This study uses a sample of 194 banks from 15 EU countries and two-stage data envelopment analysis (DEA) to provide evidence on the impact of the European Banking Authority (EBA)'s capital exercise on banks' efficiency. In the first stage of the analysis, we measure the efficiency by employing DEA. We then use Tobit regression to investigate the impact of the capital exercise on banks' technical efficiency. We estimate several specifications while controlling for bank-specific attributes and country-level characteristics accounting for macroeconomic conditions, financial development and market structure. The results indicate that EBA's capital exercise came, as a shock for the banks would be contributing towards making the banks more stable. It would be preventing banks from excessive risk-taking activities. Furthermore, it would be allowing the banks to withstand the financial distress and contributing in banks be- coming less prone to the systemic risk. The study finds that the capital requirements would be creating favourable economic conditions, which would be, affect the extent, depth and quality of financial intermediation and banking services.
{"title":"EBA's Capital Exercise and Technical Efficiency of the Banks","authors":"A. Rathore","doi":"10.15353/rea.v12i4.1774","DOIUrl":"https://doi.org/10.15353/rea.v12i4.1774","url":null,"abstract":"This study uses a sample of 194 banks from 15 EU countries and two-stage data envelopment analysis (DEA) to provide evidence on the impact of the European Banking Authority (EBA)'s capital exercise on banks' efficiency. In the first stage of the analysis, we measure the efficiency by employing DEA. We then use Tobit regression to investigate the impact of the capital exercise on banks' technical efficiency. We estimate several specifications while controlling for bank-specific attributes and country-level characteristics accounting for macroeconomic conditions, financial development and market structure. The results indicate that EBA's capital exercise came, as a shock for the banks would be contributing towards making the banks more stable. It would be preventing banks from excessive risk-taking activities. Furthermore, it would be allowing the banks to withstand the financial distress and contributing in banks be- coming less prone to the systemic risk. The study finds that the capital requirements would be creating favourable economic conditions, which would be, affect the extent, depth and quality of financial intermediation and banking services.","PeriodicalId":42350,"journal":{"name":"Review of Economic Analysis","volume":null,"pages":null},"PeriodicalIF":0.5,"publicationDate":"2020-12-23","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"47827519","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}
Remittances are an important source of external resources for developing countries. These transfers may increase the levels of consumption and capital formation in these economies. This paper examines the economic impact of international remittances on different import categories. A panel VAR was estimated using data from eight Latin-American economies during the 1991 to 2004 period. The impulse response functions show that remittances increase imports of capital, consumption, and intermediate goods. It was also found that the accelerator is a plausible transmission mechanism from this type of income to investment.
{"title":"The Effect of Remittances on Imports in Eight Latin-American Countries","authors":"J. Hernández, Wilfredo Toledo","doi":"10.15353/rea.v12i3.1773","DOIUrl":"https://doi.org/10.15353/rea.v12i3.1773","url":null,"abstract":"Remittances are an important source of external resources for developing countries. These transfers may increase the levels of consumption and capital formation in these economies. This paper examines the economic impact of international remittances on different import categories. A panel VAR was estimated using data from eight Latin-American economies during the 1991 to 2004 period. The impulse response functions show that remittances increase imports of capital, consumption, and intermediate goods. It was also found that the accelerator is a plausible transmission mechanism from this type of income to investment.","PeriodicalId":42350,"journal":{"name":"Review of Economic Analysis","volume":null,"pages":null},"PeriodicalIF":0.5,"publicationDate":"2020-10-27","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"43060847","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 paper estimates the effect of Chinese Yuan devaluation on the trade balance of China. For that a regression equation is developed in which domestic income, foreign income, domestic money supply, foreign money supply and real effective exchange rate are used as explanatory variable with trade balance as the dependent variable. In order to test the J-curve phenomenon the lagged values of exchange rata are also included. Quarterly time series data from 1999 to 2016 are used. Before estimating the model the time series properties of the data are diagnosed and an error correction model is developed and estimated. The estimated results show that the contemporaneous effect of devaluation is positive, but the total effect is insignificant. A J-curve pattern of adjustment of the trade balance is also detected.
