Purchasing
Power Parity: Evidence from Developing Countries
EMMANUEL ANORUO, HABTU BRAHA, AND YUSUF AHMAD
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This paper utilizes the dynamic error-correction model (DECM) to examine
the issue of purchasing power parity (PPP) for 11 developing countries
(Argentina, Bolivia, Colombia, Cote d'Ivoire, Ecuador, Guatemala, Kenya,
Nigeria, Peru, South Africa, and Venezuela). For comparison purposes,
evidence from the traditional unit root methods of the augmented Dickey-Fuller
(ADF) and Phillips-Perron is presented. The results from the conventional
unit root tests failed to find evidence of PPP in all of the cases. However,
the results from the generalized error-correction model detected evidence
of PPP for nine out of the 11 countries under consideration. Based on
these results, it was concluded that PPP holds in the long-run for the
sample countries and that the implicit restrictions associated with unit
root tests prevented earlier studies from finding evidence in support
of PPP theory. (JEL F31); Int'l Advances in Econ. Res., 8(2): pp. 85-96,
May 02. ŠAll Rights Reserved
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The Unimportance
of the Choice-Value Thesis in Economics
BJORN FRANK
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The choice-value thesis claims that people always choose what is best
for them, given their information on the set of alternatives. This paper
attempts to show that this assumption is less important than is suggested
by the high esteem in which it is held. Modern economics neither relies
on it, as shown by inspecting a sample of 742 papers, nor does the rejection
of the choice-value thesis imply paternalism, as is sometimes suggested.
It is shown that paternalism can be argued against without referring to
the choice-value thesis. (JEL B41, D69); Int'l Advances in Econ. Res.,
8(2): pp. 97-106, May 02. ŠAll Rights Reserved
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Socio-Economic
Evaluation of Mental Health as a Basis for Financing Health Care in
Sweden
DICK JONSSON, JOSE FERRAZ-NUNES, AND MIKAEL RAHMQVIST
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The objective of this paper is to examine hypotheses about the relationships
between socio-economic factors, risk factors in working life, and the
occurrence of mental illness, together with the degree of quality of life
and consumption of health care, costs for health care, and costs for social
insurance. This is a prospective and longitudinal study of 1,347 individuals
of an active working age, 18-64 years, who have been on sick leave for
more than 30 days. The group is characterized by the prevalence of risk
factors in their work environment and welfare losses, such as multiple
health problems, poor quality of life, inability to work, and dependency
on society's support from health care and social insurance. The costs
for health care were just over 2.8 million SEK, or 30 percent higher for
those with psychological distress as compared to the group without. The
payments from social insurance also increased by approximately 15 percent.
The relatively greater weighting of health care costs and sickness cash
benefits were motivating factors to study whether this group had an optimal
amount and quality of health care, or if the resources available for health
care should be distributed in another way that better satisfies the needs
of the group. (JEL I00, D60); Int'l Advances in Econ. Res., 8(2): pp.
107-118, May 02. ŠAll Rights Reserved
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Did the EMS
Encourage Inflation Convergence?
VICTOR MANUEL MONTUENGA-GOMEZ
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This paper studies the convergence of inflation rates over the period
of 1983-93 for some countries within the European Monetary System. Three
different price indices are considered for consumer goods, services, and
industrial products. This study focuses on the difference between core
and peripheral countries for measuring convergence speed. By using ß-
and s-convergence tools, as previously identified in studies on output
growth convergence, it was found that the convergence process did not
evolve equally whether considered through price indices, time, or countries.
