The Regional Impact of Monetary Policy in Indonesia

This paper employs vector autoregressive (VAR) models to measure the impact of monetary policy shocks on regional output in Indonesia. We find substantial cross‐regional variation in policy responses in terms of both magnitude as well as timing. Our work adds to the existing literature by providing insights from a large developing country, viz. Indonesia, where monetary policy has both a national and a regional dimension. The results support previous findings that the differential regional effects of monetary policy are significantly related to sectoral composition (especially the share of manufacturing), providing evidence for the relevance of the interest rate channel of monetary policy. We also find that firm size contributes to these differences, providing evidence for the importance of the credit channel. As a whole, both types of channels appear to operate simultaneously in the decentralized Indonesian monetary policy and to impact on the real part of the regional economy.     

Regional inflation persistence in Turkey

The purpose of the current study is to investigate the degree of inflation persistence, its geographical variation, sources of cross‐regional variation, and presence of geographical/sectoral aggregation bias in national monetary policy. Our data set covers 26 NUTS‐2 level Turkish regions and monthly CPI inflation over the period 2003–2019. We first estimate the degree of regional inflation persistence by autoregressive regressions, check its robustness against the presence of structural breaks (by Bai–Perron's algorithm) and nonlinearities (by Markovian Regime Switching regressions). Second, we examine the possibility of geographical and sectoral aggregation bias. Third, we investigate the cross‐regional determinants of inflation persistence by panel data analysis, employing hybrid‐effects spatial panel regressions. We analyze the direct and indirect effects of the determinants and test for regional spillover effects. Three main results are obtained. First, estimated persistence degrees are heterogeneous across regions. The geographical pattern is empirically robust against structural breaks and nonlinearities. We find that inflation persistence is distributed in a spatially correlated manner. Second, when sectoral and regional aggregation bias is tested, only sectoral aggregation indicates a considerable level of bias. Third, we find that the presence of large firms in the region and a higher share of agricultural output in GDP leads to lower persistence, while an increased share of industrial output, and increased trade volume leads to higher inflation persistence. Moreover, we find spatial spillovers of price variability evident in regression analysis. From a policy standpoint, it is required that structural policy programs are targeted to maintain flexibility in the regions where persistence is high (i.e., providing market entry/exit, institutional quality, policy credibility, stimulation of SMEs). Moreover, sectors that have high persistence, such as Hotels and Restaurants (persistence degree 0.55) and Health Services (0.39) should be weighted more in CPI calculations.     

Moonlighting in a High Growth Economy: Evidence from U.S. State‐Level Data

Despite the prevalence of multiple jobholding, there is relatively little research into its causes. Existing research has tested the predictions of standard labor models with micro data. Yet, there has been virtually no research into the relationship between moonlighting and structural differences in regional labor markets such as wages and employment growth. In this manner, this study examines the large differences in multiple jobholding rates across U.S. states. The findings indicate that multiple jobholding acts as a short‐term shock absorber to cyclical changes. However, in the long‐term, these effects dissipate, indicating that moonlighting plays a similar role as do changes in unemployment and labor‐force participation to regional labor market shocks. Conversely, multiple jobholding rates are inversely related to average weekly earnings. Thus, job growth accompanied by real wage (and productivity) growth may result in a decline in multiple jobholding, further exacerbating potential labor shortages. Other key factors found to influence multiple jobholding include occupational structure and education.     

The Dynamic Effects of Entrepreneurship on Regional Economic Growth: Evidence from Canada

Facilitating entrepreneurship to address regional income disparity continues to be a major concern of policy makers across the globe. This study explores the temporal pattern of income disparity for Canadian provinces in two estimation steps. First, an econometric growth regression model is applied to identify the impact of entrepreneurship on regional economic growth. The estimation results suggest that entrepreneurship, measured in terms of the self‐employment rate, plays a pivotal role in determining regional development in Canada. Second, a dynamic vector autoregression model is employed to simulate long‐run regional growth effects that result from policy shocks affecting entrepreneurship. Compared to other growth drivers, entrepreneurship is found to have more pronounced and long‐term stimulative effects on regional development for the period of 1987–2007.     

