Volume 2, Issue 4 (winter 2013)


To download Volume 2, Issue 4, please click here (opens as a PDF file, 3.69 MB in size)


Interaction between international trade and economic growth: evidence from qualitative comparative analysis


Asli Seda Bilman (Dokuz Eylul University) and Serdar Turkeli (UNU-MERIT, Maastricht Graduate School of Governance)


The relationship between international trade and growth is one of the most popular debates in international economics literature. Although there are numerous theoretical approaches and empirical studies about the issue, the direction of the causality and the magnitude of the interaction still remain unclear. In this study, qualitative comparative analysis introduced by Ragin (1987) is applied, different from the previous empirical studies on the topic. The results present the conditions for growth in the country groups involved. The findings imply that trade policy is still of great importance in terms of stimulating growth in developing countries, while it has little importance in developed countries. 

Keywords: international trade, openness, growth, qualitative comparative analysis

JEL Classification: F19, F43, O24, C00 

pp. 5-18


Interdependence between taxation, cultural values and the role of the state in economic life


Inna Čábelková (Charles University, Prague) and Wadim Strielkowski (Charles University, Prague)


The role played by the state in economy is one of the most important problems in economic science. With regard to this role and its importance, it is often forgotten that the state is largely influenced by the cultural values of its citizens. This paper evaluates the role of cultural values in explaining the differences in state tax revenues as percentage of GDP in cross-country perspective.

Our results suggest that there is a statistically significant relationship between shared cultural values and taxation (measured by the revenues that are accumulated by the state). Therefore, it seems to be important to take culture into account when designing optimal economic policies and influencing the level of life and well-being.

Keywords: tax revenues, state, cultural values

JEL classification:  H21, P48

pp. 19-29


A strategy of No-Tricks that sets the stage for unconditional cooperators in Prisoner’s Dilemma


Kuiying Deng (Science China Press, Beijing, China; College of Engineering, Peking University, Beijing, China; and Department of Mathematics, Uppsala University, Uppsala, Sweden) and Tianguang Chu (College of Engineering, Peking University, Beijing, China)


The evolution of strategic cooperation between competitive countries in international relations may be effectively modeled by the iterated Prisoner's Dilemma. Win-stay-lose-shift (WSLS) might be considered the most successful strategy since the seminal computer tournaments organized by Robert Axelrod. However, WSLS as a strategy to explain the evolution of cooperation is a failure in the sense that, whereas it cooperates with unconditional defection (ALLD) in every second round, WSLS ruthlessly exploits unconditional cooperation (ALLC) after an error of his own. Here we propose a promising cooperative strategy of No-Tricks, which wins against WSLS and some other well-known strategies, particularly inhibiting the evolution of ALLD. Remarkably, the prevalence of No-Tricks ensures the survival of ALLC, while the survival of ALLC is the toehold for a plethora of other strategies, which in turn render impossible the ALLC invasion of No-Tricks by neutral drift.

Keywords: game, cooperation, defection, diversity, win-stay-lose-shift

JEL classification: C63, C72, C73, D80, F50

pp. 30-40


A note on the immigrant-native gap in earnings


Stephan Humpert (Federal Office for Migration and Refugees (BAMF), Nuremberg , Germany and and Leuphana University Lueneburg , Germany)


This note analyzes earning differentials between foreigners and natives in Germany. We use the recent published 2012 wave of German social survey data (ALLBUS) to perform Mincer-style quintile regressions and Oaxaca-Blinder decompositions. People born outside Germany have an average earning loss for about -6.5 to -10 percent, relative to natives. Persons with foreign citizenship have even higher losses. They face penalties between -8.2 to -14.3 percent. Both groups are performing relatively better at the upper part than at the lower part of the income distribution. Decompositions show a 9.2 percent difference for immigrants, while the most of the gap itself is unexplained by differences in endowments. Individuals without German citizenship have a 15.8 percent difference. Here, more of the half remains unexplained. 

Keywords:  immigration, earnings, pay gap, Germany, ALLBUS

JEL Classification: F22, F66, J24, J31, J61

pp. 41-48