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on Central and Western Asia |
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Issue of 2010‒12‒11
eleven papers chosen by Bibhu Prasad Nayak Institute for Social and Economic Change |
| By: | Timothy Azarchs; Tamar Khitarishvili |
| Abstract: | The hypothesis of the natural resource curse has captivated the economics profession, and since the mid-1990s has generated a large body of policymaking initiatives aimed at dispelling the curse. In this paper, we evaluate how the effect of resource abundance on economic growth has changed since these policies were first introduced by comparing the periods 1970–89 and 1996–2008. We disaggregate resources into oil, gas, coal, and nonfuel mineral resources, and find that disaggregation unmasks diverse effects of resources on concurrent economic and institutional outcomes, as well as on the ability of countries to transform their economic and institutional infrastructure. We consider resource dependence and institutional quality as two channels linking resource abundance to economic growth in the context of an instrumental variables (IV) model. In addition to exploring these channels, the IV framework enables us to test for the endogeneity of the measures of resource dependence and institutional quality in the growth regressions, paying particular attention to the weakness of the instruments. |
| Keywords: | Resource Curse; Resource Stocks; Resource Dependence; Rule of Law; Institutions; Economic Growth; Growth Regressions; Instrumental Variables |
| JEL: | O11 O13 O4 Q3 |
| Date: | 2010–12 |
| URL: | http://d.repec.org/n?u=RePEc:lev:wrkpap:wp_641&r=cwa |
| By: | Barbone, Luca; Reva, Anna; Zaidi, Salman |
| Abstract: | How should Tajikistan adapt to ongoing and future climate change, in particular given the many pressing development challenges it currently faces? The paper argues that for developing countries like Tajikistan, faster economic and social development is the best possible defense against climate change. It presents some key findings from a recent nationally representative household survey to illustrate the strong public support for more climate change related spending on better management of water resources, disaster management, agriculture, and public health--four key sectors that the government's latest poverty reduction strategy identifies as being especially important from a climate change perspective. Finally, the paper argues that, as important as project-based adaptation measures may be, it is imperative that they be supported by an overall policy framework that provides a truly enabling environment to facilitate faster climate change adaptation. |
| Keywords: | Science of Climate Change,Climate Change Mitigation and Green House Gases,Climate Change Economics,Water Supply and Sanitation Governance and Institutions,Population Policies |
| Date: | 2010–11–01 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:5487&r=cwa |
| By: | Peter A. Petri (International Business School, Brandeis University) |
| Abstract: | Intra-Asian foreign direct investment (FDI) is dominated by flows from high technology economies to medium technology economies, while FDI elsewhere primarily consists of flows among high technology economies. This distinctive pattern is not due simply to differences in the relative distribution of Asian FDI recipients by technology, or to systematic differences in Asia’s technology characteristics. A gravity model analysis is used to explore whether Asian FDI patterns differ significantly from those elsewhere, and if so, in what ways. The results show that Asian FDI flows, in contrast to other FDI flows, systematically favor hosts with relatively low technology achievement and relatively strong intellectual property rights regimes. This type of “Asian exceptionalism” is consistent with “flying geese” theories that have argued that Asian development is the result of technology flows among economies that occupy nearby rungs of the technology ladder. |
| Keywords: | Foreign Direct Investment, FDI, Asia, Technology Transfer, Gravity Model, Intellectual Property Rights, Flying Geese Paradigm |
| JEL: | F21 O33 O34 |
| Date: | 2010–03 |
| URL: | http://d.repec.org/n?u=RePEc:brd:wpaper:12&r=cwa |
| By: | Peter A. Petri (International Business School, Brandeis University); Michael G. Plummer (Johns Hopkins University); Fan Zhai (China Investment Corporation) |
