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on Macroeconomics |
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Issue of 2015‒11‒07
114 papers chosen by Soumitra K Mallick Indian Institute of Social Welfare and Business Management |
| By: | Vadim Elenev; Tim Landvoigt; Stijn Van Nieuwerburgh |
| Abstract: | We develop a new model of the mortgage market where both borrowers and lenders can default. Risk tolerant savers act as intermediaries between risk averse depositors and impatient borrowers. The government plays a crucial role by providing both mortgage guarantees and deposit insurance. Underpriced government mortgage guarantees lead to more and riskier mortgage originations as well as to high financial sector leverage. Mortgage crises occasionally turn into financial crises and government bailouts due to the fragility of the intermediaries' balance sheets. Increasing the price of the mortgage guarantee "crowds in" the private sector, reduces financial fragility, leads to fewer but safer mortgages, lowers house prices, and raises mortgage and risk-free interest rates. Due to a more robust financial sector, consumption smoothing improves and aggregate welfare increases. While borrowers are nearly indifferent to a world with or without mortgage guarantees, savers are substantially better off. While aggregate welfare increases, so does wealth inequality. |
| JEL: | E0 E21 E62 G00 G12 G18 G21 G28 |
| Date: | 2015–10 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:21626&r=mac |
| By: | Garriga, Carlos (Federal Reserve Bank of St. Louis); Kydland, Finn E. (University of California–Santa Barbara and NBER); Sustek, Roman (University of London and Centre for Macroeconomics) |
| Abstract: | Mortgages are long-term nominal loans. Under incomplete asset markets, monetary policy is shown to affect housing investment and the economy through the cost of new mortgage borrowing and the value of payments on outstanding debt. These channels, distinct from traditional transmission of monetary policy, are evaluated within a general equilibrium model. Persistent monetary policy shocks, resembling the level factor in the nominal yield curve, have larger effects than transitory shocks, manifesting themselves as long-short spread. The transmission is stronger under adjustable- than fixed-rate mortgages. Higher, persistent, inflation benefits homeowners under FRMs, but hurts them under ARMs. |
| Keywords: | Mortgage finance; monetary policy; general equilibrium; housing investment; redistribution |
| JEL: | E32 E52 G21 R21 |
| Date: | 2015–10–25 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fedlwp:2015-033&r=mac |
| By: | Sanjay K. Chugh (Boston College); Wolfgang Lechthalerz (Kiel Institute for the World Economy); Christian Merkl (Friedrich-Alexander-University Erlangen-Nuremberg) |
| Abstract: | This paper characterizes long-run and short-run optimal fiscal policy in the labor selection framework. Quantitatively, the time-series volatility of the labor income tax rate is orders of magnitude larger than the "tax-smoothing" results based on Walrasian labor markets, but is a few times smaller than the results based on search and matching labor markets. To understand these results in terms of model primitives, we develop a welfare-relevant analytic concept of externalities for the selection model, which we label "tightness." This concept of tightness is the source of the decentralized economy's inefficient cross-sectional wage premia between the average newly-hired worker and the marginal newly-hired worker. Compared to the traditional concept of labor-market tightness in the search and matching literature, this new concept of tightness plays a highly similar role, and, like in the matching model, is crucial for understanding efficiency and optimal policy. |
| Keywords: | labor market frictions, hiring costs, efficiency, optimal taxation, labor wedge, zero intertemporal distortions |
| JEL: | E24 E32 E50 E62 E63 J20 |
| Date: | 2015–10–25 |
| URL: | http://d.repec.org/n?u=RePEc:boc:bocoec:884&r=mac |
| By: | Ayşe Ertuğrul (Bahcesehir University) |
| Abstract: | The high single-digit inflation in Turkey, as well as in other developing countries is the subject of studies focusing on the role of monetary policy. While low budget deficits and sustainable debt dynamics in post 2001 crisis period in Turkey, whether the fiscal aggregates are expansionary and they play any role in inflation rigidity remain as unanswered and important questions. This study aims to provide evidence on these questions. After analyzing the nature of fiscal policy in Turkey between 2002:Q1-2014:Q4 period, I try to evaluate the impact of fiscal policy shock on macroeconomic variables, with a special focus on inflation. The methodological framework is structural vector autoregressive. Whereas the preliminary results regarding the effect on output are in line with the previous literature for fiscal policy in Turkey, the findings for the effects on inflation differ in respect to fiscal aggregates. |
| Keywords: | Fiscal Policy, Inflation, Nonlinearity, Structural VAR |
| JEL: | E31 |
| Date: | 2015 |
| URL: | http://d.repec.org/n?u=RePEc:eyd:cp2015:252&r=mac |
| By: | Ahmet Benlialper (Ipek University, Department of Economics); Hasan Cömert (Middle East Technical University, Department of Economics); Nadir Öcal (Middle East Technical University, Department of Economics) |
| Abstract: | In the last decades, many developing countries abandoned their existing policy regimes and adopted inflation targeting (IT) by which they aimed to control inflation through the use of policy interest rates. During the period before the crisis, most of these countries experienced large appreciations in their currencies. Given that appreciation helps central banks to curb inflationary pressures, we ask whether central banks in developing countries have a different policy stance with respect to depreciation and appreciation. We specifically claim that during the period under investigation (2002-2008), central banks in developing countries which implement IT have tolerated appreciation but fought against depreciation in order to hit their inflation targets. In order to support our claim, we analyze two components of central bank’s response to exchange rate movements. First, we analyze central banks’ interest rate decisions by estimating a non-linear monetary policy reaction function using a panel threshold model. Evidence suggests that whereas central banks respond to depreciation pressures, they remain inactive to appreciation. Secondly, we construct a probit model in order to investigate the determinants of foreign exchange intervention of central banks. We find that depreciation has an explanatory power for sale interventions whereas appreciation does not explain purchase interventions. Hence, we conclude that central banks’ policy stance in IT developing countries with respect to exchange rate movements is asymmetric favoring appreciation. In this sense, IT seems to contribute to the ignorance of dangers regarding to financial flows leading to appreciation of currencies in developing countries. |
| Keywords: | Inflation Targeting, Central Banking, Developing Countries, Exchange Rates |
| JEL: | E52 E58 E31 F31 |
| Date: | 2015 |
| URL: | http://d.repec.org/n?u=RePEc:eyd:cp2015:257&r=mac |
| By: | Guido Ascari; Louis Phaneuf |
| Abstract: | Abstract We offer a comprehensive evaluation of the welfare and cyclical implications of moderate trend inflation. In an extended version of a medium-scale New Keynesian model, recent proposals to increase trend inflation from 2 to 4 percent would generate a consumption-equivalent welfare loss of 3.7 percent based on the non-stochastic steady state and of 6.9 percent based on the stochastic mean. Welfare costs of this magnitude are driven by four main factors: i) multiperiod nominal wage contracting, ii) trend growth in investment-specific and neutral technology, iii) roundaboutness in the U.S. production structure, and iv) and the interaction between trend inflation and shocks to the marginal efficiency of investment (MEI), insofar that this type of shock is sufficiently persistent. Moreover, moderate trend inflation has important cyclical implications. It interacts much more strongly with MEI shocks than with either productivity or monetary shocks. |
| Keywords: | Wage and price contracting; trend inflation; trend growth in technology; roundabout production; investment shocks; inflation costs; business cycles. |
| JEL: | E31 E32 |
| Date: | 2015–11–03 |
| URL: | http://d.repec.org/n?u=RePEc:oxf:wpaper:763&r=mac |
| By: | Nikolas Kontogiannis (University of Leicester) |
| Abstract: | I construct a New Keynesian, two-country model with labour market frictions in the search and matching process and real wage rigidity. Following a linear-quadratic approach, I analyse quantitatively the welfare-based optimal monetary policy in a currency union. I allow for labour market heterogeneity among the member states captured by an index based on the real wage rigidity differential. I show that when the optimal monetary policy is conducted, in the presence of productivity shocks, thewelfare loss in the currency union increasesmonotonically with the value of the labour market heterogeneity index. That is based on the key role of the terms of trade which intensify the effects of the shocks. I also draw the implications of labour market heterogeneity for the optimal regime choice by the central bank. |
| Keywords: | Currency union; Optimal monetary policy; Labour market heterogeneity. |
| JEL: | E24 E31 E52 F41 |
| Date: | 2015 |
| URL: | http://d.repec.org/n?u=RePEc:inf:wpaper:2015.04&r=mac |
| By: | Leila E. Davis; Charalampos Konstantinidis; Yorghos Tripodis |
| Abstract: | The ongoing crisis in the Eurozone, together with growing evidence of structural imbalances, points to a role for new institutions to support a more stable EMU structure. As is well established in the context of monetary union when business cycles are not synchronized, a system of fiscal transfers can support monetary union. Unemployment insurance (UI) is, in particular, a key component of fiscal crisis management. UI supports household incomes during downturns, and also acts as an automatic stabilizer, thereby helping individual countries respond to asymmetric shocks. This paper proposes a `federalized’ EMU-level UI mechanism as one program that can contribute to a system of fiscal transfers in the EMU, and estimates the cost of the proposed system under different financing and eligibility scenarios. We find that, under a variety of reasonable institutional parameters, such a system is fiscally feasible with limited reason to expect adverse employment effects in member countries. We conclude that fiscal transfers extended via automatic stabilizers are a productive avenue towards a more stable Eurozone architecture. |
| Keywords: | Eurozone, unemployment insurance, fiscal transfers |
| JEL: | E51 E62 |
| Date: | 2015–10 |
| URL: | http://d.repec.org/n?u=RePEc:mab:wpaper:2015_02&r=mac |
| By: | Seyit Mümin Cilasun (Atilim University, Department of Economics); Burcu Dinçergök (Atilim University, Department of Management); Mustafa İsmihan (Atilim University, Department of Economics) |
| Abstract: | The aim of this study is to analyze the impact of financial development and instability on economic growth in Turkey as well as on capital accumulation and productivity, which are the sources of growth. To this end, a quarterly data set (1989Q1-2014Q4) is used to investigate the relationship between financial development, instability and economic growth within a production function framework using the Johansen cointegration and impulse response techniques. The impact of financial development and economic instability on capital accumulation and productivity is also analyzed in the same way. Furthermore, in addition to using the private sector credits-GDP ratio, which is the widely used basic financial development indicator in the related literature, appropriate indices are developed to represent the role of the banking system and capital markets in financial development. In so doing, this study aims to clarify the role played by the banking system and capital markets in capital accumulation, productivity and growth in a way that is of relevance to policymakers. |
| Keywords: | Financial Development, Capital Accumulation, Productivity, Macroeconomic Instability, Growth, Turkey |
| JEL: | E10 G00 E44 E20 O40 |
| Date: | 2015 |
| URL: | http://d.repec.org/n?u=RePEc:eyd:cp2015:293&r=mac |
| By: | Bauer, Michael D. (Federal Reserve Bank of San Francisco); Hamilton, James D. (UC San Diego) |
| Abstract: | A consensus has recently emerged that a number of variables in addition to the level, slope, and curvature of the term structure can help predict interest rates and excess bond returns. We demonstrate that the statistical tests that have been used to support this conclusion are subject to very large size distortions from a previously unrecognized problem arising from highly persistent regressors and correlation between the true predictors and lags of the dependent variable. We revisit the evidence using tests that are robust to this problem and conclude that the current consensus is wrong. Only the level and the slope of the yield curve are robust predictors of excess bond returns, and there is no robust and convincing evidence for unspanned macro risk. |
| JEL: | E43 E44 E47 |
| Date: | 2015–09–25 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fedfwp:2015-15&r=mac |
| By: | Uluc Aysun (University of Central Florida, Orlando, FL) |
| Abstract: | I solve a two-country real business cycle model that includes Cournot competitive global and local banks to investigate the impact of banking competition and global bank presence on local business cycles. Simulations reveal an inverted U-shaped relationship between the two factors and the volatility of output when global banks face portfolio adjustment costs. This relationship is determined by the asymmetric degree of diminishing returns to lending that global banks face in each economy. SpeciÂ…cally, when global banks have a larger presence or are less competitive in one of the economies than the other, the cross-country mobility of loanable funds and the local responses to domestic shocks are smaller compared those obtained when the two economies are more symmetric. |
| Keywords: | Global banks, Cournot competition, real business cycles, bank size |
| JEL: | E32 E44 F33 F44 |
| Date: | 2015–10 |
| URL: | http://d.repec.org/n?u=RePEc:cfl:wpaper:2015-02&r=mac |
| By: | Kurmaş Akdoğan (Central Bank of Turkey) |
| Abstract: | We examine the unemployment hysteresis hypothesis for 31 European countries, US and Japan, using linear and nonlinear unit root tests. Two types of smooth transition models - Exponential Smooth Transition Autoregressive (ESTAR) and Asymmetric Exponential Smooth Transition Autoregressive (AESTAR) - are employed to account for the mean-reverting behaviour in unemployment due to heterogeneity in hiring and firing costs across firms. Four main results emerge: First, the hysteresis hypothesis is rejected for 60 percent of the countries in our sample. Second, nonlinear models capture the asymmetries in unemployment dynamics over the business cycle for some countries. Third, many of the series display multiple structural breaks which might point out shifts in mean level of unemployment. Fourth, forecasting powers of our nonlinear models are moderately better than the random walk model in the longer term. The results have policy implications for the debate on the benefits of demand or supply side policies for tackling the current unemployment problem in Europe. |
| Keywords: | Unemployment, Hysteresis, Nonlinear Adjustment, Structural Breaks, Forecasting |
| JEL: | E24 C22 E27 |
| Date: | 2015 |
| URL: | http://d.repec.org/n?u=RePEc:eyd:cp2015:266&r=mac |
| By: | Gerald Carlino; Robert P. Inman |
| Abstract: | The Great Recession and the subsequent passage of the American Recovery and Reinvestment Act returned fiscal policy, and particularly the importance of state and local governments, to the center stage of macroeconomic policy-making. This paper addresses three questions for the design of intergovernmental macroeconomic fiscal policies. First, are such policies necessary? Analysis of US state fiscal policies show state deficits (in particular from tax cuts) can stimulate state economies in the short-run, but that there are significant job spillovers to neighboring states. Second, to internalize these spillovers, what central government fiscal policies are most effective for stimulating income and job growth? Both federal tax cuts and transfers to households and firms and intergovernmental transfers to states for lower income assistance are effective, with one and two year multipliers greater than 2.0. Third, how are states, as politically independent agents, motivated to provide increased transfers to lower income households? The answer is matching (price subsidy) assistance for such spending. The intergovernmental aid is spent immediately by the states and supports assistance to those most likely to spend new transfers. |
| JEL: | E62 H77 |
| Date: | 2015–10 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:21680&r=mac |
| By: | Gita Gopinath |
| Abstract: | I define and provide empirical evidence for an "International Price System" in global trade, employing data for thirty-five developed and developing countries. This price system is characterized by two features. First, the overwhelming share of world trade is invoiced in very few currencies, with the dollar the dominant currency. Second, international prices, in their currency of invoicing, are not very sensitive to exchange rates at horizons of up to two years. In this system, a good proxy for a country's inflation sensitivity to exchange rate fluctuations is the fraction of its imports invoiced in a foreign currency. U.S. inflation is consequently more insulated from exchange rate shocks, while other countries are highly sensitive to it. Exchange rate depreciations (appreciations) make U.S. exports cheaper (expensive), while for other countries they mainly raise (lower) mark-ups and hence profits. U.S. monetary policy has spillover effects on inflation in other countries, while spillovers from other countries monetary policies on to U.S. inflation are more muted. |
| JEL: | E31 F0 F41 |
| Date: | 2015–10 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:21646&r=mac |
| By: | James Feyrer; Erin T. Mansur; Bruce Sacerdote |
| Abstract: | The combining of horizontal drilling and hydrofracturing unleashed a boom in oil and natural gas production in the US. This technological shift interacts with local geology to create an exogenous shock to county income and employment. We measure the effects of these shocks within the county where production occurs and track their geographic propagation. Every million dollars of oil and gas extracted produces $66,000 in wage income, $61,000 in royalty payments, and 0.78 jobs within the county. Outside the immediate county but within the region, the economic impacts are over three times larger. Within 100 miles of the new production, one million dollars generates $243,000 in wages, $117,000 in royalties, and 2.49 jobs. Thus, over a third of the fracking revenue stays within the regional economy. Our results suggest new oil and gas extraction led to an increase in aggregate US employment of 725,000 and a 0.5 percent decrease in the unemployment rate during the Great Recession. |
| JEL: | E24 Q33 Q43 |
| Date: | 2015–10 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:21624&r=mac |
| By: | Burçhan Sakarya (Banking Regulation and Supervision Agency) |
| Abstract: | Following the global financial crisis researchers in advanced economies dwelled on the question of a state of weak investment in times of favourable liquidity conditions. During this period emerging and developing economies were relatively strong on the growth side, some even turning into macro prudential policies to control overheating. Turkey being one of the acclaimed economies of prudential policy measures has also been experiencing a stalled investment recently. This mere observation brings out few questions about the relation between investment and loan growth in Turkey. Mainly looking from banking lending perspective, this study tries to raise questions about investment demand and sectoral preferences. |
