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on Central and Western Asia |
| By: | Arazmuradov, Annageldy |
| Abstract: | This paper investigates the relationship between foreign aid (ODA), foreign direct investment (FDI) and their effect on domestic investment in five landlocked and emerging economies of Central Asia. It is important for donor countries to understand whether their aid helps to bring in a private capital essential in transition period or not. If it does, it creates a ground for public-private partnership that could release from financial constraints and restore conditions for economic growth in transition economies. If it does not, then it calls for reassessing mechanisms of ‘aid architecture’. We test ODA-FDI link on two levels: regional and country. Our results from seemingly unrelated regression on regional level indicate that (a) aid has a positive role on FDI inflows; (b) aid and FDI are complementing flows, and (c) FDI complements domestic investment, while ODA decrease it. However, on the country level only in Kyrgyzstan and Tajikistan, foreign aid catalyzes FDI inflows. We conclude that the ODA-FDI nexus is present in countries with low per capita GDP and economic growth. There is a need for improvement of aid mechanism and a room for public-private cooperation in economies of Central Asia. |
| Keywords: | Central Asia; transition economies; foreign direct investment; official development assistance;gross fixed capital formation |
| JEL: | F30 P20 |
| Date: | 2011–12–29 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:36881&r=cwa |
| By: | Nawaz, Saima |
| Abstract: | The objective of this study is to analyze the impact of institutions on the economic growth and examine whether the ultimate impact differs at various stages of development among 24 Asian countries over the period 1996-2008 using a dynamic panel data analysis model based on the SYS-GMM estimation procedure. The overall analysis of this study shows that institutions indeed are important in determining the long-run economic growth. However, the impact of the institutions on economic growth varies across the regions and depends upon the existence level of development. This study concludes that the institutions are more effective in developed region as compared to developing region. More specially, control over corruption, rule of law and regulatory quality are highly effective in promoting long rum economic growth in East Asia than South Asia. Different countries require different set of institutions to promote long run economic growth. |
| Keywords: | Institutions; Economic Growth; Stages of Development |
| JEL: | E02 O43 |
| Date: | 2011–12–01 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:36961&r=cwa |
| By: | Dizaji, S.F. |
| Abstract: | In this study, I investigate the short run and long run effects of government size and exports on the economic growth of Iran as a developing oil export based economy for the period of 1974 to 2008. For this purpose I use the bounds testing approach to cointegration and error correction models, developed within an autoregressive distributed lag (ARDL) framework. A modified form of Ram’s (1986) model has been applied to include both government size and exports as determinants of economic growth in addition to labor force and capital. I use total exports, oil exports and non-oil exports respectively in three different equations to assess their effects on economic growth. Moreover, according to Armey curve(1995) in each of the equations I test the existence of non-linear relationship between government size and economic growth. My findings show that in all of the equations both in long run and short run the Armey curve is valid for Iranian economy, indicating that both a very big size and a too small size of government are harmful for growth and Iranian government should adjust its size (to have smaller size, compared to the average size over the period of this study) for obtaining higher rates of growth. The results show that total exports, the amount of oil exports in terms of barrels and oil prices could affect the economic growth positively and significantly both in short run and long run. However because of the weaknesses of the Iranian non-oil sectors, the non-oil exports could not have significant effects on growth in the long run. As a result of this study in the short run, Iran should try to attract foreign technologies and investments to develop the capacity and ability of its oil production. In the short run this can be a reliable factor for having the stable economy in comparison with relying on uncertain oil prices. In the long run Iran should use the oil revenues to improve its economic structure and invest on some non-oil sectors to diversify its non-oil exports. This can create new resources for government revenues and will reduce the dependence of the economy on Oil exports. |
| Keywords: | oil prices;economic growth;Iran;oil exports;government size;non-oil exports |
| Date: | 2012–02–27 |
| URL: | http://d.repec.org/n?u=RePEc:dgr:euriss:535&r=cwa |
| By: | Harrison, Mark (University of Warwick); Markevich, Andrei (New Economic School, Moscow) |
