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on Central and Western Asia |
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Issue of 2010‒10‒16
eighteen papers chosen by Bibhu Prasad Nayak Institute for Social and Economic Change |
| By: | Anke Weber; Asmaa A ElGanainy |
| Abstract: | This paper employs several econometric techniques to estimate the Armenian output gap. The findings indicate that the output gap is significantly positive in 2007 and 2008 and decreased dramatically in 2009. The paper uses these results to estimate a New Keynesian Phillips curve for Armenia, suggesting a significant role of the output gap and inflation expectations in determining current inflation. Finally, the underlying fiscal stance over the period 2000-09 is assessed by estimating the cyclically-adjusted fiscal balance. Most of Armenia’s fiscal deficit is found to be structural. Fiscal policy, while providing counter-cyclical support in 2009, has been largely pro-cyclical in the past. |
| Keywords: | Armenia , Business cycles , Economic growth , Economic models , Fiscal policy , Inflation , Monetary policy , Production , Time series , |
| Date: | 2010–08–26 |
| URL: | http://d.repec.org/n?u=RePEc:imf:imfwpa:10/197&r=cwa |
| By: | Zafer Dilaver (Surrey Energy Economics Centre (SEEC), Department of Economics, University of Surrey); Lester C Hunt (Surrey Energy Economics Centre (SEEC), Department of Economics, University of Surrey) |
| Abstract: | This research investigates the relationship between Turkish industrial electricity consumption, industrial value added and electricity prices in order to forecast future Turkish industrial electricity demand. To achieve this, an industrial electricity demand function for Turkey is estimated by applying the structural time series technique to annual data over the period 1960 to 2008. In addition to identifying the size and significance of the price and industrial value added (output) elasticities, this technique also uncovers the electricity Underlying Energy Demand Trend (UEDT) for the Turkish industrial sector and is, as far as is known, the first attempt to do this. The results suggest that output and real electricity prices and a UEDT all have an important role to play in driving Turkish industrial electricity demand. Consequently, they should all be incorporated when modelling Turkish industrial electricity demand and the estimated UEDT should arguably be considered in future energy policy decisions concerning the Turkish electricity industry. The output and price elasticities are estimated to be 0.15 and -0.16 respectively, with an increasing (but at a decreasing rate) UEDT and based on the estimated equation, and different forecast assumptions, it is predicted that Turkish industrial electricity demand will be somewhere between 97 and 148 TWh by 2020. |
| Keywords: | Turkish Industrial Electricity Demand; Energy Demand Modelling and Forecasting; Structural Time Series Model (STSM); Future Scenarios. |
| JEL: | C22 Q41 Q48 |
| Date: | 2010–09 |
| URL: | http://d.repec.org/n?u=RePEc:sur:seedps:129&r=cwa |
| By: | Kangni Kpodar; Patrick A. Imam |
| Abstract: | This paper investigates the determinants of the pattern of Islamic bank diffusion around the world using country-level data for 1992 - 2006. The analysis illustrates that income per capita, share of Muslims in the population and status as an oil producer are linked to the development of Islamic banking, as are economic integration with Middle Eastern countries and proximity to Islamic financial centers. Interest rates have a negative impact on Islamic banking, reflecting the implicit benchmark for Islamic banks. The quality of institutions does not matter, probably because the often higher hurdle set by Shariah law trumps the quality of local institutions in most countries. The 9/11 attacks were not important to the diffusion of Islamic banking; but they coincided with rising oil prices, which are a significant factor in the diffusion of Islamic banking. Islamic banks also appear to be complements to, rather than substitutes for, conventional banks. |
| Keywords: | Banking systems , Cross country analysis , Economic models , Financial systems , Interest rates , International banking , Islamic banking , Middle East , North Africa , South Asia , Sub-Saharan Africa , Time series , |
| Date: | 2010–08–25 |
| URL: | http://d.repec.org/n?u=RePEc:imf:imfwpa:10/195&r=cwa |
| By: | Heiko Hesse; Raphael A. Espinoza; Adolfo Barajas; Ralph Chami |