{"title":"Another Look at Devaluation and the Trade Balance in China","authors":"Ethan T. McGee, K. Upadhyaya, Rabin Bhandari","doi":"10.15353/rea.v12i3.1770","DOIUrl":"https://doi.org/10.15353/rea.v12i3.1770","url":null,"abstract":"This paper estimates the effect of Chinese Yuan devaluation on the trade balance of China. For that a regression equation is developed in which domestic income, foreign income, domestic money supply, foreign money supply and real effective exchange rate are used as explanatory variable with trade balance as the dependent variable. In order to test the J-curve phenomenon the lagged values of exchange rata are also included. Quarterly time series data from 1999 to 2016 are used. Before estimating the model the time series properties of the data are diagnosed and an error correction model is developed and estimated. The estimated results show that the contemporaneous effect of devaluation is positive, but the total effect is insignificant. A J-curve pattern of adjustment of the trade balance is also detected.","PeriodicalId":42350,"journal":{"name":"Review of Economic Analysis","volume":null,"pages":null},"PeriodicalIF":0.5,"publicationDate":"2020-10-27","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"66903032","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}
A dynamic labour force participation model is used to estimate the impact of disability shocks on labour force participation using a longitudinal sample drawn from the National Population Health Survey. Findings suggest that state dependence play a crucial role in how temporary disabilities can have long lasting employment effects. A disability shock that last only one period is shown to lower labour force participation up to 3 additional periods. Findings are in support of policies that promote greater labour force attachment for individuals with disabilities.
{"title":"Why Do Past Disabilities Still Haunt the Newly Healthy?","authors":"Umut Oguzoglu","doi":"10.15353/rea.v12i3.1768","DOIUrl":"https://doi.org/10.15353/rea.v12i3.1768","url":null,"abstract":" A dynamic labour force participation model is used to estimate the impact of disability shocks on labour force participation using a longitudinal sample drawn from the National Population Health Survey. Findings suggest that state dependence play a crucial role in how temporary disabilities can have long lasting employment effects. A disability shock that last only one period is shown to lower labour force participation up to 3 additional periods. Findings are in support of policies that promote greater labour force attachment for individuals with disabilities.","PeriodicalId":42350,"journal":{"name":"Review of Economic Analysis","volume":null,"pages":null},"PeriodicalIF":0.5,"publicationDate":"2020-10-27","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"47408331","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}
Abstract Dunning’s Eclectic Paradigm is used to assess the effectiveness and impact of U.S. drug prohibition policy on economic growth and political stability in Latin American countries as well as the decision making of Latin American Transnational Criminal Enterprises (TCE) in the cocaine-coca market. Results showed U.S. drug prohibition policy reduces the on-site supply but does not significantly reduce the transportation of cocaine and coca. U.S. drug prohibition policy also generated political instability for the region, and revealed policy externalities that facilitated TCE expansion. Tougher U.S. drug prohibition policy advances TCE by amplifying the impact that unemployment and local wages have on increases in cocaine-coca production, and by limiting the impact of control of corruption and economic freedom on coca eradication. Our results signal that a site-specific approach accompanied with policies that improve the farmers’ economic freedom, such as land formalization rights, and policies that lower unemployment rate facilitate effective U.S. drug prohibition policy.
{"title":"Identifying New Approaches for U.S. Drug Policy using Ownership, Location, and Internalization Factors","authors":"Mariana Saenz, Antony G. Barilla","doi":"10.15353/rea.v12i3.1790","DOIUrl":"https://doi.org/10.15353/rea.v12i3.1790","url":null,"abstract":"Abstract Dunning’s Eclectic Paradigm is used to assess the effectiveness and impact of U.S. drug prohibition policy on economic growth and political stability in Latin American countries as well as the decision making of Latin American Transnational Criminal Enterprises (TCE) in the cocaine-coca market. Results showed U.S. drug prohibition policy reduces the on-site supply but does not significantly reduce the transportation of cocaine and coca. U.S. drug prohibition policy also generated political instability for the region, and revealed policy externalities that facilitated TCE expansion. Tougher U.S. drug prohibition policy advances TCE by amplifying the impact that unemployment and local wages have on increases in cocaine-coca production, and by limiting the impact of control of corruption and economic freedom on coca eradication. Our results signal that a site-specific approach accompanied with policies that improve the farmers’ economic freedom, such as land formalization rights, and policies that lower unemployment rate facilitate effective U.S. drug prohibition policy.","PeriodicalId":42350,"journal":{"name":"Review of Economic Analysis","volume":null,"pages":null},"PeriodicalIF":0.5,"publicationDate":"2020-10-27","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"48962854","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 issue marks the tenth anniversary of the founding of the Review of Economic Analysis.
