Explaining the gaps in labour productivity in some developed countries

Modern economic theories explain differences in productivity and economic growth by differences in political and economic institutions, and differences in culture, geographical location, policies, and laws. Another new strand of the literature explains productivity and economic growth differentials by gaps in general purpose technology and information and communication technology, while another literature cites real exchange rate depreciations as the main explanatory variable. These gaps might explain differences in economic performances between developed and developing countries, but they are too small to explain differences between developed industrial economies such as New Zealand and Australia or Canada and the United States. In this paper, more than eighty percent of labour productivity gaps between New Zealand and Australia and Canada and the United States are explained by endogenous technology shocks (TFP) and capital intensities.Productivity, nontradable prices, real exchange rate

Predicting Instability

Unanticipated shocks could lead to instability, which is reflected in statistically significant changes in distributions of independent Gaussian random variables. Changes in the conditional moments of stationary variables are predictable. We provide a framework based on a statistic for the Sample Generalized Variance, which is useful for interrogating real time data and to predicting statistically significant sudden and large shifts in the conditional variance of a vector of correlated macroeconomic variables. Central banks can incorporate the framework in the policy making process.Sample Generalized Variance, Conditional Variance, Sudden and Large Shifts in the Moments

An Empirical Glimpse on MSEs Four MENA Countries

The Economic Research Forum (ERF) produced a one-off survey of micro & small private enterprises (MSE) in a number of Middle East and North African countries (MENA). It contains sufficient information to fit a production function and additional information about the owner’s education type; the scope of the market; and the type of technology. Further, it provides information about perceived constraints to production. We test the effect of these factors on technical progress. We believe that empirical research of policy issues can help promote the making of ‘evidence-based policies’ in the MENA countries.Micro-small Private Enterprise; Production Function; Stochastic Dominance.

An Empirical Glimpse on MSEs Four MENA Countries

The Economic Research Forum (ERF) produced a one-off survey of micro & small private enterprises (MSE) in a number of Middle East and North African countries (MENA). It contains sufficient information to fit a production function and additional information about the owner’s education type; the scope of the market; and the type of technology. Further, it provides information about perceived constraints to production. We test the effect of these factors on technical progress. We believe that empirical research of policy issues can help promote the making of ‘evidence-based policies’ in the MENA countries.Micro-small private enterprise; production function; stochastic dominance.

On The dynamic of search, matching and productivity in New Zealand and Australia

As far as we know there has been no, or very little, empirical examination of search models and unemployment – vacancy relationship in New Zealand. We empirically examine dynamic matching functions in the New Zealand labor market over the period 1986-2006. Further, it is well documented that although New Zealand and Australia embarked on similar wide economic reforms almost 25 years ago, the level of New Zealand’s labor productivity is still lower than that of Australia (Razzak, 2007) and lower than the US productivity level (Prescott, 2002). It is has been argued that among the main explanatory variable is the low level of capital intensity – capital per hour worked - Razzak (2007) and Hall and Scobie (2005). However, there has been no formal explanation for the low level of capital intensity. This paper explains why capital investments are relatively lower in New Zealand. We do this by examining the dynamics of the labor markets in New Zealand and Australia.Matching Function, Beveridge curve, Labor Productivity

On the GCC Currency Union

Essentially, the impact of the currency union on member countries depends on whether the common currency area is optimal in the sense that the effect of the asymmetric shocks is small, Mundell (1961). Typically, researchers use VAR of different types to analyze the data. For robustness, we use different methodologies. First, we use different estimators to estimate a small textbook model for the panel of the Gulf Cooperation Council countries (GCC) from 1970 to 2006, where the short-run equilibrium real output and the real exchange rate are determined by the intersection of the assets and goods markets equilibrium schedules. And the central bank fixes the exchange rate by keeping the money supply at a level where the domestic interest rate is equal to the foreign interest rate. Then we test for symmetry using the nonparametric Triples test, Randles et al. (1980). Third, we introduce a nonparametric multivariate statistic to test whether the variances of the shocks (the conditional variance) are equal across countries.Optimum Currency Area, asymmetrical shocks and conditional variance

Explaining the gaps in labour productivity in some developed countries

Modern economic theories explain differences in productivity and economic growth across countries by differences in political and economic institutions, and differences in culture, geographical location, policies, and laws. The success of any of these theories in explaining the gap in productivity between any two countries depends on the countries in the sample. We argue in this paper that differences in the above variables might explain gaps in economic performance between developed and developing countries, but are too small to explain the productivity gaps between developed countries. We test this hypothesis for two pairs of developed neighbouring countries: New Zealand and Australia and Canada and the United States, hence New Zealand – Australia and Canada – United States. In this paper, more than eighty percent of labour productivity gaps between New Zealand and Australia and Canada and the United States are explained by endogenous technology shocks (TFP) and capital intensities.Labour Productivity; TFP; Real exchange rate

Intelligent Energy Optimization for User Intelligible Goals in Smart Home Environments

Intelligent management of energy consumption is one of the key issues for future energy distribution systems, smart buildings, and consumer appliances. The problem can be tackled both from the point of view of the utility provider, with the intelligence embedded in the smart grid, or from the point of view of the consumer, thanks to suitable local energy management systems (EMS). Conserving energy, however, should respect the user requirements regarding the desired state of the environment, therefore an EMS should constantly and intelligently find the balance between user requirements and energy saving. The paper proposes a solution to this problem, based on explicit high-level modeling of user intentions and automatic control of device states through the solution and optimization of a constrained Boolean satisfiability problem. The proposed approach has been integrated into a smart environment framework, and promising preliminary results are reporte