|
on Central and Western Asia |
| By: | Fabrice Murtin; Romain Wacziarg |
| Abstract: | Over the last two centuries, many countries experienced regime transitions toward democracy. We document this democratic transition over a long time horizon. We use historical time series of income, education and democracy levels from 1870 to 2000 to explore the economic factors associated with rising levels of democracy. We find that primary schooling, and to a weaker extent per capita income levels, are strong determinants of the quality of political institutions. We find little evidence of causality running the other way, from democracy to income or education. |
| JEL: | N10 O43 O57 |
| Date: | 2011–09 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:17432&r=cwa |
| By: | Richard Jong-A-Pin; Jochen O. Mierau |
| Abstract: | This paper develops a model of the relationship between the age of a dictator and economic growth. In the model a dictator must spread the resources of the economy over his reign but faces mortality and political risk. The model shows that if the time horizon of the dictator decreases, either due to an increase of mortality risk or political risk, the economic growth rate decreases. The model predictions are supported by empirical evidence based on a threeway fixed effects model including country, year and dictator fixed effects for a sample of dictators from 116 countries. These results are robust to sample selection, the tenure of dictators, the definition of dictatorship, and a broad set of economic growth determinants. |
| Keywords: | Aging, ,; economic growth; government performance; political instability; political leaders |
| JEL: | H11 O11 O43 |
| Date: | 2011–09 |
| URL: | http://d.repec.org/n?u=RePEc:sol:wpaper:2013/97265&r=cwa |
| By: | Tobias N. Rasmussen; Agustin Roitman |
| Abstract: | Using a comprehensive global dataset, we outline stylized facts characterizing relationships between crude oil prices and macroeconomic developments across the world. Approaching the data from several angles, we find that the impact of higher oil prices on oil-importing economies is generally small: a 25 percent increase in oil prices typically causes GDP to fall by about half of one percent or less. While cross-country differences in impact are found to depend mainly on the relative size of oil imports, we also show that oil price shocks are not always costly for oil-importing countries: although higher oil prices increase the import bill, there are partly offsetting increases in external receipts. We provide a small open economy model illustrating the main transmission channels of oil shocks, and show how the recycling of petrodollars may mitigate the impact. |
| Keywords: | Cross country analysis , Developing countries , Economic models , Emerging markets , External shocks , Imports , Oil prices , Price increases , |
| Date: | 2011–08–11 |
| URL: | http://d.repec.org/n?u=RePEc:imf:imfwpa:11/194&r=cwa |
| By: | Dr. Ulrike Lehr (GWS - Institute of Economic Structures Research); Dr. Christian Lutz (GWS - Institute of Economic Structures Research); Kirsten Wiebe (GWS - Institute of Economic Structures Research) |
| Abstract: | The paper at hand presents results of a model-based scenario analysis on the economic implications in the next decade of an oil peak today and significantly decreasing oil production in the coming years. For that the extraction paths of oil and other fossil fuels given in LBST (2010) are implemented in the global macroeconomic model GINFORS. Additionally, the scenarios incorporate different technological potentials for energy efficiency and renewable energy, which cannot be forecast using econometric methods. GINFORS then endogenously determines world-wide energy demand and energy prices.The results show that the oil shortage firstly and strongly affects the transport sector but then has indirect effects on all other sectors through global supply chains. The medium term reactions to the oil shortage and corresponding substantial increase in the oil price of the global energy system and the individual sectors are energy saving and substitution, lowering global energy demand. The global macroeconomic effects of an increase of the oil price as high as modelled here are comparable to the effects of the financial and economic crises of 2008/2009. |
| Keywords: | oil peak today, model-based scenario analysis, world-wide energy demand, energy prices |
| JEL: | Q32 |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:gws:dpaper:11-3&r=cwa |
| By: | Nepal, Rabindra |
