Urban, Rural, Regional, Real Estate, and Transportation Economics
Does entrepreneurship cause urban economic growth and if so how large is the impact? Empirical analysis of such question is hampered by endogeneity. This paper uses two different sets of variables – the homestead exemption levels in state bankruptcy laws from 1975 and the share of MSA overlaying aquifers - to instrument for entrepreneurship and examine urban growth between 1993 and 2002. Despite using different sets of instrumental variables, the ranges of 2SLS estimates are similar, further supporting the significant impact of entrepreneurship on urban growth.
This paper examines the impact of government guaranteed small business loans on urban economic growth, and compares the growth impacts of government versus market financed entrepreneurship. OLS estimates indicate a significant and positive relation between the Small Business Administration’s guaranteed loans and metropolitan growth between 1993 and 2002. However, first-difference and instrumental variable regressions show no growth impact from government guaranteed loans. In contrast, market entrepreneurship significantly and positively contributes to local economic growth.
Poor maintenance, slow expansion of streets and urban highways and excessive congestion are chronic in many cities. This chapter argues that public-private partnerships (PPPs) can be used to improve the timing of new investments, ensure adequate maintenance of highways and streets and manage congestion with road user charges. Nevertheless, PPPs will only work with timely public planning, deft contract design and enforcement and competent inter jurisdiction coordination.
Private finance of infrastructure grew substantially during the last twenty five years. Part of the growth has been caused by public-private partnerships (PPPs), which bundle investment and service provision of single public infrastructure projects into a long-term contract with a private single-purpose firm. Because most PPPs enjoy few economies of scope and assets are project specific, project finance is appropriate. PPP projects are highly levered. Banks tend to finance construction. During the operation of the project, bond finance substitutes for bank lending.
This paper assesses empirically whether China's central bank should react to house prices and if so how. We use three kinds of VAR models including structural VARs with a combination of short-run and long-run restrictions to solve the endogeneity problem of identifying shocks to monetary policy and house prices. Broader money supply (M2) and the one-year lending rate are used as monetary policy proxies according to the distinctive background in China. The interaction between M2 and house prices is much more evident than the effects of M2 and house prices on GDP and CPI.
A growing number of roads, particularly in developing countries, are currently financed by the private sector via Build-Operate-and-Transfer (BOT) schemes. When the franchised road has no close substitute, the government must regulate tolls. Yet when there are many ways of getting from one point to another, regulation may be avoided by allowing competition between several franchise owners. This paper studies toll competition among private roads with congestion.
India has experienced a remarkable transition in recent decades, from chronic food deficits in the 1960s to national food surpluses on average today, despite a more than doubling of the population. This has been accompanied by an equally dramatic reduction in poverty; from about 60 percent of the population in the 1960s to less than 30 percent today. Poverty and malnutrition still persist at unacceptably high levels, but this is due to insufficient access to income rather than the ability of the agricultural sector to feed the entire population.