|
on Central and Western Asia |
| By: | Ramis Khabibullin (Bank of Russia, Russian Federation); Alexey Ponomarenko (Bank of Russia, Russian Federation) |
| Abstract: | We use the behavioral concept to endogenously model the evolution of the link between households’ deposit dollarization and exchange rate developments in Russia. We estimate the model empirically and show that the reaction of households to exchange rate appreciation weakens when exchange rate developments become more volatile. The proposed model outperforms the contemporary nonlinear time series models in forecasting the changes in dollarization during the Bank of Russia’s transition to a flexible exchange rate regime. |
| Keywords: | Dollarization, behavioral finance, variational Bayes, Russia |
| JEL: | C11 D84 E44 G17 |
| Date: | 2020–12 |
| URL: | http://d.repec.org/n?u=RePEc:bkr:wpaper:wps67&r=all |
| By: | Paschke, Max; Müller, Anna |
| Abstract: | In the last decade, contextualization has matured into an important topic of entrepreneurship research and continues to attract great interest. However, from a methodological point of view, contextualization still seems to pose significant challenges. In order to reflect the current trends and challenges of methods used in entrepreneurship context research, we analyze articles published in leading scientific journals of the field against the background of context methodologies of Welter and Baker (who, where, when). We deductively coded our final sample (131 articles) regarding type of method, used Data, unit of analysis and context typologies of Welter and Baker. Our results show the following 4 most important findings: 1. Case studies in particular show methodological strengths with regard to the depth of contextual observation. 2. The contextualization show clear differences in the methods required and used regarding the different typologies. 3. Methodological processing of contextualization depends on aspects such as data availability, data type and generalizability. 4. Individuality and depth represent the greatest challenges for a qualitatively appropriate contextualization of entrepreneurship research. |
| Keywords: | Context,Research Method,Entrepreneurship Research |
| JEL: | I23 M21 |
| Date: | 2020 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:ifmwps:0520&r=all |
| By: | Tigran Poghosyan |
| Abstract: | This paper estimates the extent and speed of exchange rate pass-through (ERPT) in seven Caucasus and Central Asia (CCA) countries using monthly data over the January 1995–May 2020 period. The estimations are performed using the local projections method. We find that the average pass-through in the CCA is about 10 percent on impact and about 25 percent after 12 months. There is no evidence of asymmetric ERPT with respect to the size and the sign of exchange rate changes. The pass-through is broadly unchanged in fixed versus floating exchange rate regimes. There has been a downward shift in the speed of ERPT in the aftermath of the global financial crisis as CCA countries have entered a relatively low inflation environment. The pass-through estimates could be used by the CCA monetary authorities for inflation projections. The absence of non-linearities in the pass-through with respect to the exchange rate regime suggests that transition from fixed to floating exchange rate regimes in the region is not likely to impose additional inflationary costs. |
| Keywords: | Exchange rates;Exchange rate adjustments;Exchange rate pass-through;Exchange rate arrangements;Inflation;WP,confidence interval |
| Date: | 2020–08–07 |
| URL: | http://d.repec.org/n?u=RePEc:imf:imfwpa:2020/154&r=all |
| By: | Armando Marozzi |
| Abstract: | Central Bank Independence has often been praised as a "free lunch" as it lowers inflation with no costs to output. This paper, instead, claims that in a peculiar monetary union such as the European Monetary Union (EMU) defending the independence during a financial crisis can be macroeconomically costly: unconventional monetary policies may expose the European Central Bank (ECB) to the threat of fiscal dominance which, in turn, might endogenously shift the ECB’s fiscal stance toward fiscal conservatism. Fiscally hawkish signals can then depress GDP and inflation, thereby forcing the ECB to prolong the unconventional stimuli to achieve its target. This paper finds evidence of this new "doom-loop" at the core of the EMU. |
| Keywords: | ECB, monetary-fiscal interaction, CBI, unconventional monetary policy, EMU, fiscal communication |
| JEL: | E52 E58 E61 E63 |
| Date: | 2021 |
| URL: | http://d.repec.org/n?u=RePEc:baf:cbafwp:cbafwp20152&r=all |
| By: | Toptancı, Ali İskan |
| Abstract: | The oil and gas sector in the Kurdistan Region developed rapidly between 2007-2013 and this situation was described as the days of the prosperity of Kurdistan. Therefore, the Kurdistan Regional Government has faced falling oil prices and problems in oil production since 2014. As a new oil-exporting country, the income from oil is of great importance in the development of the country. This study addresses three important questions: What is the cause of the difficulties faced by oil-exporting countries? How has the development of the oil and gas industry contributed to the development of other economic sectors, especially the agricultural sector in the Kurdistan Region? What kind of policy can be followed against the problems to be experienced due to limited resources? It will be discussed in this study that the economy of the Kurdistan Region is heavily dependent on revenues from oil and that the surplus income is not adequately and effectively invested in other economic areas such as agriculture to diversify its sources of income. |
| Keywords: | Kurdistan Region,Petrol and Gas,Agriculture,Economic Development |
| Date: | 2021 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:esrepo:228721&r=all |
| By: | Brotto, André; Jakubik, Adam; Piermartini, Roberta |
| Abstract: | On the occasion of the 25th anniversary of the WTO, this paper re-estimates the impact of WTO accession on growth. Joining the multilateral trading system not only expands access to international markets but also requires commitment to domestic reforms. Tang and Wei (2009) showed that there is in fact a positive effect of WTO on growth also during the period of accession when these commitments are undertaken. In this paper, we extend Tang and Wei's analysis to the sample of 32 newly acceded countries. We find that WTO accession is associated with a significant positive increase in GDP growth. This effect is larger than previously estimated. We find that five years after accession an economy is 30% larger, and that the impact of WTO entry on growth persists beyond the first five years. |
