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on Financial Development and Growth |
| By: | Atoumane Diagne (STAT AGENCY SARL); Lucien Sagbo |
| Abstract: | Dans les pays en développement, Les sources de financement extérieur de la croissance économique comprennent entre autres l'aide publique au développement (APD), les transferts de fonds des migrants (TFM) et les investissements directs étrangers (IDE). Les enjeux d'un financement suffisant de la croissance économique au Sénégal s'expliquent par l'impact important que peuvent jouer l'APD, les TFM et les IDE. Ce travail est une analyse comparée des effets directs et indirects de l'APD et des TFM sur la croissance économique au Sénégal. En utilisant la méthode par variables instrumentales pour régler le problème d'endogénéité, les résultats économétriques obtenus sont un impact positif significatif des TFM contrairement à l'APD. Suite à une hausse de 1 point de la part des TFM dans le PIB, le taux de croissance économique augmente de 2,78 points. Bien que non significatif, l'impact de l'APD sur la croissance économique est positif. Cependant, l'ouverture économique a un effet néfaste sur l'économie malgré le grand rôle des sources de financement extérieur de la croissance économique. Pour une comparaison des canaux de transmission de l'APD et des TFM sur la croissance économique, les estimations montrent que l'épargne privée n'est pas une voie où passent les effets de ces sources de financement sur la croissance. L'APD a un effet négatif sur la consommation et les investissements privés alors qu'elle fait augmenter les importations. Ainsi, elle est indirectement néfaste à la croissance économique. Les deux seuls canaux de transmission des TFM sur la croissance économique sont le développement financier et le développement humain. Comme recommandations de politique, il faudrait favoriser le développement financier et l'épargne privée pour qu'il y ait plus d'impact significatif sur la croissance économique. En outre, l'accompagnement des migrants dans leurs projets d'investissement ou l'utilisation des transferts dans la scolarisation de la population pourrait permettre d'avoir plus d'impact positif sur la croissance économique. Enfin, l'APD devrait primordialement être stabilisée à son niveau actuel car elle empêche l'essor de l'activité économique (baisse de la demande intérieure et hausse des importations). |
| Keywords: | croissance économique,aide publique,transferts de migrants,variables instrumentales,sources de développement |
| Date: | 2019–11 |
| URL: | http://d.repec.org/n?u=RePEc:hal:wpaper:hal-02385662&r=all |
| By: | Gilbert, Randolph; Padilla, Ramón; Villarreal, Francisco G. |
| Abstract: | En algunos países de ingreso medio y bajo, los flujos de las remesas superan con amplitud a los que corresponden, por ejemplo, a la inversión extranjera directa y la asistencia oficial para el desarrollo. Al cierre de 2017 la República Dominicana el flujo de remesas familiares alcanzó los 5.912 millones de dólares, cifra equivalente al 8,1% del PIB. Aunque la mayor parte de las remesas se orienta a satisfacer las necesidades básicas de los hogares receptores, hasta una tercera parte de estas se ahorra o se invierte, principalmente en educación y salud. No obstante, el uso de las remesas familiares para la inversión productiva y el emprendimiento es aún reducido. Algunos de los factores que limitan su inversión en actividades productivas son la fragmentación excesiva de los recursos disponibles, escasas capacidades empresariales, baja rentabilidad de las inversiones locales, desconfianza en la estabilidad macroeconómica, así como la limitada inclusión financiera de los hogares receptores de remesas, situación que se acentúa en el ámbito rural. El objetivo de este documento es presentar un conjunto de estrategias que fomenten un mayor uso productivo de las remesas familiares en la República Dominicana a través de una mayor inclusión financiera, a partir del estudio de caso de la cadena de lácteos. Sobre la base del análisis del estado actual de los flujos de remesas y su uso, así como del examen de las principales limitaciones que enfrenta la cadena de valor, se identifican oportunidades para apalancar las remesas familiares en el financiamiento de proyectos productivos mediante un mayor acceso y uso de productos financieros formales y servicios. |
| Keywords: | REMESAS, INGRESOS, INGRESOS FAMILIARES, DESARROLLO ECONOMICO, PEQUEÑAS EMPRESAS, EMPRESAS MEDIANAS, PRODUCTOS LACTEOS, INDUSTRIA LECHERA, VALOR, MODELOS ECONOMETRICOS, ESTUDIOS DE CASOS, SERVICIOS FINANCIEROS, REMITTANCES, INCOME, FAMILY INCOME, ECONOMIC DEVELOPMENT, SMALL ENTERPRISES, MEDIUM ENTERPRISES, DAIRY PRODUCTS, DAIRY INDUSTRY, VALUE, FINANCIAL SERVICES, ECONOMETRIC MODELS, CASE STUDIES |
