Pub Date : 2012-08-01DOI: 10.5089/9781475505580.001.A001
A. Thomas
The paper considers the determinants of exchange rate movements among sub-Saharan countries that have flexible exchange rate regimes. The determinants are based on the law of one price and interest parity conditions. Results indicate that the exchange rates have responded significantly to changes in the US Treasury bill rate and to the EMBI spread in recent years. The effects are more important for countries with open capital accounts. On the other hand the paper does not provide any support for the interest rate parity theory because domestic interest rates have no bearing on exchange rate movements.
{"title":"Exchange Rate and Foreign Interest Rate Linkages for Sub-Saharan Africa Floaters","authors":"A. Thomas","doi":"10.5089/9781475505580.001.A001","DOIUrl":"https://doi.org/10.5089/9781475505580.001.A001","url":null,"abstract":"The paper considers the determinants of exchange rate movements among sub-Saharan countries that have flexible exchange rate regimes. The determinants are based on the law of one price and interest parity conditions. Results indicate that the exchange rates have responded significantly to changes in the US Treasury bill rate and to the EMBI spread in recent years. The effects are more important for countries with open capital accounts. On the other hand the paper does not provide any support for the interest rate parity theory because domestic interest rates have no bearing on exchange rate movements.","PeriodicalId":107878,"journal":{"name":"SRPN: Globalization (Sustainability) (Topic)","volume":"11 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2012-08-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"117327861","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Most projections envision continued rapid growth in ASEAN, the PRC and India over the next two decades. By 2030, they could quadruple their output, virtually eliminate extreme poverty, and dramatically transform the lives of their more than 3 billion citizens. The impact will be felt across the world. This study -- a background paper to an Asian Development Bank report -- used a Computable General Equilibrium model to examine the likely effects of the region's growth on trade, resources and the environment, as well as the implications of the many risks the region faces from its internal and the external environment.
{"title":"Navigating a Changing World Economy: ASEAN, the PRC and India, 2010-2030","authors":"P. Petri, F. Zhai","doi":"10.2139/ssrn.2148796","DOIUrl":"https://doi.org/10.2139/ssrn.2148796","url":null,"abstract":"Most projections envision continued rapid growth in ASEAN, the PRC and India over the next two decades. By 2030, they could quadruple their output, virtually eliminate extreme poverty, and dramatically transform the lives of their more than 3 billion citizens. The impact will be felt across the world. This study -- a background paper to an Asian Development Bank report -- used a Computable General Equilibrium model to examine the likely effects of the region's growth on trade, resources and the environment, as well as the implications of the many risks the region faces from its internal and the external environment.","PeriodicalId":107878,"journal":{"name":"SRPN: Globalization (Sustainability) (Topic)","volume":"1 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2012-07-28","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"128455118","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
We investigate the directional accuracy of GDP and price forecasts by the Japanese government and the IMF with a new method developed by Pesaran and Timmermann [Pesaran, M.H., Timmermann, A., 2009. Testing dependence among serially correlated multi-category variables. Journal of the American Statistical Association 485, 325–337]. Extending the literature to government forecasts, our results illustrate an empirical application of the new test. Our findings provide positive evidence about the usefulness of IMF forecasts whereas they cast doubts about government forecasts.
我们用Pesaran和Timmermann [Pesaran, m.h.， Timmermann, a .， 2009]开发的新方法来研究日本政府和IMF对GDP和价格预测的方向性准确性。序列相关多类别变量间的相关性检验。[j].中国科学:自然科学版。将文献扩展到政府预测，我们的结果说明了新检验的实证应用。我们的研究结果为国际货币基金组织预测的有效性提供了积极的证据，同时对政府的预测提出了质疑。
{"title":"Are Government and IMF Forecasts Useful? An Application of a New Market-Timing Test","authors":"Y. Tsuchiya","doi":"10.2139/ssrn.2136530","DOIUrl":"https://doi.org/10.2139/ssrn.2136530","url":null,"abstract":"We investigate the directional accuracy of GDP and price forecasts by the Japanese government and the IMF with a new method developed by Pesaran and Timmermann [Pesaran, M.H., Timmermann, A., 2009. Testing dependence among serially correlated multi-category variables. Journal of the American Statistical Association 485, 325–337]. Extending the literature to government forecasts, our results illustrate an empirical application of the new test. Our findings provide positive evidence about the usefulness of IMF forecasts whereas they cast doubts about government forecasts.","PeriodicalId":107878,"journal":{"name":"SRPN: Globalization (Sustainability) (Topic)","volume":"39 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2012-06-10","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"133944616","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Marialuz Moreno Badia, L. Eyraud, J. Sarnes, J. Escolano, A. Tuladhar
Shocks stemming from Brazil - the large neighbor in South America - have historically been a source of concern for policy-makers in other countries of the region. This paper studies the importance of Brazil’s influence on its neighboring economies, documenting trade linkages over the last two decades and quantifying spillover effects in a Vector Auto Regression setting. While trade linkages with Brazil are significant for the Southern Cone countries (Argentina, Bolivia, Chile, Paraguay, and Uruguay), they are very weak for others. Consistent with this evidence, econometric results show that, while the Southern Cone economies (especially Mercosur’s members) are vulnerable to output shocks from Brazil, the rest of South America is not. Spillovers can take two different forms: the transmission of Brazil-specific shocks and the amplification of global shocks—through their impact on Brazil’s output. Finally, we also find suggestive evidence that depreciations of Brazil’s currency may not have significant impact on output of its key trading partners.
