Pak Hung Mo

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I retired from the Department of Economics, HKBU in 2018. Currently I am conducting researches on Prehistorical Chinese History which attempt to integrate the related empirical findings, literature with economic theory for restructuring the history and the lessons related to human development.

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CovolvtS5 st mPolicies to Ignite Sustained Economic Growth: Trade, Government Investment or Botho

conference paper, 2018

In various empirical studies, some ‘institutional variables’ are found to have extensive effects ... more In various empirical studies, some ‘institutional variables’ are found to have extensive effects on many various ‘change variables’. For instance, Mo (2010a) finds that initial trade per capita not only affect GDP growth rate but also the growth rates of capital and net export due to its positive effect on productivity growth; Mo (2007c) conclude that government investment can raise GDP growth through the supply and demand-side variables in the cross- section study.

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Policies to Ignite Sustained Economic Growth: Trade, Government Investment or Both, 2018

I provide theoretical and empirical models to examine the mechanism and effectiveness of governme... more I provide theoretical and empirical models to examine the mechanism and effectiveness of government investment and trade in starting a virtuous cycle of sustained economic growth The models are structured under the general framework governing the relationship between stock variables, motivation structure, behaviors and their effects on related coevolution process. The regression model can observe the possible coevolution mechanism between economic growth and the key market and government institutions as well as their respective conditioned effect on the growth rate. With the remarkable robustness in the regression estimations, we conclude that empirical results and the theory are mutually supportive.

format_quoteImprovements in trade (TRA) are necessary for government investment (GI) to effectively raise GDP growth (GR); otherwise, GI can negatively affect GR.format_quote

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Papers by Pak Hung Mo

on Corruption and Economic Growth1

This study introduces a new perspective on the role of corruption in economic growth and provides... more This study introduces a new perspective on the role of corruption in economic growth and provides quantitative estimates of the impact of corruption on the growth and importance of the transmission channels. In our ordinary least squares estimations, we find that a 1 % increase in the corruption level reduces the growth rate by about 0.72 % or, expressed differently, a one-unit increase in the corruption index reduces the growth rate by 0.545 percentage points. The most important channel through which corruption affects economic growth is political instability, which accounts for about 53 % of the total effect. We also find that corruption reduces the level of human capital and the share of private investment.

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Marketization, Regional Economic Integration, and the Profit Criterion

Oxford University Press eBooks, Feb 10, 1999

Impossible Trinity, Capital Flow Market and Financial Stability

Kyklos, Nov 1, 2009

SUMMARYAs observed by Calvo (2002), the world financial market is wrought with systemic hazards t... more SUMMARYAs observed by Calvo (2002), the world financial market is wrought with systemic hazards that are largely independent to the individual countries affected. Systemic problem requires systemic instrument. Based on the Mundell‐Fleming model, we institute a capital flow market into an economy. After the additional market is introduced, countries can enjoy the benefits from opening their foreign exchange and capital markets but at the same time, be free from exchange rate volatility and financial crises as well as retain full autonomy in monetary and fiscal policies for maintaining internal balances. The ‘globalization hazard’ is resolved.

Income Inequality and Economic Growth

Kyklos, Aug 1, 2000

ABSTRACT

The supply-side and demand-side effects of government size and investment

International Journal of Economic Perspectives, Sep 1, 2008

Income inequality and economic growth

Economic Modelling, 2012

Despite the extensive existing literature on income inequality and economic growth, there remains... more Despite the extensive existing literature on income inequality and economic growth, there remains considerable disagreement on the effect of inequality on economic growth. Existing literatures find either a positive or a negative relationship. In this paper, we attempt to theoretically examine that relationship with a stochastic optimal growth model. We make the disagreement clear within a single model. We conclude (i) that both are possible-that is, higher inequality can retard growth in the early stage of economic development, and can encourage growth in a near steady state, (ii) that income redistribution by high income tax does not always reduce income inequality. Income inequality can be reduced by higher income tax in a near steady state, but it cannot be reduced in the early stage of economic development, and (iii) that two government polices-rapid economic growth and low income inequality-can be achieved by low income tax in the early stage of economic development, but both cannot be achieved simultaneously in a near steady state.