| Date: | 2019–12–05 |
| URL: | http://d.repec.org/n?u=RePEc:ecr:col022:44992&r=all |
| By: | Pawel Dlotko; Simon Rudkin; Wanling Qiu |
| Abstract: | An understanding of the economic landscape in a world of ever increasing data necessitates representations of data that can inform policy, deepen understanding and guide future research. Topological Data Analysis offers a set of tools which deliver on all three calls. Abstract two-dimensional snapshots of multi-dimensional space readily capture non-monotonic relationships, inform of similarity between points of interest in parameter space, mapping such to outcomes. Specific examples show how some, but not all, countries have returned to Great Depression levels, and reappraise the links between real private capital growth and the performance of the economy. Theoretical and empirical expositions alike remind on the dangers of assuming monotonic relationships and discounting combinations of factors as determinants of outcomes; both dangers Topological Data Analysis addresses. Policy-makers can look at outcomes and target areas of the input space where such are not satisfactory, academics may additionally find evidence to motivate theoretical development, and practitioners can gain a rapid and robust base for decision making. |
| Date: | 2019–11 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:1911.10476&r=all |
| By: | Christina Nicolas (LAPE - Laboratoire d'Analyse et de Prospective Economique - IR SHS UNILIM - Institut Sciences de l'Homme et de la Société - UNILIM - Université de Limoges); Amine Tarazi (LAPE - Laboratoire d'Analyse et de Prospective Economique - IR SHS UNILIM - Institut Sciences de l'Homme et de la Société - UNILIM - Université de Limoges) |
| Abstract: | Please do not quote without the permission of the authors. Abstract This paper examines the effect of trust on bank lending using a sample of commercial banks in 34 countries around the world. We distinguish between two forms of trust: In-group trust, which we define as the trust in people we know, and Out-group trust, which we define as the trust in people we meet for the first time. We find that that Out-group trust significantly boosts bank lending. A closer look shows that this effect only holds in countries with relatively lower levels of institutional and judicial development. As for In-group trust, we find that it affects bank lending indirectly by favoring the development of informal lending. Overall, this paper provides novel evidence on the importance of trust and the mechanisms by which it influences bank lending around the world. JEL classification: G21, G28, G32 |
| Keywords: | Bank Lending,Trust,Institutional Development |
| Date: | 2019–11–28 |
| URL: | http://d.repec.org/n?u=RePEc:hal:wpaper:hal-02384495&r=all |
| By: | Gehrig, Stefan; Mesoudi, Alex (University of Exeter); Lamba, Shakti |
| Abstract: | Microfinance is an economic development intervention that involves credit provision to low-income entrepreneurs. Lenders typically require joint liability, where borrowers share the responsibility of repaying a group loan. We argue that this lending practice is subject to the same fundamental cooperation problem faced by other organisms in nature, and consequently evolutionary theories of cooperation from the biological sciences can provide new insights into loan repayment behaviour. This could both inform the design of microfinance institutions, and offer a real-world test case for evolutionary theories of cooperation. We first formulate evolutionary hypotheses on group loan repayment based on assortment mechanisms like kin selection, reciprocity or partner choice. We then test them by reviewing 40 studies on micro-borrowers’ loan repayment from 31 countries. We find more supportive than contrary evidence for the hypotheses, but results are generally mixed, generating avenues for future research within this framework. Finally, we present an evolutionary game-theoretic model of group lending as a threshold public goods game which further explains some empirical findings and generates new predictions on repayment rates. Our work shows how understanding the evolution of cooperation can guide economic development interventions and, more generally, offer ultimate explanatory theories for phenomena studied by social scientists. |
| Date: | 2019–10–21 |
| URL: | http://d.repec.org/n?u=RePEc:osf:osfxxx:tmpqj&r=all |
| By: | Scott Wilbur (Yale University [New Haven], FFJ - Fondation France-Japon de l'EHESS - EHESS - École des hautes études en sciences sociales) |
