Pub Date : 2017-12-01DOI: 10.5089/9781484325063.001.A001
Ryota Nakatani
How should resource-rich economies handle the balance of payments adjustment required after commodity price declines? This paper addresses the question theoretically by developing a simple two-period multi-sector model based on Nakatani (2016) to compare different exchange rate policies, and empirically by estimating elasticities of imports and commodity exports with respect to exchange rates using Papua New Guinean data. In the empirical part, using various econometric methods, I find the statistically significant elasticities of commodity exports to real exchange rates. In the theoretical part, by introducing the notion of a shadow exchange rate premium, I show how the rationing of foreign exchange reduces consumer welfare. Using the estimated elasticities and theoretical outcomes, I further discuss policy implications for resource-rich countries with a focus on Papua New Guinea.
{"title":"External Adjustment in a Resource-Rich Economy: The Case of Papua New Guinea","authors":"Ryota Nakatani","doi":"10.5089/9781484325063.001.A001","DOIUrl":"https://doi.org/10.5089/9781484325063.001.A001","url":null,"abstract":"How should resource-rich economies handle the balance of payments adjustment required after commodity price declines? This paper addresses the question theoretically by developing a simple two-period multi-sector model based on Nakatani (2016) to compare different exchange rate policies, and empirically by estimating elasticities of imports and commodity exports with respect to exchange rates using Papua New Guinean data. In the empirical part, using various econometric methods, I find the statistically significant elasticities of commodity exports to real exchange rates. In the theoretical part, by introducing the notion of a shadow exchange rate premium, I show how the rationing of foreign exchange reduces consumer welfare. Using the estimated elasticities and theoretical outcomes, I further discuss policy implications for resource-rich countries with a focus on Papua New Guinea.","PeriodicalId":259955,"journal":{"name":"ERN: Open Macroeconomics in Transition Economics (Topic)","volume":"48 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2017-12-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"134499339","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}
Muhammad Hafeez, Muhammad Imran, Sadaf Shahab, M. Tariq
This study explores the linkage of exchange rate, political regimes, structural shocks and economic growth by utilizing the time series data set from 1960 to 2016. Our results indicate that the exchange rate’s magnitude impact is relatively high on real GDP growth in the presence of more political shocks as compared to fiscal deficit and investment in Pakistan’s economy. Fiscal deficit has an adverse effect on economic growth. Thus due to an extreme event, the fiscal deficit is likely to have more influence than the exchange rate. However, political regimes do the reverse.
{"title":"Economic Growth, Exchange Rate, Political Regimes and Extreme Events Linkage: A Time Series Approach for Pakistan","authors":"Muhammad Hafeez, Muhammad Imran, Sadaf Shahab, M. Tariq","doi":"10.2139/ssrn.3049798","DOIUrl":"https://doi.org/10.2139/ssrn.3049798","url":null,"abstract":"This study explores the linkage of exchange rate, political regimes, structural shocks and economic growth by utilizing the time series data set from 1960 to 2016. Our results indicate that the exchange rate’s magnitude impact is relatively high on real GDP growth in the presence of more political shocks as compared to fiscal deficit and investment in Pakistan’s economy. Fiscal deficit has an adverse effect on economic growth. Thus due to an extreme event, the fiscal deficit is likely to have more influence than the exchange rate. However, political regimes do the reverse.","PeriodicalId":259955,"journal":{"name":"ERN: Open Macroeconomics in Transition Economics (Topic)","volume":"61 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2017-10-09","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"121296021","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 the open economy control conditions, the government’s main concern should be ensurance of macroeconomic stabilization. One of real tools for achieving this goal is monetary and budgetary levers’ combination, in which strong fiscal stimuls should be merged with monetary policy, although herewith it requires tough coordination between government-led public and the National Bank’s monetary policies. In addition, it should be noted that monetary levers should be used to influence tax balance, while fiscal policy should be oriented only on regulation of aggregate demand. Cutting taxes and decreasing government spending is essential to stimulate production in Georgia, as well as increasing research funds and developing effective system for qualification growth.