{"title":"Intra-Regional Spillovers in South America: Is Brazil Systemic after All?","authors":"Marialuz Moreno Badia, L. Eyraud, J. Sarnes, J. Escolano, A. Tuladhar","doi":"10.2139/ssrn.2012230","DOIUrl":"https://doi.org/10.2139/ssrn.2012230","url":null,"abstract":"Shocks stemming from Brazil - the large neighbor in South America - have historically been a source of concern for policy-makers in other countries of the region. This paper studies the importance of Brazil’s influence on its neighboring economies, documenting trade linkages over the last two decades and quantifying spillover effects in a Vector Auto Regression setting. While trade linkages with Brazil are significant for the Southern Cone countries (Argentina, Bolivia, Chile, Paraguay, and Uruguay), they are very weak for others. Consistent with this evidence, econometric results show that, while the Southern Cone economies (especially Mercosur’s members) are vulnerable to output shocks from Brazil, the rest of South America is not. Spillovers can take two different forms: the transmission of Brazil-specific shocks and the amplification of global shocks—through their impact on Brazil’s output. Finally, we also find suggestive evidence that depreciations of Brazil’s currency may not have significant impact on output of its key trading partners.","PeriodicalId":107878,"journal":{"name":"SRPN: Globalization (Sustainability) (Topic)","volume":"715 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2012-06-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"126935641","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2012-04-01DOI: 10.5089/9781475502831.001.A001
Olivier Basdevant
Following the onset of the global economic crisis in 2008, SACU member countries have witnessed a significant growth slowdown, and a deterioration of their fiscal balances. This paper (i) assesses options for the design of the needed fiscal consolidation, and (ii) discussed medium-term fiscal policy rules that would help maintain a sound fiscal stance once consolidation has taken place. The main messages are: (i) government consumption cuts appears to minimize the negative impact on growth, and would be appropriate given the relatively large size of the public sector in each country, (ii) fiscal rules could be of particular interest for SACU members notably, a new customs revenue-sharing formula, procedural rules to strengthen budget process, and numerical rules at the national level.
{"title":"Fiscal Policies and Rules in the Face of Revenue Volatility within Southern Africa Customs Union Countries (SACU)","authors":"Olivier Basdevant","doi":"10.5089/9781475502831.001.A001","DOIUrl":"https://doi.org/10.5089/9781475502831.001.A001","url":null,"abstract":"Following the onset of the global economic crisis in 2008, SACU member countries have witnessed a significant growth slowdown, and a deterioration of their fiscal balances. This paper (i) assesses options for the design of the needed fiscal consolidation, and (ii) discussed medium-term fiscal policy rules that would help maintain a sound fiscal stance once consolidation has taken place. The main messages are: (i) government consumption cuts appears to minimize the negative impact on growth, and would be appropriate given the relatively large size of the public sector in each country, (ii) fiscal rules could be of particular interest for SACU members notably, a new customs revenue-sharing formula, procedural rules to strengthen budget process, and numerical rules at the national level.","PeriodicalId":107878,"journal":{"name":"SRPN: Globalization (Sustainability) (Topic)","volume":"101 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2012-04-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"124714178","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
In this paper, I examine changes in international trade associated with the integration of low- and middle-income countries into the global economy. Led by China and India, the share of developing economies in global exports more than doubled between 1994 and 2008. One feature of new trade patterns is greater South-South trade. China and India have booming demand for imported raw materials, which they use to build cities and factories. Industrialization throughout the South has deepened global production networks, contributing to greater trade in intermediate inputs. A second feature of new trade patterns is the return of comparative advantage as a driver of global commerce. Growth in low- and middle-income nations makes specialization according to comparative advantage more important for the global composition of trade, as North-South and South-South commerce overtakes North-North flows. China's export specialization evolves rapidly over time, revealing a capacity to speed up product ladders. Most developing countries hyper-specialize in handful of export products. The emergence of low- and middle-income countries in trade reveals significant gaps in knowledge about the deep empirical determinants of export specialization, the dynamics of specialization patterns, and why South-South and North-North trade differ.
