Gross capital formation (investment), volumes and prices. 1948–1990 National Accounts (SFSO) for structures and equipment. 1990–2005 National Accounts ESVG95 (SFSO) for three components of structures (“residential buildings”, “non-residential buildings”, “civil engineering”) and nine components of equip- ment (“fabricated metal products, machinery and equipment”, “office machin- ery and computers”, “electrical machinery and apparatus”, “radio, television and communication equipment and apparatus”, “medical, precision and optical instruments, watches and clocks”, “motor vehicles, trailers and semi-trailers”, “other transport equipment”, “computer and related services”, and “growing of crops, market gardening, horticulture, farming of animals”). The data on “non- residential buildings” is calculated as a residual from data on “buildings” and “residential buildings”. Before 1948: growth rates of investment volumes are approximated by estimates of GDP growth taken from Andrist, Anderson and Williams (2000) for 1913–1948, Ritzmann-Blickenstorfer (1996) for 1851–1913 (gross value added deflated by CPI), and Maddison (2006) for 1820–1851 (based on estimates of the level of real GDP for 1820 and 1851). Growth rates from before 1948 and for 1948–1990 are chain linked to the 1990 data from ESVG95. Investment volumes are at chained 1990 prices. Gross operating surplus. “Gross operating surplus and mixed income” 1990–
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Sustainability could be defined as the amount of consumptionthat can be continued indefinitely without degrading capital stocks—including"natural capital" stocks 13 .In a business, capital stock includeslong-term assets such as buildings and machinery that serve as the means of production.Natural capital is the soil and atmospheric structure, plant and animal biomass, forests, fish populations and petroleum deposits etc., thatforms the basis of all ecosystems. This natural capital stock uses primaryinputs (sunlight) to produce the range of ecosystem services and physical natural resourceflows. The natural resource flows yielded by these natural capital stocks are, respectively,cut timber, caught fish, and pumped crude oil. We have now entered a new era in whichthe limiting factor in development is no longer manmade capital but remaining naturalcapital. Timber is limited by remaining forests, not sawmill capacity; fish catch is limitedby fish populations, not by fishing boats; crude oil is limited by the accessibility ofremaining petroleum deposits, not by pumping and drilling capacity 13 . Ecological economists see manmade and natural capital as fundamentally complementaryand therefore emphasize the importance of limiting factors and changes in the pattern ofscarcity. This is a fundamental difference that needs to be reconciled through debate and research.
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Natural capital has been variously deﬁned as the stock of phys- ical assets in the environment (water, trees, minerals, species, etc.), but also the processes (e.g. water puriﬁcation, climate regulation) from which we obtain beneﬁts (e.g. NCC, 2013). Wider deﬁnitions (e.g. Daily et al., 2000), which include whole ecosystems, cause dif- ﬁculties when trying to understand how the natural components combine with other, human-derived inputs to produce ecosystem services, and fail to recognise how the quality of capital also affects the ecosystem services produced. In this paper we deﬁne capi- tal ‘stocks’ as being assets in the environment and capital ‘ﬂows’ as transformations or movement of those stocks. We adopt an encompassing deﬁnition of natural capital as “A conﬁguration (over time and space) of natural resources and ecological processes that contributes through its existence and/or in some combination, to human welfare” (Dickie et al., 2014). We discuss below how knowl- edge of their characteristics and the interactions between natural capital stocks and ﬂows is essential in order to understand not only how services are delivered but how they might be managed sustain- ably. The distinction between natural and human-derived capital is not clear in the context of domesticated plants and animals. We use the term cultivated natural capital (Daly, 2005) to include crop
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The distinguishing feature of the capital path obtained in the ATR experiment is that it falls below control in the lead up to the tariff cut in year 12. The reason for this is that producers allow their capital stocks to fall (by delaying their investments) to avoid anticipated capital losses in year 12. The reduction in capital stocks between years 2 and 12 is gradual because it is cheaper to reduce capital stocks gradually rather than abruptly. Over this period capital losses get progressively bigger and the rental price of capital rises. Beyond year 12 the capital losses get smaller and the rental price of capital falls gradually. This is reflected in the gradual increase in capital stocks after year 12. The capital losses fade away after year 12 because there are no further reductions in the cost of capital emanating directly from the tariff cut and because the economy’s supply constraints become progressively less severe.
