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on Central and Western Asia |
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Issue of 2011‒03‒26
eight papers chosen by Bibhu Prasad Nayak Institute for Social and Economic Change |
| By: | Fakhri , Hasanov; Khudayar , Hasanli |
| Abstract: | The study examines whether inflation process can be explained within the framework of the Money Market Approach in the third stage of economic development of Azerbaijan economy covering 2004-2008. By employing dynamic modeling study concludes that the Money Market Approach has not been relevant for explaining Azerbaijani inflation. Because Azerbaijan, a resource rich small open economy in transition processes, has some stylized facts which are important to take into account in the analysis of the inflation. Since the Money Market Approach seems irrelevant one, the paper puts forward application of other alternative explanations for Azerbaijani inflation in the future. In this regard analyzing inflation in the context of resource dependence seems one of the relevant approaches due to high price increases mainly sourced from oil revenues. |
| Keywords: | Inflation rate; Money Market Approach; Transition economy; Resource Abundance; Oil and Non-oil Sectors; Econometric modeling; Azerbaijan |
| JEL: | P24 Q33 C22 |
| Date: | 2011–02 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:29559&r=cwa |
| By: | Gonenc, Rauf; Rawdanowicz, Lukasz |
| Abstract: | In the 2000s, Turkey has enjoyed rapid catching–up. This was possible despite the adverse business environment, as the semi–formal and informal economy had a significant contribution to the expansion of the private sector. Productivity growth was strong, but labour utilisation remained very low. Looking forward, higher employment and productivity growth will not be possible without profound regulatory reforms of minimum wages, severance payments, social security contributions and flexible job contracts. These reforms have been discussed for a long time, but political obstacles prevented implementing them. Resolving this deadlock calls for advancing an integrated strategy of labour reforms and formalisation via experimenting with new regulation on the voluntary basis to identify the most successful solutions that can be later rolled out to the whole economy. Moreover, Turkey has to ease further anti–competitive product market regulations by reducing barriers to entrepreneurship and foreign direct investment, and by limiting government involvement in business. A successful implementation of these reforms would allow Turkey to enjoy golden decades. |
| Date: | 2010–12 |
| URL: | http://d.repec.org/n?u=RePEc:reg:wpaper:650&r=cwa |
| By: | Sulku, Seher Nur |
| Abstract: | Turkey has implemented major health care reforms to improve the efficiency of the health care system since 2003. The objective of this study is to investigate the impact of these reforms, especially the performance-based payment system (P4P), on the efficiency of public hospitals. We employ the Data Envelopment Approach and the Malmquist index to comparatively examine before and after the reform years, 2001 and 2006 respectively. Our analyses compare the performances of public hospitals served in provincial markets. Inputs of number of beds, number of primary care physician, and number of specialists, and how they are used to produce outputs of inpatient discharges, outpatient visits, surgical operations are investigated. Indeed, as the quality indicators dead rate, hospital bed occupation rate and average length of stay are considered. We found that the P4P was successful in boosting productivity due to advancements in technology and technical efficiency. It is seen that the average technical efficiency gains took place because of the significantly improved scale efficiencies, but the average pure technical efficiency did not improve. The lower pure technical efficiencies compared to scale efficiencies affirms the lack adaptation of the hospital management to the renewed system. Additionally, our analysis indicates that in the socio-economically disadvantaged provinces productivity gains have not been achieved. Lastly, it is seen that the hospital quality indicators have not improved in the short run. In the international literature, P4P has been examined extensively for the developed countries. However there are a limited number of studies on developing countries. As it has been noted in the OECD health system review of Turkey: “Turkey is closing the performance gap with other OECD countries and, on a number of measures including overall costs, performs well relative to other comparable upper middle-income countries. Indeed, there may be much that other countries can learn from the recent health reforms in Turkey, especially in the use of performance-related pay to raise staff productivity”. Thus, our study would contribute to the existing literature with a comprehensive analysis of the health system efficiency in Turkey. |
| Keywords: | Turkey; Healthcare reform; Performance based supplementary payment system; Hospital efficiency |
| JEL: | I11 I12 I18 C33 |
| Date: | 2011–03–14 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:29598&r=cwa |
| By: | Balli, Faruk; Elsamadisy, Elsayed |
