|
on Financial Development and Growth |
| By: | Karen Davtyan (Faculty of Economics, University of Barcelona) |
| Abstract: | The interrelation among economic growth, income inequality, and fiscal performance is very complex. The paper provides the analysis of the interrelations among these variables jointly by the structural VAR methodology, examining also transmission channels among them. This approach allows exploring dynamic interactions among them and feedback effects on each other. The empirical analysis is implemented for the Anglo-Saxon countries, the UK, the USA, and Canada. We find that income inequality has negative effect on economic growth in the case of the UK. The effect is positive in the cases of the USA and Canada. The increase in income inequality worsens fiscal performance for all the countries. |
| Keywords: | economic growth, income inequality, fiscal performance, VAR JEL classification: C32, D31, E62, O47 |
| Date: | 2014–02 |
| URL: | http://d.repec.org/n?u=RePEc:ira:wpaper:201405&r=fdg |
| By: | Mohamed Arouri; Gazi Salah Uddin; Phouphet Kyophilavong; Frédéric Teulon; Aviral Kumar Tiwari |
| Abstract: | This paper contributes to literature by investigating the relationship between energy utilization and output per capita in France using asymmetric causality test over the period 1960-2011. Our approach is based on bootstrap simulation method combined with leveraged corrections that provide accurate critical values. We show that energy utilization explains output per capita over the long-run, but that the relationship between the two variables is rather asymmetric. |
| Keywords: | Energy Utilization, Income, Asymmetric Causality Test, France |
| Date: | 2014–02–25 |
| URL: | http://d.repec.org/n?u=RePEc:ipg:wpaper:2014-102&r=fdg |
| By: | Huang, Haifang (University of Alberta, Department of Economics); Humphreys, Brad (West Virginia University); Zhou, Li (University of Alberta, Department of Economics) |
| Abstract: | Access to legal gambling has expanded in Canada. Casinos can generate both positive and negative local impacts. We analyze the effect of new urban Canadian casinos on nearby neighborhoods in terms of population growth and composition, and housing market outcomes based on more than 40 urban casinos opened in Canada between 1986 and 2007. We define neighborhoods based on spatial proximity, and analyze impacts on changes in census tract profiles. We find no evidence that casino openings affect population growth or population composition by age, gender and martial status, or home ownership rates, and evidence that casino openings reduced unemployment in surrounding areas, and are correlated with faster growth in household income. We also find evidence of negative effects on changes in housing values and rents despite the faster income growth. The findings suggest a double-edged nature to casino openings: positive for employment and income growth but negative for residential amenities. |
| Keywords: | casino; economic impact; amenities; employment |
| JEL: | L83 R23 R31 |
| Date: | 2014–02–01 |
| URL: | http://d.repec.org/n?u=RePEc:ris:albaec:2014_002&r=fdg |
| By: | Cialani, Catia (Department of Economics, Umeå School of Business and Economics) |
| Abstract: | This thesis consists of a summary and four self-contained papers. Paper [I] Following the 1987 report by The World Commission on Environment and Development, the genuine saving has come to play a key role in the context of sustainable development, and the World Bank regularly publishes numbers for genuine saving on a national basis. However, these numbers are typically calculated as if the tax system is non-distortionary. This paper presents an analogue to genuine saving in a second best economy, where the government raises revenue by means of distortionary taxation. We show how the social cost of public debt, which depends on the marginal excess burden, ought to be reflected in the genuine saving. We also illustrate by presenting calculations for Greece, Japan, Portugal, U.K., U.S. and OECD average, showing that the numbers published by the World Bank are likely to be biased and may even give incorrect information as to whether the economy is locally sustainable. Paper [II] This paper examines the relationships among per capita CO2 emissions, per capita GDP and international trade based on panel data spanning the period 1960-2008 for 150 countries. A distinction is also made between OECD and Non-OECD countries to capture the differences of this relationship between developed and developing economies. We apply panel unit root and cointegration tests, and estimate a panel error correction model. The results from the error correction model suggest that there are long-term relationships between the variables for the whole sample and for Non-OECD countries. Finally, Granger causality tests show that there is bidirectional short-term causality between per capita GDP and international trade for the whole sample and between per capita GDP and CO2 emissions for OECD countries. Paper [III] Fundamental questions in economics are why some regions are richer than others, why their growth rates differ, whether their growth rates tend to converge, and what key factors contribute to explain economic growth. This paper deals with the average income growth, net migration, and changes in unemployment rates at the municipal level in Sweden. The aim is to explore in depth the effects of possible underlying determinants with a particular focus on local policy variables. The analysis is based on a three-equation model. Our results show, among other things, that increases in the local public expenditure and income taxe rate have negative effects on subsequent income income growth. In addition, the results show conditional convergence, i.e. that the average income among the municipal residents tends to grow more rapidly in relatively poor local jurisdictions than in initially “richer” jurisdictions, conditional on the other explanatory variables. Paper [IV] This paper