Review of Economic Analysis 2022-06-28T18:37:34-04:00 Jerzy (Jurek) Konieczny Open Journal Systems <p><em>Review of Economic Analysis</em> is an open access, peer reviewed economic journal. We are committed to open exchange of ideas and information. Unlike many open-access journals, we charge neither submission nor publication fees. We aim to become a leading general interest journal. We accept submissions from all fields of economics and offer rigorous refereeing process and wide dissemination.</p> <p>Papers published in open access journals are read and cited more and have greater impact than those published in fee-based journals.</p> <p>We are the official journal of the International Centre for Economic Analysis (</p> The Welfare State and Economic Growth – Econometric Evidence from Germany 2020-11-11T05:32:12-05:00 Richard Reichel <p>The growth effects of modern welfare states with relatively high shares of gross domestic product for spending on pensions, health, unemployment and other social security systems has been intensively discussed in the literature, both theoretically as well as from an empirical viewpoint. Clear-cut empirical evidence, however, is still missing. This paper attempts to uncover the growth effects of social spending in Germany within a time series framework. A vector error correction model is estimated for the time period 1960-2019 . The results indicate strong negative long-run growth effects of welfare spending with Granger-causality running from spending to growth. In the short-run the same inverse relationship is found. However, the direction of causality is reversed. As growth rates decline, welfare spending increases.</p> 2022-06-28T00:00:00-04:00 Copyright (c) 2022 Richard Reichel The Impact of Enterprise Zones on the Incubation and Evolution of Technology and Manufacturing Businesses in New York State 2021-01-04T21:37:46-05:00 Hal Wesley Snarr Dan Friesner <p>This analysis empirically evaluates the effectiveness of entrepreneurial policies using the number and distribution of firms as outcome variables.&nbsp; The analysis occurs within the context of a natural experiment: the START-UP NY program. Implemented in 2014, START-UP NY created enterprise development zones adjacent to publicly supported universities (i.e., SUNY and CUNY campuses) within the state. New business start-ups operating within these zones, and within a specific set of technology and health-related industries received tax incentives that substantially lowered tax rates for a 5-10 year period. In 2016, the State of New York substantially altered its corporate tax structure; a policy initiative affecting firms, business owners, and households in the state simultaneously, and may also induce entrepreneurship. The results suggest that START-UP NY had a positive effect on the growth of New York's micro and small-sized firms operating in professional, scientific, and technical industries. START-UP NY also negatively affected micro-sized manufacturing firms, while positively affecting small manufacturing firms. The latter finding suggests that START-UP NY is effective in incubating micro-sized manufacturing firms that eventually grow into small manufacturing firms.</p> 2022-06-28T00:00:00-04:00 Copyright (c) 2021 Hal Wesley Snarr, Dan Friesner COVID-19 effects on the Canadian term structure of interest rates 2022-05-12T11:31:23-04:00 Federico Severino Marzia A. Cremona Éric Dadié <div class="page" title="Page 1"> <div class="layoutArea"> <div class="column"> <p><span style="font-size: 10.000000pt; font-family: 'CMR10';">In Canada, COVID-19 pandemic triggered exceptional monetary policy interventions by the central bank, which in March 2020 made multiple unscheduled cuts to its target rate. In this paper we assess the extent to which Bank of Canada interventions affected the determinants of the yield curve. In particular, we apply Functional Principal Component Analysis to the term structure of interest rates. We find that, during the pandemic, the long-run dependence of level and slope components of the yield curve is unchanged with respect to previous months, although the shape of the mean yield curve completely changed after target rate cuts. Bank of Canada was effective in lowering the whole yield curve and correcting the inverted hump of previous months, but it was not able to reduce the exposure to already existing long-run risks. </span></p> </div> </div> </div> 2022-06-28T00:00:00-04:00 Copyright (c) 2022 Federico Severino, Marzia A. Cremona, Éric Dadié Role of Social Media in Socioeconomic Development: Case of Facebook 2021-07-07T08:57:41-04:00 Nawel Amrouche Moez Hababou <p>To study the role of Information and Communication Technology (ICT) on countries’ socioeconomic development, the paper investigates the case of Facebook penetration on improving their standing as measured via GNI per capita PPP (Gross National Income per capita based on purchasing power parity). We use four macro factors categories (political, economic, demographic, and technological) in addition to Facebook penetration per capita in order to measure the potential influence of various factors on the socioeconomic level of countries. While the analyses of ICT effect on development has been the focus of many papers in the past, the specific analysis of social media is scarce. Compared to previous studies investigating social media role, we use a large dataset covering all classes of countries and examine holistically many types of determinants using different models. In addition, we distinguish our paper using the economic classification of countries according to the World Bank. Our study indicates that Facebook penetration has a significant positive role on the socioeconomic level of countries, but such role varies depending on the countries’ classification level. Besides, there is a decreasing marginal effect showing the importance for policy makers to assess the complex dynamic behind the characteristic of each country.