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on Central and Western Asia |
| By: | Murtin, Fabrice; Wacziarg, Romain |
| 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. |
| Keywords: | democracy; GMM; human capital; modernization |
| JEL: | N30 N40 O43 |
| Date: | 2011–10 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:8599&r=cwa |
| By: | Cohen, Joseph N |
| Abstract: | A conventional reading of economic history implies that free market reforms rescued the world’s economies from stagnancy during the 1970s and 1980s. I reexamine a well-established econometric literature linking economic freedom to growth, and argue that their positive findings hinge on two problems: conceptual conflation and ahistoricity. When these criticisms are taken seriously, a very different view of the historical record emerges. There does not appear to be enduring relationship between economic liberalism and growth. Much of the observed relationship between these two variables involves a one-shot transition to freer markets around the Cold War’s end. Several concurrent changes took place in this historical context, and it is hasty to conclude that it was market liberalization alone that produced the economic turnaround of the 1990s and early-2000s. I also question market fundamentalists’ view that all forms of liberalization are helpful, arguing that the data show little to no benefit from reforms that did not attract foreign investment. |
| Keywords: | Economic Growth; Economic Freedom; Economic Liberalization; Economic Development; Foreign Investment; Market Fundamentalism; Inflation; Governance |
| JEL: | P11 P17 O21 E61 O4 |
| Date: | 2011–09–27 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:33757&r=cwa |
| By: | Simplice A., Asongu |
| Abstract: | This paper cuts adrift the mainstream approach to the legal-origins debate on the law-growth nexus by integrating both overall economic and human components in our understanding of how regulation quality and the rule of law lie at the heart of economic and inequality adjusted human developments. Findings summarily reveal that legal-origin does not explain economic growth and human development beyond the mechanisms of law channels. As a policy implication results support benefits of the rule of law and quality of regulation as channels to economic growth and human development. |
| Keywords: | Law; economic growth; human development; developing countries |
| JEL: | O1 K2 P5 I0 K4 |
| Date: | 2011–10–03 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:34082&r=cwa |
| By: | Renato G. Flores Jr. |
| Abstract: | The crisis has drawn attention to the fact that not only emerging powers but other regions of the world as well may be offering different development models and may constitute into alternative, in some dimensions more positive agents, in the conduct of the present stage of globalisation. Notwithstanding, the traditional western powers have not lost a large amount of control of the world economy. And the crisis proceeds, reallocating world power as in a Hobbesian anarchy. It is difficult to foresee smooth developments in the near future. On the contrary, multilateralism seems to be losing ground to unilateral action or bilateral arrangements. More or less disguised currency wars may lead to serious disequilibria, and turf wars may become more frequent, with motives ranging from securing captive markets to control of specific commodities and energy goods, or targeted regulatory frameworks. As economic policy becomes even more involved with defence and security affairs, the feedbacks from each side to the other seem likely to keep dissent and animosity high, rather than contributing to peaceful and constructive approaches. A more trouble-prone world may be easily expected. JEL codes: |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:unl:unlfep:wp558&r=cwa |
| By: | Khiabani, Nasser |
| Abstract: | This paper analyzes the effects of oil price and monetary shocks on the Iranian housing market in a Bayesian SVAR framework. The prior information for the contemporaneous identification of the SVAR model is derived from standard economic theory. To deal with uncertainty in the identification schemes, I calculate posterior model probabilities for the SVAR model identified by a different set of over-identification restrictions. In order to draw accurate inferences regarding the effectiveness of the shocks in an over-identified Bayesian SVAR, a Bayesian Monte Carlo integration method is applied. The findings indicate that oil price shocks explain a substantial portion of housing market fluctuations. Housing prices increase in response to a positive credit shock, but only with a noticeably smaller magnitude when compared with the response to a positive oil price shock. |
| Keywords: | Housing market fluctuations; Oil price shocks; Credit shocks; Bayesian Structural VAR; Bayesian model averaging (BMA); Bayesian Monte Carlo integration method |
| JEL: | C32 C53 E32 E52 |
| Date: | 2010–03–06 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:34041&r=cwa |
| By: | John Whalley |
| Abstract: | This paper discusses the role that trade can potentially play in both negotiating and operating a post Kyoto/post 2012 global climate policy regime. As an addition to the bargaining set for a global climate negotiation, trade in principle widens the range of jointly beneficial potential outcomes and can in this sense be a potential facilitator of an agreed global climate regime. The reverse is also true, that in a linked climate-trade-finance global policy coordination structure that goes well beyond what was envisioned at Bretton Woods, climate now added to the global policy bargaining set also offers the prospect of potentially stronger trade disciplines (and even beyond WTO disciplines being negotiated). Trade policy can as well be an instrument for the implementation of a global climate regime, since trade provides a mechanism for achieving an internalization outcome for the global externality that climate change represents, and that provides a potentially more efficient outcome and also helps meet distributional objectives. In short, trade added to the emerging post 2012 climate regime can both expand the bargaining set for both (effectively linked) negotiations, and additionally provide an instrument for the implementation of an agreed outcome. |