| Abstract: | Global climate change and security of supply concerns pose significant challenges for sustainable development as well as the need to improve energy efficiency in transition and developing economies. Meanwhile, economic theory suggests that market-based economic policies and reforms are crucial for accelerating energy efficiency in developing and transition countries. Hence, this paper analyses the impacts of several market-oriented economic reforms on energy efficiency in the transition countries. The transition countries experienced a rapid marketization process that saw their economies transformed from central planning towards more market based economies since the early 1990s. The econometric results from the bias corrected fixed-effect analysis (LSDVC) suggest that both large and small scale privatisation process has been the sole driver of energy efficiency in transition countries. However, the lack of suitable institutions to support overall-market reforms implies that other market based economic reforms remain ineffective in improving energy efficiency in transition countries. |
| Keywords: | market reforms; energy efficiency; transition countries; institutions |
| JEL: | Q54 P28 C33 |
| Date: | 2011–09–13 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:33349&r=cwa |
| By: | Giulio Cifarelli (Dipartimento Scienze Economiche) |
| Abstract: | The interaction between rational hedgers and informed oil traders is parameterized and tested empirically with the help of a complex non linear smooth transition regime shift CCC-GARCH procedure. In spite of their gyrations, futures price changes are usually self-correcting. Well informed producers and consumers will ensure that crude oil prices – and thus the prices of the corresponding futures contracts – fluctuate within a long run equilibrium range determined by market fundamentals. During the 2008 oil price upswing, however, shifts in positions in the futures markets by well informed optimizing agents, that usually dampen price changes, result in destabilizing positive feedback trading. Futures price changes that can be classified as speculative are due to hedgers’ reaction to movements in the variability of the return of their covered cash position. |
| Keywords: | oil price dynamics; dynamic hedging; logistic smooth transition; multivariate GARCH. |
| JEL: | G11 G12 G18 Q40 |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:frz:wpaper:wp2011_13.rdf&r=cwa |
| By: | Marc Joëts; Valérie Mignon |
| Abstract: | This paper investigates the relationship between forward prices of oil, gas, coal, and electricity using a nonlinear panel cointegration framework. To this end, we consider a panel of 35 maturities and control for the economic and financial environment using equity futures prices. Estimating the cointegrating relationship, we find that oil, gas and coal forward prices are positively linked, while the negative link between oil and electricity prices is consistent with a substitution effect between the two energy sources on the long run. Estimating panel smooth transition regression (PSTR) models, we show that the forward oil price adjustment process toward its equilibrium value is nonlinear and asymmetric, putting forward the key role played by self-sustaining dynamics and speculation phenomena. |
| Keywords: | forward energy prices, speculation, panel cointegration, nonlinear model, PSTR |
| JEL: | C33 Q40 |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:drm:wpaper:2011-25&r=cwa |
| By: | Brückner, Markus; Chong, Alberto; Gradstein, Mark |
| Abstract: | We estimate the income elasticity of government expenditures using variation in the international oil price as a plausibly exogenous source of within-country variation of countries’ permanent income. Our short run elasticity estimates, between 0.25-0.50, are generally somewhat smaller than the previously obtained ones, and they, in particular, indicate that Wagner’s law does not hold; long run elasticities are larger, but still smaller than unity. We also explore the correlates of the income elasticity of government spending and find no support for views that either democracy, inequality, or openness are associated with a larger elasticity. However, we find evidence consistent with “voracity” theories: cross-country differences in ethnic polarization are associated with a significantly higher oil price driven income elasticity of government spending. |
| Keywords: | Wagner law |
| JEL: | H1 |
| Date: | 2011–09 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:8563&r=cwa |
| By: | Gourinchas, Pierre-Olivier; Rey, Hélène; Truempler, Kai Alexander |
| Abstract: | This paper studies the geography of wealth transfers during the 2008 global financial crisis. We construct valuation changes on bilateral external positions in equity, direct investment and portfolio debt at the height of the crisis to map who benefited and who lost on their external exposure. We find a very diverse set of fortunes governed by the structure of countries' external portfolios. In particular, we are able to relate the gains and losses on debt portfolios to the country's exposure to ABCP conduits and the extent of dollar shortage. |
