators. This perspective highlights a multi-prong technologies approach that uses three novel technologies (BLAP-tagged proteins, TUBES, and DUB-Chips) that can rapidly identify a number of potential candidates that modulate ubiquitylation and deubiquitylation of cellular proteins

Nature, socioeconomics and adaptation to natural disasters: new evidence from floods

The authors analyze the determinants of fatalities in 2,194 large flood events in 108 countries between 1985 and 2008. Given that socioeconomic factors can affect mortality right in the aftermath of a flood, but also indirectly by influencing flood frequency and magnitude, they distinguish between direct and indirect effects of development on flood mortality. The authors find that income is negatively associated with the frequency of floods and, conditional on their magnitude, the fatalities they cause in developing countries. However, for developed countries they find that increased income is associated with more fatalities, both directly (conditional on flood occurrence and magnitude) and indirectly through an increase in the frequency and magnitude of flood events. Also in contrast to the literature, they find that the effect of governance on flood frequency and fatalities in developing countries is U-shaped, with improvements in governance reducing the numbers of floods and deaths when governance is weaker but raising them when governance is stronger.Hazard Risk Management,Natural Disasters,Governance Indicators,Disaster Management,Flood Control