William R. DiPietro

GDP per capita and its challengers as measures of happiness

Purpose – The paper attempts to empirically assess whether GDP per capita or the human capital index is a better measure of happiness. Design/methodology/approach – Cross-country regressions are run to see how GDP per capita fairs in comparison to the human capital index in explaining happiness based on survey questionnaires. Findings – The paper finds that GDP per capita accounts for a far greater share of the cross country variation in happiness based on survey data than the human capita index and assorted other measures of human welfare. Practical implications – The important implication is that the often heard criticism that GDP per capita is inappropriate for use in economic analysis, especially in the area of economic development and other international fields, because it is not specifically designed as a measure of welfare, may be unfounded. Originality/value – The paper shows that GDP per capita is a better measure of happiness defined in surveys than the human capital index.

The Effect of the Size of the Military on Stock Market Performance in the United States and the UK

This paper uses regression analysis to investigate the relationship between military expenditure and stock market performance for the United States and the United Kingdom. Specifically, the study applies the Bierens-Guo unit root procedures to ascertain the time series properties of the variables in the study. The standard OLS technique is employed to determine the influence of military expenditure on stock markets for the period 1914 through 2001. The results from the unit root tests indicate that the military expenditure, military personnel, stock market, and energy consumption series are level stationary. The results from the OLS equations suggest that military expenditure has significantly positive effect on stock market performance for the United States and the United Kingdom. The implication of this finding is that high-income class and people in power are less likely to oppose increases in military spending even though such expenditures are not in the best interest of the society.

The world distribution of military spending: is there a convergence?

This paper examines the issue of convergence in military spending among NATO countries. In particular, the paper employs the sequential panel selection method (SPSM) to ascertain whether the military spending of NATO countries has converged relative to that of the USA. The results from the SPSM for both the full- and sub-periods indicate that military spending of NATO countries, with the exception of Hungary, have converged to that of the USA. The results show that the number of NATO countries whose military spending converged relative to that of the USA did not change following the collapse of the Soviet Union. The overall finding of this study contradicts the alliance theory which stipulates that alliances tend to weaken or dissolve following the elimination of the unifying threat.

Economic and Other Determinants of Political Trust

Political trust is important for the effective functioning of government. This chapter uses cross country regression analysis to see whether three different measures of economic performance matter for political trust. In this chapter, an economic approach to politics has been developed. The results lend support to the hypothesis that political trust is influenced by economic growth, the standard of living, and the appropriate use of government spending.

Wages and Corporate Dominance (Плате и Koрпоративнa Доминацијa)

English Abstract: As wages are the primary means of income for the majority of people in every country in the world, understanding the reasons for differences in wages is important for human welfare. One potential source of differences in wages between countries is differences in the degree of corporate dominance. This paper proposes that average country wages are negatively related to the extent of corporate dominance. The proposition is tested using cross country regression analysis. The results show that greater corporate dominance reduces average national wages when adjusting for the level of economic development and other relevant variables.Serbian Abstract: Пошто су плате главни извор прихода за већину људи у свакој земљи на свету, разумевање разлога за разлике у платама је важно за људску добробит. Један од потенцијалних извора разлика у платама између земаља је разлика у степену корпоративне доминације. У раду се претпоставља да су просечне плате негативно повезане са обимом корпоративне доминације. Претпоставка је тестирана помоћу регресионе анализе између земаља. Резултати показују да већа корпоративна доминација смањује просечне националне зараде приликом прилагођавања нивоа економског развоја и других релевантних варијабли.

The role of individual values in the process of economic growth

Purpose - The purpose of the paper is to investigate whether, and, if so, to what extent, the valuation that nations place on individual personality traits change with economic growth and development. Design/methodology/approach - The paper compares the averages of the cross-country valuations of eight different personality characteristics for various levels of development, and, in addition, employs cross-country regression analysis to assess the impact of economic growth on the value placed on these characteristics. Findings - In general, the findings of both the comparative analysis and the cross-country regression analysis indicate that the valuation counties place on individual personality characteristics change with economic growth and development, and for certain characteristics, rather dramatically. Research limitations/implications - A major implication of the findings of the paper is that economic growth may not just act in a neutral fashion by merely providing additional material goods, but may have profound effect on future national identity, on the definition of the type of individual that a nation values. Practical implications - Since economic growth changes the way personality characteristics are valued by a nation, it is possible that the growth process itself can alter the future growth prospects of a nation, because some personality characterizes are apt to be growth fostering, while others are likely to be growth inhibiting. Originality/value - The paper should be of interest to anyone interested in the changes brought about by growth and development.