</p> 2022-06-28T00:00:00-04:00 Copyright (c) 2021 Nawel Amrouche, Moez Hababou The Nexus between Causal Macroeconomic Relations in Japan 2021-06-04T13:48:47-04:00 George K Zestos Yixiao Jiang Ryan Patnode <p>Japan achieved phenomenal economic growth after WWII. Starting in the early 1990s, however, the Japanese economy began experiencing a prolonged deflation-stagnation period widely known as the “Lost Decades”. Based on data from the World Bank and the Federal Reserve Bank of Saint Louis, this paper employs an autoregressive distributed lags (ARDL) model to find evidence of a long run relation among the real GDP, real imports, the real exchange rate, and the public debt-to-GDP ratio for Japan. Once cointegration is established with the Bounds Test, Granger Causality tests are performed by employing an estimated Vector Autoregressive (VAR) model with the same variables. The empirical results support Granger causality in all directions. In particular, we found real imports and public debt-to-GDP ratio to directly cause real GDP. Interestingly, the real exchange rate causes real GDP indirectly via imports. The public debt had a negative effect on GDP but did not wreak havoc on the Japanese economy. The study also examines whether former Prime Minister Shinzō Abe’s unprecedented macroeconomic policies and structural reforms launched in 2013, known as Abenomics, are pulling Japan out of its economic doldrums.</p> 2022-06-28T00:00:00-04:00 Copyright (c) 2021 George K Zestos, Yixiao Jiang, Ryan Patnode Foreign Direct Investment and the Robustness of Host-Country Commitment 2021-02-02T19:20:00-05:00 Shaikh Shahnawaz <p>This paper presents a model of a forward-looking government wooing foreign direct investment by enacting policies that reflect its commitment to the foreign enterprise. The ease with which the government is able to spend or carry out economic reform to complement the foreign venture evolves over time and influences the likelihood of its sustained commitment. The domestic and external strength of the government, the stability and not necessarily the level of returns from the project, venture-specificity of government spending or reform, and public and elite attitudes toward foreign commercial entry determine how invested the government remains in the long term success of the enterprise. More committed governments tend to be stronger and prefer robust investor-regime relationships. Reform that is not designed too narrowly to favor the investor is also less likely to be reversed later. Like pro-FDI public sentiment, a noisy policy environment induces deeper government commitment.</p> 2022-06-28T00:00:00-04:00 Copyright (c) 2021 Shaikh Shahnawaz The (non) impact of education on marital dissolution 2020-06-07T15:25:54-04:00 Edith Aguirre <p>Despite the relevant role attributed to education on marital outcomes, literature does not show a generalized consensus regarding a positive or negative effect from education on marital decisions. In this paper the impact of education on marriage dissolution is analysed exploiting a change in the length of compulsory education in Mexico in 1993 as an instrument for education. The federal government increased compulsory education from completion of primary school, sixth grade, to completion of secondary school, ninth grade, at a national level. In the first part of the analysis, the probit models reveal that education is significant and negatively related to the probability of marital breakdown. An additional year of education is associated with a decrease between 0.6 and 0.9 percentage points in the probability of marital disruption for the 2002-2012 period. However, the results using the instrumental variables methodology indicate that an additional year of schooling has no effect on the probability of marriage dissolution. This finding demonstrates that the relationship between education and divorce is not causal and suggests that although higher levels of education are an undeniable trait observed in non-broken marriages, it is not education by itself one of the mechanisms leading to better marriage outcomes.