In parametric stochastic frontier models, the composed error is specified as the sum of a two-sided noise component and a one-sided inefficiency component, which is usually assumed to be half-normal, implying that the error distribution is skewed in one direction. In practice, however, estimation residuals may display skewness in the wrong direction. Model respecification or pulling a new sampl...

This paper is about income and poverty dynamics and their socioeconomic correlates. The first half of the paper aims to establish some of the salient facts for Britain, applying the pioneering methods of Bane and Ellwood (1986). Important for poverty dynamics are changes in labour earnings from persons other than the household head, changes in non-labour income (including benefits), and changes...

With the change in donors’ priorities since the end of the Cold War in the late 1980s, there has been a decline in annual aid inflows to Pacific island countries (PICs), which have been among the world’s top recipients of aid per capita in the past. Along with fall in aid inflows, growing annual domestic budgetary deficits in recent years have forced some PICs to finance them through borrowing....

Adopting a time series convergence definition and panel unit root testing procedures, we fail to reject the null hypothesis of no convergence in GDP per capita across former West German states. This result stands in contrast to the findings of previous studies for West German regions using cross-section regression techniques and is contrary to the time series findings for the United States. Fro...

A multiproduct cost function is estimated for English higher education institutions using a panel of data from recent years. The panel approach allows estimation by means of a random parameter stochastic frontier model which provides considerable new insights in that it allows the impact on costs of inter-institutional differences in the cost function itself to be distinguished from inter-insti...

The paper presents a monetary model of endogenous growth and specifies an econometric model consistent with it. The economic model suggests a negative inflation-growth effect, and one that is stronger at lower levels of inflation. Empirical evaluation of the model is based on a large panel of OECD and APEC member countries over the years 1961-1997. The hypothesized negative inflation effect is ...

In this paper we investigate whether macroeconomic uncertainty could distort banks’ allocation of loanable funds. To provide a road– map for our empirical investigation, we present a simple framework which demonstrates that lower uncertainty about the return from lending should lead to a more unequal distribution of lending across banks as managers take advantage of more precise knowledge of di...

We examine the mean-reverting properties of real exchange rates, by comparing the unit root properties of a group of international real exchange rates with two groups of intranational real exchange rates. Strikingly, we find that while the international real rates taken as a group appear mean reverting, the intranational rates are not. This is consistent with the view that while nominal shocks ...

The paper extends the literature on financial development, inflation, and growth by using the idea that both the rates of return on physical and human capital affect growth. This leads to the introduction of the investment rate into the model, as a proxy for the return to physical capital, along with the inflation rate as a variable affecting the return to human capital. As a result financial d...

Total Factor Productivity (TFP) accounts for a sizable proportion of the income differences across countries. Two challenges remain to researchers aiming to explain these differences: on the one hand, TFP growth is hard to measure empirically; on the other hand, model uncertainty hampers consensus on its key determinants. This paper combines a non-parametric measure of TFP growth with Bayesian ...