| Keywords: | Investment, Credit, Growth |
| JEL: | E22 E51 O40 |
| Date: | 2015 |
| URL: | http://d.repec.org/n?u=RePEc:eyd:cp2015:201&r=mac |
| By: | Andrey G. Shulgin (National Research University Higher School of Economics) |
| Abstract: | Stabilizing monetary policy in a small open economy is constrained by the open economy trilemma. In a crisis this constraint may not allow the Central Bank to cut interest rates because this may cause significant capital flight and the ensuing problems. In this paper we investigate whether the Central Bank’s credit rationing at the official rate (CROR) may soften the open economy trilemma constraint and improve the results of monetary policy for different monetary regimes. We construct a DSGE model appropriate for analysing the forward-looking behaviour of households facing a non-zero probability of credit rationing at the official rate. A simulation of estimated on a Russian data model and welfare optimization exercises allow us to contribute to the question of optimal monetary regime choice and to analyse the role of credit rationing for different monetary regimes. We have found significant credit rationing in the quarterly Russian data of 2001–2014. The share of liquidity constrained (non-Ricardian) households and the probability of CROR are estimated as 22% and 66% respectively. Welfare maximization exercises reveal a trade off between low-inflation and high-welfare solutions and favour of a floating exchange rate regime. Researching CROR gives mixed results. On the one hand we found the optimal value of the probability of CROR in both exchange rate-based and Taylor rule-based models. On the other hand the resulting improvement in welfare is very small. |
| Keywords: | DSGE; Bayesian estimation; intermediate exchange rate regime; rationing of credit; exchange rate rule; Russia |
| JEL: | E52 E58 F41 |
| Date: | 2015 |
| URL: | http://d.repec.org/n?u=RePEc:hig:wpaper:103/ec/2015&r=mac |
| By: | Barnichon, Régis; Garda, Paula |
| Abstract: | This paper evaluates the flow approach to unemployment forecasting proposed by Barnichon and Nekarda (2012) for a set of OECD countries characterized by very different labor markets. We find that the flow approach yields substantial improvements in forecast accuracy over professional forecasts for all countries, with especially large improvements at longer horizons (one-year ahead forecasts) for European countries. Moreover, the flow approach has the highest predictive ability during recessions and turning points, when unemployment forecasts are most valuable. |
| Keywords: | steady-state unemployment; stock-flow model |
| JEL: | E24 E27 J6 |
| Date: | 2015–11 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:10910&r=mac |
| By: | Demirel, Baki |
| Abstract: | Following September 2010, the Central Bank of Turkey has targeted financial stability as well as its price stability. An increase in credit risks in the banking sector induces economic risks and therefore affects adversely the financial stability. The aim of this paper is to analyse the relationship between variables, that are believed to affect NLPs, in the Turkish banking sector and NLPs. For this purpose, Vector Autoregression (VAR) model is used. To study short- and long-run relationship between variables, Johansen Cointegration test and Error Correction Model are applied. |
| Keywords: | Banking Sector, Credit Risk, NPLs, VAR Model |
| JEL: | E44 E52 E58 G18 |
| Date: | 2015–11–02 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:67576&r=mac |
| By: | Crosilla, Luciana; Leproux, Solange; Malgarini, Marco |
| Abstract: | Traditional measures of the output gap rely on statistical filtering of trended series, results being highly sensitive to the method chosen, especially at endpoints (Oprhanides and van Norden, 2002). Following Koberl and Lein (2011) and Fessler et al. (2014), the aim of our paper is to derive ameasure of capacity utilisation gap for Italy, usually referred to in the literature asthe Non-Inflationary Rate of Capacity Utilisation (NIRCU).The NIRCU is defined as the capacity utilisation rate at which firms do not feel any pressure to adjust prices; the main advantages of the methodare (1) that it is micro-founded, being based on firm level information about capacity and prices, (2) that it is available almost in real time and (3) that it does not need any prior statistical filtering. Our NIRCU performs well as an indicator of inflationary pressures in a standard Phillips-curve framework.Results also show that the capacity gap after the crisis is in Italy at its highest in the last 25 years, remaining more than 5 percentage points above the current level of capacity utilisation, a finding with relevant implication for both monetary and fiscal policies. |
| Keywords: | inflation; capacity utilisation; NIRCU; Phillips Curve |
| JEL: | E31 E32 E52 |
| Date: | 2014–09 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:67531&r=mac |
| By: | Günter W. Beck; Sarah M. Lein (University of Basel) |
| Abstract: | To model the observed slow response of aggregate real variables to nominal shocks, most macroeconomic models incorporate real rigidities in addition to nominal rigidities. One popular way of modelling such a real rigidity is to assume a non-constant demand elasticity. By using a homescan data set for three European countries, including prices and quantities bought for a large number of goods, in addition to consumer characteristics, we provide estimates of price elasticities of demand and on the degree of demand-side real rigidities. We find that price elasticities of demand are about 4 in the median. Furthermore, we find evidence for demand-side real rigidities. These are, however, much smaller than what is often assumed in macroeconomic models. The median estimate for demand-side real rigidity, the super-elasticity, is in a range between 1 and 2. To quantitatively assess the implications of our empirical estimates, we calibrate a menu-cost model with the estimated super-elasticity. We find that the degree of monetary non-neutrality doubles in the model including demand-side real rigidity, compared to the model with only nominal rigidity, suggesting a multiplier effect of around two. However, the model can explain only up to 6% of the monetary non-neutrality observed in the data, implying that additional multipliers are necessary to match the behavior of aggregate variables. |
| Keywords: | Demand curve, price elasticity, super-elasticity, price-setting, monetary non-neutrality |
| JEL: | E30 E31 E50 D12 C3 |
| Date: | 2015 |
| URL: | http://d.repec.org/n?u=RePEc:bsl:wpaper:2015/13&r=mac |
| By: | Demyanyk, Yuliya (Federal Reserve Bank of Cleveland); Hryshko, Dmytro (University of Alberta); Luengo-Prado, Maria Jose (Federal Reserve Bank of Boston); Sorensen, Bent E. (University of Houston) |
| Abstract: | The major portion of U.S. gross domestic product (GDP) is accounted for by consumer spending, which significantly affects the business cycle. Consumer demand has been extremely volatile since 2000, especially given the booms and busts in housing values and in subprime mortgage lending. While it is well-established that housing net worth, credit availability, and household debt levels help to explain changes in consumer spending, the roles played by other potential determinants of consumption are not well identified or understood. This paper uses county-level data and a multiple-regression framework to explore how fluctuations in consumption between 2000 and 2012 are correlated with these macroeconomic variables: income, unemployment, debt, income inequality, consumer expectations, housing wealth, credit access, cash-out refinancings, and foreclosures. Four subperiods are considered: the "dot-com" recession (2001–2003), the "subprime boom" (2004–2006), the Great Recession (2007–2009), and the "tepid recovery" (2010–2012). |
| JEL: | E21 E37 |
| Date: | 2015–10–16 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fedbwp:15-12&r=mac |
| By: | Tomas Havranek (Institute of Economic Studies, Faculty of Social Sciences, Charles University in Prague, Smetanovo nábreží 6, 111 01 Prague 1, Czech Republic; Czech National Bank); Zuzana Irsova; Jitka Lesanovska (Institute of Economic Studies, Faculty of Social Sciences, Charles University in Prague, Smetanovo nábreží 6, 111 01 Prague 1, Czech Republic) |
| Abstract: | An important component of monetary policy transmission is the pass-through from financial market interest rates, directly influenced or targeted by central banks, to the rates that banks charge firms and households. Yet the available evidence on the strength and speed of the pass-through is mixed and varies across countries, time periods, and even individual banks. We examine the pass-through mechanism using a unique data set of Czech loan and deposit products and focus on bank-level determinants of pricing policies, especially cost efficiency, which we estimate employing both stochastic frontier and data envelopment analysis. Our main results are threefold: First, the long-term pass-through was close to complete for most products before the financial crisis, but has weakened considerably afterward. Second, banks that provide high rates for deposits usually charge high loan markups. Third, cost-efficient banks tend to delay responses to changes in the market rate, smoothing loan rates for their clie nts. |
| Keywords: | Monetary transmission, cost efficiency, bank pricing policies, stochastic frontier analysis, data envelopment analysis |
| JEL: | E43 E58 G21 |
| Date: | 2015–10 |
| URL: | http://d.repec.org/n?u=RePEc:fau:wpaper:wp2015_24&r=mac |
| By: | Christopher L. House; Linda L. Tesar |
| Abstract: | As of August 2015, Greece’s loan repayments due to external creditors through 2057 summed to €319.5 billion, requiring an average debt payment on a flow basis of 4.1 percent of 2014 Greek GDP. This paper examines the economic impact of increases in distortionary taxes on consumption, capital and labor income as well as reductions in government expenditures sufficient to increase Greece’s primary balance by one percent of 2014 GDP – roughly a quarter of Greece’s total debt obligations. In the baseline case calibrated to the Greek economy, all of the tax and expenditure policies we consider produce declines in output in both the short- and long-run. Projections of the primary surplus based on static revenue scoring grossly overestimate the amount of actual revenue that Greece would raise due to the endogenous adjustment of capital and labor. Meeting the debt repayment schedule is substantially more costly because Greece is a small economy that is integrated with the larger European economy. Failure to incorporate the impact of capital and labor mobility results in a significant overestimate of future revenue. Delaying the implementation of tax increases or government expenditure cuts can help mitigate the short-run fall in output, but such delays require greater economic hardship in the long run. |
| JEL: | E62 F42 F43 H63 |
| Date: | 2015–10 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:21688&r=mac |
| By: | Annamaria Artner (Institute of World Economics, Centre for Economic and Regional Studies, Hungarian Academy of Sciences) |
| Abstract: | Since 1989, due to historical developments and the works of theorists such as Francis Fukuyama, authoritative sources have claimed that the combination of a “free market economy” and “liberal democracy built on equal rights” results in the most developed form of human society. Taking into consideration that development is driven by contradictions, the above premise is true if it is accepted that no contradictions exist within or between a free market economy and liberal democracy. If, however, such contradictions do exist, the potential development of human society cannot be said to ultimately conclude with capitalism. Therefore, democratic capitalism may be the most developed and final form of capitalism, but not that of human society in general. This essay aims to clarify the meanings of free market and democracy, and their relationship. Based on the general and specific definitions of democracy, it distinguishes between the concepts of de jure and de facto equality, and analyses the impact of the most important working mechanism of a market economy – competition – on manifold inequalities. It discusses the real inequalities manifested in income and the ownership of the means of production, and also the inequalities within capital, and between capital and wage labour. By reflecting upon these inequalities, the study looks at how free market forces work towards the erosion of democracy and constrain the practical utilization of democratic institutions. |
| Keywords: | wage labour, inequality, democracy, market economy, return on capital, competitiveness |
| JEL: | E22 E24 F01 F50 F52 |
| Date: | 2015–10 |
| URL: | http://d.repec.org/n?u=RePEc:iwe:workpr:216&r=mac |
| By: | Tanweer Akram |
| Abstract: | Long-term interest rates in advanced economies have been low since the global financial crisis. However, in the United States the Federal Reserve could begin to hike its policy rate, the federal funds target rate, before the end of the year. In the United Kingdom, the Bank of England could follow suit. What is the outlook for global long-term interest rates? What are the risks around interest rates? What can policymakers do to cure the malady of low interest rates? It is argued that global interest rates are likely to stay low in the remainder of this year and the first half of next year due to a combination of domestic and international factors, even if a few central banks gradually begin to tighten monetary policy. The cure for this malady lies in proactive fiscal policy and measures to support job growth. Boosting effective demand and promoting higher wages and real disposable income would help lift inflation rates close to their targets and raise long-term interest rates. |
| Keywords: | Government Bond Yields; Global Interest Rates; Long-Term Interest Rates |
| JEL: | E43 E50 E60 |
| Date: | 2015–10 |
| URL: | http://d.repec.org/n?u=RePEc:lev:wrkpap:wp_852&r=mac |
| By: | David Berger; Veronica Guerrieri; Guido Lorenzoni; Joseph Vavra |
| Abstract: | Recent empirical work shows large consumption responses to house price movements. Can consumption theory explain these responses? We consider a variety of consumption models with uninsurable income risk and show that consumption responses to permanent house price shocks can be approximated by a simple "sufficient-statistic" formula: the marginal propensity to consume out of temporary income times the value of housing. Calibrated versions of the models generate house price effects that are both large and sensitive to the level of household debt in the economy. We apply our formula to micro data to provide new measures of house price effects. |
| JEL: | D14 D91 E21 E32 E6 R21 |
| Date: | 2015–10 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:21667&r=mac |
| By: | Eyno Rots (Magyar Nemzeti Bank (the Central Bank of Hungary)) |
| Abstract: | House prices have inertia, which may be because housing-market participants need time to recognize long booms and recessions. Within a dynamic stochastic general-equilibrium model with markets for housing and defaultable mortgages, I consider the case of imperfect knowledge and learning about the persistence of exogenous shocks. I evaluate the performance of the model against the last 40 years of key U.S. macroeconomic data. Bayesian comparison strongly favors the model with learning over the baseline case with perfect knowledge, although additional assumptions about the learning process may be necessary for an adequate account of house-price dynamics. |
| Keywords: | housing market, DSGE, signal extraction, Bayesian estimation. |
| JEL: | E32 E37 R31 |
| Date: | 2015 |
| URL: | http://d.repec.org/n?u=RePEc:mnb:wpaper:2015/4&r=mac |
| By: | Mauro Bambi (University of York, Department of Economics and Related Studies, York, UK); Cristina Di Girolami (Università di Pescara, Dipartimento di Economia Aziendale, Pescara, Italy; Département de Mathèmatiques, Avenue Olivier Messiaen 72085 Le Mans Cedex 9, France); Salvatore Federico (Dipartimento di Scienze per l'Economia e l'Impresa, Universita' degli Studi di Firenze, Italy); Fausto Gozzi (Dipartimento di Scienze Economiche ed Aziendali, Università LUISS - Guido Carli, Rome, Italy) |
| Abstract: | In this paper we study an endogenous growth model where investments are (generically) distributed over multi-period flexible projects leading to new capital once completed. Recently developed techniques in dynamic programming are adapted and used to unveil the global dynamics of this model. Based on this analytical ground, several numerical exercises are performed to show the quantitative relevance of the analytical findings with an emphasis on the relation between project features and economic growth and speed of convergence toward the balanced growth path. |
| Keywords: | Endogenous growth, investment projects, distributed delays, optimal control, dynamic programming, infinite dimensional problems. |
| JEL: | E22 E32 O40 |
| Date: | 2015–10 |
| URL: | http://d.repec.org/n?u=RePEc:flo:wpaper:2015-04&r=mac |
| By: | Hale Kırmızıoğlu (Ahi Evran University, Department of Economics) |
| Abstract: | 2007 ABD Mortgage krizi ve 2010 Avrupa borç krizinin ardından ekonomik alanda en önemli gündem maddelerinden biri, krizlerden çıkış için uygulanacak politikalar olmuştur. Özellikle Euro Bölgesi'nde yer alan ülkeler açısından para politikasının yokluğu temel kısıtı oluşturmuş, yegane alternatif olarak maliye politikası görülmüştür. Ancak finansal güçlükleri peşi sıra getiren kriz, maliye politikasının da teorik olarak kabul gören şekliyle uygulanmasını imkansız kılmıştır. Bir başka deyişle toplam talebin düştüğü bir ekonomik evrede ülkeler kurtuluş için bilinenin aksine daraltıcı maliye politikası uygulamak durumunda kalmışlardır. Gerek Euro Bölgesi'nde gerekse Avrupa'da kriz yaşayan diğer ülkelerde mali disiplini sağlamak için mali konsolidasyon programları zorunlu hale gelmiştir. Maliye politikası ve büyüme arasındaki geri beslemeli döngü neticesinde mali konsolidasyonların ekonomik aktivitedeki toparlanmayı daha da yavaşlatması muhtemeldir. Bu çalışma mali disiplin ve büyüme arasındaki karşılıklı ilişkinin teorik temellerine odaklanarak uygulamada ortaya çıkması olası etkileri dönemsel olarak ele almaktadır. Ayrıca 2010 Avrupa krizini yaşamış İtalya ve Macatistan'ın hem kriz döneminde hem de daha önce uyguladıkları mali konsolidasyon programlarının ekonomik aktivite üzerindeki etkilerini karşılaştırmalı olarak değerlendirmektedir. |
| Keywords: | Maliye Politikası, Mali Konsolidasyon, Ekonomik Büyüme |
| JEL: | E6 E61 E65 H3 |
| Date: | 2015 |
| URL: | http://d.repec.org/n?u=RePEc:eyd:cp2015:299&r=mac |
| By: | Mariana García-Schmidt; Michael Woodford |
| Abstract: | We illustrate a pitfall that can result from the common practice of assessing alternative monetary policies purely by considering the perfect foresight equilibria (PFE) consistent with the proposed rule. In a standard New Keynesian model, such analysis may seem to support the “Neo-Fisherian” proposition according to which low nominal interest rates can cause inflation to be lower. We propose instead an explicit cognitive process by which agents may form their expectations of future endogenous variables. Under some circumstances, a PFE can arise as a limiting case of our more general concept of reflective equilibrium, when the process of reflection is pursued sufficiently far. But we show that an announced intention to fix the nominal interest rate for a long enough period of time creates a situation in which reflective equilibrium need not resemble any PFE. In our view, this makes PFE predictions not plausible outcomes in the case of such policies. Our alternative approach implies that a commitment to keep interest rates low should raise inflation and output, though by less than some PFE analyses apply. |
| JEL: | E31 E43 E52 |