| JEL: | F13 F18 Q54 Q56 |
| Date: | 2011–10 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:17498&r=cwa |
| By: | Onour, Ibrahim; Sergi, Bruno |
| Abstract: | This paper investigates volatility spillover across crude oil market and wheat and corn markets. The corn commodity is taken here to assess the impact of change in demand for biofuel on wheat market. Results of multivariate GARCH model show evidence of corn price volatility transmission to wheat market . Our results indicate that while shocks (unexpected news) in crude oil market have significant impact on volatility in wheat and corn markets, the effect of crude oil price changes on corn and wheat markets is insignificant. The impulse response analysis indicate shocks in oil markets have permanent effect on food commodity price changes. Also indicated that fertilizers markets influenced by own-shocks and shocks in oil markets. |
| Keywords: | Volatility; global food; impulse response |
| JEL: | C53 Q18 |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:34079&r=cwa |
| By: | Adriana Di Liberto; M. Sideri |
| Abstract: | In this paper we study the connection between economic performance and the quality of government institutions for the sample of 103 Italian NUTS3 regions. We include new measures of institutional quality calculated using data on the provision of four areas of public services - health, education, environment and energy. We depart from the vast literature that examines the role of different formal institutions on economic development and investigate if the quality of the same governing institutions matters for productivity. To get through likely endogeneity problems we focus on history to find good instruments. We firstly concentrate on the Spanish period that has been often portrayed by historians as having negatively affected the dominated areas through its legacy of inefficient bureaucracy. Secondly, unlike previous studies that are usually based on specific historical events, we collect data for all different dominations that governed each Italian province over seven centuries before the creation of the unified Italian State. Our results suggest a significant role of past historical institutions on the current public administration efficiency and, most of all, confirm that the latter matters for explaining region’s economic performance, with institutional quality differences explaining more than 20% of the observed differences in productivity levels. Our results are robust to the inclusion of different sets of controls, instruments and the use of different measures of regional economic performance. |
| Keywords: | economic development; quality of institutions; history |
| JEL: | O43 O11 |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:cns:cnscwp:201115&r=cwa |
| By: | JG. Brida; N. Garrido; Francesco Mureddu |
| Abstract: | This paper compares the long run prediction of convergence clubs introduced by Quah (1996 and 1997) with the actual observed dynamics of the Italian regions during the period 1970-2004. Economic dynamics is described by the evolution per capita GDP and different notions of distance are introduced to compare the trajectories of the regions. In addition, by means of hierarchical clustering methodologies the set of economies are segmented. By using the average distance, the study identifies two main performance clubs resembling the long run prediction of two converge clubs. On the other hand, the distance correlation shows different co-movements between members of the same cluster, indicating a variety of responses to external shocks. In particular the average distance identifies a clear division between a high performance club consisting of regions from the Center North, and a low performance club composed by regions from the South and islands. The presence of a cluster composed by center north regions is substantially confirmed by the distance correlation analysis, suggesting an homogeneous response to external shock. By contrast Southern regions display the same dynamical evolution but difference in co-movements. Our analysis provides hints about the fundamentals that link the regions in their process of divergence. In fact the performance clubs pattern we discovered reflects the distribution of economic activities as well as the structural attributes of the regional economies. |
| Keywords: | economic convergence; economic dualism; hierarchical clustering |
| JEL: | L83 C24 C14 |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:cns:cnscwp:201116&r=cwa |
| By: | Amit K. Khandelwal; Peter K. Schott; Shang-Jin Wei |
| Abstract: | If trade barriers are managed by inefficient institutions, trade liberalization can lead to greater-than-expected gains. We examine Chinese textile and clothing exports before and after the elimination of externally imposed export quotas. We find that the surge in export value and decline in export prices following quota removal is driven by net entry, and show that this dominance is inconsistent with use of a productivity-based allocation of quota licenses by the Chinese government. Our counterfactual implies that elimination of misallocated quotas raised the overall productivity gain of quota removal by 28 percent. |