{"title":"Problems of Macroeconomic Stabilization in Georgia in the Conditions of an Open Economy","authors":"G. Abuselidze, Davit Qatamadze","doi":"10.2139/ssrn.2978163","DOIUrl":"https://doi.org/10.2139/ssrn.2978163","url":null,"abstract":"In the open economy control conditions, the government’s main concern should be ensurance of macroeconomic stabilization. One of real tools for achieving this goal is monetary and budgetary levers’ combination, in which strong fiscal stimuls should be merged with monetary policy, although herewith it requires tough coordination between government-led public and the National Bank’s monetary policies. \u0000 \u0000In addition, it should be noted that monetary levers should be used to influence tax balance, while fiscal policy should be oriented only on regulation of aggregate demand. Cutting taxes and decreasing government spending is essential to stimulate production in Georgia, as well as increasing research funds and developing effective system for qualification growth.","PeriodicalId":259955,"journal":{"name":"ERN: Open Macroeconomics in Transition Economics (Topic)","volume":"103 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2017-05-31","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"122347237","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}
The purpose of this paper is to explore the puzzle of why so many Chinese firms eschew listings in China. Hundreds of firms founded in China have reorganized themselves as overseas corporations and listed on the Hong Kong Stock Exchange. These firms are called Red-chips if they are state-owned enterprises (SOEs) and P-chips if they are not state-owned (non-SOEs). To examine the rationale behind the listing decisions of P-chips and Red-chips, we compare the characteristics of Red-chips (P-chips) with SOEs (non-SOEs) listed on China stock exchanges. We find that SOEs are more likely to list in China. Moreover, while we do not observe any significant difference between the performance of Hong Kong-listed and mainland-listed SOEs, we find non-SOEs that are listed in Hong Kong are significantly more profitable than those listed in China. We then explore three possible explanations for why Chinese firms, especially non-SOEs, may prefer to be listed in Hong Kong: (1) to facilitate personal wealth transfers out of China, (2) to increase access to debt capital, and (3) to facilitate more efficient stock price formation. We find that all three of these explanations have statistical support.
{"title":"Avoiding China's Capital Market: Evidence from Hong Kong-Listed Red-Chips and P-Chips","authors":"Weishi Jia, Grace Pownall, Jingran Zhao","doi":"10.2308/JIAR-52178","DOIUrl":"https://doi.org/10.2308/JIAR-52178","url":null,"abstract":"\u0000 The purpose of this paper is to explore the puzzle of why so many Chinese firms eschew listings in China. Hundreds of firms founded in China have reorganized themselves as overseas corporations and listed on the Hong Kong Stock Exchange. These firms are called Red-chips if they are state-owned enterprises (SOEs) and P-chips if they are not state-owned (non-SOEs). To examine the rationale behind the listing decisions of P-chips and Red-chips, we compare the characteristics of Red-chips (P-chips) with SOEs (non-SOEs) listed on China stock exchanges. We find that SOEs are more likely to list in China. Moreover, while we do not observe any significant difference between the performance of Hong Kong-listed and mainland-listed SOEs, we find non-SOEs that are listed in Hong Kong are significantly more profitable than those listed in China. We then explore three possible explanations for why Chinese firms, especially non-SOEs, may prefer to be listed in Hong Kong: (1) to facilitate personal wealth transfers out of China, (2) to increase access to debt capital, and (3) to facilitate more efficient stock price formation. We find that all three of these explanations have statistical support.","PeriodicalId":259955,"journal":{"name":"ERN: Open Macroeconomics in Transition Economics (Topic)","volume":"13 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2017-03-05","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"115798882","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}
The central bank in an open developing economy often balances the national foreign exchange market by selling liquid assets (typically domestic sovereign securities) to commercial banks and other institutional investors that would otherwise be motivated to invest in foreign financial assets. Therefore, securities denominated in domestic currency, ostensibly sold in the name of “mopping up excess reserves”, serve as a compensation transmission mechanism under which international reserves and the exchange rate target are central. This transmission mechanism allows the central bank to target the exchange rate while also pursuing an independent monetary policy under free capital mobility, thus to a large degree circumventing the Trilemma. In addition, the securities serve the other purpose of reducing the volatility of the portfolio of bank assets. In an imperfectly competitive security market, this compensation strategy is less expensive than would result if the strategy is to be implemented in a purely competitive securities market.