| Date: | 2015–10 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:21614&r=mac |
| By: | Kiminori Matsuyama (Department of Economics Northwestern University); Iryna Sushko (Institute of Mathematics, National Academy of Science, Ukraine); Laura Gardini (Facoltà di Economia Università degli Studi di Urbino) |
| Abstract: | We propose and analyze a two-country model of endogenous innovation cycles. In autarky, innovation fluctuations in the two countries are decoupled. As the trade costs fall and intra-industry trade rises, they become synchronized. This is because globalization leads to the alignment of innovation incentives across firms based in different countries, as they operate in the increasingly global (hence common) market environment. Furthermore, synchronization occurs faster (i.e., with a smaller reduction in trade costs) when the country sizes are more unequal, and it is the larger country that dictates the tempo of global innovation cycles with the smaller country adjusting its rhythm to the rhythm of the larger country. These results suggest that adding endogenous sources of productivity fluctuations might help improve our understanding of why countries that trade more with each other have more synchronized business cycles. |
| Keywords: | Endrogenous innovation cycles and productivity co-movements, globalization, home market effect, synchronised vs. asynchronised cycles, synchronisation of coupled oscillators, basins of attraction, two-dimensional piecewise smooth, noninvertable maps |
| JEL: | C61 E32 F12 F44 O31 |
| Date: | 2014–12 |
| URL: | http://d.repec.org/n?u=RePEc:cfm:wpaper:1527&r=mac |
| By: | Tarkan Çavuşoğlu (Hacettepe University/Department of Public Finance) |
| Abstract: | Okun’s law is considered a crucial empirical relationship in macroeconomics. This study revisits Okun's relation for a number of European countries over the 1965-2014 period. The main motivation behind the study is the lack of unanimity in the literature in modelling the direction of the systematic opposite movements of the unemployment rate and output. While a strand of the literature treats changes in unemployment rates as the outcome of aggregate demand fluctuations, another strand relates unemployment to output through a production-function approach, where fluctuations in labour -particularly unemployment- capital, and technology are modelled to explain fluctuations in output. Accordingly, this study revisits the Okun’s law by empirically questioning the model specification of the unemployment-output relationship. The relevant statistical evidence is obtained through exploiting recent panel data estimation techniques of instrumental variable estimations and vector autoregression analyses. |
| Keywords: | Okun’s Law, Unemployment, Panel Data. |
| JEL: | E24 J64 C33 |
| Date: | 2015 |
| URL: | http://d.repec.org/n?u=RePEc:eyd:cp2015:248&r=mac |
| By: | Harun Öztürkler (Kırıkkale University, Department of Econometrics); Fatih Demir (Kırıkkale University, Department of Econometics); Serhat Yılmaz (Kırıkkale University, Department of Econometics) |
| Abstract: | Increasing World population leads to an ever-rising energy need. For every individual in the economic activity and sector the most important energy resource is oil and oil products. Oil is also one of the most important items in the trade between countries. Turkey is a mostly energy dependent country, and this dependency is also the case for oil and oil products. As it is the case for those countries with significant energy dependency, oil price is important for economic stability in Turkey. The effects of oil price on macroeconomic variables are discussed frequently in the related literature. There are empirical studies in the literature investigating the differing effects of oil price rise and fall on economic activity. Some of these studies conclude that the effect is asymmetric. On the other hand, there is no consensus in the literature about the causes of asymmetric price pass-though. This study aims at determining the effects of oil price changes on the inflation in Turkey and whether price pass-through symmetric or asymmetric. |
| Keywords: | Oil Price, Asymmetric Price Pass-Through, Asymmetric ARDL, Turkey |
| JEL: | C13 C32 E31 Q43 |
| Date: | 2015 |
| URL: | http://d.repec.org/n?u=RePEc:eyd:cp2015:256&r=mac |
| By: | Zixi Liu (Goethe University Frankfurt) |
| Abstract: | Regarding the financial crisis since 2008, one heated debate lies in the relationships between public debt and economic growth. The present paper develops a theoretical model in a small open economy with sovereign risk based on Galí and Monacelli (2005, 2008). A country- specific sovereign risk parameter is inserted into the sovereign interest rate equation to analyze its influence to the links between debt and growth. This paper shows that there is no single threshold and additionally, the relationship between debt and growth is country-specific and it varies depending on the degree of sovereign risk. Three scenarios are considered conditional on one set of randomly drawn simulated exogenous shocks. In a country with a high sovereign risk, there is a negative relationship between debt and growth whereby debt- GDP ratio is above 90%. With an extremely high sovereign risk, the relationship turns out to be rather negative and the turning point is quite low. In some countries that sovereign risk is not that high, fiscal stimulus could be effective to improve the economic growth. Moreover, the relationships between debt and growth under the three scenarios are all hump-shaped. |
| Keywords: | Growth, Sovereign Debt, DSGE, Fiscal Policy. |
| JEL: | E62 F41 H30 H60 |
| Date: | 2015 |
| URL: | http://d.repec.org/n?u=RePEc:inf:wpaper:2015.05&r=mac |
| By: | Boneva, Lena (Bank of England); Harrison, Richard (Bank of England); Waldron, Matt (Bank of England) |
| Abstract: | Motivated by policies implemented by some central banks in response to the financial crisis, we use a simple New Keynesian model to study a particular form of forward guidance. We assume that the policy maker makes a state-contingent commitment to hold the policy rate at the zero lower bound (ZLB) in a way that ensures that specific macroeconomic variables (eg inflation) do not breach particular ‘thresholds’. In common with other similar policies, threshold-based forward guidance (TBFG) can be used to stimulate the economy at the ZLB via a commitment to hold the policy rate lower-for-longer than would otherwise have been the case. But TBFG also acts as a hedge against the asymmetric effects of shocks. That is because if further adverse shocks arise, prolonging the recession, exit would be expected to occur later and the policy would provide additional stimulus. In contrast, if positive shocks arrive, so that the economy recovers more quickly than originally expected, exit would be expected to occur sooner, thereby removing some of the policy stimulus. This hedging property of TBFG also means that there is a relatively low incentive for policy makers to renege on the policy, unlike lower-for-longer policies that depend purely on calendar time. |
| Keywords: | New Keynesian model; monetary policy; zero lower bound; forward guidance; thresholds |
| JEL: | E17 E31 E52 |
| Date: | 2015–10–23 |
| URL: | http://d.repec.org/n?u=RePEc:boe:boeewp:0561&r=mac |
| By: | İsmail Hakkı İşcan (Bilecik Şeyh Edebali University) |
| Abstract: | 2007 yılının ikinci altı aylık döneminden itibaren kendini hissettiren ve 2008 yılında ABD gayrimenkul piyasasında kredi geri ödemelerinde yaşanan olumsuzluklarla patlak veren sistemik finans krizi, 2009 yılında, ABD dışında diğer ülke ekonomilerini de etkisi altına almaya başlamıştır. 2011 yılından itibaren ise Avrupa Birliği (AB) ülkelerinde hissedilmeye başlanan kriz ve krize yönelik önleyici/iyileştirici politikaların etkileri hala devam etmektedir. Bu çalışma sistemik finans krizini iki merkez bankasının yürüttüğü para politikaları çerçevesinde incelemektedir. Amerikan Merkez Bankası (FED) ve Avrupa Merkez Bankası (ECB), krize yönelik aldıkları politikalarla dünya ekonomi gündemini belirlemekte ve adeta yönlendirmektedir. Krizin hemen başlangıcından itibaren niceliksel gevşeme (QE) politikaları ile aylık 85 milyar dolar gibi yüksek bir miktar ile piyasadan tahvil alım programı yürüten FED’in, bu programı sonlandırmaya başladığı yıllarda ECB’nin böyle bir programı yürütüp yürütmeyeceği hala tartışılıyordu. Parasal piyasalardaki dalgalanmalar ile enflasyon korkusu ECB’nin para politikalarına yön veren temel endişeler olduğu halde, FED için bu endişelere reel piyasalardaki olumsuzluklar ve işsizlik unsurunun da eklendiği görülmektedir. Krizin her iki bölge ekonomilerini farklı şekillerde etkilemesi yanında FED ve ECB’nin krizlere karşı aldığı tedbirlerde görülen anlayış farklılığı bu çalışmanın ortaya çıkarmaya çalışacağı en önemli husustur. |
| Keywords: | FED, ECB, Kriz, Para Politikası |
| JEL: | E52 E58 E50 E44 |
| Date: | 2015 |
| URL: | http://d.repec.org/n?u=RePEc:eyd:cp2015:212&r=mac |
| By: | Lubos Pastor; Pietro Veronesi |
| Abstract: | We develop a simple general equilibrium model with heterogeneous agents, incomplete financial markets, and redistributive taxation. Agents differ in both skill and risk aversion. In equilibrium, agents become entrepreneurs if their skill is sufficiently high or risk aversion sufficiently low. Under heavier taxation, entrepreneurs are more skilled and less risk-averse, on average. Through these selection effects, the tax rate is positively related to aggregate productivity and negatively related to the expected stock market return. Both income inequality and the level of stock prices initially increase but eventually decrease with the tax rate. Investment risk, stock market participation, and skill heterogeneity all contribute to inequality. Cross-country empirical evidence largely supports the model's predictions. |
| JEL: | E24 G1 H2 J24 J31 J38 |
| Date: | 2015–10 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:21668&r=mac |
| By: | Ricardo J. Caballero; Emmanuel Farhi; Pierre-Olivier Gourinchas |
| Abstract: | This paper explores the consequences of extremely low equilibrium real interest rates in a world with integrated but heterogenous capital markets, and nominal rigidities. In this context, we establish five main results: (i) Economies experiencing liquidity traps pull others into a similar situation by running current account surpluses; (ii) Reserve currencies have a tendency to bear a disproportionate share of the global liquidity trap—a phenomenon we dub the “reserve currency paradox;” (iii) Beggar-thy-neighbor exchange rate devaluations stimulate the domestic economy at the expense of other economies; (iv) While more price and wage flexibility exacerbates the risk of a deflationary global liquidity trap, it is the more rigid economies that bear the brunt of the recession; (v) (Safe) Public debt issuances and increases in government spending anywhere are expansionary everywhere, and more so when there is some degree of price or wage flexibility. We use our model to shed light on the evolution of global imbalances, interest rates, and exchange rates since the beginning of the global financial crisis. |
| JEL: | E0 F3 F4 G01 |
| Date: | 2015–10 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:21670&r=mac |
| By: | Hasan Bakır (Uludag University, Department of Economics); Filiz Eryılmaz (Uludag University, Department of Economics) |
| Abstract: | In the literature the relationships between inflation, real wages and labour productivity has received much attention. Because strong evidence of these variables can help shape policy formation for productivity enhancement, inflation control or consumption stimulation. There are a number of reasons why associations may exist between real wages, inflation and productivity. It is almost standard to envisage that inflation and productivity are negatively related as workers purchasing power affects motivation and effort, but also because inflation affects firms’ investment plans, influences capital depreciation rates and induces changes in the choices of production techniques in the literature. On the other hand a positive relationship between real wages and productivity is often hypothesized because higher real wages increase the opportunity cost of job loss and stimulate greater work effort to avoid redundancy. This positive relationship is also hypothesized because higher real wages put upward pressure on labour costs and cause firms to substitute capital for labour, thereby increasing the marginal productivity of labour. In this direction the purpose of this study is to investigate the relationship between labor productivity, real wages and inflation in Turkish manufacturing sector for the period 1988Q1- 2014Q2. Cointegration analysis,Granger causality and structural change tests has been used in order to see the existence of long-run and causality relationships between these three series. |
| Keywords: | Real wage, Inflation, Labour productivity, Cointegration, Granger causality, Turkey |
| JEL: | C50 E23 E29 |
| Date: | 2015 |
| URL: | http://d.repec.org/n?u=RePEc:eyd:cp2015:214&r=mac |
| By: | Martin ZUMPE |
| Abstract: | Over the past fifteen years, the “New Keynesian Model” has occupied a central place in macro-monetary economics. Michael Woodford’s “Interest and Prices” (2003) provides the smartest and most general presentation of this model. However, due to its non-linear and somehow fragmented structure, comprehension of this work may be challenging for readers. Sketchiness of analytical resolutions is another obstacle to full understanding. In order to cope with these difficulties, this paper suggests a unified, exhaustive and detailed derivation of Woodford’s basic model. Beyond a mere re-examination of Woodford’s analytical work, the paper investigates the functioning of the model and brings to light its implicit assumptions. It also shows the absence of national savings in the model, and provides an unpublished formal expression of the transmission mechanism of monetary policy. |
| Keywords: | new Keynesian model – dynamic stochastic equilibrium modelling – rational expectations – monetary policy |
| JEL: | E12 E32 D84 E52 |
| Date: | 2015 |
| URL: | http://d.repec.org/n?u=RePEc:grt:wpegrt:2015-30&r=mac |
| By: | Lehmann, Robert; Wohlrabe, Klaus |
| Abstract: | This paper looks into the 'fine print' of boosting for economic forecasting. By using German industrial production for the period from 1996 to 2014 and a data set consisting of 175 monthly indicators, we evaluate which indicators get selected by the boosting algorithm over time and four different forecasting horizons. It turns out that a number of hard indicators like turnovers, as well as a small number of survey results, get selected frequently by the algorithm and are therefore important to forecasting the performance of the German economy. However, there are indicators such as money supply that never get chosen by the boosting approach at all. |
| Keywords: | boosting; economic forecasting; industrial production |
| JEL: | C53 E17 E37 |
| Date: | 2015–11–03 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:67608&r=mac |
| By: | Maito, Esteban Ezequiel |
| Abstract: | In this paper we present a long-term study on the process of accumulation in Argentina over the past century. Explanations of the Argentine historical development are hegemonized by both the neoclassical, politically identified with the conservatives, and the Keynesian school, the latter related with Peronism and other particular ideologies. However, we will develop an alternative explanation deeply focused in Marxist political economy, empirical research and the country economic and political history over the past century. In the first section we will introduce some theoretical aspects aiming to a deeper acknowledge of some particularities in peripheral countries and their relation to Marxist political economy. In the second section, we establish a concrete analysis of the accumulation process in historical perspective. In the third section, we present the long run results of our estimates for Argentina in the period 1910-2011. |
| Keywords: | Argentina - Value - Accumulation - Rate of profit |
| JEL: | E22 E23 E32 N16 P16 |
| Date: | 2015–08 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:67560&r=mac |
| By: | Belke, Ansgar; Haskamp, Ulrich; Schnabl, Gunther; Zemanek, Holger |
| Abstract: | We scrutinize the role of capital flows in competitiveness in a set of seven euroarea member countries (Estonia, Greece, Latvia, Lithuania, Portugal, Slovenia, and the Slovak Republic) in the context of real convergence and crisis. A specific focus is on Greece. The paper extends the seminal Balassa-Samuelson model to include international capital markets, placing a particular focus on their impact on national wage policies. Capital flows are assumed to be able to invert the traditional direction of transmission of real wage increases from the tradable sector to the non-tradable sector and to cause real wages to increase beyond productivity increases. The augmented Balassa-Samuelson model is extended to trace cyclical deviations of real exchange rates from the productivity-driven equilibrium path. Panel estimations for the period from 1995 to 2013 show evidence of the Balassa-Samuelson effect if Greece is excluded from the panel. For Greece, this in turn provides evidence in favour of capital inflow-driven real wage increases in excess of productivity increases. |
| Abstract: | Dieser Beitrag untersucht die Bedeutung von Kapitalflüssen für die internationale Wettbewerbsfähigkeit einer Gruppe von sieben Mitgliedsländern der Eurozone (Griechenland, Portugal, Estland, Lettland, Litauen, Slowenien und die Slowakei) im Kontext realer Konvergenz und der Finanzkrise. Ein besonderer Fokus wird aber auf Griechenland gelegt. Wir erweitern für diese Zwecke das klassische Balassa-Samuelson Modell durch die Einbeziehung internationaler Kapitalmärkte - mit einem besonderen Fokus auf deren Einfluss auf nationale Lohnpolitiken. Wir nehmen an, dass Kapitalflüsse die traditionelle Richtung der Transmission von Reallohnerhöhungen vom Sektor der handelbaren Güter zum Sektor der nicht handelbaren Güter umkehren und Reallöhne über Produktionszuwächse ansteigen lassen können. Das so erweiterte Balassa-Samuelson Modell kann zyklische Abweichungen realer Wechselkurse vom produktivitätsgetriebenen Gleichgewichtspfad gut erklären. Unsere Panelschätzungen für die Periode von 1995 bis 2013 liefern immer dann Evidenz für den klassischen Balassa-Samuelson-Effekt, wenn Griechenland aus dem untersuchten Ländersample ausgeschlossen wird. Für Griechenland implizieren unsere Panelschätzungen im Umkehrschluss Evidenz für durch Kapitalzustrom induzierte Reallohnanstiege, die über das Produktivitätswachstum hinausgehen. |
| Keywords: | Balassa-Samuelson effect,capital inflows,exchange rate regime,inflation,Greece,Latvia,Portugal,panel model,productivity differential,wages |
| JEL: | E24 F16 F31 F32 |
| Date: | 2015 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:rwirep:577&r=mac |
| By: | James Poterba; Steven Venti; David A. Wise |
| Abstract: | We consider assets when individuals were last observed prior to death in the Health and Retirement Study (HRS) and trace assets backwards to the age when these individuals were first observed. For most individuals, assets in the last year observed (LYO) were very similar to assets in the first year observed (FYO). In particular, most of those who were last observed with very low asset levels also had low assets when first observed. We also estimate the relationship between an individual’s asset change between the first and last date of observation, that individual’s education and health status when first observed, and that individual’s within-sample changes in health and family composition. We obtain estimates for HRS respondents who were 51 to 61 in 1992 and for AHEAD respondents who were age 70 and over in 1993. |
| JEL: | E21 J14 |
| Date: | 2015–10 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:21682&r=mac |
| By: | Gökçer Özgür (Hacettepe University, Department of Economics); Emel Memiş (Ankara University, Department of Economics) |