</p> 2022-06-28T00:00:00-04:00 Copyright (c) 2021 Edith Aguirre Demand for Money in Greece After Euro Area and Policy Uncertainties 2021-07-05T21:39:44-04:00 Serdar Ongan Ismet Gocer <p>This study examines the asymmetric effects of uncertainties in monetary policy on the demand for money in Greece. In doing so, it introduces and uses the monetary policy uncertainty (MPU) index, which can probably be a very appropriate and robust explanatory variable in <em>demand-for-money</em> <em>models</em>. Therefore, this study with this index differs from previous empirical studies that use conventional uncertainty-based independent variables. Empirical findings of both models indicate that changes in the MPU index have significant effects on Greek money demand. Additionally, compendious inferences of the nonlinear model for the Greek people’s financial preferences are as follow as: (<em>i</em>): <em>Greek people invest more in alternative financial instruments and/or spend their money rather than hold (demand) it when the </em><em>MPU</em> <em>index rises,</em> (<em>ii</em>): <em>Greek people’s money demand in both increases and decreases in </em><em>the</em> <em>MPU</em> <em>index is predominantly determined by longer-term bond rate changes. </em></p> 2022-06-28T00:00:00-04:00 Copyright (c) 2022 Serdar Ongan, Ismet Gocer The Effect of Different Fields of Tertiary Education on Economic Growth 2021-07-06T16:11:18-04:00 Müzeyyen Merve Serifoglu Pelin Oge Guney <p>The purpose of this paper is to analyze empirically the contribution of tertiary level education by fields on economic growth for 29 developed and 25 developing countries over the period 1998-2012. Using the two-step System Generalized Method of Moments (GMM), we find that in the developed countries graduates from science faculties make the most contribution to economic growth, but in developing countries graduates from education, humanities and social sciences faculties contributed the most to economic growth. In addition, we focus on the effect of distribution of tertiary level graduates among different fields on economic growth and our results imply that, having human capital from different fields in both developed and developing countries positively affects economic growth.</p> 2022-06-28T00:00:00-04:00 Copyright (c) 2022 Müzeyyen Merve Serifoglu, Pelin Oge Guney Energy Input Interaction in US Output 2021-03-25T07:20:27-04:00 Cassandra Copeland Henry Thompson <p>This paper estimates production functions for annual US output from 1949 to 2013 adding energy Btu input to fixed capital assets and the labor force.&nbsp; Interactions between inputs are parsimoniously introduced in the error correction estimates.&nbsp; Fixed capital assets successfully imbed technology.&nbsp; Energy and capital are weak substitutes or complements due to their positive interaction.&nbsp; Energy is substantially underpaid relative to its increasing productivity while labor is increasingly overpaid relative to its declining productivity.&nbsp; Factor price elasticities involving labor and the wage are noticeably strong.&nbsp; The nearly elastic own wage effect explains the challenges facing labor.</p> 2022-06-28T00:00:00-04:00 Copyright (c) 2022 Cassandra Copeland, Henry Thompson The Canadian-Mexico Commodity Trade and Exchange Rate Uncertainty: An Asymmetric Analysis 2021-08-27T11:53:38-04:00 Mohsen Bahmani-Oskooee Hanafiah Harvey <p>A previous study assessed asymmetric effects of the real peso-dollar volatility on trade flows between Mexico and the U.S., two members of the former NAFTA. We now expand that analysis by considering the trade flows between Mexico and Canada. Estimating traditional linear models did not yield much significant effects of the real peso-Canadian dollar volatility on trade flows between the two countries. However, estimating a nonlinear model revealed that four out of 16 Canadian exporting industries to Mexico and 10 out of 21 Mexican industries to Canada were affected asymmetrically. While the export shares of four Canadian industries was 28.2%, that of 10 Mexican industries, with a non-linear model was 80%. Additionally, while increased volatility boosted exports of four US industries, it had no significant effects on the exports of 10 Mexican industries. In contrast, decreased volatility had no significant effects on the US exporting industries, but it had favorable impact on Mexican exporting industries.</p> 2022-06-28T00:00:00-04:00 Copyright (c) 2022 Mohsen Bahmani-Oskooee, Professor Special issue: Papers from ICEA After the Pandemic Conference Series, Fall 2021 2022-06-27T14:00:38-04:00 Jerzy (Jurek) Konieczny <p>Papers in the special issue were presented at five conferences in the <strong>After the Pandemic Conference Series</strong>, organized by the International Centre for Economic Analysis (ICEA), for which the <em>Review </em>&nbsp;is the official journal, and held online between October 29, 2021 and December 10, 2021. <strong>&nbsp;</strong>The list of the conferences in the series is at the end of the introduction.