{"title":"The Rise of Middle Kingdoms: Emerging Economies in Global Trade","authors":"Gordon H. Hanson","doi":"10.1257/JEP.26.2.41","DOIUrl":"https://doi.org/10.1257/JEP.26.2.41","url":null,"abstract":"In this paper, I examine changes in international trade associated with the integration of low- and middle-income countries into the global economy. Led by China and India, the share of developing economies in global exports more than doubled between 1994 and 2008. One feature of new trade patterns is greater South-South trade. China and India have booming demand for imported raw materials, which they use to build cities and factories. Industrialization throughout the South has deepened global production networks, contributing to greater trade in intermediate inputs. A second feature of new trade patterns is the return of comparative advantage as a driver of global commerce. Growth in low- and middle-income nations makes specialization according to comparative advantage more important for the global composition of trade, as North-South and South-South commerce overtakes North-North flows. China's export specialization evolves rapidly over time, revealing a capacity to speed up product ladders. Most developing countries hyper-specialize in handful of export products. The emergence of low- and middle-income countries in trade reveals significant gaps in knowledge about the deep empirical determinants of export specialization, the dynamics of specialization patterns, and why South-South and North-North trade differ.","PeriodicalId":107878,"journal":{"name":"SRPN: Globalization (Sustainability) (Topic)","volume":"6 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2012-03-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"126189731","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
India is ranked at No. 1 for starting a Retail business across the globe. Retail in India, mostly an unorganized business, is an estimated $590 billion market. As per the current regulatory regime, retail trading (except under single-brand product retailing — FDI up to 51 per cent, under the Government route) is prohibited in India. Simply put, for a company to be able to get foreign funding, products sold by it to the general public should only be of a ‘single-brand’; this condition being in addition to a few other conditions to be adhered to. That explains why we do not have a Gucci in India. The Vodafone Judgement coinciding with the entry of Starbucks in India showcases the issue of FDI’s in retail sector through means and modes of franchising or Joint Ventures.
{"title":"Retail Franchising and FDI Policy in India","authors":"Aman Singh","doi":"10.2139/SSRN.2004082","DOIUrl":"https://doi.org/10.2139/SSRN.2004082","url":null,"abstract":"India is ranked at No. 1 for starting a Retail business across the globe. Retail in India, mostly an unorganized business, is an estimated $590 billion market. As per the current regulatory regime, retail trading (except under single-brand product retailing — FDI up to 51 per cent, under the Government route) is prohibited in India. Simply put, for a company to be able to get foreign funding, products sold by it to the general public should only be of a ‘single-brand’; this condition being in addition to a few other conditions to be adhered to. That explains why we do not have a Gucci in India. The Vodafone Judgement coinciding with the entry of Starbucks in India showcases the issue of FDI’s in retail sector through means and modes of franchising or Joint Ventures.","PeriodicalId":107878,"journal":{"name":"SRPN: Globalization (Sustainability) (Topic)","volume":"3 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2012-02-08","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"120943818","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Countries that trade more with each other tend to have more correlated business cycles. Yet, traditional international business cycle models predict a much weaker link between trade and business cycle comovement. We propose that the international diffusion of technology through trade in varieties may be driving the observed comovement by increasing the correlation of total factor productivity (TFP). Our hypothesis is that business cycles should be more correlated between countries that trade a wider variety of goods. We find empirical support for this hypothesis. After decomposing trade into its extensive and intensive margins, we find that the extensive margin explains most of the trade-TFP and trade-output comovement. This result is striking because the extensive margin accounts for only a third of total trade. We then develop a three-country model of technology innovation and international diffusion through trade, in which TFP correlation increases with trade in varieties. A numerical exercise shows that the proposed mechanism increases business cycle synchronization relative to traditional models. Impulse responses to a TFP shock in one country reveal a strong positive effect on the output of its trading partner. Finally, our model implies a trade-output coefficient that is 40% of that observed in the data and 5 times higher than that predicted by standard models.