Regional Equality and National Development in China: Is There a Trade‐Off?

Despite high economic growth over the past 30 years, China's substantial and persistent regional disparities have been the subject of continuing concern to policy makers, as well as the target of a wide variety of policies. An important issue in the policy debate about whether and how best to attack these disparities is whether measures designed to improve regional equality come at a cost to national development, i.e., whether there is a trade‐off between the level of national output and the equality of its distribution across the regions. There is little analysis of this issue in the literature. We help fill this gap by setting up a two‐region model designed to capture some of the salient features of the Chinese economy. We subject this model to a number of policy shocks and assess the effects on regional disparities in per capita output, on the one hand, and on aggregate output on the other to investigate the trade‐off. We also consider income and welfare as alternatives to output. We find, first, that disparities in per capita output, income, and welfare may move in different directions so that it is important to specify which disparity is being targeted. Second, since both disparities and aggregate outcomes are endogenous, how they move together depends on the nature of the shock driving the model. Thus, some policies designed to reduce disparities face a trade‐off and others do not. Only a reduction in internal migration restrictions unambiguously reduces all three disparity measures and increases aggregate output, income, and welfare. All other policies considered face a trade‐off in at least one dimension. Third, whether there is a trade‐off depends also on the time horizon—some policies face a trade‐off in the short run and not in the long run and vice versa.     

The elusive quest for balanced regional growth from Barlow to Brexit: Lessons from partitioning regional employment growth in Great Britain

The British Government’s economic strategy for post‐Brexit Britain of achieving balanced regional growth by “driving growth across the whole country” echoes the objectives set by the Barlow Report of 1940. The regional policies that followed the Barlow Report were heavily influenced by papers written for the Commission by G D A (later Sir Donald) MacDougall. The first of these papers was included as an appendix to the report itself and introduced the shift‐share methodology to the analysis of regional employment growth, and subsequently shown to be flawed. The second paper considered the urban hierarchy and growth but was never fully developed. Consequently post‐war regional policy focussed on the contribution of industrial structure to employment growth without fully taking into account the urban hierarchy or regional locations of that employment. This article replaces the flawed shift‐share methodology with multifactor partitioning (MFP) and applies it to regional employment growth for the period 1971‐2012, a span of special interest because it largely coincides with British membership of the European Union (EU). The deficiencies in the second paper are addressed by introducing allometry to measure the employment growth of each region relative to that of Great Britain and then regression analysis to relate the allometries to distance from London. The results of the two sets of analyses highlight the need for a multiple‐factor, comprehensive, and integrated approach to regional policy and provide a benchmark against which to gauge the success of Britain's post‐Brexit policy of driving future growth across the whole country.     

A Synthesis of Empirical Research on the Impact of Government onLong‐Run Growth

This paper provides a synthesis of the 1983–98 published literature on the empirical evidence regarding the interaction between government policies and growth. Five policy areas are considered: general government consumption, tax rates, education expenditures, defense and public infrastructure. The most conclusive results in the literature relate to the positive impact of education expenditures on growth. Public infrastructure also appears important. Regression analysis remains the most commonly adopted research methodology. A better link with current theories will be obtained when parameter calibration methods formicro‐foundations based models replace parameter estimation of regression models with ad hoc specifications. Nonetheless, there remain severe limitations on what can be learned for policy from highly aggregative models of endogenous growth. Better data are needed at the regional macro and meso levels to complement thecurrently available pooled cross‐section time‐series country data. The potential endogeneity of government fiscal variables can be resolved through the selection of appropriate instrumental variables, such as those that arise in cases of “natural experiments”.     