| Keywords: | global financial crisis; international monetary system; reserve currency; valuation effects |
| JEL: | F32 F33 |
| Date: | 2011–09 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:8567&r=cwa |
| By: | Randall S. Jones; Byungseo Yoo |
| Abstract: | The New Growth Strategy aims to create demand and jobs through regulatory reform and fiscal measures. The Strategy focuses on key challenges, notably climate change and population ageing, which can be turned into sources of growth. Given Japan’s precarious fiscal position, it is essential to co-ordinate spending related to the Strategy with the medium-term fiscal plan, in part by increasing the emphasis on regulatory reform. Such measures should cover the entire economy, rather than being limited to the seven areas identified in the Strategy. Among those areas, effectively promoting green innovation will require market-based instruments to place a price on carbon, preferably through a mandatory and comprehensive emissions trading system, to promote private investment, accompanied by a range of other policies. Achieving deeper economic integration with Asia depends on reducing support for agriculture to facilitate more bilateral and regional trade agreements, while bringing down barriers to foreign direct investment and foreign workers. Policies to expand venture capital would help launch innovative firms. This Working Paper relates to the 2011 OECD Economic Survey of Japan (www.oecd.org/eco/surveys/Japan).<P>La Nouvelle stratégie de croissance du Japon visant à stimuler la demande et l'emploi<BR>La Nouvelle stratégie de croissance a pour objectif de stimuler la demande et l’emploi par le biais de la réforme de la réglementation et de mesures budgétaires. Elle met l’accent sur des enjeux fondamentaux, notamment le changement climatique et le vieillissement de la population, qui peuvent devenir des sources de croissance. La situation budgétaire du Japon étant délicate, il est primordial de coordonner les dépenses liées à la stratégie avec le plan budgétaire à moyen terme, en partie en privilégiant la réforme de la réglementation. Ces mesures devraient intéresser l’ensemble de l’économie, et non être limitées aux sept volets définis dans la stratégie. S’agissant de ces derniers, pour promouvoir efficacement l’innovation verte, il faudra utiliser des instruments fondés sur le marché pour instituer une tarification du carbone, de préférence dans le cadre d’un système obligatoire et complet d’échange de droits d’émission, afin d’encourager l’investissement privé, parallèlement à diverses autres mesures. Pour parvenir à une intégration économique plus étroite avec l’Asie, il importe de réduire le soutien à l’agriculture de manière à faciliter la multiplication des accords commerciaux bilatéraux et régionaux, tout en éliminant les obstacles à l’entrée des investissements directs étrangers et des travailleurs étrangers. Des mesures destinées à accroître le capital-risque favoriseraient la création d’entreprises innovantes. Ce Document de travail se rapporte à l’Étude économique de l’OCDE du Japon, 2011 (www.oecd.org/eco/etudes/japon). |
| Keywords: | Japan, regulatory reforms, financial sector, foreign direct investment, health care reforms, climate change, economic partnership agreements, immigration, free trade agreements, Japanese economy, green growth, regional development, New Growth Strategy, Asian economic integration, réforme de la réglementation, Japon, secteur financier, investissement direct étranger, changement climatique, accords de partenariat économique, accords libre-échange, réforme du système de soins de santé, économie japonaise, croissance verte, Nouvelle stratégie de croissance, intégration économique en Asie, développement régional |
| JEL: | F13 I18 Q54 |
| Date: | 2011–09–06 |
| URL: | http://d.repec.org/n?u=RePEc:oec:ecoaaa:890-en&r=cwa |
| By: | Matthias Neuenkirch (University of Marburg) |
| Abstract: | In this paper, we study the influence of central bank transparency on the formation of money market expectations in emerging markets. The sample covers 25 countries for the period from January 1998 to December 2009. We find, first, that transparency reduces the bias (the difference between the money market rate and the weighted expected target rate over the contract period) in money market expectations. The effect is larger for non-inflation targeters, countries with low income, and countries with low financial depth. However, the biasreducing effect of transparency prevails only if inflation is relatively low. Second, three subcategories of the Eijffinger and Geraats (2006) lead to a smaller bias in expectations: operational, political, and economic transparency, with the effect being the largest for operational transparency. Finally, an intermediate level of transparency is found to have the most favourable influence on money market expectations. Neither complete secrecy nor complete transparency is optimal. |
