Template-Type: ReDIF-Article 1.0 Author-Name: Koji Akimoto Title: A Fundamental Cause of Economic Crisis―A Macro-economic Game between the Real Economic Sector and Monetary Sector Abstract: This study examines a fundamental cause of the economic crisis from which the current capitalist economy is suffering. We posit that the cause is an imbalance between the real economic sector and the monetary sector. To test this hypothesis, we construct a differential game. Players are the agents selected by the two sectors. We adopt linear objective functions, because if we adopt concave objective functions, the analysis is restricted to examining the first and the second order conditions to maximize the Hamiltonians. A main theoretical originality of this study is to describe how players and policy makers should play to ensure balance between the real economic and the monetary sectors in the capitalist economy. The auxiliary equations do not have any stable steady state points under the linear functions. The game requires two rules to have a solution. One rule is the strategy rule that requires players to adopt a strategy that makes the strategy exchange point coincide with the steady state point in reaction to the other player’s strategy. The other rule is the policy rule that requires the policy-maker (Central Bank) to control the strategy exchange point of the monetary sector by undertaking buying operation. It is shown that the distribution rate of GDP to the monetary sector has a rigorous range for the game to have a solution. In addition, the solution has the character of a natural economy. We conclude that large deviations from the solution of the game (which we consider as deviations from the natural economy) are a fundamental cause of economic crisis. We investigate actual transitions of the distribution rate in USA, Euro area and Japan to prove our hypothesis in identifying the fundamental cause. Keywords: economic crisis, strategy rule, unbalance of the real economic sector and the monetary sector, policy rule, natural economy, differential game Classification-JEL: C61, C72, E40, E51, E52, E58, E60 Pages: 01-37 Volume: 2014 Issue: 4 Year: 2014 File-URL: http://www.vse.cz/ijes/20 File-Format: text/html Handle: RePEc:prg:jnljes:v:2014:y:2014:i:4:id:20:p:01-37 X-File-Ref: http://www.vse.cz/RePEc/prg/jnljes/references/20 Template-Type: ReDIF-Article 1.0 Author-Name: Adrian Otoiu Author-Name: Emilia Titan Title: An Alternative Method of Component Aggregation for Computing Multidimensional Well-Being Indicators Abstract: This paper questions the validity of the statistical methods currently used in computing the composite indicators of well-being from their main subcomponents. The facts that most of the weights of the principal sub-components of the composite indicators are equal, that the determinants of well-being are correlated, and that the results are interpreted primarily in terms of country ranks, point out to the appropriateness of using a rank-based method for computing the composite indicators form their sub-indexes. A comparison of the actual ranks with ranks computed as averages of the ranks of sub-indexes for three well-known indicators of well-being, Human Development Index, Legatum Prosperity Index, and Social Progress Index, shows that results are almost the same. This calls into question the use of weighted averages of actual values of sub-components, as very high values for a sub-component increases a country’s relative rank, despite much lower performance on other sub-components, as in the case of USA and New Zealand. Our proposed approach helps achieve more robust/reliable rankings of countries and tackle the issues posed by extreme values or non-normal distributions of the sub-components variables used. Keywords: well-being composite indexes, rank-based statistical methods, Human Development Index, Legatum Prosperity Index, Social Progress Index Classification-JEL: C14, C40, I30 Pages: 38-52 Volume: 2014 Issue: 4 Year: 2014 File-URL: http://www.vse.cz/ijes/21 File-Format: text/html Handle: RePEc:prg:jnljes:v:2014:y:2014:i:4:id:21:p:38-52 X-File-Ref: http://www.vse.cz/RePEc/prg/jnljes/references/21 Template-Type: ReDIF-Article 1.0 Author-Name: Yudistira Hendra Permana Author-Name: Ike Yuli Andjani Title: Financial efficiency performance of regional development bank (RDB) to support regional economy in Indonesia Abstract: Regional development bank (RDB) in Indonesia is financial institution in purpose to strengthen regional economy through financial inclusion. It is mandated on Act 13/1962 about main rules of RDB in Indonesia. By the time, RDB get into competition with other banks on financial market yet strive for RDB to have financial efficiency. Therefore, it is needed to increase the competitiveness of RDB and also performing its role as the agent of regional development. This study is going to analyze financial efficiency of RDB in order to influence regional development in Indonesia. We employ panel data method using fixed-effect model for estimation using period of 2002 to 2012. Analysis will also take place on RDB’s performance to meet the mandate of ‘BPD Regional Champion’ (BRC) in order to be agent of regional development in Indonesia. Keywords: Panel data, RDB, financial efficiency, financial inclusion, regional economy Classification-JEL: C33, O16 Pages: 53-69 Volume: 2014 Issue: 4 Year: 2014 File-URL: http://www.vse.cz/ijes/22 File-Format: text/html Handle: RePEc:prg:jnljes:v:2014:y:2014:i:4:id:22:p:53-69 X-File-Ref: http://www.vse.cz/RePEc/prg/jnljes/references/22 Template-Type: ReDIF-Article 1.0 Author-Name: Tobias Trütsch Title: The Impact of Contactless Payment on Spending Abstract: This paper estimates the effect of contactless payment on the spending ratio in terms of transactions for different transaction types at the point-of-sale. The specific devices that are investigated are debit and credit cards, to which the feature is embedded. Data is drawn from a national representative survey on consumer payment behavior in the US in 2010. Using propensity score matching to control for selection, the estimation shows that the contactless feature yields to a significant increase in the spending ratio at the point-of-sale for both payment methods. The average treatment effect on the treated for credit and debit cards is roughly 8 and 10 percent, respectively. These findings indicate that the private industry can highly benefit from the innovation with respect to new revenue streams. This paper contributes to the existing literature in payment economics by analyzing one of the most recent payment products. Keywords: contactless payment, payment innovation, spending habits, credit and debit cards, near- field communication (NFC), propensity score matching Classification-JEL: C21, D12, D14, O33 Pages: 70-98 Volume: 2014 Issue: 4 Year: 2014 File-URL: http://www.vse.cz/ijes/23 File-Format: text/html Handle: RePEc:prg:jnljes:v:2014:y:2014:i:4:id:23:p:70-98 X-File-Ref: http://www.vse.cz/RePEc/prg/jnljes/references/23 Template-Type: ReDIF-Article 1.0 Author-Name: Aras Zirgulis Title: Is International Capital Tax Competition Fueled by the Quest for Increased Productivity? Abstract: This paper examines the relationship between capital tax competition amongst countries and the productivity spillover effects from foreign capital movements. An econometric model is constructed to test for the impact that domestic and foreign productivity shocks has on a country’s tax setting behavior. The paper empirically tests this using a spatial dynamic panel data model with system GMM, utilizing a dataset consisting of 41 countries spanning the years of 1998-2012. This study finds evidence that foreign productivity level changes are having a negative impact on domestic tax rates. In addition, this paper also finds support for the idea that countries competitively set their tax rates in response to foreign countries tax setting decisions. Keywords: Tax competition, system gmm, productivity, capital tax Classification-JEL: F21, H25 Pages: 99-116 Volume: 2014 Issue: 4 Year: 2014 File-URL: http://www.vse.cz/ijes/24 File-Format: text/html Handle: RePEc:prg:jnljes:v:2014:y:2014:i:4:id:24:p:99-116 X-File-Ref: http://www.vse.cz/RePEc/prg/jnljes/references/24