Money Demand Stability under Currency Substitution: Some Recent Evidence

This study deals with the issue of independent monetary policy and the stability of the domestic money demand function in the presence of currency substitution and capital mobility in five Asian economies. It is argued that money demand will be less stable and more difficult to control in the presence of international variables. The money demand function is derived using the portfolio balance approach. The results from the cointegration analysis reveal that capital mobility and currency substitution are significant factors in the domestic money demand equations for Indonesia, Korea, Malaysia, Singapore, and Thailand. The results also show that the US dollar, Japanese yen, and British pound are used significantly by domestic residents together with the domestic currency in Indonesia, Korea, Singapore and Thailand. However, in the case of Malaysia, despite the existence of currency substitution for the US dollar and Japanese yen, there is no evidence of currency substitution between the domestic currency and British pound. Therefore, for these countries to have an effective monetary policy, the monetary authorities should take into account the two international factors

Substitution between Money and Near Monies in Switzerland

This paper investigates the substitutability between money and near-money assets during the period 1976 to 1996 in Switzerland. Financial developments have made a variety of instruments available to store wealth and conduct economic transactions. These developments have generated a near money component in households\u27 and businesses\u27 portfolio balances. It is important to evaluate the effect of near-money on money demand and the effectiveness of monetary policy. Towards this goal, five monetary assets: currency and demand deposits at commercial banks, demand deposits with the postal system, deposits on transaction accounts with banks, savings deposits and time deposits are considered. We evaluate the degree of substitutability among these assets using the Morishima elasticity. Results show that various monetary assets substitute for one another. Consistent with a high degree of diversification, the Morishima elasticity is significantly larger when adjustment takes place in the price of a relatively broader monetary asset as compared with a narrower one. Targeting a broad monetary aggregate captures a variety of assets that contribute to liquidity and aggregate demand, enhancing the effectiveness of monetary policy. Nonetheless, high elasticity of substitution between monetary assets has made it increasingly difficult to target money demand via changes in the interest rate. As a result, in 1999 the Swiss National Bank abandoned monetary targeting in favor of an expected inflation target

Efficiency and Productivity Analyses of Indonesian Manufacturing Industries

This study estimates the technical efficiencies and total factor productivity (TFP) growth in food, textile, chemical and metal products industries during 1993 to 2000 in Indonesia by using the stochastic frontier model. Furthermore, the determinants of inefficiency are also analyzed and the TFP growth is decomposed into technological progress, scale component, and efficiency growth. The results reveal that the food, textile, chemical and metal products sectors are on average 50.79%, 47.89%, 68.65% and 68.91% technically efficient respectively. It is noted that ownership contributed to technical inefficiency in the food sector; location and size contributed to technical inefficiency in the textile sector, whereas size, ownership and age contributed to inefficiencies in the chemical and metal products sectors. The estimates of TFP growth indicate that productivity in Indonesian manufacturing industries decreased at the rate of 2.73%, 0.26%, 1.65% and 0.5% in food, textile, and metal products respectively, whereas in the chemical sector, it increased at a rate of 0.5% during the period of the study. The decomposition of TFP growth indicates that the growths are driven positively by technical efficiency changes and negatively by technological progress in all four sectors

On Public Capital Investment and Economic Growth in Illinois

The present paper was written as an analysis of the proposed capital budget plan which is being considered by the State of Illinois and which has been a major item on the political agenda in the state for well approximately two years. In the spring of 2008, Southern Illinois University President Glenn Poshard asked Dr. Subhash C. Sharma of the Department of Economics at Southern Illinois University Carbondale to do an analysis of the proposed capital improvements plan which was being advocated by then Governor Rod Blagojevich and being considered by the Illinois General Assembly. The plan would make a major investment in infrastructure improvements in the state, and it would have been the first major capital plan to pass the General Assembly in almost a decade. It follows in the tradition of two other major capital improvements bills advocated by earlier Governors and passed by the Illinois General Assembly. In 1985 under the leadership of Governor James R. Thompson, the state passed the Build Illinois Plan, which claimed at the time to be the largest public works project in the state’s history. It was funded at $2.3 billion total. In 1999 at the beginning of his administration, Governor George Ryan initiated and the General Assembly passed a new capital budget called the Illinois FIRST plan for the infrastructure improvements and capital needs. Illinois FIRST was funded at$12 billion total. The current Illinois Works plan would follow in the footsteps of those two prior major investments made in infrastructure by the people of Illinois if it were to be approved. The plan is still being considered by the Illinois General Assembly, and this proposal or something like it will be one of the major items for consideration by the new Governor Pat Quinn and his administration