| Abstract: | The economic crisis of the Eurozone emerged after the subprime mortgage crisis of the U.S. and since then fiscal profligacy of some member countries primarily Greece at the outset, were seen as the root of the crisis. However, alternative approaches pointed to the current account imbalances within the Eurozone; the flaws in the architecture of the Eurozone system. In this study, we aim to analyze these structural problems behind the macroeconomic imbalances and trace their consequences in terms of credit expansion and asset price speculation. More specifically we examine the impacts of credit expansion (the change in new loans relative to GDP) on asset prices using dynamic panel estimations for 11 countries in the Eurozone over the period 1990-2011. We provide the estimates for the pooled sample and for the subsample countries separately regrouped based on Hein (2013) as: i) the debt-led consumption (Greece, Ireland and Spain); ii) export-led mercantilist (Austria, Belgium, Finland, Germany and Netherlands) and iii) domestic demand-led countries (France, Italy and Portugal). We find that the credit expansion and asset prices are closely associated in the first and third group of countries whereas no significant correlation is observed in the second group. In addition we also provide evidence on the relationship between the growth of GDP and credit expansion supporting previous findings in the literature. |
| Keywords: | Credit expansion; Asset prices; Eurozone crisis; Macroeconomic imbalances |
| JEL: | E42 E65 F36 F34 |
| Date: | 2015 |
| URL: | http://d.repec.org/n?u=RePEc:eyd:cp2015:296&r=mac |
| By: | Felipe S. Iachan; Plamen T. Nenov; Alp Simsek |
| Abstract: | Financial innovations in recent decades have vastly expanded investors' portfolio choice. We theoretically analyze the effect of these developments on investors' savings and asset returns. In our model, investors with possibly heterogeneous beliefs choose their savings portfolios. Under mild assumptions, we establish a choice channel by which greater portfolio choice increases investors' (perceived) return from saving, and induces them to save more. We then investigate the asset pricing implications of the choice channel, which depend on the type of financial innovation. Our main result shows that greater customization, which we capture with improved ability to trade risky assets other than the market portfolio, reduces the expected return on every asset. This result is consistent with the decline in the risk-free interest rate since the early 1980s, and is in contrast with the "precautionary savings" literature that would make the opposite prediction. Greater participation, which we capture with improved ability to trade the market portfolio, reduces the risk premia but typically increases the risk-free rate. We also analyze the effect of greater securitization, which we capture with a relaxation of constraints to issue risk-free promises in an environment in which there is a high demand for safe assets. |
| JEL: | E21 E43 E44 G11 G12 |
| Date: | 2015–10 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:21686&r=mac |
| By: | Benjamin W. Pugsley; Aysegül Sahin |
| Abstract: | We document two striking facts about U.S. firm dynamics and interpret their significance for employment dynamics. The first is the dramatic decline in firm entry and the second is the gradual shift of employment toward older firms since 1980. We show that despite these trends, the lifecycle dynamics of firms and their business cycle properties have remained virtually unchanged. Consequently, aging is the delayed effect of accumulating startup deficits. Together, the decline in the employment contribution of startups and the shift of employment toward more mature firms contributed to the emergence of jobless recoveries in the U.S. economy. |
| Keywords: | firm dynamics, employment dynamics, business cycles, entrepreneurship |
| Date: | 2015–10 |
| URL: | http://d.repec.org/n?u=RePEc:cen:wpaper:15-33&r=mac |
| By: | Marco Battaglini; Levon Barseghyan |
| Abstract: | We present a theory of endogenous fiscal policy and growth. Fiscal policy — debt, income tax, spending on local public goods and public investment — is determined through legislative bargaining. Economic growth depends directly on public investment, private investment in human capital and, via learning-by-doing, labor supply. The model predicts that the economy converges to a balanced growth path in which consumption, private investment, public investment, public goods provision, public debt and productivity grow at the same constant rate. The transition to the balanced growth path is characterized by what we call the shrinking government effect: public debt grows faster than GDP, provisions of public goods and infrastructure grow slower than GDP and the tax rate declines. We use the model to study the impact of austerity programs which impose a ceiling on the amount of public debt a country can issue. |
| JEL: | D72 E6 E62 H6 H72 |
| Date: | 2015–10 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:21660&r=mac |
| By: | Christopher J. Ruhm |
| Abstract: | This analysis summarizes prior research and uses national, state and county level data from the United States from 1976-2013 to examine whether the mortality effects of economic crises differ in kind from those of the more typical fluctuations. The tentative conclusion is that economic crises affect mortality rates (and presumably other measures of health) in the same way as less severe downturns: namely, they lead to improvements in physical health. The effects of severe national recessions in the United States, appear to have a beneficial effect on mortality that is roughly twice as strong as that predicted due to the elevated unemployment rates alone while the higher predicted rate of suicides during typical periods of economic weakness is approximately offset during severe recessions. No consistent pattern is obtained for more localized economic crises occurring at the state level – some estimates suggest larger protective mortality effects while others indicate offsetting deleterious consequences. |
| JEL: | E32 I1 I12 I18 J68 |
| Date: | 2015–10 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:21604&r=mac |
| By: | Michael Cooper; John McClelland; James Pearce; Richard Prisinzano; Joseph Sullivan; Danny Yagan; Owen Zidar; Eric Zwick |
| Abstract: | “Pass-through” businesses like partnerships and S-corporations now generate over half of U.S. business income and account for much of the post-1980 rise in the top- 1% income share. We use administrative tax data from 2011 to identify pass-through business owners and estimate how much tax they pay. We present three findings. (1) Relative to traditional business income, pass-through business income is substantially more concentrated among high-earners. (2) Partnership ownership is opaque: 20% of the income goes to unclassifiable partners, and 15% of the income is earned in circularly owned partnerships. (3) The average federal income tax rate on U.S. pass- through business income is 19%|much lower than the average rate on traditional corporations. If pass-through activity had remained at 1980's low level, strong but straightforward assumptions imply that the 2011 average U.S. tax rate on total U.S. business income would have been 28% rather than 24%, and tax revenue would have been approximately $100 billion higher. |
| JEL: | D31 D33 E25 E62 H2 H22 H25 M2 |
| Date: | 2015–10 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:21651&r=mac |
| By: | Scott R. Baker; Nicholas Bloom; Steven J. Davis |
| Abstract: | We develop a new index of economic policy uncertainty (EPU) based on newspaper coverage frequency. Several types of evidence - including human readings of 12,000 newspaper articles - indicate that our index proxies for movements in policy-related economic uncertainty. Our US index spikes near tight presidential elections, Gulf Wars I and II, the 9/11 attacks, the failure of Lehman Brothers, the 2011 debt-ceiling dispute and other major battles over fiscal policy. Using firm-level data, we find that policy uncertainty raises stock price volatility and reduces investment and employment in policy-sensitive sectors like defense, healthcare, and infrastructure construction. At the macro level, policy uncertainty innovations foreshadow declines in investment, output, and employment in the United States and, in a panel VAR setting, for 12 major economies. Extending our US index back to 1900, EPU rose dramatically in the 1930s (from late 1931) and has drifted upwards since the 1960s. |
| Keywords: | Economic uncertainty, policy uncertainty, business cycles, fluctuations |
| JEL: | D80 E22 E66 G18 L50 |
| Date: | 2015–10 |
| URL: | http://d.repec.org/n?u=RePEc:cep:cepdps:dp1379&r=mac |
| By: | Stefano Bosi (EPEE, University of Evry); David Desmarchelier (LEM, University of Lille) |
| Abstract: | Since Heal (1982), there is a theoretical consensus about the occurrence of limit cycles (through a Hopf bifurcation) under a positive effect of pollution on consumption demand (compensation effect ) and about the impossibility under a negative effect (distaste effect ). However, recent empirical evidence advocates for the relevance of distaste effects. Our paper challenges the conventional view on the theoretical ground and reconciles theory and evidence. The Environmental Kuznets Curve (pollution Þrst increases in the capital level then decreases) plays the main role. Indeed, the standard case à la Heal (limit cycles only under a compensation effect ) only works along the upward-sloping branch of the curve while the opposite (limit cycles only under a distaste effect ) holds along the downward-sloping branch. Welfare effects of taxation also change according to the slope of the EKC. |
| JEL: | E32 O44 |
| Date: | 2015 |
| URL: | http://d.repec.org/n?u=RePEc:eve:wpaper:15-04&r=mac |
| By: | Toke Aidt (University of Cambridge and CESifo); Zareh Asatryan (ZEW Mannheim and University of Freiburg); Lusine Badalyan (University of Bremen and Jacobs University); Friedrich Heinemann (ZEW Mannheim and University of Heidelberg) |
| Abstract: | We study the short-run effect of elections on monetary aggregates in a sample of 85 low and middle income democracies (1975-2009). We find an increase in the growth rate of M1 during election months of about one tenth of a standard deviation. A similar effect can neither be detected in established OECD democracies nor in other months. The effect is larger in democracies with many poor and uneducated voters, and in Sub-Saharan Africa, Latin America, and in East-Asia and the Pacific. We argue that the election month monetary expansion is related to systemic vote buying which requires significant amounts of cash to be disbursed right before elections. The finely timed increase in M1 is consistent with this; is inconsistent with a monetary cycle aimed at creating an election time boom; and it cannot be, fully, accounted for by alternative explanations. |
| Keywords: | Political business cycles, vote buying, monetary economics |
| JEL: | D72 E51 O10 |
| Date: | 2015 |
| URL: | http://d.repec.org/n?u=RePEc:ieb:wpaper:doc2015-23&r=mac |
| By: | Hacı B. Işık (Kırıkkale Üniversitesi, İktisat Bölümü); Efe Can Kılınç (Kırıkkale Üniversitesi, Ekonometri Bölümü); Nazan Şahbaz Kılınç (Kırıkkale Üniversitesi, İktisat Bölümü) |
| Abstract: | Arthur Okun tarafından 1962 yılında Amerikan ekonomisi üzerine yapılan çalışma sonucu geliştirilen Okun Kanunu en basit haliyle, çıktı açığı (output gap) ve işsizlik (unemployment) arasındaki negatif ilişkiyi göstermektedir. Okun Kanunu, birçok araştırmacının ilgisini çekmiş, yapılan uygulamalı çalışmalarda işsizliğin yanısıra; emek verimliliği, çalışma saatleri, teknoloji ve sermaye gibi değişkenler de kullanılmıştır. Bu çalışmada, OECD ülkelerinde çıktı açığı ile işsizlik oranı arasındaki ilişki, 1990-2014 dönemi için dinamik panel veri yöntemleri kullanılarak test edilmiştir. Bulgular, Okun Katsayısı’nın OECD ülkeler için geçerli olduğunu göstermiştir. Ayrıca, çıktı düzeyi ile işsizlik arasında iki yönlü bir ilişki olduğu görülmüştür. |
| Keywords: | Okun Kanunu, İşsizlik, Büyüme, Dinamik Panel Veri |
| JEL: | E24 O40 C23 |
| Date: | 2015 |
| URL: | http://d.repec.org/n?u=RePEc:eyd:cp2015:249&r=mac |
| By: | KANO, Takashi; WADA, Kenji |
| Abstract: | This paper reconsiders the successful currency outcome of the first arrow of the Abenomics. The Japanese yen depreciation against the U.S. dollar after the introduction of the first arrow comoves tightly with long-term yield differentials between Japan and the United States. The estimated term structure of the sensitivity of the currency return of the Japanese yen to the two-country interest rate differential indeed shifts up and becomes steeper after the onset of the Abenomics. To explain this structural change in the term structure of the Fama regression coeffiient, we employ a long-run risk model endowed with real and nominal conditional volatilities as in Bansal and Shaliastovich (2013). Under a plausible calibration, the model replicates the structural change when nominal uncertainty dominates real uncertainty in the U.S. bond market. We conjecture that the arrow was shot off from the U.S. side, not the Japan side. |
| Keywords: | Japanese yen/U.S. dollar exchange rate, Term structure, Fama regression, Long-run risk, Abenomics |
| JEL: | E31 E37 F41 |
| Date: | 2015–10–29 |
| URL: | http://d.repec.org/n?u=RePEc:hit:hiasdp:hias-e-13&r=mac |
| By: | Huriye Alkın (Akdeniz University, Department of Economics); Sayım Işık (Akdeniz University, Department of Economics) |
| Abstract: | Bugün birçok merkez bankasının kullandığı para politikası, Yeni Uzlaşı modeli tarafından geliştirilen enflasyon hedeflemesine dayanmaktadır. Bu model çerçevesinde para politikasının amacının fiyat istikrarı olduğu kabul edilmekte ve enflasyon para politikaları sonucu ortaya çıkan parasal bir olgu olarak görülmektedir. Fiyat istikrarı ile uzun dönemde enflasyonun maliyetinin en aza indirgenmesi ve çıktı düzeyinin potansiyel (doğal) seviye taşınması hedeflenmektedir. Post Keynesyen yaklaşım, modern merkez bankalarının temelini oluşturan enflasyon hedeflemesini ekonomi ile uyumu açısından irdelemektedir. Post Keynesyen yaklaşımda enflasyon hedeflemesine dayalı faiz kuralları reddedilmekte ve bu faiz kuralına alternatif olarak üç farklı faiz kuralı geliştirilmektedir. Bu faiz kurallarından ilki, Pasinetti (1980)' nin ''adil faiz oranı'' kuralıdır. Bu faiz kuralında faizler ücretlerin artış oranına eşitlenmektedir. İkinci faiz kuralı Wray'in nominal faizleri sıfıra eşitlediği ''Kansas kural''dır. Üçüncü faiz kuralı Smithin'in geliştirdiği ucuz para politikasına dayanan düşük faizin savunulduğu ''Smithin kural''dır. Bu çalışmada İleriye Dönük Taylor kuralının TCMB para politikasındaki geçerliliği araştırılmaktadır. Türkiye'nin 2006: 01-2015: 02 dönemine ait aylık verileri kullanılmıştır. Analizde reel faiz oranı, faiz düzleştirme değişkeni, döviz kuru, enflasyon açığı ve çıktı açığı değişkenleri kullanılmıştır. Değişkenler arasındaki uzun dönem ilişki Johansen eşbütünleşme testi ile incelenmiştir. Ardından değişkenler arasındaki nedensellik test edilmiştir. Testlerin sonucunda enflasyon açığı, faiz düzleştirme değişkeni ve reel faiz oranı arasında uzun dönemli ilişkiye rastlanmıştır. Granger nedensellik testinin sonuçları ise uzun dönemde enflasyon açığı ve faiz düzleştirme değişkeninden faiz oranına doğru nedenselliğin olduğunu göstermektedir. |
| Keywords: | Post Keynesyenler, Yeni Uzlaşı, Post Keynesyen Faiz Kuralları, Post Keynesyen Enflasyon Hedeflemesi, Yeni Uzlaşı Enflasyon Hedeflemesi, TCMB Para Politikası |
| JEL: | E11 E43 E52 E58 |
| Date: | 2015 |
| URL: | http://d.repec.org/n?u=RePEc:eyd:cp2015:117&r=mac |
| By: | Ceyhun Elgin (Bogazici University, Economics); Oguz Oztunalı (Bogazici University, Economics) |
| Abstract: | The presence of informality and its connection with economic growth has been a contentious issue on which the current literature has failed to generate a consensus. In this study, first, we investigate the growth performance of the Turkish economy through the lenses of a simple growth accounting exercise. Moreover, we also extend the growth accounting framework to account for the presence of an informal sector and give emphasis on how the presence of a relatively large informal sector in Turkey (about 28 % of GDP, according to recent estimates) affects growth of the official economy as well as its determinants. |
| Keywords: | Economic Growth, Growth Accounting, Turkish Economy, Informal Sector |
| JEL: | E26 O17 O47 |
| Date: | 2015 |
| URL: | http://d.repec.org/n?u=RePEc:eyd:cp2015:4&r=mac |
| By: | Julian Caballero (Research Department, Inter-American Development Bank, 1300 New York Ave NW, Washington DC); Ugo Panizza (Department of International Economics, The Graduate Institute of International and Development Studies, Maison de la Paix, Case Postale 136, CH1211 Genève 21); Andrew Powell (Research Department, Inter-American Development Bank, 1300 New York Ave NW, Washington DC) |
| Abstract: | Recent work suggests that non-financial firms have acted like financial intermediaries particularly in emerging economies. We corroborate these findings but then ask why? Our results indicate evidence for carry-trade activities but focused in countries with higher levels of capital controls, particular controls on infl‡ows. We find little evidence for such activities given other potential motives. We posit that this phenomenon is due more to the reaction to low global interest rates and strong capital infl‡ows than to incomplete markets or the retreat of global banks due to impaired balance-sheets or tighter regulations. |
| Keywords: | Corporate finance, bond issuance, currency mismatches, carry-trade, capital controls |
| JEL: | E51 F30 F33 |
| Date: | 2015–10–01 |
| URL: | http://d.repec.org/n?u=RePEc:gii:giihei:heidwp21-2015&r=mac |
| By: | Mehmet Songur (Gazi University, Department of Economics) |
| Abstract: | Geleneksel makro iktisat teorisinde, fiyat düzeyinin belirlenmesi hususunda maliye politikalarının önemli olup olmadığı konusunda tartışmalar yer almaktadır. Bu bağlamda Ricardocu Maliye Politikası (RFPs)’nı savunan gruba göre, fiyat düzeyinin belirlenmesinde maliye politikaları önemli değildir. RFPs’nda faiz dışı bütçe fazlasının en önemli belirleyicisi kamu borcudur. Ancak bu tartışmalar 1990’lı yıllarda ülkelerde gerçekleşen mali açıklar ve fiyat istikrarsızlıkları ile tekrar gündeme gelmiştir. Leeper (1991), Sims (1993), Woodford (1994, 1995, 2001) ve Cochrane (2001) gibi iktisatçılar fiyat düzeyinin belirlenmesinde maliye politikalarının önemli olduğunu iddia etmiş ve Fiyat Düzeyinin Mali Teorisi (FTPL) olarak anılan yaklaşımı geliştirmişlerdir. FTPL’ye göre, maliye politikasının geçerli disiplinden yoksun olduğu yıllarda, merkez bankasının fiyat istikrarını sağlamak için etkin politikalar yürütemeyeceği ileri sürülmüştür. Woodford (1996)’a göre, parasal birlik sağlayan tüm ülkelerde RFPs uygulanırsa mali şoklar enflasyon, faiz ve çıktıyı etkilemez. Ancak ülkelerden biri FTPL uyguluyorsa söz konusu şoklar parasal birlik üyesi tüm ülkelerde parasal değerleri ve çıktıyı etkiler. Elmas ve Songur (2015), Avrupa Birliği Ekonomik ve Parasal Birlik üyesi ülkeler için gerçekleştirdikleri analizlerinde, ele alınan ülkelerin RFPs’yi uyguladıkları sonucuna ulaşmışlardır. Söz konusu çalışmadan hareketle Avrupa Birliği’ne aday ülke konumunda bulunan Türkiye’nin fiyat düzeyinin belirlenmesinde maliye politikasının etkisinin araştırılması önemlidir. Çalışmanın temel amacı, Türkiye’de RFPs’nin ya da FTPL’nin geçerliliğini (2001 yılında gerçekleşen kriz dikkate alınarak) zaman serisi tekniklerinden yararlanarak 1975-2014 dönemi için analiz etmektir. Bu çerçevede Afonso (2002) tarafından geliştirilen model kullanılarak kamu borcunun bir dönem gecikmesinin faiz dışı bütçe fazlası üzerine etkileri incelenecektir. |
| Keywords: | Ricardocu Maliye Politikası, Fiyat Düzeyinin Mali Teorisi, Zaman Serisi Analizi |
| JEL: | C32 E62 H62 |
| Date: | 2015 |
| URL: | http://d.repec.org/n?u=RePEc:eyd:cp2015:63&r=mac |
| By: | Mahir Binici (Central Bank of Turkey); Hakan Kara (Central Bank of Turkey); Pınar Özlü (Central Bank of Turkey) |