本期是《经济分析评论》创刊十周年。
{"title":"TEN YEARS OF THE REVIEW OF ECONOMIC ANALYSIS","authors":"J. Konieczny","doi":"10.15353/rea.v12i2.1833","DOIUrl":"https://doi.org/10.15353/rea.v12i2.1833","url":null,"abstract":"This issue marks the tenth anniversary of the founding of the Review of Economic Analysis.","PeriodicalId":42350,"journal":{"name":"Review of Economic Analysis","volume":null,"pages":null},"PeriodicalIF":0.5,"publicationDate":"2020-07-04","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"42311516","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}
Using panel data from Canadian National Population Health Survey (2006-2011), this study examined what happened to individuals’ self-reported health during and in the aftermath of great recession of 2008-2009. The study used different methods such as ordered probit method, ordinary least square method and panel fixed effects method. Once individual specific fixed effects are controlled for, the results show that great recession had no statistically significant detrimental impact on self-reported health status. The results further show that health status in the aftermath of great recession did not significantly differ from the health status before the great recession.
{"title":"Health Outcomes Before, During and After the Great Recession in Canada: A Longitudinal Analysis","authors":"E. Latif","doi":"10.15353/rea.v12i1.1759","DOIUrl":"https://doi.org/10.15353/rea.v12i1.1759","url":null,"abstract":"Using panel data from Canadian National Population Health Survey (2006-2011), this study examined what happened to individuals’ self-reported health during and in the aftermath of great recession of 2008-2009. The study used different methods such as ordered probit method, ordinary least square method and panel fixed effects method. Once individual specific fixed effects are controlled for, the results show that great recession had no statistically significant detrimental impact on self-reported health status. The results further show that health status in the aftermath of great recession did not significantly differ from the health status before the great recession.","PeriodicalId":42350,"journal":{"name":"Review of Economic Analysis","volume":null,"pages":null},"PeriodicalIF":0.5,"publicationDate":"2020-04-25","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"47211907","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 an attempt to establish stability of the demand for money, some recent studies have included the volatility of the money supply and output to account for uncertainty. In this paper we consider the experience of Japan but rather than including an uncertainty measure related to money supply and output, we include a relatively more comprehensive measure known as Economic Policy Uncertainty. When we included this later measure, we were unable to find a stable money demand in Japan. However, when we introduced the nonlinear adjustment of policy uncertainty, we not only found a stable money demand but also meaningful estimates. Since the approach allows us to assess asymmetries, we found that in Japan the public hold more cash when there is an increase or a decrease in uncertainty.
{"title":"Policy Uncertainty and the Demand for Money in Japan","authors":"Mohsen Bahmani‐Oskooee, M. Nayeri","doi":"10.15353/REA.V12I1.1692","DOIUrl":"https://doi.org/10.15353/REA.V12I1.1692","url":null,"abstract":"In an attempt to establish stability of the demand for money, some recent studies have included the volatility of the money supply and output to account for uncertainty. In this paper we consider the experience of Japan but rather than including an uncertainty measure related to money supply and output, we include a relatively more comprehensive measure known as Economic Policy Uncertainty. When we included this later measure, we were unable to find a stable money demand in Japan. However, when we introduced the nonlinear adjustment of policy uncertainty, we not only found a stable money demand but also meaningful estimates. Since the approach allows us to assess asymmetries, we found that in Japan the public hold more cash when there is an increase or a decrease in uncertainty.","PeriodicalId":42350,"journal":{"name":"Review of Economic Analysis","volume":null,"pages":null},"PeriodicalIF":0.5,"publicationDate":"2020-04-25","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"48488829","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}
R. Dimand, Terrence Hines, Olivia Gong, M. O’reilly, Tom Velk, Mengyue Zhao
For the past several years, we have presented and published studies based on postal related data, from postmaster cash books and the Official Register, where we use postmaster salary data as a measure of local, highly disaggregate proxies for general economic activity at town and village level. Using micro-level, high frequency, nationally uniform and previously unknown data, we will report on the outcome of measuring levels of economic activity, political influence and social mobility phenomena. In our latest work, we will use a recently published work of railroad history investments in the 19th century. The railroad history we have is highly detailed, naming particular towns and routes. Our own micro data will allow us to associate our postmaster data with railway town information at the same micro level. Our data will also allow us to report the economic activity of non-railway towns. We will then have, at the micro-level, bi-annual comparisons made over the life of the railway routes. The relative economic, political and demographic impact of railway investment will be examined. For example, as we have the names, birthplaces and ethnic origins of postmasters in addition to their salaries. We can measure not just differences in economic activity between railway and non-railway towns but even examine questions like: "Are the railway towns places where new immigrants get to be postmasters more quickly than elsewhere?" Our larger purpose is to advertise our ever-expanding postal based dataset, which provides information of interest to economists, sociologists, historians and political scientists.