Technical Efficiency and Productivity Analysis in Indonesian Provincial Economies

By using the stochastic frontier methodology, this study investigates the technical efficiency and total factor productivity (TFP) growth in Indonesian provincial economies during the period from 1993 to 2000. In addition to the estimation of provincial technical efficiency, factors that contribute to technical inefficiency are also examined and the TFP growth is decomposed into technological progress, the scale component and the change in technical efficiency. The results reveal that average technical efficiency is only around 50%. Our results reveal that the mean years of schooling and sectoral differences affected technical efficiency. The TFP grew, on average, in the range from 1.65% to 5.43% with an average growth of 3.59%. In twenty out of twenty six provinces the TFP growth was driven by efficiency changes while in four provinces the TFP growth was driven by technological progress. Further, we note that the Asian crisis affected the TFP growth and the western provinces suffered from the crisis more than the eastern provinces

Cost efficiency, Economies of Scale, Technological Progress and Productivity in Indonesian Banks

This study estimates cost efficiency, scale economies, technological progress and productivity growth for Indonesian banks over the period 1993-2000. Overall the cost efficiency of all banks during this period was 69.82%. However, on average the efficiency of banks prior to the Asian crisis and after the Asian crisis were 79.67% and 53.40% respectively. Moreover, the results also indicate that private-owned banks and joint venture/foreign banks were more efficient than public-owned banks. Furthermore, as expected large banks tend to be more efficient as compared to smaller banks. Total factor productivity growth for Indonesian banks over the period 1993-2000 was -3.14%. However, before the Asian crisis, Indonesian banks productivity decreased by 1.48%, while after the crisis it decreased by 6.45%

Context aware Routing to Assist Routing Decisions for Quality Improvement in Multi Hop Ad hoc Networks

The context information is an intriguing aspect of decision making. The context-awareness can be useful in the ad hoc networks in which nodes are mobile, and the conditions are dynamic. In ad hoc networks, routing protocols are intended to discover the route over multi-hop wireless links under varying conditions. The context-awareness can assist the routing protocols in determining the appropriate path. This paper investigates into choosing the appropriate route by applying the context information and presents the approach to improve the decision making and the quality of the route. We consider nodes, connecting links, and different layers as the context. The paper introduces the scalability and flexibility in the set of parameters that govern the eminence of the node inter-connection that, in turn, influences the overall quality of the route. We propose the context-aware dynamic routing protocol (CADR) and present the approach, algorithm, and analysis. We simulate the protocol by taking the flexible combination of the context attributes and the values, also compares the performance with AODV. The simulation results show that the protocol chooses the appropriate route as per the considered attributes and weight, and provide the enhanced performanc

Efficiency Analysis of K-12 Public Education in Illinois

The public education system in the United States has received a great deal of attention from both constituents and policy makers alike over the past thirty years. Identifying less efficient school districts and examining the sources of inefficiency has important policy implications. School districts might improve efficiency by managing educational resources differently. In this paper, we estimate technical efficiency for all three types of school districts in the state of Illinois K-12 public education system. Technical efficiency in the Illinois school system averaged 90% for unit school districts, 85% for elementary school districts, and 82% for high school districts. We also investigate possible factors associated with inefficiency. The percentage of student enrollment that qualifies as low income and the size of the school district are positively related to inefficiency. School districts that have a larger percentage of teachers with advanced degrees are more efficient. Having a lower ratio of students per administrator in a school district increases technical efficiency

A Simple Procedure to Correct for Attenuation of ANOVA Statistics in Decision Sciences Research

Studies in the field of Decision Sciences that employ multi-item rating scales to measure latent constructs have predominantly used ANOVA rather than Means and Covariance Structure Analysis (MACS) in order to investigate group mean differences. However, traditional statistics in ANOVA (e.g., t and F) attenuate when dealing with imperfect measures, which in turn potentially leads to incorrect interpretation of results in the form of accepting the false null hypothesis and/or underestimating the true effect size. To address this issue, we describe in this paper a new but simple procedure to disattenuate the ANOVA-based statistics for measurement error. Using previously published studies, we provide an illustration for practically implementing this procedure that has not been used in prior literature. A major implication of our work is that scholars in decision sciences can now report correct estimates of test statistic and enhanced effect size when examining between-group mean differences, thereby leading to a richer and more appropriate interpretation of findings in contemporary research

Enthalpies of Mixing of Cyclohexane with Binary Mixtures of Benzene with Toluene, p-Xylene & Carbon Tetrachloride

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