| Abstract: | This paper examines the recent credit slowdown among Middle Eastern and North African (MENA) countries from three analytical angles. First, it finds that, similar to other regions and to its past history, a credit boom preceded the current slowdown, and that a protracted period of sluggish growth is likely going forward. Second, it uncovers a key role played by bank funding (deposit growth and external borrowing slowed considerably) but whose effect was frequently dampened by expansionary monetary policy. Third, bank-level fundamentals - capitalization and loan quality - helped to explain differences in credit growth across banks and countries. |
| Keywords: | Bank credit , Banking sector , Credit expansion , Cross country analysis , Economic growth , Middle East , Monetary policy , North Africa , |
| Date: | 2010–09–27 |
| URL: | http://d.repec.org/n?u=RePEc:imf:imfwpa:10/219&r=cwa |
| By: | Chhachhi, A. |
| Abstract: | As livelihood insecurity rises and existing systems of social security are being eroded in South Asia, a number of social protection interventions have been proposed. Despite different frameworks, there appears to be convergence on the ground between contending pathways of social protection. Contemporary policies dealing with socio-economic/human insecurity and informalization of the labour market that propose trade-offs between citizenship-based and employment-based entitlements, either explicitly or implicitly, need to be critically examined and unpacked. citizenship-based, employment-based, community-based and market-based, linking to the broader discussion on commoditization/privatization of the social versus de-commoditization and a broader framework of democratic citizenship. Drawing on evidence from research, the paper explores, not only, the ways in which the design of interventions assume, incorporate or ignore gendered structures and gender ideologies, which impinge on the outcomes of these interventions, but also the ways in which women have articulated, fought for and gained better entitlements. It argues that both employment based and citizenship based entitlements are essential and these require the universalization of social protection and measures that ensure redistribution and recognition. The last section discusses some proposals along with suggestions for South Asian level regional interventions. |
| Keywords: | gender;poverty;social protection;democratic citizenship;entitlements |
| Date: | 2009–12–01 |
| URL: | http://d.repec.org/n?u=RePEc:dgr:euriss:486&r=cwa |
| By: | David Coady; Javier Arze del Granado |
| Abstract: | This paper reviews evidence on the impact of fuel subsidy reform on household welfare in developing countries. On average, the burden of subsidy reform is neutrally distributed across income groups; a $0.25 decrease in the per liter subsidy results in a 6 percent decrease in income for all groups. More than half of this impact arises from the indirect impact on prices of other goods and services consumed by households. Fuel subsidies are a costly approach to protecting the poor due to substantial benefit leakage to higher income groups. In absolute terms, the top income quintile captures six times more in subsidies than the bottom. Issues that need to be addressed when undertaking subsidy reform are also discussed, including the need for a new approach to fuel pricing in many countries. |
| Keywords: | Developing countries , Income distribution , Oil prices , Oil pricing policy , Oil subsidies , Price increases , Private consumption , Welfare , |
| Date: | 2010–09–03 |
| URL: | http://d.repec.org/n?u=RePEc:imf:imfwpa:10/202&r=cwa |
| By: | Petia Topalova |
| Abstract: | This paper uses the 1991 Indian trade liberalization to measure the impact of trade liberalization on poverty, and to examine the mechanisms underpinning this impact. Variation in sectoral composition across districts and liberalization intensity across production sectors allows a difference-in-difference approach. Rural districts, in which production sectors more exposed to liberalization were concentrated, experienced slower decline in poverty and lower consumption growth. The impact of liberalization was most pronounced among the least geographically mobile, at the bottom of the income distribution, and in Indian states where inflexible labor laws impeded factor reallocation across sectors. |
| Keywords: | Fiscal reforms , Income distribution , India , International trade , Nontariff barriers , Poverty , Private consumption , Protectionism , Tariffs , Trade liberalization , Trade policy , |