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Measures of Income Distribution and Economic Growth

Journal of Income Distribution®, 2012

In this study, the empirical contents of various income inequality measures are compared under an... more In this study, the empirical contents of various income inequality measures are compared under an identical framework with a well-tested data set. Our study suggests that long-term income inequality has a strong negative effect on Gross Domestic Product (GDP) growth under different measurements. Moreover, governments should investigate further into changes in the income size of the middle class as an indicator for potential changes in social stability, investment, and GDP growth, besides focusing on the Gini coefficient, which they predominantly do now.

Institutions, tools variety and channels to sustained economic growth

1 Trade , Exchanges and Productivity Growth

Many studies suggest the positive causal effects of trade openness on productivity and growth. Ho... more Many studies suggest the positive causal effects of trade openness on productivity and growth. However, controversies are still prevalent among vast empirical studies on the issue. In this paper, we propose a standard empirical framework for investigating economic growth and apply the framework to estimate the growth effects and transmission processes of per capita trade. Based on prior information, theoretical reasoning and various empirical evidences, we tend to conclude that the international exchanges have positive independent effects on economic performances.

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Geography, writing system and the course of history

Technical advance, income allocation and economic growth

International trafficking in persons: Theory and solution

Income Distribution Extremity and Economic Growth

Developing and transitional economies usually experience high levels of income extremity during t... more Developing and transitional economies usually experience high levels of income extremity during the period of transition and rapid economic growth. Understanding and quantifying its effects on the economy is important to their development strategies. A recent study by Mo (2000) concludes that income inequality measured by the Gini coefficient has significant negative effect on the rate of GDP growth. The most important channe l is the transfer channel while the least important one is the human capital channel. However, the Gini coefficient measure of income inequality is only a partial measure. In this paper, we study whether income distribution extremity can generate similar conclusions. We find that instead of the transfer channel, the most important transmission channel is the sociopolitical instability. We also suggest some strategies to deal with the problem in view of our results and the experiences of income redistribution policies in developed countries.

Geography, writing system and the fates of ancient civilizations

Income Distribution Polarization and Economic Growth: Channels and Effects

Developing and transitional economies usually experience high levels of income polarization durin... more Developing and transitional economies usually experience high levels of income polarization during the period of transition and rapid economic growth. Understanding and quantifying its effects on the economy is important to developmental strategies. In this paper, we study the effect of income distribution polarization on GDP growth and its transmission channels. We also suggest some strategies to deal with the problem in view of our results and the experiences of income redistribution policies in developed countries.

Entrepreneurs, Sticky Competition and the Schumpeterian Cobb-Douglas Production Function

In this paper, we institute the role of entrepreneurs in technical progress and the mechanism of ... more In this paper, we institute the role of entrepreneurs in technical progress and the mechanism of tools multiplication into the Cobb Douglas Production Function. After the advancements, the technology component in the function has technical meaning and is potentially observable. Unlimited technical progress becomes possible and automatic under sticky competitive markets. The coexistence of sustained growth, decline and stagnation across countries and time becomes obvious and the target of public policies for achieving sustained growth is also clear and precise.

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Munich Personal RePEc Archive International Human Trafficking: Theory and Solution

In this paper, we build a simple model to explain the choice of migration method and the root cau... more In this paper, we build a simple model to explain the choice of migration method and the root causes of international human trafficking (IHT). Our analyses result in several implications on the problems related to IHT. First, IHT is driven by poverty and international productivity/living quality disparities. Second, the existing humanitarian and/or suppressive approaches cannot solve the problem. Third, the best option for solving the problem is setting up the ‘reciprocal direct investment’ (RDI) scheme between leading and lagged economies. The RDI scheme can facilitate improvements in the quality of public governance in lagged economies and directly promote international competition, efficiency, trade liberalization and division of labor. The resulting convergence in global living quality at a higher level across nations will eliminate the root causes of illicit migrations.

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Corruption and Economic Growth 1

This study introduces a new perspective on the role of corruption in economic growth and provides... more

Pak Hung Mo

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