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This paper uses the statistical data from 1997 to 2015 to calculate the female human capital stock in Guangdong Province, and empirically analyzes the contribution rate of female human capital to Guangdong’s output and its comparison with men. At the same time, it empirically analyzes the contribu- tion of female human capital stocks at different levels to Guangdong’s eco- nomic growth, studies the correlation between women’s education levels and economic growth, and examines the differences in the impact of male and female human capital on economic growth. The research results show that female human capital is an important factor affecting Guangdong’s economic growth. Male human capital has a greater impact than female human capital. Female human capital at different educational levels has different effects on economic growth. In order to promote economic and social development, we should increase the awareness of gender equality and strengthen the attention and investment in women’s human capital.
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22. The capital service measure used here is taken from Schreyer (2000). It is calculated for the G-7 countries on the basis of an aggregation across six types of capital goods weighted with their user costs also considering capital gains or losses and hedonic deflators. Given the great heterogeneity of physical capital assets, this is still a fairly high level of aggregation. As a matter of comparison, Jorgenson generally uses a decomposition of capital into 69 different assets. An important omission in the decomposition used here is that ICT assets do not include software, given data limitations at the international level. Recent studies on the US (Jorgenson and Stiroh, 2000; and Oliner and Sichel, 2000) incorporate software as an ICT asset and find that it plays an important role. Moreover, a number of assumptions had to be made in computing capital stocks by asset, in deriving user costs expressions and in aggregating across assets. Particular effort was made to derive a set of internationally harmonised price indices (based on hedonic adjustments) for investment in ICT assets. Figure 3 shows the difference between the original price deflator for ICT equipment and the harmonised one for Germany, whose official data do not adjust for quality changes in ICT assets.
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The last few years have seen the development of a significant body of research that includes measures of external knowledge capital in an attempt to estimate the productivity effects of knowledge spillovers across firms (see, for example, Los and Verspagen 2000, and Mairesse and Sassenou 1991 for a survey), across industries (see, for example, Scherer 1993, and Branstetter 2001) or across countries (see, for example, Park 1995) 3 . Even though the subnational region is increasingly regarded as an important level of economic policy, there have been very few attempts so far to investigate the impact of knowledge capital stocks on region-level total factor productivity. One notable exception is the study by Robbins (2006) which finds mixed evidence in terms of the significance of industry-specific knowledge spillovers at the state level in the US, and a lack of evidence in most manufacturing industries. This contradicts the strong findings in firm-level, sectoral and country-level studies.
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Further, a WFP would provide a useful platform to evaluate the impact of farm practices on natural capital stocks and the performance and sustainability of the farm system in providing a range of ecosystem services in a single integrated farm-scale assessment. Critically, this would provide a clear link between performance of service provision on-farm and management decisions, and an expansion of the concepts of: (i) natural capital, as determined by compositional state or stocks (Dominati et al. 2010); (ii) capability, the inherent properties of stocks that describe potential functionality (e.g. strength of topsoil, or root architecture of tree species); and (iii) condition, the current state the stock is in (e.g. canopy intactness, presence/absence of understorey), in terms of quality and quantity. Condition is a manageable property of stocks (McBratney & Field 2015) and therefore a logical target for management interventions for the purpose of enhancing service provision and long-term resilience of farm-systems (Maseyk et al. 2017b).
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Such models therefore typically fail to accommodate key features that are likely to be crucial to an informed analysis of the environment. In particular, production processes also feature the use of natural assets (or natural capital) or some notion of “inputs” from nature (in the form of “ecosystems service flows”) to generate outputs. (We distinguish different forms of ecosystem services below.) This use of natural inputs in production is analogous to the use of physical capital stocks and intermediate goods in production. Additionally, natural capital and/or ecosystem service flows may be enjoyed by consumers, analogously to how they enjoy consumer goods. It is clear therefore that we might usefully extend economic models, by analogy with how assets and goods are already treated within them, to encompass natural capital stocks and ecosystem service flows.
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In a world classified by the rival forces of promoting inward investment and ba- lancing budgets we see low capital taxes, high infrastructure spending and na- tions not borrowing to fund this. Extending static fiscal competition models af- ter ZMW we show a dynamic framework in which precisely the observed pattern emerges in the set of equilibria. Key to enabling taxation to be imposed without deterring private capital is that public capital be sufficiently productive and there be a substitutability between the two sources. By detaching the direct link be- tween private capital and its taxation rate many of the original results from the static literature are revisited. Dynamic models also enable us to show adjustment speeds and offer valuable insight to policymakers evaluating their taxation rates in light of the possible gains identified above. For the Cobb-Douglas economy much of the change was within one economic cycle, suggesting that incumbent governments may see the benefits on their own watch. Meanwhile, should public capital be less productive we move back to the initial two period results, but now with dynamic motivation.