| Date: | 2010–09–22 |
| URL: | http://d.repec.org/n?u=RePEc:imf:imfwpa:10/218&r=cwa |
| By: | Hakan Yilmazkuday (Department of Economics, Temple University) |
| Abstract: | This paper uses a unique monthly data set that covers overall credit card usage in a small-open economy, Turkey, to investigate a possible credit channel of monetary policy transmission through credit cards. A reduced-form vector autoregression analysis is employed where the forecast error variance decompositions are calculated for three-year windows over the period 2002-2009. It is shown that, during the recent financial crisis that has started in 2007, the monetary policy of Turkey has shifted toward focusing on output volatility and interest-rate smoothing through setting short-term interest rates, while the inflation rate has been mostly affected by exchange rate movements and inflation inertia. Credit cards usage has an increasing effect on inflation rates through time, requiring more policy emphasis on the credit channel through credit cards. When the effects of the credit view and the money view are compared, the former seems to be more effective on the real side of the economy independent of the level of inflation. |
| Keywords: | Credit Cards, Monetary Policy, Credit Channel, Vector Autoregression, Turkey |
| JEL: | E44 E50 E60 C32 |
| Date: | 2010–09 |
| URL: | http://d.repec.org/n?u=RePEc:tem:wpaper:1010&r=cwa |
| By: | Angus Deaton; Jean Drèze |
| Abstract: | The Indian economy has recently grown at historically unprecedented rates and is now one of the fastest-growing economies in the world. Real GDP per head grew at 3.95 percent a year from 1980 to 2005, and at 5.4 percent a year from 2000 to 2005. Measured at international prices, real per capita income in India, which was two-thirds of Kenya’s in 1950, and about the same as Nigeria’s, is now two and a half times as large as per capita income in both countries. [Working Paper No. 170] |
| Keywords: | Indian economy, historically, fastest-growing economies, world, Kenya, Nigeria, per capita income |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:ess:wpaper:id:2965&r=cwa |
| By: | Andrabi, Tahir; Das, Jishnu |
| Abstract: | Winning"hearts and minds"inthe Muslim world is an explicitly acknowledged aim of U.S. foreign policy and increasingly, bilateral foreign aid is recognized as a vehicle towards this end. The authors examine the effect of aid from foreign organizations and on-the-ground presence of foreigners following the 2005 earthquake in Northern Pakistan on local attitudes. They show that four years after the earthquake, humanitarian assistance by foreigners and foreign organizations has left a lasting imprint on population attitudes. Measured in three different ways those living closer to the fault-line report more positive attitudes towards foreigners, including Europeans and Americans; trust in foreigners decreases 6 percentage points for every 10 Kilometers distance from the fault-line. In contrast, there is no association between distance to the fault-line and trust in local populations. Pre-existing differences in socioeconomic characteristics or population attitudes do not account for this finding. Instead, the relationship between trust in foreigners and proximity to the fault-line mirrors the greater provision of foreign aid and foreign presence in these villages. In villages closest to the fault-line, foreign organizations were the second largest providers of aid after the Pakistan army (despite reports to the contrary aid provision by militant organizations was extremely limited, with less than 1 percent of all respondents reporting any help from such organizations). The results provide a compelling case that trust in foreigners is malleable, responds to humanitarian actions by foreigners and is not a deep-rooted function of local preferences. |
| Keywords: | Post Conflict Reconstruction,Corporate Law,Population Policies,Hazard Risk Management,Statistical&Mathematical Sciences |
| Date: | 2010–10–01 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:5440&r=cwa |
| By: | Maher Hasan; Jemma Dridi |