| Abstract: | The ASEAN Economic Community (AEC) is the largest integration effort attempted in the developing world; if realized, it will create a single market with the free movement of goods, services, foreign direct investment and skilled labor, and freer movement of capital encompassing nearly 600 million people. The study finds that the AEC could yield benefits similar to those of the European Union, amounting to 5.3% of the region’s GDP and more than twice that if, as expected, the AEC leads to free trade agreements with key external partners. Every ASEAN member will share in these benefits. There will be mild trade and investment diversion effects, but the world as a whole will benefit from the AEC. Nevertheless, the AEC poses political challenges: the study finds that the project will imply significant structural adjustment in several ASEAN economies. |
| Keywords: | ASEAN, ASEAN Economic Community, Regional Economic Integration, Free Trade Areas |
| JEL: | F12 F13 F14 F15 O2 |
| Date: | 2010–09 |
| URL: | http://d.repec.org/n?u=RePEc:brd:wpaper:13&r=cwa |
| By: | Sofronis Clerides; Peter Davis; Antonis Michis |
| Abstract: | Did the rise in anti-American sentiment caused by the Iraq war affect sales of US goods abroad? We address this question using data on sales of soft drinks and fabric detergents in nine Arab countries. We find a statistically significant but modest and short-lived negative impact of the war on sales of US soft drinks in some countries but no impact on the sales of detergents in any country. Variation in aggregate market shares of US products across countries correlates with consumer attitudes toward the US in the soft drink market but not in the detergent market. |
| Keywords: | consumer behavior, consumer boycotts, Iraq war. |
| Date: | 2010–11 |
| URL: | http://d.repec.org/n?u=RePEc:ucy:cypeua:06-2010&r=cwa |
| By: | Yoshikazu Kobayashi (The Institute of Energy Economics, Japan) |
| Abstract: | With crude oil price largely fluctuating, both oil producing and consuming countries have come to identify the challenges brought by the destabilization of crude oil price. Among those, there have been discussions on fair price, that is, the price level which both consuming and oil producing countries can accept. It is, however, difficult to specify a particular price level as a fair price. It is reasonable to understand that a fair price is determined by the price level obtained as a result of the pursuit of stabilization of the crude oil market by both oil producing and consuming countries. As measures for stabilization of the crude oil market, it is important to form a mechanism that provides the market with balanced information that will avoid unnecessary price fluctuation, taking into account the recently increasing importance of “market sentiments” and “information” in price formation. It is furthermore meaningful that both oil producing and consuming countries ensure enough flexibility to absorb the occurrence of unexpected phenomena in terms of supply and demand. It is also important to ensure a diversity of market players and design a system where the market mechanism is exerted to the utmost extent. |
| Keywords: | crude oil, price level, price stabilisation, oil consumption, oil supply |
| JEL: | Q30 Q38 |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:eab:energy:2345&r=cwa |
| By: | Robert Kappel |
| Abstract: | As the conception of and debates on regional powers have been led by political science, this pa-per aims to contribute to the discussion from an economics perspective. Based on the discussion of different concepts of economic power—such as those of Schumpeter, Perroux, Predöhl, or Kindleberger—concepts of technological leadership, and the global value chain approaches, the paper develops a research framework for the economics of regional powers. This framework is then tested using descriptive statistics as well as regressions analysis, with a focus on the four regional powers Brazil, China, India, and South Africa. As economic power is relational, the re-lationship of regional powers to other nations in the region is analyzed. According to the findings, only limited statements on the economics of regional powers are possible: a regional power can be described as an economy with a relatively large population and land area which plays a dominant role in trade within the region and in the regional governance. The regional power develops its technological capacities, and its businesses act regionally and globally with increasing strength. |
| Keywords: | Brazil, China, economic geography, economic leadership, economic power, growth, India, investment, public goods, regional powers, regression analysis, South Africa, technological change, value chain, trade. |
| JEL: | A12 B1 B29 C01 F14 F15 F23 F59 |
| Date: | 2010–09 |
| URL: | http://d.repec.org/n?u=RePEc:gig:wpaper:145&r=cwa |
| By: | Georg Strüver |