{"title":"Measuring U.S. 19th Century Economic Activity Using Unexploited Railway and Postal Micro-level Data","authors":"R. Dimand, Terrence Hines, Olivia Gong, M. O’reilly, Tom Velk, Mengyue Zhao","doi":"10.15353/rea.v12i1.1691","DOIUrl":"https://doi.org/10.15353/rea.v12i1.1691","url":null,"abstract":"For the past several years, we have presented and published studies based on postal related data, from postmaster cash books and the Official Register, where we use postmaster salary data as a measure of local, highly disaggregate proxies for general economic activity at town and village level. Using micro-level, high frequency, nationally uniform and previously unknown data, we will report on the outcome of measuring levels of economic activity, political influence and social mobility phenomena. In our latest work, we will use a recently published work of railroad history investments in the 19th century. The railroad history we have is highly detailed, naming particular towns and routes. Our own micro data will allow us to associate our postmaster data with railway town information at the same micro level. Our data will also allow us to report the economic activity of non-railway towns. We will then have, at the micro-level, bi-annual comparisons made over the life of the railway routes. The relative economic, political and demographic impact of railway investment will be examined. For example, as we have the names, birthplaces and ethnic origins of postmasters in addition to their salaries. We can measure not just differences in economic activity between railway and non-railway towns but even examine questions like: \"Are the railway towns places where new immigrants get to be postmasters more quickly than elsewhere?\" Our larger purpose is to advertise our ever-expanding postal based dataset, which provides information of interest to economists, sociologists, historians and political scientists.","PeriodicalId":42350,"journal":{"name":"Review of Economic Analysis","volume":null,"pages":null},"PeriodicalIF":0.5,"publicationDate":"2019-11-16","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"46447260","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 Canada, targeting the inflation rate was intended as a temporary measure during a transition to price-level stability, but became a well-established monetary policy regime in its own right. This paper analyses the role of the interaction of economic ideas with the experience generated by their application to policy in bringing about this outcome. In the following account, changing beliefs about the stability or otherwise of ongoing inflation, the capacity of a flexible exchange rate to create a vicious circle of depreciation and rising domestic prices, are emphasised, while ideas about the natural unemployment rate and money growth in influencing economic outcomes are also discussed. Today’s standard theoretical approach to modelling inflation targeting arrived on the scene only as the Canadian regime was becoming well established.
{"title":"Interactions among Economic Ideas, Policies and Experience - The Establishment of Inflation Targeting in Canada, 1991-2001","authors":"D. Laidler","doi":"10.15353/rea.v12i2.1693","DOIUrl":"https://doi.org/10.15353/rea.v12i2.1693","url":null,"abstract":"In Canada, targeting the inflation rate was intended as a temporary measure during a transition to price-level stability, but became a well-established monetary policy regime in its own right. This paper analyses the role of the interaction of economic ideas with the experience generated by their application to policy in bringing about this outcome. In the following account, changing beliefs about the stability or otherwise of ongoing inflation, the capacity of a flexible exchange rate to create a vicious circle of depreciation and rising domestic prices, are emphasised, while ideas about the natural unemployment rate and money growth in influencing economic outcomes are also discussed. Today’s standard theoretical approach to modelling inflation targeting arrived on the scene only as the Canadian regime was becoming well established.","PeriodicalId":42350,"journal":{"name":"Review of Economic Analysis","volume":null,"pages":null},"PeriodicalIF":0.5,"publicationDate":"2019-11-16","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"45222946","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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