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that significantly progressed in time, many studies analyse integration uti- lizing various estimation periods and varying country selections, providing evidence from different methodologies. Due to the fact that integration is a dynamic process it is challenging to measure it. The study by Kearney and Lucey (2004) discussed different approaches to the investigation of in- tegration. There are two main categories of measures that can be used to evaluate the integration of financial markets: direct measures and indirect measures. The first approach, i.e. direct measures, suggests evaluating the extent to which the rate of returns of financial assets, with the same maturity and risk characteristics, are equalized across financial markets. The direct measures approach is based on the so-called law of one price, following the logic that the lessening of regulatory barriers between markets will cause the distribution of capital flows to the most attractive asset classes across the globe, consequently equalising the returns on the assets with the same risk characteristics. However, the main challenge of this approach to measuring integration is to identify assets that are sufficiently homogenous in terms of their risk profiles to make an adequate comparison of the equalisation of fi- nancial markets (Kearney & Lucey, 2004, p. 573). Kearney and Lucey (2004, p. 574) further divided the literature on financial integration into three cat- egories, testing: i) the segmentation of equity markets via the international CAPM (e.g., Bekaert & Hodrick, 1992; Campbell & Hamao, 1992; Errunza, Losq, & Padmanabhan, 1992); ii) the extent, and determinants, of changes in the correlation or co-integration structure of the markets (e.g., Bernard, 1991; Gilmore & McManus, 2002); and iii) time-varying measures of integra- tion (e.g., Bekaert & Harvey,1995; Longin & Solnik, 1995; Forbes & Rigobon, 2002; Barari, 2004; Birg & Lucey, 2006; Aggarwal, Lucey, & Muckley, 2003, 2010). While the first two categories demonstrated limited attempts to mea- sure the time-varying nature of integration, the third category of papers used more sophisticated methodologies to capture the dynamic linkages between markets.
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between authors such as Marx, Wicksell, Schumpeter, Keynes and Minsky, as well as between the New Cambridge simulation modeling and, say, the ‘ linguistic ’ research of Bernard Schmitt. Yet, the Franco-Italian approach to the MTP shows that those divergences can be regarded as less relevant than the views that they have in common with each other. More precisely, the keystone of the TMC is the association of the Keynesian concept of ‘ initial finance ’ with the Marxian notion of ‘ money-capital ’ (see Messori, 1983). On this basis, TMC authors depict the working of capitalism as a ‘ monetary circuit ’ , viz. a circular sequence of economic acts involving the use of sign- money which is ex nihilo created by banking system. In detail, the causal-chain which marks an ‘ artificial ’ monetary economy of production, made up of only three sectors (non-financial corporations, workers and banks), is opened by the decision of corporations to borrow from the banking sector. This flow of credit-money, named the initial finance, is used to pay a wage-bill to workers in return for the labour-force required to start the process of production. Notice that the labour-force bought thanks to the bank initial finance is the only item that the corporate sector (considered as a whole) cannot reproduce by itself. Once the production cycle is concluded, wage-earners spend one portion of their income in the commodity market and a second portion in the financial market, on the purchase of securities issued by firms 6 . Notice that, for corporate sector considered as a whole, there is no difference between these two sources of expenditure: in both cases, the liquidity flows back to firms in the form of final finance. However, wage-earners can also decide to save part – the third portion – of their income by holding it in the form of bank deposits (or even in the form of cash balances, if the government sector is included in the model). In this case, the greater the liquid balances held by wage-earners, the greater the losses of revenue suffered by the corporate sector. Nevertheless, as wage-earners use the whole of their income both on expenditure of consumer-goods and/or the purchase of securities, corporations are able to repay their debt and ‘the circuit is closed “without losses”’ (Graziani, 2003, p. 30) 7 .
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If one knows the role of finance, it is easier to understand how market disciplines the bank. (Lane, 1992) points out that finance’s role is to allow agents to maintain temporary imbal- ances of revenue and cost. Thereby economic agents who have profitable investment opportunities could start the business even though they lack sufficient capital. Finance increases economic efficiency by transforming excess savings to the most efficient investments. What is important in this process is that by whom and how it is determined whether the imbalances are temporary or not. Economists argue that this function is well done by markets and the resulting resource allocation is optimal.