Endogenous Processes in European Regional Growth: Convergence and Policy

The traditional empirical approaches to the analysis of economic growth,cross‐section and panel data regressions are substantially uninformative withrespect to the issue of convergence. Whether national or regional economies appear to converge in terms of per capita income or productivity levels (the so‐called β‐convergence) critically depends on the way in which the empirical model is specified. Traditional specifications witness a disproportionate presence of proxies for forces leading towards divergence among the conditioning variables. It is therefore hardly surprising that these analyses find a positive and statistically significant value for the estimate of the speed of convergence. A more constructive use of cross‐section and panel data regressions is in the analysis of the determinants of growth. The present paper therefore builds on recent work on the role of different growth determinants (Cheshire and Carbonaro 1996) and analyses the growth performance of 122 Functional Urban Regions (FURs)over the period 1978–1994. This model explicitly recognizes growth as amultivariate process. In this new formulation it incorporates a spatialized adaptation of Romer's endogenous growth model (Romer 1990), developing the work of Magrini (Magrini 1997). Magrini's model originated from the view that technological knowledge has a very important tacit component that has been neglected in formal theories of endogenous growth. This tacit component, being the non‐written personal heritage of individuals or groups, is naturally concentrated in space. As a result, technological change is profoundly influenced by the interaction between firms and their local environments. The present paper reports the results of the estimation of a fully specified model of regional growth in per capita income. Particular attention is played to the role of research and development (R&D) activities, and to the influence of factors such as Universities that shape the local environments and have important policy implications. These results are then applied to quantifying the scope for policy to influence the growth process. Several simulations are presented deriving alternative growth outcomes across European regions that would have been obtained if those variables over which policy might have control—including the contribution of human capital—had had alternative values reflecting the realistic scope of policy makers' influence. The implications for convergence/divergence in regional per capita income levels are then analyzed using a Markov chain approach (Quah 1993 and 1996; Magrini 1999).     

International healthcare worker migration in Asia Pacific: International policy responses

The growth of the international migration of health workers in recent decades has taken place in the context of the transnationalisation of healthcare provision as well as of governance and policy responses. This paper examines international policy responses to cross‐border health worker migration in the Asia Pacific region. These include multilateral (global and regional) and bilateral policy agreements, policy dialogue and programmes of action in relation to key issues of ethical recruitment, ‘circular’ migration and labour rights and key themes of health workforce planning and management. The paper brings original new analysis of international datasets and secondary data to bear on the pressing and important questions of what international policy initiatives and responses are at work in the Asia Pacific region, and what these mean for the nature of migration governance in the region. The paper's focus routes the evidence and argument towards current research and policy debates about the relationship between health worker migration, health worker shortages and poor health outcomes. In this, the paper brings new insights into the analysis of the international policy ‘universe’ through its emphasis on multiple and intersecting cross‐border institutions, initiatives and actors operating across different scales. Coherent national and international strategies for integrated health worker migration governance and policy need to incorporate these insights, and the paper considers their implications for current strategies to attain universal health care and improved health outcomes in Asia Pacific and beyond.     

Logistics Services: Global Functions and Global Cities

The services that organise global and regional trade are supplied by multi‐locational, multi‐functional, and information‐intensive firms. However, in much of the urban and regional research these firms are still seen as part of the transportation task, so their urban and regional impacts are expected to be expressed in concentrations of transportation infrastructure. This paper shows that there has been considerable functional and structural change within these services. In effect, they act like producer services and, for many, head offices and regional offices are in global cities, not all of which are major transportation centres. Using data on the location of the head and regional offices of a sample of the largest of these firms, this research shows that high‐ranked global cities, rather than large transportation centres, are a common office location although some firms operate from small cities. When these firms have regional offices overseas, all favour global cities. These results provide some insight on the links between these cities and the service tasks performed by service firms. They also provide grounds to develop a potentially rich research agenda based on analyses of the activities of these understudied firms.     

