Goods Production Sector Research Articles

Household behavior and the rebound effect

This paper studies the rebound effect from a dynamic general equilibrium perspective, where how household’s decisions about consumption, investment and labor supply change in response to energy efficiency gains are crucial for assessing their effects on energy demand. The paper considers three types of energy efficiency gains: In the production of energy, in the energy consumed by households, and in the use of energy as an input by firms. A clear and significant rebound effect in the long-run is observed following an efficiency improvement in the production of energy, and in a lesser extent, in the case of the use of energy as an input in the final goods production sector. By contrast, in the case of the consumption of energy by households, the effect depends on the elasticity of substitution between energy services and the rest of goods. Finally, the paper also studies the dynamics of energy demand over the business cycle by considering stochastic energy efficiency shocks.

What are the impacts of the carbon peaking and carbon neutrality target constraints on China's economy?

The carbon peaking target (CPT) and carbon neutrality target (CNT) will force the low-carbon transformation of China's economy. However, few studies have evaluated the economic impacts of the CPT and CNT constraints in the context of China's current carbon target policies. Based on the analytical general equilibrium model, this study assesses the impacts of the CPT and CNT constraints on China's economy. The results are shown as follows. First, the CPT and CNT constraints will tighten the high-carbon goods production sector but not hinder the sustained growth of the low-carbon goods production sector, thereby forcing China's industrial structure to transform into a low-carbon direction. In the scenario of achieving the CPT, the output growth rate of the high-carbon goods production sector will drop by 0.03%, while that of the low-carbon goods production sector will rise by 0.14%, relative to the baseline. Second, under the CPT and CNT constraints, some labor and energy inputs in the high-carbon goods production sector will flow into the low-carbon goods production sector, forming the crowding-out effect. Third, carbon target constraints will force the high-carbon goods production sector to transform from energy and labor-intensive to capital and technology-intensive. Fourth, the CPT and CNT constraints will negatively affect households' consumption. Fifth, under the carbon target constraints, the growth rate of carbon emissions price shows a rising trend, while that of labor and energy prices shows a declining trend. These findings suggest that the government should make full use of the forced mechanism of the CPT and CNT constraints to promote the transformation and upgrading of industrial and energy structures. Meanwhile, the government should also be highly vigilant against the risk of an excessive slowdown in the high-carbon goods production sector under carbon target constraints.

Elderly long-term care policy and sandwich caregivers’ time allocation between child-rearing and market labor

Using an overlapping generations model, we present analyses of public long-term care provision effects on fertility and time allocation decisions of sandwich caregivers, those caring for young children and old parents simultaneously. If the public long-term care level runs short of the necessary level, then working children must compensate for the difference by spending their time. Reportedly, about a third of university students’ parents are sandwich caregivers in Japan, although Japan has a Long-Term Care Insurance system, which is a mandatory system with universal coverage. With a rapidly aging population, demand for long-term care is predicted to increase, thereby affecting family time allocation, e.g., fertility decisions, in Japan. Results show that if public long-term care production is costly relative to family care provision, then increases in public care provision lower the fertility rate. If labor productivity in the public long-term care sector improves, then it increases the fertility rate by freeing caregivers’ time from family care provision. It will also increase social welfare. The effects on labor employment in the goods production sector are generally ambiguous because the increased public care provision requires more labor.

Urban density, directed technological change, and carbon intensity: An empirical study based on Chinese cities

Technological change is one of the most effective methods to reduce carbon intensity. Meanwhile, cities are essential carriers of technological change and carbon emissions. Considering the extensive land expansion in urbanization which always manifests in the density of urban economic activity, this paper analyzes the relationship between urban density and carbon intensity and also the mediating role of directed technological change to explore the interaction among them. First, the authors construct a theoretical model that considers the knowledge production sector, final goods production sector, and technical choice. Second, based on the panel data of 280 cities in China from 2008 to 2017, the authors use the two-way fixed effect regression, mediation-effect regression, and panel-threshold model to examine the results. The results show that: (1) The increase in urban density helps to reduce carbon intensity. (2) Capital-saving technological change is a mediating factor in the path of urban density's effect on carbon intensity. (3) With the increase in market size, the effect of urban density on capital-saving technological change weakens, thereby weakening the inhibitory effect on carbon intensity. Findings can provide a reference for reducing carbon intensity in other countries to formulate reasonable and practical policies for sustainable urbanization, especially for developing countries.