However, this should not be seen as invalidating the purpose of the foregoing enquiry. There is much to be gained from analysing the potential contradictions of contemporary capitalism as a matter of logic, especially when partial confirmation is forthcoming for their practical manifestation. Whatever the broader social influences on actual trading decisions, the common-sense properties of financial models create a very real dilemma of financialization for firms. The successful operation of a financialized business model is entirely contingent upon fund managers ignoring the most fundamental insights of financial economics, but two significant contextual factors suggest that this will probably not be the case. The reality of investing passive savers’ money means that fund managers are likely to internalize those savers’ risk- aversion, which immediately places them in a decision-making context analogous to the hypothetical world of the Capital Asset Pricing Model. The analogy is deepened when it is remembered that fund managers have to pass frequent performance checks which incentivize market-conforming trading strategies.
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GDP adds up all marketed deliveries to “final demand” (sales to households, government, net exports, and capital formation) that occur within a country, regardless of whether they represent a real benefit or a “defensive expenditure” like cleaning up an oil spill or treating pollution caused health effects. This is because GDP is calculated using the input/output model. This means that the only things that can be included in GDP are those items that are produced and consumed by one of the sectors in the economy. Nothing else is included.
Indeed, one of the biggest reasons for all investors to consider having at least some portion of their money in bonds is the ballast they provide for an overall portfolio. During periods of market volatility and out-and-out downturns, bonds are often useful as a safety net to keep an overall diversiﬁed portfolio from falling too far. This was particularly evident in the bear market of 2000, when many portfolios that were heavily weighted toward equities, and growth- oriented equities in particular, were battered. Meanwhile, well-diversiﬁed portfolios that had core weightings toward bonds—which means anywhere from 20 to 50 percent—held up surprisingly well. Consider the performance of several hypothetical portfolios during that downturn, as shown in Figure 6-1. As you can see, those who put all of their assets in stocks lost more than 40 percent of their wealth during this bear market stretch. And those who in- vested in the riskiest types of stocks—technology shares that make up a big portion of the Nasdaq composite index—lost even more: three-quarters of their money. Indeed, a $100,000 portfolio in Nasdaq stocks shrank to a little more than $25,000 in about two and half years.
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Various studies suggest that regions with larger stocks of physical infrastructure and human capital often exhibit comparatively robust economic performance. The research at hand examines whether this is the case for regions within Mexico using data from the 2010 Census and other sources. Aggregate production functions are estimated in order to analyze the determinants of economic performance across Mexican states. Explanatory variables include kilometers of highways, airport runway lengths, percentages of adults in each state with education beyond the primary level, and the number of certified researchers as a share of the national total. In line with prior research, results indicate that regional-level investments in transportation infrastructure and education will likely facilitate economic growth in Mexico. An out-of-sample policy simulation is used to further quantify regional economic throughout the country.
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Strong control power leads to biased estimates about the external financing costs and thus the managers may make capital structure decisions that deviate from the optimal one. But under the debt conservatism, investors will not change their expectations about the real risks of the investment projects regardless of this irrational capital structure decision and still require the corresponding investment returns. Under the radical debt financing condition, the corporate financial crisis costs will be raised and thus the general equity capital costs will increase, leading to the loss of the firm value. This theory provides a new thought to understand the value effect of the capital struc- ture from the perspective of the drives for decision making. Based on the analysis above, this paper raises the following hypothesis 2: Ceteris paribus, the stronger the managerial power is, the stronger the discount effect is.
The result of the analysis confirms the meaningfulness of certain existing theories concerning the exist- ence of three relatively different groups of “classic” securities: common stocks, preferred stocks, and bonds. At the same time, the analysis has shown that as far as this classification is concerned, it is based mainly on the function of the securities, which means that the properties regarding their structure and legal content are covered only partially. This is also proved by making a proposal for a comprehensive systemization, which shows that on the current financial market there are many situations when (except the legal identification) it is difficult to judge from the particular properties of a security whether it is a bond or a stock, or (in the latter case) which type of stock it is. For the above-mentioned reason, the conclusion stresses the necessity to create at least partly harmonised international legislation in the giv- en area, and presents recommendations for the establishment of the fundamental part of a harmonised system of legislation, which increasingly appears to be essential.
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Social capital tends to be seen as a resource with only positive outcomes, but scholars argue that this position is too one-sided (Adler and Kwon, 2002). In tightly knit, ethnic communities, social capital often leads to business start-up opportunities; however groups may hinder individual economic advancement by placing heavy personal obligations on its members (Portes, 1998). Entrepreneurship can be seen as legitimate in one context but opportunistic and self-seeking in another context (Adler and Kwon, 2002; Burt, 1997). In a cultural tourism context, if actors are seen as free- riders, or if their entrepreneurial ventures lack authenticity, then they may encounter resistance; therefore, social capital becomes a liability or constraint on action. The next section will introduce the notion of authenticity and I will attempt to show how social capital can be both an asset and a liability.
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