| Abstract: | This paper examines the performance of Islamic banks (IBs) and conventional banks (CBs) during the recent global crisis by looking at the impact of the crisis on profitability, credit and asset growth, and external ratings in a group of countries where the two types of banks have significant market share. Our analysis suggests that IBs have been affected differently than CBs. Factors related to IBs‘ business model helped limit the adverse impact on profitability in 2008, while weaknesses in risk management practices in some IBs led to a larger decline in profitability in 2009 compared to CBs. IBs‘ credit and asset growth performed better than did that of CBs in 2008-09, contributing to financial and economic stability. External rating agencies‘ re-assessment of IBs‘ risk was generally more favorable. |
| Keywords: | Banking systems , Banks , Competition , Credit expansion , Financial assets , Financial crisis , Global Financial Crisis 2008-2009 , Islamic banking , Markets , Profit margins , Risk management , |
| Date: | 2010–09–03 |
| URL: | http://d.repec.org/n?u=RePEc:imf:imfwpa:10/201&r=cwa |
| By: | Aasha Kapur Mehta; Trishna Satpathy |
| Abstract: | Poverty remains to be the most important development issue facing India with an estimated 301.72 million Indians (27.5 percent) living below the poverty line in 2004-2005. In 1975, Ralegan Siddhi was just another drought prone, poverty stricken village, but it has had much success in poverty reduction since then. Ralegan Siddhi's success is not just a story of change as a result of access to water. This paper provides evidence of the remarkable economic, social and community regeneration in Ralegan Siddhi, due to a strong, selfless, ethical and accountable leadership as well as its replication in Hivre Bazaar. [Working Paper No. 38] |
| Keywords: | Best practice, poverty reduction, Anna Hazare, watershed, equitable development, inclusive, holistic, replicable, reverse migration, selfless leadership |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:ess:wpaper:id:2951&r=cwa |
| By: | Nidhi Dhamija; Shashanka Bhide |
| Abstract: | India experienced high economic growth in the 1990s. Some earlier studies, which attempted to identify the influence of growth on poverty dynamics in the country by including growth variables among the factors affecting the incidence of and transition from poverty, concluded that growth is not uniformly associated with poverty reduction. While panel household data was used to identify the factors influencing the incidence and mobility of poverty, the changes in the influence of these factors over time were not analysed. This paper examines whether there has been change in the influence of factors such as village level composition,household size and composition, and economic growth on poverty dynamics in different periods of time. [Working Paper No. 39] |
| Keywords: | poverty dynamics, poverty, household, composition, composition, periods, time |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:ess:wpaper:id:2950&r=cwa |
| By: | Nancy Birdsall; Molly Kinder; Wren Elhai |
| Abstract: | This essay draws on the work of the Center for Global Development’s Study Group on U.S. Development Strategy in Pakistan and on the ideas in the group’s open letters to Ambassador Richard Holbrooke to present five recommendations for spending aid money well in Pakistan. [CGD Essay]. |
| Keywords: | global, development, pakistan, money, development, United States, |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:ess:wpaper:id:2971&r=cwa |
| By: | Metin Cosgel (University of Connecticut); Bogac A. Ergene (University of Vermont) |
| Abstract: | This article studies the accumulation and intergenerational transmission of wealth in early-modern Ottoman Anatolia by employing data from probate estate inventories (terekes) as found in the court records (sicils) of eighteenth-century Kastamonu, a town located in northern Anatolia. Extracting information on the wealth levels and personal characteristics of father-son pairs in the period between 1710 and 1806, we conduct regression analysis of factors determining the wealth of sons. In this first attempt to simultaneously analyze the estate inventories of parents and children in the Ottoman Empire, we also compare our results with those obtained for regions that were growing rapidly in this era and discuss the implications of our findings for the prospects of capital accumulation in the Ottoman context. Our results show that wealth holding was more equal in Kastamonu than in Britain in the eighteenth century. This was caused in part by the significantly lower transmission of wealth from fathers to sons. Although there was a significant correlation between the wealth-levels of fathers and sons in Kastamonu, this relationship was weaker there than what has been observed for eighteenth-century Britain. Regression to the mean among the sons was more rapid in Kastamonu. Finally, in at least one Ottoman context, our calculations cast doubt on the argument that Islamic inheritance practices led to excessive levels of wealth fragmentation. |
