In this article, Nobel Prize Laureate Joseph Stiglitz argues that the standard macro-economic paradigm has failed not only to predict the crisis but also to provide insights into the design of a regulatory framework that would make a recurrence less likely. He points out that many of the underlying assumptions of the standard paradigm always seemed implausible and many of its predictions, such as those concerning the micro-economic behavior of the constituents (firms and households), are inconsistent with the empirical evidence. He then identifies a number of key modeling challenges, what he views as key ingredients that have to be incorporated in any model that is going to describe economic fluctuations or be the basis of a well-designed regulatory or monetary framework.
With the rapid urbanization and mass internal migration in China during the past several decades, the population of children who migrate with their parents to the cities has now reached over 35 million. The education of migrant children poses significant challenges to China’s hukou based education system. In this paper, we first review the policy developments and descriptive studies related to migrant children’s education to offer a comprehensive view of the issue. We then provide in-depth examination of several important quantitative literatures, including the effect of parental migration on children’s education, schooling choices of migrant children and their impacts on school performance, peer effects of migrant children in urban public schools. Overall, although considerable progress has been made regarding migrant children’s education in China, more fundamental policy reforms are necessary to improve the quality of migrant children’s education at the compulsory education level and beyond.
Kreps and Scheinkman (1983)’s celebrated result is that in a two-stage model of a market with homogeneous products in which firms noncooperatively pick capacities in the first stage and set prices in the second stage, the equilibrium outcome is that of a one-shot Cournot game. This note derives capacity best response functions for the first stage and extends the Kreps and Scheinkman result to the case of differentiated products.
Asymmetry analysis is a new norm in applied research and the link between the trade balance and the exchange rate is no exception. In this paper we investigate the asymmetric response of the trade balance of each of the 60 industries that trade between Malaysia and Japan. We find short-run asymmetric effects of exchange rate changes on the trade balance of 50 industries (including the two largest industries), short-run adjustment asymmetry in 47 industries, and short-run impact asymmetry in 30 industries. However, short-run asymmetric effects lasted into the long run only in limited number of industries. Results are industry-specific at best.
This paper investigates the daily labor supply decisions of Hangzhou cabdrivers. We find that Hangzhou cabdrivers’ wage elasticity is significantly positive, their working decisions are largely affected by shift time, and crude proxy variables for income; hours targets can hardly explain their working behavior. Nevertheless, Hangzhou cabdrivers are still affected by reference dependent preference. Using new empirical strategies, we show that cabdrivers are more likely to continue working when wage rates are unexpectedly low and more likely to quit when wage rates are unexpectedly high.
This is the first study attempting to investigate the patterns of BRICS’ imports and exports with five United Nations regional groups: the African, Asia-Pacific, Eastern European, Latin American and Caribbean, and Western European and Others. A panel data gravity trade model with series from 2001 to 2016 was used to estimate the gravity variables in the models. The main results provide evidence that reinforced the dissimilarities in the foreign trade patterns of BRICS with these five regional groups. The econometric results substantiated that BRICS’ foreign trade patterns are sensitive to changes in the economies of trading partners from the more developed regions. This is evidence for stronger economic ties between BRICS and the more developed regions such as Western Europe and Asia-Pacific. It also reveals the trade convergence of BRICS in these developed regions.