| Keywords: | Dynamic gains from trade,economic growth,trade liberalization,newly acceded countries,Article XII countries |
| JEL: | F1 |
| Date: | 2021 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:wtowps:ersd20211&r=all |
| By: | Marinho Bertanha |
| Abstract: | Numerous empirical studies employ regression discontinuity designs with multiple cutoffs and heterogeneous treatments. A common practice is to normalize all the cutoffs to zero and estimate one effect. This procedure identifies the average treatment effect (ATE) on the observed distribution of individuals local to existing cutoffs. However, researchers often want to make inferences on more meaningful ATEs, computed over general counterfactual distributions of individuals, rather than simply the observed distribution of individuals local to existing cutoffs. This paper proposes a consistent and asymptotically normal estimator for such ATEs when heterogeneity follows a non-parametric function of cutoff characteristics in the sharp case. The proposed estimator converges at the minimax optimal rate of root-n for a specific choice of tuning parameters. Identification in the fuzzy case, with multiple cutoffs, is impossible unless heterogeneity follows a finite-dimensional function of cutoff characteristics. Under parametric heterogeneity, this paper proposes an ATE estimator for the fuzzy case that optimally combines observations to maximize its precision. |
| Date: | 2021–01 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:2101.01245&r=all |
| By: | Hull, Isaiah (Research Department, Central Bank of Sweden); Sattath, Or (Department of Computer Science); Diamanti, Eleni (LIP6, CNRS); Wendin, Göran (Department of Microtechnology and Nanoscience) |
| Abstract: | Research on quantum technology spans multiple disciplines: physics, computer science, engineering, and mathematics. The objective of this manuscript is to provide an accessible introduction to this emerging field for economists that is centered around quantum computing and quantum money. We proceed in three steps. First, we discuss basic concepts in quantum computing and quantum communication, assuming knowledge of linear algebra and statistics, but not of computer science or physics. This covers fundamental topics, such as qubits, superposition, entanglement, quantum circuits, oracles, and the no-cloning theorem. Second, we provide an overview of quantum money, an early invention of the quantum communication literature that has recently been partially implemented in an experimental setting. One form of quantum money offers the privacy and anonymity of physical cash, the option to transact without the involvement of a third party, and the efficiency and convenience of a debit card payment. Such features cannot be achieved in combination with any other form of money. Finally, we review all existing quantum speedups that have been identified for algorithms used to solve and estimate economic models. This includes function approximation, linear systems analysis, Monte Carlo simulation, matrix inversion, principal component analysis, linear regression, interpolation, numerical differentiation, and true random number generation. We also discuss the difficulty of achieving quantum speedups and comment on common misconceptions about what is achievable with quantum computing. |
| Keywords: | Quantum Computing; Econometrics; Computational Economics; Money; Central Banks |
| JEL: | C50 C60 E40 E50 |
| Date: | 2020–12–01 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:rbnkwp:0398&r=all |
| By: | Aziz Atamanov; Nethra Palaniswamy |
| Keywords: | Poverty Reduction - Inequality Poverty Reduction - Poverty Assessment Poverty Reduction - Poverty Lines Poverty Reduction - Poverty Monitoring & Analysis Poverty Reduction - Small Area Estimation Poverty Mapping |
| Date: | 2019–09 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wboper:33374&r=all |
| By: | Monoj Kumar Majumder; Mala Raghavan; Joaquin Vespignani |
| Abstract: | This study explores the impact of commodity price volatility on external debt accumulation under fixed, managed, and floating regimes. We estimate dynamic panel data models for 97 countries from 1993 to 2016. Our empirical findings show that commodity price volatility increases external debt accumulation for commodity-exporting countries. This impact is three-times higher for countries with fixed exchange rate regimes compared to managed floating exchange rate regimes. Under floating exchange regimes, the effect of commodity price volatility on external debt is statistically insignificant. Our results suggest that the adoption of a floating exchange rate regime by commodity-exporting countries is critical to mitigate the effects of commodity price volatility on external debt accumulation. |
| Keywords: | Commodity price volatility, external debt, commodity-exporting countries, exchange rate regime |
| JEL: | E62 F31 F34 G01 |
| Date: | 2020–12 |
| URL: | http://d.repec.org/n?u=RePEc:een:camaaa:2020-110&r=all |
| By: | Deepankar Basu (Department of Economics, University of Massachusetts Amherst) |
| Abstract: | This paper reconsiders two questions relating to India’s economic growth: structural breaks in growth and the impact of equipment investment on aggregate economic growth. First, statistical tests of structural change show that economic growth in post-independence India has witnessed four structural breaks: in 1964-65, in 1978-79, in 1990-91, and in 2004-05. However, substantial growth accelerations, i.e. increase of more than 1.0% per annum in the growth rate of per capita real GDP, occurred only at two points: 1978-79 and 2004-05. Second, to analyze the impact of equipment investment on growth, I use an ARDL bounds testing methodology. I find a positive and statistically significant long run positive impact of private investment in equipment and machinery on the growth rate of real GDP. |
| Keywords: | India, economic growth, structural change, ARDL bounds testing. |
| JEL: | O11 O47 O53 |
| Date: | 2020 |
| URL: | http://d.repec.org/n?u=RePEc:ums:papers:2020-01&r=all |
| By: | Jansen, Kristy (Tilburg University, School of Economics and Management) |
| Date: | 2021 |
| URL: | http://d.repec.org/n?u=RePEc:tiu:tiutis:fd998408-d282-4e0f-b542-40e6154f40d2&r=all |
| By: | Di Pace, Federico (Bank of England); Juvenal, Luciana (International Monetary Fund); Petrella, Ivan (Warwick Business School and CEPR) |