(JEL E31, C31, C32, O52); Int'l Advances in Econ. Res., 8(2): pp. 119-127,
May 02. ŠAll Rights Reserved
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Assessment
of Latin American and Carribean Countries in the International Economy
FARHANG NIROOMAND AND EDWARD NISSAN
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Based on the construction of two composite indices for economic integration,
this paper looks at the hierarchical position of Latin America and the
Caribbean. The two indices, called the speed of integration and the initial
level of integration, are composed of changes and initial values of real
trade as a share of GDP, institutional investor rating, FDI as a share
of GDP, and manufacturing export as a share of GDP. Mexico ranked first
and Peru ranked last for the speed index, while Trinidad and Tobago ranked
first and Nicaragua ranked last for the initial level index. (JEL F4);
Int'l Advances in Econ. Res., 8(2): pp. 128-134, May 02. ŠAll Rights Reserved
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An Analysis
of EU Wine Trade: A Gravity Model Approach
DANA DASCAL, KONSTADINOS MATTAS, AND VANGELIS TZOUVELEKAS
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In this research study, a gravity model approach was used in order to
analyze the main factors affecting the trade flows of wine in the EU.
The empirical model was applied using data for the first twelve EU countries
for the period 1989-97. It has been clearly shown in the empirical literature
that gravity models can be successfully applied to a single commodity
market. The present study utilized pooled cross-sectional and time series
data in a one-way fixed effects model that accounted for country-pair
heterogeneity. The results revealed that wine trade was positively influenced
by an increase in GDP per capita, since greater income promotes trade.
The remoteness of one country from another influenced exports positively
and imports negatively, and the quantities traded did not prove to be
very sensitive to wine prices. The depreciation of EU currencies and the
high production of wine in the EU increased exports and reduced imports,
while EU integration enhanced trade among members. (JEL Q10); Int'l Advances
in Econ. Res., 8(2): pp. 135-147, May 02. ŠAll Rights Reserved
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The
Impact of Oil Prices on Income and Energy
YONG U. GLASURE AND AIE-RIE LEE
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The major determinant of real income growth in Korea is real oil prices,
followed by money supply, exchange rates, energy consumption, and government
spending. Over the longer horizon, the effects of exchange rates, oil
prices, government spending, and money supply become more pronounced.
For energy consumption, the most important factor is oil prices, followed
by exchange rates, government spending, money supply, and income. For
the association between energy consumption and real income, energy consumption
influences real income growth only through energy consumption, while real
income affects energy consumption only through the error correction term.
The findings of the study thus suggest that the level of economic activity
and energy consumption mutually influence each other. (JEL Q43, O53);
Int'l Advances in Econ. Res., 8(2): pp. 148-154, May 02. ŠAll Rights Reserved
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Cash
Flow Effects on Economic Growth
MIGUEL-ANGEL GALINDO MARTIN AND MARIA-TERESA MENDEZ PICAZO
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Policy makers have traditionally considered the macroeconomic relations
and the variables that can affect the economic objectives that they pursue,
such as prices, employment, balance of payments, and economic growth.
Recently, microeconomic behavior has also been considered. To complete
the analysis, it is necessary to include those variables that define the
firm's evolution and activities, and cash flow could be this kind of variable
to be included in the analysis. The main objective of this paper is to
show the relationship between cash flow and one of the final economic
policy targets, economic growth. This paper considers the relationship
between cash flow and applied economics, then develops the effects of
cash flow on economic growth. (JEL: O40); Int'l Advances in Econ. Res.,
8(2): pp. 155-159, May 02. ŠAll Rights Reserved
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Class
Length and Student Performance: An Extended Study
SID EWER, OLEN GREER, WILBUR BRIDGES, AND BARRY LEWIS
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Many accounting educators believe that the student learning
of accounting is better facilitated over a longer period of time, rather
than a shorter period of time. This study examined the results of student
performance in two introductory accounting courses, comparing student
performance results of four-week summer classes with the results of
traditional 16-week courses. In this research, the same professor taught
the spring and summer ACC 201 courses, and two other professors taught
both the spring and summer ACC 211 courses. Also held constant were
the lecture material, course assignment, and test content. The results
of the study indicate that in general, students taking introductory
accounting over four weeks fare about as well as students who take introductory
accounting over a traditional 16-week period. These results have potential
importance beyond accounting education and provide support to universities
offering more block courses to better serve individual student needs.
(JEL I21); Int'l Advances in Econ. Res., 8(2): pp. 160-168, May 02.
ŠAll Rights Reserved
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