| Abstract: | In recent years and particularly since the global financial crisis, zombie firms—unprofitable businesses supported by financial relief—have generated widespread concern due to their purported harm to economic vitality. Economic studies hold that zombie firms impede the normal flow of capital and human resources to healthy businesses, and thereby defy creative destruction and hurt investment and employment growth. But what causes zombie firms to occur? Addressing this question from a political economy perspective, this paper investigates a novel hypothesis about the role of credit guarantees in supporting weak firms. The results of a case study of small and medium-sized enterprises (SME) in Japan in the 1990s and 2000s suggest that Japan's credit guarantee system may indeed have contributed to numerous zombies among this firm category. However, evidence also suggests that these firms tended to quickly escape from zombie status, calling into question the negative connotation of the zombie firm concept. |
| Keywords: | economic performance,institutional change,Japan,political economy,public policy,social policy |
| Date: | 2019–11 |
| URL: | http://d.repec.org/n?u=RePEc:hal:wpaper:hal-02382926&r=all |
| By: | Bilge Erten; Anton Korinek; Jose Antonio Ocampo |
| Abstract: | This paper synthesizes recent advances in the theoretical and empirical literature on capital controls. We start by observing that international capital flows have both benefits and costs, but some of these are not internalized by individual actors and thus constitute externalities. The theoretical literature has identified pecuniary externalities and aggregate demand externalities that respectively contribute to financial instability and recessions. These externalities provide a natural rationale for counter-cyclical capital controls that lean against boom and busts cycles in international capital flows. The empirical literature has developed several measures of capital controls to capture different aspects of capital account openness. We evaluate the strengths and weaknesses of different measures and provide an overview of the empirical findings on the effectiveness of capital controls in addressing the externalities identified by the theory literature, i.e. in reducing financial fragility and enhancing macroeconomic stability. We also discuss strategies to deal with the endogeneity of capital controls in such statistical exercises. We conclude by providing an overview of the historical and current debates on the role of capital controls in macroeconomic management and their relationship to the academic literature. |
| JEL: | D62 E44 F32 F38 F42 H23 |
| Date: | 2019–11 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:26447&r=all |
| By: | LAHLOU, Kamal (Bank Al-Maghrib, Département de la Recherche) |
| Abstract: | In this paper, we present the improvement made by Morocco in terms of capital account openness, the remaining levels to be achieved, the challenges that the economy should face and to analyze through a panel data model estimated for 47 emerging and developing countries the structural factors of foreign capital attractiveness. The analysis of the regulation shows that the capital account is totally open for short and long-term foreign investments and partly for foreign investment maid by Moroccan financial and non-financial firms. For individuals, the capital account remains restricted. The models results have shown that the most important determinants of capital inflows are GDP, the current account balance, price stability, and exchange rate stability. Thus, opening the capital account may be seen more as a necessary condition for allowing foreign capital to integrate the economy, but not sufficient to attract large flows. In terms of recommendations and based on the results of models and lessons from international experiences, it appears that, firstly, progress must be made in terms of sustainability of internal and external balances, but also at the level of structural reforms that will lead to productivity gains and the development of the business environment. For the capital account regulation, it would seem important to pay particular attention to the risks associated with portfolio investments that are almost completely liberalized for non-residents. In addition, the strategy of gradual liberalization, particularly for residents, must be maintained by basing decisions on the expected gains in terms of growth but also on the stability of macroeconomic balances. |
| Keywords: | capital control; capital account liberalization; capital flows drivers |
| JEL: | E44 F43 G20 |
| Date: | 2019–12–11 |