| Abstract: | When analyzing terms-of-trade shocks, it is implicitly assumed that the economy responds symmetrically to changes in export and import prices. Using a sample of developing countries our paper shows that this is not the case. We construct export and import price indices using commodity and manufacturing price data matched with trade shares and separately identify export price, import price, and global economic activity shocks using sign and narrative restrictions. Taken together, export and import price shocks account for around 40% of output fluctuations but export price shocks are, on average, twice as important as import price shocks for domestic business cycles. Given that shifts in export and import prices have asymmetric effects on the economy, global economic activity shocks, which simultaneously affect export and import prices, are largely undetected in the terms of trade measure but have large effects on domestic business cycles. |
| Keywords: | Terms of trade; commodity prices; business cycles; world shocks |
| JEL: | F41 F44 |
| Date: | 2021–01–08 |
| URL: | http://d.repec.org/n?u=RePEc:boe:boeewp:0901&r=all |
| By: | Saissi Hassani, Samir (HEC Montreal, Canada Research Chair in Risk Management); Dionne, Georges (HEC Montreal, Canada Research Chair in Risk Management) |
| Abstract: | We model the new quantitative aspects of market risk management for banks that Basel established in 2016 and came into effect in January 2019. Market risk is measured by Conditional Value at Risk (CVaR) or Expected Shortfall at a confidence level of 97.5%. The regulatory backtest remains largely based on 99% VaR. As additional statistical procedures, in line with the Basel recommendations, supplementary VaR and CVaR backtests must be performed at different confidence levels. We apply these tests to various parametric distributions and use non-parametric measures of CVaR, including CVaR- and CVaR+ to supplement the modelling validation. Our data relate to a period of extreme market turbulence. After testing eight parametric distributions with these data, we find that the information obtained on their empirical performance is closely tied to the backtesting conclusions regarding the competing models. |
| Keywords: | Basel III; VaR; CVaR; Expected Shortfall; backtesting; parametric model; non-parametric model; mixture of distributions; fat-tail distribution |
| JEL: | C44 C46 C52 G21 G24 G28 G32 |
| Date: | 2021–01–12 |
| URL: | http://d.repec.org/n?u=RePEc:ris:crcrmw:2021_001&r=all |
| By: | Nomaler, Önder; Spinola, Danilo; Verspagen, Bart |
| Abstract: | We investigate how economic growth in a demand-led economy with semi-endogenous productivity growth can be compatible with a stable employment path. Our model uses a Sraffian supermultiplier (SSM), and we endogenize the growth rate of autonomous demand, and semi-endogenize productivity growth. The basic model has a steady state that is consistent with a stable employment rate. Consumption smoothing (between periods of high and low employment) by workers is the mechanism that keeps the growing economy stable. We also introduce a version of the model where the burden for stabilization falls upon government fiscal policy. This also yields a stable growth path, although the parameter restrictions for stability are more demanding in this case. |
| Keywords: | Economic growth model; Sraffian supermultiplier; Research and Development (R&D) |
| Date: | 2021–01–12 |
| URL: | http://d.repec.org/n?u=RePEc:akf:cafewp:9&r=all |
| By: | Uddin, Godwin |
| Abstract: | This article recapitulates some of the trade theories reputed to be of the twentieth century. Here, the Heckscher-Ohlin theory (with some of its variants), endogenous growth theory, product cycle theory, and new trade theory were considered. This review thereof, amidst others, highlight some of the assumptions of these theories and thus present some critique of the same theories. |
| Keywords: | Trade; Critique; Heckscher-Ohlin theory; endogenous growth theory; product cycle theory; new trade theory |
| JEL: | F0 F00 F1 F10 |
| Date: | 2021–01–07 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:105194&r=all |
| By: | Sarah Auster (Department of Economics, University of Bonn); Jeremy Kettering (Department of Economics, University of Rochester); Asen Kochov (Department of Economics, University of Rochester) |
| Abstract: | We consider a dynamic economy in which agents are initially unaware of some risks. As awareness of these risks emerges, markets re-open so agents can re-optimize and purchase insurance. An inefficiency may nonetheless arise as the cost of insurance is not spread over time. This \savings mistake" does not arise in two benchmark cases. In those, the ability to re-trade fully negates the initial misperception of risks. We also demonstrate the possibility of unexpected default. This arises when agents borrow \too much" and once perceptions change, there is no equilibrium price at which they can refinance their debt. |
| Keywords: | coarse perceptions, unforeseen risks, sequential trading, default |
| Date: | 2021–01 |
| URL: | http://d.repec.org/n?u=RePEc:ajk:ajkdps:052&r=all |
| By: | Oladunni, Sunday |
| Abstract: | The global oil dynamics has significant implications for both oil exporting and importing small open economies. However, much of the literature on oil shocks is oriented towards advanced oil-importing economies. Micro-founded studies that explore the effects of oil shocks from the standpoint of oil-endowed emerging economies are rather sparse, compared to the preponderance of studies on developed oil importers and exporters. Thus, resulting to a consequential knowledge gap on oil price transmission mechanism and a limited appreciation of the growing policy dilemmas in these economies. In addition, we consider a positive oil price shock to uncover the extent to which oil price increase is positive for the economy. The paper, therefore, sets up a new Keynesian dynamic stochastic general equilibrium (DSGE) model to study how an oil price shock impact macroeconomic aggregates in an oil-rich emerging economy. The typical small open economy model is enriched with an export-oriented oil firm, a multi-sector foreign production and a non-oil domestic firm. The model is closed with exchange rate-augmented interest rate rule, and it is calibrated for Nigeria, an important oil producer. Macroeconomic responses, sequel to a simulated positive oil price shock, reveal evidence of Dutch disease and the operation of the Harrod-Balassa-Samuelson effect. We find a compelling need for oil-endowed emerging economies to address these phenomena by ensuring a robust non-oil sector with limited exposure to the vagaries of oil price oscillation. |
| Keywords: | Oil Price, DSGE Model, Macroeconomic Dynamics, Emerging Oil Exporter |
| JEL: | E32 E37 E39 |
| Date: | 2020–03–13 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:104551&r=all |
| By: | Esseau-Thomas, C.; Galarraga, O.; Khalifa, S. |