| Abstract: | The main concern of this report is to model the daily and weekly forecasting of the currency in circulation (CIC) for the State of Qatar. The time series of daily observations of the CIC is expected to display marked seasonal and cyclical patterns daily, weekly or even monthly basis. We have compared the forecasting performance of typical linear forecasting models, namely the regression model and the seasonal ARIMA model using daily data. We found that seasonal ARIMA model performs better in forecasting CIC, particularly for short-term horizons. |
| Keywords: | Currency in Circulation; Forecasting; Seasonal ARIMA |
| JEL: | C32 C53 |
| Date: | 2010–01–15 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:20159&r=cwa |
| By: | Katsushi S. Imai (Economics, School of Social Sciences, University of Manchester, UK and Research Institute for Economics & Business Administration, Kobe University, Japan); Raghav Gaiha (Massachusetts Institute of Technology, USA & Faculty of Management Studies, University of Delhi, India); Ganesh Thapa (International Fund for Agricultural Development, Italy) |
| Abstract: | This paper examines whether agricultural growth through public expenditure, ODA or investment will improve significantly the prospects of achieving MDG 1 of halving poverty in Asia and the Pacific Region. As more than a few countries in this Region recorded impressive economic growth in the early years of the present decade, the case for the widely used poverty threshold of US$1.25 per day (at 2005 PPP) for assessing progress towards MDG1 is not so compelling now. Accordingly, the present assessment uses two poverty thresholds: US$2 per day and US$1.25 per day (both at 2005 PPP). Our analysis, based on country panel data, confirms robustly that increases in public agricultural expenditure, agricultural ODA, agricultural investment, or fertiliser use (as a proxy for technology), accelerate agricultural and GDP growth. Consequently, the headcount and depth of poverty indices are reduced substantially. Our simulation results show that, for halving the headcount index at US$2 per day, Asia and the Pacific region as a whole would need in 2007-13 a 56% increase in annual agricultural ODA, a 28% increase in agricultural expenditure, a 23% increase in fertiliser use or a 24% increase in agricultural investment. Aggregation of the simulation results for various groups reveals that countries in low income group, with a low level of macro governance or institutional quality, or with low ease of doing business would need larger increase in agricultural ODA, expenditure or investment to halve poverty. Although the share of agriculture in GDP has declined, our analysis reinforces the case for channelling a substantially larger flow of resources not just for accelerating growth but also for achieving the more ambitious MDG1. A policy dilemma, however, is the trade-off between institutional quality and resource transfers. National governments and donors must reflect deeply on triggers for institutional reforms and mechanisms that would ensure larger outlays for agriculture and their allocation between rural infrastructure and sustainable technologies. |
| Keywords: | Millennium Development Goal, Poverty, Agriculture, ODA, Investment, Public Expenditure, Asia, Panel Data, Simulations |
| JEL: | C31 C33 H53 I32 |
| Date: | 2011–01 |
| URL: | http://d.repec.org/n?u=RePEc:kob:dpaper:dp2011-01&r=cwa |
| By: | Leon Podkaminer (The Vienna Institute for International Economic Studies, wiiw); Mario Holzner (The Vienna Institute for International Economic Studies, wiiw); Vasily Astrov (The Vienna Institute for International Economic Studies, wiiw); Anton Mihailov; Vladimir Gligorov (The Vienna Institute for International Economic Studies, wiiw); Gábor Hunya (The Vienna Institute for International Economic Studies, wiiw); Peter Havlik (The Vienna Institute for International Economic Studies, wiiw); Sebastian Leitner (The Vienna Institute for International Economic Studies, wiiw); Zdenek Lukas (The Vienna Institute for International Economic Studies, wiiw); Josef Pöschl (The Vienna Institute for International Economic Studies, wiiw); Olga Pindyuk (The Vienna Institute for International Economic Studies, wiiw); Waltraut Urban (The Vienna Institute for International Economic Studies, wiiw); Hermine Vidovic (The Vienna Institute for International Economic Studies, wiiw); Sándor Richter (The Vienna Institute for International Economic Studies, wiiw) |
| Abstract: | The outlook for the world economy has improved in the course of 2010 and the recovery has gained strength in the EU as well. The Central, East and Southeast European countries (CESEE) have also recovered from the crisis; the majority of them recorded positive GDP growth. On average, the recent revival of exports has been even stronger than their growth before the crisis. By way of contrast, the trends in industrial output have so far remained more or less flat. The persistent decline in construction and fixed investments – both related to the still hesitant credit markets – represents one of the key downward internal risks to our moderately optimistic regional economic forecast. The general outlook for the CESEE region in the baseline scenario reckons with a gradual strengthening of economic growth over the period 2011-2013, in most cases rarely exceeding 4% per annum. GDP growth will become more broadly based. The formerly predominant role of external demand will weaken somewhat, while both household consumption and gross fixed investments will ultimately contribute positively to GDP growth. With exports, industrial output levels and eventually also GDP growth having