| Abstract: | In the aftermath of the global crisis, to alleviate the dilemma between price stability and financial stability and to reduce macro financial risks, many central banks in emerging economies developed unconventional policies and heavily used macro-prudential tools. In this process, the Central Bank of Turkey used a policy combination of interest rate corridor, one-week repo rate, reserve requirements, foreign exchange intervention and liquidity policy. In this study, using bank level data, we investigate the impact of alternative policy tool on the credit and deposit rates. Accordingly, we document that the impact of policy instruments on deposit and loan rates differs; implying different policy instruments could have significant implications for bank behavior. |
| Date: | 2015 |
| URL: | http://d.repec.org/n?u=RePEc:eyd:cp2015:24&r=mac |
| By: | Maria Alessandra Antonelli; Valeria De Bonis (Università Sapienza di Roma - Dipartimento di Studi Giuridici, Filosofici ed Economici) |
| Abstract: | In questo lavoro esaminiamo le caratteristiche dei sistemi di welfare europei con riferimento alla tradizionale quadripartizione in regimi (nordico, anglosassone, continentale, meridionale), considerando misure della spesa sociale che tengono conto sia della differenza tra spesa lorda e spesa netta, sia di quella tra spesa pubblica e spesa privata. Inoltre, all’analisi della struttura della spesa pubblica, uniamo quella del finanziamento della stessa. Attraverso il metodo dell’analisi dei gruppi, troviamo che non esiste una distinzione tra paesi continentali e meridionali, e che l’Irlanda appartiene al gruppo anglo-sassone se si considerano esclusivamente gli indicatori dal lato del finanziamento. Length: 68 pages |
| Keywords: | Non-separable preferences, OLG, cycles |
| JEL: | D50 D91 E13 E32 O41 |
| Date: | 2015–10 |
| URL: | http://d.repec.org/n?u=RePEc:gfe:pfrp00:00016&r=mac |
| By: | Nicat Gasım (Dokuz Eylül Üniversitesi ,İktisadi İdari Bilimler Fakültesi, Ekonometri Bölümü); Hatice Armutçuoğlu (Adnan Menderes Üniversites, Söke İşletme Fakültesi, Bankacılık ve Finans Bölümü); Hakan Kahyaoğlu (Dokuz Eylül Üniversitesi ,İktisadi İdari Bilimler Fakültesi, İktisat Bölümü) |
| Abstract: | Bu çalışmada amaç döviz kuru ve ithal mal fiyatlarının iç fiyatlar düzeyi üzerindeki etkisini analiz etmektir. Uluslararası fiyat düzeyindeki gelişmeler ülkelerin ticaret yapmış oldukları ülke gruplarının toplam ithalat içindeki paylarına bağlı olarak ithalat yoluyla enflasyon üzerinde etkili olmaktadır. Bu kanal dolaysız kanal iken, döviz kurlarına bağlı etki ise dolaylı kanalı oluşturmaktadır. Bu açıdan dış fiyatlardaki gelişmeler ile ülkenin döviz kurundaki gelişmeler fiyatlar genel düzeyi üzerinde asimetrik etkileri olmaktadır. Bununla birlikte iç fiyatların, özellikle maliyet unsurlarına bağlı olarak aşağıya doğru esnek olmaması da bu asimetrinin en önemi nedeni olmaktadır. Bundan dolayı bu çalışmada asimetrik durumun varlığını dikkate alan tahmin yaklaşımı kullanılmıştır. Ayrıca sözkonusu asimeterik durumun varlığının ortaya çıkardığı parametrelerin zamana bağlı değişkenliğine bağlı olarak zaman göre değişim tekniği tahminleme aşamasında tercih edilmiştir. Bu çalışma da yeni açıklanmaya başlanan yurt içi ve yurt dışı fiyatlar endeksleri kullnıldığı için elde edilen sonuçlar dış ticaret politikalarına yönelik bilgi sağlamakatadır. |
| Keywords: | Dış Ticaret, Enflasyon, Asimetrik Etki |
| JEL: | E31 F19 C32 |
| Date: | 2015 |
| URL: | http://d.repec.org/n?u=RePEc:eyd:cp2015:246&r=mac |
| By: | Mehmet Cem Fendoğlu (Ministry of Development) |
| Abstract: | 2008 küresel finansal krizinin gelişmiş ülke ekonomilerine maliyeti ağır olmuş, takip eden yıllarda uygulanan niceliksel genişlemeler ve politika belirsizlikleri uluslararası finansal piyasaları oldukça oynak hale getirmiştir. Bunun sonucunda gelişmekte olan ülkelerde finansal istikrar sorunu ortaya çıkmıştır. Bu maliyetleri en aza indirgemek için geleneksel politikaların işe yaramayacağı anlaşılmış ve geleneksel olmayan alternatif politikalara ihtiyaç duyulmuştur. Bu politika ihtiyacına makro-ihtiyati politikalar cevap verebilmiştir. Bu bağlamda, krizden ve kriz sonrası oluşan yoğun sermaye akımlarından en çok etkilenen gelişmekte olan 15 ülke için uygulanan makro-ihtiyati araçların finansal istikrarı sağlamada öncü bir gösterge olan reel kredi büyümesine olan etkisi dinamik bir panel regresyon analizi ile sistem genelleştirilmiş momentler metodu (GMM) kullanılarak test edilmiştir. Analiz sonucunda makro-ihtiyati araçların çoğunun (özellikle ve sırasıyla sermaye gereksinimi, zorunlu karşılıklar, borç-gelir limiti ve kredi büyümesi limitinin) reel kredi büyümesini ve sermaye akımlarının reel kredi büyümesi üzerindeki hassasiyetini düşürdüğü sonucuna varılmıştır. |
| Keywords: | Finansal istikrar, makro-ihtiyati araçlar, dinamik panel regresyon, sistem GMM yöntemi |
| JEL: | E50 E61 G10 G32 |
| Date: | 2015 |
| URL: | http://d.repec.org/n?u=RePEc:eyd:cp2015:233&r=mac |
| By: | Gökçer Özgür (Hacettepe University, Department of Economics) |
| Abstract: | Austerity policies have defined the economic and political landscape of Europe since the break of the last economic crisis. These policies claim to promote long-term economic growth by promoting domestic savings so that savings can lead to investments and economic growth. Yet, saving-investment equality has always been a highly disputed topic in economics. Though various economists from different background accept this equality ex post, the causality ex ante is an area of dispute: the main issue, at least since Keynes published General Theory, whether investments lead to savings or ex ante savings are responsible for investment. This difference has serious macroeconomic policy outcomes; Feldstein-Horioka Puzzle (Feldstein and Horioka, 1980), Glut of Savings (Bernanke, 2005) and finally austerity programs have all built on the presumption that ex ante savings are responsible for investments and economic growth. However, heterodox economists, especially Post Keynesians, have gathered an immense literature with theoretical and empirical studies. The mainstream views depend on the notion that households, government, firms and foreign savings take place first and these are used to fund investments. In this understanding, households or firms decision to save at the micro level is assumed as responsible for national savings at the macro level. However, these studies, especially empirical ones, do not tell how national savings data is compiled and how micro saving decisions lead to national savings at the macro level. A close study of saving data reveals that national savings data is compiled at the macro level ex post as simple national income accounting dictates. And there is a big gap between savings at the micro level and national savings and this gap is estimated as a residual so that savings at the micro level and macro level can fit to each other. In this study we will analyze how savings data is compiled according to System of National Accounts (SNA), the international guideline for national income accounting since 1946, and U.S. Flow of Funds Accounts. Both sources reveal that an economic unit, a household, a government or a national economy is not constrained by savings; and each unit can always spend more (or less) than its income which in turn lead to an increase in liabilities (assets). (This methodology is not new for Post Keynesians, especially to those using stock-flow consistent approach.) According to SNA, micro level savings are only “balancing items” and the differences between savings at the micro level and national savings are again balanced with another item; i.e. consumption of fixed capital (CFC). The CFC, by definition, is estimated according to investment data and in many economies it is the largest component of national savings. As a result, many economists are using national savings data to argue savings are responsible for investment, yet the data they use is compiled ex post through national income accounting and investment is the biggest component there. This study will try to show that there is no ex ante savings data independent of investment and national income which means empirical studies that starts with ex ante savings is flawed from their start. |
| Keywords: | na |
| Date: | 2015 |
| URL: | http://d.repec.org/n?u=RePEc:eyd:cp2015:297&r=mac |
| By: | Tatjana Dahlhaus; Justin-Damien Guénette; Garima Vasishtha |
| Abstract: | Emerging-market economies have become increasingly important in driving global GDP growth over the past 10 to 15 years. This has made timely and accurate assessment of current and future economic activity in emerging markets important for policy-makers not only in these countries but also in advanced economies. This paper uses state-of-theart dynamic factor models (DFMs) to nowcast real GDP growth in five major emerging markets—Brazil, Russia, India, China and Mexico (“BRIC+M”). The DFM framework allows us to efficiently handle data series characterized by different publication lags, frequencies and sample lengths. This framework is particularly suitable for emerging markets for which many indicators are subject to significant publication lags and/or have been compiled only recently. The methodology also allows us to extract model-based “news” from a data release and assess the impact of this news on nowcast revisions. Results show that the DFMs generally outperform simple univariate benchmark models for the BRIC+M. Overall, our results suggest that the DFM framework provides reliable nowcasts for GDP growth for the emerging markets under consideration. |
| Keywords: | Econometric and statistical methods, International topics |
| JEL: | C33 C53 E37 |
| Date: | 2015 |
| URL: | http://d.repec.org/n?u=RePEc:bca:bocawp:15-38&r=mac |
| By: | Juan Mauricio Ramírez; Susana Martínez-Restrepo; Adriana Sabogal |
| Abstract: | Este libro propone recomendaciones de política para mejorar la calidad y pertinencia de la educación Técnica y Tecnológica (T&T) en el Pacífico y lograr una mayor inclusión y movilidad social de los jóvenes afrocolombianos, a través de su inserción exitosa en el mercado laboral formal. Para ello, en los diferentes capítulos de este libro se estudian en cuanto a la oferta, las características del capital humano, el acceso, la calidad, y la diversidad de los programas de educación técnica y tecnológica en el Pacífico, así como las habilidades cognitivas y socio-emocionales de los estudiantes y egresados de estos programas. Respecto a la demanda, se estudian las características del mercado laboral, el tejido empresarial y la demanda de habilidades socio-emocionales por parte de los empleadores. Este estudio muestra que existe una correlación espacial entre la pobreza, la falta de tejido empresarial, la informalidad laboral y la concentración de población afrocolombiana. El Pacífico refleja igualmente, mayores desafíos en cuanto a la calidad de los programas y mayores índices de deserción de programas T&T que el departamento del Valle y que el promedio nacional. Se resalta además, que aunque la población afrodescendiente presenta igual o un mayor número de años de educación, también presenta mayores índices de desempleo y de informalidad que la población no afrodescendiente. No obstante, no existen diferencias significativas en cuanto a ingresos entre la población afrodescendiente y el resto, y las principales diferencias en la región están asociadas con el género. Las habilidades socio-emocionales (estabilidad emocional, extraversión, apertura, amabilidad y responsabilidad) son igualmente cruciales para el desempeño escolar y el éxito laboral. Se observa que existen deficiencias importantes en varias de éstas habilidades, sobre todo entre estudiantes de programas de baja calidad. Se requieren estrategias transversales en los municipios del Pacifico en donde se concentran los mayores índices de pobreza, y al mismo tiempo, la mayor proporción de población afrodescendiente. Una mayor oferta de T&T y un mayor acceso no necesariamente conllevan a un cambio en la inclusión de estos jóvenes. La educación superior como instrumento para la movilidad social, sólo tiene sentido si es de calidad, si tiene pertinencia con el mercado laboral y el tejido empresarial local y si se desarrollan las habilidades socio-emocionales necesarias. |
| Keywords: | Educación Técnica y Tecnológica, Región Pacífica, Afrodescendientes, Desarrollo de Capital Humano, Tejido empresarial, Habilidades socio-emocionales, Educación, Colombia |
| JEL: | E24 J24 I21 I25 |
| Date: | 2015–09–23 |
| URL: | http://d.repec.org/n?u=RePEc:col:000124:013887&r=mac |
| By: | Eren Yıldırım (Hitit University, Departments of Economics) |
| Abstract: | Bu çalışma, seçilmiş ülkelerde gelir eşitsizliğinin toplam tasarruflar üzerindeki etkisini incelemeyi amaçlamaktadır. Son yıllarda, gelir eşitsizliği konusunda yapılan çalışmalara dünya genelinde artan bir ilgi söz konusudur. Gelir eşitsizliğinin artan öneminin, ülkelerin ekonomik büyüme performansıyla ilişkili olabileceği düşünülmektedir. Ekonomik büyüme eğilimi dalgalı seyir izleyen ülkelerde gelir eşitsizliğinin yüksek olduğu görülmektedir. İktisat literatüründeki bazı büyüme teorilerine göre, ekonomik büyümenin dinamiklerinden biri tasarruflardır. Ayrıca, hanehalklarının gelir düzeyleri artarken marjinal tasarruf eğilimleri de artmaktadır. Bu nedenle, gelir eşitsizliği artarken hanehalklarının tasarruf davranışlarına bağlı olarak ülkelerin ekonomik büyüme performansları farklılık gösterebilmektedir. Böylece gelir eşitsizliği gerek gelişmiş gerek gelişmekte olan ülkeler için önemli bir makroekonomik gösterge haline gelmektedir. Literatürde gelir eşitsizliği ile tasarruflar arasındaki ilişkiyi analiz eden çok sayıda çalışma bulunmaktadır. Bu çalışmaların bazılarında gelir eşitsizliğinin ülkelerin tasarruf oranları üzerindeki etkisinin pozitif olabileceği, bazılarında ise negatif olabileceği ortaya konulmaktadır. Buna göre, çalışmada hedeflenen gelir eşitsizliğinin toplam tasarruflar üzerindeki etkisinin seçilmiş ülkelerde ne yönde olduğunun ortaya konulmasıdır. Bu kapsamda, çalışmada 1980-2013 yılları arasında seçilmiş ülkelerde gelir eşitsizliğinin tasarruflar üzerindeki etkisini gözlemlemek için panel veri analizi yapılmaktadır. Elde edilen ilk bulgular teorik ve ampirik literatüre paralel olarak, gelir eşitsizliğinin tasarruflar üzerinde farklı etkileri olduğunu göstermektedir. |
| Keywords: | Gelir Eşitsizliği, Tasarruflar, Panel Veri Analizi |
| JEL: | O15 D63 E21 |
| Date: | 2015 |
| URL: | http://d.repec.org/n?u=RePEc:eyd:cp2015:220&r=mac |
| By: | Selva Baziki (Central Bank of the Republic of Turkey, Banking and Financial Institutions Department) |
| Abstract: | This paper studies the effect of increased competition from low wage countries on the earnings gap between skilled and unskilled workers by using matched worker-firm micro data covering the total population of workers in private manufacturing firms in Sweden, 1996-2007. Treating Chinese accession into WTO as an exogenous shock to domestic competition, the paper shows that higher Chinese import penetration increases the wage gap between low educated and college educated workers, translating into a rise in wage inequality. Estimations show that the skill wage gap has increased due to a significant increase in the premium for college educated workers. This effect remains even after taking a time trend in the return to college education into account. The effect on high-skilled workers in response to an average of 2.9 percentage point increase in Chinese import penetration is 2.7 percent higher wages. Since real skilled wages have risen about 27 percent in this period, suggesting that rising competition from low-wage countries has contributed to around 10 percent of the increase in skilled wages. Skilled workers appear to be complementary to the goods imported from low-wage countries, and therefore command a higher wage with rising imports from China. Firms may even upgrade their production technologies in response to rising competition from China, which should further increase the demand for and wages of these workers. One of the reasons why wages for non-college workers are not significantly affected by changes in Chinese imports could be due to the institutional setting in Sweden where contracts negotiated with labor unions impose lower limits on wages. The results of the paper differ from previous work by both utilizing a detailed matched employer-employee database and by finding a robust and significant positive effect on the return to college education even after controlling for a time trend in return to education. |
| Keywords: | Chinese Imports, Wage Dynamics, Import Competition, Skill Premium, Return to Education |
| JEL: | E24 F16 J24 J31 L60 |
| Date: | 2015 |
| URL: | http://d.repec.org/n?u=RePEc:eyd:cp2015:260&r=mac |
| By: | Eşref Uğur Çelik (Atilim University, Depertmant of Economics); Mustafa İsmihan (Atilim University, Depertmant of Economics) |
| Abstract: | Ülkelerin makroekonomik performanslarını inceleyen çalışmaların çoğunda makroekonomik performansın farklı boyutlarını ölçmek için değişik göstergeler kullanılmaktadır. Her ne kadar, her gösterge tek başına faydalı olsa da, genel makroekonomik performans düzeyini gösteren bileşik bir gösterge (endeks) araştırmacılara farklı hükümetlerin ve dönemlerin performanslarını kıyaslama ve sıralama olanağı verecektir. Bu çalışmanın temel amacı beş temel makroekonomik göstergeyi ─işsizlik oranı, büyüme hızı, cari işlemler dengesi, kamu bütçe dengesi ve enflasyon oranı─ kullanarak makroekonomik performans endeksi oluşturmak ve, çok partili dönemde (1950-2014), farklı siyasi ve yapısal evreleri analiz etmektir. |
| Keywords: | Türkiye Ekonomisi, Çok Partili Dönem, Makroekonomik Performans |
| JEL: | E60 C82 O50 |
| Date: | 2015 |
| URL: | http://d.repec.org/n?u=RePEc:eyd:cp2015:209&r=mac |
| By: | Stefano Bosi (EPEE, University of Evry); Cuong Le Van (CNRS, Paris School of Economics, IPAG, VCREME); Ngoc-Sang Pham (EPEE, University of Evry) |
| Abstract: | We build dynamic general equilibrium models with heterogeneous produc- ers and financial market imperfections. First, we prove the existence of equi- librium. Second, we investigate the role of financial market imperfection in growth and land prices. Third, we introduce land dividends, then define and study land bubbles as well as individual land bubbles. |
| Keywords: | Infinite horizon, general equilibrium, financial market imperfection, land bubbles |
| JEL: | C62 D53 D9 E44 G10 |
| Date: | 2015 |
| URL: | http://d.repec.org/n?u=RePEc:eve:wpaper:15-05&r=mac |
| By: | Becker, Gideon |
| Abstract: | Nearly 25 years after the German reunification, vastly different living conditions between East and West Germany still remain. This is particularly true for the distribution of net wealth which is of special importance for the well-being of individuals. Wealth provides utility in a number of ways, for instance, by acting as a buffer against negative income shocks. Using the wealth component of the German Socio-Economic Panel (GSOEP), we find that, on average, members of western households exhibit a net worth more than twice as high as their eastern counterparts. This wealth gap remains roughly stable over time and is much more pronounced for upper parts of the distributions. In this paper, we analyze how much of this gap in per capita net wealth at different parts of the distribution can be attributed to observable factors such as permanent income or sociodemographic characteristics. We carry out our decomposition analysis via a reweighting approach. We find that for the lower part of the distribution, most of the gap can be attributed to the wealth determinants, while this share is much lower at the upper part. The most important contributing factors in this regard are the lower levels of income still prevailing in East Germany as well as differentials in labor market outcomes. Moreover, Germans in younger cohorts feature more similar levels of wealth and are more similar than the older generation. For them the success on the labor market is by far the most important factor. We also find that home ownership rates differ markedly between the two regions and play an important role for the wealth gap even though differences in housing prices also seem matter. |