| Abstract: | The novel coronavirus is part of a series of infectious disease outbreaks that include: Ebola, Avian influenza, Middle East respiratory syndrome coronavirus (MERS-CoV), Influenza A (H1N1), and others. This paper addresses the question of how do these epidemics and pandemics affect income inequality in countries around the world during the first two decades of the 21st century. To achieve its objective, the paper explores the effect on the Gini coefficient of a dummy variable that indicates the occurrence of an epidemic or a pandemic in a country in a given year, in addition to the fatality rate of the epidemic or the pandemic. The panel estimations show that the dummy variable has a statistically significant positive effect on income inequality, while the fatality rate does not have a statistically significant nor an economically important effect on income inequality. To properly address potential endogeneity, we implement a Three-Stage-Least Squares technique. The estimation shows that both epidemics indicators have a statistically significant positive effect on income inequality, while income inequality does not have a statistically significant effect on the epidemics and pandemics indicators. |
| Keywords: | Epidemics; income inequality |
| JEL: | I14 D31 |
| Date: | 2020–12 |
| URL: | http://d.repec.org/n?u=RePEc:yor:hectdg:20/22&r=all |
| By: | Jesus R Gonzalez-Garcia; Yuanchen Yang |
| Abstract: | This paper examines the effect of international trade on corporate market power in emerging market economies and developing countries, with a special focus on sub-Saharan Africa. The analysis is based on a large firm-level dataset, tariff data by sector and agreggate indicators of international trade for the period 2000-17. Greater trade liberalization and trade integration are associated with significant declines in market power, with the effect being more pronounced for firms in the manufacturing and ICT sectors, private sector firms, and firms with higher initial markups. Firms in sub-Saharan Africa tend to experience signficantly lower markups after allowing greater trade integration. The effects of trade liberalization on market power materializes over time, and there are significant complementarities between trade reforms and real sector reforms. |
| Keywords: | Trade liberalization;Tariffs;Trade barriers;Structural reforms;Imports;WP,market power,import penetration |
| Date: | 2020–07–17 |
| URL: | http://d.repec.org/n?u=RePEc:imf:imfwpa:2020/131&r=all |
| By: | Radu Vranceanu (ESSEC Business School - Essec Business School, THEMA - Théorie économique, modélisation et applications - CNRS - Centre National de la Recherche Scientifique - CY - CY Cergy Paris Université); Angela Sutan (UBFC - Université Bourgogne Franche-Comté [COMUE]) |
| Abstract: | Upskilling is an investment in human capital that allows a worker to successfully undertake a new task or new project within his/her existing job. It involves costly effort on behalf of the employee to acquire new skills and new knowledge. In this context, one essential question for managers is whether to invest in workers' upskilling or let them pay for the investment in human capital and compensate them accordingly. Using traditional contract theory analysis, we show that the latter choice is not cost-neutral since the most flexible workers benefit of an informational rent. A profit comparison shows that it might be in the interest of a company to invest in worker upskilling, rather than to rely on worker self-training |
| Keywords: | Contract theory,Upskilling,Screening,Training policy |
| Date: | 2020–10–01 |
| URL: | http://d.repec.org/n?u=RePEc:hal:wpaper:hal-02977891&r=all |
| By: | Claussen, Jörg; Kretschmer, Tobias; Khashabi, Pooyan; Seifried, Mareike |
| Abstract: | Despite some advantages over traditional (offline) labor markets - such as lower search costs, better matching and improved monitoring - online labor markets (OLMs) have not taken off as initially expected. In this paper, we study the factors that limit perceived project success on OLMs. Using psychological contract theory, we theorize how common OLM features including contracts with virtual monitoring, multi-freelancer projects, and simultaneous projects by a client trigger the perception of psychological contract breach among OLM participants and reduce perceived project success for both participants. We test these hypotheses using an extensive dataset with more than 143,000 transactions on the world's largest freelancing platform, Upwork, and find that - contrary to predictions from agency theory - projects equipped with strict freelancer monitoring (hourly-pay contracts) and projects enabling peer comparison (multi-freelancer projects or multiple simultaneous projects), lead to lower perceived project success both from the freelancer's and the client's perspective. Our work implies that transactions on online labor markets should not be viewed solely as agency relations, and that some features that supposedly reduce agency costs and improve efficiency on OLMs come at the cost of triggering the perception of psychological contract breach. |
| Keywords: | Online labor markets,gig economy,outsourcing,psychological contract theory,platforms,knowledge work |
| JEL: | L14 L24 J44 |
| Date: | 2020 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:zewdip:20078&r=all |
| By: | Andriansyah, Andriansyah; Nurwanda, Asep; Rifai, Bakhtiar |
| Abstract: | This paper investigates the relationship between structural change and regional economic growth in Indonesia. We utilize several measures of structural change, i.e. structural change index, norm absolute value index, shift-share method, and effective structural change index, for 30 provinces over the period 2005-2018. We show that the structural change has occurred across provinces, even though it is slowing, towards an agricultural-services transition. By employing dynamic panel data models, this study shows that structural change is a significant determinant of growth. However, structural change matters for growth only if there is an increase in productivity, not only a movement of labor across sectors. An improvement in productivity within sectors and a movement of labors to other sectors with better productivity lead to a better economic development. |
| Keywords: | Structural Change; Regional Growth; Indonesia; Productivity |
| JEL: | L16 O40 R11 |
| Date: | 2020–08–07 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:105177&r=all |
| By: | Aidan Coville; Victor Orozco; Arndt Reichert |
| Keywords: | Energy - Electric Power Energy - Renewable Energy Energy - Rural Energy Rural Development - Rural and Renewable Energy |
