Fine particulate pollution (PM2.5) is a leading mortality risk factor in the People's Republic of China (PRC) and many Asian countries. Current studies of PM2.5 mortality have been conducted at the national and provincial levels, or at the grid-based micro level, and report only the exposure index or attributable premature deaths. Little is known about the welfare implications of PM2.5 mortality for urban areas. In this study, we estimate the total cost of PM2.5 mortality, the benefit of its reduction achieved through meeting various air quality targets, and the benefit of mortality reduction achieved through a uniform 10 micrograms per cubic meter decrease in PM2.5 concentration in the urban areas of 300 major cities in the PRC. Significant heterogeneity exists in welfare indicators across rich versus poor and clean versus dirty cities. The results indicate that cities in the PRC should accelerate the fine particulate pollution control process and implement more stringent air quality targets to achieve much greater mortality reduction benefits.

Computer and information technology is considered one of the most powerful engines of modern growth, but more empirical evidence is needed to quantify its impacts. This paper studies the role of computer and information technology in industrial restructuring by observing structural change in the manufacturing sector in the People's Republic of China using a large firm-level data set. Computer and information technology is found to boost changes in industrial structure substantially. This paper also identifies faster and higher-quality growth of firms as the underlying channel through which computer use can improve industrial structure. Firms using computers grow faster, spend more on research and development, and enjoy greater productivity.

Real estate booms have regularly occurred throughout the world, leaving painful busts and financial crises in their wake. Real estate is a natural investment for more passive debt investors, including banks, because real estate's flexibility makes it a better source of collateral than production facilities built for a specific purpose. Consequently, passive capital may flow disproportionately into real estate and help generate real estate bubbles. The preference of banks for more fungible real estate assets also explains why real estate is so often the source of a financial crisis. Real estate bubbles can be welfare enhancing if cities would otherwise be too small, either because of agglomeration economies or building restrictions. But given reasonable parameters, the large welfare costs of any financial crisis are likely to be higher than the modest benefits of extra building. The benefits of real estate bubbles are welfare “triangles,” while the costs of widespread default are welfare “rectangles.”

Climate change could significantly reduce the quality of life for poor people in Asia. Extreme heat and drought, and the increased incidence of natural disasters will pose new challenges for the urban poor and rural farmers. If farming profits decline, urbanization rates will accelerate and the social costs of rapid urbanization could increase due to rising infectious disease rates, pollution, and congestion. This paper studies strategies for reducing the increased social costs imposed on cities by climate change.

This paper evaluates the conjecture that factory managers may not be offering a cost-minimizing configuration of compensation and workplace amenities by using manager and worker survey data from Better Work Vietnam. Working conditions are found to have a significant positive impact on global life assessments and reduce measures of depression and traumatic stress. We find significant deviations in manager perceptions of working conditions from those of workers. These deviations significantly impact a worker's perception of well-being and indicators of mental health. Such deviations may lead the factory manager to underprovide certain workplace amenities relative to the cost-minimizing configuration, which may in part explain the persistence of relatively poor working conditions in developing economies.

We propose a new dynamic transition analysis on the basis of a small open economy dynamic stochastic general equilibrium model. Our proposed analysis differs from existing static and conventional dynamic analyses in that shifts from a fixed exchange rate regime to a basket peg or a floating regime are explicitly explored. We apply quantitative analysis, using data from the People's Republic of China and Thailand, and find that both economies would be better off shifting from a dollar peg to a basket peg or a floating regime over the long run. Furthermore, the longer the transition period, the greater the benefits of shifting to a basket peg regime from a dollar peg regime owing to limited volatility in interest rates. Regarding sudden shifts to a desired regime, the welfare gains are larger under a shift to a basket peg if the exchange rate fluctuates significantly.

Recent decades have witnessed an unprecedented expansion of democracy. During the third wave of democratization, as described by Samuel Huntington, democracy spread well beyond its historical boundaries and it is now adopted in all major regions of the world. Yet, not all democracies are equally effectual in delivering good governance and progrowth policies. Why do democratic institutions induce good governance and prosperity only in some economies? This paper presents an overview of the dimensions along which successful and unsuccessful democracies differ. It argues that four socioeconomic variables are of critical importance to create and maintain a well-functioning democracy: (i) social capital, (ii) information, (iii) education, and (iv) equality. History also plays an important role as do the contingencies characterizing the collapse of authoritarian regimes and the emergence of democratic institutions.

Growth in the aggregate market penetration rate (MPR) of the People's Republic of China (PRC) slowed during the period 2002–2014. Closer examination of the destinations and product levels reveals a simultaneous weakening in various markets. Production and trade costs were found to be the main determinants of these changes, while productivity growth and real exchange rate appreciation had either insignificant or limited effects. Predicting trends until 2016, we expect the MPR in almost all destinations and product markets to increase in the optimistic case. However, in a more realistic case, the MPR will likely plateau or fall in most markets. To stabilize exports, the PRC must actively facilitate structural transition in destinations and products. Meanwhile, macro policies to boost domestic demand are also urgently needed to maintain the country's high economic growth.

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