| Keywords: | household finance,wealth distribution,wealth gap,decomposition methods,counterfactuals,distributional analysis |
| JEL: | D14 D31 D63 E21 |
| Date: | 2015 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:tuewef:87&r=mac |
| By: | N. Hande Sevgi (Gazi University, Department of Economics); Nejat Coşkun (Gazi University, Department of Economics) |
| Abstract: | Gelişmiş ve gelişmekte olan pek çok ülke merkez bankası, enflasyonu birincil hedef olarak görmüştür. Küresel krizle birlikte finansal istikrarın sağlanması da merkez bankalarının öncelikli hedefleri arasında yer almaya başlamıştır. Küresel krizin yarattığı ortamda merkez bankaları geleneksel politika araçlarının yanında geleneksel olmayan araçları da kullanmaya başlamışlardır. Bu da beraberinde para politikasının finansal istikrarı da gözetecek biçimde yeniden şekillenmesine ve yeni araçlarla güçlenmesine; kriz dönemlerinde krizin yaratacağı olumsuzlukları azaltacak biçimde kullanılmasına neden olmuştur. Türkiye Cumhuriyet Merkez Bankası (TCMB) da bu konjonktüre uyum sağlayarak politika araçlarını yeni hedeflerine uyumlu biçimde değiştirmiştir. Bu çalışmanın amacı, TCMB’nin izlediği para politikasının söz konusu konjonktürde nasıl evrildiğini Avrupa Merkez Bankası ve İngiltere Merkez Bankası uygulamalarıyla karşılaştırarak analiz etmektir. |
| Keywords: | Para Politikası, Merkez Bankası, Küresel Kriz |
| JEL: | E50 E52 G01 |
| Date: | 2015 |
| URL: | http://d.repec.org/n?u=RePEc:eyd:cp2015:292&r=mac |
| By: | Stijn Rocher (BNP Paribas Fortis); Michael Stierle (European Commission) |
| Abstract: | This paper investigates what can contribute to explaining why household saving rate levels are persistently so dispersed across EU countries, ranging from –10% of household income in Romania to +16% in Germany in 2013. Factors explaining changes over time or forecasting of household savings fall out of the scope of this paper. First, we argue that caution is needed when comparing household saving rates across countries. Institutional differences and data reliability are likely to hinder the international comparability of saving rates. Second, we discuss various determinants of household saving behaviour. We find that traditional explanatory variables like income levels, age dependency and uncertainty can explain more than half of the cross section variance in saving rates. However, large unobserved country fixed effects (e.g. because of institutional differences and measurement error) appear to be present. |
| Keywords: | household saving, international comparability, determinants of saving, panel data. |
| JEL: | E21 C23 H55 |
| Date: | 2015 |
| URL: | http://d.repec.org/n?u=RePEc:inf:wpaper:2015.01&r=mac |
| By: | Daron Acemoglu; Murat Ucer |
| Abstract: | We document a change in the character and quality of Turkish economic growth with a turning point around 2007 and link this change to the reversal in the nature of economic institutions, which underwent a series of growth-enhancing reforms following Turkey's financial crisis in 2001, but then started moving in the opposite direction in the second half of 2000s. This institutional reversal, we argue, is itself a consequence of a turnaround in political factors. The first phase coincided with a deepening in Turkish democracy under the prodding and the guidance of the European Union, and witnessed the waning of the military's influence and the broadening of effective political participation. As Turkey-European Union relations collapsed and internal political dynamics removed the checks against the domination of the governing party, in power since 2002, these political dynamics went into reverse and paved the way for the institutional slide that is largely responsible for the lower-paced and lower-quality growth Turkey has been experiencing since about 2007. |
| JEL: | E65 O52 |
| Date: | 2015–10 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:21608&r=mac |
| By: | Roel van Elk; Bas ter Weel; Karen van der Wiel; Bram Wouterse; Bart Verspagen |
| Abstract: | This paper analyses the economic returns to public R&D investments in 22 OECD countries. We exploit a dataset containing time-series from 1963 to 2011 and estimate and compare the outcomes of different types of production function models. Robustness analyses are performed to test the sensitivity of the outcomes for particular model specifications, sample selections, assumptions with respect to the construction of R&D stocks, and variable definitions. Analyses based on Cobb-Douglas and translog production functions mostly yield statistically insignificant or negative returns. In these models we control for private and foreign R&D investments and the primary production factors. Models including additional controls, such as public capital, the stock of inward and outward foreign direct investment, and the shares of high-tech imports and exports, yield more positive returns. Our findings suggest that public R&D investments do not automatically foster GDP and TFP growth. The economic return to scientific research seems to depend on the specific national context. |
| JEL: | I23 O11 O40 O47 |
| Date: | 2015–10 |
| URL: | http://d.repec.org/n?u=RePEc:cpb:discus:313&r=mac |
| By: | Leonardo Villar; David Forero; Carmen Elisa Flórez; Nadia Puerta; Erika Enríquez; Natalia Valencia-López |
| Abstract: | En este capítulo se analizan los mecanismos de ahorro e inversión en la población mayor en Colombia, y complementa el análisis con la teoría y las evidencias empíricas encontradas en la literatura económica sobre el tema. Incluye también los resultados del trabajo de campo cualitativo de los grupos focales realizados en Nariño, Cundinamarca y Córdoba. Este capítulo está compuesto por cinco partes, incluida esta introducción. En la siguiente sección se hace un repaso de la teoría del ciclo de vida y de lo que se espera que pase con la tasa de ahorro de un individuo al llegar a la vejez. En la tercera sección se examina el sistema de ahorro pensional voluntario en Colombia, su cobertura y alcance, y se examinan las experiencias de sistemas similares en otros países de América Latina. En la cuarta parte se analiza el concepto de ahorro en activos como mecanismo de protección para la vejez, y se hace una revisión de la literatura sobre el ahorro y de los resultados que arroja para Colombia. El capítulo finaliza con una caracterización de los activos acumulados por las personas mayores y otros grupos etarios próximos a la vejez mediante encuestas a los hogares, con lo que se pretende ofrecer una fotografía del ahorro en Colombia y su asociación con las características socioeconómicas de los hogares en el país. |
| Keywords: | Ahorros, Inversiones, Vejez, Envejecimiento de la Población, Protección Social, Colombia |
| JEL: | E21 E22 O16 I38 J11 J14 J18 J26 |
| Date: | 2015–09–28 |
| URL: | http://d.repec.org/n?u=RePEc:col:000124:013897&r=mac |
| By: | Arif Oduncu (Central Bank of the Republic of Turkey); Fatih Altunok (Central Bank of the Republic of Turkey) |
| Abstract: | We make use of a unique data set that includes loan and bank relationship information at the firm level to investigate the role of monetary policy on the loan growth of firms. We analyze how Turkish firms adjust their credit growth in response to unexpected monetary policy shocks. We use unexpected shocks instead of interest-rate changes in order to solve the possible endogeneity problem between monetary policy and credit growth. We show that unexpected monetary tightening has a significant effect on the decline of firm credit growth. This effect is larger for credit-constrained firms. We find that unexpected shocks are effective only for short term loans but are not effective for medium and longterm loans. We also show the asymmetric impact of monetary policy on loan growth. Our results are robust to firm characteristics, credit demand and firm financial performance factors as well as the firm-bank relationship. |
| Keywords: | NA |
| JEL: | G30 G32 E52 |
| Date: | 2015 |
| URL: | http://d.repec.org/n?u=RePEc:eyd:cp2015:253&r=mac |
| By: | Bilge Öztürk Göktuna (Galatasaray University, Department of Economics); Gülen Derya Zayim (Galatasaray University, Institute of Social Sciences, Graduate Student) |
| Abstract: | Party switching is a frequently observed political behaviour in Turkish political life. In the literature, switching is defined as party mobility of a currently selected deputy or a group of deputies to a new party during a legislative session. In this paper, however, switching will be identified as all the party interchange both throughout and between the legislative sessions. Party switching does not only shed light on the individual decision making of the politicians but also explains the evolution of political parties, democratic representation and the electoral competition. Our study will focus on the behaviour of party switchers, the causes behind this political choice in Turkey. Data will contain the politicians who have participated in the general elections held between 1983-2015 period. It does not matter whether the politician is elected or not. Our main concern is under which banner politicians have participated in the elections. Literature review reveals that there exists two main factors behind the switching: First, individual motivations like having a seat in the parliament and being closer to state resources have great importance for the decision of the switchers. On the other hand, primary motivation of the politicians to get a seat in the parliament might be concerns for policy. They search for the party in which they might have a strong position to implement policy; thus represent his/her electorate effectively. By following this theoretical framework, we construct our main hypotheses to understand the reasons of Turkish politicians’ switching behaviour. In this empirical study our aim is to test these hypotheses using the data set containing all the candidates (selected or not) participated in the general elections held in Turkey between the 1983-2015 period by following their party affiliations and switching decisions. In conclusion, we intend to have some implications for the political decision making of the politicians in Turkey. |
| Keywords: | Party Switching, Party Affiliation, Political Decision Making, Democratic Representation |
| JEL: | E24 O40 C23 |
| Date: | 2015 |
| URL: | http://d.repec.org/n?u=RePEc:eyd:cp2015:255&r=mac |
| By: | Kuchler, Theresa (New York University); Zafar, Basit (Federal Reserve Bank of New York) |
| Abstract: | We use novel survey data to estimate how personal experiences affect household expectations about aggregate economic outcomes in housing and labor markets. We exploit variation in locally experienced house prices to show that individuals systematically extrapolate from recent locally experienced home prices when asked for their expectations about US house price changes over the next year. In addition, higher volatility of locally experienced house prices causes respondents to report a wider distribution over expected future national house price movements. We find similar results for labor market expectations, where we exploit within-individual variation in labor market status to estimate the effect of own experience on national labor market expectations. Personally experiencing unemployment leads respondents to be significantly more pessimistic about future nationwide unemployment. The extent of extrapolation is unrelated to proxies for how informative personal experiences are, and is more pronounced for less sophisticated individuals. |
| Keywords: | expectations, experiences |
| JEL: | D83 D84 |
| Date: | 2015–10 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp9444&r=mac |
| By: | Rannenberg, Ansgar (Central Bank of Ireland); Schoder, Christian (Vienna University of Economics and Business); Strasky, Jan (Organisation for Economic Co-operation and Development) |
| Abstract: | This economic letter summarizes research by Rannenberg et al. (2015), who simulate the Euro Area's fiscal consolidation between 2011 and 2013 by employing two DSGE models used by the ECB and the European Commission. The cumulative multiplier over the 2011-2013 period amounts to 0.7 and 1.0 in the baseline, but increases to 1.3 with a reasonably calibrated nancial accelerator and a crisis-related increase of the share of credit constrained households. In the latter scenario, fiscal consolidation would be largely responsible for the further decline in GDP relative to its pre-crisis trend during 2011-2013. Postponing the fiscal consolidation to a period of unconstrained monetary policy (until after the economic recovery) would have avoided most of these losses. |
| Date: | 2015–10 |
| URL: | http://d.repec.org/n?u=RePEc:cbi:ecolet:10/el/15&r=mac |
| By: | Badel, Alejandro (Federal Reserve Bank of St. Louis) |
| Abstract: | Why has the U.S. black/white earnings gap remained around 40 percent for nearly 40 years? This paper''s answer consists of a model of skill accumulation and neighborhood formation featuring a trap: Initial racial inequality and racial preferences induce racial segregation and asymmetric skill accumulation choices that perpetuate racial inequality. Calibrated to match the U.S. distribution of race, house prices and earnings across neighborhoods, the model produces one-half of the observed racial earnings gap. Moving the economy from the trap to a racially integrated steady state implies a 15.6 percent welfare gain for black households and a 2.7 percent loss for white households. |
| Keywords: | Racial Inequality; Neighborhood Externalities; Human Capital; Segregation; Incomplete Markets; Earnings Inequality |
| JEL: | E24 J15 J24 O18 |
| Date: | 2015–09–11 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fedlwp:2015-034&r=mac |
| By: | Rovane Battaglin Schwengber (IPC-IG); Eduardo Pontual Ribeiro (IPC-IG); Fábio Veras Soares (IPC-IG); Rodrigo Octávio Orair (IPC-IG) |
| Abstract: | "Apesar da drástica redução da pobreza no Brasil, sua incidência e severidade ainda são maiores entre as famílias que vivem em áreas rurais, ainda mais quando o chefe da família trabalha em atividades agrícolas. A agricultura familiar representa 84 por cento dos empreendimentos rurais no país, embora ocupe apenas 24 por cento das terras agrícolas. Em 2013, por exemplo, 9 por cento das pessoas que viviam em áreas rurais eram extremamente pobres, em contraste com 4 por cento na população geral. Nos casos em que o chefe da família trabalha principalmente na agricultura, esse percentual aumenta para 11 por cento (SCHWENGBER et al., 2015). As políticas de demanda estruturada utilizam os recursos do governo como ferramentas para promover um mercado estável e preços de referência para os produtos da agricultura familiar." (...) |
| Keywords: | Escala, Aquisição Pública, Alimentos, Consequências, Crescimento Agrícola Inclusivo |
| Date: | 2015–11 |
| URL: | http://d.repec.org/n?u=RePEc:ipc:opport:305&r=mac |
| By: | Baki Demirel (GOP Üniversitesi İ.İ.B.F., İktisat Bölümü); Nagehan Karanfil (GOP Üniversitesi İ.İ.B.F., İktisat Bölümü, Doktora Öğrencisi) |
| Abstract: | Bu çalışma yurt içi ve yurt dışı faktörlerin Türk Bankacılık sektörünün risk yapısı üzerindeki etkilerini araştırmayı amaçlamaktadır. Bu çalışmada Kibritçioğlu (2003), Türkiye ve Singh (2010) çalışmasında Hindistan bankacılık sektörü kırılganlık endeksi hesaplaması referans alınmıştır. Çalışma, elde edilen kırılganlık endeksini veya Türk bankacılık sektörünün risk yapısını etkilediği düşünülen, reel enflasyon oranı, cari açık, döviz kuru oynaklığı, kredi faiz oranı, mevduat faiz oranı gibi yurt içi; FED funs (ABD para politikası faiz oranı), JP Morgan EMBI+Turkiye ve TOT (dış ticaret şokları) gibi yurt dışı değişkenlerin etkisi incelenmiştir. Çalışmada bankacılık sektörü risk yapısı ile seçilmiş değişkenler arasındaki ilişki, “Johansen eş bütünleşme analizi” ve “hata düzeltme modeli” kullanılarak test edilmiştir. Ayrıca yurt içi ve yurt dışı değişkenlerin bankacılık sektörü risk yapısına etkisini analiz edebilmek için VAR modelinden hareketle “etki tepki analizi” ve “varyans ayrıştırma yöntemi” kullanılmıştır. |
| Keywords: | Sermaye Hareketleri, Küresel Kriz, Banka Kırılganlığı, Var Analizi |
| JEL: | E44 G21 G32 |
| Date: | 2015 |
| URL: | http://d.repec.org/n?u=RePEc:eyd:cp2015:30&r=mac |
| By: | Ersan Bocutoğlu (Karadeniz Technical University, Department of Economics) |
| Abstract: | Piketty 21. Yüzyılda Kapital adlı eserinde, gelir ve servet hiyerarşisindeki en üst binde birlik (%0,1) kesimin toplam gelirden aldığı payın, 1970-2010 döneminde bütün Anglosakson ülkelerinde (ABD, İngiltere, Kanada, Avusturalya) ciddi biçimde arttığını ortaya koymuştur. 2007 Küresel Finansal Krizinin nedenleri araştırılırken, 1970-2007 döneminde, esas olarak ABD ve Birleşik Krallık olmak üzere, Anglosakson dünyasında ticaret ve yatırım bankalarının (ABD’de Wall Street’in ve Birleşik Krallıkta the City’nin) temsil ettiği finansal sermayenin; finansal hizmetler, kredi derecelendirme, Libor ve media endüstrilerinde oligopolcü yapılar oluşturduğu, bu yapıların finans ve finansla ilgili endüstrilerde çıkar çatışmalarına, şeffaflık ve hesap verilebilirlikten uzaklaşmaya, iş ahlakında çözülmeye, rant kollamaya, kazançların özelleştirilmesine karşın zararların kamulaştırılmasına yol açtığı iddiaları belgelenmiş, Kongre raporlarına girmiş ve mahkeme konusu olmuştur. Bu bildiri 2007 Büyük Durgunluğuna yol açan finansal oligopolleşme sürecinde, gelir ve servet dağılımının tepesinde yer alan %0.1’lik grubun rolü bulunduğunu ileri sürmektedir. İktisadi güce sahip gruplar ekonominin işleyişini etkilemekte, bu nedenle de Neo-klasik analizin metodolojik bireycilik ilkesine dayanan ve kendi kendine çalışan sisteminin sorgulanması gerekmektedir. |
| Keywords: | Gelir ve Servet Dağılımı, Oligopol, 2007 Büyük Durgunluk |
| JEL: | D43 D63 D72 E12 E32 G21 G24 |
| Date: | 2015 |
| URL: | http://d.repec.org/n?u=RePEc:eyd:cp2015:29&r=mac |
| By: | Shyam Gouri Suresh |
| Abstract: | This paper constructs an agent-based model of a simple barter economy with stochastic productivity shocks. Each agent produces a certain variety of a good but can only consume a different variety that she receives through barter with another randomly paired agent. The model is constructed bottom-up (i.e., without a Walrasian auctioneer or price-based coordinating mechanism) through the simulation of purposeful interacting agents. The benchmark version of the model simulates homogeneous agents with rational expectations. Next, the benchmark model is modified by relaxing homogeneity and implementing two alternative versions of adaptive expectations in place of rational expectations. These modifications lead to greater path-dependence and the occurrence of inefficient outcomes (in the form of sub-optimal over- and under-production) that differ significantly from the benchmark results. Further, the rational expectations approach is shown to be qualitatively and quantitatively distinct from adaptive expectations in important ways. |
| Keywords: | Agent-Based Modeling, Rational Expectations, Adaptive Expectations, Multiple Equilibria |
| JEL: | B41 C6 D84 E17 |
| Date: | 2015–08 |
| URL: | http://d.repec.org/n?u=RePEc:dav:wpaper:15-03&r=mac |
| By: | Viviana Alejandra Alfonso C. |
| Abstract: | This work uses readily accessible data about the stocks of unemployed workers, labor force and duration of unemployment to measure the job finding and separation rates for Colombia from 1984 to 2014. It also evaluates the relative contribution of these rates to the fluctuations of unemployment rate. It is found that contemporaneous movements in both rates explain significantly and in roughly the same proportion the changes in the unemployment rate during the analyzed period; however, for the last seven years job finding rate has driven the unemployment fluctuations. The results of this work differ from previous findings by Lasso (2011) where the separation rate is the most important in Colombia. Results are contrasted with the obtained for France and United States to show that Colombian unemployment is of European nature but has United States’ features. |
| Keywords: | Job finding rate, separation rate, business cycle, unemployment |
| JEL: | J63 J64 E32 |
| Date: | 2015–10–23 |
| URL: | http://d.repec.org/n?u=RePEc:col:000094:013885&r=mac |
| By: | Lionel Roger |