| Keywords: | Central Bank Transparency, Emerging Markets, Financial Market Expectations, Interest Rates, Monetary Policy, Money Market |
| JEL: | E52 E58 |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:mar:magkse:201136&r=cwa |
| By: | Jaouadi, Saïd |
| Abstract: | The aim of this survey is to explain the real impact of aid on governance in the developing countries: including the subsahara and the MENA region during the period 1990-2004 by using the “threshold theory”. Stephen Knack proved that foreign aid had a harmful impact on the governance of the developing countries. But, in this study we used a new econometric approach to test the existence of a threshold and to determine its value. This methodology allowed us to find interesting results in the relation between aid and governance, in the short and in the long run. |
| Keywords: | foreign aid; governance; threshold; institutions |
| JEL: | F35 O16 O19 |
| Date: | 2011–02–10 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:33387&r=cwa |
| By: | Niklas Potrafke (Department of Economics, University of Konstanz, Germany); Heinrich Ursprung (Department of Economics, University of Konstanz, Germany) |
| Abstract: | This study empirically assesses the influence of globalization on the institutional root causes of gender equality as measured by the new OECD Social Institutions and Gender Index (SIGI). We capture the multifaceted concept of globalization with the KOF index and its three sub-indices which measure the economic, social and political dimensions of globalization. Observing the progress of globalization for a sample of almost one hundred countries at ten year intervals starting in 1970, we find that economic and social globalization exerted a decidedly positive influence on the social institutions which underlie gender equality. |
| Keywords: | globalization, gender equality, social institutions |
| JEL: | O11 O57 |
| Date: | 2011–09–12 |
| URL: | http://d.repec.org/n?u=RePEc:knz:dpteco:1133&r=cwa |
| By: | Herwig Immervoll; Linda Richardson |
| Abstract: | We use a range of data sources to assess if, and to what extent, government redistribution policies have slowed or accelerated the trend towards greater income disparities in the past 20-25 years. In most countries, inequality among “non-elderly” households has widened during most phases of the economic cycle and any episodes of narrowing income differentials have usually not lasted long enough to close the gap between high and low incomes that had opened up previously. With progressive redistribution systems in place, greater inequality automatically leads to more redistribution, even if no policy action is taken. We find that, in the context of rising market-income inequality, tax-benefit systems have indeed become more redistributive since the 1980s but that this did not stop income inequality from rising: market-income inequality grew by twice as much as redistribution. The redistributive strength of tax-benefit systems weakened in many countries particularly in the most recent decade. While growing market-income disparities were the main driver of inequality trends between the mid-1980s and mid-1990s, reduced redistribution was often the main driver in the ten years that followed. Benefits had a much stronger impact on inequality than social contributions or taxes, despite the much bigger aggregate size of direct taxes. As a result, redistribution policies were often less successful at counteracting growing income gaps at the bottom in the top half of the income distribution.<BR>Nous utilisons une série de sources de données afin d'évaluer si, et dans quelle mesure, les politiques de redistribution du gouvernement ont ralenti ou accéléré la tendance vers une aggravation des disparités de revenus dans les 20-25 dernières années. Dans la majorité des pays, l'inégalité parmi les ménages de “non-personnes âgées” s’est élargie pendant la plupart des phases du cycle économique et des épisodes de rétrécissement d’écarts de revenus n'ont généralement pas duré assez longtemps pour réduire l'écart entre les revenus élevés et faibles qui se sont ouverts auparavant. Avec les systèmes de redistribution progressive en place, une plus grande inégalité conduit automatiquement à une plus grande redistribution, même si aucune décision politique n'est prise. Nous constatons que, dans le contexte de la hausse de l’inégalité du revenu du marché, les systèmes socio-fiscaux sont en effet devenus plus redistributifs depuis les années 80 mais cela n'a pas empêché les inégalités de revenu à augmenter : l'inégalité du revenu du marché a augmenté deux fois plus que la redistribution. La force de redistribution des systèmes socio-fiscaux s’est affaiblie dans de nombreux pays, en particulier dans la dernière décennie. Alors que l’augmentation des disparités du revenu du marché a été le principal moteur de l'évolution des inégalités entre les années 80 et 90, la réduction de redistribution était souvent le principal moteur dans les dix ans qui ont suivi. Les bénéfices ont eu un impact beaucoup plus fort sur les inégalités que les cotisations sociales ou les impôts, malgré l’importance plus grande de l’ensemble des impôts directs. En conséquence, les politiques de redistribution ont souvent connu moins de succès à contrecarrer les écarts de revenus croissants au fond dans la moitié supérieure de la répartition des revenus. |