| Date: | 2019–05 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wboper:34339&r=all |
| By: | Costas Meghir (Cowles Foundation, Yale University, NBER, IZA, CEPR, and Institute for Fiscal Studies); Ahmed Mushfiq Mobarak (Cowles Foundation, Yale University); Ahmed Corina Mommaerts (University of Wisconsin – Madison); Ahmed Melanie Morten (Stanford University and NBER) |
| Abstract: | We document that an experimental intervention offering transport subsidies for poor rural households to migrate seasonally in Bangladesh improved risk sharing. A theoretical model of endogenous migration and risk sharing shows that the effect of subsidizing migration depends on the underlying economic environment. If migration is risky, a temporary subsidy can induce an improvement in risk sharing and enable profitable migration. We estimate the model and find that the migration experiment increased welfare by 12.9%. Counterfactual analysis suggests that a permanent, rather than temporary, decline in migration costs in the same environment would result in a reduction in risk sharing. |
| Keywords: | Informal Insurance, Migration, Bangladesh, RCT |
| JEL: | D12 D91 D52 O12 R23 |
| Date: | 2019–07 |
| URL: | http://d.repec.org/n?u=RePEc:cwl:cwldpp:2185r2&r=all |
| By: | Deodhar, Satish Y. |
| Abstract: | Concern for farmers and market facilitation by the state is as old as Indian civilization. In the post-Independence era, this concern was addressed by provision of market-yards for the farmers through APMC Acts of the state governments; and, by announcements of minimum support prices (MSP) for quite a few crops by the central government. Over time, however, these initiatives had their unintended consequences. APMC markets turned into monopsonies and central government has never committed itself to buying all produce at MSP from Indian farmers, except perhaps from a few states such as Punjab and Haryana. Contract farming was successful in a few states and for a few products; however, it never reached any threshold in most states. In this context, I discuss the institutional structure of the Indian farm markets and a few policy initiatives from the past. Thereafter, I present the main features of the new farm acts introduced in 2020 and emphasize the importance of their implementation. |
| Date: | 2021–01–21 |
| URL: | http://d.repec.org/n?u=RePEc:iim:iimawp:14646&r=all |
| By: | Herrade Igersheim (BETA - Bureau d'Économie Théorique et Appliquée - UL - Université de Lorraine - UNISTRA - Université de Strasbourg - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement) |
| Abstract: | The death of welfare economics has been declared several times. One of the reasons cited for these plural obituaries is that Kenneth Arrow's impossibility theorem, as set out in his path-breaking Social Choice and Individual Values in 1951, has shown that the social welfare function-one of the main concepts of the new welfare economics as defined by Abram Bergson (Burk) in 1938 and clarified by Paul Samuelson in the Foundations of Economic Analysis (1947, ch. VIII)-does not exist under reasonable conditions. Indeed, from the very start, Arrow kept asserting that his famous impossibility result has direct and devastating consequences for the Bergson-Samuelson social welfare function (1948, 1950, 1951a, 1963), though he seemed to soften his position in the early eighties. On his side, especially from the seventies on, Samuelson remained active on this issue and continued to defend the concept he had devised with Bergson, tooth and nail, against Arrow' |
| Keywords: | welfare economics JEL Codes. B21,social choice theory,Samuelson,Arrow,Social welfare function |
| Date: | 2019–10–01 |
| URL: | http://d.repec.org/n?u=RePEc:hal:journl:hal-03095907&r=all |
| By: | Daniel Haim |
| Abstract: | The job guarantee is a viable policy option for tackling both unemployment and underemployment. Hyman P. Minsky was one of the seminal writers on this subject. The first part of this working paper provides a survey of Minsky's writings to identify what kind of jobs he had in mind when recommending employer-of-last-resort policies. Minsky favored: (1) jobs increasing socially useful output, providing all of society better public services and goods; (2) jobs guaranteed by the public sector on a project-by-project basis at a minimum wage; (3) jobs in the places where people need them; and (4) jobs taking the people that need them as they are. The second part of the paper suggests policy recommendations for today's economy. As long as the COVID-19 pandemic still rages on, a targeted public job guarantee program can assist in the social provisioning and distribution of food, shelter, and medical services. After the pandemic, a public job guarantee can reduce poverty and inequality, and bring about a more democratic, sustainable, and socially cohesive economic system. |
| Keywords: | Job Guarantee; Public Service Employment; Employer of Last Resort (ELR); Unemployment; Full Employment; Minsky; Policy Design; COVID-19 |
| JEL: | B31 E24 E61 H41 H53 I38 J21 J45 J68 |
| Date: | 2021–01 |
| URL: | http://d.repec.org/n?u=RePEc:lev:wrkpap:wp_981&r=all |
| By: | Ruda Zhang; Roger Ghanem |
| Abstract: | We consider a variant of Cournot competition, where multiple firms allocate the same amount of resource across multiple markets. We prove that the game has a unique pure-strategy Nash equilibrium (NE), which is symmetric and is characterized by the maximal point of a "potential function". The NE is globally asymptotically stable under the gradient adjustment process, and is not socially optimal in general. An application is in transportation, where drivers allocate time over a street network. |
| Date: | 2020–12 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:2012.06742&r=all |
| By: | Kodjo Adandohoin (CERDI - Centre d'Études et de Recherches sur le Développement International - Clermont Auvergne - UCA - Université Clermont Auvergne - CNRS - Centre National de la Recherche Scientifique); Jean-Francois Brun (CERDI - Centre d'Études et de Recherches sur le Développement International - Clermont Auvergne - UCA - Université Clermont Auvergne - CNRS - Centre National de la Recherche Scientifique) |