explores the relationship between income growth and income inequality using data at the municipal level in Sweden for the period 1992-2007. We estimate a fixed effects panel data growth model, where the within-municipality income inequality is one of the explanatory variables. Different inequality measures (Gini coefficient, top income shares, and measures of inequality in the lower and upper part of the income distribution) are examined. We find a positive and significant relationship between income growth and income inequality measured as the Gini coefficient and top income shares, respectively. In addition, while inequality in the upper part of the income distribution is positively associated with the income growth rate, inequality in the lower part of the income distribution seems to be negatively related to the income growth. Our findings also suggest that increased income inequality enhances growth more in municipalities with a high level of average income than in municipalities with a low level of average income. |
| Keywords: | Genuine saving; welfare change; taxation; per capita GDP; per capita CO2; international trade; net migration; unemployment; growth; inequality |
| JEL: | C33 D31 D60 D63 E24 H21 I31 O47 Q28 Q48 Q56 R11 R23 |
| Date: | 2014–02–26 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:umnees:0875&r=fdg |
| By: | Mohamed Arouri; Yahya Rashid; Muhammad Shahbaz; Frédéric Teulon |
| Abstract: | This paper contributes to the literature by determining macroeconomic drivers of brain drain in case of Pakistan over the period of 1972-2012 using the ARDL bounds testing approach. Our findings show that economic growth and financial development have negative impact on brain drain. However, inflation, unemployment and trade openness aggravate brain drain. This study highlights macroeconomic insights for policy makers to control brain drain problem in Pakistan. |
| Date: | 2014–02–25 |
| URL: | http://d.repec.org/n?u=RePEc:ipg:wpaper:2014-113&r=fdg |
| By: | Kirill Borissov; Joseph Hanna (Laboratoire IDP, Universite de Valenciennes et du Hainaut-Cambresis); Stephane Lambrecht |
| Abstract: | We study a parametric politico-economic model of economic growth with productive public goods and public consumption goods. The provision of public goods is funded by a proportional tax on consumers' income. Agents are heterogeneous in their initial capital endowments, discount factors and the relative weights of public consumption in overall private utility. They vote on the shares of public goods in GDP. We propose a definition of voting equilibrium, prove the existence and provide a characterization of voting equilibria, and obtain a closed-form solution for the voting outcomes. |
| Keywords: | : intertemporal choice, growth, public goods, voting |
| JEL: | D91 O41 H41 D72 |
| Date: | 2014–02–23 |
| URL: | http://d.repec.org/n?u=RePEc:eus:wpaper:ec0114&r=fdg |
| By: | Neil Lee; Paul Sissons; Ceri Hughes; Anne Green; Gaby Atfield; Duncan Adam; Andrés Rodríguez-Pose |
| Abstract: | Cities are drivers of economic growth, but how does growth affect poverty? This report explores the connection between growth and poverty in UK cities, and examines how strategies for economic growth and poverty reduction can be aligned. The report finds that: - There is no guarantee that economic growth will reduce poverty – in some economically expanding cities poverty has stayed the same or increased; - Employment growth has the greatest impact on poverty, but if jobs are low-paid or go to workers living outside the area, the impact is minimal; - Increased output risks worsening poverty because it can lead to increases in the cost of living; - Some cities are tackling this by promoting employment in expanding sectors or providing training for disadvantaged groups so they can access opportunities associated with major infrastructure projects. |
| JEL: | N0 R14 J01 |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:ehl:lserod:55799&r=fdg |
| By: | Hein, Eckhard; Dodig, Nina |
| Abstract: | In this paper we review the empirical and theoretical literature on the effects of changes in the relationship between the financial sector and the non-financial sectors of the economy associated with 'financialisation' on distribution, growth, instability and crises. We take a macroeconomic perspective and examine four channels of transmission of financialisation to the macroeconomy: first, the effect on income distribution, second, the effects on investment in capital stock, third, the effects on household debt and consumption, and fourth, the effects on net exports and current account balances. For each of these channels we briefly review some empirical and econometric literature supporting the presumed channels, some theoretical and modelling literature examining the macroeconomic effects via these channels, and finally, we present small models generating the most important macroeconomic effects. We show that, against the background of redistribution of income at the expense of the labour income share and depressed investment in capital stock, each a major feature of financialisation, short- to medium-run dynamic 'profits without investment' regimes may emerge, which can be driven by flourishing consumption demand or by rising export surpluses, compensating for low or falling investment in capital stock. However, each type of these regimes, the 'debt-led consumption boom' type and the 'export-led mercantilist' type, contains internal contradictions, with respect to household debt in the first regime and with respect to foreign debt of the counterpart current account deficit countries in the second regime, which finally undermine the sustainability of these regimes and lead to financial and economic crises. -- |
| Keywords: | financialisation,distribution,growth,instability,financial and economic crisis,Kaleckian models,current account imbalances |
| JEL: | E12 E22 E24 E44 F41 G01 |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:ipewps:352014&r=fdg |