A growth model with endogenous technological revolutions and cycles

We propose a new approach to deal with continuous time dynamic model with discontinuity, by which we incorporate gradual innovations and technological leaps, as well as endogenous cycles and long-run growth into one framework. We show that the optimal or equilibrium growth path is a cyclic growth path (CGP) and we develop the mathematical technique to prove the existence and uniqueness of the solution. We provide two basic setups to include the technological leaps in the R&D sector or goods production sector respectively. The growth paths under these two setups show different cyclic features and abundant economic dynamics. Our approach can be easily utilized to evaluate the optimality of the timing of the technological revolution. In the decentralized economy, the technological breakthrough is exogenous to families and always happens too late. The social planner’s problem clarifies two fundamental effects on the optimal growth path, i.e., the “dividend effect” and the “swot-up effect”, induced by discontinuous technological change. Our framework can also serve as a workhorse to address dynamic economic problems with discontinuity.

Protection of Intellectual Property Rights, Financial Development and Green Low-Carbon Endogenous Economic Growth

This paper considers the protection of intellectual property rights and financial development in the green low-carbon endogenous economic growth model, and also considers the total financing scale of the firms in the financial development sector, the transformation ability of the R&D sector to the advanced technology of developed countries, and the intensity of intellectual property protection, which gives the household utility function to a household. After maximizing the utility function, this paper analyzes the economic growth rate and mainly finds that the economic growth rate increases with the increase of technological transformation capacity parameters, two kinds of production efficiency parameters, and the total financing scale of the firms, and in addition it decreases with the increase of the technical level of developing countries relative to developed countries. Then, considering the improvement degree of intermediate goods, R&D efficiency and financial frictional coefficient, the relationship between it and the economic growth rate is obtained. This paper finds that the economic growth rate increases with the increase of the degree of improvement; R&D efficiency parameter; the probability that any R&D project can bring positive returns; technical level; the investment in reducing carbon emissions; the amount of energy invested in the final goods production sector; and it decreases with the increase of the financial frictional coefficient.

Corporate Spiritual Leadership: Model Kepemimpinan Bisnis Era Milenial dalam Menciptakan Great Corporate

The millennial era shows an increasing spirit of religiosity, especially for the younger generation. Religious identity is one of the pride of the millennial generation to create an image and gain public trust. This article aims to find a leadership model in creating a company that is not only good but also great. To obtain this model a qualitative approach is used, with in-depth interview and observation instruments in a sharia-based accommodation business, then inductively analyzed based on the relevant theory. The research findings in this article show that there is a spiritual leadership model that meets the criteria for creating a great corporate and applicable in a millennial era that tends to be religious. Great Corporate will be created through trust built by the company through spiritual activities. This article is expected to encourage further research to determine the relevance of the company's spiritual leadership model in the goods production sector as well as quantitative research to determine the correlation between SCL on business sustainability and growth.

Innovation agglomeration and urban hierarchy: evidence from Chinese cities

ABSTRACT Innovation agglomeration leads to changes in the hierarchical structure of innovation, driving regional economic development. We establish a general equilibrium framework for urban innovation, that is to say, the process of production in a city can be divided into the knowledge production sector and final goods production sector. By this we explain the positive matching relationship between innovation agglomeration and a city’s position in the urban hierarchy (herein called urban tier). Then we empirically analyse 286 prefecture level Chinese cities to evaluate the impact of urban tier on innovation agglomeration using a two-way fixed effect model. To reveal the nonlinear relationship between urban hierarchy and innovation agglomeration, panel quantile and threshold regression models were also used. The main results show that: (1) The spatial structure of innovation in Chinese cities is consistent with the urban tier, and the urban tier plays a significant role in promoting innovation agglomeration. (2) Heterogeneous spatial structures of innovation among urban tiers are reflected in the higher agglomeration of innovation resources in high-tier cities, and the impact of city scale on innovation agglomeration is nonlinear. When the city scale reaches a certain threshold value, its impact on innovation agglomeration is significantly strengthened.