</p> 2022-06-28T00:00:00-04:00 Copyright (c) 2022 Jerzy (Jurek) Konieczny Gender, Growth Mindset, and Covid-19: A Cluster Randomized Controlled Trial in Bangladesh 2022-05-12T10:05:10-04:00 Jennifer Seager T.M. Asaduzzaman Sarah Baird Shwetlena Sabarwal Salauddin Tauseef <p class="7Abstract" style="margin: 0cm 28.1pt 6.0pt 28.1pt;"><span lang="EN-US">School closures during the covid-19 pandemic disrupted learning among students globally, with concerns for long-term impacts on adolescent well-being and likely differential effects for boys versus girls. This study explores the gendered impacts of covid-19-related school closures on continued learning and motivation among secondary-school students in Bangladesh and presents short-term impacts of a cluster randomized intervention that offered students an innovative, virtually-delivered Growth Mindset curriculum. During the covid-19 pandemic, our analysis highlights that boys were significantly more likely to engage with media for continued learning, whereas girls were more likely to use books and paper assignments. Motivation for learning and aspirations for higher education fell during the covid-19 pandemic, particularly for girls. The randomized Growth Mindset intervention, which promoted the idea that individual characteristics, such as intelligence can be developed through practice, results in significant increases in adolescent motivation and aspirations across both genders. For boys, the effect sizes are large enough to compensate for negative covid-19 pandemic impacts; however, due to the larger negative impacts of the pandemic for girls, a covid-19 pandemic-related gender gap persists. Our findings suggest that a virtually-delivered Growth Mindset intervention mitigates the negative impacts of extended school closures, but that additional policies are needed to address gender differences in adolescent outcomes.</span></p> 2022-06-28T00:00:00-04:00 Copyright (c) 2022 Jennifer Seager , T.M. Asaduzzaman, Sarah Baird, Shwetlena Sabarwal, Salauddin Tauseef Gender Impacts of COVID-19 on the Labor Market and Household Wellbeing in Pakistan 2022-06-27T16:13:22-04:00 Emcet O. Tas Norihiko Matsuda Tanima Ahmed Shinsaku Nomura <p class="7Abstract"><span lang="EN-US">This study examines the gender impacts of the COVID-19 pandemic on the labor market and household wellbeing, using an online survey of the users of Pakistan’s largest online job platform. The analysis shows that the pandemic led to an unprecedented level of economic insecurity for employees and employers alike, resulting in widespread job loss, business closures, a slowdown in business activity, and reduced working hours. The sectors where female workers are heavily concentrated, such as education, were more severely affected. The pandemic has also led to a disproportionate increase in women’s unpaid care work and increased their reported rates of stress and anxiety. These findings suggest that the pandemic had significant wellbeing impacts on women in Pakistan, including a decline in the female labor force participation rate, which is already among the world’s lowest.</span></p> 2022-06-28T00:00:00-04:00 Copyright (c) 2022 Emcet O. Tas, Norihiko Matsuda, Tanima Ahmed, Shinsaku Nomura Are ESG Female? The Hidden Benefits of Female Presence on Sustainable Finance 2022-06-27T16:26:44-04:00 Constanza Bosone Stefania Maria Bogliardi Paolo Giudici <p>Though gender equality has been at the centre of debate over the last decades, a number of benefits concerning the impact of female directors on corporate performance are still overlooked. Particularly, the link that seems to exist between female directors and sustainable finance has received limited attention. We investigate the impact of an enhancement in female presence, meant as women in decision-making positions, on a firm’s performance both in financial and sustainability terms. The goal is to contribute to the literature streams on gender economics and on sustainable finance.</p> <p>Most research on sustainable finance and its impact on corporate governance rely only on aggregate ESG ratings for their results. Such scores are typically a black-box, with financial providers supplying little information about their methodology.&nbsp; Our analysis not only develops disaggregate scores for each dimension, but also provides motivation for the measurement of gender equality by means of specific indicators, such as the number of female directors, going beyond the bare (S) or (G) rating. ESG ratings and specific indicators of gender equality were retrieved from the well-known Bloomberg provider. Relying on a dataset concerning European companies, we empirically show that an increase in gender equality has a positive effect on a firm’s financial performance and on its share of sustainable investments.</p> 2022-06-28T00:00:00-04:00 Copyright (c) 2022 Constanza Bosone, Stefania Maria Bogliardi, Paolo Giudici Managing Pandemic-induced Mental Health Concerns in the Philippines: A Strong Case for Building Public Trust and Confidence 2022-06-27T20:15:48-04:00 Raymond E. Gaspar Nina Ashley O. Dela Cruz <p class="7Abstract"><span lang="EN-US">Using an online survey among Filipinos jointly conducted by YouGov and the Institute of Global Health Innovation at the Imperial College London from 31 March to 30 September 2020, this paper examines the state of mental health in the Philippines during the height of the pandemic and its link to public trust in and confidence toward the government and relevant authorities. The analysis reveals that young adults, women, part-time employees, unemployed, and persons with comorbidities have faced elevated risks of psychological distress during the pandemic. Empirical results further indicate that having strong and capable governance, setting clear directions and guidelines, and effectively motivating compliant behaviors on safety protocols allay fears and concerns among these groups, and thus are instrumental to preventing potential cases of depressive and anxiety disorders.