Employment volatility in lagging and advanced regions: The Italian case

The presence of cycles characterizes all economic systems, but economic cycles have differentiated spatial impacts. Some regions have broader cycles with respect to the country, while others tend to be less responsive to shocks and hence have narrower cycles. Being exposed to broader cycles, that is, greater volatility, may increase the strain on a regional economic system. This paper investigates the different responsiveness to cyclical forces and volatility of regions in the long run. It does so by using quarterly employment data for the Nuts2 Italian regions over almost 40 years before and during the period 1978–2016. Explored in particular are the cross-regional variations in employment volatility and the reasons for the patterns observed, as well as whether they have changed the following different macroeconomic policy regimes. The paper identifies the break dates of different regimes, and these regime changes will be related to policy modifications, such as the implementation of the European Monetary Union. The determinants of this regional volatility appear to be quite stable, so that the changes in volatility are explained by how these determinants have changed overtime and how they are unevenly distributed in space. In particular, the lagging regions of the country suffer, in addition to lower production and income, from higher volatility due to a structure which is weaker and more unstable. Volatility can hence be an additional issue for lagging regions.     

Financial Policy and Efficiency of Resource Utilization in Developing Countries

This study examines the effects of selected policies on economic efficiency in 81 developing countries by pooling cross-country data over various subperids between 1961–90. An incremental output-capital ratio is the measure of economic efficiency, while the policy variables include: export orientation, size of the public sector, directed credit program through development bank lendings, financial depth (computed as the ratio of the flow of real value of monetary liabilities to real GDP), inflation rate, real interest rate, and real exchange rate distortion. The export-orientation, financial depth, and real interest rate are found to promote economic efficiency, while other policy variables are found to hinder it.     

Regional Convergence in Mexico, 1970–2005: A Panel Data Approach

This paper empirically analyzes regional disparity in terms of convergence of per capita income across Mexican states for the period 1970–2005. In particular, this study extends the conventional cross‐sectional conditional β‐convergence analysis of the existing literatures on Mexico to panel data analysis, and focuses on whether the convergence performance varies between the pre‐ and post‐economic liberalization periods. When unobservable state‐specific effects are controlled by the panel data technique, the estimated coefficients show significant conditional β‐convergence, even after economic liberalization, but with a lower speed than before economic liberalization.     

Regional Development Within National Industrial Policies: An Analysis of the British Coal Industry

Three variations in regional policy distinguish the conduct of the nationalized British coal industry—social industry, state industry, and state commerce. Each variation takes a distinct approach to natural and human resource development in chronically depressed regions such as the peripheral coal fields in Britain or the Appalachian coal fields in the United States. Central to the variation are recognition of the factor of decline that E. F. Schumacher analyzed in the 1950s and the mitigation of social welfare consequences of shifts in production and investment. Schumacher's analysis raised policy issues of social welfare, resource development, and energy. These emerged again in the British coalminers'strike of 1984–85. Broad issues like these are likely to surface in regions where employment is concentrated in a declining industry facing new and severe competition.     

A quantitative method for measuring regional economic resilience to the great recession

Regional economic resilience can be defined as an economy’s ability to withstand and recover quickly from shocks. The ability to measure resilience is necessary to developing our understanding of what influences resilience. In this paper, we develop a new, two‐dimensional quantitative measure of resilience using observed differences between expected and actual employment in a region following a shock and distinguish the response to the shock from random variation. We demonstrate one application of this metric to US county‐level employment data to compare county responses to the 2007–2009 national recession and discuss how different regions of the United States responded to the shock of the Great Recession in terms of resilience.     

The State‐Level Impacts of Enforcing Sales Taxes for E‐retail Purchases

The Marketplace Fairness Act (S. 743) recently passed by the U.S. Senate may portend a national move toward states imposing sales taxes for business‐to‐consumer e‐retail purchases. While much of the policy debate surrounding this question has focused on trade creation versus diversion, there are likely distinct compositional effects at the state level, which will affect both economic activity and tax revenue. Consumers are clearly hurt by an online sales tax. However, such a policy would seemingly benefit state tax coffers, as well as traditional brick‐and‐mortar retailers and their employees. This paper uses a computable general equilibrium model approach to get a better understanding of the state‐level income, employment, and tax revenue effects of such a policy shift, in particular the likely tradeoffs between these three traditional economic targets across reasonable ranges of price elasticities.     