| URL: | http://d.repec.org/n?u=RePEc:ris:bkamdt:2019_002&r=all |
| By: | Schuler, Tobias; Corrado, Luisa |
| Abstract: | This paper analyzes the effects of several policy instruments for mitigating financial bubbles generated in the banking sector. We augment a New Keynesian macroeconomic framework by endogenizing boundedly-rational expectations on asset values of loan portfolios, allow for interbank trading and show how a credit bubble can develop from a financial innovation. We then evaluate the efficacy of several policy instruments in counteracting financial bubbles. We find that an endogenous capital requirement reduces the impact of a financial bubble significantly while central bank intervention (“leaning against the wind”) proves to be less effective. A welfare analysis ranks the policy reaction through an endogenous capital requirement highest. We therefore provide a rationale for the use of countercyclical capital buffers. JEL Classification: E44, E52 |
| Keywords: | Basel III, CCyB, credit-to-GDP gap |
| Date: | 2019–12 |
| URL: | http://d.repec.org/n?u=RePEc:ecb:ecbwps:20192336&r=all |
| By: | Eleni Iliopulos; Francois Langot (GAINS - Groupe d'Analyse des Itinéraires et des Niveaux Salariaux - UM - Le Mans Université, TEPP - Travail, Emploi et Politiques Publiques - UPEM - Université Paris-Est Marne-la-Vallée - CNRS - Centre National de la Recherche Scientifique); Thepthida Sopraseuth (THEMA - Théorie économique, modélisation et applications - UCP - Université de Cergy Pontoise - Université Paris-Seine - CNRS - Centre National de la Recherche Scientifique) |
| Abstract: | We study the welfare costs of business cycles in a search and matching model with financial frictions à la Kiyotaki & Moore (1997). We investigate the mechanisms thatnallow the model to replicate the volatility on labor and financial markets and show that business cycle costs are sizable. We first demonstrate that the interactions between labor market and financial frictions magnify the impact of shocks via (i) a credit multiplier effect and (ii) an endogenous wage rigidity inherent to financial frictions. Secondly, in a non-linear framework, we show that the large welfare costs of fluctuations are also explained by the high average unemployment and the low job finding rates with respect to their deterministic steady-state values. |
| Keywords: | Welfare,business cycle,financial friction,labor market search |
| Date: | 2019–10–25 |
| URL: | http://d.repec.org/n?u=RePEc:hal:wpaper:hal-02334103&r=all |
| By: | Setzer, Ralph; Stieglitz, Moritz |
| Abstract: | We explore the interaction between labour market reforms and financial frictions. Our study combines a new cross-country reform database on labour market reforms with matched firm-bank data for nine euro area countries over the period 1999 to 2013. While we find that labour market reforms are overall effective in increasing employment, restricted access to bank credit can undo up to half of long-term employment gains at the firm-level. Entrepreneurs without sufficient access to credit cannot reap the full benefits of more flexible employment regulation. JEL Classification: G21, J21, J60, K31 |
| Keywords: | bank stress, employment protection, structural reforms, unemployment insurance |
| Date: | 2019–12 |
| URL: | http://d.repec.org/n?u=RePEc:ecb:ecbwps:20192334&r=all |
| By: | Alejandro Izquierdo; Ruy E. Lama; Juan Pablo Medina; Jorge P. Puig; Daniel Riera-Crichton; Carlos A. Vegh; Guillermo Vuletin |
| Abstract: | Over the last decade, empirical studies analyzing macroeconomic conditions that may affect the size of government spending multipliers have flourished. Yet, in spite of their obvious public policy importance, little is known about public investment multipliers. In particular, the clear theoretical implication that public investment multipliers should be higher (lower) the lower (higher) is the initial stock of public capital has not, to the best of our knowledge, been tested. This paper tackles this empirical challenge and finds robust evidence in favor of the above hypothesis: countries with a low initial stock of public capital (as a proportion of GDP) have significantly higher public investment multipliers than countries with a high initial stock of public capital. This key finding seems robust to the sample (European countries, U.S. states, and Argentine provinces) and identification method (Blanchard-Perotti, forecast errors, and instrumental variables). Our results thus suggest that public investment in developing countries would carry high returns. |
| JEL: | E22 E32 E62 |
| Date: | 2019–11 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:26478&r=all |