</span></p> 2022-06-28T00:00:00-04:00 Copyright (c) 2022 Raymond E. Gaspar, Nina Ashley O. Dela Cruz Demystifying Rising Income Inequality Influence on Shadow Economy: Empirical Evidence from Nigeria 2022-06-27T20:25:24-04:00 Usman Alhassan Emmanuel Umoru Haruna <p class="7Abstract"><span lang="EN-US">We investigate whether rising income disparity contributes to the proliferation of shadow economic activities in Nigeria. The study uses data from 1991 to 2018 and adopts the Auto-regressive Distributed Lags (ARDL) cointegration approach to study the effects of income inequality on the shadow economy in both the short- and the long-run. Our results show that the Nigerian shadow economy responds positively to increases in income inequality, especially in the short run. We also find that the large income disparity in Nigeria drives the poor into informal economic activity, primarily for survival, and that unemployment partly contributes to informality. Our findings suggest that unemployment may be both a result and a cause of rising income disparity in Nigeria, leading to an expansion of the shadow economy. These findings indicate that regulating the proliferation of shadow economic activities in Nigeria will necessitate, among other things, the implementation of measures to reduce income gaps, such as stronger institutional frameworks and the expansion of financial intermediation services such as credit supply to the informal sectors.</span></p> 2022-06-28T00:00:00-04:00 Copyright (c) 2022 Usman Alhassan, Emmanuel Umoru Haruna The Ability to Work Remotely: Measures and Implications 2022-06-27T20:35:29-04:00 Kathryn Langemeier Maria D. Tito <p class="7Abstract"><span lang="EN-US">Our paper explores how the ability to work remotely has changed over time, its relationship with demographic characteristics and employment outcomes, and the role it played during the pandemic recession. We focus on two different remote work indexes, a measure of “no physical presence”—proposed by Dingel and Neiman (2020)—and a measure of “remote communications”—presented by Montenovo et al. (2020). While the two measures suggest a similar prevalence of remote work in recent years and display fairly similar behaviors across demographic groups and in terms of wage and employment outcomes, their evolution is significantly different. While the share of occupations that require no physical presence has remained relatively constant since July 2003, the share of those occupations featuring remote communications increased more than 40 percentage points over the same period. Those differing evolutions paint a starkly different picture of the role of remote work during the pandemic: Compared to a counterfactual scenario that keeps the remote classification constant at the 2004 levels for each measure, the index of no physical presence suggests that there would have been little changes in terms of aggregate hours losses during the pandemic, while the index of remote communications points to much larger declines in aggregate hours. Even without much change in the ability of working remotely, the trend towards more remote work underscores the importance of the hours margin as an additional dimension for the realization of gains from working at home.</span></p> 2022-06-28T00:00:00-04:00 Copyright (c) 2022 Kathryn Langemeier, Maria D. Tito Cardiovascular Medical Device Failure: Using Five-Week Moving Averages To Assess Adverse Event Report Data 2022-06-27T20:45:13-04:00 Elsa S. Zhou Sujata K. Bhatia <p class="7Abstract"><span lang="EN-US">The COVID-19 pandemic had a variety of effects on the healthcare system, including the interruption of regular cardiology practices. We examined the pandemic’s effects on cardiovascular medical device failure by investigating trends in the number of reports of adverse events of several cardiovascular medical devices over the span of three years, including the first year of the pandemic. Specifically, we used data from the FDA’s MAUDE database, calculating the five-week moving average of adverse events associated with both implantable cardioverter defibrillators and coronary drug-eluting stents. We previously reported a 46% decrease in reported deaths attributed to ICDs and a 27% decrease in reported injuries attributed to coronary DES. We use a five-week moving average and confirm a 46% decrease in reported deaths attributed to ICDs, report a 9.8% increase in ICD-attributed malfunctions, and confirm a 27% decrease in reported injuries attributed to coronary DES. The different effects of the pandemic on these adverse event report trends, even within one device, show there are more factors to consider than explanations such as underreporting which would be expected to affect most medical devices relatively homogeneously.</span></p> 2022-06-28T00:00:00-04:00 Copyright (c) 2022 Elsa S. Zhou, Sujata K. Bhatia