| Keywords: | redistribution, OECD, income inequality, working age population |
| JEL: | C81 D31 H22 H55 |
| Date: | 2011–09–02 |
| URL: | http://d.repec.org/n?u=RePEc:oec:elsaab:122-en&r=cwa |
| By: | Colignatus, Thomas |
| Abstract: | The 2007+ credit crunch and economic crisis put European governments in severe debt, with talk about a Greek partial default. It also put the European banks into a zombie condition, while under Basel III the capital requirement rises from 8% to 10.5% (which requirement does not cover public debt since that is considered reliable). Fiscal measures concern tax structures and that Germany and Holland eliminate their surplusses on the external account. A monetary measure is that the European Central Bank as lender of last resort helps to prevent a crisis of confidence. The ECB can create capital and neutralise this by higher reserve requirements. Two reasonable measures are: (1) EUR 400 billion of European Recovery Capital (ERC) will reduce Greek and Italian debt to 100% of their GDP (using 2010 data). Greece and Italy on their part can have a wealth tax or create 40 year leases (implictly at 10 billion per year excluding interest) like Hong Kong once was for investment areas under foreign law (think of Magna Graecia). (2) EUR 400 billion can be injected in eurozone equity (and not eurozone bonds) in banks to allow the increase from the 8% to the 10.5% target. This equity can be managed by newly created independent ERC Investment Banks (ERBs), where the shares are allocated to eurozone member states in proportion to their GDP. This partial nationalisation would reduce eurozone national debts by 4.3% of GDP. |
| Keywords: | Economic stability; monetary policy; monetary crisis; credit crunch; zombie banks; euro; European Central Bank; fiscal policy; tax; external balance |
| JEL: | E00 A10 P16 |
| Date: | 2011–09–17 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:33476&r=cwa |
| By: | Arvind Virmani |
| Abstract: | The paper examines the principles on which a reform of a Quota based global economic institution like the IMF must be based, taking account of both the relative economic power of countries and the need for voice and representation of the poor countries. These principles are then used in the context of the global economic realities of the 21st century to examine the suitability of different variables in the IMF.s Quota formula. Based on this analysis a simple transparent formula is suggested, which will help increase the credibility and legitimacy of the IMF as a global macroeconomic and financial institution. |
| Keywords: | Corporate governance , Fund , International monetary system , Quota formulas , Quotas , Voting power , |
| Date: | 2011–08–26 |
| URL: | http://d.repec.org/n?u=RePEc:imf:imfwpa:11/208&r=cwa |
| By: | Alain de Serres; John Llewellyn; Preston Llewellyn |
| Abstract: | Developments over the past few years have shown that reforms to address climate change are no less difficult to implement than reforms in other areas, even if the objective of limiting global warming is broadly accepted. In the case of global public goods such as the climate, the political challenge is further complicated by the need to convince voters that domestic action to reduce greenhouse gas emissions is worth taking, notwithstanding the cost and uncertainties regarding other countries’ commitments. This paper seeks to draw a number of political-economy lessons from reform experience in other economic areas, and considers how these lessons can be applied to the particular case of climate change mitigation policy. It examines the main ingredients for building a constituency for greenhouse gas (GHG) emissions reduction policies at home, stressing the need to establish the credibility of the overall objective and intermediate targets. It also reviews the challenges faced in securing successful implementation of the least-cost set of policies, focusing on how to address the concerns raised by the uneven distribution of costs and benefits of pricing instruments without undermining their effectiveness.