Global Economy Journal

In an industrial market economy, the interaction between monopolistic and competitive sectors results in within-country productivity differences, inequality and inefficiency. We demonstrate this using a two-sector mass market economy model. The monopolistic sector represents large-scale, mass production and is associated with innovation and market power, while the competitive sector represents small-scale production and engages instead in technological absorption. The endogenous dynamics of technological change between the two sectors generate a steady state technology gradient, with the competitive sector lagging behind. This technology gradient is a key endogenous feature of the industrial market economy, associated with economic growth, that generates inequality and inefficiency. Inequality is generated in two ways: innovation profits are concentrated among a few owners of large-scale innovation, while economy-wide wage levels reflect the lagging small-scale technological level. The model shows there are innovative-distributive policies that can increase efficiency in production, innovation, and absorption, and restore income equality, increasing wages and reducing profits. A cointegration and weak exogeneity panel study of the US states between 1997 and 2011 corroborates that the large-scale sector drives aggregate employment, wages and inequality, while top income inequality makes the technology gradient steeper.

Global public goods (GPGs) have been moving to the focus of discussion in international organisations due to globalisation, deepening economic integration, and technological advancements. We provide an overview of the research field of GPGs by conducting a bibliometric analysis for the period from 1993 to 2021. The increasing number of publications and citations of articles dealing with GPGs in the Web of Science is particularly noteworthy in the last decade. Publications on GPGs related to climate change experienced the largest relative growth. Analysis of the co-occurrence networks on authors’ keywords revealed that the focus of GPG research shifted between the 1993–2008 and 2009–2021 subperiods. In the latter period, our results show that sustainable development and the use of GPGs are interconnected and that the need for global governance related to GPGs is increasingly recognised in the literature. Several interrelated challenges of today’s world, related to environmental, technological, health, (cyber)security, economic, and geopolitical transformations have created the need for a new approach to GPGs.

The study investigates the existence and the extent of information rigidity in gross domestic product (GDP) growth forecasts among 25 developed and 18 developing economies during 2002–2017 period utilizing a survey dataset never explored before on this issue. In general, the study finds ample evidence of information rigidity. However, it is not as common and as severe as it is in earlier studies. Our study also finds ample evidence of overreaction to new information. Information rigidity is present during the recession period for the developed countries, and we find some evidence of information gathering picking up during the recession period. Overall, we notice less forecast rigidity or inefficiency in our study compared to some earlier studies. Our multi-country test results show that forecast revisions depend on both own country and cross-country lagged revisions. In general, forecast revisions of developed economies, especially USA, prompt revisions in other developed and developing economies. Similarly, some developing countries’ forecast revisions prompt revisions in other developed and developing countries although at smaller magnitudes. Therefore, we confirm from earlier studies that one source of forecast rigidity is not to incorporate overseas events in forecast revisions quickly and completely.

The role of financial systems in sustainable development has become the center of global and national interest and development strategies, and more developed and stable financial systems are the cornerstones for development finance and for achieving the Sustainable Development Goals. This research aims at examining the impact of financial development and stability on human development in a sample of 185 countries over the period 1990–2019. This study adopts as the primary empirical methodology, the Panel Data Econometrics (Fixed Effects and Random Effects Methods), and for the robustness test, a Dynamic GMM system. To proxy for human development, it exploits the UNDP’s Human Development Index and its three sub-indices (Education, Income, and Life expectancy), while it adopts broad money, credit to the domestic private sector, and banking sector deposits (all as a percentage of GDP) to proxy for financial development. Moreover, it represents financial stability by the banking sector Z-score and a dummy variable representing crises. The empirical results reveal the prevailing role of development and stability in the financial systems on human development and its three sub-components, regardless of the country’s economic development level.

This study makes an attempt to trace out the extent to which (in)direct taxation distorts consumers’ behavior, thus being a hindrance towards achieving an optimal allocation of resources between equity and efficiency targets. To substantiate our argument, a utility maximization model is built to examine whether fiscal policy restores public confidence in attaining equilibrium between the marginal rate of substitution (MRS) and the marginal rate of transformation (MRT). The validity of our model is then tested by using a sample of eleven countries. Comparing actual with optimal (in)direct tax rates, we find that the tax system of eight countries tends to favor equity over efficiency (actual direct (indirect) tax rates higher (lower) than optimal direct (indirect) tax rates) and the tax system of three countries tends to apply the efficiency principle.

This study aimed to investigate the relationship between information technology and the real sector in sub-Saharan Africa during the period 1995–2019. The study proxied the real sector by industrial value-added, agriculture value-added and total factor productivity, while technological progress is proxied by fixed telephone, mobile phone and internet penetration. To achieve the objective of this study, dynamic models were estimated. The study found that the fixed telephone enhances industrial value-added and total factor productivity, while the mobile phone promotes all the proxies of the real sector. The study found that the internet does not contribute to industrial value-added or agriculture value-added, but it enhances total factor productivity. Sub-Saharan African countries can further benefit from technological advancement by providing infrastructure facilities.