The distributional impact of labour market reforms: A model-based assessment

Abstract This paper studies the effects of labour market reforms on the functional distribution of income in a DSGE model (Roeger et al., 2008) with skill differentiation, in which households supply three types of labour: low-, medium- and high-skilled. The households receive income from labour, tangible capital, intangible capital, financial wealth, and transfers. We trace how structural reforms in the labour market affect these different types of income. The quantification of labour market reforms is based on changes in structural indicators that significantly reduce the gap of the EU average income towards the best-performing EU countries. We find a general trade-off between an increase in employment for a particular group and the income of the average group member relative to income per capita. Reforms, which aim at increasing employment of low- and medium-skilled workers, are associated with a fall in low- and medium-skilled wages relative to income per capita. Capital owners generally benefit from labour market reforms, with an increasing share of profits in total income that can be attributed to limited entry into the final goods production sector.

The production of national defense and the macroeconomy

This study investigates the interactions between defense production and the rest of the economy. We develop a two-sector dynamic stochastic general equilibrium model with military and nonmilitary production. Inputs (capital and labor) are distributed between the two sectors. Calibration of the model to key targets of the US economy results in an elasticity of substitution between consumption of goods and services and national defense services of 0.56. The estimated complementarity between consumption goods and defense services results in positive spillovers across military and final goods production sectors, even when the nonmilitary production function is not directly related to military spending. We find that military spending is procyclical and that military spending as a percentage of output is countercyclical. Finally, investment-specific technological shocks to military equipment have a positive impact on nonmilitary output, although they reduce business investment.

News shocks, government subsidies and housing prices in Brazil

PurposeIn recent years, housing prices in Brazil have shown a surprising growth. An important issue is trying to understand what elements can explain this behavior. This study aims to investigate the hypothesis that a generalized optimism associated with government policies directed to the housing sector may be behind the behavior of real estate prices. This study develops a dynamic stochastic general equilibrium (DSGE) model to investigate these issues. The results showed that subsidies combined with the easing of credit conditions were able to positively influence real estate prices. Moreover, unanticipated shocks had a greater impact on housing prices than anticipated shocks.Design/methodology/approachThe DSGE model was developed to analyze the relationship between economic agents’ expectations about future economic developments, also known in the literature as “news shocks,” expansionary fiscal policy and housing prices in Brazil. The economy is composed of families, entrepreneurs, final goods firms, a financial sector and a fiscal authority. Families are divided into two groups: patients or savers and impatient or debtors. They differ in terms of their intertemporal discount factors. Both provide labor for firms producing non-durable goods. Impatient families are restricted in the amount of borrowing they can take. The production side of economy model is given by the consumer goods production sector. The financial sector is composed of a representative bank that pays the deposits made by patient families and channels resources for the granting of housing loans with the accumulation of assets subject to regulatory restrictions.FindingsThe results show that both price subsidies and subsidized interest rates exerted a positive influence on housing prices in Brazil. In response to a housing demand shock, housing prices display a greater increase the greater are the subsidies to low income families. The authors show that anticipated shocks have a larger impact on housing prices than unexpected shocks. Therefore, the results support the idea that the wave of good news, optimistic behavior and government policies aimed at the housing sector were behind the behavior of housing prices in Brazil.Originality/valueThere are some studies applied to the Brazilian economy that mention some of these stimuli. In this study, the authors focused on studies proposed by Mendonça et al. (2011), Mendonça (2013), Silva et al. (2014) and Besarria et al. (2016). In general, the authors show that there is a negative relationship between monetary policy instruments and real estate prices. This paper differs from these authors by considering the effects of government subsidies, subsidized interest rates and anticipated shocks from a DSGE model, thus explicitly addressing their effects on housing prices in Brazil.

A two-sector Kaleckian model of growth and distribution with endogenous productivity dynamics

This study extends a two-sector Kaleckian model of output growth and income distribution by incorporating endogenous labour productivity growth. The model is composed of investment goods and consumption goods production sectors. The impact of a change in wage and profit shares on capacity utilisation and output growth rates at the sectoral and aggregate levels are identified. The study reveals short-run cyclical capacity utilisation rates and productivity growth dynamics. Even if the short-run steady state is stable, the capital accumulation rate in the consumption goods sector must decrease more than that in the investment sector for long-run stability. When simultaneous rises in profit shares in both the sectors affect long-run aggregate economic growth differently at a steady state, the distributional interests between the same class in different sectors may hamper the long-run economic growth. A policy message is that the effect of income distribution on industrial output growth is not always beneficial. These phenomena are specific to two-sector models and cannot be observed when using conventional aggregate growth models.