| JEL: | F1 O1 |
| Date: | 2011–10 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:17524&r=cwa |
| By: | Masood, Omar; Fry, J. M. |
| Abstract: | This paper addresses an important contemporary issue; namely the implementation of the Basel Accord worldwide. The Basel Accord provides a series of measures to improve the stability of the world’s financial system but its implementation poses a number of challenges for both developing and emerging economies. Pakistan faces a number of unique challenges in this regard due to its recent economic expansion and the fact that the rate at which the Basel Accord is being adopted lags behind that of other countries. This paper throws light on this and a number of related issues due to a combination of the novelty of the survey data from risk managers coupled with a rigorous statistical analysis. Results reflect that the Basel Accord is generally well regarded due to its underlying aims of improved capital standards and a scientific treatment of risk. However, operational risk emerges as a key barrier to implementation in Pakistan. A number of further obstacles are highlighted, which, do seem to have been addressed although only with a partial degree of success. Privately owned banks appear to be more technically competent and more favourably disposed towards implementation than publicly owned banks. |
| Keywords: | Risk Management; Basel Accord; Banking; Financial Regulation; Emerging Markets |
| JEL: | C10 O53 G21 |
| Date: | 2011–10–17 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:34163&r=cwa |
| By: | Jarko Fidrmuc (Zeppelin University Friedrichshafen, CESifo Munich, Institute for Eastern European Studies,); Mariya Hake (Oesterreichische Nationalbank); Helmut Stix (Oesterreichische Nationalbank, Economic Studies Division Central and Eastern Europe) |
| Abstract: | Foreign currency loans represent an important feature of recent financial developments in CEECs. This might pose a serious challenge for macroeconomic stability. Against this background, the authors study the determinants of foreign currency loans of households, using data on the behavior of households in nine CEECs. Their results reveal that foreign currency loans are driven by households’ lack of trust in the stability of the local currency and in domestic financial institutions. Moreover, special factors including remittances and expectations of euro adoption play an important role in selected regions. The financial crisis reduced foreign currency borrowing, but there is some indication this effect might be only temporary. JEL classification: G18, G21, C25 |
| Keywords: | Foreign currency loans, dollarization, euroization, monetary credibility, trust, CEEC |
| Date: | 2011–09–01 |
| URL: | http://d.repec.org/n?u=RePEc:onb:oenbwp:171&r=cwa |
| By: | Fort, Margherita; Schneeweis, Nicole; Winter-Ebmer, Rudolf |
| Abstract: | We study the relationship between education and fertility, exploiting compulsory schooling reforms in Europe as source of exogenous variation in education. Using data from 8 European countries, we assess the causal effect of education on the number of biological kids and the incidence of childlessness. We find that more education causes a substantial decrease in childlessness and an increase in the average number of children per woman. Our findings are robust to a number of falsification checks and we can provide complementary empirical evidence on the mechanisms leading to these surprising results. |
| Keywords: | education; fertility; instrumental variables |
| JEL: | I2 J13 |
| Date: | 2011–10 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:8609&r=cwa |
| By: | Çokgezen, Murat |
| Abstract: | This study evaluates attitudes of Turkish university students towards markets and influence of taking a course in economics on these attitudes, and compares the results with students in other countries. The study results show that the opinions of university students in Turkey about the justice of market relations are negative compared to students from other countries; and, unlike other countries’ students, taking a course in economics does not change this attitude. |
| Keywords: | attitudes; markets; economics education; Turkey |
| JEL: | A13 A20 |
| Date: | 2011–06 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:32346&r=cwa |
| By: | Çokgezen, Murat |
| Abstract: | This study has examined the results of SOE policy by comparing two provinces in Turkey, one that was a would-be beneficiary of this policy and the other not. Statistical data and anecdotal evidence from in-depth interviews show that the SOEs increased labor costs, discouraged private entrepreneurship and guided locals to political, rather than productive solutions to their economic problems; regional development in the province in which SOEs dominated the regional economy was hindered. These results are in line with the reported outcomes of SOE policy adopted by Italian governments in order to promote development in southern Italy. |
| Keywords: | state owned enterprises turkey regional development |
| JEL: | O18 L26 |
| Date: | 2011–01–24 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:27676&r=cwa |
| By: | Petrushchak, Bohdan |
| Abstract: | The purpose of this article is to analyze the influence of metallurgical sector on Ukrainian economy. We try to examine what is iron ore for Ukraine – a basis for successful economic development or resource curse, and investigate the impact of steel and iron companies on performance of domestic stock exchange. |
| Keywords: | Metallurgical sector; resource curse; Ukrainian stock market; volatility of export revenues; |
| JEL: | D53 E32 F14 G20 |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:34001&r=cwa |