| JEL: | D3 E24 N3 O53 Z12 |
| Date: | 2010–09 |
| URL: | http://d.repec.org/n?u=RePEc:uct:uconnp:2010-24&r=cwa |
| By: | Catriona Purfield; Christoph B. Rosenberg |
| Abstract: | The paper traces the Baltics’ adjustment strategy during the 2008-09 global financial crisis. The abrupt end to the externally-financed domestic demand boom triggered a severe output collapse, bringing per capita income levels back to 2005/06 levels. In response to this shock, the Baltics undertook an internal devaluation that relied on unprecedented fiscal and nominal wage adjustment, steps to preserve financial sector stability as well as complementary efforts to facilitate voluntary private debt restructuring. One-and-half years on, the strategy is making good progress but not yet complete. Confidence in the exchange rate was maintained, the banking system was supported by its parent banks, external imbalances and inflation have largely disappeared, competitiveness is improving, and fiscal deficits are gradually being brought back towards pre-crisis levels. However, amid record levels of unemployment, further reforms are needed to foster a return to more balanced growth, fiscal sustainability, and a healthier banking system. |
| Keywords: | Baltics , Currency pegs , Debt restructuring , Estonia , Financial crisis , Fiscal policy , Global competitiveness , Global Financial Crisis 2008-2009 , Labor market policy , Latvia , Lithuania , Private sector , Stabilization measures , Wage adjustments , |
| Date: | 2010–09–15 |
| URL: | http://d.repec.org/n?u=RePEc:imf:imfwpa:10/213&r=cwa |
| By: | Silve, F.; Reiner, D.M. |
| Abstract: | We evaluate the cost-effectiveness of various policy options and infrastructure investment proposals to improve the security of gas supply in Bulgaria, one of the most gas insecure countries in the European Union. We do this by computing ‘security of supply cost curve’ for different gas supply disruption scenarios. The curves show the cumulative amount of security of supply on the horizontal axis and the unit cost of security on the vertical axis. Measures should be implemented by order or rising unit cost until the public authorities’ preferred level of security is achieved. Our results show that a costeffective gas supply security policy for Bulgaria would concentrate on two measures: (1) allowing reverse-flow transactions on the transit pipelines to Greece and Turkey to access the LNG terminals in these countries in case of disruption in Russian gas supplies and, (2) ensuring effective dual-fuel capability for Bulgaria’s heat generation plants. The infrastructure options actually considered by the Bulgarian authorities and gas industry (expanding the withdrawal rate of the Chiren underground gas storage and building a new gas interconnector pipeline with Greece) appear to be much more costly. |
| Keywords: | Natural Gas, Security of Supply, Energy Policy, Bulgaria, EU |
| JEL: | L38 Q48 L5 L95 L98 |
| Date: | 2010–10–01 |
| URL: | http://d.repec.org/n?u=RePEc:cam:camdae:1056&r=cwa |
| By: | Kunal Dasgupta |
| Abstract: | We develop a two sector growth model to understand the relation between inequality and growth. Agents, who are endowed with different levels of knowledge, select either into a retail or a manufacturing sector. Agents in the manufacturing sector match to carry out production. A by-product of production is creation of ideas that spill over to the retail sector and improve productivity, thereby causing growth. Ideas are generated according to an idea production function that takes the knowledge of all the agents in a firm as arguments. We go on to study how an increase in the inequality of the knowledge distribution affects the growth rate. A change in the distribution not only affects the occupational choice of agents, but also the way agents match within the manufacturing sector. We show that if the idea generation function is sufficiently convex, an increase in inequality raises the growth rate of the economy. |
| Keywords: | Inequality, growth, idea generation, matching, knowledge |
| JEL: | O30 O40 O41 |
| Date: | 2010–09–30 |
| URL: | http://d.repec.org/n?u=RePEc:tor:tecipa:tecipa-411&r=cwa |