| Abstract: | This paper investigates second wave tax transition (transfer of tax pressure from border taxation towards domestic taxation) concerns in developing countries. It essentially focuses on the compensation effects of incomes and property taxes over international trade tax revenue losses in developing countries. Using a generalized method of moment estimator, we come to the evidence that, incomes and property taxes are poor instruments to balance trade tax revenue losses of trade liberalization in these countries. However, a mediating effect of financial development in the compensation nexus driven by corporate income taxes was found. We explain this result by the fact that the use of financial sector generates paper trails to government in order to enforce and raise corporate income taxes. Financial development may progressively crowd‐out informal sector and leads to business formalization. Surprising, we do not find any mediating effect of financial development in the compensation patterns with personal income taxes. Nevertheless, some heterogeneities were discovered. Financial development mediates the compensation patterns of personal income taxes in Latin American countries, while the effect holds on corporate income taxes in African countries. We conclude the paper by highlighting the important role of financial development in second generation tax transition concerns over developing countries. |
| Keywords: | Income taxes,Property tax,Developing countries |
| Date: | 2020–12 |
| URL: | http://d.repec.org/n?u=RePEc:hal:wpaper:hal-03053683&r=all |
| By: | Robin Koepke; Simon Paetzold |
| Abstract: | This paper provides an analytical overview of the most widely used capital flow datasets. The paper is written as a guide for academics who embark on empirical research projects and for policymakers who need timely information on capital flow developments to inform their decisions. We address common misconceptions about capital flow data and discuss differences between high-frequency proxies for portfolio flows. In a nowcasting “horse race” we show that high-frequency proxies have significant predictive content for portfolio flows from the balance of payments (BoP). We also construct a new dataset for academic use, consisting of monthly portfolio flows broadly consistent with BoP data. |
| Keywords: | Capital flows;Stocks;Balance of payments statistics;Flow of funds;Emerging and frontier financial markets;WP,flow data,portfolio flow,debt flow,flow proxy,IMF balance of payments statistic |
| Date: | 2020–08–21 |
| URL: | http://d.repec.org/n?u=RePEc:imf:imfwpa:2020/171&r=all |
| By: | Paweł Sakowski (Quantitative Finance Research Group, Department of Quantitative Finance, Faculty of Economic Sciences, University of Warsaw); Daria Turovtseva |
| Abstract: | The aim of the paper is to check if cryptocurrency Bitcoin – a new investable asset class representative – is able to improve the performance of an optimal portfolio. Using two Markowitz criteria of optimization – expected return maximization and expected shortfall (CVaR) minimization – we test the investment opportunities after adding Bitcoin to the portfolio of 10 traditional assets (among them equity, fixed income, money, commodities and money market indices). Using daily observations from 1.05.2013 till 24.05.2019, we examine the behavior of the portfolios without and with Bitcoin and check if the return-risk ratio improves for the latter. Discussing the results, we conduct the sensitivity analysis by changing the lookback window (LB) and rebalancing frequency (RB) parameters. Empirical analysis suggests that Bitcoin-inclusive portfolios provide an investor with wider diversification opportunities. Robustness check confirms the findings and also advocates for the cryptocurrency to be added to the portfolio. |
| Keywords: | Portfolio optimization, portfolio theory, cryptocurrency, Bitcoin, Markowitz model, asset allocation, portfolio diversification, investment opportunities |
| JEL: | C20 C22 C61 C80 G14 G17 |
| Date: | 2020 |
| URL: | http://d.repec.org/n?u=RePEc:war:wpaper:2020-42&r=all |
| By: | Mohajan, Haradhan |
| Abstract: | Research is the framework used for the planning, implementation, and analysis of a study. The proper choice of a suitable research methodology can provide an effective and successful original research. A researcher can reach his/her expected goal by following any kind of research methodology. Quantitative research methodology is preferred by many researchers. This article presents and analyzes the design of quantitative research. It also discusses the proper use and the components of quantitative research methodology. It is used to quantify attitudes, opinions, behaviors, and other defined variables and generalize results from a larger sample population by the way of generating numerical data. The purpose of this study is to provide some important fundamental concepts of quantitative research to the common readers for the development of their future projects, articles and/or theses. An attempt has been taken here to study the aspects of the quantitative research methodology in some detail. |
| Keywords: | Research methodology, quantitative research, numerical analysis, ethics |
| JEL: | B4 C00 |
| Date: | 2020–10–10 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:105149&r=all |
| By: | Tobias Adrian; Francis Vitek |
| Abstract: | We augment a linearized dynamic stochastic general equilibrium (DSGE) model with a tractable endogenous risk mechanism, to support the joint analysis of monetary and macroprudential policy. This state dependent conditional heteroskedasticity mechanism specifies the conditional variances of structural shocks as functions of the business or financial cycle. The resultant heteroskedastic linearized DSGE model preserves the satisfactory simulation and forecasting performance of its nested homoskedastic counterpart for the conditional means of endogenous variables, while substantially improving its goodness of fit to their conditional distributions. In particular, the model matches the key stylized facts of growth at risk. Accounting for state dependent conditional heteroskedasticity makes it optimal for monetary policy to respond more aggressively to the business cycle, and for macroprudential policy to manage the resilience of the banking sector more actively over the financial cycle. |
| Keywords: | Mortgages;Production growth;Macroprudential policy;Short term interest rates;Banking;WP,math display |
| Date: | 2020–08–07 |
| URL: | http://d.repec.org/n?u=RePEc:imf:imfwpa:2020/151&r=all |
| By: | Paolo Falbo; Giorgio Ferrari; Giorgio Rizzini; Maren Diane Schmeck |
