Journal of Economic and Social Measurement - Volume 38, issue 2

Authors: Schmitz, Martin | De Clercq, Maarten | Fidora, Michael | Lauro, Bernadette | Pinheiro, Cristina

Article Type: Research Article

Abstract: This paper discusses in detail methodological issues in the construction of nominal and real effective exchange rate indicators based on the methodology used by the European Central Bank (ECB). Taking economic theory and data constraints into account, it presents the …options available for constructing nominal and real effective exchange rates and describes how this is implemented in practice based on the example of the euro. In particular, the paper discusses the use and development of trade weights based on trade in manufactured goods (taking account of third market effects), the selection of trading partners, and the choice of deflators for constructing real effective exchange rate indices. It also describes how the concept of real effective exchange rates of the euro can be extended to consistent harmonised measures of competitiveness of euro area Member States. It finally shows how the available indicators can be applied in analysing exchange rate and competitiveness developments of the euro area as a whole or individual Member States. Show more

Keywords: Competitiveness, effective exchange rate (EER), nominal effective exchange rate (NEER), real effective exchange rate (REER), trade weights

DOI: 10.3233/JEM-130374

Citation: Journal of Economic and Social Measurement, vol. 38, no. 2, pp. 127-158, 2013

Authors: Feng, Shuaizhang

Article Type: Research Article

Abstract: This paper analyzes identification and statistical inference issues related to matched March Current Population Survey (CPS) data sets. Existing studies using matched March CPS typically ignore the non-match and mismatch problems, which is equivalent to imposing strong but not credible …assumptions for point identification. I instead take a partial identification approach, starting from identification regions based on empirical evidence alone, followed by explorations of the identification powers of more credible assumptions, some of which are directly motivated by the understanding of the matching process. The paper uses U.S. poverty dynamics as an example to illustrate the method proposed. Show more

Keywords: Partial identification, Current Population Surveys, longitudinal matching

DOI: 10.3233/JEM-130372

Citation: Journal of Economic and Social Measurement, vol. 38, no. 2, pp. 159-170, 2013

Authors: Reich, Utz-Peter

Article Type: Research Article

Abstract: The World Bank's International Comparison Project (ICP) takes the United States as base country for normalising purchasing power parities between countries over space, and over time. The rule is being followed on the assumption that the particular choice is arbitrary, …as well as irrelevant for the results, as it only fixes a numeraire for the Geary-Khamis index. The paper contests this assumption. It shows, by means of a simple example, how substituting a different base country may alter figures and rankings of countries' GDP, and it recommends a neutral standard of measurement to apply, instead. On this basis, the paper also sketches a vision of how the Geary-Khamis index may naturally be extended to form the mathematical underpinning of a full, and coherent system of accounting for world growth and world inflation, together. Show more

Keywords: Purchasing power parity, Geary-Khami index, global GDP, global inflation, numeraire

DOI: 10.3233/JEM-130373

Citation: Journal of Economic and Social Measurement, vol. 38, no. 2, pp. 171-185, 2013

Authors: Durand, René

Article Type: Research Article

Abstract: Endogenous growth models consider the stock of R&D (or knowledge) both as a paid input and as an indicator of technical progress. It is shown in this paper that this is inconsistent with core economic theory. In addition, growth eventually …stalls in these models unless one assumes increasing returns to scale in all inputs or allows for some exogenous technical progress to occur. This paper shows that neither of these assumptions are necessary to obtain sustained endogenous growth when inputs are properly defined and when a new input is introduced that we call thinking. Show more

Keywords: Growth accounting, technical progress, endogenous growth

DOI: 10.3233/JEM-130375

Citation: Journal of Economic and Social Measurement, vol. 38, no. 2, pp. 187-200, 2013