| Abstract: | This paper describes the main trends of the Russian economy through the Great War (1914 to 1917), Civil War (1918 to 1921), and postwar famine (1921 to 1922) for the general reader. During its Great War mobilization the Russian economy declined, but no more than other continental economies under similar pressures. In contrast, the Civil War inflicted the greatest economic trauma that Russians suffered in the course of the twentieth century. The paper identifies the main shocks in each period evaluates the relative contributions of circumstances and policy, and sums up their historical significance. |
| Keywords: | Civil War, Russia, Soviet Union, World War I |
| Date: | 2012 |
| URL: | http://d.repec.org/n?u=RePEc:cge:warwcg:73&r=cwa |
| By: | Tao Wu; Michele Cavallo |
| Abstract: | We study the effects of oil-price shocks on the U.S. economy combining narrative and quantitative approaches. After examining daily oil-related events since 1984, we classify them into various event types. We then develop measures of exogenous shocks that avoid endogeneity and predictability concerns. Estimation results indicate that oil-price shocks have had substantial and statistically significant effects during the last 25 years. In contrast, traditional VAR approaches imply much weaker and insignificant effects for the same period. This discrepancy stems from the inability of VARs to separate exogenous oil-supply shocks from endogenous oil-price fluctuations driven by changes in oil demand. |
| Keywords: | Commodity price fluctuations , External shocks , Oil prices , Price increases , United States , |
| Date: | 2012–01–19 |
| URL: | http://d.repec.org/n?u=RePEc:imf:imfwpa:12/19&r=cwa |
| By: | Claudio Morana (Università di Milano Bicocca, CeRP-Collegio Carlo Alberto, Fondazione Eni Enrico Mattei and International Centre for Economic Research Abstract: What is the role of financial speculation in determining the real oil price? We find that while macroeconomic shocks have been the major upward driver of the real oil price since the mid 1980s, also financial shocks have sizably contributed since the early 2000s, and at a much larger extent since the mid 2000s: over the period 2004:1 through 2010:3, the real oil price increased 65%; of the latter, 33% is related to fundamental financial shocks, 11% to non fundamental financial shocks, with macroeconomic and oil market supply side shocks contributing with a 5% and 3% increase, respectively. Yet, it would be inaccurate describing the third oil price shock as a purely financial episode: macroeconomic shocks largely accounted for the 65% real oil price run up over the 2007(2)-2008 (2) period, and similarly for the -67% and -31% contractions in 2008(4) and 2009(1); only over the 2009(2) through 2009(4) period macroeconomic and financial shocks equally contributed to the 54% real oil price increase. Hence, while we find support to the demand side view of real oil price determination, we also find a much larger role for financial shocks than previously noted in the literature.) |
| Keywords: | Oil Price, Financial speculation, Macro-finance Interface, International Business Cycle, Factor Vector Autoregressive Models |
| JEL: | C22 E32 G12 |
| Date: | 2012–02 |
| URL: | http://d.repec.org/n?u=RePEc:fem:femwpa:2012.07&r=cwa |
| By: | Fuad Hasanov; Reda Cherif |
| Abstract: | Policymakers in oil-exporting countries confront the question of how to allocate oil revenues among consumption, saving, and investment in the face of high income volatility. We study this allocation problem in a precautionary saving and investment model under uncertainty. Consistent with data in the 2000s, precautionary saving is sizable and the marginal propensity to consume out of permanent shocks is below one, in stark contrast to the predictions of the perfect foresight model. The optimal investment rate is high if productivity in the tradable sector is high enough. |
| Keywords: | Oil exporting countries , Oil revenues , Public investment , Resource allocation , Savings , |
| Date: | 2012–01–10 |
| URL: | http://d.repec.org/n?u=RePEc:imf:imfwpa:12/4&r=cwa |
| By: | Philip K. Verleger (Peterson Institute for International Economics) |
| Abstract: | The new, draconian sanctions introduced by the United States and the European Union to prevent Iran from earning money from its crude oil exports could pose a serious economic threat to oil-importing countries that also trade heavily with the US and EU economies. Nations such as China, South Korea, and Japan, which obtain significant amount of oil from Iran while enjoying large trade surpluses with the United States, are justifiably anxious. These countries and others worry that by pushing Iran from the global crude market, the new US and EU sanctions will disrupt oil markets, increase crude prices, and further slow global economic growth, which, at a minimum, would cut their export revenues. Saudi Arabia and other members of the Oil and Petroleum Exporting Countries (OPEC) have indicated they would replace oil previously purchased from Iran, but these offers have done little to allay the apprehensions. Verleger suggests a way to put real pressure on Iran while moderating or eliminating economic fallout for the US and EU economies and those of their trading partners: selling oil from the US Strategic Petroleum Reserve (SPR), which now holds far more oil than required by treaty obligations—more than 280 million surplus barrels. This strategic use of the SPR will increase the effectiveness of sanctions on Iran and ease the adjustment difficulties that confront US allies. The sales might also reduce any price pressure caused by removal of light Iranian crude from the market. |