| Abstract: | In this paper we propose and solve a real options model for the optimal adoption of an electric vehicle. A policymaker promotes the abeyance of fossil-fueled vehicles through an incentive, and the representative fossil-fueled vehicle's owner decides the time at which buying an electric vehicle, while minimizing a certain expected cost. This involves a combination of various types of costs: the stochastic opportunity cost of driving one unit distance with a traditional fossil-fueled vehicle instead of an electric one, the cost associated to traffic bans, and the net purchase cost. After determining the optimal switching time and the minimal cost function for a general diffusive opportunity cost, we specialize to the case of a mean-reverting process. In such a setting, we provide a model calibration on real data from Italy, and we study the dependency of the optimal switching time with respect to the model's parameters. Moreover, we study the effect of traffic bans and incentive on the expected optimal switching time. We observe that incentive and traffic bans on fossil-fueled transport can be used as effective tools in the hand of the policymaker to encourage the adoption of electric vehicles, and hence to reduce air pollution. |
| Date: | 2020–12 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:2012.09493&r=all |
| By: | Nikolov, Plamen |
| Abstract: | This guide overviews several important rules for writing economics research papers. It focuses on three important pillars of economics writing: research, organization, and analysis. Economic research entails the use of state-of-the-art methods and data from any of a number of standard statistical sources or surveys. Organization entails organizing ideas coherently and persuasively, outlining the paper, and professional formatting. The final part focuses on the importance of analysis for economics writing: statistical or econometric analysis takes data and reports useful numerical summaries used to shed light on empirical relationships between important economic variables, test various economic models, or make predictions for the future. |
| Keywords: | Writing, Economics, Research Papers, Tips, Manuscripts |
| JEL: | A2 A20 A29 D0 H0 I0 J0 O1 O10 Y2 |
| Date: | 2020–07–31 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:105088&r=all |
| By: | Miglo, Anton |
| Abstract: | This article presents a new capital structure model based on four factors well documented in literature: asymmetric information, taxes, bankruptcy costs and decision-makers' overconfidence. The model can simultaneously explain several facts about capital structure including those that remain puzzling from existing theories point of view eg. negative correlation between debt and profitability; why firms issue equity etc. Unlike many advanced research on capital structure, a closed-form solution is obtained for most results. |
| Keywords: | capital structure; asymmetric information; overconfidence; debt tax shield; bankruptcy costs |
| JEL: | D81 D82 D84 D86 G32 |
| Date: | 2021–01–03 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:105102&r=all |
| By: | Monica Billio (Department of Economics, University Of Venice Cà Foscari); Roberto Casarin (Department of Economics, University Of Venice Cà Foscari); Enrica De Cian (Centro Euro-Mediterraneo sui Cambiamenti Climatici (CMCC), Venice, Italy); Malcolm Mistry (Centro Euro-Mediterraneo sui Cambiamenti Climatici (CMCC), Venice, Italy); Anthony Osuntuyi (Department of Mathematics, Obafemi Awolowo University Nigeria) |
| Abstract: | This paper examines the impact of climate shocks on 13 European economies analysing jointly business and financial cycles, in different phases and disentangling the effects for different sector channels. A Bayesian Panel Markov-switching framework is proposed to jointly estimate the impact of extreme weather events on the economies as well as the interaction between business and financial cycles. Results from the empirical analysis suggest that extreme weather events impact asymmetrically across the different phases of the economy and heterogeneously across the EU countries. Moreover, we highlight how the manufacturing output, a component of the industrial production index, constitutes the main channel through which climate shocks impact the EU economies. |
| Keywords: | Bayesian inference, climate shocks, financial cycle, business cycle, Markov-switching, Multi-country Panel |
| JEL: | C11 C15 C33 C53 E37 |
| Date: | 2021 |
| URL: | http://d.repec.org/n?u=RePEc:ven:wpaper:2021:03&r=all |
| By: | Alexandre Georgieff; Anna Milanez |
| Abstract: | This study looks at what happened to jobs at risk of automation over the past decade and across 21 countries. There is no support for net job destruction at the broad country level. All countries experienced employment growth over the past decade and countries that faced higher automation risk back in 2012 experienced higher employment growth over the subsequent period. At the occupational level, however, employment growth has been much lower in jobs at high risk of automation (6%) than in jobs at low risk (18%).Low-educated workers were more concentrated in high-risk occupations in 2012 and have become even more concentrated in these occupations since then. In spite of this, the low growth in jobs in high-risk occupations has not led to a drop in the employment rate of low-educated workers relative to that of other education groups. This is largely because the number of low-educated workers has fallen in line with the demand for these workers.Going forward, however, the risk of automation is increasingly falling on low-educated workers and the COVID-19 crisis may have accelerated automation, as companies reduce reliance on human labour and contact between workers, or re-shore some production. |
| Keywords: | automation, job stability |
| JEL: | E32 J22 J23 |
| Date: | 2021–01–25 |
| URL: | http://d.repec.org/n?u=RePEc:oec:elsaab:255-en&r=all |
| By: | Hyun Woong Park (Department of Economics, Denison University) |
| Abstract: | In this paper, I develop a Marxian model of market for money capital populated by capitalists equipped with equal money capital endowment but with heterogeneous linear production technology. Due to a maximization of return on equity, capitalists with relatively weak technology, yielding profit rate lower than interest rate, become a money capitalist (lender) and capitalists with relatively strong technology, yielding profit rate greater than interest rate, become an industrial capitalist (borrower). The equilibrium interest rate is derived by the associated demand and supply relation. In this context, Marx’s notion of the role of credit system in an expanded reproduction of capital is understood in terms of an efficient reallocation of funds through credit market. From this setup of the model follow two essential relationships Marx establishes between the average profit rate and the interest rate: (i) that the profit (rate) sets a maximum limit of interest (rate), and (ii) that the two rates are correlated. Lastly, depending on the financial sector’s leverage ratio, which is supported by its intermediation technology, the financial sector may be more or less profitable than the industrial sector. This result suggests that one aspect of the industrial-banking capitalists antagonism surrounding the division of profit into interest and profit of enterprise lies in the banking capitalists’ strenuous efforts towards continuous innovations in financial intermediation technology. |