{"title":"The Role of Excess Liquid Assets in Monetary Policy of Small Open Developing Economies","authors":"Tarron Khemraj","doi":"10.2139/ssrn.2980120","DOIUrl":"https://doi.org/10.2139/ssrn.2980120","url":null,"abstract":"The central bank in an open developing economy often balances the national foreign exchange market by selling liquid assets (typically domestic sovereign securities) to commercial banks and other institutional investors that would otherwise be motivated to invest in foreign financial assets. Therefore, securities denominated in domestic currency, ostensibly sold in the name of “mopping up excess reserves”, serve as a compensation transmission mechanism under which international reserves and the exchange rate target are central. This transmission mechanism allows the central bank to target the exchange rate while also pursuing an independent monetary policy under free capital mobility, thus to a large degree circumventing the Trilemma. In addition, the securities serve the other purpose of reducing the volatility of the portfolio of bank assets. In an imperfectly competitive security market, this compensation strategy is less expensive than would result if the strategy is to be implemented in a purely competitive securities market.","PeriodicalId":259955,"journal":{"name":"ERN: Open Macroeconomics in Transition Economics (Topic)","volume":"44 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2017-03-03","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"123744942","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}
This study begins with an overview of the poverty situation in the Philippines. It then takes a brief look at the poor in the rural areas, followed with a discussion of the poor in the informal sector. It then, brings these two sectors together, with an examination of the poor and the urban/rural and formal/informal divides. It concludes with a discussion of the relationship among trade, poverty and the structural transformation of the Philippine economy.
{"title":"Trade and Poverty Issues: A Country Case Study of the Philippines","authors":"Leonardo L. Sta. Romana","doi":"10.2139/ssrn.2953680","DOIUrl":"https://doi.org/10.2139/ssrn.2953680","url":null,"abstract":"This study begins with an overview of the poverty situation in the Philippines. It then takes a brief look at the poor in the rural areas, followed with a discussion of the poor in the informal sector. It then, brings these two sectors together, with an examination of the poor and the urban/rural and formal/informal divides. It concludes with a discussion of the relationship among trade, poverty and the structural transformation of the Philippine economy.","PeriodicalId":259955,"journal":{"name":"ERN: Open Macroeconomics in Transition Economics (Topic)","volume":"15 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2017-01-31","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"129667481","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 explore the asymmetric effects of institutional differences on bilateral foreign direct investment (FDI) flows conditional on countries' development levels, previous experiences of foreign investors and bilateral trade relations. The empirical results using bilateral FDI data from 134 countries during 1990–2009 suggest that institutional differences create entry barriers for foreign investors only in North–South and South–North directions, and more so for the former. Furthermore, Southern investors appear to have a comparative advantage in institutionally different developing countries. Finally, we find no evidence that investor experiences in other institutionally different countries or existing trade linkages negate the negative effect of institutional distance.
{"title":"Institutional Differences and the Direction of Bilateral Foreign Direct Investment Flows: Are South–South Flows Any Different than the Rest?","authors":"Firat Demir, Chenghao Hu","doi":"10.1111/twec.12356","DOIUrl":"https://doi.org/10.1111/twec.12356","url":null,"abstract":"We explore the asymmetric effects of institutional differences on bilateral foreign direct investment (FDI) flows conditional on countries' development levels, previous experiences of foreign investors and bilateral trade relations. The empirical results using bilateral FDI data from 134 countries during 1990–2009 suggest that institutional differences create entry barriers for foreign investors only in North–South and South–North directions, and more so for the former. Furthermore, Southern investors appear to have a comparative advantage in institutionally different developing countries. Finally, we find no evidence that investor experiences in other institutionally different countries or existing trade linkages negate the negative effect of institutional distance.","PeriodicalId":259955,"journal":{"name":"ERN: Open Macroeconomics in Transition Economics (Topic)","volume":"132 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2016-12-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"122915921","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}
Developing countries frequently offer tax incentives and even subsidize the entry and operation of foreign firms. I examine the optimality of such policies in an economy where growth is driven by entrepreneurial know-how, a skill that is continuously updated on the basis of the productive ideas implemented in the country. Openness allows foreign ideas to disseminate inside a country and can foster the country's domestic accumulation of know- how. With externalities, however, laissez-faire openness is suboptimal and can be growth-and even welfare-reducing. I examine the gains from openness under an optimal taxation program the self-funding taxes on domestic and foreign firms that maximize the welfare of the recipient country, subject to the equilibrium behavior of national and foreign firms. Under optimal taxation, openness is always welfare enhancing and leads lagging countries to catch up with the world frontier. Yet, a country may want to subsidize the entry of foreign firms only if it can also subsidize the domestic accumulation of know-how. I also consider the optimal tax program under a number of restrictions that developing countries typically face. For instance, a country must not subsidize entry of foreign firms if doing so requires taxing the concurrent cohort of domestic firms. Similarly, an international agreement that requires equal taxation of domestic and foreign firms can be welfare reducing for a country close to the knowledge frontier.