{"title":"The Trade Comovement Puzzle and the Margins of International Trade","authors":"Wei Liao, Ana Maria Santacreu","doi":"10.2139/ssrn.2422179","DOIUrl":"https://doi.org/10.2139/ssrn.2422179","url":null,"abstract":"Countries that trade more with each other tend to have more correlated business cycles. Yet, traditional international business cycle models predict a much weaker link between trade and business cycle comovement. We propose that the international diffusion of technology through trade in varieties may be driving the observed comovement by increasing the correlation of total factor productivity (TFP). Our hypothesis is that business cycles should be more correlated between countries that trade a wider variety of goods. We find empirical support for this hypothesis. After decomposing trade into its extensive and intensive margins, we find that the extensive margin explains most of the trade-TFP and trade-output comovement. This result is striking because the extensive margin accounts for only a third of total trade. We then develop a three-country model of technology innovation and international diffusion through trade, in which TFP correlation increases with trade in varieties. A numerical exercise shows that the proposed mechanism increases business cycle synchronization relative to traditional models. Impulse responses to a TFP shock in one country reveal a strong positive effect on the output of its trading partner. Finally, our model implies a trade-output coefficient that is 40% of that observed in the data and 5 times higher than that predicted by standard models.","PeriodicalId":107878,"journal":{"name":"SRPN: Globalization (Sustainability) (Topic)","volume":"36 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2011-12-20","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"124451158","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Recently, Mastromarco, Serlenga and Shin (2010) propose a two-step approach to examine dynamic transmission mechanism under which globalization factors fos- ter technology efficiency. In this paper, we extend the MSS model by combining panel threshold regression technique advanced by Hansen (1999). This threshold stochastic frontier panel data model enables us to analyze regime-specific stochas- tic frontiers and complex time-varying patterns of technical efficiencies in a robust manner. Using a dataset of 44 countries over 1970-2007, we find that income elas- ticities of labour and capital and time-varying common efficiencies are substantially different under superior and inferior frontiers. Capital and labour inputs are more productive under superior frontier. More importantly, common efficiencies have steadily increased under superior frontier, but technical efficiency has monotoni- cally decreased for low income countries, supporting the so-called club convergence hypothesis. Furthermore, the VAR-based impulse response analyses suggest that openness factors through FDI and trade help the countries improve production technology and efficiency position relative to the frontier only after the country has reached a certain level of development.
{"title":"Is Globalization Driving Efficiency? A Threshold Stochastic Frontier Panel Data Modelling Approach","authors":"Camilla Mastromarco, L. Serlenga, Y. Shin","doi":"10.2139/ssrn.2118478","DOIUrl":"https://doi.org/10.2139/ssrn.2118478","url":null,"abstract":"Recently, Mastromarco, Serlenga and Shin (2010) propose a two-step approach to examine dynamic transmission mechanism under which globalization factors fos- ter technology efficiency. In this paper, we extend the MSS model by combining panel threshold regression technique advanced by Hansen (1999). This threshold stochastic frontier panel data model enables us to analyze regime-specific stochas- tic frontiers and complex time-varying patterns of technical efficiencies in a robust manner. Using a dataset of 44 countries over 1970-2007, we find that income elas- ticities of labour and capital and time-varying common efficiencies are substantially different under superior and inferior frontiers. Capital and labour inputs are more productive under superior frontier. More importantly, common efficiencies have steadily increased under superior frontier, but technical efficiency has monotoni- cally decreased for low income countries, supporting the so-called club convergence hypothesis. Furthermore, the VAR-based impulse response analyses suggest that openness factors through FDI and trade help the countries improve production technology and efficiency position relative to the frontier only after the country has reached a certain level of development.","PeriodicalId":107878,"journal":{"name":"SRPN: Globalization (Sustainability) (Topic)","volume":"1 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2011-10-21","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"131350834","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Fiscal sustainability conditions for the Maastricht gross nominal consolidated public debt are analyzed using Hungarian data. The components of debt dynamics are grouped following the commonly used debts sustainability approach while the factors and their contributions to the changes of the debt are analyzed using a VAR model. The stochastic properties (variance) of macro variables used in the VAR model help to asses risks to fiscal sustainability. This approach offers a way to determine the effect of possible macroeconomic shocks on debt dynamics. Using stochastic simulation, we can estimate a confidence interval around the expected debt ratio path at pre-specified probability levels.
{"title":"Fiscal Sustainability Risk Assessment with Macroeconomic Factors","authors":"I. Ábel, Adam Kobor","doi":"10.2139/ssrn.1868543","DOIUrl":"https://doi.org/10.2139/ssrn.1868543","url":null,"abstract":"Fiscal sustainability conditions for the Maastricht gross nominal consolidated public debt are analyzed using Hungarian data. The components of debt dynamics are grouped following the commonly used debts sustainability approach while the factors and their contributions to the changes of the debt are analyzed using a VAR model. The stochastic properties (variance) of macro variables used in the VAR model help to asses risks to fiscal sustainability. This approach offers a way to determine the effect of possible macroeconomic shocks on debt dynamics. Using stochastic simulation, we can estimate a confidence interval around the expected debt ratio path at pre-specified probability levels.","PeriodicalId":107878,"journal":{"name":"SRPN: Globalization (Sustainability) (Topic)","volume":"22 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2011-06-20","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"122439870","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
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