| Keywords: | Money capital, interest-bearing capital, loanable capital, credit, interest rate |
| JEL: | B51 |
| Date: | 2020 |
| URL: | http://d.repec.org/n?u=RePEc:ums:papers:2020-02&r=all |
| By: | Le Trung Hieu |
| Abstract: | Stock portfolio optimization is the process of constant re-distribution of money to a pool of various stocks. In this paper, we will formulate the problem such that we can apply Reinforcement Learning for the task properly. To maintain a realistic assumption about the market, we will incorporate transaction cost and risk factor into the state as well. On top of that, we will apply various state-of-the-art Deep Reinforcement Learning algorithms for comparison. Since the action space is continuous, the realistic formulation were tested under a family of state-of-the-art continuous policy gradients algorithms: Deep Deterministic Policy Gradient (DDPG), Generalized Deterministic Policy Gradient (GDPG) and Proximal Policy Optimization (PPO), where the former two perform much better than the last one. Next, we will present the end-to-end solution for the task with Minimum Variance Portfolio Theory for stock subset selection, and Wavelet Transform for extracting multi-frequency data pattern. Observations and hypothesis were discussed about the results, as well as possible future research directions.1 |
| Date: | 2020–12 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:2012.06325&r=all |
| By: | Martín Gonzalez-Eiras; Dirk Niepelt |
| Abstract: | We propose a flexible model of infectious dynamics with a single endogenous state variable and economic choices. We characterize equilibrium, optimal outcomes, static and dynamic externalities, and prove the following: (i) A lockdown generically is followed by policies to stimulate activity. (ii) Re-infection risk lowers the activity level chosen by the government early on and, for small static externalities, implies too cautious equilibrium steady-state activity. (iii) When a cure arrives deterministically, optimal policy is dis-continuous, featuring a light/strict lockdown when the arrival date exceeds/falls short of a specific value. Calibrated to the ongoing COVID-19 pandemic the baseline model and a battery of robustness checks and extensions imply (iv) lockdowns for 3-4 months, with activity reductions by 25-40 percent, and (v) substantial welfare gains from optimal policy unless the government lacks instruments to stimulate activity after a lockdown. |
| Keywords: | epidemic, lockdown, forced opening, SIR model, SIS model, SI model, logistic model, Covid-19 |
| JEL: | I18 |
| Date: | 2020 |
| URL: | http://d.repec.org/n?u=RePEc:ces:ceswps:_8770&r=all |
| By: | Nicholas Bloom; Steven J. Davis; Lucia Foster; Brian Lucking; Scott Ohlmacher; Itay Saporta-Eksten |
| Abstract: | The Census Bureau’s 2015 Management and Organizational Practices Survey (MOPS) utilized innovative methodology to collect five-point forecast distributions over own future shipments, employment, and capital and materials expenditures for 35,000 U.S. manufacturing plants. First and second moments of these plant-level forecast distributions covary strongly with first and second moments, respectively, of historical outcomes. The first moment of the distribution provides a measure of business’ expectations for future outcomes, while the second moment provides a measure of business’ subjective uncertainty over those outcomes. This subjective uncertainty measure correlates positively with financial risk measures. Drawing on the Annual Survey of Manufactures and the Census of Manufactures for the corresponding realizations, we find that subjective expectations are highly predictive of actual outcomes and, in fact, more predictive than statistical models fit to historical data. When respondents express greater subjective uncertainty about future outcomes at their plants, their forecasts are less accurate. However, managers supply overly precise forecast distributions in that implied confidence intervals for sales growth rates are much narrower than the distribution of actual outcomes. Finally, we develop evidence that greater use of predictive computing and structured management practices at the plant and a more decentralized decision-making process (across plants in the same firm) are associated with better forecast accuracy. |
| Keywords: | Subjective forecast distributions, business-level uncertainty, forecast quality |
| JEL: | L2 M2 O32 O33 |
| Date: | 2020–12 |
| URL: | http://d.repec.org/n?u=RePEc:cen:wpaper:20-41&r=all |
| By: | Ruiqiang Song; Min Shu; Wei Zhu |
| Abstract: | Starting on February 20, 2020, the global stock markets began to suffer the worst decline since the Great Recession in 2008, and the COVID-19 has been widely blamed on the stock market crashes. In this study, we applied the log-periodic power law singularity (LPPLS) methodology based on multilevel time series to unravel the underlying mechanisms of the 2020 global stock market crash by analyzing the trajectories of 10 major stock market indexes from both developed and emergent stock markets, including the S&P 500, DJIA, NASDAQ, FTSE, DAX, NIKKEI, CSI 300, HSI, BSESN, and BOVESPA. In order to effectively distinguish between endogenous crash and exogenous crash, we proposed using the LPPLS confidence indicator as a classification proxy. The results show that the apparent LPPLS bubble patterns of the super-exponential increase, corrected by the accelerating logarithm-periodic oscillations, have indeed presented in the price trajectories of the seven indexes: S&P 500, DJIA, NASDAQ, DAX, CSI 300, BSESN, and BOVESPA, indicating that the large positive bubbles have formed endogenously prior to the 2020 stock market crash, and the subsequent crashes for the seven indexes are endogenous, stemming from the increasingly systemic instability of the stock markets, while the well-known external shocks such as the COVID-19 pandemic etc. only acted as sparks during the 2020 global stock market crash. In contrast, the obvious signatures of the LPPLS model have not been observed in the price trajectories of the three remaining indexes: FTSE, NIKKEI, and HSI, signifying that the crashes in these three indexes are exogenous, stemming from external shocks. The novel classification method of crash types proposed in this study can also be used to analyze regime changes of any price trajectories in global financial markets. |
| Date: | 2021–01 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:2101.00327&r=all |