{"title":"Openness and the Optimal Taxation of Foreign Know-How","authors":"A. Monge-Naranjo","doi":"10.20955/wp.2016.020","DOIUrl":"https://doi.org/10.20955/wp.2016.020","url":null,"abstract":"Developing countries frequently offer tax incentives and even subsidize the entry and operation of foreign firms. I examine the optimality of such policies in an economy where growth is driven by entrepreneurial know-how, a skill that is continuously updated on the basis of the productive ideas implemented in the country. Openness allows foreign ideas to disseminate inside a country and can foster the country's domestic accumulation of know- how. With externalities, however, laissez-faire openness is suboptimal and can be growth-and even welfare-reducing. I examine the gains from openness under an optimal taxation program the self-funding taxes on domestic and foreign firms that maximize the welfare of the recipient country, subject to the equilibrium behavior of national and foreign firms. Under optimal taxation, openness is always welfare enhancing and leads lagging countries to catch up with the world frontier. Yet, a country may want to subsidize the entry of foreign firms only if it can also subsidize the domestic accumulation of know-how. I also consider the optimal tax program under a number of restrictions that developing countries typically face. For instance, a country must not subsidize entry of foreign firms if doing so requires taxing the concurrent cohort of domestic firms. Similarly, an international agreement that requires equal taxation of domestic and foreign firms can be welfare reducing for a country close to the knowledge frontier.","PeriodicalId":259955,"journal":{"name":"ERN: Open Macroeconomics in Transition Economics (Topic)","volume":"70 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2016-10-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"127305357","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}
Russian Abstract: В настоящем исследовании детально анализируется география транспортных потоков внешней торговли через границу Российской Федерации. Мы строим теоретическую модель торговли и модель выбора транспортного маршрута для транспортировки внешнеторговых грузов, а затем оцениваем модель выбора транспортного маршрута на данных по пунктам пропуска России.English Abstract: The present study examines in detail the geography of transport flows for foreign trade through the Russian border. We build a theoretical model of trade and transport model for the choice of the route for the transport of foreign trade goods, and then evaluate the model of choice of the transport route to the data points of pass Russia.
{"title":"География Внешнеторговых Маршрутов: Роль Транспортной Инфраструктуры (The Geography of Foreign Trade Routes: The Role of Transport Infrastructure)","authors":"T. Mikhailova, V. Gordeev","doi":"10.2139/SSRN.2782031","DOIUrl":"https://doi.org/10.2139/SSRN.2782031","url":null,"abstract":"Russian Abstract: В настоящем исследовании детально анализируется география транспортных потоков внешней торговли через границу Российской Федерации. Мы строим теоретическую модель торговли и модель выбора транспортного маршрута для транспортировки внешнеторговых грузов, а затем оцениваем модель выбора транспортного маршрута на данных по пунктам пропуска России.English Abstract: The present study examines in detail the geography of transport flows for foreign trade through the Russian border. We build a theoretical model of trade and transport model for the choice of the route for the transport of foreign trade goods, and then evaluate the model of choice of the transport route to the data points of pass Russia.","PeriodicalId":259955,"journal":{"name":"ERN: Open Macroeconomics in Transition Economics (Topic)","volume":"53 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2016-05-12","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"115752904","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}
This research will analyze the effects of the similarities in economic size and institutional level on bilateral trade. It is interested whether similarities at the country size and institutional level encourage international trade between countries. Using panel data of the bilateral trade of Azerbaijan with 50 different countries from 1995 to 2012 estimating by the Poisson Pseudo-Maximum Likelihood (PPML) method, it is expecting that similarity at the income size is not necessary for increasing bilateral trade across countries, on the contrary, country has interest to trade with dissimilar economic-size countries. Institutional similarity is expecting plays pivot role in international relationships and it has positive impact on bilateral trade.
{"title":"The Gravity of Institutions in Resource-Rich Country","authors":"A. Zeynalov","doi":"10.2139/ssrn.2586494","DOIUrl":"https://doi.org/10.2139/ssrn.2586494","url":null,"abstract":"This research will analyze the effects of the similarities in economic size and institutional level on bilateral trade. It is interested whether similarities at the country size and institutional level encourage international trade between countries. Using panel data of the bilateral trade of Azerbaijan with 50 different countries from 1995 to 2012 estimating by the Poisson Pseudo-Maximum Likelihood (PPML) method, it is expecting that similarity at the income size is not necessary for increasing bilateral trade across countries, on the contrary, country has interest to trade with dissimilar economic-size countries. Institutional similarity is expecting plays pivot role in international relationships and it has positive impact on bilateral trade.","PeriodicalId":259955,"journal":{"name":"ERN: Open Macroeconomics in Transition Economics (Topic)","volume":"5 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2015-03-28","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"124452746","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}
京公网安备 11010802042870号
京ICP备2023020795号-1
扫码关注我们
求助内容：
应助结果提醒方式：