nep-fdg New Economics Papers
on Financial Development and Growth
Issue of 2012‒02‒08
seven papers chosen by
Iulia Igescu
Global Insight, GmbH

  1. The Effect of Entrepreneurship on Economic Growth in Alabama By Starks, Danyelle
  2. Fossil fuel consumption and economic growth: causality relationship in the world By Hazuki Ishida
  3. Endogenous Growth and Fluctuations in an Overlapping Generations Economy with Credit Market Imperfections By Kunieda, Takuma; Shibata, Akihisa
  4. Financial reform after the crisis: an early assessment By Nicolas Véron
  5. Causative factors for changes in total factor productivity of Japanese agriculture under the era of climatic uncertainty By Kunimitsu, Yoji
  6. Continuous time regime switching model applied to foreign exchange rate. By Stéphane Goutte; Benteng Zou
  7. Effects of Trade Openness on Economic Growth: The Case of African Countries By Yeboah, Osei; Naanwaab, Cephas; Saleem, Shaik; Akuffo, Akua

  1. By: Starks, Danyelle
    Keywords: Agribusiness,
    Date: 2012–01–15
  2. By: Hazuki Ishida
    Abstract: Fossil fuels are major sources of energy, and have several advantages over other primary energy sources. Without extensive dependence on fossil fuels, it is questionable whether our economic prosperity can continue or not. This paper analyzes cointegration and causality between fossil fuel consumption and economic growth in the world over the period 1971--2008. The estimation results indicate that fossil fuel consumption and GDP are cointegrated and there exists long-run unidirectional causality from fossil fuel consumption to GDP. This paper also investigates the nexus between nonfossil energy consumption and GDP, and shows that there is no causality between the variables. The conclusions are that reducing fossil fuel consumption may hamper economic growth, and that it is unlikely that nonfossil energy will substantially replace fossil fuels. This paper also examines causal linkages between the variables using a trivariate model, and obtains the same results as those from the bivariate model.
    Date: 2012–01
  3. By: Kunieda, Takuma; Shibata, Akihisa
    Abstract: We study the dynamic properties of growth rates in an overlapping generations economy with credit market imperfections. The analysis demonstrates that in early stages of financial development where credit constraints are severe, growth rates evolve monotonically. At the intermediate level of financial development, as the degree of credit market imperfections diminishes, growth rates exhibit endogenous fluctuations for some parameter values. However, as the financial sector matures, fluctuations disappear and the growth rates evolve once again monotonically.
    Keywords: Credit market imperfections; Endogenous business fluctuations; Endogenous growth; Heterogeneous agents
    JEL: O41
    Date: 2011–12
  4. By: Nicolas Véron
    Abstract: This paper takes stock of global efforts towards financial reform since the start of the financial crisis in 2007-08, and provides a synthetic (if simplified) picture of their status as of January 2012. Underlying dynamics are described and analysed both at the global level (particularly G-20, International Monetary Fund and the Financial Stability Board) and in individual jurisdictions, together with the impact the crisis has had on them. The possible next steps of financial reform are then reviewed along several dimensions including ongoing crisis management in Europe, the new emphasis on macroprudential approaches, the challenges posed by globally integrated financial firms, the implementation of harmonised global standards and the links between financial systems and growth. This text is forthcoming in: Barry Eichengreen and Bokyeong Park (eds) (2012), The global economy after the financial crisis, World Scientific Publishing. Financial support from the Korea Institute for International Economic Policy (KIEP) is gratefully acknowledged.
    Date: 2012–01
  5. By: Kunimitsu, Yoji
    Abstract: This study analyzed causative factors on TFP growth in Japanese agriculture. The regression analysis with consideration of correlation between factors demonstrated that without further deregulation for introducing new comers, enlarging farm management area and asset management for keeping public capital, agricultural TFP cannot be improved in the future.
    Keywords: fertility of farmland, human factor, scale economies, public capital stock, knowledge capital stock, technological progress, Total Factor Productivity, Agricultural and Food Policy, Production Economics, Productivity Analysis, Public Economics,
    Date: 2012–01–17
  6. By: Stéphane Goutte (LPMA - Laboratoire de Probabilités et Modèles Aléatoires - CNRS : UMR7599 - Université Paris VI - Pierre et Marie Curie - Université Paris VII - Paris Diderot); Benteng Zou (CREA - Center for Research in Economic Analysis - Université du Luxembourg)
    Abstract: Modified Cox-Ingersoll-Ross model is employed, combining with Hamilton (1989) type Markov regime switching framework, to study foreign exchange rates, where all parameter values depend on the value of a continuous time Markov chain. Basing on real data of some foreign exchange rates, the Expectation-Maximization algorithm is extended to this more general model and it is applied to calibrate all parameters. We compare the obtained results regarding to results obtained with non regime switching models and notice that our results match much better the reality than the others without Markov switching. Furthermore, we illustrate our model on various foreign exchange rate data and clarify some significant eco- nomic time periods in which financial or economic crisis appeared, thus, regime switching obtained.
    Keywords: Foreign exchange rate; Regime switching model; calibration; financial crisis
    Date: 2012–01–21
  7. By: Yeboah, Osei; Naanwaab, Cephas; Saleem, Shaik; Akuffo, Akua
    Abstract: The relationship between trade and productivity has not been established theoretically. Some researchers have indeed found some, if not complete, support for the view that increasing openness has a positive impact on productivity. This study used a Cobb-Douglas production function as in Miller and Upadhyay (2000) to estimate the impact of FDI, exchange rate, capital-labor ratio and trade openness on GDP for 38 African countries from 1980 to 2008. Data were transformed to natural logs and estimated using alternative panel models; which included one- or-two-way fixed or random effects models. The results found trade openness having a positive relationship with GDP; which is comparable to findings of Ahmed et al.; (2008).
    Keywords: Trade Openness, Productivity, Africa, Cobb Douglas Production Function., International Development, International Relations/Trade, Productivity Analysis,
    Date: 2012

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