| Abstract: | International conflicts over natural resources are frequently cited as the most prominent threat to global peace in the decades ahead. However, this subject has not yet been adequately tackled in the academic literature. This paper contributes to filling the gap by, first, proposing a four-class typology of resource conflicts and by, second, testing these conflict types against data on fossil fuels and interstate conflicts derived from two major conflict datasets: the Militarized Interstate Dispute Dataset (1960–2001) and the UCDP/PRIO Armed Conflicts Dataset (1960–2008). The findings, although preliminary, suggest that resource scarcity may play a less prominent role in the aggression of belligerent countries than is often assumed and that the existence of large oil deposits and high resource-rent incomes are better predictors of conflict involvement. |
| Keywords: | resource scarcity, resource abundance, interstate conflicts, military intervention |
| Date: | 2010–10 |
| URL: | http://d.repec.org/n?u=RePEc:gig:wpaper:147&r=cwa |
| By: | Joachim Betz; Melanie Hanif |
| Abstract: | This paper examines the formation of India’s energy-policy strategy as an act of doubleedged diplomacy. After developing an analytical framework based on the two-level game approach to international relations (IR), it focuses on the domestic context of policy preference formation. India’s energy strategy is shaped by a shortage of energy and the scarcity of indigenous reserves; these problems have together resulted in a growing import dependence in order to sustain economic growth rates, outdated cross-subsidies, overregulation, and nontransparent bureaucratic structures which are adverse to private investment. The Indian government still dominates the energy sector, but large electoral constituencies within the country exert a considerable indirect influence. The paper analyzes how all these domestic necessities combine with India’s general foreign policy goals and traditions to form an overall energy strategy. We finally discuss how this strategy plays out in a competitive international environment where global resources are shrinking (with most claims already distributed) and environmental concerns are on the rise. |
| Keywords: | preferences in two-level games, Indian foreign policy, energy security |
| Date: | 2010–09 |
| URL: | http://d.repec.org/n?u=RePEc:gig:wpaper:142&r=cwa |
| By: | Alivelu G |
| Abstract: | This paper makes an attempt to provide a broad overview of the salient aspects of the growth story of Indian Railways (IR) since independence. More specifically, the study aims to analyse the trends of output and employment for the period 1981-82 through 2007-08. The entire study period is divided into three sub-periods - Period I (1981-82 to 1991-92); Period II (1992-93-2002-03); Period III (2003-04 to 2007-08). In addition, the study also looks at the 'turnaround' story of IR. [CESS WP No. 86]. |
| Keywords: | indian railways, employment, independence, skilled management personnel, time, cost, resources, insurance, communications, health, trade, Bombay, utility, efficiency, workload, Thane |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:ess:wpaper:id:3244&r=cwa |
| By: | Chia-Lin Chang (Department of Applied Economics, Department of Finance, National Chung Hsing University); Michael McAleer (Erasmus University Rotterdam, Tinbergen Institute, The Netherlands, and Institute of Economic Research, Kyoto University); Roengchai Tansuchat (Faculty of Economics, Maejo University) |
| Abstract: | The paper examines the performance of four multivariate volatility models, namely CCC, VARMA-GARCH, DCC, BEKK and diagonal BEKK, for the crude oil spot and futures returns of two major benchmark international crude oil markets, Brent and WTI, to calculate optimal portfolio weights and optimal hedge ratios, and to suggest a crude oil hedge strategy. The empirical results show that the optimal portfolio weights of all multivariate volatility models for Brent suggest holding futures in larger proportions than spot. For WTI, however, DCC, BEKK and diagonal BEKK suggest holding crude oil futures to spot, but CCC and VARMA-GARCH suggest holding crude oil spot to futures. In addition, the calculated optimal hedge ratios (OHRs) from each multivariate conditional volatility model give the time-varying hedge ratios, and recommend to short in crude oil futures with a high proportion of one dollar long in crude oil spot. Finally, the hedging effectiveness indicates that diagonal BEKK (BEKK) is the best (worst) model for OHR calculation in terms of reducing the variance of the portfolio. |
| Keywords: | Multivariate GARCH, conditional correlations, crude oil prices, optimal hedge ratio, optimal portfolio weights, hedging strategies. |
| JEL: | C22 C32 G11 G32 |
| Date: | 2010–11 |
| URL: | http://d.repec.org/n?u=RePEc:kyo:wpaper:743&r=cwa |