The Distributional Impact of Labour Market Reforms: A Model-Based Assessment

This paper studies the effects of labour market reforms on the functional distribution of income in a DSGE model (Roeger et al., 2008) with skill differentiation, in which households supply three types of labour: low-, medium- and high-skilled. The households receive income from labour, tangible capital, intangible capital, financial wealth and transfers. We trace how structural reforms in the labour market affect these different types of income. The quantification of labour market reforms is based on changes in structural indicators that significantly reduce the gap of the EU average income towards the best-performing EU countries. We find a general trade-off between an increase in employment for a particular group and the income of the average group member relative to income per capita. Reforms that increase employment of low- and medium-skilled workers imply a trade-off between employment and wages in the low- and medium-skilled group, due to the increase in the skill-specific supply of labour. Capital owners generally benefit from labour market reforms, with an increasing share in total income. This can be attributed to limited entry into the final goods production sector, underlining the importance of product market reforms in addition to labour market reforms.

Application of Wearable Devices for Supporting Operators in Human-Robot Cooperative Assembly Tasks

This paper presents a tool for supporting operators in shared industrial workplaces where humans and robots coexist. The tool has been developed in the form of software application for wearable devices, such as smartwatches, and provides functionalities for direct interaction with the robot. Interfaces to audio commands, manual guidance applications and AR visualization systems have been implemented. The paper focuses on the development of the smartwatch application and its integration with the network of resources under the ROS framework. The tool has been tested on two pilot cases, one in the automotive and one in the white goods production sectors. The results indicate that the approach can significantly enhance the operators’ integration in the hybrid assembly system.

Agriculture and local economic development: a case study of uMshwathi

Local economic development (LED) is a process encompassing mobilisation of resources for competitive advantage by locally-owned or managed courses of action, identified through participation and social dialogue, in a strategically defined territory. LED based on sound business principles can contribute to economic growth, job creation and poverty alleviation. The South African Constitution mandates LED to municipalities. Agriculture remains one of the most labour-intensive goods-production sectors with substantial employment linkages. The study centres on whether agriculture can provide an effective strategy for LED in uMshwathi Local Municipality, District Municipality of uMgungundlovu, KwaZulu-Natal, using the research method of the case study and secondary data. LED theories applied embody the principle of value-adding risk management. Locational development-inducing factors and high potential agricultural land for smallholder and organic farming provide comparative and competitive advantage. Agriculture’s significant role to accelerate LED in uMshwathi is confirmed. A grand strategy and functional strategies are proposed.

Consumption and real exchange rates with incomplete markets and non-traded goods

This paper addresses the consumption–real exchange rate anomaly. International real business cycle models based on complete financial markets predict a unitary correlation between the real exchange rate and the ratio of home to foreign consumption when subjected to supply-side shocks. In the data, this correlation is usually small and often negative. This paper shows that this anomaly can be successfully addressed by models that have an incomplete financial market structure and a non-traded as well as traded goods production sector.

Consumption and Real Exchange Rates With Incomplete Markets and Non-Traded Goods

This paper addresses the consumption-real exchange rate anomaly. International real business cycle models based on complete financial markets predict a unitary correlation between the real exchange rate and the ratio of home to foreign consumption when subjected to supply side shocks. In the data, this correlation is usually small and often negative. This paper shows that this anomaly can be successfully addressed by models that have an incomplete financial market structure and a non-traded as well as traded goods production sector.

On the Consumption-real Exchange Rate Anomaly

This paper addresses the consumption-real exchange rate anomaly. International real business cycle models based on complete financial markets predict a unitary correlation between the real exchange rate and the ratio of home to foreign consumption when subjected to supply-side shocks. In the data, this correlation is usually small and often negative. This paper shows that this anomaly can be successfully addressed by models that have an incomplete financial market structure and a non-traded as well as traded goods production sector.