| Date: | 2012–02 |
| URL: | http://d.repec.org/n?u=RePEc:iie:pbrief:pb12-6&r=cwa |
| By: | Kumudini R. Ganegodage (School of Economics, The University of Queensland); Alicia N. Rambaldi (School of Economics, The University of Queensland) |
| Abstract: | We propose a theoretical and econometric framework to evaluate the impact of war on economic growth of a developing country with an open economy. The theoretical framework encompasses both the neoclassical and endogenous growth models. The econometric model is derived from the theoretical framework and an Autoregressive Distributed Lag framework is used for the estimation. We test this framework using Sri Lankan data. The war had significant and negative effects both in the short and long-run (annual average of 9% of GDP). High returns from investment in physical capital did not translate in sizable positive externalities. No significant effects of openness on growth in the long-run are found; however, effects are significant in the short- run. Inconsistent politically driven policies towards openness are the likely reason. As the ethnic conflict has finally come to an end, a policy framework with appropriate institutional reforms is needed for rapid growth and development. |
| Date: | 2012 |
| URL: | http://d.repec.org/n?u=RePEc:qld:uq2004:453&r=cwa |
| By: | Degryse, H.A.; Elahi, M.A.; Penas, M.F. (Tilburg University, Center for Economic Research) |
| Abstract: | Abstract: Banking systems are fragile not only within one country but also within and across regions. We study the role of regional banking system characteristics for regional banking system fragility. We find that regional banking system fragility reduces when banks in the region jointly hold more liquid assets, are better capitalized, and when regional banking systems are more competitive. For Asia and Latin-America, a greater presence of foreign banks also reduces regional banking fragility. We further investigate the possibility of contagion within and across regions. Within region banking contagion is important in all regions but it is substantially lower in the developed regions compared to emerging market regions. For cross-regional contagion, we find that the contagion effects of Europe and the US on Asia and Latin America are significantly higher compared to the effect of Asia and Latin America among themselves. Finally, the impact of cross-regional contagion is attenuated when the host region has a more liquid and more capitalized banking sector. |
| Keywords: | Banking system stability;cross-regional contagion;financial integration. |
| JEL: | G15 G20 G29 |
| Date: | 2012 |
| URL: | http://d.repec.org/n?u=RePEc:dgr:kubcen:2012015&r=cwa |
| By: | Baele, L.; Farooq, M.; Ongena, S. (Tilburg University, Center for Economic Research) |
| Abstract: | Abstract: We compare default rates on conventional and Islamic loans using a comprehensive monthly dataset from Pakistan that follows more than 150,000 loans over the period 2006:04 to 2008:12. We find robust evidence that the default rate on Islamic loans is less than half the default rate on conventional loans. Islamic loans are less likely to default during Ramadan and in big cities if the share of votes to religious-political parties increases, suggesting that religion – either through individual piousness or network effects – may play a role in determining loan default. |
| Keywords: | Loan Default;Islamic Loans;Religion;Duration Analysis. |
| JEL: | A13 G21 G32 G33 Z12 |
| Date: | 2012 |
| URL: | http://d.repec.org/n?u=RePEc:dgr:kubcen:2012014&r=cwa |
| By: | Lifshits, Marina |
| Abstract: | The author of this paper has taken to the econometric analysis of the ROSSTAT and World Bank data to answer the following questions: (1) Provided that age structure of the population is influenced by migration, can migration influence upon living standards too, and to what extend? (2) What factors determine the volumes and direction of the world migration flows? (3) For what reasons net migration to Russia from various post-Soviet countries is that different? (4) What are the prospects of net migration to Russia? (5) What kind of migration policy does Russia need? |
| Keywords: | Migration of population; net migration; migration policy; post-Soviet space; ageing of population; |
| JEL: | C33 J18 J11 |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:36945&r=cwa |
| By: | Howes, Stephen (Asian Development Bank Institute); Wyrwoll, Paul (Asian Development Bank Institute) |