| Abstract: | The link between foreign aid and economic growth remains a controversial issue in the literature, and a large share of the disagreement could be explained by differences in the data employed. Using GDP data from three different versions of the Penn World Table and the World Development Indicators, I investigate the robustness of Juselius, Møller and Tarp (2014)'s (JMT) conclusions about long-run aid effectiveness. The analysis is carried out in two stages. First, I apply the same models as developed by JMT to the new datasets. Second, I re-specify the Cointegrated VAR models using the same criteria as JMT, but limit the analysis to the four most and least consistent countries respectively. The first exercise shows that results change in a significant manner in approximately 10 of the 36 countries examined. The second exercise shows that the if the models are re-specified for each country and dataset individually as a function of the data, this leads to more qualitative changes in the conclusions. |
| Keywords: | Time-Series Models, Foreign Aid, Economic Growth |
| Date: | 2015 |
| URL: | http://d.repec.org/n?u=RePEc:not:notcre:15/06&r=mac |
| By: | Lachaud, Michee; Bravo-Ureta, Boris; Ludena, Carlos |
| Abstract: | This study estimates a Climate Adjusted Total Factor Productivity (CATFP) for agriculture in Latin America and Caribbean (LAC) countries. Climatic variability is introduced in SPF models by including average annual maximum temperature, precipitation and its monthly intra-year standard deviations, and the number of rainy days. Climatic conditions have a negative impact on production becoming stronger at the end of the 2000s compared to earlier periods. An Error Correction Model is applied to investigate catch-up and convergence across LAC countries. Argentina defines the frontier in LAC and CATFP convergence is found across all South American countries, Costa Rica, Mexico, Barbados and The Bahamas. Using IPCC 2014 scenarios, the study shows climatic variability induces significant reductions in productivity over the 2013-2040 period. Estimated productivity losses due to climatic variability range from USD 12.7 to 89.1 billion in the LAC region depending on the scenario and the discount rate. |
| Keywords: | Agriculture, Total Factor Productivity, Climate Effects, Convergence, Forecasting, Latin America, Caribbean, Agricultural Finance, Production Economics, Productivity Analysis, D24, Q54, O47, E27, |
| Date: | 2015 |
| URL: | http://d.repec.org/n?u=RePEc:ags:iaae15:211721&r=mac |
| By: | Ben Cheikh, Nidhaleddine (ESSCA School of Management); Rault, Christophe (University of Orléans) |
| Abstract: | This paper investigates whether exchange rate pass-through (ERPT) into import prices is a nonlinear phenomenon for five heavily indebted Euro area countries, namely the so-called GIIPS group (Greece, Ireland, Italy, Portugal, and Spain). Using logistic smooth transition models, we explore the existence of nonlinearity with respect to sovereign bond yield spreads (versus the German bund) as an indicator of confidence crisis/macroeconomic instability. Our results provide strong evidence that the extent of ERPT is higher in periods of macroeconomic distress, i.e. when sovereign bond yield spreads exceed a given threshold. For almost all the GIIPS countries, we reveal that the increase in macroeconomic instability and the loss of confidence during the recent sovereign debt crisis has entailed higher sensitivity of import prices to exchange rate movements. For instance, the rate of pass-through in Greece is equal to 0.66% when the yield differential is below 2.13%, but beyond this threshold level, the sensitivity of import prices becomes higher and reaches full ERPT. Our findings raise the serious question of whether the exchange rate could be an effective tool to boost the trade balance and prevent deflationary threats when financial crisis hits. |
| Keywords: | exchange rate pass-through, import prices, sovereign spreads, smooth transition models |
| JEL: | C22 E31 F31 |
| Date: | 2015–10 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp9467&r=mac |
| By: | Jörg Döpke (Hochschule Merseburg (University of Applied Sciences Merseburg)); Ulrich Fritsche (Universität Hamburg (University of Hamburg)); Christian Pierdzioch (Helmut-Schmidt-Universität (Helmut-Schmidt-University)) |
| Abstract: | We use a machine-learning approach known as Boosted Regression Trees (BRT) to reexamine the usefulness of selected leading indicators for predicting recessions. We estimate the BRT approach on German data and study the relative importance of the indicators and their marginal effects on the probability of a recession. We then use receiver operating characteristic (ROC) curves to study the accuracy of forecasts. Results show that the short-term interest rate and the term spread are important leading indicators, but also that the stock market has some predictive value. The recession probability is a nonlinear function of these leading indicators. The BRT approach also helps to recover how the recession probability depends on the interactions of the leading indicators. While the predictive power of the short-term interest rates has declined over time, the term spread and the stock market have gained in importance. We also study how the shape of a forecaster’s utility function affects the optimal choice of a cutoff value above which the estimated recession prob- ability should be interpreted as a signal of a recession. The BRT approach shows a competitive out-of-sample performance compared to popular Pro- bit approaches. |
| Keywords: | Recession forecasting, Boosting, Regression trees, ROC curves |
| JEL: | C52 C53 E32 E37 |
| Date: | 2015–10 |
| URL: | http://d.repec.org/n?u=RePEc:hep:macppr:201505&r=mac |
| By: | Dimitrios Paparas (Harper Adams University, UK); Christian Richter (German University in Cairo, Egypt) |
| Abstract: | The role of Fiscal policy in the long run growth process has been crucial in macroeconomics since the appearance of endogenous growth models. Additionally, a significant debate among economists involves whether several types of spending or taxation enhance economic growth. The main objective of this paper is to highlight the relationship between fiscal policy and economic growth in the EU-15, and to make an attempt to determine which of the fiscal policy instruments enhance economic growth. We deployed panel data techniques and included both sides of budget, spending and taxation, in our regressions and used the most recent dataset data for fiscal variables from Eurostat. We made a new classification of public expenditures into homogeneous groups in order to reduce the explanatory variables and increase the efficiency of our model and results since we have data for only 14 years. In our empirical analysis we included OLS, fixed effects models, random effects models and GMM estimators, the Arellano and Bond (1991) and the Arellano and Bover (1995) - Blundell and Bond (1998) estimators. On the first round of our regressions we find a negative impact of spending on human capital accumulation on economic growth. Our empirical results also indicate that an increase in government spending on infrastructure has a significant positive impact on the economic growth of a country. Additionally, in our regressions the variable government spending on property rights protections include spending on defence and spending on public order safety. Our empirical results from the first round of regressions imply a strongly negative relationship between t hese two variables. However, on the second round of our regressions we aggregate defence spending from spending on property right protection and we did not find any relationship between economic growth and defence spending. Moreover, we found a non-significant relationship between government spending on social protection and economic growth. On the second round of regressions, when we allow for non-linear growth effects we find a positive relationship with deficits and economic growth, which is in contrast with Ricardian Equivalence. We also included the employment growth and business investment in our model because labour and capital are very important factors of production in growth models. In our empirical results we do not find a significant impact of employment on economic growth, but when we allow for non-linear growth effects we find a strongly positive impact. However, we found that gross fixed capital formation of the private sector as a percentage of GDP in both rounds of our regressions, has no significant impact on economic growth. Finally, our empirical results do not support any evidence of a relationship between openness and economic growth. |
| Keywords: | Panel Data. Fiscal Policy. Taxation. Government Expenditures. |
| JEL: | C23 C33 E62 H2 H5 |
| Date: | 2015 |
| URL: | http://d.repec.org/n?u=RePEc:inf:wpaper:2015.06&r=mac |
| By: | İbrahim Ünalmış (Central Bank of Turkey) |
| Abstract: | The recent crisis has led to massive fiscal stimulus packages around the world to boost the economic growth. These stimulus packages include government consumption and investment spending and transfers to households. However, effects of these different fiscal policy tools on macroeconomic variables can be considerably different. In this paper, we contribute to the literature by comparing the effects of temporary increases in government consumption good spending, government investment spending and government transfers to households in a new Keynesian dynamic stochastic general equilibrium (DSGE) framework. Different from the conventional new-Keynesian literature, our model features private and public capital stock which enables us to examine the effects of productive government investment spending increases. We calibrate the model for the US economy and show that the magnitude and persistency of the responses of macroeconomic variables differ significantly across different fiscal policy choices. We also show that governments willingness for building up high debt stocks significantly affects the outcomes of fiscal stimulus efforts. |
| Keywords: | na |
| Date: | 2015 |
| URL: | http://d.repec.org/n?u=RePEc:eyd:cp2015:284&r=mac |
| By: | Antonis Adam; Panos Hatzipanayotou (Athens University of Economics and Business); Thomas Moutos (DIEES, AUEB) |
| Abstract: | In this paper we argue that the strictness of labour market regulations can interact with the mode of fiscal consolidation (tax- based versus spending-based fiscal adjustments) to affect whether current account adjustments are successful. Using data from 81 countries, we are able to identify 147 episodes of current account adjustments, of which 69 are classified as successful. On the basis of a discrete choice cross- sectional time- series model we find that the co-existence of tax-based fiscal consolidations and strict labour market regulations reduces significantly the probability of successful current account adjustments. |
| Keywords: | Current account adjustment, labour market regulations, fiscal consolidation |
| JEL: | E62 F32 F41 |
| Date: | 2015–10–29 |
| URL: | http://d.repec.org/n?u=RePEc:aue:wpaper:1517&r=mac |
| By: | Henger, Ralph; Schaefer, Thilo |
| Abstract: | Bund und Länder streiten seit 1995 über eine Reform der Grundsteuer. Das aktuelle Verfahren ist mittlerweile veraltet, ungerecht und nicht mehr verfassungskonform. Die Gründe für das bisherige Scheitern der Reformbemühungen sind die erheblichen Umverteilungswirkungen zwischen Ländern, Kommunen und Grundstückseigentümern, die mit allen diskutieren Modellen einhergehen. Der vorliegende Beitrag stellt die Ergebnisse eines neu entwickelten Simulationsmodells vor. Die Ergebnisse zeigen, dass die in diesem Beitrag weiter präzisierten Bodensteuermodelle nicht nur aus anreiztheoretischer Sicht überlegen sind, sondern bei einer aufkommensneutralen Grundsteuerreform auch politisch vertretbare Verteilungseffekte auslösen. Wir plädieren für die Umsetzung eines Bodensteuermodells, da es Investitionsentscheidungen der Eigentümer nicht belastet und baureife Grundstücke zu einer Bebauung mobilisiert. Zudem lassen sich die Einnahmen aus einer Bodensteuer mit einem geringem Verwaltungsaufwand erzielen. Aus diesen Gründen sollte sich die mit der Reform beauftragte länderoffene Arbeitsgruppe auch mit diesen Modellvarianten intensiv beschäftigen. |
| Keywords: | Investitionen,Kommunen,Steuerpolitik,Umwelt und Energie |
| JEL: | C15 E62 H21 H22 H23 H71 |
| Date: | 2015 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:iwkpps:322015&r=mac |
| By: | Ida-Maria Weirsøe FALLESEN (European Commission, DG Competition, Cabinet of Commissioner Margrethe Vestager.) |
| Abstract: | The EU Banking Union combines micro- and macro-prudential regulation. It aims at breaking the “doom loop” between banks and sovereign debt, promoting financial stability and mitigating the next financial shock to the real EU economy, at the lowest possible cost to the financial institutions and to the taxpayers. Success, or failure, is determined by how the banking union copes with the challenges to its two main pillars, the Single Supervisory Mechanism (SSM) and the Single Resolution Mechanism (SRM). Under the SSM, in its new supervisory role, the ECB may be subject to conflicts between the objectives of price and financial stability, and the single-supervisor role may be sub-optimal. Two regulators might have been preferable and more focus on ECB accountability will now be required. The shock-absorbing Single Resolution Fund (SRF), which is part of the SRM, may not have the capacity to deal with a crisis of the size of the one of 2008. Especially as the nature and severity of a future financial crisis cannot be forecasted. The design of the banking union is not the result of theoretical studies, but a political compromise to deal with an acute crisis. The theoretical studies that are included in this paper are not supportive of the banking union in its current form. Nevertheless, there is a good chance that the EU Banking Union may succeed, as ECB supervision of the 123 systemically important banks should contain potential demands on the SRM. In the event of a crisis that is too severe for the banking union to absorb with its current capability, the crucial assumption is that there is political will to rapidly provide new resources. The same applies, if a major financial crisis develops before the banking union is fully operational. |
| Keywords: | Banking Union, supervision, resolution, Eurozone, financial crisis |
| JEL: | E42 E52 F33 F36 G01 O52 |
| Date: | 2015–10 |
| URL: | http://d.repec.org/n?u=RePEc:coe:wpbeep:36&r=mac |
| By: | Wang, Wei; Suen, Richard M. H. |
| Abstract: | Is a more heterogeneous population conducive or detrimental to capital accumulation and economic growth? This paper addresses this question using a dynamic general equilibrium model with ex ante heterogeneous consumers and progressive taxation. We show that the answer depends crucially on the shape of the marginal tax function. If this function is concave, then a more heterogeneous population will have a lower average marginal tax rate and a higher level of capital accumulation. The opposite is true when the marginal tax function is convex. These results are robust in a variety of models with either exogenous or endogenous economic growth. |
| Keywords: | Consumer Heterogeneity, Progressive Taxation, Economic Growth |
| JEL: | D31 E62 |
| Date: | 2015–10–30 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:67569&r=mac |
| By: | Saima Nawaz (COMSATS Institute of Information Technology); Muhammad Idrees Khawaja (Pakistan Institute of Development Economics) |
| Abstract: | This study investigates the impact of institutions on government size using panel data for 56 countries over the period 1981-2010. The results show that institutions put constraints on aggregate spending in both developed and developing regions. However, the role of institutions varies with the level of development, the impact of most institutions on government spending being greater in the developed countries. The analysis further demonstrates that government stability and rule of law are relatively more effective at higher level of income while control over corruption is more important at low level of income. The implication is that developing nations should first focus on controlling corruption. Control over corruption will furnish the base environment required to benefit more from improvement in other institutions. |
| Keywords: | Institutions, Fiscal Policy, Panel Data, Level of Development |
| JEL: | H30 E02 C33 |
| Date: | 2015 |
| URL: | http://d.repec.org/n?u=RePEc:eyd:cp2015:267&r=mac |
| By: | Alexandra Spicer; Olena Stavrunova; Susan Thorp |
| Abstract: | Households in many countries reach retirement with lump sums of financial wealth accumulated in defined contribution (DC) retirement plans. Retired households need to manage risks and generate income from their savings. We study the dynamics of retirement wealth and portfolio allocation using the three wealth waves of the Household, Income and Labour Dynamics in Australia panel survey. The average retired household maintained or accumulated wealth in 2002-06 and decumulated in 2006-10 consistent with trends in financial asset prices. At older ages, households prefer portfolios with less risk and more liquidity, while maintaining ownership of the family home. The probability of households exhausting financial assets increased over the sample but households who depleted financial wealth did not liquidate their housing wealth at higher rates than other households. In contrast to the U.S., the overall effect of health shocks on the wealth of retired Australian households is minimal but financial shocks have large effects. |
| Keywords: | Retirement wealth, Life-cycle saving, Public pension, Portfolio choice |
| JEL: | D91 E21 G11 |
| Date: | 2015–11 |
| URL: | http://d.repec.org/n?u=RePEc:een:camaaa:2015-39&r=mac |
| By: | Nihat Işık (Kırıkkale University, Department of Econometrics); Efe Can Kılınç (Kırıkkale University, Department of Econometrics); Özgür Engeloğlu (Kırıkkale University, Department of Econometrics) |
| Abstract: | Kredi arz şokları; krediye uygun banka sermayesindeki beklenmedik değişiklikler (örneğin, yasal sermaye oranı gereksinimlerindeki değişim), banka finansmanındaki değişiklikler (örneğin, kredilendirilebilir mevduat sigortasının uygulamaya konulması vb.), bankacılık sektöründeki rekabet düzeyindeki farklılıklar ve borç verenlerin risk algısındaki değişikliklerden (örneğin, banka izleme teknolojisindeki yenilikler) kaynaklanabilmektedir. Kredi arz şoklarının ülke ekonomileri için öneminden hareketle bu çalışmada, kredi arz şoklarının reel ekonomi üzerindeki etkileri Türkiye için 2002Q1-2014Q4 dönemi kapsamında Yapısal Vektör Otoregresif (Strucrucal Vector Autoregresive-SVAR) Modeller kullanılarak tahmin edilecektir. Bununla birlikte etki-tepki fonksiyonları yardımıyla, kredi arz şoklarında meydana gelen artışların reel ekonomi üzerindeki etkisinin düzeyi ölçülmeye çalışılacaktır. |
| Keywords: | Kredi Arz Şoku, Reel Ekonomi, SVAR Modeli |
| JEL: | H81 E44 C22 |
| Date: | 2015 |
| URL: | http://d.repec.org/n?u=RePEc:eyd:cp2015:230&r=mac |
| By: | Lehmann, Robert; Weyh, Antje (Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany]) |
| Abstract: | "In this paper we evaluate the forecasting performance of employment expectations for employment growth in 15 European states. Our data cover the period from the first quarter 1998 to the fourth quarter 2014. With in-sample analyses and pseudo out-ofsample exercises, we find that for most of the European states considered, the survey-based indicator model outperforms common benchmark models. It is therefore a powerful tool for generating more accurate employment forecasts. We observe the best results for one quarter ahead predictions that are primarily the aim of the survey question. However, employment expectations also work well for longer forecast horizons in some countries." (Author's abstract, IAB-Doku) ((en)) |
| Keywords: | Arbeitsmarktprognose, Prognoseverfahren, Arbeitsmarktforschung, Meinungsforschung, Befragung, Datengewinnung, Prognosegenauigkeit, Erwartung, Arbeitsplatzsicherheit, Arbeitsmarktrisiko, Arbeitsmarktindikatoren, Europa, Österreich, Belgien, Bulgarien, Tschechische Republik, Estland, Finnland, Frankreich, Bundesrepublik Deutschland, Ungarn, Italien, Niederlande, Portugal, Slowakei, Schweden, Großbritannien |