already recovered, the economy is seen as having largely returned ‘back to normal’ – yet with at least two important differences: (1) post-crisis growth will be slower. That slower growth, however, also implies that (2) the labour market situation will be ‘very far from normal’ as unemployment will remain high, with young and low-skilled workers being especially adversely affected, and any improvement only gradual and delayed. Inflation rose throughout 2010 as food and commodity prices soared; in general, however, it will pose no (or little immediate) threat. The moderate economic upturn and a revival of capital inflows have resulted in renewed appreciation pressures. The forecasts point to a gradual deterioration of current account positions in all CESEE countries, yet the return (or persistence) of extreme imbal-ances are only expected for Montenegro, Albania and Serbia. The financing constraint with respect to both domestic and external loans will constitute one of the key brakes on future economic growth. Given the sorry state of public finances and the ensuing budget consolidation efforts, we cannot expect any new additional growth-stimulating measures from the public sector – on the contrary, owing to the limited fiscal space government deficits and public debts will be scaled back. The sharp drop in GDP in most CESEE countries during the crisis resulted in both absolute and relative declines in their per capita GDP. The catching-up process of the previous decade was thus interrupted and income gaps vis-à-vis Western Europe widened. In the baseline GDP growth sce-nario wiiw reckons with a renewed catching-up process starting as early as 2011 (after losing 5 to 7 years in terms of income convergence). |
| Keywords: | Central and East European new EU member states, Southeast Europe, future EU member states, Balkans, former Soviet Union, Turkey, economic forecasts, employment, foreign trade, competitiveness, exchange rates, inflation, monetary policy |
| JEL: | G18 O52 O57 P24 P27 P33 P52 |
| Date: | 2011–03 |
| URL: | http://d.repec.org/n?u=RePEc:wii:fpaper:fc:7&r=cwa |
| By: | Khaled Guesmi; Duc Khuong Nguyen |
| Abstract: | In recent years, various emerging market regions have actively taken part in the movements of globalization and world market integration. However, the process of financial integration appears to vary over time and differs significantly across emerging market regions. This paper attempts to evaluate the time-varying integration of emerging markets from a regional perspective (Asia, Latin America, Middle East, and Southeast Europe) based on a conditional version of the International Capital Asset Pricing Model (ICAPM) with DCC-GARCH parameters that allows for dynamic changes in the degree of market integration, global market risk premium, regional exchange-rate risk premium, and local market risk premium. Overall, our findings reveal several interesting facts. First, the time-varying degree of integration of four emerging regions, satisfactorily explained by the regional level of trade openness and the term premium of US interest rates, has recently tended to increase, but these markets still remain substantially segmented from the world market. Second, the local market risk premium is found to explain more than 50% of the total risk premium for emerging market returns. Finally, we show that conditional correlations usually underestimate and overstate the measure of time-varying market integration. The empirical results of this study have some important implications for both global investors and policy makers with respect to dedicated portfolio investments in emerging markets and policy adjustments. |
| Keywords: | time-varying integration, emerging markets, ICAPM, risk premium, DCC-GARCH |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:drm:wpaper:2011-9&r=cwa |
| By: | Igor Vetlov (Bank of Lithuania); Ricardo Mourinho Félix (Banco de Portugal); Laure Frey (Banque de France); Tibor Hlédik (Czech National Bank); Zoltán Jakab (Office of the Fiscal Council, Republic of Hungary); Niki Papadopoulou (Central Bank of Cyprus); Lukas Reiss (Oesterreichische Nationalbank); Martin Schneider (Oesterreichische Nationalbank) |
| Abstract: | The new generation of dynamic stochastic general equilibrium (DSGE) models seems particularly suited for conducting scenario analysis. These models formalise the behaviour of economic agents on the basis of explicit micro-foundations. As a result, they appear less prone to the Lucas critique than more traditional macroeconometric models. DSGE models provide researchers with powerful tools, which allow for the designing of a broad range of scenarios and tackling a large range of issues, offering at the same time an appealing structural interpretation of the scenario specification and simulation results. The paper provides illustrations on some of the modelling issues that often arise when implementing scenarios using DSGE models in the context of projection exercises or policy analysis. These issues reflect the sensitivity of DSGE model-based analysis to scenario assumptions, which in more traditional models are apparently less critical, such as, for example, scenario event anticipation and duration, treatment of monetary and fiscal policy rules. |
| Keywords: | business fluctuations, monetary policy, fiscal policy, forecasting and simulation |
| JEL: | E32 E52 E62 E37 |
| Date: | 2010–08–25 |
| URL: | http://d.repec.org/n?u=RePEc:lie:wpaper:8&r=cwa |