| Abstract: | The developing economies of Asia are confronted by serious environmental problems that threaten to undermine future growth, food security, and regional stability. This study considers four major environmental challenges that policymakers across developing Asia will need to address towards 2030: water management, air pollution, deforestation and land degradation, and climate change. We argue that these challenges, each unique in their own way, all exhibit the characteristics of “wicked problems”. As developed in the planning literature, and now applied much more broadly, wicked problems are dynamic, complex, encompass many issues and stakeholders, and evade straightforward, lasting solutions. |
| Keywords: | asia environmental problems; food security; water management; air pollution; deforestation; land degradation; climate change; wicked problems |
| JEL: | O10 O44 O53 Q28 Q53 Q56 Q58 |
| Date: | 2012–03–01 |
| URL: | http://d.repec.org/n?u=RePEc:ris:adbiwp:0348&r=cwa |
| By: | Abdul Razzaq, Khan; Dr. Pervez Ahmed, Pathan; Dr. Abdida, Taherani; Sadia Razzaq, Khan |
| Abstract: | The present study attempted to assess the vulnerability of coastal areas of Pakistan that cashed in one's chips in the monsoon flood, 2010. This assessment helps to recognize the vulnerability of local people of coastal communities for planning better developmental work. The study conducted through field work in two districts “Thatta and Badin” of coastal area of Sindh Province of Pakistan. Multistage cluster sampling technique has used to select the sample size of 360 households from the area. Data was collected through well-structured questionnaire. Most of population in the study area is illiterate i.e. about 61% of population. This is not only due to lack of awareness and lack of passion to seek education, but, government also ignores these areas in the provision of educational facilities. Considering the disaster vulnerability of coastal areas, these health facilities are very few and it leads to make them more vulnerable towards various diseases caused by frequent disasters. Depending on the disaster vulnerability of the target area, disaster management arrangement had analyzed through the availability of emergency camp along with its distance from the villages. Vulnerability of coastal communities assessed using various indicators and in the end suggestions and recommendations put forward in the light of local vulnerability to have minimum loss in upcoming disasters. |
| Keywords: | Disaster; Disaster Management; Vulnerability; Hazards; Global Warming; Rehabilitation; Awareness; Local Community |
| JEL: | D81 |
| Date: | 2011–10–17 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:37076&r=cwa |
| By: | Zaman, Nadeem Uz; Ghutai, Gul; Khan, Kaneez Raza |
| Abstract: | Terrorism has badly affected Pakistan and Balochistan is one of its worst – hit provinces. There is no research that accounts for the nature, sources and effects of terrorism on Balochistan; this study, thus, tried to explore the same. A sample size of 250 respondents was chosen to cast their opinion about the problem using a questionnaire through a stratified sample of Quetta city. The results indicated that the nature of terrorism in Balochistan is, at first, Political and is caused by the prevailing social injustice and lack of economic activity, cross-border activities and religious and ethnic extremism. Terrorism has negatively affected business optimism, foreign investment and economic life in Balochistan. As far as the social life is concerned, a sense of fear prevails in the province that has reduced social activities in the province. One of the worst – hit areas by terrorism is education and religious practices. In order to correct the current situation prevailing in Balochistan the government has to play an intelligent, planned and effective role in Balochistan. |
| Keywords: | Socio-economic effects; Terrorism; Balochistan |
| JEL: | I30 A10 |
| Date: | 2012–03–03 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:37075&r=cwa |
| By: | Pïerre Cahuc; Stephane Carcillo |
| Abstract: | This paper analyzes the relation between public wage bills and public deficits in the OECD countries from 1995 to 2009. The paper shows that fiscal drift episodes, characterized by simultaneous increases in the GDP shares of public wage bills and budget deficits, are more frequent during booms and election years, but not during recessions, except for the 2009 exceptionally strong recession. The emergence of fiscal drift episodes during booms and election years is less frequent in countries with more transparent government, more freedom of the press, as well as in countries with presidential regimes and less union coverage. Inversely, fiscal tightening episodes, characterized by simultaneous decreases in the GDP shares of public wage bills and budget deficits, occur less often during booms than during recessions. The emergence of fiscal tightening episodes during recessions and election years is less frequent in countries with more union coverage. |
| JEL: | E62 H76 J45 |
| Date: | 2012–03 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:17881&r=cwa |