<P>L'économie politique de l'atténuation du changement climatique : comment assurer un soutien populaire en faveur d'actions pour enrayer le réchauffement planétaire<BR>Les discussions des dernières années ont montré que la mise en place de mesures pour atténuer le changement climatique peut s’avérer aussi difficile que la conduite de réformes économiques dans d’autres secteurs, même si l’objectif de limiter le réchauffement de la planète est largement accepté. Dans le cas d’un bien public comme le climat, le défi politique est accentué par la nécessité de convaincre les électeurs du bien fondé de l’action au plan national, malgré les coûts et les incertitudes concernant l’engagement des autres pays. Cette étude vise à tirer certains enseignements de l’expérience en matière de politique économique acquise lors de la mise en place de réformes majeures dans d’autres champs d’action, et à voir dans quelle mesure ces enseignements peuvent s’appliquer au cas particulier de la lutte au changement climatique. Les principaux ingrédients pour assurer un large soutien à des mesures efficaces de réduction des émissions de gaz à effet de serres sont passés en revue, de même que les défis que posent leur mise en place, ce qui nécessite de prendre en compte les inquiétudes concernant la distribution inégale des coûts et des bénéfices des instruments de prix en tout évitant de saper leur efficacité. |
| Keywords: | competitiveness, political economy, carbon tax, cost-effectiveness, climate change mitigation, compétitivité, économie politique, taxes carbone, efficacité par rapport aux coûts, atténuation du changement climatique |
| JEL: | Q52 Q54 |
| Date: | 2011–09–05 |
| URL: | http://d.repec.org/n?u=RePEc:oec:ecoaaa:887-en&r=cwa |
| By: | Khondoker Abdul Mottaleb (Civil Service College); Tetsushi Sonobe (National Graduate Institute for Policy Studies) |
| Abstract: | The export-oriented garment industry in Bangladesh has grown rapidly for the last three decades and now ranks among the largest garment exporters in the world. While its early success is attributed to the initial technology transfer from South Korea, such a one-time infusion of knowledge alone is insufficient to explain the sustained growth for three decades. This paper uses primary data collected from knitwear manufacturers and garment traders to explore the process of the continuous learning of advanced skills and know-how. It finds, among other things, that the high profitability of garment manufacturing due to the initial infusion of specific human capital attracted a number of highly educated entrepreneurs to the industry, that the division of labor between manufacturers and traders has facilitated the expansion of the industry, and that enterprise growth has lasted long because of the continuous learning from abroad by the highly educated entrepreneurs. |
| Date: | 2011–09 |
| URL: | http://d.repec.org/n?u=RePEc:ngi:dpaper:11-10&r=cwa |
| By: | Sarah Carmichael |
| Abstract: | This paper examines age at first marriage for women and spousal age gap as an indicator for female agency from 1950 until 2005. Using a dataset of 77 LDCs this paper seeks to explore which variables determine differences at a country level in marriage patterns. We look at the influence of urbanisation, education, percentage population of Muslim faith, and family type. We find that education is key in determining at what age women marry, having as would be expected a positive effect on age at first marriage and depressing spousal age gap. Urbanisation is significant, with a positive effect on age and negative on spousal age gap, although the effect is not very large. The percentage Muslim variable depresses female age at first marriage and increases spousal age gap but only when family type is not controlled for. The initially strong negative effect of percentage population Muslim over the period under consideration on age of first marriage has decreased, which raises some interesting questions about the role of Islam in female empowerment. |
| Keywords: | Marriage patterns, female agency, age at first marriage, spousal age gap |
| Date: | 2011–09 |
| URL: | http://d.repec.org/n?u=RePEc:ucg:wpaper:0015&r=cwa |
| By: | Clark, Andrew E. (Paris School of Economics) |
| Abstract: | The role of money in producing sustained subjective well-being seems to be seriously compromised by social comparisons and habituation. But does that necessarily mean that we would be better off doing something else instead? This paper suggests that the phenomena of comparison and habituation are actually found in a considerable variety of economic and social activities, rendering conclusions regarding well-being policy less straightforward. |
| Keywords: | comparison, habituation, income, unemployment, marriage, divorce, health, religion, policy |
| JEL: | D01 D31 H00 I31 J12 J28 |
| Date: | 2011–09 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp5966&r=cwa |