| JEL: | E27 J00 J49 |
| Date: | 2015–10–29 |
| URL: | http://d.repec.org/n?u=RePEc:iab:iabdpa:201530&r=mac |
| By: | Fernald , John (BOFIT); Hsu , Eric (BOFIT); Spiegel , Mark M. (BOFIT) |
| Abstract: | How reliable are China’s GDP and other data? We address this question by using trading partner exports to China as an independent measure of its economic activity from 2000–2014. We find that the information content of Chinese GDP improves markedly after 2008.We also consider a number of plausible, non-GDP indicators of economic activity that have been identified as alternative Chinese output measures. We find that activity factors based on the first principal component of sets of indicators are substantially more informative than GDP alone. The index that best matches activity in-sample uses four indicators: electricity, rail freight, an index of raw materials supply, and retail sales. Adding GDP to this group only modestly improves in-sample performance. Moreover, out of sample, a single activity factor without GDP proves the most reliable measure of economic activity. |
| Keywords: | China; GDP; principal components; structural break; forecasting |
| JEL: | C53 C82 E20 F17 |
| Date: | 2015–10–15 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:bofitp:2015_029&r=mac |
| By: | Eduardo A. Cavallo; Mathieu Pedemonte |
| Abstract: | Using panel co-integration techniques and a comprehensive dataset covering the period 1980-2013, this paper finds a positive and significant correlation between national saving and domestic investment rates in Latin America and the Caribbean (LAC). The estimated correlation is approximately 0. 39; i. e. , for every 1 percentage point of GDP increase in national saving, domestic investment increases by 0. 39 percentage points on average. There are however, three nuances to the headline result: i) the estimated correlation has been declining over time; ii) the regional average hides a large degree of intra-regional heterogeneity; and iii) the estimated coefficient is largest amongst the biggest economies in the region. It is concluded that low national saving rates remain a binding constraint for capital accumulation in LAC. |
| Keywords: | Savings, Investment, Saving, Investment, Feldstein-Horioka puzzle, Panel cointegration |
| Date: | 2015–08 |
| URL: | http://d.repec.org/n?u=RePEc:idb:brikps:90996&r=mac |
| By: | José María Casado (Banco de España); Cristina Fernández (Banco de España); Juan F. Jimeno (Banco de España) |
| Abstract: | We firstly measure the contribution of worker flows across employment, unemployment, and non-participation to the change in unemployment in eleven EU countries during the period 2006-2012, paying special attention to which socio-demographic groups in each of the countries were most affected by job creation and job destruction during the crisis. We find that age, to a greater extent than educational attainment, is the main determinant of flows from employment into unemployment, particularly in those countries where unemployment increased most. Secondly, we highlight some institutional features of the labour market (employment protection legislation, unemployment insurance and the incidence of active labour market policies) that help explain the cross-country differences in flows between employment and unemployment and in their socio-demographic composition. Finally, we examine whether the crisis has led to some employment reallocation across sectors, finding that, so far, there is no clear evidence in favour of cleansing effects. |
| Keywords: | labour flows, unemployment, labour market institutions, Great Recession |
| JEL: | J6 E24 C25 |
| Date: | 2015–10 |
| URL: | http://d.repec.org/n?u=RePEc:bde:wpaper:1529&r=mac |
| By: | Claudia Foroni (Norges Bank); Pierre Guérin (Bank of Canada); Massimiliano Marcellino (Bocconi University, IGIER and CEPR) |
| Abstract: | We analyze how to incorporate low frequency information in models for predicting high frequency variables. In doing so, we introduce a new model, the reverse unrestricted MIDAS (RU-MIDAS), which has a periodic structure but can be estimated by simple least squares methods and used to produce forecasts of high frequency variables that also incorporate low frequency information. We compare this model with two versions of the mixed frequency VAR, which so far had been only applied to study the reverse problem, that is, using the high frequency information for predicting low frequency variables. We then implement a simulation study to evaluate the relative forecasting ability of the alternative models in finite samples. Finally, we conduct several empirical applications to assess the relevance of quarterly survey data for forecasting a set of monthly macroeconomic indicators. Overall, it turns out that low frequency information is important, particularly so when it is just released. |
| Keywords: | Mixed-Frequency VAR models, temporal aggregation, MIDAS models |
| JEL: | E37 C53 |
| Date: | 2015–10–29 |
| URL: | http://d.repec.org/n?u=RePEc:bno:worpap:2015_13&r=mac |
| By: | Pınar Kaynak (TOBB University of Economics and Technology); Serdar Sayan (TOBB University of Economics and Technology) |
| Abstract: | Turkey has had an episode of rapidly increasing public debt to GDP ratios due to roaring budget deficits throughout the 1990s and the early 2000s. Bonds issued by the government to finance annual budget deficits drove down the price of bonds and increased interest rates because of the inverse relation between the two. Increased supply of bonds have made them both increasingly affordable (due to the resulting decline in their prices) and attractive (due to increasing returns) for the wealthy with high savings. As a result, wealthier sections of the society became even wealthier because of the high interest income and high returns to the bonds they purchased. After the restoration of fiscal discipline through the stabilization program introduced after the 2001 crisis, there has been a remarkable contraction in budget deficits leading to a significant decline in debt to GDP ratios and interest rates thereby causing a reduction in the interest earnings of the wealthier sections. It appears as though the restoration and maintenance of fiscal discipline have facilitated an improvement in income equality, albeit as an indirect consequence of the stabilization program. The purpose of this paper is to fill a gap in the literature by studying the link between income inequality as measured by the Gini coefficient and the public debt to GDP ratio empirically in the context of Turkish stabilization experience of the 2000s. The analysis is based on the raw data provided by the National Household Labor Force Survey (HLFS) and the National Household Budget Survey (HBS) published by the Turkish Statistical Institute (TURKSTAT) and the Central Bank of Republic of Turkey from 2000 to date. The paper concludes with a discussion of the policy implications of the results, and suggestions for further research. |
| Keywords: | Budget Deficit, Income Distribution, Stabilization |
| JEL: | H63 O15 E63 |
| Date: | 2015 |
| URL: | http://d.repec.org/n?u=RePEc:eyd:cp2015:9&r=mac |
| By: | Banu Tanrıöver (Osmaniye Korkut Ata University/Department Economomics); Burhan Biçer (Osmaniye Korkut Ata University/Department Economomics) |
| Abstract: | Ekonomik büyümenin istihdam yaratma kapasitesi literatürde uzun süredir tartışılmakla birlikte konu ile ilgili temel çalışma, Okun (1962)’in çalışmasıdır. Okun kanunu ekonomik büyüme ile işsizlik oranı arasındaki ilişkinin, konjonktürel dalgalanmaların genişleme ve daralma dönemlerinde aynı büyüklükte olacağını ileri sürmektedir. Ancak son yıllarda yapılan çalışmalarla Okun katsayısının daralma ve genişleme dönemlerinde farklılık göstereceği ileri sürülmektedir. Ayrıca son yıllarda dünya ekonomisinde ekonomik büyümenin işsizlik sorununu çözmede yetersiz kalması, istihdam yaratmayan büyüme kavramının gelişmesine neden olmuştur. Bu nedenle çalışmada 2000’li yıllarda ekonomik büyümeye rağmen işsizlik oranları azalmayan Türkiye ekonomisinde istihdam yaratmayan büyümenin varlığının 2005-2015 dönemi için araştırılması ve çıktı açığı ile işsizlik oranı açığı arasındaki olası asimetrik ilişkinin varlığının sınanması amaçlanmıştır. Bu amaçla çalışmada doğal işsizlik oranı ve potansiyel çıktı düzeyini belirlemek amacıyla, kalıcı şokların varlığını dikkate alan ve stokastik trend ayrıştırma yöntemi olan Beveridge ve Nelson (1981) ayrıştırma yöntemi kullanılmıştır. Hem ekonomik büyümenin istihdam yaratma kapasitesini tespit etmek ve hem de söz konusu iki değişken arasında genişleme ve daralma dönemlerinde ortaya çıkan olası asimetrik ilişkinin varlığını sınamak amacıyla iki farklı Okun aralık modeli oluşturulmuştur. Tahmin edilen Okun aralık modelleri sonucunda, konjonktürel dalgalanmaların daralma dönemlerinde ortaya çıkan çıktı artışının genişleme dönemlerindeki çıktı artışına göre işsizlik oranını daha az azalttığı veya daha az istihdam yarattığı yönünde bulgulara ulaşılmıştır. |
| Keywords: | Okun Kanunu, Beveridge ve Nelson (1981) Ayrıştırma Analizi, Çıktı Açığı, İşsizlik Oranı Açığı ve İstihdam Yaratmayan Büyüme |
| JEL: | C13 E32 J64 |
| Date: | 2015 |
| URL: | http://d.repec.org/n?u=RePEc:eyd:cp2015:305&r=mac |
| By: | Helena Chuliá (Faculty of Economics, University of Barcelona); Montserrat Guillén (Faculty of Economics, University of Barcelona); Jorge M. Uribe (Department of Economics, Universidad del Valle) |
| Abstract: | We propose a daily index of time-varying stock market uncertainty. The index is constructed after first removing the common variations in the series, based on recent advances in the literature that emphasize the difference between risk (expected variation) and uncertainty (unexpected variation). To this end, we draw on data from 25 portfolios between 1926 and 2014, sorted by size and book-to-market value. This strategy considerably reduces information requirements and modeling design costs, compared to previous proposals. We compare our index with indicators of macrouncertainty and estimate the impact of an uncertainty shock on the dynamics of variables such as production, employment, consumption, stock market prices and interest rates. Our results show that, even when the estimates can be considered as a measure of stock market uncertainty (i.e., financial uncertainty), they perform very well as indicators of the uncertainty of the economy as a whole. |
| Keywords: | Uncertainty, Risk, Factor models, Stock market. JEL classification: E00; E44; G10; G14 |
| Date: | 2015–10 |
| URL: | http://d.repec.org/n?u=RePEc:ira:wpaper:201524&r=mac |
| By: | Laubach, Thomas (Board of Governors of the Federal Reserve System); Williams, John C. (Federal Reserve Bank of San Francisco) |
| Abstract: | Persistently low real interest rates have prompted the question whether low interest rates are here to stay. This essay assesses the empirical evidence regarding the natural rate of interest in the United States using the Laubach-Williams model. Since the start of the Great Recession, the estimated natural rate of interest fell sharply and shows no sign of recovering. These results are robust to alternative model specifications. If the natural rate remains low, future episodes of hitting the zero lower bound are likely to be frequent and long-lasting. In addition, uncertainty about the natural rate argues for policy approaches that are more robust to mismeasurement of natural rates. |
| Date: | 2015–10–31 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fedfwp:2015-16&r=mac |
| By: | Williams, Noah (University of Wisconsin–Madison); Li, Rui (University of Massachusetts–Boston) |
| Abstract: | The authors study the design of optimal unemployment insurance in an environment with moral hazard and cyclical fluctuations. The optimal unemployment insurance contract balances the insurance motive to provide consumption for the unemployed with the provision of incentives to search for a job. This balance is affected by aggregate conditions, as recessions are characterized by reductions in job finding rates. We show how benefits should vary with aggregate conditions in an optimal contract. In a special case of the model, the optimal contract can be solved in closed form. We show how this contract can be implemented in a rather simple way by allowing unemployed workers to borrow and save in a bond (whose return depends on the state of the economy), providing flow payments that are constant over an unemployment spell but vary with the aggregate state, and giving additional lump-sum payments (or charges) upon finding a job or when the aggregate state switches. We then consider a calibrated version of the model and study the quantitative impact of changing from the current unemployment system to the optimal one. In a recession, the optimal system reduces unemployment rates by roughly 2.5 percentage points and shortens the duration of unemployment by about 50 percent. |
| Keywords: | optimal contract; unemployment benefits; lump-sum payments; welfare; unemployment durations |
| JEL: | E32 |
| Date: | 2015–08–01 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fedacq:15-02&r=mac |
| By: | Tiziano De Angelis (School of Mathematics, University of Leeds, Woodhouse Lane, Leeds LS2 9JT, United Kingdom); Salvatore Federico (Dipartimento di Scienze per l'Economia e l'Impresa, Universita' degli Studi di Firenze, Via delle Pandette 9, 50127 Firenze, Italy); Giorgio Ferrari (Center for Mathematical Economics (IMW), Bielefeld University, Universitatsstrasse 25, D-33615 Bielefeld, Germany) |
| Abstract: | This paper examines a Markovian model for the optimal irreversible investment problem of a firm aiming at minimizing total expected costs of production. We model market uncertainty and the cost of investment per unit of production capacity as two independent one-dimensional regular diffusions, and we consider a general convex running cost function. The optimization problem is set as a three-dimensional degenerate singular stochastic control problem. We provide the optimal control as the solution of a reflected diffusion at a suitable boundary surface. Such boundary arises from the analysis of a family of two-dimensional parameter-dependent optimal stopping problems and it is characterized in terms of the family of unique continuous solutions to parameter-dependent nonlinear integral equations of Fredholm type. |
| Keywords: | irreversible investment, singular stochastic control, optimal stopping, freeboundary problems, nonlinear integral equations. |
| JEL: | C02 C73 E22 D92 |
| Date: | 2015–10 |
| URL: | http://d.repec.org/n?u=RePEc:flo:wpaper:2015-03&r=mac |
| By: | Filiz Eryılmaz (Uludag University) |
| Abstract: | The Political Business Cycle Theory which emerged as one of the basic areas of discussion of Positive Public Choice Theory, were based on the studies of Kalecki (1943) and Akerman (1947) in the 1940s. Political Business Cycle Theory are examined under two main branches of Traditional Political Business Cycle Theory and Rational Political Business Cycle Theory. While Traditional Political Business Cycle Theory are classified in two groups as Traditional Opportunistic Political Business Cycle Theory and Traditional Partisan Political Business Cycle Theory, the Rational Political Business Cycle Theory are separated as Rational Opportunistic Political Business Cycle Theory and Rational Partisan Political Business Cycle Theory. While voters are assumed to have adaptive expectations in Traditional Political Business Cycle Theory, they are accepted as being rational in Rational Political Business Cycle Theory. Another model of differentiation of the relationship of Political Business Cycle Theory is the Opportunistic or Partisan relationship. In the Opportunistic model, it is assumed that the single aim of the governing parties, which are accepted as equally formed, is to apply policies which will maximise their chances of winning elections. In partisan models, the governing parties are not similar, and are in fact at different ends of the ideological spectrum as right and left-wing (Alesina and Roubini, 1990; Alesina, Roubini and Cohen, 1991). In this study, the Traditional Opportunistic Business Cycle Theory of Nordhaus (1975) was tested for the series of M0, M1, M2, M2Y, the interbank rate, the three-month Turkish lira (TL) time deposit rate, the three-month United States (US) dollar time deposit rate, nominal and real treasury auction rates for the Turkish economy. In the determination of whether or not political opportunistic policies were observed in general elections held in the period 1985M12- 2012M4, the autoregressive model used in studies by Alesina, Cohen ve Roubini (1991, 1992, 1997) of OECD countries and industrial countries, was used in this study. |
| Keywords: | Political Business Cycle Theory, Traditional Opportunistic Political Business Cycle Theory, Monetary Policy, Box-Jenkins Models, Turkey |
| JEL: | D72 E62 H62 |
| Date: | 2015 |
| URL: | http://d.repec.org/n?u=RePEc:eyd:cp2015:221&r=mac |
| By: | Abdel-Rahman, Alaa; Fuller, David |
| Abstract: | For the past decades, different economic policies were implemented in order to better the Egyptians’ living standards. However when we look at where Egypt stands in terms of quality of education and labor efficiency, we realize that those policies did not help as much as we would have hoped. With an outlook on these different policies and potential solutions to overcome their inefficiencies, the author analyzes a potential starting point which includes working on the education sector in order to upgrade the Egyptians’ living standards and hopefully, the growth path of the economy. It was found that a simple increase of 20% in the quality of education leads to almost double the average growth rate of the country. |
| Keywords: | development, education, macroeconomics, policies, Egypt |
| JEL: | A23 E02 I22 I23 I24 I25 I28 |
| Date: | 2014–05–06 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:67571&r=mac |
| By: | Ferreira, Francisco H. G. (World Bank); Chen, Shaohua (World Bank); Dabalen, Andrew (World Bank); Dikhanov, Yuri (World Bank); Hamadeh, Nada (World Bank); Jolliffe, Dean (World Bank); Narayan, Ambar (World Bank); Prydz, Espen Beer (World Bank); Revenga, Ana (World Bank); Sangraula, Prem (World Bank); Serajuddin, Umar (World Bank); Yoshida, Nobuo (World Bank) |
| Abstract: | The 2014 release of a new set of purchasing power parity conversion factors (PPPs) for 2011 has prompted a revision of the international poverty line. In order to preserve the integrity of the goalposts for international targets such as the Sustainable Development Goals and the World Bank's twin goals, the new poverty line was chosen so as to preserve the definition and real purchasing power of the earlier $1.25 line (in 2005 PPPs) in poor countries. Using the new 2011 PPPs, the new line equals $1.90 per person per day. The higher value of the line in US dollars reflects the fact that the new PPPs yield a relatively lower purchasing power of that currency vis-à-vis those of most poor countries. Because the line was designed to preserve real purchasing power in poor countries, the revisions lead to relatively small changes in global poverty incidence: from 14.5 percent in the old method to 14.1 percent in the new method for 2011. In 2012, the new reference year for the global count, we find 12.7 percent of the world's population, or 897 million people, are living in extreme poverty. There are changes in the regional composition of poverty, but they are also relatively small. This paper documents the detailed methodological decisions taken in the process of updating both the poverty line and the consumption and income distributions at the country level, including issues of inter-temporal and spatial price adjustments. It also describes various caveats, limitations, perils and pitfalls of the approach taken. |
| Keywords: | global poverty, poverty measurement, purchasing power parity |
| JEL: | I3 I32 E31 F01 |
| Date: | 2015–10 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp9442&r=mac |