Climate change,migration and human rights in Bangladesh: Perspectives on governance

Bangladesh experiences some of the most severe impacts of climate change, with impacts already evident in the coastal regions. Recent data shows that around 32% of the coastal communities in Bangladesh are affected by climate‐induced hazards each year. In 2011, 64% among them were displaced locally and 27% were displaced to other locations in Bangladesh. It requires comprehensive and viable polices and planning to meet the challenges of managing a large number of displaced people. In this context, this paper reviews and investigates the effectiveness of current governance frameworks to address migration of affected communities. It argues that migration can be an effective way to cope with environmental shocks. Finally, it discusses policy imperatives for effective protection of people displaced by climate risks with a special reference to adopting a human rights‐based approach in law and policy making for climate‐induced migration.     

Renewing Canada's Manufacturing Economy: A Regional Comparison, 1973‐1996

ABSTRACT Regional economies are continually undergoing adjustment as their firm populations react to changing tastes, technologies, and the challenges of outside competition. Adjustment typically takes place as the stock of jobs is renewed in each industry. This micro‐dynamic process of renewal has a substantial impact on the structure of national and regional economies. The primary objective of this paper is to measure the degree of renewal within the Canadian manufacturing economy as whole and within individual provinces. Using a longitudinal micro‐data set—which covers the population of manufacturing plants in Canada from 1973 to 1996—the study shows that the manufacturing sector experienced considerable job renewal. Two‐thirds of jobs in 1996 were newly created since 1973. There was considerable variation in provincial renewal rates. A decomposition analysis suggests this variation is not purely an artifact of the types of industries found in provinces, but reflects other characteristics of provincial economies.     

Institutions and local growth coalitions in China's urban land reform: The case of Hangzhou High‐Technology Zone

Abstract: China's urban land reform is a gradualist process of transforming a planned land allocation system to an open land market system, while the ownership of the land remains under the control of the state. This process defines the relationships between local government and emerging non‐public interest groups in the land development process. These issues can be most clearly seen in the State‐Approved Development Zones, where municipalities have been encouraged to promote economic development and test out land policy initiatives. Using the institutionalist and urban growth machine analytical approaches to land development processes, this study examines the operation of development processes and the role of local government and its relationship with other interest groups. By employing a case study research strategy, focused upon the Hangzhou High‐Technology Zone, the study uncovered a local government‐led growth coalition which featured participation by other interest groups and revealed the applicability and variations when applying two strands of theories to a socialist economy in transition. Besides the land reform policy implications drawn from the case study evidence, the study concludes that the presence of interest groups and the missing community organisations unique to China give new theoretical implications and that both theories work much better with the economic domain than with the political domain largely because of a lagged political reform.     

Innovative and Competitive Structure of Regional Economies in Turkey

Regional development theories have experienced a transition from Keynesian state‐led economic development models to development based on public–private partnerships, innovation, industrial districts, etc. With the increasing concern for innovative milieu, products, process, organizational, and institutional innovations have assumed an important place in regional development policies. All these regional development paradigms have formed the basis of the initiation of a new process in regional development called the new regionalism, which includes cumulative efforts to revitalize local economic growth. In this paper, we identify technological levels of 26 NUTS 2‐level regions according to the Organisation for Economic Co‐operation and Development (OECD)'s classification. Then, we develop an innovation and competitiveness index for Turkey by employing principal component analysis. In conclusion, we formulate some workable policy solutions and suggestions for regional economies in Turkey. According to the results, Istanbul is the most innovative and competitive region in Turkey. Ankara is becoming a regional knowledge cluster, thanks to its strong R&D infrastructure and highly qualified researchers.