Long
Memory in the Interest Rates in Some Asian Countries
LUIS A. GIL-ALANA
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In this paper, the stochastic behavior of short run interest rates in
some Asian development countries is examined by means of using fractionally
integrated semiparametric techniques. In doing so, a much richer flexibility
is allowed in the dynamic behavior of the series not achieved by the classical
representations based on I(0) or I(1) processes. The author uses a quasi-maximum
likelihood estimation procedure of Robinson [QMLE, 1995a], which has some
advantages with respect to other methods. The results show that the orders
of integration of the short run interest rates in Singapore and Thailand
are strictly below 1, implying mean reversion. On the contrary, the results
for Malaysia, South Korea, and Philippines are less conclusive, the values
of d oscillating around the unit root case. (JEL C22); Int'l Advances
in Econ. Res., 9(4): pp. 257-267, Nov. 03. ŠAll Rights Reserved
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Financial
Variables as Leading Indicators in Greece
NIKOLAOS MYLONIDIS
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This paper presents business cycle stylized facts for the Greek economy
and extends the relevant Greek literature in the following directions.
First, the index of industrial production (IOP) is used to represent real
economic activity and business cycle conditions. Second, the behavior
of certain financial variables throughout the various phases of the business
cycle is analyzed in order to assess their leading indicator properties.
Third, possible non-linearities in these variables are investigated and
tested for their relation to the business cycle states. The results imply
that the most reliable leading indicators are real Treasury bill rates.
Volatilities of real short-term interest rates may also contain useful
predictive information for IOP volatility. Finally, mean non-linearities
seem to be associated with business cycle asymmetries in the mean. (JEL
E32, E44); Int'l Advances in Econ. Res., 9(4): pp. 268-278, Nov. 03. ŠAll
Rights Reserved
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Empirical Analysis
of Savings Behavior in European Countries:
New Insights
CRISTINA RUZA AND JOSE M. MONTERO
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The primary aim of this paper is to carry out an analysis of the savings
behavior by separately analyzing its public and private components and
the private savings components as well. Particularly, the authors will
devote attention to appraise the extent to which the substitution effect
between those magnitudes have held for the last few decades in the European
context. The authors will apply unit root tests and have chosen the following:
Augmented Dickey-Fuller, Phillips-Perron, and Kwiatkowski-Phillips-Schmidt-Shin
tests. It's expected that empirical results will shed light for policymakers
aimed at being capable of increasing aggregate private savings which,
in turn, will improve the country's economic growth. (JEL E20, C22, C23);
Int'l Advances in Econ. Res., 9(4): pp. 279-287, Nov. 03. ŠAll Rights
Reserved
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Income Smoothing
Behavior of U.S. Banks Under
Revised International Capital Requirements
RICHARD J. RIVARD, EUGENE BLAND, AND GAY B. HATFIELD MORRIS
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The use of the loan-loss provision to smooth reported income by large
bank holding companies is a much-investigated practice. To the extent
that the variability of net income is a measure of risk, income smoothing
may reduce the perceived riskiness of the bank and thus increase stock
value. Managers may have added incentive to smooth income in response
to the structure of their compensation package. The Basel Accord of 1988
phased in new definitions of regulatory capital for banks. These changes
have increased the incentives for income smoothing. Most previous studies
on income smoothing and loan-loss reserves predate the implementation
of the Basel Accord. Others use data that include the transition period.
This study revisits the subject, using only post-Accord data. Results
of this study are compared with previous results. The evidence confirms
the continued existence of income smoothing and supports the proposition
that banks have become more aggressive in using loan-loss reserves as
a tool for income smoothing. (JEL G21); Int'l Advances in Econ. Res.,
9(4): pp. 288-294, Nov. 03. ŠAll Rights Reserved
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Arithmetic
Visibility Estimates for OECD Countries
with Three Government Levels
MIGUEL ROIG ALONSO
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The importance of fiscal visibility has been well known for a long time
but attempts to quantify it by taking the internal structure of every
type of revenue and expenditure in a fiscal system into consideration
are recent. Indicators used until now rest on structural parameters combined
in a multiplicative way with a 0 estimate always resulting in at least
one of such factors being null. An alternative way to measure fiscal visibility
consists of combining parametric values in an additive instead of a multiplicative
form. Calculations can then show estimates which are much more sensitive
to the initial values. The aim of this contribution is to present new
additive indicators that are applied to several territorial government
levels in Australia, Austria, Canada, Germany, Spain, Switzerland, and
the U. S. Comparisons, conclusions, and comments are offered for general
development. (JEL P16); Int'l Advances in Econ. Res., 9(4): pp. 295-303,
Nov. 03. ŠAll Rights Reserved
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Consumption
Taxes in the Internet World
CHARLES SCOTT, FREDERICK DERRICK, AND NORMAN SEDGLEY
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The evolution of e-commerce raises serious issues concerning the current
and future viability of consumption taxes. The dimensions of e-commerce
(product, process, and agent) are shown to significantly impact the characteristics
of taxes. The key issue addressed is whether the sales and use tax or
the VAT is better positioned to evolve and handle the consequences of
e-commerce. The conclusion deduced is that the United States with the
sales and use tax is further ahead in addressing the problems but that
the European Union with the VAT is likely to solve the problems first
due to uniformity and cooperation. (JEL H2); Int'l Advances in Econ. Res.,
9(4): pp. 304-311, Nov. 03. ŠAll Rights Reserved
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The
Effect of Health Investment on Growth:
A Causality Analysis
BERTA RIVERA AND LUIS CURRAIS
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The aim of this paper is to analyze the effect of health investment on
productivity as an important variable associated with human capital accumulation.
The authors also study the possible existence of endogeneity by using
instrumental variables estimation. The results that are obtained may be
interpreted as evidence of the positive impact of health expenditure on
income growth. Furthermore, the authors looked at the bounded gains of
health status and divided the sample according to the median of total
health expenditure and found that the countries with lower levels of health
spending obtain larger benefits when the other determinants of growth
are held constant. (JEL N10, J24, I10); Int'l Advances in Econ. Res.,
9(4): pp. 312-323, Nov. 03. ŠAll Rights Reserved
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