Month: June 2017

OUTPUT, GROWTH, AND CONVERGENCE IN A GREATIVE REGION: AN ANALYSIS OF SOME MEASUREMENT ISSUES

Amitrajeet A. BATABYAL

Department of Economics, Rochester Institute of Technology, 92 Lomb Memorial Drive, Rochester, NY 14623-5604, USA.

aabgsh@rit.edu

Abstract

We study some measurement issues that arise when analyzing the long run behavior of the  jth creative region’s time t log output per creative class member (yj(t)) when this region is part of an aggregate economy of j=1,…N creative regions. We focus first (second) on absolute (relative) convergence. In the absolute (relative) convergence case, the N creative regions are similar (dissimilar) in that they all have the same (different) balanced growth path (BGP) level of log output per creative class member denoted by yBGP(yjBGP) In the absolute convergence case, we analyze how to estimate the speed of convergence parameter (σ) and then discuss the relationship between the variance of yj(t) and that of yj(0) In the relative convergence case, we study the error associated with estimating σ using the methodology of the absolute convergence case. Finally, suppose yjBGP= a + bXj where Xj is an explanatory variable such as creative capital and a and b are positive constants. Here, we study how to estimate b from our knowledge of the coefficients of a related cross-region growth regression.

Keywords: Convergence, Creative Capital, Economic Growth, Measurement, Output

JEL classification: R11, C18

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MOVING REGIONAL ECONOMIC POLICY MODERNIZATION AHEAD: SYSTEMS BASIS FOR ORGANIZATIONAL AND DEBLOCKING MECHANISMS IN PRESENT-DAY UKRAINE

Igor DUNAYEV

PhD in PA, associate professor, post-doctoral fellow, Kharkiv regional institute of public administration of the National academy of public administration by the President of Ukraine

Igor.dunayev@gmail.com

Abstract

The paper objective is to provide rationale for the systems basis for organizational and deblocking mechanisms of a discrete regional modernization process. Basing on methodology of systems analysis, the paper offers an author’s conceptualization of a systemic regional economic policy modernization in the present-day Ukraine. The author’s original contribution is his profound idea of the modernization process being discrete, non-linear, and following a changeable trajectory. These properties of the system have influenced considerably the interpretation and revaluation of the current state of the modernization process and its “tension lines”. Starting out from the properties of “system material” and the author’s general concept of the regional economic policy modernization in Ukraine, the paper identifies two actual mechanisms for ensuring stability of a desired modernization trajectory – a mechanism of modernization process organization, and a mechanism deblocking the process of modernization. For each of them, the reasons for existence and “tension lines” are determined and rationalized. Finally, an important conclusion is drawn that the proposed logic of analyzing the mechanisms to support regional modernization can be applied both in Ukraine and in other counties, providing a way to purposefully affect the procedure and structure of governance mechanisms in accordance with the set priorities.

Keywords: regional economic policy, systems approach, mechanisms, Ukrainian modernization

JEL classification: O38, R58, R50

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PAYMENT TECHNOLOGIES AND MONEY DEMAND: EVIDENCE FROM DYNAMIC PANEL

Payam Mohammad ALIHA

Ph.D candidate, National University of Malaysia (UKM), Malaysia

payammaliha@gmail.com

Tamat SARMIDI

Professor Dr. Faculty of Economics and Management, National University of Malaysia (UKM), Malaysia

tamat@ukm.my

Abu Hassan SHAARI

Professor Dr. Faculty of Economics and Management, National University of Malaysia (UKM), Malaysia

ahassan@ukm.my

Fathin Faizah SAID

Professor Dr. Faculty of Economics and Management, National University of Malaysia (UKM), Malaysia

fatin@ukm.my

Abstract

The banking system has experienced rapid and significant technological changes in recent years, including automated teller machines (ATMs), automated clearing houses, point of sale systems, telephone transfers, automatic bill payer accounts, and credit cards. The total effect of these innovations on money demand has been the subject of some empirical research; however, the individual effect of most of these innovations has not been estimated. This article attempts to partially bridge the gap in the empirical literature by providing empirical evidence relating to the effect of ATMs on money demand in world scale. The demand for money is a very important for the conduct of monetary policy and measurement of the effectiveness of monetary policy. This study attempts to analyse if financial innovations has impacted the demand for money using a system (the original equation and the transformed one) GMM method. In this study, money demand dynamics are examined empirically by using the Blundell–Bond estimator which reinforces Arellano–Bond by making an additional assumption that first differences of instrument variables are uncorrelated with the fixed effects. It makes it possible to introduce more instruments that improve the efficiency considerably. We estimate the demand for money (M2) for a panel of 215 countries and territories from 2004 to 2013. The elasticity of the demand for real money to ATM is about 0.01 percent meaning that the sensitivity of money demand to ATM is low. In other words, money demand is not elastic with regard to ATM.

Keywords: Money demand, ATM, Financial innovation, Dynamic panel data model, GMM

JEL classification: C13, C40, C51, E40, E44

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